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There’s no shortage of investing apps available today, which can make choosing one difficult. M1 Finance is one example, and it’s a solid contender among the competition. Our review covers the ins and outs of this investing platform so you can decide whether or not it’s the right one for you.
M1’s monthly platform fee will apply to all clients who do not meet the following monthly program requirements (“Program Requirements”):
M1 Finance is a self-directed automated investing platform that allows you to trade more than 6,000 stocks and ETFs and build customized Model Portfolios. You can also manage your spending with its Owner’s Reward Card, save in a high-yield cash accounts account, and borrow through M1’s Margin and Personal Loan products.
While M1 Finance offers a fully-automated investing experience. M1 automates your investments, but they leave the decision-making to you.
When you set up an M1 Finance portfolio, you’ll be directed to create “pies”—groups of investments created for specific goals, such as retirement or socially responsible investing. Each pie has “slices,” which can be individual investments, other pies, or groups of pies. There can be up to 100 slices per pie.
M1 Finance is best for medium- to long-term investors who want to choose their own investments while benefiting from its fully automated platform. M1 is not ideally designed for day traders or anyone looking for financial planning or advisor services.
M1 Finance has several benefits to offer investors of all experience levels.
The M1 Finance app is easy to use. It will help you set goals and choose your investments, whether you prefer to select your investments or choose a pre-selected portfolio. The app will also guide you through opening a high-yield cash account, applying for a credit card, or taking out a loan. You can also rebalance your investments with a single click from the app to ensure they match your goals.
Any cash you add to your M1 Finance account that isn’t invested will be redirected to a high-yield cash account that offers a 5.00% annual percentage yield (APY). and $3.75M FDIC insurance. This allows you to earn a return on all the money in your portfolio, even if you’re not actively investing it.
M1 Finance’s rebalancing function uses an algorithm to maintain the percentages you set for your investments. By dynamic rebalancing with auto-invest on gradually rebalancing your portfolio over time as new deposits are automatically invested into underweight holdings. This allows your portfolio to balance back towards your targets without selling, avoiding potential tax implications from rebalancing trades.This helps to ensure that your portfolio maintains your desired asset allocation.
M1 Finance is one of many investing apps that does not charge trading fees, which can help you maximize your returns. Other commission-free brokers include Public, Stash, and Plynk. M1 does charge other types of fees, which are detailed later in this review.
When you build your portfolio with M1 Finance, you can choose from more than 6,000 stocks and exchange-traded funds (ETFs), allowing you to create a customized, diversified portfolio.
M1 Finance offers more than 80 portfolio types, called “Model Portfolios.” Portfolios”. A model portfolio is a pre-built, diversified basket of investments designed to align with a specific investment strategy or goal that can be used as a starting point for investors to customize and build their own personalized portfolio. Model portfolios are not assembled by a specific individual “expert”.
There are a few areas where M1 Finance falls short and could stand to improve.
M1 Finance doesn’t offer many educational resources, so it may be a better fit for those already familiar with the process. You can always find these resources outside the app to help improve your investing knowledge, but it’s an extra step you have to take, which could be seen as a downside by some.
M1 Finance doesn’t offer mutual funds. While ETFs are a favorable alternative for many, if you’re a dedicated mutual fund investor, then M1 Finance likely isn’t the right platform for you.
As mentioned, M1 Finance is not a robo-advisor, but it also doesn’t offer live assistance for those who need extra help. It only offers self-directed brokerage services. This may not be a concern if you’re fairly comfortable with the investing process.
If you’re a beginner investor, you might prefer a platform with access to live advisors who can help you build your portfolio. Higher net worth investors looking for advisor access might want to consider Empower, which offers advisor access to anyone who invests $100,000 or more.
With M1 Finance, there is no customer service number you can call for assistance. However, if you need help with your account, you can schedule a call with a representative or submit an online help request and get a response within one business day. If you have an immediate question, though, you may need to wait longer than you’d prefer for an answer.
Overall assessment of how the investing platform compares to the others in the table.
| Feature | M1 Finance | Robinhood | Ally Invest | SoFi Invest |
|---|---|---|---|---|
Account minimum | $100 ($500 for retirement accounts) | $0 | $0 | $0 |
Accounts offered | Self-directed brokerage, retirement, crypto | Brokerage, retirement, crypto | Brokerage, robo-advisor, retirement | Brokerage, robo-advisor, retirement |
Account & trading fees | No trading fees; $100 outgoing transfer fee; $100 retirement account termination fee; $50 per month if the balance falls below $50 | No trading or account fees; Robinhood Gold is $5/month | No trading fees on stocks or ETFs priced $2.00 or higher, no account fees | No trading or account fees |
Customer service | Phone or email | Phone or chat | Phone, chat, email | Phone, chat |
Let’s look deeper at what M1 offers and how it works.
