M1 Finance Review: Is It Right for You?

M1 Finance
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In this M1 Finance review, I’ll look at the company through the eyes of a financial planner, breaking down what’s to like and who stands to benefit the most from everything the platform has to offer.

If you’re looking for M1 bonus offers, check out our up-to-date M1 Finance promotions, referrals and transfer offers page.


M1 Finance is a great choice for beginners thanks to its easy-to-use interface and goal-based investing approach, but it also offers an array of customizable options that are valuable for experienced investors.

M1 Pros:
  • A combined robo-advisor/investment brokerage with no fee trading fees and no account fees.
  • Account types include taxable accounts as well as Roth and traditional IRAs.
  • Goal-based investing provides beginner investors with a hands-off approach.
M1 Cons:
  • Doesn't offer the ability to invest in mutual funds.
  • Doesn't offer the ability to invest in cryptocurrencies.
  • The wide range of investment strategies and options can be overwhelming.

How Does M1 Finance Work?

M1 Finance offers the best of many worlds, but at its core is a concept called “pies.” 

Pies are M1’s term for portfolio asset allocation.

There are two types of pies:

  • Expert Pies. These pies allow you to invest in done-for-you portfolios that align with a variety of financial goals and risk tolerances, such as retirement or dividend income (or that follow the strategies of specific hedge fund managers). 
  • Customized Pies. These pies give intermediate and advanced investors the ability to create a customized investment portfolio composed of stocks and ETFs that can be automatically rebalanced with a single click.

We’ll cover pies in more detail below. But first, let’s go over the basics of M1 Finance, which offers two types of investment accounts:

  • Brokerage account. Members can invest in individual stock and ETF shares with no trading fees.
  • Retirement accounts. M1 allows you to invest in both a traditional and/or Roth IRA. 

The primary benefit offered by M1 Finance compared to most robo-advisors is that it doesn’t charge asset management fees. For comparison’s sake, many robo-advisors charge .25% for what is a very similar offering to what M1 has available via their Expert pies.

Keep in mind that the funds contained in Expert pies do have their own expense ratios. However, these are on the very low end, at around 0.10%. 

Beyond investing, M1 Finance also offers:

  • M1 Spend. An online checking account and debit card that integrate with the investment platform to allow for easier overall money management. 
  • M1 Borrow. The ability to borrow up to 40% of your portfolio value at a favorable interest rate.
  • Owner’s Rewards Card. A credit card that offers cash-back from companies you own stock in, with the ability to automatically invest any rewards you earn.

Users are allowed to upgrade their account to an M1 Plus account, which provides additional features across M1’s different products (which we’ll cover below). An M1 Plus account is free the first three months and $125 each year thereafter.

M1 Finance Pie Investing Strategy Explained

With the M1 Finances pie investment strategy, you choose between an expert pie or a custom pie. 

M1 Finance Expert Pies

Expert pies offer traditional asset allocations, such as retirement portfolios and general investment portfolios aimed at reaching short-term, medium-term and long-term financial goals.

Examples of M1 expert pies.
Examples of M1 expert pies.

However, there are also some more advanced investment options, such as the “Hedge Fund Followers” pie, which allows you to mimic the trades of popular hedge funds.

M1 Finance's Hedge Fund Followers pies.
M1 Finance’s Hedge Fund Followers pies.

Here are some of the expert pies available on the platform:

  • General Investing: You can set this up to reflect your own risk tolerance and create a diversified portfolio to protect yourself.
  • Plan for Retirement: You can use this for setting up a target retirement date (see the next section for more details).
  • Responsible Investing: This is a good pick for those who put a high emphasis on being a socially responsible investor.
  • Income Earning: This is an option for those who focus on dividends and income.
  • Hedge Fund Followers: This follows the strategies of top hedge fund investors.
  • Industries and Sectors: This option lets you invest in specific industries that interest you.

M1 Finance Target Date Funds

Under the “Plan for Retirement” expert pies, M1 offers a wide range of target date retirement funds for all ages. For those investing for retirement, there’s a lot to like about what the M1 platform offers in this area. 

While I’m somewhat nitpicking here, one of my complaints about Vanguard’s Target Retirement Fund, as well as many of the similar funds offered by other large investment institutions, is that they’re fairly cookie cutter. 

