M1 Finance M1  rating

M1 Finance Review

M1 Finance review, investing account fees, broker rates, robo advisor mobile app pros and cons, performance/returns, fund withdrawals, and problems for 2018.

Overview of M1 Finance

M1 Finance is a new brokerage firm that combines elements of robo-trading with features of traditional investing. This hybrid brokerage house offers a unique form of money management that will attract investors from the Millennial generation, but anyone can benefit from the company’s noteworthy style of financial supervision. Let’s check it out.

M1 Finance Investment Method

M1 Finance customers invest in Pies. These are portfolios of stocks, ETF’s, and other Pies. Some of them are created by M1, while others are built by the customer. In either case, a Pie can have up to 100 slices. Each slice is a stock, ETF, or fractional ownership of another Pie. One Pie can be composed of a single stock or ETF.

M1 Finance uses Modern Portfolio Theory (MPT) to design its own selection of Pies. This investment strategy assumes that risk is a natural part of any project that seeks return. M1’s Pies will attempt to find an efficient frontier, which is the place believed to have the highest level of return for a given amount of risk.

The company’s Pies cannot be adjusted by clients, although the broker updates them once every three months. Custom-built Pies of course can be modified at will, and M1 investors can have multiple Pies.

M1 Finance review

As some underlying stocks or exchange-traded funds increase in value, while others decrease in price, a Pie’s original asset allocation will change. M1 rebalances Pies by using contributions to purchase underweight slices. The broker sells overweight slices when customers make withdrawals. Clients can also login anytime and submit a rebalance request without making any deposits or withdrawals.

Cash balances are automatically invested in an account’s Pies. This occurs once every market day at 10 am, EST. Orders placed outside of this short window will be filled on the upcoming market day. M1 says that limiting trades to just once a day keeps costs down. The broker’s investment method is also supposed to be a long-term strategy.

Opening a M1 Finance Account

Most investors open M1 Finance account with their promotion offer: Invest and get your money managed absolutely FREE!

Unlike most robo-advisors, M1 Finance does not have a thorough questionnaire. The broker’s application asks just a few questions about risk tolerance and investment objectives. Actually, these questions are required by industry guidelines, so there’s no indication that M1 is a typical robo advisor. The application takes just a few minutes, and an e-mail address must be used as the login ID. The broker does not require any minimum deposit to open an investment account.

M1 Finance Investment Categories

During the application process, M1 presents several categories of its own Pies, so that applicants can see what types of portfolios are available. The categories are:

General Investing – As the name suggests, this category is for all-purpose investing. There are several Pies within this category. They range from ultra conservative to ultra aggressive.

Plan for Retirement – These Pies are target-date portfolios. Each target date has three options: aggressive, conservative, and moderate.

Responsible Investing – These are socially-conscious Pies that meet environmental, social, and governance criteria. All of the underlying ETF’s are from NuShares.

Income Earners – These are fixed-income Pies.

Hedge Fund Followers – M1 Finance built these Pies in hopes of mimicking the returns of notable money management groups.

Industries & Sectors – This group of Pies delivers a large selection of investment areas, such as telecom and energy companies. Most of the securities in the Pies are stocks, not ETF’s.

Just Stocks & Bonds – This category includes Pies that are split in various proportions between debt and equity ETF’s.

Other Strategies – This group include a Dow Jones Pie, which invests in the 30 stocks that make up the Dow Jones Industrial Average. The other option is the Market Cap 100 Pie, which invests in the 100 largest companies in the U.S. Each stock makes up 1% of the Pie.

M1 Investment review

Tax Considerations

M1 tax documents can be sent electronically to an H&R Block account. The request must be initiated from the H&R Block platform. Tax information and security transactions can also be imported into Turbo Tax from a Turbo Tax account.

M1 Finance does not conduct tax-loss harvesting in its clients’ Pies. The result of this is that securities in the portfolios aren’t bought and sold in a tax efficient manner.

Although M1 does not provide traditional tax-loss harvesting, it did recently launch a new withdrawal method that considers tax implications. When a client makes a withdrawal request, M1 has an algorithm that determines which specific securities should be sold, incorporating not just target allocations, but also tax issues. The computer program will sell securities in this order:

1. Shares that don’t create a tax liability
2. Shares that produce long-term capital gains
3. Shares that create short-term gains (which are taxed at a higher rate than long-term gains)

Customer Service

An M1 representative can be reached over the phone anytime between 9 am and 5 pm, CST, Monday through Friday. The broker regrettably does not offer any weekend hours, which will probably be an inconvenience for some investors. Besides its phone number, the company also has a service e-mail address.

M1 Finance does not have any brick-and-mortar locations, which are still fairly common in the 21st century. The M1 website does not offer on-line chat, although there is a robo-chat program. If the robo-chat function doesn’t answer your question, the chat box provides a way to send a message, with attachments if necessary, to a company associate.

M1 Finance Fees, Account Minimums, and Commissions

Although M1 Finance doesn’t require any amount to open an account, it does require $100 to make an investment. However, there are NO COMMISSIONS or FEES to invest your money - it's incredible!

There is no annual account fee, and no commissions are charged on trades for either stocks or ETF’s. Amazingly, the broker allows an unlimited number of trades and still doesn’t charge any commissions.

The company also lets customers borrow up to 35% of their margin account value at the incredibly low rate of just 3.75% APR.

How do they make money? M1’s back-end services generate revenue, and the addition of new services in 2018 will further contribute to earnings.



M1’s website is easy to navigate. It includes plenty of information on the broker’s financial offerings. There are screeners for stocks and ETF’s. They both are unique by offering an icon for the fund or stock. For example, the golden arches appear next to McDonald’s in the stock search results. Only limited information is displayed for the securities, however.

Pies can be created and edited on either the website or the broker’s mobile app, which is compatible with Android and Apple devices. Account documents can be accessed on the mobile app, but the platform doesn’t offer mobile check deposit or live streaming of business news.

M1 Finance review

Retirement Options

Roth, Traditional, and SEP IRA’s are available at M1 Finance. For the first year, a retirement account has no fee. Afterwards, there is a $7.50 quarterly charge for accounts below $5,000. Every IRA has a termination fee of $60.

The retirement Pies have target dates between 2020 and 2060. The underlying ETF’s are from Vanguard, iShares, State Street, and PowerShares.

M1 Finance review


Betterment, one of the first robo advisors, provides access to licensed experts free of charge as part of its basic automated investment account. It costs just 25 basis points and has no minimum balance requirement. For a 0.40% fee and a $100,000 balance, the brokerage firm provides unlimited assistance from advisors with a CFP® qualification. Unlike M1, stocks are not available at the broker, as it only trades a few low-cost ETF’s. M1's absense of commissions also makes it more attractive than Betterment.

M1 Finance Review Summary

M1 Finance offers a distinctive method of financial management that will definitely attract many investors. Because M1 does not charge any commissions on transactions, it is a good choice for frequent traders.

Open M1 Finance Account

Open M1 Finance Account

M1 Finance reviewed by Brokerage-Review.com on . Rating: 4.5