Charles Schwab vs M1 Finance in 2022

Charles Schwab vs. M1 Finance Introduction

Which broker offers the better trading experience, Schwab or M1 Finance? Schwab customers get branch locations and advanced software, while M1 Finance clients get to create their own funds.

Sound enticing? Keep reading.

M1 Finance Pros and Cons

M1 Finance is best known for these advantages:

- Fractional shares
- Pie investing
- Free debit card

But it does have these disadvantages:

- Small selection of securities
- No managed accounts
- Underdeveloped software

Schwab Pros and Cons

Schwab is known for many strengths, including:

- High-level trading tools
- Managed accounts in both robo and human formats
- Global trading

But the broker does have these weaknesses:

- Limited selection of stocks eligible for whole-dollar investing
- Low yield on checking account


M1 Finance: Up to $500 cash bonus for funding account at M1 Finance.

Charles Schwab: Get commission-free online stock trades.

1. Assets and Investment Services

Schwab traders will find a large selection of products they can invest in. The list includes:

- Stocks (including foreign stocks on foreign exchanges)
- Futures
- Options and options on futures
- Mutual funds (more than 3,000)
- ETFs
- Closed-end funds
- Fixed-income products

Besides the international marketplace, Schwab customers also get access to the over-the-counter space.

M1 Finance doesn’t offer OTC or foreign stocks. It does have stocks listed on the major U.S. exchanges, though. It also offers trading in ETFs and closed-end funds.

Technically speaking, M1 customers actually trade Pies. These are collections of stocks and/or funds. M1 creates Pies for its customers, and it’s also possible to build your own.

Winner: Schwab

Charles Schwab vs M1

2. Banking Tools

Besides all the investment products just mentioned, both M1 Finance and Schwab offer cash management tools. Schwab customers can sign up for the firm’s High Yield Checking Account. Despite the name, it only pays 0.03% in interest right now. But in return, account holders get a lot of great perks, including free checks and unlimited ATM fee rebates around the world.

M1 Finance customers can sign up for M1 Spend. This is the company’s banking service. There are two versions, neither of which offers unlimited ATM fee rebates. The free version offers just one per month and pays no interest. The second option costs $125 per year but offers 4 ATM fee rebates per month with a 1% APY.

Winner: Schwab

3. Mobile Apps

To manage a debit card or place a trade, you can use a mobile app at either firm. Schwab actually has two of them; one is used for futures trading, but it can be used to submit trades for other products, too. During our testing of it, we found it to be somewhat buggy. The second app offers:

Schwab vs M1

- Advanced order ticket with multiple trade options
- Mobile check deposit and bill pay
- Heat maps
- Audio market updates
- Option chains

M1 Finance’s app brings the same layout as its website cousin. This means it is rather simple with no real tools to speak of. It’s easy to add a bank connection and perform a funds transfer.

M1 Mobile App

Winner: Schwab

4. Website Trading

Besides their mobile platforms, both brokerage firms in this duel have websites that provide trading functions. M1’s is rather simple with almost no charting and a very simple order ticket. It’s really just a request form that’s sent to M1 instead of an exchange. There is a watchlist on the M1 site, and another highlight we like is a rebalance tool for rebalancing Pies.

M1 Finance

Moving to Schwab’s site is like moving from night to day. First up is a trade ticket that offers multiple order types and duration choices, not to mention the ability to send orders to exchanges whenever you want.

Charts come with some nice tools like technical studies, company events, drawing tools, and multiple display styles. We also like the online chat feature on the site, the many research materials, and the ability to trade bonds.

Last, but certainly not least, is Schwab’s browser platform just in case the website isn’t enough. The software offers even more advanced charting plus some really good tools for trading futures.

Winner: Schwab

5. Desktop Software

If you pick Schwab but don’t care for its very excellent web-based tools, you could always download and install StreetSmart Edge, the broker’s desktop software. Once logged in, you’ll find a host of professional-level features. Our favorites include:

- Level II data
- Charts that can be filled the width of the monitor
- High level of customization
- Free use of Recognia
- Advanced option tools
- Free streaming of CNBC

Because M1 Finance doesn’t emphasize active trading, it has no desktop software.

Winner: Schwab

6. Miscellaneous Services

Dividend Reinvestment Program: It’s easy to sign up for automatic dividend reinvesting at either firm. M1 Finance does require a $25 cash balance to reinvest, however. Schwab has no such requirement on its DRIP plan.

IRAs: Individual Retirement Accounts are available at both Schwab and M1 Finance. Schwab has more IRA types, including Inherited and Custodial versions.

Fractional-share Trading: Schwab offers whole-dollar investing (with a $5 minimum) in the stocks that make up the S&P 500. Any stock or fund that trades on the U.S. exchanges is eligible at M1 Finance.

Winner: Schwab


M1 Finance: Up to $500 cash bonus for funding account at M1 Finance.

Charles Schwab: Get commission-free online stock trades.

And Now, Our Recommendations

Beginners: You may think we would choose M1 Finance here. After all, the company tries to simplify the trading experience as much as possible. But during our test drive of its service, we found creating Pies to be somewhat confusing and difficult on its platform. Plus, it doesn’t have near the learning materials that Schwab has, not to mention its lack of 24/7 customer support and branch locations. New traders should definitely go with Schwab.

Stock/ETF Trading: Schwab for its great trading tools.

Small Accounts: Either will work for self-directed trading. For robo investing, it’s M1 because Schwab has a $5,000 minimum.

Long-Term Investors and Retirement Savers: With Schwab’s financial planners, managed accounts, and individual 401k plans, it is the easy pick.

M1 Finance vs Charles Schwab Assessment

M1 Finance has a unique style of investment management, but it just doesn’t offer the overall package that Schwab customers get.

Open M1 Finance Account

Open Charles Schwab Account

About the Author
Chad Morris is a financial writer with more than 20 years experience as both an English teacher and an avid trader. When he isn’t writing expert content for, Chad can usually be found managing his portfolio or building a new home computer.