For example, the current breakdown of Vanguard’s 2050 fund is:

the current breakdown of Vanguard’s 2050 fund.

M1 Finance, on the other hand, has 16 different ETFs in their 2050 Moderate fund:

Slices in the M1 Finance 2025 Target Date Fund.

Looking back at the five-year returns of the different target date funds M1 offers, this has resulted in better gains:

FundFive-Year Return as of 12/23/2022
Vanguard Target Retirement 20507.07%
M1 Finance 2050 Conservative27.64%
M1 Finance 2050 Moderate30.08%
M1 Finance 2050 Aggressive30.83%

A big reason why is that M1 Finance operates its target date funds more like a robo-advisor, aiming to use algorithms to provide slightly better returns for their investors. As someone who is a big proponent of the automated investing that a robo-advisor and target date fund provides, I really like what M1 Finance offers here.

M1 Finance Custom Pies

With a custom pie, you can develop your own investment portfolio and choose how big you want each slice to be. This is a nice feature for more hands-on investors looking to follow a specific strategy, such as a three-fund portfolio, which is a popular asset allocation strategy that consists of:

  1. A total U.S. stock market index fund.
  2. A total international stock index fund.
  3. A total U.S. bond index fund.
M1 Finance Slices
Example of a three-fund portfolio on M1.

One major benefit offered by M1 Finance is the ease of portfolio rebalancing. At any time, you can rebalance to your original allocations with just the click of a button.

Tax Planning Tip: This ease of rebalancing can be both a pro and a con. Rebalancing can result in short-term capital gains taxes if the asset was held for less than a year. Also, research is inconclusive about which rebalancing frequency (monthly, quarterly, annually, etc.) is best. 

Another beneficial rebalancing option is dynamic rebalancing, which:

  • Rebalances closer to your desired percentages when you add cash.
  • Has withdrawals taken from winners to rebalance towards your original percentages.

M1 Finance Cryptocurrency Trading

M1 allows users to trade a limited selection of cryptocurrencies (10 total), including Bitcoin, Ethereum and Soluna. 

M1 does not charge extra fees for buying or selling cryptocurrencies. However, Apex Crypto, the custodian M1 uses to execute trades, charges a 1% (or 100 basis points) fee on all crypto transactions. 

M1 crypto assets are stored with Apex Crypto. Assets are generally held in cold storage.

Individual wallets and private keys are not currently supported by M1. Unfortunately, that means you can’t do direct transfers to or from an outside crypto wallet. The only option is to sell your crypto positions, incur potential capital gains taxes, and withdraw the proceeds to a linked bank account

Overall, while it may not be the most comprehensive option available in the crypto space, M1 Finance’s crypto offerings are a good choice for beginners or those looking for a simple way to buy and sell blue chip digital assets.

M1 Plus Investing Perks

On the investing side, the optional M1 Plus upgrade gives you the ability to:

  • Create custodial accounts, which are investing accounts for minors.
  • Trade during morning or afternoon trading windows, with the ability to execute trades in extended trading hours. To qualify to trade during both morning and afternoon hours, your account balance must exceed $25,000. If less than $25,000, you’re allowed to trade in either the A.M. or P.M. but not both.
  • Enable Smart Transfers. Described in more detail below, Smart Transfers allows you to set rules based on the balance in your bank account.

M1 Plus features can be found for free on many other platforms. Yet, as you’ll see below, it’s really in the M1 Borrow and M1 Spend checking account where M1 Plus stands out. 

M1 Spend Checking Account Review

M1 Spend is an optional checking account that’s linked to your investment portfolio and integrated into the main investment platform. It’s FDIC-insured and works like any checking account offered by a major consumer bank: you can accept direct deposits and deposit checks electronically, and it comes with a Visa debit card.

It also gives you the quick and easy ability to transfer funds back and forth between your checking and investment accounts.

There are two versions of M1 Spend to choose from: M1 Standard (which is free) and M1 Plus (which is free the first three months and $125 each year thereafter).

M1 Standard is a nice option for those already investing on the platform. The fact that the investing account and bank account are linked and integrated offers a degree of convenience, as well as flexibility should you need to access your invested funds. 

