Ally Invest vs M1 Finance in 2021



Ally Invest vs. M1 Finance Introduction


Which broker will deliver the trading tools you need, Ally Invest or M1 Finance? Ally Invest clients have the ability to trade forex, while M1 Finance customers get a free debit card.

To find out more about these two, keep reading.


M1 Finance Pros and Cons


If you pick M1 Finance, you’ll get these perks:

- Basic web platform
- Partial-share trading
- Ability to create your own funds

But with every upside, there’s a downside:

- Only a few security types available for trading
- Customer service is very weak
- Trading tools are very rudimentary


Ally Invest Pros and Cons


If you go with Ally Invest, you’ll find these nice features:

- Multiple trading platforms
- A robo option if you don’t want the burden of trading
- 24/7 customer support

But you’ll have to accept these downsides:

- No-transaction-fee mutual funds are missing in action
- No partial shares in self-directed accounts


Promotions


M1 Finance: $30 bonus for funding account with $1,000. Transfer account to get up to $3,500 bonus.

Ally Invest : Up to $3,500 cash bonus + $0 commission trades.



1. Investment Services and Assets


Ally Invest clients can buy and sell these financial instruments:

- Stocks (those on regular exchanges and OTC securities)
- Forex
- Options
- Mutual funds (over 10,000 of them)
- Exchange-traded and closed-end funds
- Bonds and cash equivalents

M1 Finance provides a much smaller selection. It is just stocks, ETFs, and closed-end funds with this broker. They are traded inside of Pies, which customers can either create or use the broker’s own.

M1-constructed Pies are the closest thing to automated management with this broker. Although Ally Invest doesn’t offer Pie investing, it does have a robo account option that M1 Finance doesn’t have.

Winner: Ally Invest


2. Cash Management


If you’re thinking about picking Ally Invest for its banking features, you may want to think again. Despite its relationship with Ally Bank, the brokerage arm itself doesn’t have very good offerings. A debit card costs $35 per year; and yes, checkwriting is available, but the service costs $20 per year. Even worse, Ally Invest requires a $100,000 account balance just to add these features to a brokerage account.

There is one method Ally Invest customers can use to circumvent the broker’s rather disappointing banking service: open a deposit account with Ally Bank and link it to a brokerage account. This is easily accomplished, and Ally Bank offers good rates, up to $10 per month in ATM fee rebates, no annual fee, and free checkwriting.

M1 Finance has no minimum balance requirement. Its Visa debit card has no annual fee, although traders can elect to pay $125 per year for a card that has 4 ATM fee rebates per month. The broker doesn’t offer checkwriting.

Winner: Ally Invest/Ally Bank


3. Mobile Apps


When you get ready to make an investment, you can use a mobile app at either brokerage firm. Ally Invest’s is the same one that Ally Bank customers use. The advantage of this setup is that brokerage customers get a lot of useful tools, including:


Ally Stock Investing App


- Bill pay
- Mobile check deposit
- Zelle transfers

On top of these banking tools, the app offers options trading, an advanced order ticket, and horizontal charting.

The M1 Finance app doesn’t quite have the same number of cash management tools (for example, all three tools mentioned above for Ally are missing). But it is possible to research Pies and invest in them.


M1 Mobile App


Winner: Ally Invest


4. Website Trading


If you prefer a bigger screen, you can use a desktop or laptop at either firm. The M1 Finance website is rather basic without any notable tools. For example, there is no trade ticket to speak of because M1 clients submit order requests to the broker, who then submits orders to the exchanges in batches. Furthermore, charts are very simple without full-screen mode or any decent tools.


M1 Finance


The Ally Invest site does have a trade ticket. In fact, it has two of them because it has a browser platform in addition to the site itself. There is also very good charting with tools and several good options-trading features. A trade bar at the bottom of the site makes order entry simple and easy.


Ally Invest


Winner: Ally Invest


5. Desktop Software


Although most Ally Invest customers will find everything they need on the company’s website, mobile app, and browser platform, a few traders may want more. Ally Invest does offer more in a desktop program called Quotestream. The software unfortunately does have an active trader requirement (10 trades a month). But users will get:

- Level 2 quotes
- Professional-level charting
- Economic calendar

Ally Invest clients who want to trade forex get yet another piece of software, Ally Invest’s own currency platform. And traders who don’t care for this can use MetaTrader 4 instead.

Against all of Ally’s software platforms, M1 Finance has no desktop system at all.

Winner: Ally Invest


6. Miscellaneous Services


Dividend Reinvestment Program: While both broker-dealers in this contest offer free DRIP service, only M1 Finance has a $25 minimum cash requirement.

IRAs: If you want to open an Individual Retirement Account, you can do so at either broker. Ally Invest does have an aggravating $25 fee to close one.

Fractional-share Trading: Available at M1 Finance but not at Ally Invest.

Winner: M1 Finance


Promotions


M1 Finance: $30 bonus for funding account with $1,000. Transfer account to get up to $3,500 bonus.

Ally Invest : Up to $3,500 cash bonus + $0 commission trades.



And Now, Our Recommendations


Stock/ETF Trading: This one is easy. Ally Invest for its very good software.

Beginners: This one is a little more difficult. While M1 Finance caters to traders who need some hand holding, Ally Invest has much better customer service. Plus, we found the Pie method of investing to be somewhat complicated. We would go with Ally Invest.

Small Accounts: Investors who want portfolio management and have less than $100 should go with M1 Finance because Ally Invest’s robo service requires that much to start. For self-directed trading, either will work.

Long-Term Investors and Retirement Savers: M1 Finance does have target-date Pies in addition to its IRAs. However, Ally Invest has target-date mutual funds, plus its robo program can be used inside of an IRA. We would pick Ally Invest.


M1 Finance vs Ally Invest Assessment


We do really like M1 Finance’s whole-dollar investing. But overall, it has underperformed its rival here in almost every category.


Open M1 Finance Account




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