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

M1 Finance and Fidelity Rivalry

Fidelity Investments has been around since the end of World War II. But it faces a lot of competition from newer firms in the industry, many of which bring a different approach. M1 Finance is one of those brokers. It uses a different style of investing, and as we’ll see, it differs in nearly every category. Let’s see how this newer startup stacks up against an old giant.

Pricing

Style of Investing

Fidelity offers both managed and self-directed accounts. Its robo-advisory service has no advisory fee under $25,000 and then charges 0.35%, with no minimum required to open an account. Traditional advisory packages cost more and usually require larger balances, but they provide access to securities beyond ETFs.

Self-directed accounts are also available to customers who want to trade mutual funds, ETFs, stocks, options, and fixed-income securities on their own.

M1 Finance offers Pie investing. A Pie is a basket of assets (specifically stocks, ETFs, cryptocurrencies, and other Pies). Pies are usually created by the broker, although it’s also possible to build your own. The company does not offer digital or human advisory services beyond its Pie structure. All accounts are technically self-directed, although it’s possible to buy broker-created Pies inside a self-directed account.





M1 does not offer mutual funds, options, or bonds, and obviously that is a weakness compared to Fidelity.

Trading Tools

M1’s website is very basic. There aren’t many advanced features, and in fact, trading takes place on simple web pages. There is no trade bar, no browser platform, and certainly no desktop system. If you planned to do technical analysis, forget about it. There are no charting tools here. We were able to test building Pies without any trouble.





Although checking M1 Finance’s trading tools didn’t take much time, Fidelity required a lot more of it. While its website is easy to use, there is a lot on it. There’s a pop-out trading ticket, for example, or you can simply trade on web pages. While the broker doesn’t offer a browser platform, charting on the website is very good. We found technical studies, company events, and drawing tools. A chart can be downloaded as a png image, shown across the full width of the computer monitor, or saved for later use.





Fidelity customers also get access to a very advanced platform called Active Trader Pro. There is no charge for the software, and it comes with some excellent features, such as Level II quotes.

Mobile Apps

M1 Finance customers can create Pies and browse broker-built Pies on the company’s mobile app. It works on Apple and Android devices. While it has a user-friendly layout, there isn’t a lot of sophistication to it. We didn’t find solid charting or an advanced trade ticket. Also missing on the platform is live streaming of financial news and a check deposit feature.





Fidelity’s mobile app offers much more. There’s mobile check deposit, free streaming of Bloomberg News in HD, advanced charting with technical studies, options and mutual fund trading, and much more. We especially liked the many news articles and videos, which should help the broker’s customers stay up to date on ongoing financial events.

Customer Service

M1 Finance traders can reach a representative on weekdays from 9:00am until 4:00pm ET. Disappointingly, we couldn’t find any availability on Saturday or Sunday. M1 does offer support through its Client Success Center, although this still may be less convenient for some customers. The company has zero brick-and-mortar locations.

Fidelity easily beats M1 in this category, offering not only online chat (during set hours), but also a large network of branch offices. Furthermore, the broker’s website has a robo chat service. During our testing, it was able to answer some, but not all, of the questions we asked.

Fidelity offers phone service around the clock, another advantage over M1 Finance. One more perk is the self-help section on the broker’s website. It offers many useful tools, such as the ability to add a trusted contact or change beneficiaries on an account.

Investment Education and Research

If you’re planning to do a lot of research before making an investment, you should probably stay away from M1 Finance. The company’s website just doesn’t have a lot of research materials. We did find some news articles from CNBC. Information on its Pies mostly comes down to data on stocks and ETFs, and that information is pretty brief.

We found much better learning tools on the Fidelity site. A very good learning center is devoted to financial education. And profile pages for stocks and ETFs provide a great deal of information, including free equity reports from leading analysts.

Cash Management

While M1 Finance doesn’t provide a debit card or checks with any of its brokerage accounts, the broker-dealer does offer something called M1 Borrow. It’s a line of credit that lets customers borrow against account assets.

Fidelity does much better in this category, offering not only checks and a debit card, but ATM fee refunds as well. The brokerage firm provides multiple cash position options, one of which is an FDIC-insured sweep program. We also like the banking tools on its website, including management of not only debit cards, but also the Fidelity credit card.

Recommendation

For the reasons already mentioned, we have to recommend Fidelity over M1 for options, fixed-income, and mutual fund traders. We also suggest Fidelity for day traders and other active stock or derivative traders who need advanced software.

Beginners will probably be better served at M1 Finance.

We also have to suggest Fidelity for retirement savers. Its selection of target-date mutual funds and retirement learning materials seems to beat M1.

For banking features, M1 Finance's Plus services are the ones to beat.

Another area where M1 Finance stands out is with its Pie method of investing, which is cheaper than Fidelity’s robo-advisory model.

Fidelity vs M1 Finance Recap

M1 Finance has tried to bring something new and exciting to the market. But when compared with a giant like Fidelity, it doesn’t look especially impressive... unless you focus on pricing—$0 commissions, the lowest margin rates, and high interest on cash definitely make this broker worth a look.

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