M1 Finance provides an exceptional mixture of automated investing with a high level of customization, enabling customers to create a portfolio tailored to their exact specifications. It is not, even so, an advisory service. The firm now has much more than $2 billion in assets under management and more than 500,000 customers. M1 Finance is our top selection for low costs as it does not charge any portfolio management or trading fees, or any charges for deposits or withdrawals to a connected bank account.
New & Notable
- M1 Spend, an integrated digital bank along with its investment service, sweeps your excess money into an account that includes a debit card that earns 1% cashback on purchases.
- M1 Borrow, a portfolio line of credit available to clients with more than $10,000 of marginable securities in their accounts, charges 3.5% interest. You can set up a payback schedule on the app or site.
- M1 Plus, a subscription service that charges $125/year, allows members to earn 1% interest on their cash balances. M1 Plus also drops the interest charged for loans to 2%. There are frequent discounts on M1 Plus that are worth looking for.
- Smart Transfers, available to M1 Plus members, lets you set a cash threshold in your M1 Spend account. Any amount more than that threshold gets transferred into an Invest account, according to rules defined by the user.
What to expect
A user can create portfolios containing low-cost ETFs or use individual stocks or both in the same. M1 Finance offers low-cost alternatives that allow fractional share transactions and control over these portfolio contents.
For the new users, it is pretty easy and simple to sign up for the M1 Finance account. All the user needs to do is to enter the email address and choose the password, just after this the user will get a pie-building feature where the user can create the pie or choose the made up of ETFs or individual stocks. For help, there are tutorials on the website alongside to guide how the website works.
M1 Finance is also expanding to offer a digital bank along with its investment service. They are also looking forward to launching a service that will sweep your excess cash into a paying 1.5% per year, it includes a debit card that earns 1% cashback on various purchases. The service will be named M1 Spend.
The M1 Standard limited to long-term users. If the user is looking forward to investing in long-term usage then the user will get decent cashback. That’s one of the reasons to go with M1 finance. There are better-paying places to park your funds, also there is a no-fee savings account or a user investment portfolio
Few of the professional pies available for the user are:
- General investing:The user can set this one up to reflect your risk tolerance and create a diversified portfolio to protect yourself
- Plan for retirement: This pie is just for the target retirement date
- Responsible investing: If you are a responsible investor then only you need this pie
- Income earnings: This pie only works for dividends and income returns
- Hedge fund followers: This one follows the strategies of reputable and acclaimed investors
- Industries and sectors: This option lets you invest in certain industries that interest only the user
They offer you Individual, joint accounts, ITAs and trust accounts.
A user can also set up automatic deposits in part of the initial account setup, which you can edit anytime. Margin loans are allowed and M1 Borrow service lets you borrow up to 35% of the account value at a 4.00% interest for non-investing purposes.
Fees and charges
M1 Finance does not charge for trading fees. Well, that’s a piece of good news for the user that they don’t need to pay for the custom pies. There is one thing they charge for, that is the termination costs.
Also, there are two versions of spend that you can choose, the free one is M1 Standard and M1 Plus which comes with an annual charge of $100 fee for the first year and $125 per year thereafter. There is also an inactivity fee if the user stays offline for more than 180 days, the platform penalizes a user with $20 for the same. (Image credit: M1 Finance)
Customer support is one of the important features of any trading platform. Here you can sort yourself from the issues that you may face during trading. From their Support Center you can go through manage account, transfers, invest, invest and borrow specific queries. Users from across the globe can sign up for trading on M1 Finance.
Solo Investors get the benefits from both of the worlds. The user can customize the portfolio and invest in any stocks and ETFs s/he wishes. M1 Finance will manage the same for the user. For the medium experienced investors, the company does not provide any advice or recommendations. This service is recommended for experienced users. For the long-term investors, M1 Finance allows trading only once a day.
Is M1 Finance a Good Fit for You?
Experienced investors will find a lot to like about M1 Finance, in particular the high level of customization that can go into your portfolio. You can stick to the investments of funds managers and then tailor the portfolios defined to your own specifications.
There are socially accountable portfolios already defined, but you can also create your own if that’s your thing. Basically, M1 is tailor-built to give investors who already know what they want to do in affordable and easier.
M1 isn’t really competing with the robo-advisories trying to scoop up starting investors and it does not pretend to. Instead, M1 is competing against the online brokerages where experienced individual investors usually end up. You won’t be walked through goal setting, you are responsible for understanding your personal risk tolerance and you should probably understand how stocks, ETFs, and markets work before you jump in. If you are ready for that level of responsibility, then M1 is offering you a high level of control over your portfolio along with powerful automation to manage it at a very affordable price tag.
- You can trade fractional shares
- No trading fees or asset management fees
- Flexible portfolio building
- Illustrates dashboard
- Individual stock/ETF orders
- Transaction timing out of your control.
- Inactive/less active accounts are charged a fee
- There is no online chat capability
- M1 does not employ any financial advisors
- You cannot consolidate external accounts