M1 Finance Review – Free Automated Investing Platform
M1 Finance is shaking up the world of robo-advising, offering customizable investments, expertly curated portfolios, and automatic rebalancing with no fees.
Why trust The Military Wallet? We’re a veteran-founded resource that has helped millions make strong financial decisions.
Advertiser Disclosure: The Military Wallet and Three Creeks Media, LLC, its parent and affiliate companies, may receive compensation through advertising placements on The Military Wallet. For any rankings or lists on this site, The Military Wallet may receive compensation from the companies being ranked; however, this compensation does not affect how, where, and in what order products and companies appear in the rankings and lists. If a ranking or list has a company noted to be a “partner,” the indicated company is a corporate affiliate of The Military Wallet. No tables, rankings, or lists are fully comprehensive and do not include all companies or available products.
The Military Wallet and Three Creeks Media have partnered with CardRatings for our coverage of credit card products. The Military Wallet and CardRatings may receive a commission from card issuers. You can read more about our card rating methodology here.
Opinions, reviews, analyses & recommendations are the author’s alone and have not been reviewed, endorsed, or approved by any of these entities. For more information, please see our Advertising Policy.
American Express is an advertiser on The Military Wallet. Terms Apply to American Express benefits and offers.
Decades ago, most people who needed help managing their money and investments hired a real-life financial advisor who sat down with them in person to give tailored advice.
These days, more and more people are turning to robo-advisors and online brokerage firms that can very often help their clients achieve better results with lower fees.
M1 Finance is a robo-advisor that aims to compete with other online advisors such as Betterment and Wealthfront.
However, with M1 Finance, investors don’t have to pay a flat ongoing fee for account management or investment advice. In fact, M1 Finance doesn’t charge any fees or commissions for its services.
Sounds too good to be true, right? In this M1 Finance review, we’ll look at this robo-advisor to help you decide whether it’s a good fit for you.
M1 Finance Review
M1 Finance
M1 Finance can probably be described best as a hybrid of a robo-advisor and a stock broker. While the service can create a portfolio suited to your needs, you can also customize your own by selecting individual stocks and funds. There are no fees associated with an M1 Finance account, making it a great choice for new investors.
M1 Finance Features
| M1 Finance | Features |
|---|---|
| Minimum Investment | $100 |
| Commissions & Fees | None |
| Types of Investments | Stocks and ETFs |
| Types of Accounts | Individual, Joint, Traditional IRA, Roth IRA, SEP IRA, Trusts |
| Asset Allocation | Customizable Managed Portfolios |
| Automatic Portfolio Rebalancing | Yes, As Needed |
| Human Advisor Availability | None |
| Tax-Loss Harvesting | No |
| Banking Services | Checking Accounts, Loans |
| App Availability | iOS, Android, Mobile Optimized Website |
| Customer Service | Email, Phone |
| FINRA CRD Number | #281242 |
| SEC Registration Number | #8-69670 |
Additional Features
- Totally Customizable Portfolios. Unlike many robo-advisors, M1 Finance lets you customize your investments to build a portfolio tailored to your needs.
- M1 Finance Expert Pies. M1 Finance also offers its own curated investment portfolios, or “pies,” crafted to meet specific goals or align with a specific risk tolerance.
- Fractional Shares. M1 Finance invests your money in fractional shares so every penny of your portfolio is always working for you.
- Automate Your Investments. Set up an automatic investing schedule so you can sit back and watch your portfolio grow.
- Automatic Rebalancing and Tax Efficiency: M1 Finance works diligently to keep your pie properly allocated at all times. It also has built-in mechanisms to keep your tax load as low as possible.
- Borrow Money. While M1 Finance focuses most of its efforts on its advising arm, the firm also lets you borrow money against your portfolio with rates as low as 4% APR.
- No Minimum Balance. You can open an account with any amount, but you do need at least $100 to start investing with a taxable account. Retirement accounts require a minimum balance of $500 to get started.
What Is M1 Finance?
