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M1 Finance Review 2023: Fees, Features & More
Swen Keller
- URL: https://m1.com
- Year Founded: 2015
- Headquarters: Chicago, USA
- Monthly/Yearly fees: $95 annually or $10 monthly for M1 Plus
- Account types: Individual Brokerage account, Joint Brokerage account, Trust accounts, Custodial accounts, Individual Retirement account, and Crypto account
- Physical Card: Yes
- Platform App: Mobile, Web
- No. of Cryptocurrencies: 3 (Bitcoin, Ethereum, and Litecoin)
- Fiat Available: USD
- Deposit Methods: Linked bank account transfer, transfer from another investment institution, rolling over an old 401(k) from a previous employer
M1 Finance Review: Our Opinion
M1 Finance is a leading robo-advisor platform that integrates investment, banking, and borrowing in one mobile app.
It stands out for its zero commissions and management costs. However, unlike a lot of its competitors, it does not feature tax loss harvesting and human financial advisors (only robo advisors).
What is M1 Finance?
M1 Finance is a hybrid robo-advisor platform that allows users to invest in over 6,000 stocks and exchange-traded funds ETFs).
An overview of M1 Finance
Founded in 2015, M1 Finance is a robo-advisor platform headquartered in Chicago, the United States.
The robo-advisor company hosts more than 1,000,000 active users and manages over $7 billion in client assets.
M1 Finance is a member of SIPC (Securities Investor Protection Corporation) and protects securities in your account up to $500,000.
M1 Finance robo advisor is also FDIC insured up to an aggregate total of $5 million on its high-yield savings account.
The company offers Earn rewards on investments and its debit card as well as a borrowing service via margin loans.
It also features automatic rebalancing services, cash management features, etc.
M1 robo-advisor was founded by its current CEO Brian Barnes.
Pros
- Offers automated investing and portfolio management
- Zero commissions and management fees
- It offers borrowing and cash management services
- No annual fee
Cons
- Does not offer Tax Loss Harvesting
- No human financial advisors
Unique Features
M1 Plus
M1 Plus is a high-yield savings account membership that gives you access to M1 Finance’s best tools and rates. M1 offers M1 plus membership for free for the first 3 months, after which you will have to pay $10 monthly. If you decide to pay annually, it only costs $95 per year.
M1 Plus offers access to multiple trading windows, custodial accounts, and on-demand trading for crypto.
You can participate in both AM and PM trade windows when you have $25,000 or more equity to comply with pattern-day trading regulations.
You also enjoy bigger cashback rewards and earn 2.5%, 5%, or 10% Owner Rewards cashback at over 70 brands. This includes major brands like Tesla and Peloton.
M1 Plus offers a maximum of $200 cashback per calendar month.
They can also enjoy monthly ATM fee reimbursement.
As stated earlier, M1 Plus costs $10 monthly but you can earn 6 months of M1 Plus free when you refer a friend and they fund their investment accounts using your code.
That’s a $60 value per referral.
If your referral deposits $5,000 into their cash management account within the first 30 days, you’ll both get a $100 invest bonus.
There is no limit to how many people you can refer to M1 and there is no limit to the free 6-month access you get to M1 Plus for every referral.
When compared to the Basic M1 Finance accounts, M1 Plus offers lower loan rates.
You can borrow for less on M1 Margin Loans. You can borrow against 40% of your portfolio’s value on margin for 7.25% without extra paperwork.
M1 Plus also offers on-demand trading to members. This is however limited to 10 on-demand trades per calendar month.
M1 Invest
M1 Invest lets you perform automated investing in a custom portfolio of stocks and ETFs commission-free.
The custom portfolio management account allows you to fine-tune the proportions of different ETFs and stocks in your strategy.
M1 Invest lets you treat your investing strategy like a Pie with slices of different securities.
Your portfolio is made up of Slices. These can either be Custom Pies or Expert Pies. You can create a Pie from scratch or add slices of already curated Expert Pies around different goals. Your fund allocation is done in proportion to the slices in your pie.
A Pie is a group of stocks. Pies are used to organize your investment strategy and portfolio.
You can make your custom pie under the Research tab and set the percentages for the target weights.
M1 also offers Expert Pie. These are prebuilt by M1 and are regularly reviewed by the M1 team. They are also rebalanced routinely to fit their unique investment objective.
M1 Invest portfolios can have a total of 100 slices.
Users who want to increase this limit can contact the M1 support team.
M1 Invest offers 6 different account types. Below are the supported account types:
- Individual Brokerage Account
- Joint Brokerage Account
- Trust Accounts
- Custodial Accounts (only available to M1 Plus users.
- Individual Retirement Accounts (IRA). You can open a Traditional IRA, Roth IRA, or Simplified employee pension (SEP) IRA account.
