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 in business since the end of World War II. But it’s getting a lot of competition from new entrants in the field, many of whom are offering something different. M1 Finance is one such brokerage firm. It has a different approach to investing, and as we shall see, is quite different in about every category. Let’s see how this young start up compares to an old titan.

Pricing

Style of Investing

Fidelity offers both managed and self-directed accounts. Its robo-advisory service costs about industry's average 0.35% with a $0 minimum account balance. Traditional packages cost more and require higher balances, but offer trading in other securities besides ETF’s.

Self-directed accounts are also available to customers who want to buy and sell mutual funds, ETF’s, stocks, options, and fixed-income securities on their own.

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





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

Trading Tools

M1’s website is pretty basic. There aren’t a lot of sophisticated 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 were planning to do some technical analysis, forget about it. There are no charting tools here. We were able to practice building Pies without a hitch.





Although an inquiry into M1 Finance’s trading tools didn’t take much time, Fidelity demanded much more of our time. While its website is easy to navigate, there is a lot on it. There’s a pop-out trading ticket, for example, or you can just use 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, displayed the width of the computer monitor, or saved for future use.





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

Mobile Apps

M1 Finance customers can create Pies and shop for broker-constructed Pies on the company’s mobile app. It functions on Apple and Android devices. While it has a user-friendly interface, there’s not a lot of sophistication to it. We didn’t find decent 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 abreast of ongoing financial events.

Customer Service

M1 Finance traders can reach a representative on a weekday from 9:00am until 5:00pm. Disappointingly, we couldn’t find any availability on Saturday or Sunday. M1 also fails to provide online chat, which will be an inconvenience for some of its customers. The company has zero brick-and-mortar locations.

Fidelity far surpasses M1 in this category, providing not only online chat (certain hours of the day), 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, questions we posed.

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 steer clear of M1 Finance. The company’s website just doesn’t have a lot of research materials. We did find some news articles courtesy of CNBC. Information on its Pies boils down to data on stocks and ETF’s, and this information is rather 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 ETF’s provide a great deal of information, not least of which is 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 allows customers to borrow against account assets.

Fidelity is not doing as well 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 reasons already stated, we have to suggest Fidelity over M1 for option, fixed-income, and mutual fund traders. We also recommend Fidelity for day traders and other active equity or derivative traders who need advanced software.

Beginners will definitely be better served at M1 Finance.

We also have to propose Fidelity for retirement savers. Its assortment of target-date mutual funds and retirement learning materials seems to outperform M1.

For banking features, M1 Finance's Plus is services is the one 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 come up with something new and exciting. But when compared against a giant like Fidelity, it doesn’t seem overly impressive... unless you look at pricing—$0 commissions, the lowest margin rates, and high interest on cash absolutely make this broker worth checking out.

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