2019 Fidelity Investments versus M1 Finance: IRA, compare commissions, investing fees, trading tools, account pros and cons. Which online broker is better?

Overview of Fidelity and M1 Finance

Fidelity is a traditional brokerage firm that has adapted to 21st-century technology. M1 Finance, on the other hand, was established in 2016 and is trying to offer something completely new and different. We’re going to compare these two against each other, and then we’ll make some recommendations for you.

Broker Cost

Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Fidelity $4.95 $49.95 $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
Fidelity
M1 Finance

Promotions

M1 Finance: Invest for FREE - pay no broker commissions or fees.

Fidelity: Get 500 free trades with $100,000+ deposit.


Is Investment Advice Available?

M1 Finance does not offer in-person financial planning or advice. Instead, it creates baskets of securities called Pies. They have specific themes, like Aerospace & Defense and Hedge Funds. They are created by M1 Finance advisors using Modern Portfolio Theory (MPT); and these baskets of securities are the only form of direction the company provides.

Fidelity, on the other hand, has created its own lineups of mutual funds and ETF’s. They are similar to Pies, although there are some important differences. Pies, for example, can be constructed by individual customers, whereas mutual and exchange-traded funds can only be built by fund families. Some of Fidelity’s funds don’t use MPT. Instead, they track indexes without any attempt to beat the market.

Fidelity also offers managed account services, something which is absent at M1 Finance. Fidelity Go is the cheapest option at 0.35%. There is no longer any minimum investment level. The computer algorithm buys and sells low-cost ETF’s. Stocks aren’t available, which makes the service different from M1’s Pies.

Traditional portfolio management is also available at Fidelity, and stocks, bonds, and mutual funds can be added to the mix.

What Accounts and Investment Vehicles Are Available?

Pies at M1 Finance are constructed of stocks and ETF’s. The brokerage firm does not offer mutual funds. Moreover, bonds and options aren’t available. As for accounts, IRA’s are on tap along with custodial accounts and trusts.


M1 vs Fidelity


Fidelity does offer mutual funds, bonds, and derivatives; so obviously it has an advantage on investments. Furthermore, the broker-dealer offers annuities and life insurance products. A wide range of accounts are available, including all the ones M1 offers plus a solo 401(k) plan. SIMPLE IRA’s are also available at Fidelity, but not at M1 Finance.


Who Has the Better Customer Support?

Fidelity has representatives on the phone 24 hours a day, 7 days a week. Less frequent hours of the week, there is a human chat service that has consistently provided good service. A nameless AI chat system is also available around the clock. Its answers aren’t quite as good as we have received through more traditional channels, but it will probably get better with time.

M1 Finance only provides customer support during the weekday. There is no chat of any kind, and the company does not have any brick-and-mortar locations (Fidelity has almost 200). One feature that we found helpful at M1 is a FAQ on its website.

Are Banking Tools Available at Either Firm?

Fidelity gives its customers free checks and a Visa debit card. Broker’s ATM card also offers fee-free withdrawals throughout the United States. Fidelity customers can choose a money market mutual fund or FDIC protection for free cash balances, and once again.

M1 Finance is offering free checking account and two debit cards. One is free and the other one has $50 annual fee but comes with 1.5% APY on cash held. It also has 1.00% cash back on all purchases and 4 free ATMs uses per month.

Who Has the Better Trading Tools?

Because M1 Finance does not emphasize active trading, the brokerage firm doesn’t provide any significant trading tools. Its website is used for trading Pies, and it’s a very elementary platform. There is no trade bar, and charting is at a very basic level. You probably have already guessed that there’s no desktop software and no browser platform.

Fidelity provides much more than its rival. The Fidelity website offers a lot more than M1’s, but it manages to be user-friendly nevertheless. A pop-up trade ticket is used to submit orders for stocks, ETF’s, and mutual funds. While the website itself has very good charting and can be used for derivative trading, a much more advanced desktop program is available free of charge.


M1 vs Fidelity


And What About Mobile Trading?

A user-friendly app is available to M1 Finance customers. There’s not a lot of sophistication to it. There are no charting tools, for example, and the order ticket is very simple. There is no video news and the all-important mobile check deposit doesn’t exist.

Fidelity’s app does offer streaming news and a mobile check deposit. It also provides a lot of charting tools. Unlike M1’s app, Fidelity’s can be used to trade mutual funds and options. One really unusual feature on Fidelity’s app is the ability to send money to third parties with a PayPal tool.


Which Broker Is Better for Security Research?

While both companies in our investigation do provide learning materials, M1 Finance doesn’t quite offer the same level of tools and information. Its stock profiles are extremely brief with only a rudimentary graph, market cap, P/E ratio, dividend yield, and a company description.

By contrast, Fidelity’s stock profile pages include advanced charting, third-party equity reports free of charge, option chains, SEC filings, and more extensive security information, such as earnings growth, social sentiment, PEG ratio, and technical analysis interpretations.

Fidelity also provides very extensive investment education, including articles and videos on bond trading, saving for retirement, and mutual fund basics. These resources are absent at M1 Finance.

Promotions

M1 Finance: Invest for FREE - pay no broker commissions or fees.

Fidelity: Get 500 free trades with $100,000+ deposit.


Our Recommendations

If you’re interested in buying stocks with a very high market price (such as Berkshire Hathaway currently trading at $293,980), then we definitely recommend M1 Finance. Unlike Fidelity, it offers trading in fractional shares. This is possible by placing one stock inside a Pie and then investing a fixed-dollar amount. Fidelity does not offer this service.

We can also recommend M1 Finance if you’re interested in managed funds created with Modern Portfolio Theory.

For small accounts, we suggest Fidelity over its rival. M1 requires $100 to start investing, whereas Fidelity requires nothing.

Retirement savers can do well with either firm, although if you need extensive guidance, go with Fidelity.

M1 Finance vs Fidelity Summary

M1 Finance is trying to change the way people invest. Compared to its heavyweight rival, it's definitely a better choice for anyone who wants the best possible pricing.



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