M1 Review (2024): A Fantastic All-In-One Investing Choice

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I’ve been an M1 (formally M1 Finance) customer since 2022, after moving my IRA from Vanguard. Since making the switch, I can confidently say that M1 is an excellent all-in-one investment platform, standing out for its unique combination of low-cost automated investing and customizable options.

In this comprehensive M1 review, I’ll share my first-hand experience using the platform, discuss its pros and cons, and explain how it stacks up against notable competitors.

4.5/5

Verdict: M1 is a top choice for long-term investors, offering the benefits of a robo-advisor without the fees. Standout features include customizable portfolios, automatic rebalancing, and various account types.

My experience: I moved my IRA to M1 in 2022, allocating 100% of my portfolio to the 2050 Moderate portfolio. As a hands-off investor, I'm happy that I don’t have to pay fees, and the returns have exceeded the comparable Vanguard Target Retirement Fund I was in (without taking on additional risk).

How it compares: Unlike Robinhood, which caters to active traders, M1 is designed for long-term investors. It offers pre-built portfolios similar to Wealthfront, but without the management fees.

Bonuses available: See the current M1 promotions for opening a new account.

M1 Pros:

• Diverse account types: taxable, IRA, trust, custodial and crypto.
• Can invest in stocks, ETFs and crypto.
• High-yield savings account (with a premium subscription).
• Access to margin and personal loans.

M1 Cons:

• Trading only occurs once per day.
• No automated tax loss harvesting.
• Some advanced features (such as the lowest rate on margin loans) require a premium subscription ($3 per month or $36 per year).

Start Investing With M1 Finance

How Does M1 Finance Work?

M1 Finance offers the best of many worlds, but at its core is a concept called “pies.” 

Pies are M1’s term for portfolio asset allocation.

There are two types of pies:

• Model Pies. These pies, formally known as Expert Pies, allow you to invest in done-for-you portfolios that align with a variety of financial goals and risk tolerances, such as retirement or dividend income. 
• Customized Pies. These pies give intermediate and advanced investors the ability to create a customized investment portfolio composed of stocks and ETFs that can be automatically rebalanced with a single click.

We’ll cover pies in more detail below. But first, let’s go over the basics of M1, which offers multiple types of investment accounts, including:

• Individual Investing. 
• Joint Investing. 
• Retirement Account, including traditional, Roth, SEP IRAs, or the rollover of an existing 401(k).
• Trust Account.
• Custodial Account (M1 Plus only).
• Crypto Account (taxable only).

The primary benefit offered by M1 compared to most robo-advisors is that it doesn’t charge asset management fees. For comparison’s sake, many robo-advisors charge 0.25% for what is a very similar offering to what M1 has available via their Model Pies.

Keep in mind that some of the investments within a Pie, such as ETFs, do have their own expense ratios. However, these are typically on the very low end, at around 0.10%.

Beyond investing, M1 also offers:

• M1 Spend. An online checking account and debit card that integrates with the investment platform to allow for easier overall money management. 
• M1 Borrow. The ability to borrow up to 40% of your portfolio value at a favorable interest rate.
• Owner’s Rewards Card. A credit card that offers cash-back from companies you own stock in, with the ability to automatically invest any rewards you earn.

Users can upgrade to an M1 Plus account, which provides additional features across M1’s products (which we’ll cover below). An M1 Plus account is free the first three months and $3 per month thereafter.

M1 Pie Investing Strategy Explained

With the M1 pie investment strategy, you choose between a Model Pie or a Custom Pie.

M1 Model Pies

Model Pies offer traditional asset allocations, such as retirement portfolios and general investment portfolios aimed at reaching short-term, medium-term and long-term financial goals.

However, there are also some more advanced investment options, such as the “ARK ETFs Equal-Weighted” pie, which brings together several of ARKs ETFs.

Here are some of the Model Pies available on the platform:

• General Investing: You can set this up to reflect your own risk tolerance and create a diversified portfolio to protect yourself.
• Plan for Retirement: You can use this for setting up a target retirement date (see the next section for more details).
• Responsible Investing: This is a good pick for those who put a high emphasis on being a socially responsible investor.
• Income Earning: This is an option for those who focus on dividends and income.
• Industries and Sectors: This option lets you invest in specific industries that interest you.

