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M1 Finance Review – How Does This Robo-Advisor Stack Up?

By Dave

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M1Finance Review

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M1 Finance Review

  • Commissions and Fees
  • Ease of Use
  • Investment Options
  • Performance
  • Support


A good robo-advisor could make a huge difference when it comes to stock trading. M1Finance could be that good robo-advisor you’ve been looking for. With loads of features that allow you to take your portfolio into your own hands, M1Finance’s popularity is only growing.

About M1 Finance

M1 Finance is a unique robo-advisory and brokerage platform that enables investors to take a larger role in the construction and management of their investment portfolios. M1 Finance offers the best of both worlds when it comes to online investing. It has the flexibility and customization of a traditional online broker and the ease-of-use/simplicity of a robo-advisor. The platform also includes tools for saving and borrowing money.

For the purpose of our review, we will be focusing primarily on the M1 Invest component of the service.

Is this service worth your time? Keep reading our M1 Finance review to find out.


If you’re going to trust a company with your capital, you probably want to know a bit about them. Let’s take a quick look at M1 Finance’s history before diving into the features.

M1 Finance was launched by Brian Barnes out of Chicago, IL. His goal was to create a platform that would empower self-directed investors frustrated with the lack of accountability on Wall Street. He believed that retail investors were constantly mislead and overcharged for transactions.

Barnes references the book “Where Are The Customers’ Yachts” which points out that the brokerage industry works and thrives consistently regardless of how well clients make out. The 2008 financial meltdown was the turning point where Barnes’ disillusionment drove him to roll out an automated investment platform as a tool for investors to take control of their financial destiny powered by cutting-edge algorithmic innovations that would handle the tedious legwork and enable investors to stay invested.

To date, the company has over 500,000 clients and over $2 billion in assets under management.

M1 FInance Platform

How M1 Finance Works

M1 Finance is essentially a combination of a robo-advisor, a traditional broker, and a completely new service altogether.

The platform is built around the concept of “pies” which represent baskets of stocks and ETFs. Essentially, a pie is your portfolio. You can choose which stocks and ETFs you’d like to include and set whatever portfolio allocation you’d like. For example, you may choose to put 25% of your portfolio in an S&P 500 ETF, 25% in Apple stock, 25% in a bond ETF, and 25% in Amazon. Once you fund your M1 Finance account, the company will build your portfolio. In the example above, if you deposited $1,000, your portfolio would consist of $250 worth of each of the stocks and ETFs in your “pie.” You do not need to have enough capital to purchase full shares of any stock or ETF, as the platform allows you to buy fractional shares.

M1 Finance Pies 2

Investors can choose to auto-invest as well as set-up a funding schedule. Auto-dividend re-investment and auto re-balancing are also available.

We’re going to discuss some of the best use cases later in our review, but for now let’s cover some more of the basics.

Account Requirements

M1 Finance is only available for U.S. residents of at least 18-years of age. The minimum starting balance for a brokerage account is $100. It’s easy to open an account and navigate the platform.

M1 Invest supports investing accounts for:

  • Individual Investing
  • Joint Investing
  • Retirement Accounts (Traditional IRA, Roth IRA, or SEP IRA0
  • Trust Accounts

You can also open an “M1 Spend” account which is a high-interest bank account.

M1 Finance Fees and Pricing

M1 Finance is free to use. There are no management fees and trades are commission-free. 

I appreciated that the company’s CEO Brian Barnes went out of his way to write a blog post about how the company makes money. As most diligent traders and investors know, the term “free” usually comes with a catch and many investors were surprised to learn how companies like Robinhood make money. While M1 Finance follows the same practices as most brokers, their transparency is refreshing.

How Does M1 Finance Make Money?

The company makes its money from interest on cash, lending securities, lending money, payment for order flow, and membership fees. Realistically, none of these should have noticeable impacts on the casual investors who the app was designed for.

M1 Plus Membership

While M1 is free to use, the company also has a premium plan for users who need more out of the platform.

