M1 Finance

M1 Finance Fees, Commissions, and Margin Rates (2019)


M1 Finance fees, commissions, IRA rates, hidden charges, broker investment management cost, and minimums. M1 Finance annual fee, maintenance, inactivity, and nonthly charge. ACAT/account transfer fee.



M1 Finance Account Fees


Overnight Mail - Domestic (per request)$50
Overnight Mail - International/Canada (per request) $100
Paper Confirm Fee (Retail Paper Only) (per request) $2
Paper Statement Fee (Retail Paper Only), (per statement) $5
Paper Tax Statement Fee (Retail Paper Only), (per statement) $5
Return Mail (per piece) $2
ACAT (Direct Account Transfers) $100


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M1 Finance Bank Fees


Wire Transfer (Domestic)$25
Wire Transfer (Foreign) $45
Returned Checks/ACH/Wires and Recalls $30
Amendment Repairs $30
ACH Notice of Change/Correction $5


M1 Finance Other Fees


IRA Termination Fee (per event)$100
Escheatment Processing (per account) $75
TOD Account Transfer Fee (per transfer) $200
Mutual Fund Sales $20


M1 Finance Annual Fee


There is no monthly or annual fee at M1 Finance. This applies to all accounts.


M1 Finance Inactivity Fee


M1 Finance does not charge inactivity fee on all of its accounts.


M1 Finance Maintenance Fee


M1 Finance has $0 maintenance fee.


M1 Finance Margin Rates


Debit Balance Margin Interest Rates
$0,01 - $24,999 4.00%
$25,000 - $49,999 4.00%
$50,000 - $99,999 4.00%
$100,000 - $249,999 4.00%
$250,000 - $499,999 4.00%
$500,000 - $999,999 4.00%
$1,000,000 + 4.00%


M1 Finance Margin Rates Requirements


M1 Finance margin rates service is called M1 Borrow. There's one qualification for M1 Borrow: a taxable brokerage account with a $25,000 or greater account balance. IRA accounts do not qualify for M1 Borrow.

There's no additional paperwork or credit check required, and you cannot be denied if you meet the qualifications.

There's no need to enroll in M1 Borrow. All eligible taxable accounts will be automatically enrolled. When your M1 account balance surpasses $25,000, you are given an instantly accessible line of credit. You do not need to use the line of credit and will only be charged for what you use. When requesting to borrow, you will be able to choose whether you would like to keep that money in M1 or transfer it to your bank account.

In most cases, the interest expense can be deducted from investment income for tax purposes. This can lower your after-tax cost of borrowing money even further.


Regulatory Fees at M1 Finance


Regulatory expenses are mandated fees passed on to the consumer. These occur when users sell a stock or ETF, and often cost only a few pennies. For example, if you sell ten shares of Apple stock at $150 per share, you would pay a total of 4 cents in regulatory expenses — 3 cents in SEC fees and 1 cent in TAF fees. These costs are calculated as follows:

SEC (Securities Exchange Commission) Fee* = total price of transaction x 13.00 / 1,000,000
TAF (Trading Activity Fee) Fee* = shares sold x 0.0001119 with a maximum of $5.95


M1 Finance Commissions, Account Minimums, and Fees


Although M1 Finance doesn’t require any amount to open an account, it does require $100 to make an investment. However, there are NO COMMISSIONS or FEES to invest your money - it's incredible!

There is no annual account fee, and no commissions are charged on trades for either stocks or ETF’s. Amazingly, the broker allows an unlimited number of trades and still doesn’t charge any commissions.

The company also lets customers borrow up to 35% of their margin account value at the incredibly low rate of just 4.00% APR.

How do they make money? M1’s back-end services generate revenue, and the addition of new services in 2019 will further contribute to earnings.


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Broker Review


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M1 Finance Hidden Fees


M1 Finance does not have hidden fees. All company's charges are clearly listed with very little fine print.


Tax Considerations


M1 tax documents can be sent electronically to an H&R Block account. The request must be initiated from the H&R Block platform. Tax information and security transactions can also be imported into Turbo Tax from a Turbo Tax account.

M1 Finance does not conduct tax-loss harvesting in its clients’ Pies. The result of this is that securities in the portfolios aren’t bought and sold in a tax efficient manner.

Although M1 does not provide traditional tax-loss harvesting, it did recently launch a new withdrawal method that considers tax implications. When a client makes a withdrawal request, M1 has an algorithm that determines which specific securities should be sold, incorporating not just target allocations, but also tax issues. The computer program will sell securities in this order:

1. Shares that don’t create a tax liability
2. Shares that produce long-term capital gains
3. Shares that create short-term gains (which are taxed at a higher rate than long-term gains)


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Comparison


Betterment, one of the first robo advisors, provides access to licensed experts free of charge as part of its basic automated investment account. It costs just 25 basis points and has no minimum balance requirement. For a 0.40% fee and a $100,000 balance, the brokerage firm provides unlimited assistance from advisors with a CFP® qualification. Unlike M1, stocks are not available at the broker, as it only trades a few low-cost ETF’s. M1's absence of commissions also makes it more attractive than Betterment.