M1 Target Date Funds

Under the “Plan for Retirement” Model Pies, M1 offers a wide range of target date retirement funds for all ages. For those investing for retirement, there’s a lot to like about what the M1 platform offers in this area. 

While I’m somewhat nitpicking here, one of my complaints about Vanguard’s Target Retirement Fund, as well as many of the similar funds offered by other large investment institutions, is that they’re fairly cookie cutter. 

For example, the current breakdown of Vanguard’s 2050 fund is:

M1, on the other hand, has 16 different ETFs in their 2050 Moderate fund:

Looking back at the five-year returns of the different target date funds M1 offers, this has resulted in better gains:

A big reason why is that M1 operates its target date funds more like a robo-advisor, aiming to use algorithms to provide slightly better returns for their investors. As someone who is a big proponent of the automated investing that a robo-advisor and target date fund provides, I really like what M1 offers here.

M1 Custom Pies

With a Custom Pie, you can develop your own investment portfolio and choose how big you want each slice to be. This is a nice feature for more hands-on investors looking to follow a specific strategy, such as a three-fund portfolio, which is a popular asset allocation strategy that consists of:

1. A total U.S. stock market index fund.
2. A total international stock index fund.
3. A total U.S. bond index fund.

One major benefit offered by M1 is the ease of portfolio rebalancing. At any time, you can rebalance to your original allocations with just the click of a button.

Tax planning tip: This ease of rebalancing can be both a pro and a con. Rebalancing can result in short-term capital gains taxes if the asset was held for less than a year. Also, research is inconclusive about which rebalancing frequency (monthly, quarterly, annually, etc.) is best. 

Another beneficial rebalancing option is dynamic rebalancing, which:

• Rebalances closer to your desired percentages when you add cash.
• Has withdrawals taken from winners to rebalance towards your original percentages.

M1 Cryptocurrency Trading

M1 allows users to trade a limited selection of cryptocurrencies, including Bitcoin and Ethereum.

M1 does not charge extra fees for buying or selling cryptocurrencies. However, Apex Crypto, the custodian M1 uses to execute trades, charges a 1% (or 100 basis points) fee on all crypto transactions. 

M1 crypto assets are stored with Apex Crypto. Assets are generally held in cold storage.

Individual wallets and private keys are not currently supported by M1. Unfortunately, that means you can’t do direct transfers to or from an outside crypto wallet. The only option is to sell your crypto positions, incur potential capital gains taxes, and withdraw the proceeds to a linked bank account

Overall, while it may not be the most comprehensive option available in the crypto space, M1’s crypto offerings are a good choice for beginners or those looking for a simple way to buy and sell blue chip digital assets.

M1 Plus Investing Perks

On the investing side, the optional M1 Plus upgrade gives you the ability to:

• Create custodial accounts, which are investing accounts for minors.
• Trade during morning or afternoon trading windows, with the ability to execute trades in extended trading hours. To qualify to trade during both morning and afternoon hours, your account balance must exceed $25,000. If less than $25,000, you’re allowed to trade in either the a.m. or p.m., but not both.
• Enable “Smart Transfers.” Described in more detail below, the Smart Transfers feature allows you to set rules based on the balance in your bank account.

M1 Plus features can be found for free on many other platforms. Yet, as you’ll see below, it’s really in the M1 Borrow and M1 Spend checking account where M1 Plus stands out. 

M1 Spend Checking Account Review

M1 Spend is an optional checking account that’s linked to your investment portfolio and integrated into the main investment platform. It’s FDIC-insured and works like any checking account offered by a major consumer bank: you can accept direct deposits and deposit checks electronically, and it comes with a Visa debit card.

It also gives you the quick and easy ability to transfer funds back and forth between your checking and investment accounts.

There are two versions of M1 Spend to choose from: M1 Standard (which is free) and M1 Plus (which is free the first three months and $3 each month thereafter).

M1 Standard is a nice option for those already investing on the platform. The fact that the investing account and bank account are linked and integrated offers a degree of convenience, as well as flexibility should you need to access your invested funds. 

