M1 Finance is an online investing platform that combines robo-advisor functionality with certain features more typically found on conventional broker platforms. This makes M1 Finance a somewhat unique product: It offers curated investment portfolios for different goals and risk tolerances, together with the ability to build your own investment portfolios.
No matter which way you choose to compile your investments, M1 Finance lands squarely in the robo-advisor camp, as it manages them for you automatically and handles all the necessary rebalancing. M1 offers taxable, trust and retirement accounts, and users can open up to five accounts under one login. Best of all, M1 charges no annual management fees.
M1 Finance refers to investment portfolios as ‚Äúpies,‚ÄĚ and the different stocks and ETFs added to each portfolio ‚Äúpie‚ÄĚ as ‚Äúslices,‚ÄĚ which you may find either charming or goofy. When you sign up with M1 and choose your first pie ‚ÄĒ one designed by M1, one with ‚Äúslices‚ÄĚ you‚Äôve selected yourself, or a mix of the two ‚ÄĒ the platform shows you how it would have performed over the last 10 years (this is called a ‚Äúbacktest‚ÄĚ in the professional investing world).
After establishing a portfolio ‚Äúpie,‚ÄĚ you complete a quick series of questions about yourself, including income, net worth, liquidity, and investment time horizon. M1 then asks you to link up a bank account to fund your investments. Once linked, you can fund your first pie, and may choose more portfolio pies.
If you decide to build your own portfolio pies, you can choose from more than 4,000 individual stocks and more than 1,900 ETFs. Each pie can hold up to 100 slices. M1 requires a minimum balance of just $100, and charges no fees to manage your portfolios. M1 makes its money from interest on cash deposits, interest on margin loans, and through the annual fee on their optional M1 Plus membership, among other things.
For users who want the platform to choose investments for them, M1 Finance offers curated pies, from target retirement portfolios (sorted by conservative to aggressive) to socially responsible investing portfolios. There‚Äôs even a ‚ÄúCannabis Pie‚ÄĚ that offers exposure to publicly traded cannabis producing, manufacturing and distributing companies.
M1 Finance has features that would appeal to both journeymen and more experienced investors. The latter will like the build-your-own portfolio option, while all users will appreciate curated portfolios based on things like your target retirement date or your desired mix of stocks and bonds. If you feel comfortable choosing your investment approach, you can set up automatic investments that will fund your account over time.
For true beginners, the M1 platform might be a little too DIY. Although you can choose from the site‚Äôs pre-selected investment mixes, there are no recommendations based on your time horizon or other measures ‚ÄĒ you‚Äôre on your own to select one. If you need help, there are no advisors available, as with some other robo-advisors ‚ÄĒ you must submit a support request via contact form.
Current M1 clients get $25 off their first year of M1 Plus, M1's premium product.
|Stock trading fees||
|Amount minimum to open account|
|Account fees (annual, transfer, inactivity)||
|Commission-free ETFs offered|
|Mutual funds (no transaction fee) offered|
|Offers automated portfolio/robo-advisor|
|Mobile app||iOS, Android|
|Customer support||Phone, Email|
M1 Finance has all of the typical protections in place. It is a registered broker/dealer with the Financial Industry Regulatory Authority (FINRA), a member of the Securities Investor Protection Corporation (SIPC) and carry SIPC insurance that protects against the loss of cash and securities held by a customer up to $500,000. They also have supplemental SIPC insurance, and M1 Spend and M1 Plus accounts are FDIC insured up to $250,000.
M1 has also taken measures to protect personal information. Your data is never stored on any device, and all information is encrypted in transit and at rest. The connection to your bank is managed via an electronic key ‚ÄĒ M1 doesn‚Äôt store your bank credentials.
M1 Finance offers features that will appeal to both experienced and beginner investors, from highly customizable portfolios to pre-set investment mixes that users can set on auto-pilot. Although there‚Äôs not much guidance on the site, users can open an IRA, choose a target date retirement mix, set up automatic investments and they‚Äôre set ‚ÄĒ or they can fill a portfolio with 100 individual stocks and ETFs of their choosing. With no management or trading fees, users are paying just the expenses on the investments themselves, and you can invest as little as $10 at a time. Compared to other robo-advisors charging higher fees and offering fewer investment options, there‚Äôs a lot to like here.
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