M1 Review 2023: A Hybrid Robo-Advisor Platform (2023)

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Who Should Choose M1

M1 is best suited for investors with intermediate skills who don’t need a lot of hand-holding but still want a platform to manage their investments for them. Beyond that profile, anyone who needs automated investment management might appreciate M1.

Whether you like to get into the weeds choosing your own investments or prefer to select a pre-baked investment portfolio, M1 manages your portfolio and handles rebalancing to keep your asset allocation aligned with your goals. With the exception of Wealthfront, there aren’t any robo-advisors that we know of that will rebalance investors’ personalized investment choices.

Independent investors who want a basic screener to craft their own portfolio will find the tools to pick their own stocks and exchange-traded funds (ETFs). M1 offers 6,000+ stocks and ETFs to choose from, allowing any investor to tweak their portfolios to suit their preferences.

If you like the idea of consolidating your banking and investing accounts, you’ll like the M1 Spend cash management account. Although plenty of other robo-advisors offer similar cash management accounts, there aren’t many with M1’s portfolio customization options plus a high-yield cash management option.

Investors who prefer using margin loans will probably like M1’s ultra low rates. For added buying power or just as a source of cash to meet unexpected needs, M1 Borrow’s low interest rates for loans also set the platform apart from competitors.

How M1 Works

M1 offers a unique platform that combines aspects of both a robo-advisor and an online brokerage.

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Unlike other robo-advisors, there’s no questionnaire to assess your goals and risk tolerance when you sign up. Users select their investments—as they might with a brokerage account—and M1 automates the process of buying and selling those choices, eliminating any need to input or execute trades yourself.

The M1 platform offers more than 80 prepared portfolios—it refers to them as “pies”—covering a wide range of investing strategies. With asset allocations ranging from very conservative to very aggressive, M1’s portfolios give investors who know their own risk tolerance plenty of options that are broadly similar to the portfolios created by the typical robo-advisor model.

After you’ve chosen one or more portfolios, M1 purchases the securities and maintains your preferred asset allocations via automatic rebalancing. This is the biggest advantage of the platform: It frees you from needing to buy and sell assets to maintain your desired mix.

M1 offers two account tiers: M1 Basic and M1 Plus. The M1 Basic account charges no annual fees, and all your trades are made once per day in the morning. For $125 per year, M1 Plus offers a second afternoon trading window, along with lower margin borrowing rates, more fee-free ATM withdrawals and several other additional benefits (more on this below).

How M1 Invests Your Money

You choose how you want to invest at M1. You can opt for a pre-made portfolio or create your own investment blend.

Custom Investment Portfolios

Self-directed investors can build portfolios from more than 6,000 ETFs and stocks listed on the New York Stock Exchange (NYSE), Nasdaq and BATS stock exchanges. You select the stocks and funds, and then indicate your preferred number of shares—M1 buys both full and fractional shares.

M1 lets you search for individual stocks by ticker symbol, or visit the research tab and screen stocks based on:

  • Market capitalization
  • P/E ratio
  • Dividend yield
  • Market sector

For ETFs, you can screen by total assets, dividend yield and expense ratio. Those seeking ETFs from specific categories can sort funds by type, including bonds, commodities, currency, equities, industry and asset allocation.

Pre-Made Investment Portfolios

M1 offers nearly 100 pre-made portfolios, which it calls “expert pies.” The list of M1’s expert portfolios are organized by category:

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  • General Investing. Tailored to specific risk tolerance levels, these portfolios are broadly similar to typical robo-advisor portfolios. There are seven options, ranging from ultra-conservative to ultra-aggressive. Each includes six to ten diversified stock, bond and real estate ETFs.
  • Retirement. Similar to target date funds, these portfolios own 15 to 19 diversified ETFs. Each targets a specific “retirement year” from 2020 to 2060, in five-year increments. Each target year fund offers an aggressive, moderate or conservative allocation.
  • Responsible Investing. Designed for investors who want a socially responsible portfolio. Choose from a U.S. or international socially responsible investing (SRI) portfolio, each holding five to seven ETFs.
  • Income. These are a great alternative to certificates of deposit. The global dividend choice includes five U.S. and international dividend-paying equity funds. Other options include short- to long-term bonds, U.S. dividend stocks, and a mortgage-backed and bond ETF combination.
  • Hedge Fund Followers. These portfolios copy the strategies of big hedge funds, without the big fees. The eight options follow Berkshire Hathaway, Coatue Management, Icah Capital, Tiger Global and more. The portfolios comprise a handful of individual stocks, from a low of seven stocks in the Pershing Square Capital Management options to 25 in the Tiger Global Management portfolio.
  • Stocks and Bonds. These simple stock and bond portfolios own two diversified ETFs, spanning global stocks and global bond markets.

Other M1 Features

M1 offers a cash management account and a lending feature that competes favorably with banking services offered by other robo-advisor and online brokerage platforms.