- Crypto Account
M1 Invest gives you access to a flexible line of credit.
You can increase your buying power, pay for large expenses, and gain liquidity by borrowing against your portfolio from 7.25% to 8.75%.
You can automate your strategy and use Dynamic Rebalancing to keep your asset allocation in line with your goal.
You can also review your trading info, risk-related data points, pricing, news feeds, performance charts, etc.
M1 only supports securities listed on NASDAQ or the New York Stock Exchange. The platform does not support mutual funds and options trading.
M1 offers a select number of OTC securities.
M1 Invest has an Auto-Invest. When this function is activated and your cash balance exceeds $25, M1 will use the Dynamic Rebalancing method to automatically invest the funds into the portfolio and manage your asset allocation.
If you do not want Auto-Invest to be active, you can turn it off and make manual orders.
You can place manual buy or sell orders on individual slices or the portfolio Individual Pie.
To do this, go to the portfolio tab, select the Pie or slice, and Click the “Buy/Sell” button.
For manual orders to work, Auto-Invest must be off.
You can use the manual rebalance if you do not want to automatically rebalance your portfolio. Manual rebalance can be used on one pie within your portfolio or on your full portfolio.
To rebalance your portfolio manually, click on the “Rebalance” button. When you do this, M1 will sell overweight securities and use the proceeds to buy underweight securities.
M1 weighs the performance of your M1 Invest Account based on Money-Weighted Return (MWRR).
This cash management feature is built to track your portfolio performance taking into account all incoming and outgoing cash movements.
M1 also uses a tax maximization strategy for every sell order in your account. When M1 sells securities, the lots to sell are prioritized in the following order:
- Losses that offset future gains
- Lots that result in long-term gains
- Lots that result in short-term gains.
M1 Invest accounts allow you to take Margin Loans of up to 40% of your account value at an 8.75% interest rate or 7.25% if you are an M1 Plus member.
Margin Loans are portfolio lines of credit on your qualifying brokerage accounts.
No paperwork or credit check is needed for Margin Loans and access to funds is granted within minutes with flexible repayment.
How to Buy Crypto with M1 Finance?
To buy crypto on M1 Finance you first need to open a crypto account. To do so, go to the Invest tab and add an account, select Crypto account, and then confirm.
All M1 Clients with funded M1 Invest Accounts can open a Crypto account for free.
Once that’s done, you need to fund your Crypto account by navigating to the Home Screen and then tapping on “Move Money”.
From there, you’ll see an option to send funds to your Crypto account.
Follow the onscreen instructions to finalize.
The initial minimum you can deposit into the crypto account is $100. Subsequent deposits have a $10 minimum deposit.
Note that cryptocurrencies purchased on M1 cannot be sent to external wallets. You also cannot deposit cryptocurrency.
How is Crypto Stored?
M1 does not have a dedicated crypto wallet; rather it stores cryptocurrencies in your Apex Crypto accounts.
Apex Crypto is the service that allows the M1 robo advisor to offer cryptocurrencies.
Cryptocurrencies Available on M1 Finance
M1 Finance currently supports only 3 cryptocurrencies: Bitcoin, Ethereum, and Litecoin.
It also allows users to invest in the following cryptocurrency-related assets in their Brokerage Accounts or IRAs:
- Grayscale Bitcoin Trust (GBTC)
- Grayscale Bitcoin Strategy ETF (BITO)
- Grayscale Ethereum Trust (ETHE)
- Grayscale Ethereum Classic Trust ( ETCG)
- Grayscale Litecoin Trust (LTCN) and
- Grayscale Digital Large Cap Fund LLC (GDLC).
M1 Finance Checking Account Fees
Outgoing Wire Fee
M1 has a $25 fee per wire transfer going out of your investment accounts, retirement accounts, high-yield savings accounts, etc.
ATM Fees
M1 Finance does not charge any fees for using its Visa debit card for ATM transactions and even offers an ATM fee reimbursement 4 times a month.
If you’re a M1 Plus member you’ll receive your reimbursement on the 10th day of the next month.
While M1 does not charge ATM fees, the ATM you use may likely charge you.
Low Balance Fees
M1 Finance FDIC-insured checking account does not charge fees if you fail to maintain a minimum balance.
Transaction Fees
M1 Finance does not charge any transaction fee or annual fee for using your M1 checking debit card.
International Fees
If you use your M1 debit card outside the United States and the transaction does not settle in US dollars then you’ll be charged a 1% conversion fee.
Also, when you use the M1 Visa debit card outside the United States and the merchant doesn’t settle the transaction in United States dollars you will be charged a 0.80% International Assessment fee.
These 2 fees are charged to one merchant.
