M1 Finance review: A top-notch self-directed investing platform for all investors

In a nutshell

M1 Finance may be the heavyweight champion among self-directed investing platforms.

• M1 finance is an industry leader in low-fees and a wide variety of investment options.
• You can open both taxable and tax-advantaged accounts, like traditional and Roth IRAs.
• M1 allows you to open multiple portfolios, which are called "pies" and add up to 100 individual securities like stocks and ETFs per pie.

Do you like the roboadvisor concept, but hate not being able to choose your own investments? If that describes you, M1 Finance has you covered. You can choose individual stocks and Exchange-Traded Funds (ETFs) for your portfolios. Just as important, there are no fees either for choosing your investments or managing your account.

M1 Finance

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M1 Finance

Minimum investment

$100

Fees

Commission-free security additions to your portfolio

$3 monthly platform fee applies (unless client has an active M1 Personal Loan or M1 assets reach a minimum value of $10,000 at least one day during each billing cycle)

Investment offered

Stocks, exchange-traded funds (ETFs) and crypto.

Available accounts

Taxable investment accounts (individual and joint); trust and custodial accounts; traditional, Roth, SEP and rollover IRAs; crypto accounts.

M1 Finance overview

While there are a handful of automated investing platforms charging no management or advisory fee, the majority charge a fee of 0.25% and up. Not only is M1 Finance a platform that charges no management fee but there are also no fees involved in buying the stocks and ETFs you can choose to fill your portfolios.

M1 Finance stands out from other automated investing platforms including roboadvisors by enabling you to choose the securities you will hold in your portfolios. Some automated investing platforms will give you some control over this, such as allowing you to increase or decrease portfolio allocations, but M1 gives you complete control. You can choose up to 100 individual stocks and/or ETFs to put in your portfolios and more than 60 prebuilt portfolio templates.

It may sound like an exaggeration, but we were not able to identify any significant negatives with this investment platform. They've put together an outstanding service with no noteworthy disadvantages. M1 Finance stands out in the investment platform industry.

M1 Finance features and services

M1 Finance has one feature that is similar to a roboadvisor: it's automatic rebalancing of portfolios, but like many of its competitors, M1 has branched into other areas of investments.

M1 Finance investment platform

M1 Finance's signature investment service is truly one of the very best in the industry.

The concept revolves around "pies", which is the term M1 Finance uses to describe portfolios. For example, you can have a pie that is a taxable brokerage account, a pie that is a traditional IRA and a pie that's a Roth IRA. Each pie can be filled with up to 100 individual stocks and/or ETFs, which are called "slices." You can either select from one of more than 60 investment portfolios or choose the securities in your pies from more than 6,000 stocks and funds available on the platform. You can also add a separate pie as a slice in another pie.

There are no commissions for adding or removing securities from your pies. You can build as many pies as you like, and you can choose to add or remove securities from your pies at any time. The use of fractional shares will enable you to hold slices of higher-priced securities in your pies.

In managing your pies, M1 Finance charges no commissions. They also offer Dynamic Rebalancing, which is a process where they will fund underweight holdings first, and if necessary, sell overweight positions. You can choose to rebalance at any time simply by hitting the Rebalance button on the app.

High-Yield Cash Account

M1 Finance is currently offering 5.00% APY with the M1 High-Yield Cash Account. The M1 High-Yield Cash Account is an investment product offered by M1 Finance offering up to $3,750,000 in FDIC coverage across all of your high yield accounts.

Crypto account

You can build pies composed of cryptocurrencies the same way you can with stocks and ETFs. You must have a brokerage account to be eligible for a crypto account. There is no charge for either opening a crypto account or making trades within your pies.

Crypto services are provided through Bakkt Crypto Solutions LLC, however, it's important to understand crypto investments are not covered by either FDIC or SIPC insurance since they are alternative assets.

M1 Finance crypto accounts support Bitcoin, Ethereum and Litecoin.

Borrow and spend

Like many other investing platforms, M1 Finance is adding services.

Summary of the services includes:

• Margin loans: You can borrow up to 50% of your account value for our rates as low as 7.25%. No application is required to qualify.
• Personal loans: M1 Finance offers personal loans furnished by B2 Bank NA for as much as $50,000, with terms ranging between two and seven years. Rates range from 7.99% to 21.75% APR, and there are no origination, late or pre-payment fees.
• Owner's Rewards Card: This is a Visa debit card providing cash back rewards of up to 10% on purchases of select brands. These include major airlines, Ulta, Peloton, Netflix, and AMC Theaters, among others. 1.5% cashback is available on all other purchases.

