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M1 Finance Review 2024

Updated April 18, 2024
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M1 Finance: Best for

  • Automatic investing
  • Margin loans
  • Customizable portfolios

M1 Finance feels like a mash-up between a broker and a robo-advisor, and it’s a great fit for investors who want to automate much of their investments while maintaining some control over them. You can invest in stocks and exchange-traded funds and build “pies” of your investment selections – and then use M1’s savings account and smart transfers to move money automatically so that you’re always investing. The core service is free, though you can upgrade to a paid service and receive additional features and benefits. But unlike a robo-advisor, you’ll need to design the investment plan yourself, and you’ll have access to plenty of low-cost funds and curated portfolios to do so. For those who are looking to put their investing on auto-pilot, M1 will feel like the perfect setup.

If you’re looking for a fully featured broker, then check out Charles Schwab or Fidelity Investments, regularly high scorers in Bankrate’s reviews, and both offer robo-advisor services, too. If you want to pivot to the robo-advisor side of things, then Wealthfront or Betterment offers a solid choice, too.

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M1 Finance: In the details

Broker logo
Rating: 4.5 stars out of 5
Bankrate Score
Rating: 5 stars out of 5
Investments and Portfolios
Rating: 5 stars out of 5
Account Types
Rating: 4.5 stars out of 5
Features and Tools
Rating: 3.5 stars out of 5
Customer Experience
Rating: 4.5 stars out of 5
About Bankrate Score
Account Minimum
$100 for taxable accounts, $500 for retirement accounts
Management Fee
No cost for trading or commissions, M1 Plus costs $10 a month, or $95 per year
Portfolio Mix
Can choose from preselected portfolios or design your own with any combination of stocks and funds
Fund Expense Ratio
Funds range as low as 0 percent, with a huge selection below 0.10 percent
Account Types
Individual and joint taxable, Roth IRA, traditional IRA, SEP IRA and rollover IRA, custodial account, trust account
Cash Management Account
High-yield savings account for members of M1 Plus
Customer service
Phone Monday through Friday 9 a.m. to 4 p.m. ET, email response within two business days
Tax Strategy
Tax minimization, but no tax-loss harvesting
No automatic rebalancing, but clients can request rebalancing
Stock and ETF screener, news feed, professionally created portfolios
Deposit $50,000 and get a cash bonus of $250.

Pros: Where M1 Finance stands out

Automated investing and investing pies

The real draw for investors at M1 Finance is the ability to set up an automatic investing plan and then have it run the way you want. It’s like having your broker run your financial plan on your behalf, and you can kick back and do something you find much more meaningful. It may be a great choice for those who want to build their own custom portfolio and then let it ride. 

Unlike a robo-advisor, which builds a portfolio for you, M1 Finance lets you select what you want to invest in. You create a “pie” – think pie chart – with the investments that you want. Your pies can consist of thousands of stocks or ETFs available on the platform, and you can weigh the slices in your pie however you like. You can create multiple pies for different strategies even. It’s useful to know what you want to invest in because you’re basically on the spot to pick your slices. That is, unlike traditional robo-advisors, you have to manage the account yourself. 

If that’s a bit too daunting, you can select from professionally created pies. Turn to a general investing pie, for example, and select one that fits your risk tolerance (conservative, moderate, aggressive and others). M1 helpfully shows the returns of these pies (over the last one, three and five years), shows the funds that comprise the pie and explains what the specific pie hopes to achieve. So even newer investors can select a pie that fits their needs. These general investing pies are typically constructed with funds from Vanguard, so they’re low-cost. 

You’ll also be able to select from expert pies that include socially responsible investing, dividend and income portfolios, a basic stock-and-bond blended portfolio, a target-date portfolio for retirement planners and pies that mimic popular hedge funds, among many others. In each case, you’ll see the longer-term returns of the pies and their objectives, helping you gauge your selections. 

Once you’ve selected what you want to invest in, you can set up auto-invest and buy your pies automatically. If you want to buy individual stocks or funds in your portfolio, you can turn off auto-invest at any point and simply buy any stock or fund that’s in one of your pies. 

In order to reduce its costs, M1 places trades during a “trade window” each day. The morning trade window begins at 9:30 a.m., so you’ll need to have your order in before that to have it executed that trading day. You may also have access to an afternoon window starting at 3 p.m. if you’re a member of the M1 Plus program (more below).

M1 Plus

While anyone can sign up and access M1 Finance’s standard plan for free, the broker really packs in the extra features with what it calls M1 Plus, its upgraded plan at $10 a month, or $95 a year. (However, you may be able to get free months of M1 Plus when you sign up for the program.)

Here’s what that annual fee buys you: 

  • An extra afternoon trade window (in addition to the morning window)
  • Custodial accounts
  • Smart transfers (more below)
  • Margin loans at a discounted rate
  • Credit card with tiered cash-back rewards of up to 10 percent
  • Cryptocurrency trading
  • A high-yield savings account with very competitive rates (new in 2023)

M1 unveiled its high-yield savings account, allowing you to earn competitive interest rates if you’re a member of M1 Plus, though it’s not open quite yet. You’ll get up to $5 million in FDIC coverage for an individual account or $10 million in a joint account, meaning you’re fully protected up to those limits. Even if you’re not a member of M1 Plus, you can still earn interest on the account, though it won’t be nearly as much. It’s a great addition to the features on offer at M1. 