M1 Finance Plus Fee
M1 Plus is a paid membership plan billed at a $95 annual fee or $10 monthly.
M1 Invest Fees
While M1 does not charge a standard commission, trading fees exist based on the action being executed and the service used.
Regulatory Fees
These mandated fees or expenses are passed on to users of the platform.
Regulatory fees are required when clients sell exchange-traded funds (ETFs) or stocks and typically cost a few pennies.
For instance, if you sell 10 shares of Google stock at $150 per share, you would be required to pay 2 cents in regulatory expenses (1 cent in TAF fees and 1 cent in SEC fees).
The fees are calculated using the following formula:
- TAF (Trading Activity Fee) Fee* = Your shares sold x 0.000145 with a max of $7.27
- SEC (Securities Exchange Commission) Fee= total price of transaction x $8.00 / 1,000,000
It’s important to note that regulatory fees are set by United States law and can be changed without notice to the client.
Additional M1 Finance Account Services Fees
- Request for Account Paper Copies
- Overnight Mail – Domestic (for each request request ): $125
- Overnight Mail – International/Canada (for each request): $100
- Paper Confirm Fee (Retail Paper Only) (per request): $2
- Paper Statement Fee (Retail Paper Alone), (50 pages): $5
- Paper Tax Statement Fee (Retail Paper Only), (50 pages): $5
- Return Mail (per piece): $2
- Tax Documents: $50
M1 Finance Direct Account Transfers
- Incoming: $0
- Outgoing: $100
- DRS Transfers (per DRS security sent): $115
Other Fees
- IRA Termination Fee (per event): $100
- Mutual Fund Sales: $20
- Liquidating Securities Traded on Foreign Exchanges: $50
- Rights Exercise Fee: $50
- M1 Finance Bank Fees
- Paper Check or Dividend Check: $5
- Returned Checks/ACH/Wires and Recalls: $30
- Amendment Repairs: $30
- ACH Notice of Change/Correction: $5
- Direct ACH deposits from or to your linked bank account are always free.
M1 Crypto Fees
M1 Finance does not charge commissions for cryptocurrency investments. However, there is a 1% or 100 basis points fee placed on all crypto transactions – both purchases and sales.
This charge is reflected in the execution price.
M1 Finance and Apex Crypto (the service that enables M1 to offer crypto investment products) have a fee rebate agreement.
Security: Is M1 Finance Safe?
M1 Finance is not a bank. It is a registered broker/dealer with FINRA. M1 Checking Accounts are furnished by Lincoln Savings Bank, Member FDIC.
M1 Checking and M1 Plus accounts are FDIC insured up to an aggregate total of $250,000.
M1 Finance Crypto accounts are not protected by SIPC insurance.
That said, the system is protected with military-grade 4096-bit encryption.
Users’ personal information is encrypted in transit and at rest. The personal information also has restricted access and is only used for account verification and protection.
Users can protect their accounts with strong passwords, two-factor authentication, and adaptive multi-factor authentication.
Staking Rewards and Cashbacks
M1 Finance offers cashback rewards via its Owner Rewards program for purchases made using their Owner Rewards Card.
Under the program, you’ll earn on every purchase you make at supported businesses.
Rewards Tiers
M1 Finance assigns Owner’s Rewards using one of the following tiers:
- Tier 1: 2.5% cash back
- Tier 2: 5% cash back
- Tier 3: 10% back
Transactions that qualify for Owner’s Rewards cannot qualify for M1’s standard 1.5% cash back.
So if a purchase qualifies for 10% in total rewards, for example, it will not also receive the standard 1.5% cash back (rewards will be 10%, not 11.5%).
To qualify for M1’s Owner’s Rewards you need to be an active member of the M1 Plus program before purchasing eligible merchant brands.
You can also receive the standard 1.5% cash back if you are not eligible to get the Owner Rewards.
Supported Countries
M1 Finance is only available to legal U.S. citizens and U.S. permanent residents residing in the United States.
M1 Finance Licences
M1 Finance is registered with the Securities Exchange Commission (SEC). It is also a member of the Securities Investor Protection Corporation (SIPC) and the Financial Industry Regulatory Authority ( FINRA).
Opening an M1 Account
To open an M1 account you need to go to https://m1.com and then hit “Get Started”.
Next, enter your email address and password.
Tap on “Continue without 3 months free trial” or “Continue with 3 months free trial” depending on your preference.
Enter your phone number and input the confirmation code sent to your phone.
Next, go to your inbox and click the “Verify Email” button.
After verification of your email and phone number, M1 Finance will walk you through the account opening process page by page.
Enter your details including first and last name, postal code, residential address, etc.
On the next page input your Social Security Number.
Next, you’ll need to answer questions about your financial status.