The M1 Plus premium membership costs $125-per year. An M1 Plus Account comes with a few benefits, but the most worthwhile ones include:

  • The higher interest rate in a checking account
  • Lower borrow rate
  • Additional trading windows

While there are some other perks, those are the three that best justify the annual fee.

M1 vs M1 Plus

Indirect Fees

To conclude our pricing section, we will discuss some of the indirect fees you may incur. These fees are related to the assets you trade, NOT the broker you use. You would incur these fees at any stock broker or robo-advisor.

For investors opting to include ETFs in their pies, keep in mind these carry separate management fees aka expense ratios. Passive domestic and global benchmark ETFs tend to carrier annual expense ratios ranging from 0.04%-to-0.25%. 

M1 Finance Platform

M1 Finance can be accessed online and through a mobile app that is available Android or iOS. Both the website and the mobile app are very easy to use.

The platform is very basic as you would expect for a service that is focused on simplicity. This type of platform is ideal for traders and investors who prefer ease-of-use to advanced functionality.

It should go without say that this service is for investing, not active trading. If you are an active trader, you should be using a traditional broker.

M1 offers a simple, easy-to-use platform that is fast, clean, and efficient.

M1 Finance Stock Research

M1 Finance Research Tools

M1 Finance is a do-it-yourself platform that enables investors to do basic research on the underlying stocks. However, there’s limited depth in terms of charting or detailed research reports. Self-directed investors will have to do their own homework to generate their own insights and rationale for investments. That said, that’s pretty much the purpose of M1 Finance. It appears that the company’s goal is to make investing simpler for casual investors. 

M1 Finance does have a Blog with compelling articles relating to personal finance and investing.

M1 Finance Pies and Portfolios

We’ve discussed the account requirements, pricing, and platform interface so far. Now it’s time for the most exciting part of the review. We’re going to look at the best ways to use the platform.

If you’re considering using M1, it’s probably so you can build a strong investment portfolio. This is where the service really shines. As mentioned earlier, M1 Finance is the perfect blend of robo-advisor and traditional stock broker. You can have as much or as little control over your portfolio as you’d like. Here’s what I mean.

Most robo-advisors sacrifice customization for simplicity. When you create a portfolio, you usually choose a risk threshold and the advisor automatically build a portfolio for you. There’s very little room for customization. For example, if you wanted to add Amazon stock to your portfolio, that’s not going to happen. Robo-advisors don’t allow customizable portfolios at that level.

With M1 Finance, customization is not a problem. You can create your portfolio however you’d like. If you want to select individual stocks, you can. If you want to diversify with ETFs, you can.

M1 Finance Custom Pie

If you prefer the simplicity of a traditional robo-advisor, you can take advantage of pre-built portfolios designed to meet your investing goals.

Let’s go over a few of the best use cases.

Use M1 Finance as a Robo-Advisor

Some investors prefer simplicity. They don’t want to choose stocks and actively manage a portfolio.

If this is how you approach investing, you can choose from pre-built portfolios on the platform. These portfolios can be customized to your personal investing goals. Examples include:

  • Retirement
  • Socially Responsible Investing
  • Dividend Income Portfolios
  • Hedge Fund “Copy Cat” Portfolios
  • And more

There are nearly 100 different portfolios to choose from. Investors have a choice every step of the way. 

Here are some of the categories:

M1 Finance Expert Pies

Within each category there are a range of different pre-built pies. You can track the performance of each pie and assess the risk level. Here is an example of the pies in the “Hedge Fund Followers” category:

Hedge Fund Followers Portfolios

M1 Finance has some of the most diverse portfolios you will find from any robo advisory service. Unlike other services, these portfolios are not limited solely to ETFs. Investors can build a portfolio using both ETF’s and stocks. M1 Finance does a good job of creating even splits by selling fractional shares.

Unlike competing robo-advisors, there are no portfolio management fees or trading fees.

M1 Finance Custom Pie

Use M1 Finance to Build a Traditional Stock Portfolio

M1 Finance can also be used to build a portfolio similar to the ones you’d build at a traditional broker like Etrade or Webull. DIY investors can choose their own stocks and start building a portfolio. That said, there is one key difference.