M1 Plus offers 1% cash-back on all purchases with your Visa debit card and pays a 5% APY interest rate on your cash holdings. You also get up to four monthly ATM fees reversed.

M1 Plus gives you some other benefits within the M1 Finance ecosystem, one of which is called Smart Transfers. This feature allows you to set automated rules that move your money between accounts.

For example, let’s say you want to carry $5,000 in your checking account, with anything above that figure being invested. You can set a rule for M1 Finance to automatically move anything over and above $5,000 into your investment account at predefined intervals.

Other M1 Spend benefits for M1 Plus members include:

  • Get reimbursed for up to four ATM fees per month.
  • 0% international transaction fees on debit card purchases.
  • The ability to send paper checks from within the M1 Finance app.

The free M1 Spend account offers only one monthly ATM fee reimbursement, charges 0.8% to 1% on international debit card transactions, and doesn’t have the ability to send paper checks. 

M1 Borrow Review

M1 allows users with $2,000 or more invested in a taxable account on the platform to borrow up to 40% of their account value at 7.75% annual interest — a very low rate, although M1 calls this a “short-term interest rate that is subject to change.”

Note that retirement account balances do not qualify you for the program.

If you upgrade to M1 Plus, you can borrow for as low as 6.5%.

You can use the funds you borrow for any purpose — buying a car, making a down payment on a home, paying for a wedding or any other personal finance goal. 

And the terms are extremely flexible: there’s no minimum payment and no timeline to pay the loan back. There’s also no credit check, which can be a huge benefit if you’re someone with limited or poor credit history.

But you need to understand that M1 Borrow’s rates are so low and its terms are so flexible because while it’s advertised as a line of credit it’s technically a margin account

In the simplest possible terms, a margin account is a line of credit that uses your investment holdings as collateral for the loan. That’s why the amount you can borrow is linked to your account balance, and why there’s no set repayment schedule: the loan is secured by your investments, so the lender’s risk is very low.

Margin accounts are typically used for buying stock or other investment products. If you have $10,000 in your account and $3,500 of “margin” (as it’s referred to in investment jargon), then you can buy $13,500 worth of stock. If your shares go up in value, you get to keep the profit from all $13,500 worth of investment.

But stocks can also go down. And sometimes, they go down a lot. For this reason, margin accounts can be subject to “maintenance calls.”

A maintenance call occurs when the value of your investment account — not including the amount you borrowed — drops below a predefined threshold. With M1 Finance, that threshold is typically about 30%, although it varies depending on the perceived volatility of your investments.

When your account receives a maintenance call, it’s frozen until you either deposit more cash or sell some of your investment assets. And in some cases, your portfolio can be subject to forced sales — meaning the company can sell your assets in order to recoup its funds, even if those sales cause you to lose money.

M1 offers a tool for monitoring your account health and showing you how close you are to receiving a maintenance call:

M1 Finance margin call meter

Still, it goes without saying that you should be careful with M1 Borrow, as with all other debt products. While there are certainly responsible uses for it — especially given the low interest rate — make sure you have a plan to pay those funds back.

M1 Finance Owner’s Rewards Card

A credit card is the latest addition to M1 Finance’s full suite of products. 

For now, the card is only available to M1 Plus members. And while there is no annual fee on the card itself, there is the annual fee you pay for the M1 Plus membership (first three months free, $125 thereafter). 

The two features that stand out about this card are:

  • The ability to earn up to 10% cash-back from companies you invest in, with a maximum of $200 a month. This feature isn’t available with every company, and the cash-back ranges from 1.5% to 10%. You’ll earn 1.5% cash-back everywhere else. 
  • The ability to automatically invest your cash-back rewards into the market, which is a nice feature for someone who typically ends up not maximizing their reward points. 

With that said, it’s not the best rewards credit card around, as there are a number of 2% cash-back cards available. Still, it can make sense for those who like the simplicity of having all their financial accounts in one place, or for those who spend a lot of money at places they also invest in. For example, Amazon offers 2.5% cash-back while Wayfair offers 10% cash-back.

M1 Finance Fees

Here’s what M1 Finance does and does not charge for.