Lastly, you need to fund your account via a linked bank account.
The account opening process takes anywhere from 5 to 10 minutes.
M1 Owner's Rewards Card
The M1 Owner’s Rewards Card is a credit card that allows you to earn instant rewards at qualifying brands.
It is a sleek metal card with contactless tap-to-pay and mobile pay.
M1 Reward credit cards are only available to M1 Plus members. The rewards earned are automatically invested in your M1 Invest Account.
Owner’s Rewards are M1 Finance’s cash-back rewards at qualifying brands for active M1 Plus members.
The Owners Rewards are classified into 3 reward tiers: 2.5% cashback, 5% cash back, or 10% cash back with a maximum of $200 cashback monthly.
Users who are not active M1 Plus members earn a standard 1.5% cashback on purchases made with the Owner’s Rewards Card.
M1 Finance’s Owner’s Rewards Card is issued by Celtic Bank, a Utah-Chartered Industrial Bank member FDIC.
Aside from earning cash back, the Owner’s Rewards Card offers other benefits like integration with the M1 Invest Account and Visa Signature benefits. Available Visa Signature benefits include lost/stolen card reporting, Visa Signature Concierge, Visa Signature Luxury Hotel Collection, zero liability, Visa Signature perks (like entertainment and travel), etc.
M1 Finance Mobile App
The M1 mobile app is a super app that allows you to invest, borrow, and spend all in one place.
With the app, you can borrow money at low rates, invest in cryptocurrency and stocks commission-free, and transfer money.
You can invest with different account types and invest in companies that share your values with Community Pies.
You can access funds and liquidity without selling securities by taking margin loans with low-interest rates.
It also offers portfolio management options and high-yield cash management features. With the mobile app, you can transfer money once or automatically on a schedule. You can also rebalance your portfolio using automatic or manual rebalancing.
The mobile app lets you invest in top-ranking cryptocurrencies like Bitcoin and Ethereum. Your crypto storage is secured with custodial wallets powered by APEX crypto.
M1 Finance Deposit and Withdrawal Methods
M1 Finance supports the following deposit methods: Linked bank account transfer, transfer from another investment institution, and rolling over an old 401(k) from a previous employer.
It offers bank wire transfers and ACH transfers for withdrawals.
All withdrawals are executed by M1’s clearing firm Apex Clearing.
Customer Service
M1 Finance offers 24/7 automated Instant Help via the chat icon at the bottom right of the screen.
You can also contact the customer support team via email and phone at 312-600-2883.
The customer support team responds to emails within 2 business days between Monday to Friday (when the US stock market is trading).
The platform also has a Help Center, Knowledge Bank, and Blog where users can find needed information.
M1 Finance Compared with its Main 2 Competitors
The 2 main competitors of M1 Finance are SoFi Invest and Merrill Edge Self-Directed.
SoFi offers more borrowing solutions than M1 Finance and stands out for its automated investing feature.
Also, like M1 Finance it offers robo advisors services but no tax loss harvesting.
Merrill Edge Self-Directed offers more investment features than M1 Finance offering mutual funds, ETFs, and stocks. It also has face-to-face service at all its US branches, which M1 Finance does not offer. It does not offer tax loss harvesting.
What is a NeoBank?
A neobank is an online bank that does not offer its banking services in physical locations but through a mobile or web app.
In addition, the banking services are typically executed by third-party traditional banks.
How to Choose the Right NeoBank for Your Needs?
To choose the right neobank for your needs you need to consider:
- If it is FDIC-insured (or the relevant body)
- Ease of use
- Investment products offered
- Deposit and Withdrawal options are available
- User reviews on client review platforms like Trustpilot
- Geographic availability
Conclusion
M1 Finance is a robo-advisor service that integrates lending, investing, cash management, and banking into one neobank app.
It is targeted at advanced investors and setting up is quite long, however, when compared to its competitors M1 doesn’t match up in available investment products or loan functions.
M1 Finance’s advanced tools are a draw for many, but it’s essential to see the bigger picture. Explore another top contender with our Current Banking breakdown.
FAQ
Most frequent questions and answers
No, M1 targets seasoned investors interested in balancing investing, borrowing, and cash management. Beginners may find the platform complex.
It takes between 2 to 6 business days to withdraw your money from M1 Finance.
Yes, M1 Investing was founded in 2015 and is headquartered in Chicago, the United States.
M1 has a minimum investment of $100.
M1 Spend cash management account is an FDIC-insured checking account and debit card that seamlessly integrates into the current M1 application. M1 Spend provides all users with a debit card and one ATM fee reimbursement per month.
We always try to provide the most accurate information available, and make sure our team follow through.
If you want to know more about our Crypto Exchanges Review Methodology follow the link below
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