Rating:  4.5-star brokerage firm rating

M1 Finance IRA cost, fees, ROTH/Traditional IRA, Rollover IRA, SEP IRA, 401K individual retirement accounts annual, signing up/closing charges and commissions on investments

M1 Finance IRA Fees and Commissions

M1 Finance IRA accounts are free to create and maintain. There are no account management or maintenance fees. There are no commissions for investing in stocks, ETFs or mutual funds. In an unlikely event if you decide to cancel your IRA account $100 fee will be charged.

List of IRA fees:

  • IRA set-up fee: $0
  • Annual IRA fee: $0
  • IRA termination fee: $100
  • Inactivity fee: $20 for accounts with less than $20 and no activity for +180 days

M1 Finance Promotion

Pay no broker commissions or fees. Invest for FREE + get $25 when you open an IRA!

Open M1 Finance Account

M1 Finance IRA Overview

M1 Finance claims to be a “Brokerage Built for Today’s Investor.” They offer free automated investing, the option to invest in an expert portfolio or build your own, and other services most brokers charge a fee for. M1 is designed for long term investors, and will not support those looking to day trade or be extremely involved in their investments.


M1 Finance IRA Fees


Investment Options

M1 doesn’t allow you to buy individual stocks, but it does allow you to build a portfolio of different stocks which it then automatically balances for you. They refer to your portfolio as a “Pie,” which they display in a circle with different slices representing the different parts of your portfolio. They offer expert or custom pies, which really just translates to your risk tolerance, level of investing knowledge, and investing goals. M1 lets you buy fractional shares of stocks through your portfolio, which is great if you are looking to buy parts of expensive stocks. In theory, you could replicate a fund or portfolio developed by Vanguard or a similar company, while avoiding the management fee. However, that is up to you. You can design literally any portfolio you want.


Account Set Up and Investing Process

Account set up can be done online, or on your phone through the M1 Finance app. It takes less than half an hour, and requires all of the standard information for establishing an account with a financial institution. If you choose to do it online, there is a button in the top right of the home page of their site. You set up an account with email and password, select or build your portfolio, link a bank account, and set up your deposits. Establishing an automatic deposit on a recurring basis is the recommended way to go, but that is up to you. This makes investing easy, and requires very little thought. A great method is to set up recurring automatic deposits, and then invest anything you can on top of that when you can.

If you set up a portfolio that generates dividends, M1 will automatically reinvest them for you. The only criticism of their investing process is that it can take a few days for the system to invest your money. In theory, it automatically invests once you have $10 or more in cash in your account. However, the system only invests once per day for all of their investors, which cuts cost, but your investment might not be at the top of the list. It might take a day or two for your trade to execute. However, M1’s outlook on investing is long term, so the day to day changes will have negligible impact to long term growth.

If you want to adjust your portfolio after establishing it, it is really simply to do. You click the button labeled “Rebalance,” and make the necessary adjustments to your pie slices. The system automatically adjusts the investments to realign with your new pie. Additionally, it automatically rebalances your portfolio to make sure it aligns with your set pie percentages.


Withdrawing Funds

Withdrawing money from your account takes 3-5 days, as M1 only makes trades once per day. Once again, it might take a day or two for your money to be converted from investment to cash. But, it doesn’t cost you anything to withdrawal or invest funds. This is an excellent benefit when you consider that some companies charge $5 or more per trade.


Performance

The pie displayed for this review is currently in the negative, but is performing much better than much of the market. M1 enabled the development of a portfolio built using only dividend aristocrats. The dividends earned from these investments offset the down turn in the market, and were even automatically reinvested. This is an extremely easy app to set a portfolio, automate funding, and watch it grow. The option to build your own portfolio was a key factor in the decision to use this platform. The lack of fees was another important reason to use this platform.


M1 Finance Website


User Interface

The website is extremely easy to use, and contains a lot of great resources for evaluating your portfolio, and for researching potential changes to your portfolio. Research is one of the 4 main tabs on the user portal page, and it is further broken down into market news, stocks, funds, pies, expert pies, and watchlist. This is probably one of the best features of the website, as it allows a new or moderately new investor to conduct targeted research about investment strategies, stocks, and anything else you could want to know about investing.

The M1 app is almost as user friendly as the website. It provides portfolio performance information, research capability, and most of the other features of the website. You are not able to access your tax and financial paperwork, but that shouldn’t be a large discriminator as it is unlikely you will need those on a mobile platform.


Dividends, Taxes, and Paperwork

As discussed above, dividends are automatically reinvested with no effort on your part. Tax, account statements, and other paperwork is kept on the website under the “Activity” tab. The paperwork is all maintained electronically, and the tax paperwork will be sent to your associated email account.


Client Interaction

M1 sends out a emails with account statements and information on a more than monthly basis. Within the first month M1 will send a new investor a series of emails with articles about investing basics and tips on how to get the most out of your M1 account. If you haven’t used an investing app or robo advisor before, these tips are really useful. If you have been investing for a while they serve as a good review, but nothing in them are earth shattering.


Final Thoughts

M1 is a great app for those who want to set up their own portfolio, and have it managed basically for free. It is an excellent choice for hands off, long term, investment management. It is a great way to invest on a recurring basis, with a managed portfolio that you never really need to check in on. If you want to save for retirement (or another long term goal), this is a great app to use. If you want to day trade or make short term investments, this is not the app for you.


Open M1 Finance Account

Pay no broker commissions or fees. Invest for FREE + get $25 when you open an IRA!

Open M1 Finance Account

Continue Reading


M1 Finance IRA reviewed by TopRatedFirms.com Rating: 4.5


Firstrade