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M1 Finance Review: free and easy to use

Updated: Sep 22, 2023


Disclosure: This post contains affiliate links through which I'm paid. No additional cost to you that's just how marketing works sometimes and its actually pretty awesome, more here.

 

M1 Finance Review

M1 Finance has emerged as a unique platform in the world of online investing. It seamlessly combines the benefits of automated investing with the flexibility of expansive portfolio customization. This blend allows investors to tailor their investment strategy while also benefiting from the platform's automation features. Additionally, M1 Finance has recently ventured into the realm of cryptocurrency trading, further expanding its offerings and catering to the modern investor's diverse needs.


M1 Finance was just an investment platform but now they are "an all-in-one personal finance platform fit or the long haul". In a very short span they have launched high-yield savings accounts, crypto-investing, and the Owner's Rewards Card


M1 Finance Recent Milestones

If you find this review helpful and want to start an account, you can find the M1 Finance Login here.



Key Takeaways: M1 Finance Review

  • Zero Commissions which matches the new industry standard

  • M1 Plus offers cash back, additional investing tools, and lower loan rates all for $10/month or $95/annually (refer a friend for 6 months free)

  • Minimal, $100, account balance is required

  • Borrow and Spend options are interesting offerings and unique vs the competition

  • Missing some features you find in the competition, outside account consolidation being the most critical

M1 Finance Features:

Portfolio Management Customization

M1 Finance stands out with its ability to offer over 80 pre-built portfolios. These portfolios, often referred to as "pies", cater to a wide range of investment strategies and risk tolerances. Whether you're a passive investor looking for a diversified portfolio or an active trader wanting to mimic hedge fund strategies, M1 has got you covered. Moreover, for those who prefer a more hands-on approach, the platform allows you to build a unique strategy tailored to your financial goals.


Cost Efficiency

In the world of investing, fees can quickly eat into your returns. M1 Finance shines in this aspect by offering a platform that's not only feature-rich but also cost-efficient. Investors can rejoice in the fact that there are no fees associated with investment management or trading. This commitment to cost efficiency ensures that your money is working for you, and not being lost to unnecessary fees.


Account Setup

Setting up an account with M1 Finance is a breeze. The platform guides users through a straightforward onboarding process, where they answer questions about their investment experience. This helps tailor the platform's recommendations. We outline each step with screen shots below to help you out.


M1 supports a variety of account types, including brokerage accounts, traditional IRAs, Roth IRAs, SEP IRAs, custodial accounts, and trust accounts. The minimum requirement to open an account is $100, and $500 for IRAs.


Goal Planning

While many platforms focus on goal planning and financial calculators, M1 Finance takes a different approach. The platform is designed to automate portfolio management, especially catering to experienced investors. This means that while you won't find traditional goal-planning tools, you'll benefit from a system that keeps your investments aligned with your initial strategy. For those seeking financial education, M1's blog offers insights on various investment topics.


Account Services

M1 Finance is not just about investing. It offers a suite of account services that make managing your finances easier. This includes seamless cash movement, scheduling auto deposits, placing individual trade orders, and transferring funds from external accounts. For those with balances exceeding $2,000, M1 offers margin accounts, allowing them to borrow up to 40% of their account value. It's worth noting the differences between the M1 Basic and M1 Plus memberships, with the latter offering enhanced features.


Cash Management

Beyond investing, M1 Finance has ventured into the world of digital banking. With M1 Spend, users can integrate their checking account with their investments. This offers a unified platform for transfers, direct deposits, and debit card spending. The platform also introduced the Owners Rewards Card, providing cashback on purchases. Additionally, the Smart Transfers feature ensures that your money is always working optimally, whether it's in investments or ready for spending.


What is M1 Finance?

M1 Finance is an innovative investing and portfolio management platform offering a wide array of investment options, including stocks, mutual funds, and expert-curated "pies." With diverse filters, M1 Finance empowers investors to tailor their portfolios according to their preferences, such as industry focus, women-led or AAPI-led companies, and more.


This flexibility allows users to invest in causes they're passionate about or simply those that offer the best potential returns.


How does M1 Finance work?

M1 Finance operates similarly to other well-known investment platforms like Fidelity, E*Trade, or Robinhood. However, M1 Finance distinguishes itself from competitors by offering a comprehensive suite of financial tools and research resources beyond investing. Continue reading for our in-depth "features" section, where we discuss each of these unique tools.


How can M1 Finance help you?