Depending on how you actually use your account, that extra fee may be worth it for you. But some of the top players such as Wealthfront and Betterment offer good rates on their cash management accounts without having to pay an annual fee of any kind. 

Low costs and low account minimum

It won’t take a lot to get started investing at M1. You’ll need $100 in a taxable account or $500 in a retirement account to get going. And M1 Finance allows you to buy fractional shares, so you’ll be able to get fully invested with your money.

You’ll get all the core features in the standard plan with no commission or trading expense. However, if you’ve invested in funds, you’ll still have to pay the fund’s management expenses.

Smart transfers

Smart transfers are M1’s way to help you automate your financial life. You can set rules and allow your account to act automatically. For example, you can set smart transfers to keep a minimum balance in your high-yield savings account and move the rest of your money over to invest.

You could set up your account to take out a margin loan if your cash account drops too low, or you could move cash to several different accounts, a taxable account and an IRA, say. You can also set them up to move money from one savings goal to another. The point is, you’re able to automate so much of your financial life that you won’t even need to think about it anymore.

It’s a cool feature, for sure, and rivals such as Wealthfront have rolled out similar features. But if there’s a downside, it’s that you have to be a member of M1 Plus to avail yourself of this perk.

Margin loans

M1 Finance offers the ability to access a margin loan, and it’s what the robo-advisor calls M1 Borrow. When interest rates were lower, M1 passed that on to clients with crazy low margin rates, but now that rates have risen sharply, margin rates are less attractive but still compare favorably to those of rivals. 

In its basic plan, the broker adds a markup to short-term interest rates, giving it one of the lowest margin rates in the industry. But if you’re part of M1 Plus, the robo-advisor drops its markup by 1.5 percentage points. That’s hard to beat these days. Remember, the total margin rate will fluctuate as the Federal Reserve adjusts interest rates.

And you won’t need $25,000 (as you would at Wealthfront) to access a margin loan. At M1, you’ll need just $2,000 to take out a margin loan, and you’ll be able to tap the account for up to 40 percent of your account’s value. This line of credit is available in taxable accounts. 

Like other margin loans, M1’s margin loan has no fixed repayment schedule, and as long as you have an outstanding balance you’ll accrue interest expenses. However, if your account value declines, you may be on the hook to replace the borrowed money, depending on the equity in your account and how much you’ve borrowed. Again, this is standard for margin loans. 

So this feature allows you to remain invested and be able to tap your funds, when needed, at a low interest rate. If you’re thinking about going with a broker instead, Interactive Brokers offers a low margin loan rate without having to buy into a specific plan, like M1 Plus. 

Is the extra fee for M1 Plus worth it for the interest savings? While the annual fee of $95 does get you some other perks, let’s assume the lower cost of margin is what you’re really after. You’ll start to break even on margin expenses with an average outstanding margin balance of $6,333 over the course of a year. In other words, you’d need an account of nearly $15,833 at max leverage to break even. 

But M1 Plus does get you some other features, as mentioned above, that may draw you in.

Cons: Where M1 Finance could improve

No advisory services or financial planning

While this review has spent a lot of time discussing how M1 Finance is like a robo-advisor, it’s necessary to mention that it is not a robo-advisor, nor does it employ financial advisors to work with clients. In this regard, it’s more like a traditional broker. And that means it doesn’t offer real financial planning to help you meet goals, for example. It lets you mimic professional portfolios or helps you design your own, but planning how your money fits into your life is up to you.

If planning is important to you, check out Betterment or Schwab Intelligent Portfolios, both of which offer robust services. They also offer access to human advisors, though it costs more than the standard service.

No tax-loss harvesting

M1 Finance does not offer tax-loss harvesting on its accounts, which is too bad, since so much of the rest of the account feels automated. Tax-loss harvesting involves selling losing investments to help offset any gains and reduce your overall taxes. It’s a standard feature among the top robo-advisors, and both Wealthfront and Betterment offer versions of it. 

What M1 Finance does offer, however, is what it calls tax minimization. This process involves reducing your tax burden by categorizing your investments by their tax effects and then, when you sell a specific stock or ETF, prioritizing those that minimize your tax burden. It’s not tax-loss harvesting, but it can reduce your taxes at the margin. 

High-yield savings account

The high-yield savings account here – what the company calls M1 Earn – is nothing special, particularly when put side-by-side with cash accounts offered at robo-advisors. M1 shut down its checking account in late 2023 and the remaining high-yield savings account requires a subscription to M1 Plus to get the advertised high yield, or you’ll receive a lower rate.

In contrast, rivals offer checking and savings features for all clients without any incremental monthly fees.

So the higher yield alone won’t justify the fee for M1 Plus, especially as rivals charge little or nothing for similarly robust cash accounts, but add this feature to the other benefits of M1 Plus and it could well be worth it, especially since you’re not shelling out for any management fees here.

Review methodology

Bankrate evaluates brokers and robo-advisors on factors that matter to individual investors, including commissions, account fees, available securities, trading platforms, research and many more. After weighting these objective measures according to their importance, we then systematically score the brokers and robo-advisors and scale the data to ensure that you are seeing the top options among a field of high-quality companies. Read our full methodology.