When you buy stocks at a broker like Etrade, you purchase shares of different companies do build your portfolio. You have to buy at least one share of each company, which can make expensive stocks inaccessible to investors with smaller accounts. For example, at the time of writing, Amazon is priced at over $3,000/share. If you have less than $3,000, you cannot purchase the stock. Even if you have a bigger portfolio, a single share of Amazon is likely to account for a large percentage of your portfolio.

At M1 Finance, you have more control. You choose which stocks you’d like to buy and what percentage of your portfolio you’d like to allocate to each stock. For example, I may create a portfolio that looks something like this:

  • 20% AMZN
  • 20% AAPL
  • 20% WMT
  • 10% NFLX
  • 10% SHOP
  • 10% DIS
  • 10% SPY

These are all expensive stocks, but M1 would allow me to buy a stake in all of them. They do this through the use of fractional shares. For example, if I deposited $1,000 in a portfolio with a 20% AMZN allocation, I would be buying $200 worth of Amazon. This represents less than 10% of a share but it would allow me to take advantage of the company’s growth without the steep barrier of the high share price.

This has two clear advantages when compared to traditional brokerage accounts.

First, it allows investors with smaller accounts to buy any stocks they like. You no longer need a couple grand to become an Amazon shareholder.

Second, the fractional shares allow for an impressive level of diversification You could literally split your portfolio across hundreds of stocks and ETF’s, regardless of your portfolio size. This leads to our last M1 Finance use case (and possibly the most exciting).

M1Finance Prebuilt Pie Charts

Build Your Own Fund With M1 Finance

We just talked about how M1 Finance can be used to diversify a portfolio. This is great for any investor but I found that it unlocked an entirely new application of the service.

M1 Finance essentially allows you to create your own mutual fund. Mutual funds and ETFs are managed investment products that are comprised of a variety of assets. For example, the ticker “SPY” is the S&P 500 ETF. This ETF consists of all of the stocks in the S&P 500. Purchasing this ETF is a great way to diversify, but what if you don’t want all 500 stocks in the S&P 500. Surely there are some companies you don’t have any interest in.

With M1 Finance you can build your own mutual fund. You can customize it to your liking and avoid the management fees associated with regular mutual funds.

Build an Investment Portfolio

This is actually the main reason I use M1 Finance and I’ve continued to move more money over regularly. I built my own personal “fund” consisting of 100 stocks (there is a 100 stock limit). 100 stocks may seem like overkill and for some investors it will be. That said, you’d be surprised how easy it is to find 100 good companies that you may want to invest in.

I combined stocks that I discovered through Motley Fool’s Stock Advisor, Everlasting Portfolio, and Augmented Reality services. I also did my own research to find dividend stocks for passive income, tech stocks I liked, growth stocks, and more.

I built separate pies for different strategies and then balanced the pies in my portfolio.

I allocated a large percentage of the portfolio to top-performing stocks.

M1 Finance Portfolio

I allocated a small percentage of the portfolio to stocks that may be considered undervalued after taking a big drop in 2020.

M1 Finance Pie

The best part is that I am able to manage all of these strategies in one simple portfolio.

If I were to take this approach at Etrade (where I have other accounts), it would be way too difficult to manage. Not only would I have to place hundreds of orders, but I would also have to manually keep track of asset allocation. It would also be more expensive since I’d have to buy at least one share of each stock.

With M1 Finance, I simply do some stock research, build out my pies and balance my portfolio to my liking.

M1 Finance Performance

We’ve covered a lot of ground so far. Now, let’s talk about how well M1 Finance performs.

Depending on the portfolio composition, performance will vary greatly between individual investors due to the customization. M1 Finance expert portfolios incorporate the principles of Modern Portfolio Theory and manage to diversify investments with stocks and funds when applicable to the theme of the portfolio.

The performance of M1 Finance portfolios can’t be analyzed the same way we analyze the performance of other robo-advisors since the platform offers so much customization.  Users have the ability to build their own unique portfolios, meaning the performance is attributed to the user instead of M1 Finance.

