Compare M1 Finance and Ally Invest: IRA, commissions, investing fees, trading tools, account pros and cons. Which robo advisor is better?


Two Rivals: M1 Finance and Ally Invest

If you’re looking for a low-cost brokerage house, be sure to look over the offerings of M1 Finance and Ally Invest. Although they don’t charge very much, they do offer some good investment services. Here’s how they stack up against each other:


Robo Advisors Cost

Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Ally Invest $4.95 $9.95 $4.95 + $0.65 per contract $0 $0
M1 Finance $0 na na $0 $0


Services

Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
Ally Invest
M1 Finance


Investment Options

Ally Invest offers its clients stocks, ETF’s, mutual funds, closed-end funds, options, forex, and bonds. The broker-dealer recently eliminated its futures trading service. It does still provide access to OTC securities and penny stocks.

Investors at M1 Finance don’t quite have the same level of products. The brokerage firm does not offer options, forex, mutual funds, or fixed-income securities. Furthermore, the broker’s search engine does not return any penny or over-the-counter stocks.

M1 Finance focuses on Pie investing. A Pie is a basket of stocks and ETF’s created either by the brokerage firm or by the customer. Whole-dollar amounts can be invested in Pies, which means fractional shares are possible. One Pie can have just one stock.

Although M1’s Pie investing may be ideal for some traders, we think Ally Invest outperforms its rival in this category by offering a larger range of investments.


Trading Software

Ally Invest offers a simple website with trading capability. A trade bar sits at the bottom of the browsing window. It provides vital trade info plus trading capability.

A step up from the website is Ally Invest LIVE, the company’s browser platform. There are many nice tools in this program. We found advanced charting with tools, a market clock, and a document center. The platform’s order ticket has several order types plus a couple of duration choices. Multiple legs can be traded in one order.


Ally Live


Although Ally doesn’t perform spectacularly in this category, M1 Finance is much worse. It does not offer a desktop system, a browser platform, or a trade bar. Everything is done on its website. While it’s user-friendly, it is very basic. For example, charting has no tools, and it’s basically pointless to try to chart anything on the M1 site.


M1 vs Ally


Because trades at M1 are placed by the broker every morning at 10:00 am, EST, there is no advanced order ticket. We did find a watch list and links to financial articles.

Ally Invest easily wins here.


Mobile Apps

Moving onto mobile trading, M1’s app is pretty similar to its website. Both platforms have a similar interface, and the mobile app offers the same level of sophistication. There is no charting or decent order form. We also couldn’t find live streaming of business news or a mobile check deposit function.


M1 vs Ally Investing


Ally Invest’s app offers much more. For instance, there is a really convenient Zelle transfer service. More traditional services like bill pay and funds transfer are available; and of course, Ally has mobile check deposit.


Ally vs Schwab


Ally’s charting program has comparisons, multiple graph styles, and some technical indicators. A chart can be displayed in horizontal mode, a huge benefit.

Last but not least is Ally Invest’s separate forex app, which allows for the trading of currencies. Both charting and trading are integrated.

M1 Finance loses again.


Cash Management

Because Ally Invest is affiliated with Ally Bank, you may think the brokerage arm offers some great cash management features. Well, it doesn’t. Ally Invest requires $100,000 (in cash no less) to qualify for checks and a debit card. A much better route would be to simply open an Ally Bank checking or savings account and link it to an Ally Invest account. The bank refunds a maximum of $10 per month in ATM fees with its free debit card.

M1 Finance has an FDIC-insured bank account that comes with a Visa debit card. Like Ally Bank, there is no charge for it, but checks aren’t available. Also, M1 only refunds one ATM fee per month.

Ally Invest appears to be the better option here.


Customer Service

Ally Invest customers can reach an agent 24 hours a day, 365 days a year. Besides phone support, the Ally Invest site also hosts a chat service. On a market day, it did take us more than 15 minutes to reach an agent, however. The brokerage firm has no branch locations (neither does Ally Bank).

M1 Finance doesn’t offer any customer service around the clock. It also doesn’t provide an online chat service, and this will put the company further behind Ally Invest. M1 offers a contact e-mail and a FAQ on its website; and that’s about it.

Ally Invest wins again.


Promotions

Ally Invest: Up to $3,500 cash bonus + commission free trades for new accounts.

M1 Finance: Invest for FREE + borrow up to $5,000 at 0% APR from 06/01/2019 to 06/30/2019.



Security Research and Education

The Ally Invest website hosts short articles on investment topics. For example, we found information on hard-to-borrow fees, how to read a stock option quote, how to build a CD ladder (in video format), margin trading, and more. Most of the resources are short and basic.

Security profile pages include option chains, financial statements, insider trading, earnings releases, and more. We definitely liked free stock reports from CFRA.

Looking at things over at M1 Finance, the picture deteriorates drastically. There are no stock reports, profile pages are much briefer, there’s almost no information on individual stocks, and details on ETF’s are even worse.

M1 Finance fails again.


Retirement and IRA’s

M1 Finance customers can open Traditional, Roth, and SEP IRA’s. An old plan from a former employer can also be rolled over into an IRA. Moreover, the brokerage firm offers trust accounts.

Ally Invest does not offer the SEP IRA, but does provide Traditional, Roth, and rollover varieties. Neither company provides a self-employed 401(k) plan.

As for retirement resources, neither broker has a lot of materials to help self-guided investors. M1 Finance offers target-date Pies, while Ally Invest provides portfolio management.

We’ll give the final category to M1 Finance for its SEP IRA.


M1 Finance vs Ally Invest Summary

M1 Finance was successful in one category, and Ally Invest won all the others. The victor of this survey is Ally Invest by a landslide. Nevertheless, we do recommend M1 Finance for investors who want to buy fractional shares of stocks and ETF’s.



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