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


Swell Investing is now out of business. As an alternative, take a look at M1 Finance Review »

Overview of Swell Investing vs M1 Finance

M1 Finance claims to be a “Brokerage Built for Today’s Investor.” Swell is an investing platform which dedicates itself to investing to support moral and ethical goals. Both allow for the creation of a personalized portfolio based on individual preferences and investment choices.


Robo Advisors Cost

Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Swell Investing na na na 0.75% 0.75%
M1 Finance $0 na na $0 $0


Services

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


Investment Options

M1 gives investors access to a wide array of stocks, bonds, and ETFs. These assets are put into a portfolio, called a ‘pie,” and are automatically adjusted over the life of the investment. The pie is structured by percentage of allocated investments, as determined by the investor. It can be adjusted at any time, with trades being made during the next trading window (typically the next day).


M1 Finance Fees


Swell offers 6 different portfolios for investors to choose from. These can be mixed together, based on percentage, to create a personalized structure based on individual investor preferences. All investments offered within the Swell investing platform are in companies which are both high performers, and support the United Nations’ 17 Sustainable Development Goals.


Swell Investing Fees


Account Set Up and Investing Process

Setting up an account with both M1 and Swell is quite simple and takes less than half an hour. They require all standard information for signing up with a financial institution, such as birthdate, full name, and social security number. Funds also need to be transferred in to start investing. The program will want you to set up automatic investments, but its totally up to the investor whether or not to do this.

Once an account is set up for M1, an investor can set up their pie based on individual stock and bond preferences. Alternatively, you can select a pie established by one of their experts at no cost. Funds do not need to be in the account in order to establish the investment portfolio. However, funds do need to be transferred in order to make the investments occur. Every time there is an infusion of funds, it is held in cash until the next trading window. One of the ways M1 keeps fees low is by only trading once per day.

Investors with Swell take similar actions. Investors select their mix of investments (or just one portfolio), and then transfer funds in for trading. Trades are made once per day, just like M1, and most likely for similar reasons. However, the 6 portfolios offered by Swell are analyzed and selected based on their compliance with the UN Development Goals and based on their business performance. While this limits the possible investment diversification, it does pre-select investments for you that are proven performance.

Regardless of business ethics, Swell appears to offer the potential for a higher rate of return. Their funds are selected by investing experts, rather than the average individual investors. The decision from here is Swell portfolios, or the expert portfolios offered by M1. Unless you trust your own investing strategy more than someone who does this for a living, in which case feel free to design your own portfolio.


Withdrawing Funds

Withdrawing funds is not immediate, but is relatively simple for both Swell and M1. Once again, you must rely on the system to make the trades in order to convert your assets to cash for transfer to an outside financial institution. The trades are made during the next trading window, and are made at the stock or bond prices at the time of the trade, not the time the trade is requested. Therefore, neither of these apps are fit for day trading. However, for long term investing, both are easy to withdrawal funds from if and when the investor needs to liquidate their assets.


Fees

M1 offers no fees for normal usage. Fees for inactivity, wire transfers, and paper account forms all have fees, but for the majority of activity, there are no fees. This is much better than say Stash ($1 per month), or Charles Schwab (fee per trade), but the tradeoff is the lack of ability to trade throughout the day.


M1 Finance Fees


Swell charges a 0.75% annual fee, and requires a $50 account minimum. There are most likely other fees, like the ones mentioned above for M1, but the normal operational fee is a bit higher for Swell than M1. The additional fee list is not available online.


Swell Investing Fees


M1 is the winner in this category from initial analysis. No fee is always better than any fee, especially since an investor can select between M1 professional portfolios and a mix of Swell portfolios.


User Interface

The M1 website is well designed, and displays almost all the data the average user needs to understand how well their portfolio is performing. Any other information is easy to find, and provides the ability to conduct research on investments. The M1 app is easy to use, and gives up to date information about your portfolio. However, as this robo advisor cuts costs by only trading once per day, the usefulness of the app for trading or timing trades is extremely limited. Still, it is a nice feature provided at no cost.


M1 Finance Website


The Swell website is easy to use, and provides a lot of information. Everything you need on the site can be accessed within two or three clicks, and any relevant information that might be effecting your particular portfolio is displayed on the front page when you log in. Swell does not currently have an app, but with a long term investing strategy, an app isn’t necessarily going to do you much good. Since it only trades once a day, it’s usefulness for trying to time trades is extremely limited.


Swell Investing Website


Dividends, Taxes, and Paperwork

For both platforms, dividends are automatically reinvested across the portfolio. M1 will hold the dividends in cash until you have $10 to invest, and Swell invests the dividend during the next trading window. M1 hold all of the statements and tax paperwork under the activity tab. Swell doesn’t provide this, but will email you the statements and forms with plenty of time to complete your taxes.


Client Interaction

M1 offers a chat function to start any troubleshooting you may need to do. From there you can talk to a live person, if the chat bot can’t give you a satisfactory answer. Swell has a phone number an email listed under their customer support section. Emails are usually answered within 24 hours.


M1 Finance vs Swell Investing Summary

Through this review we have examined the differences between M1 Finance and Swell. Both offer investing portfolio development for much less than a brick and mortar institution, but rely on the individual investor to make all of the decisions about their money. Both systems decrease cost by only making one trade per day, across the entire enterprise.

M1 offers expert portfolios, or the option to design your own. Swell offers limited portfolios to invest in, but the knowledge that all investments will be done in a way that supports global sustainability and development.

In the end, M1 offers a lest costly system, and with some work on the investor’s part, could provide the same moral and ethical investing portfolio at a reduced cost. Or, M1 offers a “Responsible Investing” pie, available in their pre selected pies.


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