M1 Finance provides an intriguing blend of automated investing paired with expansive portfolio customization to go alongside borrowing and spending features. Y'all tin select from more than sixty pre-built portfolios called "pies" (a reference to portfolio pie charts) or build your own strategy. This customizable portfolio platform is geared towards experienced investors looking to automate their strategy while adjustment to personal preferences, adventure ambition, and diversification goals. M1 also scores well for the platform's overall depression cost, charging no fees on investment management or trading which puts more than dollars to work for you. We'll take a deeper look at M1 Finance's robo-advisory to help you decide whether it is the right fit for your portfolio needs.

Key Takeaways

  • M1 Finance is a keen fit for experienced investors who prefer a low-cost customizable portfolio solution.
  • Customizations are primarily washed by screening and selecting betwixt 60 different pre-built portfolios or creating your own.
  • Investors looking for boosted production offerings in a platform may find M1 Finance's borrow and spend options attractive.
  • While offering customizations beyond most robo-advisors, M1 Finance'southward goal tracking lacks the ability to consolidate exterior accounts.

Pros

  • Extensive portfolio management customization options

  • Margin loans accessible at low involvement rates with $5K invested

  • No fees for trading or business relationship management

  • Spending and borrowing options complement portfolio management

Cons

  • No revenue enhancement loss harvesting bachelor

  • Advisors and financial planning not offered

  • Limited financial calculators, tools, and goal planning

  • No aggregating of external accounts for investment allocation purposes

Company Overview

Account Minimum $100 ($500 for retirement accounts)
Fees $0 (misc fees may apply)
Goal Planning Retirement
Available Avails Individual Stocks, ETFs, REITs
Interest Paid on Greenbacks Balances 1% (M1 Plus members merely)
Customizable Portfolio Yes
View Portfolio before Funding Yeah
Customer Service Email, Chat, Phone call
Financial Advisor Available No
Cash Direction Interest, bill pay, atm fee reimbursement (M1 Plus members simply)
Tax-Loss Harvesting No
External Account Sync/Consolidation Inbound Transfers, no aggregation
Mobile App Android, iOS

Business relationship Setup

Getting started with M1 Finance is a straightforward process. After creating a username and countersign, you'll exist prompted to begin M1's onboarding flow where yous'll learn how the platform works and answer some general questions regarding your investment experience. The portfolio construction part of the process allows you to select one of the pre-built pies or customize the portfolio to your own specifications.

Y'all'll be asked to select an business relationship to go started. M1 supports brokerage, Traditional IRA, Roth IRA, SEP IRA, custodial (M1 Plus only), and trust accounts. Keep in mind that the minimum to open an account is $100 ($500 for IRAs). Once your portfolio has been finalized, your account selected, and banking data added, yous're ready to start investing.

Goal Planning

Since M1 focuses on automating portfolio management for experienced investors, goal planning, and financial calculators are intentionally omitted. For the same reason, in that location is no access to man consultants since the platform is not an advisory offering. In that location is, withal, an extensive commodity catalogue on M1'due south blog which covers some full general financial teaching and investing topics at a loftier level.

The lack of hand holding may be discomforting for investors seeking goal planning tools or those who value homo guidance. For seasoned investors, the focus on portfolio direction creates a more streamlined investing feel centered around growing your money. It's important to call up that M1 isn't trying to be a robo-advisor that takes bones goal and risk information in order to spit out a portfolio conforming to Modern Portfolio Theory and your time horizon. Instead, M1 is looking for investors who are seeking to reduce the management burden without sacrificing portfolio flexibility, investment options, and automation capabilities.

Business relationship Services

M1 Finance offers a diverseness of account services that give you more than flexibility with your money. Greenbacks motion out of and into the platform is seamless, including an option to schedule car deposits into your portfolio on a monthly, weekly, or bi-weekly footing. Y'all can also place individual merchandise orders, which allows for more than flexibility. Transfers from external brokerage or retirement accounts into M1 allow you to consolidate your holdings in a single broker. In addition to these options, investors can use margin accounts to infringe up to 35% of the account value one time the balance exceeds $x,000.

