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

Overview of Robinhood and M1 Finance

Robinhood and M1 Finance are ultra-low-fee brokerage houses that have attracted a lot of attention due to their unbelievable pricing schedules. Despite their similarity in this arena, there are important differences between them. This study will evaluate these two firms in vital categories and then try to make some recommendations for you.

Broker Cost

Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
M1 Finance $0 na na $0 $0
Robinhood $0 na $0 $0 $0

Services

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

Promotions

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

Robinhood: Open account and get one free $3-$6 value stock.



Range of Tradable Assets

The list of available investments at Robinhood includes stocks, ETF’s, closed-end funds, option contracts, and some cryptocurrencies. Penny stocks that trade on the major exchanges are available, but not very many.

The same situation for penny stocks exists at M1 Finance. One important difference from Robinhood is the trading of Pies, which are baskets of stocks and ETF’s. A single Pie can have just one stock or ETF, so effectively individual stocks and ETF’s can be traded. Although closed-end funds are available, M1 does not offer options or any type of currency trading.

While Pie trading is interesting, the lack of options and currencies gives Robinhood the victory in this category.


M1 vs Robinhood


Software

A browser trading platform is available to Robinhood customers. Although it’s rather rudimentary, it does get the job done with a few order types and very basic stock research. Other pluses include news articles, a watchlist, and the day’s biggest moving stocks.

Robinhood’s charting function delivers two graph styles and a handful of technical indicators—definitely not the ideal software package for technical traders. Indispensable features, such as company events and drawing tools, simply don’t exist. A chart can be displayed the width of the monitor, one of the few highlights.

The broker’s order ticket offers three choices: market, limit, and stop. We found only two time-in-force selections. We did like the ability to add an extended-hours option to orders.

Because M1 Finance specializes in Pie investing, there isn’t a lot in terms of trading tools. Like Robinhood, the site is fairly simple with no trade bar. Because M1 Finance sends orders only at a certain time each day, there is no order ticket. Customers deposit money into a Pie, and M1 takes care of the order. A watchlist is available, and Pies can be edited and rebalanced with user-friendly buttons. Charting on the M1 site is very basic.

We award this category to Robinhood.

Mobile Apps

Robinhood’s mobile app is as simple as its browser platform. They are almost identical. One difference is that the charting program provides zero technical studies. Also, a graph cannot be shown in horizontal mode. The order form on the trading ticket has the same order types and the same extended-hours option.


Robin Hood vs M1


Buying and selling options is possible on Robinhood’s mobile app. Instead of chains, the software has buttons for buy and sell, and put and call. To place a trade, you simply tap on the appropriate buttons and select the expiration date and strike price. Whether this system or chains is better is a subjective question. In any case, we found Robinhood’s system easy to use.

Like Robinhood, M1 Finance has used its website as the model for its mobile app. Also like Robinhood, there is no mobile check deposit; and we consider this to be a significant oversight. Buying and selling Pies is straightforward.


M1 Brokerage Review


Robinhood is the victor here.

Other Tools

Robinhood clients get to use an app on Apple Watch. There is no charge for the software, and there are several functions available. These include order confirmations, a watchlist, and a small graph. Missing in Robinhood’s lineup are a desktop platform and an Echo skill.

M1 Finance doesn’t have a smartwatch app and so loses this category.

DRIP Service

Dividends at M1 are sent into a core account. Once this core account balance reaches $10, the funds are reinvested into the Pie according to original target percentages. There is no traditional DRIP service.

Robinhood doesn’t offer any type of reinvestment service; so it loses here.

Investment Education and Research

Robinhood clients have access to concise info on stocks and ETF’s on the broker’s app and website. The data isn’t very thorough. We were also disappointed not to find any resources on investment education. Because Robinhood specializes in stock trading, we hoped to find third-party reports, but the broker-dealer fails to deliver here, too.

M1 Finance customers don’t have a much better situation. During our inquiry, we found limited research on stocks. M1 gives the P/E ratio, the dividend yield, and the market cap of an individual stock, but that’s it. One tool that we did find on M1’s site was a stock screener. While it is rather minimalist, it’s more than Robinhood offers.

We award this category to M1 Finance.

Funds

The Robinhood site has very limited information on ETF’s and closed-end funds. We found data such as volume, bid-ask spread, and 52-week high. News articles are also available.

At M1 Finance, there is a fund screener, an indispensible tool that is unfortunately missing at Robinhood. Furthermore, M1 provides a link to a fund’s prospectus, a helpful service.

M1 offers the better service here, but not by much.

Our Recommendations

For retirement saving, we suggest M1 over its rival for the sheer fact that Robinhood doesn’t offer any IRA’s.

Active stock traders should choose Robinhood instead of M1. Although putting individual stocks in multiple Pies is possible, it would be simpler just to trade at Robinhood.

Beginners should go with Robinhood due to its simple trading platform. Plus, we think M1 Finance has the more complicated style of investing.

For reasons already mentioned, option and currency traders should pick Robinhood.

For banking services, we recommend M1 Finance. It has a new cash management program called M1 Spend that offers high yields and a debit card. At this point, Robinhood doesn’t offer anything in this arena.

Promotions

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

Robinhood: Open account and get one free $3-$6 value stock.



M1 Finance vs Robinhood Summary

Both brokerage firms in our survey offer a similar trading experience at the same price. Investors interested in Pie investing obviously will be better served at M1, while option and currency traders should head over to Robinhood.



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