Headquartered in Chicago, M1 Finance is an investment platform founded in 2015. Although it’s relatively new, M1 Finance has become popular over the last five years. In fact, the company now holds several billion dollars in assets under management (AUM) — check M1 Finance’s current site for the latest figure.
We classify M1 Finance as a robo-advisor because, when you sign up, it creates a suggested portfolio based on your financial needs and risk tolerance. Like other robo-advisors, it also automatically rebalances your portfolio. However, in some ways, M1 Finance is like a stock broker too. That’s because, even though the app suggests a portfolio, it’s highly customizable, and you can pick individual stocks and funds for your portfolio.
How Does M1 Finance Work?
M1 Finance aims to save you time and effort with set-it-and-forget-it portfolio management software that manages your chosen investments and rebalances automatically. Setting up an account is easy and can be done online.
M1 Finance Portfolios
M1 Finance allows investors to choose from pre-mixed investment options or create their own. The app asks you to choose among or create investment “pies” that include your chosen investments and corresponding allocations.
To get started with M1 Finance, open an M1 Finance account. Then select the stocks or ETFs you want and add them to your pie. Of course, you can also choose among “Expert Pies” that include curated investments chosen by M1 Finance staff.
Once your pie is set up, you’ll set the target weight of each slice — or the percentage of each stock or ETF you want to allocate to your portfolio. After that, you’ll fund your pie and let M1 Finance move your funds into your chosen investments at the percentages you agreed to.
As some slices of your pie grow larger and others shrink due to losses, M1 Finance will automatically rebalance your portfolio. You can also add, edit, or remove slices at any time. You can also set up multiple pies through M1 Finance, including customized pies and Expert Pies.
M1 Finance Fees
M1 Finance refrains from charging any fees, including broker fees or commissions.
There are also no required minimums to open an account—only a $100 minimum to begin investing in a taxable account.
Open a Free Investment Account with M1 Finance
M1 Finance Pros & Cons
- It’s Free. One of the biggest advantages of M1 Finance over some of its competitors is the fact it’s free to use. M1 Finance doesn’t charge any broker fees or commissions to use the service or gain access to its features and tools.
- Low Barrier to Entry. While M1 Finance requires at least $100 in taxable accounts and $500 in retirement accounts to start investing, you can open an account with any amount.
- Customizable or Pre-made Portfolios. While M1 Finance allows you to choose from individual stocks and ETFs to create each of your pies, you can also choose among Expert Pies that are formulated by M1 Finance staff for various goals.
- Automatic Rebalancing. Once you set up your pies and start funding them, M1 Finance will automatically rebalance on your behalf.
- Invest for Retirement or Other Goals. M1 Finance allows you to set up a taxable investing account or save for retirement with a traditional IRA, Roth IRA, or SEP IRA.
- Fractional Shares. M1 Finance invests in fractional shares instead of leaving excess funds idle. This strategy helps you maximize your returns over time.
- Not Every Type of Retirement Account. While M1 Finance lets you open a SEP IRA, Roth IRA, or traditional IRA, you can’t use the service to manage workplace retirement accounts like a 401(k).
- Limited Investment Options. M1 Finance lets you choose from ETFs and stocks traded on major exchanges, but it doesn’t let you choose among mutual funds or any other investments.
- No Tax-Loss Harvesting. M1 Finance doesn’t sell securities that have lost value to offset taxes on gains and income. However, it does offer a service called “tax minimization” that works similarly.
- Few Tools. M1 Finance doesn’t offer as many retirement tools as some of its competitors. For example, it doesn’t offer a tool that lets you see whether you’re on track to achieve your retirement and income goals.
Conclusion
If you need tailored financial advice or want to speak with an investment advisor at any time, you may be better off with a robo-advisor that offers comprehensive help via live chat or phone, or a real-life financial advisor.
Also note that because M1 Finance lets you invest only in stocks and ETFs, this service isn’t ideal for individuals who want to invest in a broad range of options.
Only you can decide whether to try M1 Finance or choose a different robo-advisor. If you’re curious about how M1 Finance works or the process involved in selecting stocks and ETFs for your pie, open a free account and give it a try.
Open a Free Investment Account with M1 Finance