M1 Plus offers 1% cash-back on all purchases with your Visa debit card and pays a 5% APY interest rate on your cash holdings. You also get up to four monthly ATM fees reversed.

M1 Plus gives you some other benefits within the M1 Finance ecosystem, one of which is called Smart Transfers. This feature allows you to set automated rules that move your money between accounts.

For example, let’s say you want to carry $5,000 in your checking account, with anything above that figure being invested. You can set a rule for M1 Finance to automatically move anything over and above $5,000 into your investment account at predefined intervals.

Other M1 Spend benefits for M1 Plus members include:

• Get reimbursed for up to four ATM fees per month.
• 0% international transaction fees on debit card purchases.
• The ability to send paper checks from within the M1 app.

The free M1 Spend account offers only one monthly ATM fee reimbursement, charges 0.8% to 1% on international debit card transactions, and doesn’t have the ability to send paper checks. 

M1 Borrow Review

M1 allows users with $2,000 or more invested in a taxable account on the platform to borrow up to 40% of their account value.

Note that retirement account balances do not qualify you for the program.

If you upgrade to M1 Plus, you can borrow for a lower rate.

You can use the funds you borrow for any purpose — buying a car, making a down payment on a home, paying for a wedding or any other personal finance goal. 

And the terms are flexible: there’s no minimum payment and no timeline to pay the loan back. There’s also no credit check, which can be a huge benefit if you’re someone with limited or poor credit history.

But you need to understand that M1 Borrow’s rates are so low and its terms are so flexible because while it’s advertised as a line of credit it’s technically a margin account. 

In the simplest possible terms, a margin account is a line of credit that uses your investment holdings as collateral for the loan. That’s why the amount you can borrow is linked to your account balance, and why there’s no set repayment schedule: the loan is secured by your investments, so the lender’s risk is very low.

Margin accounts are typically used for buying stock or other investment products. If you have $10,000 in your account and $3,500 of “margin” (as it’s referred to in investment jargon), then you can buy $13,500 worth of stock. If your shares go up in value, you get to keep the profit from all $13,500 worth of investment.

But stocks can also go down. And sometimes, they go down a lot. For this reason, margin accounts can be subject to “maintenance calls.”

A maintenance call occurs when the value of your investment account — not including the amount you borrowed — drops below a predefined threshold. With M1, that threshold is typically about 30%, although it varies depending on the perceived volatility of your investments.

When your account receives a maintenance call, it’s frozen until you either deposit more cash or sell some of your investment assets. And in some cases, your portfolio can be subject to forced sales — meaning the company can sell your assets in order to recoup its funds, even if those sales cause you to lose money.

M1 offers a tool for monitoring your account health and showing you how close you are to receiving a maintenance call:

Still, it goes without saying that you should be careful with M1 Borrow, as with all other debt products. While there are certainly responsible uses for it — especially given the low interest rate — make sure you have a plan to pay those funds back.

M1 Owner’s Rewards Card

A credit card is the latest addition to M1’s full suite of products. 

For now, the card is only available to M1 Plus members. And while there is no annual fee on the card itself, there is the annual fee you pay for the M1 Plus membership (first three months free, then $3 per month thereafter). 

The two features that stand out about this card are:

• The ability to earn up to 10% cash-back from companies you invest in, with a maximum of $200 a month. This feature isn’t available with every company, and the cash-back ranges from 1.5% to 10%. You’ll earn 1.5% cash-back everywhere else. 
• The ability to automatically invest your cash-back rewards into the market, which is a nice feature for someone who typically ends up not maximizing their reward points. 

With that said, it’s not the best rewards credit card around, as there are a number of 2% cash-back cards available without an annual fee. Still, it can make sense for those who like the simplicity of having all their financial accounts in one place, or for those who spend a lot of money at places they also invest in.

However, after reviewing the list of companies offering 10% cash-back, I found that the highest tier primarily consists of retailers and service providers that you might use for frequent, smaller purchases, such as fast food restaurants or streaming services, rather than broad categories like groceries, travel or dining.

M1 Fees

Here’s what M1 does and does not charge for.