For example, I could create a portfolio consisting of stock in Apple, Amazon, Snapchat, Facebook, Twitter, Google, and Adobe. M1 will facilitate this but that doesn’t mean they endorse it. If the portfolio doubles in the next year, the accolade is mine. If the portfolio loses money, I am also responsible.

Of course, M1 Finance also offers an impressive selection of pre-built portfolios. Most of these are more unique than the risk-based portfolios offered by competing firms. For example, with a single click, you could invest in a portfolio that mirrors Warren Buffett’s Berkshire Hathaway portfolio. You could also invest in a portfolio consisting of 50% bonds and 50% stocks if you wanted to balance potential risk and return.

Here’s a look at the five-year performance of a few of M1’s pre-built portfolios:

General Investing Portfolios
Responsible Investing Portfolios
Hedge Fund Portfolios

The company offers a broad range of high-performing portfolios that are unrivaled by most competing firms.

Additional M1 Finance Features

M1 Finance “pies” are the star of the investing platform, but there are a few other interesting features.


When individual assets exceed the selected target allocation percentages, M1 Finance will reduce the position by selling shares and buying shares of stocks or assets that are underweighted.  It will sell-off overweight slices and buy underweight slices. Fractional shares enable precision rebalancing.


M1 Finance will auto-invest funds whenever the cash balance surpasses the $10 threshold. Users can opt to increase or decrease that level. Here’s where the benefits of automation shine as human investors can get emotional or lazy if they must be reminded (or persuaded) to invest weekly. The platform enables investing schedules that are completely customizable and automated.

M1 Finance Auto Invest Settings


When withdrawing assets, M1 Finance will sell positions that are overweight past threshold ranges with no taxable gains first then sell stocks with long-term then short-term capital gains to minimize the tax liability. 

While many other robo-advisors offer tax loss harvesting, M1 Finance does not. To be honest, it wouldn’t really make sense since the portfolios are not entirely managed. Robo-advisors are able to use tax loss harvesting because they have full control over your portfolio. With M1 Finance, you are in control of your portfolio and it wouldn’t really make sense for the company to start selling off your individual stocks just to save on taxes.

M1 Borrow: Portfolio Line-of-Credit Borrowing

M1 Finance outfits investors with taxable accounts over $25,000 with M1 Borrow portfolio line-of-credit. M1 Borrow enables investors to borrow up to 35% of the value of their portfolio at significantly low rates typically below 4% interest. There’s not paperwork or applications to fill out, it’s just a matter of clicking a few tabs.

M1 Spend

M1 Spend is an online checking account with no account minimum or minimum balance requirement. The service is similar to other online-only banks. You can access your account online, order a debit card, and take money out at ATMs. M1 Spend accounts are FDIC insured up to $250,000.

The checking account is most beneficial to a very specific type of investor.

First off, you need to be paying for an M1 Plus account if you want to get a reasonable interest rate. Basic accounts get 0% APY whereas M1 Plus members get 1% APY. Without the higher interest rate, there’s very little reason to use an M1 Spend account.

That said, if you do have an M1 Plus account, the interest rate is very compelling. It’s actually one of the highest (if not the highest) rates at the moment. While 1% won’t move the needle for smaller accounts, it can result in considerable returns for bigger accounts (i.e. earn $1,000/year on every $100,000 you deposit).

You can also get 1% cash back on debit purchase (although there are many credit cards that offer similar cash back incentives).

Key Differentiators

M1 Finance is one of the most exciting investment platforms we’ve reviewed in awhile.

The platform combines the automation of a robo-brokerage with the flexibility of do-it-yourself participation for self-directed investors. Here are a few of the most exciting features:

  • Pie investing allows you to build any portfolio you can think of
  • Pre-built portfolios are available for those who want automated investing
  • There are zero asset management fees, which saves you a lot of money in the long run (especially compared to other robo-advisors or a financial advisor)
  • There are zero trading fees (i.e. no commissions)
  • There is a broad range of investment options ranging from individual stocks to ETFs
  • There is a low minimum investment ($100 account minimum)
  • You can open different types of investment accounts (Individual accounts, IRA accounts, checking accounts, etc.)
  • There is an easy to use mobile-app


M1 Finance deposits are FDIC-insured up to $250,000 in checking accounts and up to $500,000 on securities as a member of SIPC. Their clearing firm also has additional insurance in the event SIPC limits get exhausted. All data is protected with 4096-bit Military-grade encryption. They also offer two-factor authentication.

