M1 Finance Review


M1 Finance is an online brokerage service mixed with robo-advising, which means you have the freedom either to invest in individual stocks and ETFs or take a more hands-off approach by letting M1 Finance automate the process based on your personal financial goals.

So what is a robo-advisor and how do you use one? How does M1 Finance compare to other available robo-advisors currently on the market? 

Most importantly, is using M1 Finance the right decision for you?

See the answers to all of these questions and more below.

M1 Finance Review
m1 finance logo

Name: M1 Finance

Description: is an online brokerage service mixed with robo-advising, which means you have the freedom either to invest in individual stocks and ETFs or take a more hands-off approach by letting M1 Finance automate the process based on your personal financial goals.

  • Pricing
  • User Experience
  • Investment Options
  • Account Types
  • Accessibility


Used strictly for maximizing portfolio gains in a manner that requires minimal effort, M1 Finance is a phenomenal service that allows the end-user to accomplish this goal in both the short term and long term, all with no commission fees, portfolio management costs, and the ability to buy fractional shares. That being said, brand-new investors may feel out of place and unsure of what to do when it comes to designing a diverse portfolio, as M1 Finance does little to orient its users to the world of investing.


  • No Management Fees
  • No Commission Fees
  • DYI or Expert-Made Portfolio Functionality
  • Invest in Fractional Shares
  • FDIC Insurance


  • Not Beginner Friendly
  • Inability to Invest in Mutual Funds
  • $20 Inactivity Fee
  • No Tax-Loss Harvesting
  • Little Assistance Setting Your Risk Profile

Pros & Cons of M1 Finance

Pros of M1: 

  • No portfolio management fees or commissions 
  • $0 minimum investment 
  • Ability to build your own custom portfolio or select one of the many expert-constructed portfolios 
  • Easy visualization of your portfolio via The Pie 
  • Invest in fractional shares 
  • Automatic portfolio rebalancing and dividend reinvestment 
  • Ability to set up automatic and recurring direct deposits 
  • M1 Spend, a free checking account usable within the M1 Finance app 
  • Cash balances FDIC-insured up to $250,000, securities SPIC-insured up to $500,000 
  • M1 Borrow 

Cons of M1:

  • Not beginner-friendly 
  • Little assistance provided for identifying savings goals or creating a risk profile 
  • Minimum $100 initial deposit to invest with taxable accounts and $500 minimum with retirement accounts (Traditional or Roth IRA’s) 
  • Inability to invest in mutual funds 
  • $20 inactivity fee for accounts with <$20 and no activity for 90 days 
  • Inability to time buying / selling of securities (stocks and ETFs) 
  • Cannot integrate outside accounts like a 401(k) into a portfolio strategy 
  • No tax-loss harvesting (more info here
  • M1 Borrow 

M1 Finance Features

Bottom Line

M1 Finance is best suited for those who already have a working knowledge of how to invest, are aware of their own investment preferences, and have a desired amount of risk or an ideal time horizon in mind. 

Their lack of information and the limited tutorial, which is mostly devoted to how to navigate and use the features of the app itself rather than teaching the ins and outs of investing, may leave a lot to be desired for the less experienced investor.

For the prospective day trader, M1 Finance does not allow its users to designate specific times of day to buy and sell securities. If you are looking to spend each day following the stock market and executing trades, consider a different option.

For those searching for a less laborious way to manage their investments, M1 Finance provides an excellent way to passively invest while still providing the opportunity to customize your portfolio and buy individual stocks, if you wish to do so (see why picking individual stocks is a mistake). 

M1 Finance can also be an incredibly useful tool for long-term investing, as it allows you to invest using Traditional, Roth, and Rollover individual retirement accounts, or IRAs (read more about IRAs here). If you are currently investing for retirement, be sure to check out this feature, as IRAs are a great way to intelligently invest over the long term! 

What is a robo-advisor?

Before we go any further, it’s important to talk about what exactly a robo-advisor is and the pros and cons of using one: 

A robo-advisor is, in simple terms, a way of automating the investment process. Using information like risk tolerance, future goals, and any specific preferences the user may have (such as socially-responsible investing), a robo-advisor will create an investment portfolio best suited for the individual based on computer algorithms. For a small fee (usually an annual fee of around 0.3 – 0.4% of your total account balance), the robo-advisor will then manage these investments based on whatever specifications are provided.

Robo-advisors will often include such automatic features as reinvesting of any dividends paid (M1 Finance allows you to automatically invest dividends any time your account balances reaches $10), portfolio rebalancing (any new deposits will be used in accordance with your desired allocation ratios), and scheduled deposits from a linked checking account into your investment account. 