M1 Finance is a versatile platform catering to both beginners and experienced investors. If you're seeking an all-in-one solution for investing, saving, and checking, M1 Finance has got you covered. With its user-friendly interface and valuable data insights, M1 Finance streamlines the investment process.


The platform also provides extensive educational resources to help users better understand their investments. Alternatively, if you prefer a hands-off approach, you can set up a recurring investment plan and let your portfolio run on autopilot. Overall, M1 Finance is among the top personal finance tools available in today's market.


How to get started with M1 Finance: Step by Step Instructions

Getting started with M1 Finance is straightforward, just like any other investment account. Set up your username and password, provide some basic information, and M1 Finance will guide you through the rest of the process.

M1 Finance Sign Up Page
M1 Finance Sign Up Page

M1 Finance Profile Page
M1 Finance Profile Page


Once the initial setup is complete, you can move on to creating your first portfolio or "pie."


M1 Finance Pie Set Up
M1 Finance Pie Set Up

M1 Finance Pie Description
M1 Finance Pie Description


M1 Finance Pie Description Page 2
M1 Finance Pie Description Page 2


Who can benefit from using M1 Finance?

M1 Finance is suitable for anyone planning to invest for a long time horizon, utilizing a buy-and-hold strategy. The platform is designed for both novice and seasoned investors, providing all the necessary tools for success.


The auto-investing tools you can set up, similar to automatically investing in your company 401k, are great. M1 will pull money from your bank account at a date and time you determine and automatically invest that money as you see fit. One of the easiest ways to build wealth over time is to set up automatic investing like this. However, you should ensure you are maximizing your employer 401k before setting up an investment account.


One key consideration for M1 is whether or not you want financial advice. There are great research tools available within the platform, but they don't offer human advisors (check out Sigfig if you want unlimited access to human advisors).


M1 Finance vs The Competition


Sigfig is a robo-advisor that offers portfolio management by focusing on minimizing fees, maximizing diversification, and simplifying the user's financial life. It offers tax-efficient strategies and is well-known for its sleek and user-friendly interface.

Pros:

  • Free portfolio tracker

  • Free analysis of existing portfolios

  • Diverse and low-cost ETFs

  • Automatic rebalancing

Cons:

  • High minimum investment requirement

  • Charges an advisory fee on top of ETF expenses

  • Limited customization options

In comparison to M1 Finance, SigFig comes up short in a few areas. While both platforms offer automatic portfolio rebalancing, M1 Finance stands out with its pie-based investing model that offers better customization options. However, SigFig's free portfolio tracker can be a major advantage for users looking to analyze their existing portfolios. Read our full Sigfig Review here.


Wealthfront is another robo-advisor that uses software to create a diversified, low-cost portfolio based on the user's risk tolerance. It's known for its Path tool, which provides detailed advice about saving and investing for different life goals.

Pros:

  • Path tool provides personalized advice

  • Daily tax-loss harvesting

  • Automated portfolio rebalancing

Cons:

  • No fractional shares

  • No direct stock or ETF investing

  • Limited human support

Wealthfront and M1 Finance both excel in different areas. M1 Finance's fractional shares and direct stock or ETF investing offer more options to investors than Wealthfront. However, Wealthfront's personalized advice through its Path tool is a standout feature not available on M1 Finance. Read our full Wealthfront Review here.


Betterment is a goal-based robo-advisor that tailors portfolios based on the user's financial objectives. It's recognized for its goal-setting tools and human advice packages, where users can pay for financial planning packages on specific topics.

Pros:

  • Goal-based investing

  • No account minimum

  • Access to human advisors

Cons:

  • Higher fees than some competitors

  • Limited investment options

Compared to M1 Finance, Betterment offers the advantage of human advice packages, which could be beneficial for users needing more comprehensive financial planning. However, M1 Finance provides a more cost-effective platform with lower fees and a broader range of investment options. Read our full Betterment Review here.


Final Thoughts of M1 vs the Competition

While each platform has its unique features, M1 Finance offers more freedom and flexibility in its investment options. Its unique pie-based investing model and the option to purchase fractional shares gives users more control over their portfolio. However, for those seeking specialized tools like SigFig's portfolio tracker, Wealthfront's Path tool, or Betterment's human advice packages, the alternatives could be more suitable.



Summary

M1 is another great online investment tool similar to Sigfig, Stash, or Wealthfront. It doubles as an online bank and potentially a borrowing platform. If you feel confident in your ability to pick investments and/or just want to put your investments on auto-pilot, then M1 Finance is a great tool for you.






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