• They don’t charge trading fees.
• They do charge a $100 termination fee, which is fairly standard for brokerages.
• There is an inactivity fee, which applies to accounts with less than $20 and no activity for more than 180 days. So, as long as you’re active on the platform, you’ll be able to dodge this fee (even if you have barely any money invested).

M1 Minimum Investment

M1 does not technically have a minimum account value, but the minimum requirement for trading is relatively low at $100. If $100 is a stretch for you financially, you can open the account, deposit any amount, and then add more money at will until you have enough to start trading.

If you’re setting up a retirement account, you’ll need to commit more for that initial investment. For that account type, you have to deposit at least $500.

M1 vs. Betterment

Betterment is a popular investment platform that also leverages robo-advisor technology. Here are some of the key differences.

Here are a couple of notes about how the two platforms compare and contrast.

• Betterment fees start at $4 per month. If you’re investing $250 or have a total of $20,000 in assets across all your Betterment accounts, you pay 0.25% annual fee instead.
• Betterment offers investors automated tax loss harvesting, which is when certain investments are sold at a loss to reduce your tax liability. Keep in mind, tax loss harvesting only benefits someone investing in a taxable account.

M1 vs. Robinhood

Robinhood is the popular investment app that pioneered free stock trading.

Here are some of the key differences between Robinhood and M1 Finance:

Here are a couple of notes about the differences between M1 and Robinhood.

• If you’ve maxed out your IRA and 401(k) match, Robinhood is good for beginning investors who just want to invest in one or two stocks. However, if you’re a more sophisticated investor, you’d be better off with M1, as Robinhood doesn’t offer portfolio rebalancing or goal-based investing.
• Robinhood has more options for the very active trader than M1. But Robinhood isn’t the best bet out there for people who want to trade a lot either, primarily because it doesn’t offer the fastest or best trade routing and execution. That means you might not always get the best price on your shares when you place market orders.

M1 Review: Is It a Good Option?

There are certain situations where I feel it makes sense for people to use the M1 platform.

Consider going with this investing platform if you are:

• Someone who understands and is committed to investing passively and wants to park their IRA, 401(k) and 403(b) rollovers. I really like what M1 offers with their target date funds for this type of person. 
• Someone who wants to learn about the market by buying individual shares of stock. My rule of thumb is that individual stocks are OK when you’re limiting your investment to 5% to 10% of your net worth. The market is fun, and you can learn a lot about finance and economics that will help you manage your money and investments. And some people even hit it big. However, this shouldn’t replace a responsible investing strategy based on a long-term, goal-based approach.
• Someone with a taxable stock portfolio who can benefit from a margin loan. Whether it’s to start a business or buy a car, M1 Borrow’s terms are extremely favorable. Just be careful of the tax consequences if you’re considering a transfer. 

Overall, I like the company and the suite of products M1 puts into small investors’ hands. The interface is easy to set up and use; it gives you the option to customize your own investments or rely on their model recommendations; and you can even manage your account on the go with the M1 investing app (which is available for Android and iOS).

All of that, along with the lack of management fees, makes this a solid option.

If you think M1 is right for you, click here to open an account.

Disclaimers: M1 Plus is a paid membership that confers benefits for products and services offered by M1 Finance LLC, M1 Spend LLC and M1 Digital LLC, each a separate, affiliated, and wholly-owned operating subsidiary of M1 Holdings Inc. “M1” refers to M1 Holdings Inc., and its affiliates.

The M1 Credit Card is not available for U.S. territory residents. The Owner’s Rewards Card by M1 is Powered by Deserve and issued by Celtic Bank. Review the Cardholder Agreement and Rewards Terms for important information about the Owner’s Rewards Card by M1.

R.J. Weiss

R.J. Weiss, founder of The Ways To Wealth, has been a CERTIFIED FINANCIAL PLANNER™ since 2010. Holding a B.A. in finance and having completed the CFP® certification curriculum at The American College, R.J. combines formal education with a deep commitment to providing unbiased financial insights. Recognized as a trusted authority in the financial realm, his expertise is highlighted in major publications like Business Insider, New York Times, and Forbes.