M1 Finance is easy to set up and use. Upon downloading the app, you’ll set up a username and password, enter your personal information, and be signed up for your account. From there, you can create financial goals, including investing money, maximizing earnings, and borrowing.
The app lets you easily see how your investments are doing and make changes to your portfolio as you see fit. You can also open a high-yield cash account and apply for a loan or credit card, all through the M1 app.
M1 Finance shines with its wide range of stocks, ETFs, and customizable portfolio options. You can choose from more than 80 portfolios that fall into several categories, from general or responsible investing to planning for retirement. Alternatively, you can choose your investments and build your portfolio from scratch.
As mentioned earlier, M1 Finance offers more than 6,000 stocks and ETFs. However, compared to competitors, some might consider investment options limited.
M1 Finance doesn’t charge trading, commission, or portfolio management fees just a $3 monthly fee.
Besides the subscription fee, there are very few costs associated with using M1 Finance. There’s a $100 outgoing transfer fee and a $100 retirement account termination fee. Finally, while there are no monthly maintenance fees, you will be charged $50 per month if your balance falls below $50.
There are no educational resources in the M1 Finance app or website for novice investors who want to learn more about the process. However, if you’re a more experienced investor, you can take advantage of the research section. This section provides the latest investment news, lists information about the available stocks and funds, and lets you add securities to your watchlist. This can help you make more informed decisions about where to invest your money.
The M1 Finance Client Success Team can help you set up your account. Once you’ve created a login, you can schedule a 15-minute call with a team member to walk you through the process. The app uses Calendly to set up calls, so you can choose a time and date that works best for you. This prevents you from waiting on hold for an agent to answer the call.
The M1 Finance website also has a Help Center that covers various topics, including getting started, accounts and settings, transfers, investing, borrowing, earning, and spending. If you can’t find the answer to your question in the Help Center, you can submit a request and receive a response within one business day.
However, there is no option to call customer service, so if you need to talk to someone immediately, you may be out of luck.
The M1 Finance app offers two-factor authentication for security and peace of mind. If you prefer to log in using biometrics, you can also set up Face ID.
The M1 Finance app has a rating of 4.5 or above on the App Store and Google Play. It does have a low Trustpilot score of 2.2 stars (out of 5), from 156 total reviews.
Unlike a robo-advisor, you choose how M1 Finance invests your money based on your comfort level and experience. If you’re a new investor, you can opt for a pre-selected portfolio, which M1 calls its “Model Portfolios.” But if you are familiar with investing, you can select your investments to create a customized portfolio.
If you go with a pre-selected portfolio, you can choose your goal. M1 Finance will invest your money and maintain the preferred mix of investments based on your risk tolerance.
These Model Portfolios fall into several different categories:
If you prefer to create a custom portfolio, you can choose from the more than 6,000 stocks and ETFs available to trade at M1 Finance. This is a good option for more experienced investors who prefer to pick their own investments. New investors will likely not choose this option, though they can work on their investment knowledge and eventually have the confidence and experience to craft a portfolio.
Since M1 Finance doesn’t charge fees for portfolio management or trading, you may wonder how the platform makes money. There are several ways M1 Finance makes money.
M1 Finance is a unique app that combines self-directed investing with a fully automated platform. Its user-friendly platform makes it easy for investors to choose from individual investments and model portfolios.
Because M1 Finance is a self-directed brokerage, it’s best suited for those with some prior investing experience. However, novice investors who are looking for a passive investing solution and who have a long-term mindset may be perfectly happy with how easy it is to invest with M1.
Yes. M1 Finance allows you to consolidate investments by transferring external accounts into your M1 portfolio. This allows you to track your investments in one place.
M1 Finance is only suitable for those who are comfortable making their own investment decisions. While M1 takes the work out of managing your portfolio, it’s not a robo-advisor, so there is no advice component.
Investing with M1 Finance will not impact your credit score. However, if you apply for a credit card or personal loan through M1, the platform will perform a hard credit check, temporarily impacting your score.
M1 Finance is a Financial Industry Regulatory Authority (FINRA) member firm and a member of the Securities Investor Protection Corporation (SIPC). This investing platform is designed for long-term investors versus those who trade frequently.
Aside from crypto, M1 Finance doesn’t support alternative investments. If you want to add real estate, private equity, artwork, or other alternative assets to your portfolio, you might want to consider Yieldstreet or a similar platform.
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