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M1 Finance

M1 Finance

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M1 Finance is an online financial institution that lets users invest for free on its website and mobile app. The company offers self-guided, commission-free investing, though it does require fees for miscellaneous actions like transfers, mail requests and account inactivity. In addition to investing, M1 also allows customers to borrow and integrate debit cards into their accounts.

BOTTOM LINE

M1 Finance is an online brokerage offering self-guided investing. It has a mixture of prebuilt and customized portfolios with automated investing options. It’s aimed at investors looking to build wealth over the long term.

PROS
  • No commissions or trade markups
  • Mobile app
  • Flexible portfolio building
CONS
  • Account inactivity fees
  • No online chat availability

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    What is M1 Finance?

    M1 Finance is an online brokerage with no management or commission fees and free brokerage accounts for investors. It lets you buy whole or fractional shares of stocks and EFTs. Its platform is designed to be accessible to investors at all levels and provides automatic reinvestment and dynamic rebalancing.

    Additionally, M1 Finance offers an FDIC-insured checking account with a debit card and the ability to borrow as much as 35% of your portfolio, payable on your own schedule. Securities in M1 Invest accounts are SIPC-insured.

    How does M1 Finance work?

    M1 Finance plays the role of online broker, investment manager, lender and cash manager. Its investment service comes with options for self-managed and robo-investing so its investments can be largely self-run, with the option of choosing individual stocks when desired.

    You can get started right away on the app by building your own “pie” of individual stocks and EFTs or choosing a prebuilt one with the onboarding tutorial. Each investment is a slice according to a percentage you select. You can use this pie later, but it's mostly to show how the app works.

    Once you’re familiar with how to create and customize pies, you can link your bank account to a trust account, an IRA or an individual or joint account. Once you add money to your portfolio, M1 buys investment shares based on your pie’s percentages. Later, you can choose from “expert pies,” professionally-crafted pies designed for specific goals, risk tolerances or industry investing.

    The M1 Borrow service lets you use margin for a portfolio line of credit of up to 35% of its value. There’s no paperwork to fill out, and rates are as low as 2%. There’s also no payment schedule.

    M1 Finance fees

    M1 doesn’t charge commission, platform-usage, or deposit/withdrawal fees from your connected bank. It also doesn’t mark up trades, but it does charge account maintenance fees, including:

    • Inactivity fee: $20
    • Escheatment processing (per account): $75
    • TOD account transfer fee (per transfer): $200

    When selling stock or ETF, here’s what you’ll pay:

    • Securities Exchange Commission (SEC) fee = total transaction price x 22.10 ÷ 1 million
    • Trading activity fee = shares sold x 0.0001119
    • The maximum trading activity fee is $5.95

    These fees are rounded up to the nearest penny.

    Depending on which M1 Financial services you use, there may also be miscellaneous fees like outgoing direct account transfer, IRA termination and check request fees.

    M1 Finance FAQ

    Does M1 Finance have an app?
    Yes. M1 Finance’s robust app allows for investing, borrowing and spending. It’s available for Apple and Android.
    Can you make money with M1 Finance?
    Yes. You make money when you sell stocks that have appreciated or when you receive dividend payouts. M1 Finance is designed for long-term investing, so it doesn’t offer day trading.
    Is M1 Finance good for beginners?
    Yes. Setting up an account with M1 Finance is straightforward, and the app’s onboarding tutorial guides you through the initial process of creating your first “pie.” That said, the app won’t walk you through setting goals, explain how stocks or EFTs work or help you determine your risk tolerance. To learn more about investing, find the learning materials on the “Insight” section of M1 Finance’s website.
    Can you withdraw money from M1 Finance?
    Yes, you can withdraw and transfer dividends to your bank account.
    Is M1 Finance really free?
    Like most investing platforms, M1 does charge some miscellaneous fees, but you’re never charged commissions, markups on trades, platform-usage fees or deposit and withdrawal fees from a connected bank.

    Is M1 Finance safe?

    M1 Finance is a trusted company and legitimate option for flexible investing. It's straightforward for those who want to be in control of their long-term wealth building. Its automated investing can be particularly attractive to new or time-strapped investors looking to grow their portfolio without having to rely on a middle person.

    M1 Finance also offers customization options to create a tailored portfolio or lets you choose from an expert portfolio that matches your needs. M1 Finance’s other services make it easy to keep your financials under one roof. M1 Spend allows for a checking account and debit card, while M1 Borrow lets you borrow 35% of your portfolio value — with no payment schedule.

    Overall, M1 Finance is a good long-term investing service designed for beginners who want to get in the game or more experienced users who want a customized portfolio. That said, M1 Finance’s app already assumes you have at least a basic understanding of investment principles and risks.

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    M1 Finance Company Information

    Company Name:
    M1 Finance
    Website:
    www.m1finance.com