Vanguard vs M1 Finance

2020: M1 Finance versus JP Morgan Vanguard for online investing. Compare cost, brokerage fees, IRA accounts, and differences. Which firm is better?

Overview of M1 Finance vs Vanguard

M1 Finance and Vanguard have very different approaches to money management. Vanguard is the older of the two and has a more traditional style of investing. This article will compare and contrast the two and try to determine if one model is better than the other.


Broker Fees Stock/ETF
Mutual Fund
Annual IRA
M1 Finance $0 na na $0 $0
Vanguard $0 $20 $1.00 per contract $20* $20*


M1 Finance: Pay $0 commissions. Transfer account to get up to $2,500 bonus at M1 Finance.

Vanguard: none.

Investment Choices

Vanguard provides a moderate number of investment vehicles. Stocks and bonds are available along with mutual funds, closed-end funds, ETF’s, penny stocks, over-the-counter securities, and option contracts.

M1 Finance apparently believes that Millennials and other investors of the future won’t need all of these assets. The brokerage firm provides stocks, closed-end funds, and exchange-traded funds; and that’s it. While this selection obviously underperforms Vanguard, M1 Finance customers can purchase fractional shares of stocks and funds. Vanguard does not offer such a service (other than for mutual funds).

All things considered, we think Vanguard does the better job in this category.

M1 Finance vs Vanguard

Portfolio Management

Vanguard customers can sign up for a very inexpensive account management service, although a $50,000 deposit is required. The annual asset-based fee is 0.30%. This goes down with very large balances, reaching an extremely low 0.05% at $25 million. The service comes with tax-smart strategies, quarterly reviews, free rebalancing, and ongoing consultations with a Vanguard investment advisor.

M1 Finance does not offer traditional (or robo) portfolio management. What it does do is to provide pre-built Pies. These are collections of stocks and ETF’s with certain themes, like retirement, income, and hedge funds. They are rebalanced every 3 months and have no management fees other than ETF expense ratios.

Vanguard’s traditional service seems more beneficial to us.

Investment Education

The Vanguard site has many articles on investing basics, although the resources can be hard to find sometimes. If you click on the tab “News & Perspectives” in the top menu and select “Investor education” you will find a good starting point.

There are articles on diversification, asset classes, the basics of mutual funds, how to trade fixed-income assets, estate planning, and more.

The Vanguard website also has a market summary that displays an economic calendar and movements of the world’s major indexes. The broker’s blog is also linked inside its educational section. Over at YouTube, Vanguard has a channel with a countless number of videos.

Stock and ETF profiles at Vanguard have earnings histories, links to analyst reports and prospectuses, financial statements, and charting with tools.

M1’s website only offers small charts with no tools. Instead of linking to a fund’s prospectus, M1 actually posts a link to email the broker to request one. Stock and fund profiles don’t have much information on them. The M1 website does host information on Pies.

As for general investment education, there are news articles posted on the broker’s website, stock and fund screeners (with just a few search variables), and that’s about it. The broker has a YouTube channel with a tiny fraction of the videos that Vanguard’s channel has.

Vanguard is the easy winner here.

Trading Tools

Vanguard’s website is fairly basic. It does have an order ticket where stocks, bonds, funds, and options can be traded. This is a good thing because there is no desktop software, no browser platform, and no trade bar. The broker’s trade ticket comes with stop and limit types, but no trailing types.

Vanguard vs M1 Finance

Charting for stocks and funds cannot be performed in full-screen mode. There are tools, though, such as company events, different graph styles, technical indicators, and comparisons.

M1’s website is even worse than Vanguard’s. There’s actually no trade ticket at all. Clients submit order requests and the broker turns them into market orders during certain trading windows.

Charting has no tools other than dividend dates. There is a watchlist, which Vanguard’s site also has. Like Vanguard, M1 Finance has no desktop software, browser platform, or trade bar.

We’ll take Vanguard here.

Mobile Apps

M1’s mobile app is modeled after its website. It has a similar (although not exact) interface. Many of the same features are included, such as a fund transfer tool and research information on Pies that can be traded. There are horizontal charts for stocks, Pies, and funds, although there are no tools. Missing on the app is mobile check deposit.

On Vanguard’s app we did find mobile check deposit. But oddly, there is no charting (other than small charts for market indexes). While stocks and ETFs can be traded quite easily on the app with a good trade ticket, only Vanguard-branded mutual funds can be traded. Option contracts and non-Vanguard mutual funds have to be traded on the website.

Both apps have Touch ID for Apple devices.

Vanguard secures another victory.

Other Services

Dividend Reinvestment Program: Vanguard offers a traditional DRIP service, while M1’s Pie investing service takes cash payments and converts them into additional shares of stocks and funds (these can be different stocks and funds that actually paid the dividends) that have recently gone done in price.

IRA’s: Vanguard offers SIMPLE, SEP, traditional, and Roth IRA’s. M1 Finance customers can open any of these except the SIMPLE plan.

Automatic mutual fund investing: Vanguard customers can enroll in recurring deposits into Vanguard mutual funds. The service isn’t available for non-Vanguard funds. M1 Finance doesn’t offer any mutual funds; so obviously it has nothing to offer here.

Margin investing: M1 Finance has the best margin rates in the industry.

Overall, M1 Finance takes this category.

Our Recommendations

Mutual Fund Traders: Obviously, Vanguard is the only choice.

Beginners: both brokers are pretty equal.

Long-Term Investors and Retirement Savers: With financial advice, target-date mutual funds, and an individual 401(k) plan, we have to pick Vanguard.

Stock and ETF Trading: M1 Finance. While Vanguard has an actual trade ticket, M1 allows for whole-dollar investing and has great margin rates.


M1 Finance: Pay $0 commissions. Transfer account to get up to $2,500 bonus at M1 Finance.

Vanguard: none.

Vanguard vs M1 Finance - Judgment

Vanguard is the better performing broker overall. Nevertheless, M1 would be a great broker for stock and ETF investors, margin investors, and traders who don’t have much to invest but want to buy high-priced stocks.