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M1 vs Robinhood: Comparing Two Popular Investment Platforms

M1 vs Robinhood
M1 vs Robinhood


M1 Finance


Commission-Free Trading



Fractional Shares



Options Trading



Automatic Investing



Cryptocurrency Trading



Tax-Efficient Strategies



Customizable Portfolios



Professional Research



Social Trading Features



*Available with Robinhood Gold subscription

Introduction: M1 vs Robinhood

In the current financial landscape, selecting the right investment platform plays a crucial role in how you manage your wealth. Among the numerous options available, M1 Finance and Robinhood have emerged as two popular choices. This comparison aims to provide an in-depth analysis of both platforms, highlighting their features, strengths, and weaknesses, to help you decide between M1vs Robinhood.

Importance of choosing the right investment platform

Selecting a suitable platform isn't merely about fees or popular trends; it's about finding a brokerage or robo-advisor that aligns with your financial goals and investment strategies. From long-term investing to short-term trading, retirement planning to speculative ventures, the right platform can make all the difference.

Overview of M1 and Robinhood

On one hand, we have M1 Finance, a platform that combines the automation of robo-advisors with the flexibility of a brokerage. It is ideal for investors who value portfolio customization, automatic investing, and tax-efficient strategies. On the other hand, Robinhood, popular for its commission-free trading, provides an intuitive interface for investors, making it a go-to choice for beginners and those interested in fractional shares or even cryptocurrency trading.

In this article, we'll dive into the M1 Finance vs. Robinhood comparison, focusing on aspects relevant for beginners, long-term investors, short-term traders, and those planning for retirement. Each of these platforms has distinct features, and understanding them can help answer the question: "Which is better: M1 Finance or Robinhood?"

Key Takeaway: Your choice of investment platform can significantly impact your investment journey. Both M1 Finance and Robinhood offer unique advantages, but your individual needs and investment goals will determine which one is a better fit for you.

Now, let's take a closer look at each of these platforms.

M1 Finance

Company Background and History

M1 Finance was launched in 2015 with a unique proposition - a blend of a traditional brokerage service and a robo-advisor. Its hybrid model allows investors to build and manage portfolios without the hands-on approach that traditional brokerage accounts usually require.

Key Features and Functionalities

Fractional Share Investing

M1 Finance stands out for its support of fractional share investing. With this feature, investors can purchase a portion of a share, enabling them to diversify their portfolios even with a limited budget.

Dynamic Rebalancing

M1 Finance's dynamic rebalancing helps maintain your target asset allocation. Whenever you deposit or withdraw funds, M1 Finance will allocate these changes to bring your portfolio closer to your desired balance.

Pies and Expert Portfolios

M1's platform uses a pie-based interface where each "slice" represents an asset. You can customize these pies according to your preferences, or use expert pies, pre-built by M1 Finance for different investing goals.

Tax-Efficient Investing

M1's tax minimization strategies prioritize selling assets in a manner that reduces your tax liability. This includes selling assets with losses to offset gains (tax-loss harvesting) or selling securities in a specific order to minimize taxes (tax-lot selling).

Pros of M1 Finance

  1. Customizable Portfolios: M1's pie structure allows for high customization of portfolios according to personal investment goals.

  2. No Commission or Trading Fees: M1 Finance offers commission-free trading, reducing the cost of investing.

  3. Automatic Investing Options: With M1's auto-invest feature, your deposits are automatically allocated to your portfolio based on your preset preferences.

  4. Integration of Banking Services: M1 also provides a checking account and a low-interest loan option, M1 Borrow.

Cons of M1 Finance

  1. Limited Investment Options: M1 Finance primarily focuses on stocks and ETFs, leaving out options, futures, and forex.

  2. No Real-Time Trading: M1 operates on a trading window system, which might not appeal to active traders who need real-time execution.

  3. Minimal Research Tools and Educational Resources: Compared to some competitors, M1 Finance's platform provides limited research tools and educational resources.

To summarize, M1 Finance combines the best of robo-advisors and brokerages, offering a unique platform for investors interested in automatic and tax-efficient investing. Its cons include limited investment options and a lack of real-time trading.


Company Background and History

Launched in 2013, Robinhood aimed to democratize finance for everyone. They introduced mobile-based, commission-free trading, a model that shook the traditional fee-based structures of most brokerages. Their intuitive platform appealed to a new generation of investors, making them a popular choice, especially among younger, tech-savvy traders.

Key Features and Functionalities

Commission-Free Trading

Robinhood became popular for its commission-free trades, which includes stocks, ETFs, options, and even cryptocurrencies. This feature allows investors to keep more of their investment returns.

Robinhood Gold Subscription

For a monthly fee, Robinhood Gold users get access to premium features such as professional research reports, margin trading, and larger instant deposits.

