Diving into the world of trading and investment requires a trustworthy platform brimming with useful features.
Founded in 2015, M1 Finance has consistently added new tools and enhancements. It’s rapidly emerging as a top choice for both novice and seasoned investors.
In this comprehensive review of M1 Finance, we’ll delve deep into the platform’s offerings to gauge if it’s the right fit for you.
Understanding M1 Finance
M1 Finance, branded as “The Finance Super App,” provides a blend of auto-investment and tailored portfolio tools, supplemented by spending and borrowing functionalities.
They offer over 80 “pies” or ready-made portfolios. However, users also have the flexibility to craft their investment approach. This versatility makes M1 an ideal platform for beginners attracted to auto-investment options and adept investors seeking portfolio customization based on specific risks, preferences, and financial objectives. Both can benefit from the platform’s cost-effective nature, free of trading or management fees. For those cautious about expenses or without a significant investment fund, the absence of high transaction costs is a boon.
M1 Finance provides diverse account services for increased adaptability and fluid money transfers. Investors can automate deposits into their portfolios, place individual trade orders, and merge their holdings by moving from external retirement or brokerage accounts. Additionally, for balances over $2,000, there’s an option to utilize margin accounts and borrow up to 35% of their account value.
Pricing Details for M1 Finance
Basic M1 accounts come without any monthly charges, and investment trades are commission-free.
M1 Plus is free for the initial three months, followed by a $10 monthly or $95 annual fee. This premium option enhances the platform’s functionalities, which we’ll elaborate on later.
Though most M1 Finance operations are without charges, some fees might apply. Not accessing your account for over three months attracts a $20 dormant account fee. Additionally, a wire transfer costs $25. Thankfully, M1 transparently lists all fees on their website.
Account Creation Process
M1 Finance makes the account setup process impressively uncomplicated. After setting up your login credentials, an intuitive onboarding procedure guides you. Based on your investment history and preferences, you can structure your portfolio using either a preset pie or custom options. The platform supports a variety of accounts including Traditional IRAs, Roth IRAs, SEP IRAs, brokerage, and trust accounts. M1 Plus users can also establish a custodial account.
Each account category has an opening minimum: $500 for IRAs and $100 for other accounts. After deciding on the account type and finalizing your investment strategy, simply link your external bank, and you’re all set to begin investing.
Features of M1 Finance
Your choice between M1 Basic and M1 Plus will dictate the features accessible to you.
With M1 Basic, you’re not charged annually but trades are processed only once daily in the morning. M1 Plus introduces an afternoon trading slot and provides other perks.
Highlight features include:
- M1 Spend: Launched in 2021, this feature integrates your checking account with investments. It facilitates spending via the linked debit card and setting up transfers and debits. Plus, you can access your paycheck two days early. M1 Plus users enjoy a 1% interest rate, 1% cashback, and check-sending abilities.
- Owners Rewards Card by M1: A unique cashback credit card, offering up to 10% cashback on specific company expenses, depending on your investments. It also provides a basic 1.5% cashback on other expenses. M1 Plus isn’t mandatory to access this card. The card’s annual fee is waived for active M1 Plus users, but it’s $95 for others.
- Smart Transfers: Exclusive to Plus members, this tool allows rule-based monetary transfers towards specific investment objectives, creating a structured financial flow.
- M1 Borrow: This feature grants users a low-interest portfolio credit line. Unlike other borrowing methods, it’s more affordable and flexible. Borrow up to 35% of your account value at a 3.5% interest rate, or a reduced 2% for M1 Plus members. Repayment lacks a stringent schedule; however, monthly interest is applied to outstanding amounts.
Investing with M1 Finance
Choose from preset portfolios or design your own. Create custom portfolios from a vast selection of over 6,000 ETFs and stocks available on major exchanges. M1’s user-friendly interface allows you to effortlessly search and screen individual stocks or ETFs.
Additionally, M1 offers expert-curated pies, organized into various categories catering to diverse investment strategies and preferences.
Weighing M1 Finance’s Strengths and Weaknesses
Every financial platform has its pros and cons, and M1 Finance is no exception.
Advantages:
- Nearly 100 tailor-made portfolios.
- Access to over 6,000 ETFs and stocks for custom portfolios.
- Competitive rates for margin accounts.
- Minimal fees.
- Enhanced checking account features for M1 Plus users.
Drawbacks:
- Limited features compared to comprehensive online brokers.
- Only two trading windows daily.
- Restricted customer support options.
- Absence of live financial advisor consultations.
User Experience on M1 Finance
Accessible via desktop or mobile, M1 Finance’s website boasts a clean and intuitive layout. The mobile app mirrors the website’s functionality, ensuring a seamless user journey. Although M1 might lack certain advanced tools, its minimal fee structure, especially for basic users, is a significant advantage.
Is M1 Finance Right for You?
M1 Finance suits investors with some experience, requiring minimal guidance. Its automatic investment management, combined with portfolio customization, caters to distinct needs.
Ideal for those eyeing automated investment solutions without hefty fees, M1 Finance remains a top contender. Regardless of opting for a Pie portfolio or personalizing investments, the platform ensures your investments align with your goals.
Closing Thoughts
In conclusion, M1 Finance caters to seasoned investors and those venturing into the investment domain, all without hefty fees. Its blend of preset and custom portfolios distinguishes it from standard automated advisors, aligning more with a self-managed platform integrated with automation.
Once familiar with its interface, you can set your financial activities on autopilot and focus on refining your investment acumen.
Considering its offerings and the fact that
basic operations are largely free, M1 Finance holds immense appeal. However, always base your choice of platform on your unique requirements, financial ambitions, and preferences.