  • They don’t charge trading fees.
  • They do charge a $100 termination fee, which is fairly standard for brokerages.
  • There is an inactivity fee, which applies to accounts with less than $20 and no activity for more than 180 days. So, as long as you’re active on the platform, you’ll be able to dodge this fee (even if you have barely any money invested).

How Does M1 Finance Make Money?

M1 Finance is known for its commission-free trades, but that’s a recent development. The company used to charge for trading and only stopped doing so in 2017.

M1 Finance CEO Brian Barnes explained a little more about the company’s finances and how they make money:

“We make money lending the user-owned securities and cash held in their accounts. In this way, we operate identically to a bank. We also are paid to transact on various exchanges that actually improve the pricing our customers get in a trade. In the coming months, we will introduce margin loans, adding an additional revenue stream for those who opt in.”

So while it may seem risky to do away with trading fees, those fees were only a small amount of the money the company generated before they made the switch. The company still makes (or is aiming to make) profits on the back-end.

M1 Finance Minimum Investment

M1’s does not technically have a minimum account value, but the minimum requirement for trading is relatively low at $100. If $100 is a stretch for you financially, you can open the account, deposit any amount and then add more money at will until you have enough to start trading. This makes it a good option for a beginner investor.

If you’re setting up a retirement account, you’ll need to commit more for that initial investment. For that account type, you have to deposit at least $500.

M1 Finance vs. Betterment

Betterment is a popular investment platform that also leverages robo advisor technology, so it’s natural to want to know the differences between Betterment and M1 Finance.

Here are some of the key differences.

M1 FinanceBetterment
Accounts AvailableIndividual, joint, trust, taxable, Roth, traditional, and SEP IRAs. Custodial accounts are available to M1 Plus members.Individual, joint, trust, taxable, Roth, traditional, and SEP IRAs.
Account FeesNone.Investing fees start at $4 per month.
Minimum Investment$100$0
Tax Loss HarvestingNo.Yes.
401(k) PlansNo.Available, but no i401(k)s.

Here are a few notes about how the two platforms compare and contrast.

  • Betterment fees start at $4 per month. If you’re investing $250 or have a total of $20,000 in assets across all your Betterment accounts, you pay 0.25% annual fee instead.
  • Betterment offers investors automated tax loss harvesting, which is when certain investments are sold at a loss to reduce your tax liability. Keep in mind, tax loss harvesting only benefits someone investing in a taxable account.

M1 Finance vs. Robinhood

Robinhood is the popular investment app that pioneered free stock trading.

Here are some of the key differences between Robinhood and M1 Finance:

M1 FinanceRobinhood
Accounts AvailableIndividual, joint, taxable, Roth, traditional, and SEP IRAs.Only offers taxable accounts.
Account FeesNone.Free stock trades, optional $5 per month membership upgrade.
Minimum Investment$100$0

Here are a few notes about the differences between M1 and Robinhood.

  • Robinhood is aimed at small investors and it doesn’t offer IRAs. If you’re checking out investment vehicles, an IRA should be one of your top picks (besides an employer-matched retirement plan).
  • If you’ve maxed out your IRA and 401(k) match, Robinhood is good for beginning investors who just want to invest in one or two stocks. However, if you’re a more sophisticated investor, you’d be better off with M1 Finance. Robinhood doesn’t offer rebalancing portfolios or goal-based investing.
  • Robinhood has more options for the very active trader than M1. But Robinhood isn’t the best bet out there for people who want to trade a lot either, primarily because it doesn’t offer the fastest or best trade routing and execution. That means you might not always get the best price on your shares when you place market orders.

Pro tip: Robinhood and a few other online trading platforms will give you free shares of stock just for signing up.

M1 Finance Pros and Cons

There are upsides and downsides to using M1 Finance. Let’s look at some of the biggest pros and cons.

M1 Finance Pros:

  • There are no trading, maintenance or management fees.
  • You can start investing with a minimum of $100.
  • It’s easy to rebalance.
  • New members can get a cash bonus for opening a brokerage account ($30 for a $1,000 deposit).
  • You can buy fractional shares. If you can’t afford a whole share of something, you can purchase part of it. This is a major benefit of the platform — especially if you want to invest in stocks like Amazon and Google’s parent company Alphabet, which have high sticker prices.
  • They are a member of the Securities Investor Protection Corporation (SIPC).
  • You have a lot of investment options and enormous control over your portfolio.