Fractional Shares and Options Trading

Like M1 Finance, Robinhood also allows fractional share investing. Additionally, they provide options trading, enabling investors to speculate on stock price movements or hedge their portfolio risk.

Cryptocurrency Trading

Robinhood stands out by offering cryptocurrency trading. Investors can buy and sell popular cryptocurrencies like Bitcoin and Ethereum directly from the Robinhood app.

Pros of Robinhood

  1. User-Friendly Interface: Robinhood's platform is designed to be intuitive, making it easy for beginners to start investing.

  2. Wide Range of Investment Options: Apart from stocks and ETFs, Robinhood also offers options and cryptocurrency trading.

  3. Accessible to Beginners: With a low barrier to entry and easy-to-understand platform, Robinhood is a popular choice among new investors.

  4. Social Trading Features: Robinhood's social aspect can make trading more interactive and enjoyable for some users.

Cons of Robinhood

  1. Limited Customer Support: Some users have reported difficulty getting timely support from Robinhood's customer service.

  2. Lack of Advanced Trading Features: While Robinhood's simplicity appeals to beginners, it may lack the advanced features that seasoned traders look for.

  3. Potential for Server Outages: Robinhood has faced criticism for its system outages during peak trading times.

  4. Controversies and Regulatory Scrutiny: Robinhood has been involved in various controversies and faced regulatory scrutiny, which might concern some investors.

In summary, Robinhood's strength lies in its intuitive interface and wide range of investment options, making it a solid choice for beginners and those interested in exploring different investment types. However, its customer service and occasional outages may pose challenges for users.

Comparison of M1 vs Robinhood

Pricing and Fees

Both M1 Finance and Robinhood offer commission-free trading, significantly lowering the cost of investing. However, Robinhood offers a premium subscription, Robinhood Gold, that provides additional features at a monthly fee. M1 Finance, on the other hand, does not charge for its automatic investment and rebalancing features.

Investment Options and Products

In terms of investment products, Robinhood offers a wider range, including options and cryptocurrencies. M1 Finance focuses mainly on stocks and ETFs, with an emphasis on creating customizable portfolios, or "pies". While M1 Finance's offerings might be sufficient for long-term investors, Robinhood's additional options might appeal to more speculative traders.

Ease of Use and User Experience

Robinhood shines with its intuitive and user-friendly interface, making it a favorite among beginners. M1 Finance also offers a user-friendly interface, but with a unique pie-based visualization of your portfolio. The latter might take some getting used to, but it provides a clear and straightforward view of your asset allocation.

Research and Educational Resources

Robinhood offers basic educational resources and news updates on its platform, while M1 Finance provides limited research tools and educational resources. For advanced research tools, Robinhood Gold subscribers get access to Morningstar research reports.

Customer Support and Reliability

Customer service appears to be a weak point for both platforms. They rely heavily on email support and online FAQs, with limited options for real-time assistance. On the reliability front, Robinhood has faced criticism for outages during high trading volumes. M1 Finance, with its scheduled trading windows, doesn't have the same real-time trading demands and hasn't faced such issues to the same extent.

Target Audience and Suitability

M1 Finance seems better suited for long-term investors interested in automatic investing, tax efficiency, and portfolio customization. Robinhood, with its simple interface and a wider range of investment options, might be more appealing to beginners or those interested in exploring various trading options, including cryptocurrencies.


Summary of Main Points Discussed

This article provided a comprehensive comparison of M1 Finance and Robinhood, two popular investment platforms. We delved into their backgrounds, key features, pros and cons, and then compared them across various aspects such as pricing, investment options, ease of use, and suitability.

While M1 Finance combines the benefits of a traditional brokerage with a robo-advisor, offering features like automatic investing, dynamic rebalancing, and tax-efficient strategies, Robinhood stands out with its commission-free and user-friendly platform, appealing to beginners and offering a wider range of investment options including options and cryptocurrencies.

Factors to Consider When Choosing Between M1 Finance and Robinhood

When deciding between M1 Finance vs. Robinhood, the choice will largely depend on your individual needs and goals. If you're interested in long-term investing with a hands-off approach, the automatic investing and customization offered by M1 Finance could be a great fit.

On the other hand, if you're a beginner or looking to explore a wider range of investment options, Robinhood's easy-to-use interface and additional trading options might appeal to you. Its social trading features also make investing interactive and potentially more enjoyable.

Final Thoughts

In the end, the choice between M1 Finance and Robinhood boils down to your personal investment style, preferences, and goals. There's no one-size-fits-all answer to the question, "Which is better: M1 Finance or Robinhood?"

Both platforms offer compelling features, and both have their limitations. It's essential to understand what you want from an investment platform and choose one that best aligns with your needs.

Remember: The best investment platform is one that matches your investment goals, suits your investing style, and ultimately helps you build your financial future. Take your time to explore and choose wisely.
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