SoFi Invest vs. M1 Finance Introduction
Brokerage services and more will be found at both M1 Finance and SoFi Invest. If you’re wondering which
one to choose, keep reading.
Pricing
| Broker Fees |
Stock/ETF
Commission |
Mutual Fund
Commission |
Options
Commission |
Maintenance
Fee |
Annual IRA
Fee |
|
M1 Finance
|
$0
|
na
|
na
|
$0
|
$0
|
|
Sofi Invest
|
$0
|
na
|
$0
|
$25*
|
$0
|
Services
| Broker Review |
Cost |
Investment Products |
Trading Tools |
Customer Service |
Research |
Overall Rating |
|
M1 Finance
|
|
|
|
|
|
|
|
Sofi Invest
|
|
|
|
|
|
|
Promotions
M1 Finance:
Fund within 30 days of joining with $10,000 to get $75 bonus.
SoFi Invest:
Get $0 commission stock and ETF trades.
Assets and Account Types
A brokerage account at M1 Finance can be opened as a joint, individual, trust, custodial, or retirement account. And we do emphasize brokerage here; M1 Finance has no managed accounts.
Within its self-directed service, it’s possible to trade cryptocurrencies, stocks, closed-end funds, and ETFs once per day at the opening bell (the broker doesn’t offer trading during the entire market day).
SoFi Invest offers self-managed trading during the entire market day in the same list of assets that M1 has plus option contracts. Furthermore, SoFi Invest has robo accounts that trade exchange-traded funds (mostly from SoFi). An account of either type—robo or brokerage—can be opened as an individual, joint, or retirement account at SoFi Invest.
Neither firm charges much for its services (SoFi’s robo program is actually free), although M1 Finance does have an inactivity fee of $50. Moreover, the best experience at M1 Finance will only be found with a Plus membership, which costs $3 per month. Among its many benefits is a second trading window during the afternoon.
Winner: SoFi Invest
Margin Borrowing
M1 Finance has a program called M1 Borrow. This is the company’s margin service, and every eligible account is automatically signed up for it (an IRA is not eligible). Maximum leverage is 40% of an account’s value. Right now, M1 is charging 6.5% for margin debits.
SoFi Invest also has a margin service for brokerage customers. It is a little more expensive at 11.25%. Accounts are not automatically enrolled in margin. An account needs to apply in the initial application or on the website at a later date.
Both broker-dealers in this survey display margin requirements for securities. On the SoFi site, both the maintenance and initial requirements are displayed. At M1, only the maintenance requirement is shown. For Microsoft, we found a maintenance requirement of 35% at SoFi and 25% at M1.
Winner: M1 Finance
Cash Management
Investing is just the tip of the iceberg at both firms, especially at SoFi, which has a very extensive personal-finance department. For cash management, SoFi has checking and savings accounts with FDIC insurance. The savings account pays 4.5% APY with direct deposit. Debit and credit cards are icing on the cake.
Like its rival, M1 Finance has checking and savings accounts with FDIC protection. The savings account pays 4.25% APY, although a Plus subscription is required for this rate. Debit and credit cards are available, and like the M1 cards, there are no annual fees. Plus members get a significant cash-back program with the credit card.
Winner: SoFi Invest
Websites
For account management and trading, both investment firms have user-friendly websites. The SoFi site has a trade ticket with three order types, one of which is recurring. Here, there are three choices: weekly, every two weeks, and monthly.
An asset’s profile has a small chart with five years of price history. Unfortunately, it’s not possible to expand a graph the full width of the computer screen. There is a watchlist button on the profile, although SoFi does not provide any alerts.
There is another button on the profile for option chains. SoFi’s software displays calls and puts only. There are no pre-installed strategies, and it’s not possible to create multi-leg orders.
Moving on to the M1 Finance site, we don’t find any option chains at all, although we do find better charting. A graph can be displayed full-screen, and volume and company events can be shown as well.
The downside (or the upside, depending on how you view it) on the M1 site is the lack of an actual order ticket. M1 is the party responsible for order submission. It takes its customers’ order requests and submits them during trading windows. The order system is very simple: deposit cash and let M1 place trades for assets in the account’s portfolio.
Winner: SoFi Invest
Mobile Apps
The situation is much the same on mobile devices. Both firms take their website software and replicate it on their apps. This means that M1 Finance has slightly better charting, while the SoFi Invest app has an actual order ticket.
The SoFi app has one more feature that the M1 Finance app doesn’t have: a Social section that shows what other SoFi Invest customers are trading and watching. It can be found at the bottom of every asset profile.
Neither app has mobile check deposit or streaming financial news.
Winner: SoFi Invest
Additional Services
Initial Public Offerings: IPOs are available with a SoFi Invest account.
Fractional Shares: Both firms offer whole-dollar investing. At M1 Finance, it is the only option.
Individual Retirement Accounts: An IRA can be opened at either firm.
Extended-Hours Trading: As already mentioned, M1 Finance doesn’t even offer the entire regular session. SoFi Invest customers get it plus after-hours and pre-market periods.
DRIP Service: Cash dividends can be automatically converted into shares of securities at either firm.
Fully-Paid Securities Lending Program: Both firms have it.
Winner: Even
Our Recommendations
Mutual Funds: Although neither firm here has mutual funds, Firstrade has over 11,000 of them with some really nice research materials from Morningstar.
Retirement Planning & Long-Term Investing: Who has small-business financing, VA loans, cash-out
refinance, life insurance, wedding loans, human investment advice, and much more? SoFi Invest.
M1 Finance does have some target-date investment vehicles on its site.
Active Stock Trading: SoFi Invest.
Small Accounts:
SoFi charges an inactivity fee. So M1 Finance it is.
Beginning Investors: A good place to begin is with a M1 Finance account.
Promotions
M1 Finance:
Fund within 30 days of joining with $10,000 to get $75 bonus.
SoFi Invest:
Get $0 commission stock and ETF trades.
M1 vs SoFi: Judgement
Taken as a whole, both brokers are about equal. SoFi is better for more active investors, while M1
is recommended for beginners and buy-and-hold investors.
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Updated on 10/4/2024.
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 Brokerage-Review.com, Chad can usually be found
managing his portfolio or building a new home computer.
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