M1 Finance Rating:  4.5-star brokerage firm rating

What does M1 Finance offer and what does it do? What is M1 Finance investing app, brokerage, robo advisor company in 2019?

What is M1 Finance?

M1 Finance is trying to change the way people think and go about their investing. They are not like the typical broker that expects you to invest in a few stocks and ETFs that you hand-selected, but instead M1 has created a method of investing where you can choose to invest in baskets of stocks and ETFs that share a similar theme – they call it “pie investing”. You can choose to invest in a pre-built pie that focuses on a specific sector or investment style, or you could choose to create your own custom pie. This article will discuss in detail M1’s “pie approach” to investing and how to use it.


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Pie Investing

A pie represents a basket of up to 500 stocks and ETFs. If you invest X amount in a pie, you own a small portion of each of that pie’s underlying holdings. Each pre-built pie has a specific strategy or theme, for example some are focused on dividend-paying stocks and income-paying ETFs while others are focused on specific sectors, like technology or health care. M1 currently offers some 80 unique pre-built pies you can choose to invest in.

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Invest for FREE - pay no broker commissions or fees.

Open M1 Finance Account

Custom-Built Pies

If M1’s pre-built pies don’t quite get your portfolio where you want it, or maybe they get your portfolio 90% of the way there but there’s still something missing, you should consider adding a custom pie to your mix. M1 lets you create custom pies with anywhere from one to 500 securities each. You can hand-select specific stocks and ETFs and choose the target weights for each security in your custom pies.

What’s Not Included?

You should know that M1 only supports investing through its custom pie approach, which uses ETFs and individual stocks. This means that investing in other security types, like mutual funds, options, bonds, etc. is not possible.


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Rebalancing Pies

One of the perks of pie investing is that each individual pie acts like its own mini portfolio with target weights for each of its holdings. M1 automatically rebalances their pies to keep the weights in line with the pie’s stated objectives. This is a nice benefit because if you were to maintain these mini portfolios independently with a brokerage it would cost you time and money to rebalance on your own. M1 won’t automatically rebalance any of your custom pies, however as you deposit additional funds into custom pies they will allocate that money to the pie’s holdings in a way that gets you closer to your specified target weights.

Automatic Investing

Although M1 won’t automatically rebalance custom pies, you can opt to have them automatically re-invest your idle cash balance in whichever pies you want at your chosen allocations once your cash balance reaches $10. This is a nice perk because you don’t need to wait for a larger cash pile to accumulate before putting it to work. You can even setup a recurring automatic investment schedule. You won’t need to pay any trading commissions or fees to invest extra cash.

Account Fees and Costs

Another benefit of investing with M1 Finance is that it’s completely free. They don’t charge any trading commissions or management fees to invest in their pies. The only expenses you will incur are the expense ratios embedded in any of the ETFs that are a part of the pies you invest in. If you build custom pies and ignore ETFs all together, then you won’t need to worry about these expenses.

Account Minimums and Requirements

There are no required minimum account balances or account fees for inactivity. However, M1 does require an investment of at least $100 to start investing in a new pie. This only applies to the incepting contribution, and there is no minimum for any future re-investments in that pie (although as we pointed out automatic reinvestments will only be initiated once your cash balance is $10 or more).

What is M1 Finance Summary

In conclusion, M1 offers a unique and innovative alternative to standard investing. If you would like to invest in mini portfolios of stocks and ETFs and have them automatically rebalanced and maintained and setup automatic reinvesting into these pies, you should check out M1’s platform.

Open M1 Finance Account

Invest for FREE - pay no broker commissions or fees.

Open M1 Finance Account


M1 Finance

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