M1 Borrow

M1 Borrow is a lending service that uses your existing account balance as collateral for loans. The service is available to users with account balances of $2,000 or more, and lets eligible users borrow up to 40% of their total account balance. Borrowers may set their own repayment timeline, and the funds may be used to purchase more stocks and ETFs, or for any other purpose.

A differentiating feature of M1 Borrow is lower interest rates than similar margin loans from nearly all competing online broker platforms. Users with M1 Basic accounts get an annual interest rate of 5.75%, while M1 Plus members pay 4.25% annual interest.

While M1 Borrow is a low-cost way to invest on margin and pay for other short-term expenses, like a wedding or vacation, without needing to sell your investments at an inopportune time. Just note that M1’s retirement and custodial accounts aren’t eligible for loans.

M1 Spend

M1’s cash management account works like a regular checking account from a bank or other fintech platform.

M1 Spend provides all users with a debit card and one ATM fee reimbursement per month, while M1 Invest users get cashback rewards on all debit card purchases, the ability to send physical checks via M1’s app, and three additional monthly ATM fee reimbursements.

Balances held in M1 Spend earn 1.7% APY if you are an M1 Plus user. M1 Basic users earn zero APY on deposits.

Be aware that M1 is not a bank. All M1 Spend account balances are held by Lincoln Savings Bank, which provides Federal Deposit Insurance Corp. (FDIC) insurance on deposits up to the standard limit of $250,000.

M1 Fees and Costs

M1 is remarkably light on fees and costs. Zero trading commissions on stocks and ETFs has become the online brokerage industry standard, and M1 says it charges neither commissions nor markups on any trades.

You should know that there is a $100 minimum balance requirement, while the retirement account option has a $500 minimum balance requirement.

As noted above, M1 offers two tiers of service: M1 Basic (free) and M1 Plus ($125 a year—the first year is free). Both tiers provide automatic rebalancing of your investments, margin loans and a cash management account, while M1 Plus offers various additional benefits:

M1 BasicM1 Plus
Annual fee$0$125
Trading windowsOne per day (AM)Two per day (AM & PM)
Margin loan interest rate3.50%2.00%
M1 Spend APY0%1%
ATM fee reimbursements1/month4/month
International debit purchase fee0.8% to 1.0%0%
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M1 Account Types

M1 supports individual and joint taxable brokerage accounts, plus tax-advantaged individual retirement accounts (IRAs). M1 Plus users also get access to custodial trust accounts, which require you to fill out additional paperwork.

Users who want to invest money for short- and medium-term goals should opt for a taxable brokerage account. Long-term retirement investors should opt for an IRA. Trust accounts are a great way to invest money for your kids or grandchildren.

The firm has a concierge service to help with IRA rollovers. Users who want tax advantaged, taxable brokerage and custodial accounts for the kids can set up separate accounts for each.

All account types offered by M1:

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  • Individual and joint taxable brokerage accounts
  • Traditional IRAs, Roth IRAs and rollover IRA
  • Trust accounts
  • SEP IRAs
  • Custodial accounts (UTMA/UGMA)

M1 Advantages

M1’s automated investment management capabilities let you build a portfolio and then get on with your life. All robo-advisors offer a similar approach, but unlike competitors in the robo space, M1 provides you with a remarkable degree of portfolio customization.

Do you want to pursue an income investing strategy? Set up a globally diversified portfolio of high-yield dividend stocks. Do you follow the ins and outs of the hedge fund industry? Mimic the performance of top managers by choosing one of M1’s hedge fund portfolios. No other robo-advisor offers such a wide variety of customization or pre-baked portfolios as M1.

The platform’s stock and ETF screeners can help beginning and intermediate investors refine their asset selection game, and guide them to building better portfolios. Looking for a broad-market stock ETF with a low expense ratio? M1’s screener can queue up a list of potential candidates quickly and easily.

If you intend to make frequent use of the platform’s lending and cash management features, M1 Plus could be worth a second look, especially for high-balance users. But for new users and low-balance accounts, stick with M1 Basic, which offers everything you need in an automated investing solution with zero annual fees.

M1 Disadvantages

M1 is a hybrid platform. It’s not trying to be a complete online brokerage that competes with the likes like Charles Schwab or Fidelity Investments. Nor does it offer the full-featured robo-advisor experience, like Wealthfront or Betterment.

The disadvantages of M1 might be caused by a potential mismatch between users’ expectations and the platform’s services. If you want to actively trade stocks, bonds or ETFs, you won’t be served well by M1. On the other hand, users who need financial advisors, tax-loss harvesting and insight into their financial goal and risk tolerance should look elsewhere.

One significant disadvantage is the lack of phone customer service. Chatbots are limited and frequently lack the programming to answer customers’ questions accurately. Although M1 promises rapid email customer service responses, it can be very helpful to talk with a live representative.

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