M1 Finance Review
Richard Montana | August 2, 2022
M1 Finance is a smart and innovative money management platform that is easy to use for investing, borrowing and spending. I like how they provide the modern trader and investors with simple yet powerful tools that allow you to customise your strategies, build your portfolio and take care of your finances with relative ease. I would say they combine the most important aspects of a broker with automated investing, giving you the right tools to customise the platform according to your own financial goals. After all, we are each different so it is good to see that they have something for everyone. Flexible, customizable, and automated. It’s your money, intelligently invested the way you want, commission-free.
Pros & Cons
- Innovative all-in-one platform to invest, borrow and spend
- Buy stocks and ETFs to build a long-term, customized investment plan with Pies
- Use pre-built portfolios, ‘Expert Pies,’ designed for investing goals like retirement
- Invest in companies that share your values with Community Pies
- Invest with an individual, joint, retirement, trust, or custodial investing account
- Invest as little as $1 with fractional shares
- Good choice of tools for the modern investor
- Exclusive features and rewards for your loyalty
- Can only accept clients in the USA
- Funding is limited to bank transfer
- Not the best solution for day trading
Founded in 2015, M1 Finance is an automated investing platform offering you no fees and is headquartered in Chicago, Illinois. They are primarily a robo-advisor and registered with the relevant authorities in the USA to provide such services. The company offers a robo-advisory investment platform with brokerage accounts, digital checking accounts, and lines of credit. I feel that M1 Finance can be useful in a hands-off role, and a great option for beginners as well. However, the lack of many order types and limited trading window mean M1 Finance probably isn’t the right option for short-term traders.
The M1 Finance all in one money management platform helps you control different aspects of your finances. I like how you can create customised portfolios according to your own preferences or choose from 80+ expertly designed portfolios. In addition, you can borrow and spend as they deem suitable.
M1 Finance incorporates a pie-based interface that is geared towards making building and managing a portfolio as easy and intuitive as possible. I like how there is a great selection of more than 6,000 stocks and funds to choose from to build customised pies. If you don’t have the time or knowledge to build your own pie, then you can conveniently select from nearly 100 pre-made custom expert pies that have been specifically designed to meet different financial goals and investment objectives of investors.
They support fractional shares which is a very unique feature that I don’t see that often. A fractional share (stock slice) is when you own less than one whole share of a company. Fractional shares allow you to invest in stocks based on a dollar amount, so you may end up with a fraction of a share, a whole share, or more than one share. This can be helpful when share prices are too high for an investor to be able to afford. It also makes it easier for investors to invest very precise amounts in a company. Webull being another option that do offer fractional shares if that is something you are looking for.
Regulation is very important when it comes to protection of funds. I am pleased to see that M1 Finance LLC is registered in the United States with the Securities and Exchange Commission (SEC). The SEC is an independent federal government agency responsible for protecting investors. They are also a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC) scheme. I would consider this top-tier regulation and would therefore feel confident using M1 Finance.
FINRA enables you to participate in the market with confidence by safeguarding its integrity. It is a non-governmental organisation that regulates member brokerage firms and exchange markets. The SIPC is an investor protection scheme established in order to protect you against the loss of cash and securities in case the broker cannot fulfil their financial obligations. The SIPC protection is limited to $500,000 with a $250,000 limit for cash. Though I recommend that you go through the terms and conditions as they’re pretty specific on who is eligible for the compensation.
Only US citizens and permanent residents over the age of 18 with a current US mailing address can apply to open M1 Finance brokerage account. If you don’t reside in the US, I recommend checking out our broker comparison tool for alternatives.
M1 Finance Super App
M1 Finance offer the free M1 Smart Money Management all in one platform from where you can seamlessly invest, borrow and spend to take control of and personalise your finances. I like this platform as it is intuitive and easy to use. It has a modern look and feel, with everything you need just a few taps away. I had no problems navigating the mobile app although I don’t think it is suited towards day trading. If this is something you are looking for, MetaTrader is a better option in my opinion.