Who is M1 Finance best for?

M1 Finance is available to all investors but may not be an appropriate investment vehicle for some. The minimum investment of $100 is attractive to new and small investors. Meanwhile, the ability to choose the securities in your own pies — and to design as many as you want — is a compelling benefit for more advanced investors.

How M1 Finance compares

If M1 Finance isn't your first choice, check out the following alternatives:

Betterment

Betterment Invest

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Betterment Invest

Fees

025% to 0.40%

Min. deposit

$10

Betterment was one of the original roboadvisors. The platform enables you to open an account with no money and to begin investing with as little as $10. They charge an annual investment advisory fee of 0.25% of your account value, which applies to most portfolio sizes.

Betterment does offer a premium version with an annual advisory fee of 0.40%. However, the additional services provided don't seem to justify the higher fee. They do offer a high-yield cash option, paying 4.75% variable APY for three months when you open your first cash account. Rates are as of Jan. 2024.

Wealthfront

Goal planning

Wealthfront

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Goal planning

Wealthfront

Min. deposit

$500

Fees

0.25%

Another roboadvisor option, Wealthfront, offers even more than Betterment in some areas. They do require a minimum of $500 to begin investing, and the annual management fee is 0.25% on all account balances. Wealthfront offers a few more portfolio options than the competitors, as well as a high-yield cash account currently paying 5.00% APY on all balances as of Jan. 2024. In addition, it recently made self-directed investing in individual stocks available, with no commissions. You can begin trading stocks with as little as $1, but the selection is limited to 1,500 companies.

Charles Schwab

Charles Schwab

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Charles Schwab

Min. deposit

$0

Fees

$0 stock & ETF trades.

$0.65/contract options trades.

$2.25/contract futures trades.

$0 OneSource mutual fund trades.

Charles Schwab Intelligent Portfolios matches M1 Finance with zero-cost investment management, but that's about where the similarities end. Charles Schwab Intelligent Portfolios requires a minimum of $5,000 to invest, which will put it out of reach for many new and small investors.

This competitor does have one advantage the others don't, and that's the ability to take advantage of self-directed investing on the same platform. Charles Schwab Intelligent Portfolios is the biggest retail investment broker in the world, offering nearly every type of investment there is. You can hold part of your portfolio in the roboadvisor to take advantage of no-cost investment management while engaging in self-directed investing on the same platform.

Methodology

This review is based on information provided on the M1 Finance website, as well as third-party sources providing relevant information. Those third-party sources include FINRA, the Better Business Bureau, Trustpilot and other sources.

We also compared M1 Finance with its major competitors in the investment platform space, including Betterment, Wealthfront and Charles Schwab Intelligent Portfolios.

M1 Finance

View Offer

M1 Finance

Minimum investment

$100

Fees

Commission-free security additions to your portfolio

$3 monthly platform fee applies (unless client has an active M1 Personal Loan or M1 assets reach a minimum value of $10,000 at least one day during each billing cycle)

Investment offered

Stocks, exchange-traded funds (ETFs) and crypto.

Available accounts

Taxable investment accounts (individual and joint); trust and custodial accounts; traditional, Roth, SEP and rollover IRAs; crypto accounts.

Frequently asked questions (FAQs)

Is M1 Finance investing legit?

Yes. M1 Finance is a member firm broker with the Financial Industry Regulatory Authority (FINRA), and investments on the platform are covered through SIPC for up to $500,000 in cash and securities, including up to $250,000 in cash.

M1 Finance has a Better Business Bureau rating of C+ as of Jan. 2024. They also have 2.3 out of five stars ("poor") with Trustpilot. However, the mobile app has a rating of 4.7 out of five stars among almost 58,000 iOS users on The App Store, and 4.5 out of five stars among more than 24,000 Android users on Google Play.

Is M1 Finance investing good for beginners?

Yes. No funds are required to open an account, and you can begin investing with as little as $100. Features include periodic rebalancing and no fees for adding stocks or ETFs to your portfolios. M1 Finance does provide prebuilt portfolio templates.

Does M1 Finance charge a monthly fee?

A $3 monthly platform fee applies to clients without an active M1 Personal Loan or clients with M1 assets that do not reach a minimum value of $10,000 at least one day during each billing cycle.

The opinions expressed are solely those of the authors and do not reflect the views of M1. They are for informational purposes only and are not a recommendation of an investment strategy or to buy or sell any security in any account. They are also not research reports and are not intended to serve as the basis for any investment decision. Prior to making any investment decision, you are encouraged to consult your personal investment, legal, and tax advisors.