M1 Finance Cons:

  • If you use M1 to borrow money, your account may be subject to maintenance calls if the value of your investments decreases.
  • Sometimes having too many options can be a bad thing. While it’s great that you can choose from a number of portfolios, complexity isn’t always a benefit.

M1 Finance FAQ

Does your M1 Finance account have a minimum account balance?

You can deposit any amount over $10 into your M1 account, but you cannot buy individual stocks or invest in pies until your cash balance reaches $100. To invest in retirement accounts (such as a traditional or Roth IRA), your cash balance must be at least $500.

Is M1 Finance good for day trading?

Setting aside the bigger question of whether day trading is a smart idea in general, the answer is “no.” That’s because M1 does not execute your trades the moment you place them. Instead, they operate under a trading window system in which trades placed within a certain timeframe execute at some point within another designated timeframe (i.e., the same day).

As you can imagine, this trading window system is unsuitable for day trading because you’re unable to exploit inter-day price fluctuations with any degree of precision. And of course, because you can’t actually buy and sell at will.

Does M1 Finance offer dividend reinvestment?

The answer to this question is a little bit complicated. With a traditional dividend reinvestment program (also referred to as a DRIP), any dividends you receive from a company are reinvested into shares of that company. With M1, the dividends from your portfolio are dispersed among your holdings equally based on your asset allocation (i.e., your pies) or your investment targets.

What types of assets can you invest in on M1?

M1 allows you to invest in individual stock shares (including fractional shares), ETF shares (including index fund shares), and their pre-built portfolio options. M1 account holders do not have access to mutual fund investments, OTC stocks, options or futures.

Are M1’s expert pies a replacement for a financial advisor?

No, because a financial advisor can help you build a financial plan and a custom portfolio based on specific circumstances and factors that are unique to you.

No pre-built portfolio — no matter how smartly crafted — can achieve that level of personalization.

However, M1’s automated investing approach offers a beginner investor an easy way to start building a diversified portfolio based on sound investment strategies without the minimum deposit or costs typically associated with opening a traditional brokerage account.

M1 Finance Review: Is It a Good Option?

There are certain situations where I feel it makes sense for people to use the M1 Finance platform.

Consider going with this investing platform if you are:

  • Someone who understands and is committed to investing passively and wants to park their IRA, 401(k) and 403(b) rollovers. I really like what M1 Finance offers with their target date funds for this type of person. 
  • Someone who wants to learn about the market by buying individual shares of stock. My rule of thumb is that individual stocks are OK when you’re limiting your investment to 5% to 10% of your net worth. The market is fun, and you can learn a lot about finance and economics that will help you manage your money and investments. And some people even hit it big. However, this shouldn’t replace a responsible investing strategy based on a long-term, goal-based approach.
  • Someone with a taxable stock portfolio who can benefit from a margin loan. Whether it’s to start a business or buy a car, M1 Borrow’s terms are extremely favorable. Just be careful of the tax consequences if you’re considering a transfer. 

Overall, I like the company and the suite of products M1 Finance puts into small investors’ hands. The interface is easy to set up and use; it gives you the option to customize your own investments or rely on expert recommendations; and you can even manage your account on the go with the M1 Finance investing app (which is available for Android and iOS).

Along with the lack of management fee makes this a solid option.

If you think M1 Finance is right for you, click here to open an account.

R.J. Weiss
R.J. Weiss, founder of The Ways To Wealth, has been a CERTIFIED FINANCIAL PLANNER™ since 2010. Holding a B.A. in finance and having completed the CFP® certification curriculum at The American College, R.J. combines formal education with a deep commitment to providing unbiased financial insights. Recognized as a trusted authority in the financial realm, his expertise is highlighted in major publications like Business Insider, New York Times, and Forbes.


    1. They promised me a bonus to transfer a IRA, I have never seen it. Their customer service keeps saying next month we’ll credit it. It has been 3 months and I have seen nothing. I like their idea but I think they have overpromised and can’t keep up.

      1. Hey Marco,

        Sorry to hear that. I didn’t apply for the IRA bonus promotion, however, did go through a promotion that promised a $10 bonus for making a deposit. It took only three days to hit my account.

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