As of October 2020, M1 Finance had $2 billion in assets under management. This is up from $500 million in March of 2019 so it’s clear the company is growing rapidly. The service is home to over 500,000 customers.

While AUM and customer count are traditional metrics for gauging the trustworthiness of a company, we think it speaks to the firm’s legitimacy. I would definitely trust a broker with hundreds of thousands of customers and billions in assets more than I would trust a brand new broker.

Customer Service

I was pleasantly surprised by the company’s customer service. I reached out to the company by email and got a response within 10 minutes (this was during market hours). When I reached out via email at night, I had a response waiting in my inbox bright and early the next morning. The customer service agents were both very friendly and accomodating.

Who is M1 Finance Best Suited For?

M1 caters to more experienced and self-directed investors that want to be in control of their investment decisions (investment pies) but desire automation in terms of maintaining and managing the legwork (automatic rebalancing). Enabling commission-free trades and fractional share trading further improves this flexibility and most importantly liquidity.

How Does M1 Finance Compare to Alternatives?

Every diligent investor will compare multiple platforms and investment options. There’s no clear winner because every investor has different needs. Here is how M1 Finance compares to the competition.

M1 Finance vs. Robinhood

Robinhood and M1 Finance are two of the fastest growing investment apps. Robinhood has a head start, but M1 Finance is quickly becoming a recognized leader in the space. So, which one is better?

First things first, it’s not an apples-to-apples comparison. While both apps specialize in simplified investing, they don’t have the exact same functionality. Robinhood is a traditional broker that simply eliminated commission fees. When Robinhood first launched, this was a revolutionary move, however most online brokers removed commission fees in October 2019. That said, Robinhood still does a great job of simplifying investing. Traditional brokerages have complex investment apps and a broad range of features whereas Robinhood sticks with the basics.

M1 Finance is more of an investment tool. While the firm offers many of the features you’d expect from a traditional broker, they also offer features you won’t find at Robinhood. For example, M1 Finance is famous for their investment “pies” which are diversified portfolios. Users can choose a pre-built portfolio or customize their own.

M1 Finance also allows investors to purchase fractional shares of a company, which improves the diversification of a small portfolio. For example, at the time of writing this, Amazon’s stock is priced at about  $1800/share, which may be too expensive for some investors. M1 Finance allows investors to choose how much money they’d like to invest in a particular stock and then allots a fractional share accordingly. If you were to invest $180 in Amazon, you would own 1/10 of a share. Robinhood has plans to launch fractional shares, but the program is not live yet.

While there are a handful of key differences between M1 Finance and Robinhood, you can decide which one is best for you by answering one simple question. How actively do I plan on trading?

If you want to create an investment or retirement portfolio that you check a few times per year, M1 Finance is the clear winner.

If you want to actively manage your portfolio (or trade options), Robinhood may be the better bet.

For a full comparison, check out our M1 Finance vs. Robinhood article.

M1 Finance vs. Betterment

M1 Finance and Betterment are two leaders in the robo-advisory space. If you’re new to the concept of “robo-advisors,” just know that they replace in-person financial advisors with automated strategies. For example, instead of asking your financial advisor to create a retirement portfolio, you would simply select that same objective in the robo-advisory app or website.

Both companies have similar offerings (they both offer automated investing solutions). Betterment is a much larger company, but M1 Finance is growing quickly.

The biggest difference between the two is the level of customization. M1 Finance is far more customizable and offers more features.

When you create an automated investment plan with Betterment, you simply specify your risk level and Betterment will allocate your funds across a few appropriate ETFs.

M1 Finance provides far more customization. First, you can choose from a range of unique, pre-built portfolios. Second, you can build a portfolio of stocks you select individually. Lastly, you can choose to invest in fractional shares.

For example, if you wanted to create a portfolio comprised of shares in Apple, Amazon, Microsoft, Twitter, and Facebook, you could do so at M1 Finance but not at Betterment.

