M1 Finance Review

M1 Finance is an investment and banking service for tech-savvy DIY investors. They encourage long-term investments to build sustainable wealth to carry you into retirement.

In other words, this isn’t a service for day traders or beginners (or at least, not for beginners who don’t fancy a bit of research). In our M1 Finance review, we’ll look at the platform’s features, pros and cons, and pricing to determine who is a good fit.

What is M1 Finance?

M1 Finance lets technologically savvy investors manage their investments and money in the same place. The service offers a variety of benefits and tools for investors, such as:

Self-directed and automated investing
Single and fractional share trading
Borrowing on margin
Investor resources

That said, M1 Finance is built for do-it-yourself investors who don’t need an advisor guiding their decisions. The service combines automation, FAQs and blogs, and “expert” portfolios to point you in the right direction. But at the end of the day, every trade decision is yours to make.

M1 Finance Accounts

M1 Finance offers four accounts to choose from: Invest, Borrow, Custodial, and Spend. Each provides ways to customize your financial journey, although features vary based on whether you use M1 Basic or M1 Plus. (We’ll cover the differences in our pricing section.)

M1 Invest

M1 Invest offers users the choice of four investment accounts:

Individual
Joint
IRA
Trust

Once you’ve chosen your account, you can buy whole or fractional shares of any stocks and ETFs of your choice. Or you can pick one of the site’s 80 “expert portfolios” to model your own investments after if you’re unsure of yourself.

M1 Borrow

If you don’t have enough money in your account to complete a trade, the M1 Borrow margin account has your back – as long as your portfolio is worth at least $5,000. You can borrow funds at 3.5% interest in a basic account or 2% interest with a Plus account.

M1 Custodial Accounts

M1 Finance Plus members can also open a custodial investment account for minors. With this account, you can give your kids and grandkids a head start with a well-funded, diversified portfolio.

Users can deposit and trade funds until the designated user reached the age of majority in their state (usually 18 to 21). After that, the recipient can cash out their account or transfer the securities to an account in their name.

M1 Spend

M1 users can also open a Spend, or checking account, complete with a debit card. The account links with your investment account so you can move money around as needed.

Features and Benefits

M1 Finance offers a host of features and benefits for its users. Let’s take a look at some of the best.

Pie Investing

Pie investing is simple. Each stock or ETF represents one “slice.” The size of each slice shows you how much of your portfolio is comprised of that one security. Then, the outside edge of the pie grows or shrinks based on how much money you pour into your investments.

The goal of pie investing is to provide users with a simple visual chart of their portfolio. When you first sign up, you’re invited to build your first pie by selecting investments and customizing each “slice” as an introduction to the platform. Then, you can save your pie or build a new one later.

And if you’re not confident in your investing skills, M1 offers 80 “expert” portfolios to model your own investments after!

Dynamic Rebalancing

M1 offers automated, dynamic rebalancing to keep your portfolio within your specified limits. By accounting for both your deposits and the price fluctuations of your assets, they can help you reduce drift. You can also rebalance your portfolio manually at any time.

No Trading or Portfolio Management Fees

M1 Finance is one of a few robo-advisor services that charges no trading or portfolio management fees for its basic account. Plus, you don’t have to pay to deposit, move, or withdraw funds.

Investor Resources

M1 Finance is a DIY investment platform. That said, they don’t leave you completely in the dark. With dozens of FAQs and blog articles (not to mention its newsletter), you can brush up on investing and saving tips, retirement strategies, and improving your investment approach.

Clean User Experience

Both M1’s desktop portal and mobile app are designed to be simple, clean, and fully functional. Both guide you through the sign-up and investment process in just a few simple steps. And once you’ve funded your first investment, they provide plenty of dashboards to track your progress and move your money.

Drawbacks

Every service comes with its pros and cons. And if you’re new to investing, M1 Finance’s downsides are doozies.

No Financial Advisors on Board

As a DIY investment service, M1 is sorely lacking when it comes to beginning investor resources. While their blogs and newsletter articles cover the basics, M1 doesn’t offer any advisory services to get you started. Plus, they lack both a beginner’s questionnaire and goal-setting abilities to help you track your progress and risk tolerance.

Customer Service

Unfortunately, M1 also falls behind with its customer service, with only phone and email support available. Even then, many users report receiving subpar service or being directed toward the website’s FAQs for answers. And with no financial consultants on board, all interactions are limited to using the website.

Limited Investment Choices

If you’re interested in diversifying your portfolio beyond stocks and ETFs, you’ll have to look elsewhere – that’s all M1 Finance provides. (Aside from its Spend account, of course.)

Pricing

The basic version of M1 Finance is free for all users. With this account, you’ll get:

Only one daily trade window in your Invest account
3.5% interest rates on borrowed funds
No checking APY
$10,000 daily transaction limit
1% international transaction fees, plus ATM withdrawal fees

But if you’re willing to shell out the $125 per year for M1 Plus, you’ll upgrade to features such as:

Two daily trade windows plus access to automatic transfers
2% interest on borrowed funds
1% APY plus 1% cashback on your Spend account
$50,000 daily transaction limit
No international fees and ATM fee reimbursements