Some features differ based on whether you're a M1 Basic or M1 Plus fellow member ($125 annual fee). For margin loans, M1 Basic members accept an interest rate of three.75% while M1 Plus members have a lower interest rate at 2.25%. Both tiers offer a checking account, but if you're an M1 Plus fellow member y'all'll accept more cash back options, additional ATM reimbursements, and a variety of payment methods. The credit carte product is available merely at the M1 Plus tier. The credit card offers intriguing cash back options and waives the annual fee.

Cash Management

To complement the portfolio management product, M1 Finance offers digital banking, a credit bill of fare choice, and a cash flow allocation feature that rounds out the platform:

  • M1 Spend seamlessly integrates a checking account with your investments. You tin transfer coin, set up straight deposit, and spend with a debit card. There'south no minimum balance and all deposits are insured by the FDIC up to $250,000. M1 Plus members also go ane% cash back, one% interest rate, and check sending capability.
  • TheOwners Rewards Cardis a unique credit card offering bachelor to M1 Plus members. With no annual fee, members tin can earn up to 10% cash back for spending tied to companies invested in through the platform.
  • M1'due southSmart Transfers are bachelor to Plus customers and allow you to set a rules-based strategy to allocate your excess greenbacks towards spending, maxing out annual IRA contributions, or investing through any of your brokerage accounts. Rules can be layered and then that cash management is done automatically in a way that matches your needs.

Portfolio Construction

A primary differentiator of M1's platform is portfolio construction. Investors have the ability to choose from over lx different pre-congenital Expert Pies which align to a variety of strategies including passive investing, mimicking hedge funds, and socially conscious options. As an example, the passive portfolio can be synthetic simply by using ii ETFs—1 equity, one bond—that track the global market and allow you to allocate between the 2 funds based on your risk preference. You can also create Custom Pies to cull your own holdings entirely or combine them with an existing Expert Pie.

There'southward a number of asset allocation options that y'all can leverage by using the Expert Pies. Some of these include primal analysis, technical analysis, value investing, buy and hold, growth investing, income investing, pocket-size-cap investing, and dividend reinvestment plans.

Available Assets
Private Stocks Yes
Mutual Funds No
Fixed Income No
REITs Yeah
Socially Responsible or ESG Options Aye
ETFs Yes
Not-Proprietary ETFs Yes
Private Equity No
Crypto, Forex No

Portfolio Customization

One area where M1 Finance really stands out is the all-encompassing ability to tailor your portfolio through Custom Pies. Using the Research section of the site, yous'll find a screening tool that lets you search for a broad variety of publicly tradable ETFs, REITs, and individual stocks. From there you're a few clicks away from adding these selections to an existing or new portfolio for investing.

Portfolio Direction

Once you have your pies ready, M1 monitors your portfolio and rebalances when new funds are deposited to ensure you lot don't drift too far away from your initial target allocation. This is primarily accomplished by allocating new dollars towards the parts of your portfolio that are underweight compared to the initial strategy you've prepare. Yous tin can likewise force an entire portfolio rebalance at your discretion with a click, a unique feature of the platform.

M1 supports trading once throughout the day, just M1 Plus members with an account rest over $25,000 tin can identify trades in two daily trading windows. Y'all tin can also make private buy and sell orders which don't need to be related to the pie you lot've selected. The availability of partial shares means you'll be fully invested without needing to hold a portion of your portfolio in cash.

Some other highlight is the tax management for withdrawals, which are done in a fashion to minimize taxes owed. Still, the lack of a true revenue enhancement-loss harvesting characteristic may limit the taxation optimization in your account. There as well isn't an aggregation characteristic where y'all can link upwards external investment accounts to go insight on how well yous're diversified across all portfolios. Many other robo-advisors offer this feature to give y'all a true picture of your net worth and progress towards goals.

