Advantages and disadvantages of M1 Finance investing. What are the good and bad features of the brokerage company? M1 Finance review, cons, and pros.

M1 Finance Rating: 

Overview of M1 Finance

True to its name, M1 Finance offers some first-rate financial resources. But it also stumbles in some key areas. Be sure to read through our review before opening an account.

M1 Products and Accounts

At M1 Finance, it’s possible to open a variety of bank and brokerage accounts. The latter service delivers access to the following list of investment vehicles:

• Cryptocurrencies
• Stocks (including a small list of penny/OTC stocks)
• ETFs
• Closed-end funds

Any asset will need to be placed in something called a Pie. This is a basket of assets. A Pie can have up to 100 slices, and a single account can have up to 5 Pies. It’s possible to place a single asset inside one Pie, which means individual assets can be traded.

But it’s not possible to place a trade whenever you want at M1 Finance. The brokerage firm sends its customers’ orders in batches during the trading day.

M1 also offers some custom-built Pies, so customers don’t actually have to create their own Pies if they don’t want to. In either case, investment decisions are made by M1 clients, so everything is self-directed. There are no managed accounts here.





The available tax structures for investing include joint, individual, IRA, custodial, and trust. U.S. citizenship is not required to open an M1 account, although the company does require a residential address in the United States and a U.S.-based phone number. Non-U.S. citizens must be Green Card holders.

Because M1 Finance is a member of SIPC, securities accounts (but not crypto accounts) are insured up to $500k. Some accounts that clear through Apex are eligible for additional protection up to $37 million.

Although these services certainly have their advantages, the major downside at M1 Finance is the Plus membership. The best experience at M1 does require this subscription, which is $3 per month.

Cash Management

The benefits of the Plus membership really show in the company’s banking service, which offers both checking and savings accounts. With a Plus subscription, the APY on the savings account is 4% APY. Without Plus, the yield drops to 0.5% APY.

With or without a Plus membership, the savings account comes with $5 million in FDIC insurance because M1 uses several partner banks in a sweep program (technically, M1 Finance itself is not a bank).

M1’s checking account comes with a Visa debit card, early payday, and no monthly fees. Plus members get lots of perks, like the ability to send checks and 0% forex fees.

M1 Finance has a Visa Signature credit card that comes with even more benefits. These include a rewards program that earns up to 10% cash back for shopping at participating retailers.

And finally, there are personal loans. Available through M1 with zero fees and no hard inquiry, loans come with a variety of terms and interest rates. Plus members get a 1.5% discount.

Margin Service

M1’s banking program has one more service: margin trading. With a brokerage account, it’s possible borrow funds using securities as collateral (personal loans are uncollateralized). The advantage of using margin is that the interest rates are typically lower. Members pay 6.25% for margin debits. These are very low rates by industry standards right now.

Individual and joint accounts are automatically signed up for margin. Custodial accounts and IRAs are not eligible. Trusts must have a Margin and Short Agreement on file.





M1’s software displays brief margin details on an asset’s profile. There are two data points: margin eligibility and maintenance requirement. Big stocks like Amazon will have a 25% maintenance requirement.

Customer Support

The M1 Finance website and mobile app both have a moderate amount of self-help features, which obviously circumvent the need to actually obtain customer assistance through other means. On the either platform, these useful resources will be found through the account icon that appears in the upper-right corner of the screen.

If these self-help tools don’t suffice, both platforms have a variety of other resources. One is a robo-chat tool that we found moderately helpful. There is an email form for less-urgent issues. Another resource is a Help Center, which delivers lots of answers on the ins and outs of investing at M1.

Then there is old-fashioned human support over the phone. M1 associates are available during the week from 9:00 am, EST, until 4:00 pm. The broker’s phone number is not toll free, although it is possible to schedule a call back.

M1 Finance Minimums and Fees

Trades of securities cost nothing at M1 Finance. Trades of cryptocurrencies cost 1% of trade value.

Then there are the account fees. A low-balance fee of $50 applies to investing accounts (but not bank accounts) with less than $50 in assets and zero trading or deposit activity during the previous 90 days. M1 also has an IRA termination fee of $100.

A bank or brokerage account can be opened with any deposit or no deposit at all. A brokerage account, though, will be subject to the low-balance fee just noted.

Mobile App

To manage Pies and find something to put into them, M1 Finance clients can use the broker’s mobile app. The Research tab at the bottom of the app is where the platform’s research tools will be found. There is no actual screener, though. The app delivers just a list of stocks, ETFs, and cryptocurrencies. We found it easier to simply enter a ticker symbol or company name.





Asset profiles have simple charts, brief trade data, and news articles with thumbnails from a variety of sources.

A good place to visit on the app, not surprisingly, is the Home tab. Here, there are tiles that lead to various functions of the app. These include:





- Invest (for funding an account)
- Save (deposit accounts)
- Borrow (margin service)
- Spend (the credit card)

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Website and Pie Building

Although we didn’t find a security screener on the mobile app, there is one on the website. Unfortunately, there aren’t many search criteria. Market cap, P/E ratio, and dividend yield are a few of the variables that can be specified.





Clicking on one of the assets in the search results brings up its profile. Here, assets have the same information that we saw on the mobile app. To add an asset to a Pie on either platform, website or mobile app, simply click or tap on the button to add it to the portfolio. On the next screen, you’ll need to specify the account the asset should go into and the percentage of the Pie.





If you really have no clue what to add to a Pie, there is a page with pre-built Pies (look for the sub-tab for Expert Pies under the Research tab). Here, there are a variety of Pies created by M1 Finance. There are Pies for hedge funds and retirement.

Additional Services

Extended Hours: M1 Finance does not offer pre-market or after-hours trading. As a matter of fact, M1 customers can’t even trade during the entire day session. There is one morning trade window at the opening bell, and a second one during the final hour of trading. The afternoon window is only for Plus customers. Crypto accounts get the same trade windows 7 days a week.

IPO Access: Not available at M1 Finance.

Securities Lending Income Program: M1 customers are able to earn 10% of the income generated by loaning out their shares.

DRIP Service: Cash dividends are accumulated at M1 and used to purchase additional shares of underperforming slices. This system is a little different than a traditional DRIP.

Automatic Mutual Fund Investing: No mutual funds are available.

Fractional-share Trading: All trades at M1 Finance are placed in whole dollars.

Individual Retirement Accounts: M1 Finance offers Roth, Traditional, SEP, and Rollover IRAs.

Our Recommendations

Mutual Funds: Although M1 Finance doesn’t offer trading in any mutual funds, Firstrade does.

Active Stock Trading: Because M1 Finance doesn’t offer advanced software or even the entire trading day, we don’t recommend it for frequent equity trading.

Beginners: M1 Finance is a good broker for beginner investors.

Retirement Planning & Long-Term Investing: IRAs really are not enough to create a holistic financial roadmap to retirement. Charles Schwab has much more than M1 Finance has. These resources include financial-planning services and a larger list of tax-advantaged accounts.

Small Accounts: Small account holders (above $50) will do well here.

M1 Finance Pros and Cons Judgement

Although we do really like its banking service, M1 Finance doesn’t perform spectacularly well in the brokerage category. Its Pie method of investing, which it specializes in, is rather muddled on either software platform.