2019 M1 Finance brokerage hidden fees. M1 Finance trading inactivity and monthly fee, additional charges. Costs for the broker's IRA account.

Overview of Hidden Fees at M1 Finance

M1 Finance is a relatively new broker that entered the marketplace offering commission-free trades. M1 sets themselves apart from the competition mainly through their attractive fee structure and automated investing platform, which helps you build a portfolio tailored to your needs and then cares for that portfolio for you with features such as automatic rebalancing. So far everything sounds great, especially the completely free trading platform, but let’s take a look at some of the fees you could incur outside of this.

Mutual Fund Fees

Although M1 doesn’t charge any commissions for trading, they do charge a $20 fee anytime you place a sale on shares in a mutual fund. This is important to keep in mind when building a cost-effective portfolio considering that most mutual funds already have a sizeable management fee baked into the NAV.

Account Maintenance Fees

As long as you don’t let your M1 account go completely dormant there is no maintenance fee to worry about. In fact, even if you forget about your account it still won’t incur a maintenance fee, but M1 will automatically close any accounts with less than $10 and no trading activity over the past 6 months.

Margin Fees

M1 does offer margin (up to 35% of the value of their portfolio) to investors with taxable brokerage accounts with a balance of at least $10,000. They charge a relatively attractive 4% borrowing rate on the margin balance as of the time of this writing.

M1 Finance Promotion

$100 bonus to transfer a brokerage account with $20,000 or more.

Account Transfer and IRA Fees

As you’d expect, you can transfer holdings to M1 from your current brokerage at no charge, however if you ever want to transfer your assets from M1 to another broker you will be charged a $100 transfer fee. You can also move your IRA to M1 free of charge, however once you terminate it and distribute the assets you’ll be charged a $100 termination fee.

Banking Fees

While direct ACH deposits to or from your M1 account are always free, wire transfers will incur a fee of $25 (domestic) or $45 (international). Additionally, if your bank ever rejects any of your transfer requests to M1 (ACH, wire, or check) you will be charged a $30 fee.

Fees for Paper Statements

Like most online brokers today, M1 charges fees between $2-$5 for investors who opt to receive paper statements through the mail instead of through email/online. And off on the off chance you needed these statements mailed overnight, you’d be charged $50 to $100. These fees, however, shouldn’t be much of a concern for investors as online statements are much easier for everyone involved.

Regulatory Fees

Although regulatory fees are probably the least significant of all brokerage-related fees in terms of size, we mention them here because M1, like most brokers, will pass these on to you. These fees shouldn’t really impact your selection of a broker because they usually only amount to a few pennies per trade and are mandated by the SEC regardless of which broker you trade through. Overall the fees (or lack thereof) at M1 Finance are relatively few and insignificant, setting these guys apart from most of the competition in this aspect.

Review

4.5-star brokerage firm rating

Read detailed M1 Finance Investing Review.

M1 Finance Promotion For A New Account

$100 bonus to transfer a brokerage account with $20,000 or more.

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