Key Portfolio Direction Features
Automatic Rebalancing Auto-Eolith allocation or manually triggered
Reporting Features Statements, Taxation Information
Taxation-Loss Harvesting No
External Business relationship Syncing/Consolidation Allows for rollovers and transfers, does not back up account syncing

User Feel

Desktop Experience

You'll find the website to be make clean and straightforward with like shooting fish in a barrel sign-upward instructions, clear performance metrics, and uncomplicated to navigate. This includes tabs that cover your portfolio action and holdings, buttons to buy, sell or rebalance, and graphs that intermission down your resource allotment in detail. Many Robo Advisors are focused on improving user experiences compared to traditional financial sites and M1 Finance certainly delivers here.

Mobile Feel

Similar to the Desktop version, the M1 Finance app scores highly for its ease of utilise. The workflow of the website and the app are near identical experiences. You'll find you're able to do merely about anything on the app equally yous are on the website, and then it's just a thing of which experience you prefer.

Client Service Options

  • Phone line: 312-600-2883 G-F, nine a.chiliad. - five p.m. ET
  • Instant Aid Conversation Bot
  • Email Support with 24 hr turnaround time
  • Robust Help Center articles
  • No access to human Fiscal Advisors

Security Features

  • Two-factor authentication
  • Military Grade 4096-bit encryption
  • SIPC Insurance for investments
  • FDIC Insurance for deposits

Education

There are several education resources you tin can leverage through M1 Finance. You lot'll discover the blog contains a broad range of manufactures centered around full general investing strategies and overall best financial practices. Ane notable focus of this content is on empowering investors with data to improve their long-term portfolio mentality. M1'south social media accounts, videos, and "The Investors Mindset" newsletter offer additional ways to admission this cloth. Since M1 steers away from providing financial advice and recommendations, this information is shared from a loftier-level perspective with the goal of improving your knowledge base. Beyond that, much of the educational content is near learning to apply the platform to the fullest.

Commissions & Fees

M1 Finance doesn't charge whatever portfolio management or trading fees. This is a unique aspect of the platform that puts more dollars to piece of work on your behalf. Rather, M1 makes money through involvement, lending securities, the Plus membership, and payment for order flow. ETFs purchased through the platform have their own fee that is paid direct to the fund manager, not M1, as is standard industry practice. M1 Plus tier members pay a $125 annual subscription fee. There is too a miscellaneous fee schedule for additional account operations. Overall, the low cost of the platform is an attractive feature for investors.

There are, however, IRA termination and outgoing transfer fees of $100, in add-on to a $xx fee on accounts of upwards to $20 where no trading action has occurred for 90 days.

Category Fee
Management fees for $five,000 business relationship $0
Management fees for $25,000 account $0
Direction fees for $100,000 account $0
Termination fees $100 for outgoing transfers & IRA closures
Expense ratios Typically betwixt 0.06% - 0.20%
Common funds N/A

Final Verdict

M1 Finance provides a great option for experienced investors who value extensive customization options. Customization is a clear strength of the M1 platform that sets it apart in the Robo Advisor space. Choosing amongst 60 options or building your ain portfolios from scratch is a fundamentally different experience if you are expecting a robo-counselor to only friction match you up with an ideal allocation. Although M1 is closer to self-directed investing than most robo-advisors, it comes with the ability to automate portfolio management. This allows private investors who experience comfortable with screeners and strategies to eliminate some of the more monotonous tasks like rebalancing. Your funds in M1 are also accessible through spending and borrowing features, and the cash management rules brand it easy to automate your personal finances more widely.

Methodology

Our mission at Investopedia is to provide investors with reviews and ratings of robo-advisors that are comprehensive and unbiased. Our squad of researchers and skillful writers, led past Michael Sacchitello, spent months evaluating all aspects of a robo-advisor's platform, including the account setup process, goal planning tools, account service options, portfolio construction offerings, portfolio management, mobile and desktop user experience, educational content, fees, and security. Equally part of this evaluation, we excerpt disquisitional data points that are weighted past our quantitative model that produces a powerful star-scoring system.

With the individual investor in mind, nosotros've designed a comprehensive ranking methodology to discover the best overall robo-advisors and the best robo-advisors beyond nine key categories. Each advisor is and then scored across multiple variables to rate performance in every applicative category. The score for the overall award is a weighted average of the categories.