2019 M1 Finance vs TD Ameritrade: compare IRA, commissions, investing fees, trading tools, account pros and cons. Which online broker is better?


Overview of TD Ameritrade and M1 Finance

If you’re thinking about opening a new investment account, there are several choices available to you. Keep in mind that the range of services can vary widely from broker to broker. Two companies that take very different approaches to trading are M1 Finance and TD Ameritrade. You’ll definitely want to take into consideration the following differences between these two firms before choosing one of them.


Broker Cost

Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
TD Ameritrade $6.95 $49.95 $6.95 + $0.75 per contract $0 $0
M1 Finance $0 na na $0 $0


Services

Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
TD Ameritrade
M1 Finance


Portfolio Management

Both broker-dealers in our survey offer portfolio management, but their styles differ considerably. M1 Finance offers something called Pies, which are broker-constructed baskets of securities that have certain themes, like finance or energy. There are also retirement Pies, which can be used to build a nest egg. The extent of the broker’s investment advice ends with its Pies, although there is no cost for them other than any management fees that ETF’s within Pies charge.

TD Ameritrade offers several investment management programs. The first is a robo advisor that buys and sells low-cost ETF’s for a small management fee (0.30%). The service is completely automated and has a $5,000 minimum deposit requirement.


Ameritrade vs M1


Traditional human management is also on tap. The minimum balance goes up to $25,000 (and the management fee goes up, too). But in return, you can get stocks and mutual funds plus a one-on-one working relationship with a financial planner.

Although M1 Finance is the cheaper option in this category, its service doesn’t quite provide as much as TD Ameritrade brings to the table.


M1 vs Ameritrade


Trading Software

The difference between TD Ameritrade and M1 Finance in this category is like the difference between night and day. TD Ameritrade offers some of the industry’s best trading tools. During our investigation, we found a very well-designed website that offers many resources, including trading capability. There’s a convenient trade bar at the bottom of the browsing window called SnapTicket. It can send orders to exchanges for stocks, ETF’s, and derivatives.


Ameritrade vs M1


The best software TD Ameritrade clients can use is thinkorswim, a desktop program. It offers very advanced charting with hundreds of technical studies. It can also submit orders for futures and currencies (investments that M1 doesn’t offer).

Trading tools at M1 Finance consist of the broker’s website, and that’s it. There is no trade bar. Although the site is pretty basic, the advantage is that it’s effortless to use. It’s easy to find Pies or to build your own.


M1 vs Ameritrade


Mobile Platforms

A similar situation exists for mobile trading. While TD Ameritrade emphasizes advanced trading tools and resources (including mobile check deposit, options trading, and sophisticated graphing), M1 Finance has decided to stick with simplicity. M1 does have CNBC news articles and a funds transfer feature. But overall, TD Ameritrade, which actually has 3 apps, outperforms its rival here.


Customer Support

M1 Finance clients can contact a company associate during the week from 9 in the morning until 5 in the afternoon. These hours are Central Standard Time. There are no weekend hours. While M1 has an e-mail address, its website doesn’t have online chat. The brokerage firm does not have any branch locations.

TD Ameritrade, by contrast, offers 24/7 customer service over the phone. Some hours of the day an online chat function operates. There’s also a digital assistant named Ted who does a fair job of answering many questions. The TD Ameritrade website has a very extensive self-help section, and we really like the company’s nationwide branch network.


Mutual Funds and ETF’s

After we logged into our TD Ameritrade test account, we opened the mutual fund search tool and found slightly more than 11,000 securities that were open to new investors. More than 2,000 have neither load nor transaction fee. The brokerage house also provides over 300 exchange-traded funds with zero commissions.

M1 Finance fails here by offering zero mutual funds. (The broker also provides no trading in derivatives, bonds, futures, or forex, all of which are available at its rival.) It does provide trading in all US-listed ETF’s, and even better, a single ETF can make up one Pie.

TD Ameritrade’s website has lots of great resources for ETF and mutual fund investigation. There are profile pages with very extensive information, and the broker’s screeners have many criteria to search by. We found M1’s fund resources to be far less advanced. Its fund profile pages, for example, contain less information on them.


Promotions

TD Ameritrade: Trade free for 60 days + get up to $600.

M1 Finance: $100 bonus to transfer a brokerage account with $20,000 or more.



Banking Features

If you need cash management tools, both brokers have some unique features that may, or may not, be what you’re looking for. TD Ameritrade offers checks and a debit card at no charge. These tools are attached to a securities account, so cash balances are protected by SIPC, not the FDIC.

M1 doesn’t offer checks or a debit card, although it does offer something called M1 Borrow. With this program, you can borrow a maximum of 35% of your account balance at an APR connected to the Prime Rate. Currently, the cost is 4.0%. The brokerage firm does require at least $25,000 in investible assets to participate in the service.


Recommendation

Based on grounds already mentioned, we recommend TD Ameritrade over M1 Finance for mutual fund, option, bond, futures, and forex traders. We also side with TD Ameritrade for day trading, swing trading, and other forms of active trading. Its advanced platform thinkorswim is unsurpassed for these purposes. M1 simply doesn’t have the technology for this type of trading.

For long-term investors who want professional management at the lowest possible cost, M1 Finance’s Pie method of investing would be a good bet.

We think beginners would be much better served at TD Ameritrade due to the company’s excellent customer service and extensive educational section, both of which are lacking at M1 Finance.

For retirement savers, we’re going to suggest TD Ameritrade because it doesn’t have an IRA closeout fee. M1 charges $100.


M1 Finance vs TD Ameritrade Summary

M1 Finance and TD Ameritrade have strengths and weaknesses, although M1 seems to have more drawbacks than its competitor here. With this article, you can pick the right broker.



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