The accessibility and low-cost nature of most robo-advisors make them an attractive option for would-be passive investors, and their increasingly sophisticated capabilities mean they are getting even better at designing and managing portfolios. 

However, most robo-advisors prohibit you from choosing individual stocks and ETFs as part of your investment strategy, so by using them, you’re trading some freedom in exchange for less day to day hassle. 

A More In-Depth Review

M1 Finance vs other robo-advisors

As previously mentioned, most robo-advisors on the market (Wealthfront and Betterment, for example) will charge some small percentage of your total portfolio as a management fee. M1 Finance, however, has no such fees, which put it significantly ahead of the competition here. 

M1 Finance also allows you to invest in fractional shares, which let you buy stock in a company that has a high price per share without needing to purchase entire shares at a time. This lowers the amount of money you need to start investing and helps you diversify your portfolio using less money. The inclusion of fractional shares combined with a 0$ minimum investment create a low barrier to entry for any investor using M1 Finance. 

Additionally, M1 Finance combines some of the best features of robo-advisors: the ability to have your account passively managed, with the freedom to pick individual stocks and ETFs afforded by most brokerage services. This again puts M1 Finance ahead of much of the competition, especially when combined with its absence of management fees.

It’s not a perfect service, however. Compared to alternatives such as Betterment, M1 Finance’s lack of integration with outside accounts such as a 401(k) can make balancing your portfolio across all of your accounts more challenging, as you’ll have to keep track of each account’s performance and adjust your investments accordingly. 

Also, the lack of advice-based services and more sophisticated management services like tax-loss harvesting (which is basically buying and selling investments in a way that minimizes your taxable income) put M1 Finance behind its competition in this regard, however, this makes sense when you remember M1 Finance doesn’t charge management fees. You get what you pay for. 

Lastly, unlike some other robo-advisors currently available which require no minimum deposit to open an account, M1 Finance has a minimum initial deposit of either $100 or $500, depending on whether you open a taxable investment account or an IRA. While this may be a barrier to entry for some, it can also provide an incentive to build a budget and work towards a savings goal.

User-Friendly / The Pie

Creating an account is easy enough: it takes approximately 5 minutes and is done entirely within the app. You fill out your name and email address, pick a username and password, enter some basic contact information, verify your identity by filling out some more standard information including your social security number and citizenship status (as required by law), and then fund your account by either selecting from a provided list of banks or by entering your routing and account numbers. 

A notable feature missing from this admittedly short process was a risk-analysis survey, so beware any newer investors: you will likely want to identify your risk profile through a third-party source to get a strong sense of what investment strategies are best for you. Similarly, there is a distinct lack of allocation towards any specific savings goals (click here to read more about the importance of having these), which can make it more difficult for individuals to stick to their budget and stay on track financially.

The one other weakness we found in this area was the limited educational resources available. The bulk of the available articles were focused on the importance of retirement saving (which we also strongly support), and there was almost nothing we could find on how to actually invest or diversify a portfolio. 

This means less experienced investors may be unknowingly setting themselves up for failure if they don’t properly allocate their resources, however, there are a number of freely available resources that you can read if you want to learn how to do this.

Despite these weaknesses, there is one large bright spot to M1 Finance’s user interface: The Pie. The Pie is M1 Finance’s way of combining an easily understandable visual with a chosen asset allocation. You are given the freedom to either customize your own pie by selecting individual stocks and ETFs and designating ratios to each, or you can use one of the expert-created options. 

How does The Pie work? Let’s say, for example, you designate 25% of your portfolio to Apple, Facebook, Google, and Microsoft. If you then deposit $100 into your account, $25 will go towards purchasing shares in Apple, $25 to Facebook, $25 to Google, and $25 to Microsoft. Now, if over time your Apple shares have grown in value and now make up 50% of your total portfolio’s worth, M1 Finance will help you rebalance your portfolio with each new deposit. If you deposit another $100, M1 Finance will purchase shares in the other companies (Facebook, Google, and Microsoft) until your overall portfolio has once again reached your selected 25/25/25/25 ratios. 

This feature is significant because it helps ensure your portfolio doesn’t accidentally change over time, which can have unintended consequences to your level of diversification and risk. 

M1 Finance also comes with almost 100 different expert portfolios, each built with a different purpose in mind. Some of the standouts are the Plan For Retirement portfolios, which allow you to invest based on when you’ll need to use your money, Hedge Fund Followers, which mirror the asset allocations used by top hedge fund managers to try to beat the market, and Responsible Investing, which focus on assets that are tied to environmentally conscious initiatives. 

