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 your to open multiple portfolios, which are called "pies" and add up to 100 individual securities like stocks and funds per pie.

Do you like the robo-advisor 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, then M1 Finance will provide comprehensive management. 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, no annual or monthly management or advisory fee.

Bonus

$250–$10,000 to invest when you transfer your brokerage account to M1 within 30 days of opening an M1 account

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 robo-advisors by enabling you to choose the securities you will hold in your portfolios. Some robo-advisors 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. If you decide you'd rather not pick your own investments, M1 Finance does provide more than 60 prebuilt portfolio templates for you to use.

M1 Finance is currently paying a bonus of $250 to as much as $20,000 when you transfer funds from an outside brokerage account. The bonus structure looks like this:

To be eligible, the funds transfer must be before March 31, 2024 The bonus will be paid on Dec. 5, 2024, and though the rules do not specifically state this, you should assume you'll need to maintain the required balance from the time of transfer through the bonus payment date.

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 robo-advisor: it's automatic rebalancing of portfolios, but like many of its competitors, M1 has branched into other areas of investments and even banking activities.

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 prebuilt pies 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 management or advisory fees. 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 savings account

M1 Finance is currently offering 5.0% APY on uninvested cash balances. Through the Insured Deposit Network Program from their affiliation with B2 Bank, they are offering this return on accounts with cash balances up to $5 million --- complete with FDIC insurance.

Crypto account

You can build pies composed of cryptocurrencies the same way you can with stocks and ETFs. Once again, you can either create custom pies or use prebuilt pies provided by M1 Finance. 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 firms, M1 Finance is adding banking services.

Summary of the services includes:

• Margin loans: You can borrow up to 40% 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 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, Tesla, Peloton, Netflix, Dollar General and AMC Theaters, among others. 1.5% cashback is available on all other purchases.

M1 Plus

M1 Finance offers their premium M1 Plus account. It is with this plan that holders of the Owner's Rewards Card can receive 10% cash back on purchases, while other cardholders are limited to 2.5% or 5%. It also provides the lowest interest rates on margin borrowing and provides access to custodial accounts.

M1 Plus charges a fee of $3 per month or $36 per year if you pay annually. Either way, you'll get the first three months free.

Who is M1 Finance best for?

M1 Finance is an appropriate investment vehicle for investors at every level, from beginner to advanced. The minimum investment of $100, with complete investment management at no cost, 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.

Just about the only group of investors who may not be interested in M1 Finance are self-directed 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 robo-advisors. 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

Wealthfront

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Wealthfront

Min. deposit

$500

Fees

0.25%

Another robo-advisor 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 robo-advisor 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, no annual or monthly management or advisory fee.

Bonus

$250–$10,000 to invest when you transfer your brokerage account to M1 within 30 days of opening an M1 account

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 registered 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. They provide complete investment management, including periodic rebalancing, with no advisory fee and no fees for adding stocks or ETFs to your portfolios. While you can choose your own investment, M1 Finance does provide prebuilt portfolio templates.

Does M1 Finance charge a monthly fee?

No. There are no monthly fees for using the platform, including fees for managing your account or adding stocks or ETFs to your pies. The exception is the premium M1 Plus plan which does have a monthly fee of $3, but this plan will be unnecessary for most investors.