If you want to apply your own custom investment strategy and invest in specific companies, M1 Finance is the better option for you.

If you prefer to keep things as simple as possible, Betterment may be a suitable option.

M1 Finance vs. Acorns

M1 Finance and Acorns are another group of seemingly similar robo-advisors. While M1 Finance is a “full service” robo-advisor, Acorns was built around one key feature – rounding up purchases.

Acorns grew in popularity because they offered away for everyone to get involved in investing. Users could download the Acorns app and have all of their credit/debit card purchases rounded up and put into an investment account. For example, if you bought a coffee for $1.50, you would see a charge of $2 on your credit card, $0.50 of which was added to your Acorns investment account.

Acorns builds portfolios in a way that is similar to Betterment and other robo-advisors. Users can specify their risk thresholds and investment objectives and Acorns will build a portfolio of ETFs. While I’ve been impressed with the performance of my Acorns portfolio, the platform is nowhere near as robust as M1 Finance.

Once again, M1 Finance has features you won’t find in Acorns, such as the ability to choose your pre-built portfolio, customize your portfolio, and invest in specific stocks.

Acorns is best suited for casual “investors” who otherwise wouldn’t think much about investing. If you struggle to put money aside every month, Acorns can automate the process and help you grow your investment portfolio.

If you prefer to have more control over your investments, M1 Finance is the way to go.

M1 Finance vs Vanguard

M1 Finance and Vanguard shouldn’t be directly compared because they are two separate business models. Vanguard creates funds whereas M1 Finance is a robo-advisor that helps people invest in funds. In fact, many robo-advisors will allow customer to invest in funds created by Vanguard.

When comparing the companies, there is one overlap. Both companies specialize in helping investors choose from pre-built portfolios of stocks, bonds, and ETFs.

The process is slightly different, but the end result is similar. Vanguard may create a mutual fund consisting of 100 top dividend stocks, whereas M1 Finance may offer a pre-built “pie” consisting of a similar group of stocks. Vanguard’s mutual fund will have a management fee and commission fee for buying and selling, whereas M1 Finance doesn’t charge a direct fee (although some of the funds invest in ETFs that have management fees). Vanguard funds can be purchased from multiple brokers, whereas M1 Finance funds can only be purchased at M1 Finance. Here is how the fees may look:

  • Vanguard: 0.10% Expense Ratio (Management Fee) + $20 Commission to Buy/Sell Shares
  • M1 Finance: Free

The biggest differentiator is customization. Vanguard only offers pre-built funds (in the form of mutual funds or ETFs). M1 Finance offers customizable funds in which the individual investor can choose the portfolio allocation.

For example, let’s assume you wanted to build a portfolio of tech stocks. Both Vanguard and M1 have options for investing in a pre-built fund of top-performing tech stocks, however only M1 Finance provides the ability to choose your own stocks and allocation. If you wanted a portfolio that consisted of 25% Apple stock, 25% Amazon stock, and 1% of stock in 50 other tech companies, this would be doable through M1 Finance but not Vanguard.

As mentioned earlier, it doesn’t make too much sense to compare these companies directly.

Vanguard offers a great service for investors who want mutual funds and ETFs with low expense ratios.

M1 Finance offers a feature-rich platform for investors who want to customize their portfolios and build advanced automated investment strategies.


  • No fees or commissions for investors (unless M1 Plus member)
  • Fractional shares enable more accurate rebalancing and liquidity
  • Flexible platform enables robotic automation of tedious tasks
  • Impressive 1.25% APR on checking accounts through M1 Plus
  • Best of both worlds: Robo-broker and online broker
  • Customizable portfolios “pies” and nearly 100 expert pies
  • Intuitive and simple interface


  • Too much flexibility is dangerous for new investors
  • No tax-loss harvesting function
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Dave has been a part-time day trader and swing trader since 2011 when he first became obsessed with the markets. He focuses primarily on technical setups and will hold positions anywhere from a few minutes to a few days. Over his trading career, Dave has tried numerous day trading products, brokers, services, and courses. He continues to test and review new day trading services to this day.

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