Vanguard vs M1 Finance


2022: M1 Finance versus Vanguard for online investing. Compare cost, brokerage fees, IRA accounts, and differences. Which firm is better?



Vanguard vs. M1 Finance Introduction


While M1 Finance is generally viewed as the modern brokerage firm, and Vanguard stereotyped as the traditional broker, the reality may surprise you. Have a look at the following comparison:


Pricing


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


Promotions


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

Vanguard: none.



Category #1: Investment Styles


Vanguard:

Vanguard offers both self-directed and managed accounts. The latter option comes in two varieties: traditional and robo. The latter of these two only costs 0.20% per year, and the first 90 days are free. The broker’s old-school package costs just 30 basis points annually and comes with some extra perks, like a financial plan.

Self-directed accounts have no fees of any kind and come with a large assortment of investment vehicles. They include stocks, bonds, mutual funds, ETFs, closed-end funds, and option contracts.

M1 Finance:

Traders at M1 Finance will find self-directed accounts only. There is no robo program, and the brokerage house only offers trading in equities, closed-end funds, and exchange-traded funds. These products are traded inside of Pies, which are baskets of securities that customers or M1 creates. The whole market day is not available, however. Unlike Vanguard, M1 charges $0 commission on all products.


M1 Finance vs Vanguard


Winner: Vanguard


Category #2: Websites


Vanguard:

For order placement, charting, research, and account management, Vanguard has a simple but effective website. The best place to start on this site is in the upper-right corner. Here, there is search field. Just type in a ticker symbol and you’ll be able to access a security’s profile.

Although a chart cannot be expanded the full width of the monitor, there are several tools. These include:


Vanguard vs M1 Finance


Technical indicators
Multiple graph styles
Comparisons

Vanguard’s trade ticket has 4 order types and 2 duration options. Real-time trade data is shown on the order ticket, which of course is a big help for active traders.

M1 Finance:

M1 Finance customers will find no order ticket at all on the broker’s website. Instead, they place securities inside of Pies, and M1 submits orders to the exchanges during trading windows. M1 customers have no control over order types, duration choices, and so forth.


M1 versus Vanguard


Charts on the M1 Finance website are much simpler than Vanguard’s charts. There are no tools of any kind, and there are only five years of price data (Vanguard has fifty years!). On the upside, M1’s site is easier to navigate than Vanguard’s.

Winner: Vanguard


Category #3: Mobile Apps


Vanguard:

Although Vanguard’s website is fairly simple, its mobile app is even more so. There are surprisingly no charts at all, and option chains won’t be found, either. The app restricts mutual fund trading to only Vanguard funds.


Vanguard or M1


The one trading highlight on the app is the stock/ETF order ticket, which is the same one the website has. We also like the inclusion of mobile check deposit.

M1 Finance:

M1’s app has neither mobile check deposit nor an order ticket. It is possible, however, to manage Pies and build them. Like Vanguard’s app, the M1 Finance app has TouchID for Apple devices. Unlike Vanguard’s app, the M1 app offers stock and fund research tools. There’s also a basic chart on the app.


M1 or Vanguard


It’s possible to access several accounts across the M1 Finance platform using the main menu at the bottom of the app, another advantage.

Winner: M1 Finance


Category #4: Security Research


Vanguard:

Stock profiles on the Vanguard site have a decent amount of information on them. During our investigation, we found price targets, analyst reports in pdf format, financial statements, earnings histories in bar-chart format, and quite a bit more. Option chains should not be overlooked, although they are available only in call/put format.

M1 Finance:

Security profiles at M1 Finance have far less data on them. For example, there is no information pulled from SEC statements, most price metrics are missing in action, and analyst reports won’t be found. Instead, M1 posts just a few trading details, like P/E ratio and market cap.

Winner: Vanguard


Category #5: Trading on Margin


Vanguard:

Vanguard’s software doesn’t display the margin status of an asset. The broker-dealer does, however, offer margin trading capability. It charges interest on a sliding scale, ranging from 8.75% to 5%.

M1 Finance:

Every account at M1 Finance with at least $5,000 in equity is automatically enrolled in M1 Borrow, the company’s margin service. A debit currently costs 4.25% (Plus clients get a 1.5% discount). A big advantage here is that M1’s software shows whether a security can be borrowed and what the maintenance requirement is for the asset.

Winner: M1 Finance


Category #6: Miscellaneous Services


Cash Management Tools: A debit card will be found only at M1 Finance.

Fractional-share Trading: M1 Finance offers whole-dollar investing in stocks and ETFs. Vanguard does not.

Individual Retirement Accounts: IRAs are available at both firms in this survey. Vanguard has more IRA types.

Access to IPOs: Neither Vanguard nor M1 Finance offers early access to upcoming equity offerings.

DRIP Availability: It’s possible to reinvest cash dividends as additional shares at both firms (M1 Finance has a $25 minimum).

Periodic Mutual Fund Investing: Vanguard offers this, but only for Vanguard-branded funds.

Winner: Tie


Recommendations


Beginners: either broker will work.

Retirement Savers and Long-Term Investors: Vanguard.

ETF & Stock Trading: Vanguard (unless you want to use whole dollars).

Small Accounts: M1 Finance has $0 commission on everything.


Promotions


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

Vanguard: none.



Vanguard vs M1 Finance - Judgment


While we do like M1 Finance’s margin and debit card services, Vanguard appears to offer a more comprehensive investment experience.


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 Brokerage-Review.com, Chad can usually be found managing his portfolio or building a new home computer.