These expert portfolios are great options for those who don’t want or don’t know how to effectively diversify, and you can combine these options with individually-chosen stocks and ETFs to still maintain your own unique portfolio. 

Investment and Account Options

M1 Finance currently offers over 6,000 different stocks and ETFs to choose from, and this number is continuing to grow. This provides users with a wealth of available options when building their portfolios, and the ability to also buy fractional shares only further increases your investment options. This doesn’t mean the investment opportunities are limitless in every way: standard users are limited to a single trading window per day, which limits the control you have over when your securities are purchased or sold. 

Despite offering a vast range of possible securities, M1 Finance does not allow individuals to invest in mutual funds. This makes it more difficult to diversify your investments across a wide variety of sectors, but the ability to use expert-designed portfolios does help mitigate this challenge. 

In terms of available accounts, you are currently limited to taxable accounts (either individual or joint) and IRAs. This is an upgrade over other services like Robinhood, which only offer individual taxable accounts, but still precludes other options like 401(k)’s. While it would be great to see 401(k)’s also offered, the ability to invest using an IRA allows you to use M1 Finance for long-term investment goals.

M1 Spend is the free, digital checking account that provides ATM withdrawals once per month without fees and allows money to be freely transferred between your checking account and your investments. This is also where any dividends or direct deposits will be temporarily stored until they are invested in your portfolio.

Fees and Insurance

M1 Finance has almost no fees, even below what is standard for most robo-advisors or brokerages. While they provide a complete breakdown of any and all fees on their website, the most relevant fees are a $100 fee to transfer your account’s stocks and other investments to another broker and a $20 inactivity fee if your account has less than $20 in it and there is no activity for at least 90 days. 

Your investments are all insured with both FDIC and SPIC protections. FDIC protections are the same protections federally-regulated banks provide and apply to any cash accounts, such as a checking account, up to $250,000. SPIC protections apply to any investments up to $500,000. These two protections mean the bulk of your investments are safe from any potential bankruptcy M1 Finance may suffer. 

M1 Borrow

M1 Borrow allows you to borrow up to 35% of the total value of your portfolio as a low-interest (3.5% APR) loan with no repayment schedule. This loan can be used for a wide variety of things and isn’t limited to just investing on margin, however it’s important to be aware of the dangers of taking out loans. 

These loans are subject to a variable interest rate, which means the current 3.5% rate may change in the coming months. Also, any loan you take out via M1 Borrow is secured by your portfolio, so your loan may be forcibly repaid by removing value from your investment account. 

M1 Finance’s Business Model

Here at TFT, we think it’s important for you to know how companies, especially those that claim to offer free services, earn their money. M1 Finance earns its revenue in a similar fashion to a bank, as stated by its founder and CEO: they make money off of loans provided through M1 Borrow and by lending securities and cash held in checking accounts to other institutions and charging those institutions interest. 

M1 Finance also has a premium account option and engages in payment for order flow. The former is relatively straightforward: you pay a flat fee every year in exchange for some extra services or features. The latter is a bit more complicated, and you can read more about it in our Robinhood review, but simply put payment for order flow is when a third-party company pays a company like M1 Finance to send their clients’ stock or ETF orders to one location instead of another. With that in mind, M1 Finance does earn a much smaller profit than a company like Robinhood, so this is likely something you shouldn’t worry too much about as it usually only offsets prices by a cent or so per share. 

The premium account, M1 Plus, costs $125 / year and gives users access to a checking account that provides 1% APY, a debit card with 1% cashback, and a 2% interest rate when using M1 Borrow (down from the standard 3.5%). When deciding whether or not to use M1 Plus versus the free, standard version, here’s a helpful benchmark: it would take holding at least $12,500 in your checking account to just break even on the interest gained vs annual fees. For this amount of money, there are much better returns you could gain than simply breaking even. 

M1 Plus users also gain access to a second trading window at the end of each closing day, which provides more flexibility in when you execute trades, however, we still don’t recommend M1 Finance as a day trading app, so this feature provides less utility than one might expect.

The Final Verdict On M1 Finance

As a service used strictly for maximizing portfolio gains in a manner that requires minimal effort, M1 Finance is a phenomenal service that allows the end-user to accomplish this goal in both the short term and long term, all with no commission fees, portfolio management costs, and the ability to buy fractional shares. 

That being said, we want to again emphasize that brand-new investors may feel out of place and unsure of what to do when it comes to designing a diverse portfolio, as M1 Finance does little to orient its users to the world of investing. 

If you are unsure whether or not you have enough experience to successfully navigate the processes of portfolio building and investing, you can always download the app and give it a try (it is free after all). And if you feel uncomfortable designing your own portfolio, you can take advantage of one of the expert-created ones provided.