M1 Finance use dynamic pie charts to help you easily visualise and manage your investments, so you always know what and how much you own of each. I like how you can review performance and check progress anytime, anywhere. Up-to-date important news articles for investments is included. There is also M1 Plus which is a paid upgrade ($125 per year) that has some additional benefits including lower borrowing rates, an additional day trading window, cashback and more. The basic should be enough if you are a casual user but I think it is a very reasonable price if you can afford the upgrade and want access to all of the bells and whistles of the M1 Finance Super app.
Create your own portfolio with your choice of stocks and ETFs. M1 Finance uses fractional shares and intelligent automation to invest your money according to your target allocations.
Borrow a flexible portfolio line of credit at competitive rates with a $10,000 investment. With M1 Borrow, you can borrow up to 35 percent of your portfolio and pay back on your schedule.
Move money between investments instantly with an M1 checking account and debit card. Clients can set up direct deposits, pay bills, and spend.
Invest with Pies
Manage your portfolio with Pies, the intuitive, interactive dashboard. Choose your stocks and ETFs and build your customized investment plan with ease. Or get started quickly with pre-baked Expert Pies designed for a multitude of goals or investment styles. Add your securities as slices of your Pie or build a Pie and use it as a smaller part of your overall Pie to organize your portfolio with ease. They have put together over 60 curated Pies for a variety of investing styles or goals. From responsible investing, to dividend earners, to cannabis companies and so much more.
Schedule contributions, automatically invest, and dynamically rebalance every time you buy into your portfolio.
Build a custom portfolio of the stocks and funds you want or choose from an expert portfolio that speaks to you.
The M1 Finance platform is a useful tool within itself containing most of the functionality and features needed to manage your portfolio. The tools help you develop the right strategy for your time horizon, risk tolerance, and goals. Then, powerful automation helps you execute and maintain it over the long term. M1 Finance does not provide the usual analysis tools that you will find with many other online brokers like Robinhood. That being said, if you are a causal trader or investor, you should find there is enough to get by.
There is a help section on the M1 website where you can find a collection of useful trading guides to bring you up to speed with the various products and services that they provide. However, the educational materials offered are limited as compared to other brokers like tastyworks although there is a blog which has some very useful articles related to their services and investing in general.
M1 Finance offer trading on stocks, ETFs and funds. You can create your own custom portfolio or choose from over 80+ expert portfolios. Along with the vast choice of securities, I like how they also offer automation with robo-advisors. Despite the ease of use, I felt that the available instruments seem to be quite limited when compared to other brokers such as Freedom24.
M1 Finance has a choice of different accounts to cater to different investor need, ranging from general investing accounts to IRA accounts. A minimum account balance of $100 is required to get started with M1 Finance which is pretty much the industry average. Once the $100 account minimum has been reached, I like how deposits can be any amount greater than $10. Retirement accounts have an initial investment requirement of $500.
- Individual: Your own account for general investing needs
- Joint: Joint account with a relative, spouse, or domestic partner
- Retirement: Invest in your future with Traditional, Roth, and SEP IRAs
- Trust: Manage trust investments
M1 Finance accounts have no trading commissions or management fees. However, whilst M1’s core services are free, some services outside of normal course of use will have a fee. You should ensure that you read, understand and accept all of the fees involved on the official M1 Finance website before you open an account with them.
The M1 Finance customer service is limited to email only. I find this to be very frustrating for those of you who would prefer to speak to a member of the support team directly over the phone or live webchat. I would like to see them expand their customer service in the not so distant future. That being said, I like how there is a comprehensive support area on the official M1 Finance website that can provide instant answers to a variety of questions covering different topics such as accounts, investing and more.
To start investing with M1 Finance you will need to connect your bank and make your first deposit. You can do this easily by selecting the “funding” option from within the mobile app. It is also possible to setup recurring deposits. It would be beneficial if they offered alternative online methods for funding such as digital wallets or even cryptos if they are trying to cater towards the modern investor.
Overall, I think that M1 Finance is an intuitive all in one tool for managing money and investing in customised or pre-build portfolios. I like how they charge no trading fees but the automated aspect of the platform may not be suitable for those of you who prefer to have more control over individual investments. They also do not offer forex, cryptocurrency of CFD trading whilst the trading platforms and analysis tools are limited for those of you who like to get down into the nitty gritty of the charts. I would say they are worth consideration for anyone who is looking to take a more hands-off approach and invest without any unnecessary complications.