Traditionally, the barriers of entry to the investing marketplace were quite high.
A lack of technology, a slower moving world, and strict regulation meant that it was nearly impossible for regular investors to gain any type of access.
Thankfully, this is now changing with a wide variety of applications which can assist investors to not only gain access to the market, but also provide a comprehensive set of analytical tools and research materials.
What was not long ago the domain of traders in financial institutions can now be made available to investors from their smartphones.
The following is a list of the best applications for both experienced and beginner investors alike.
Choosing the right application can often be the difference between a profitable trading venture or a losing one.
#1 – M1 Finance ($10 Bonus)
M1 Finance is a hybrid between a robo-advisor and brokerage, offering free automated investing.
A robo-advisor essentially makes investing passive, with an algorithmic selection based on select criteria.
The application is very user-friendly and easy to use.
They make investing fun, and have zero fees. It is an excellent all-around platform with few downsides, established in 2015.
M1 Finance Pros
M1 is one of the most flexible investment applications available.
Investors have the choice of selecting pre-built portfolios or alternatively making their own from a combination of ETFs and stocks.
The prebuild portfolios called “Pies” can be customized.
Unlike other robo-advisors, users do not have to fill out a questionnaire beforehand to examine their preferences and risk tolerance in building the portfolios.
There are over 60 prebuilt “pies” to choose from.
M1 Finance is free. Yes, free.
Accounts are also protected up to $500,000 with SIPC protection.
The M1 Finance app automatically rebalances.
There is no minimum investment.
M1 Finance is regulated by FINRA and is revolutionizing the investment model.
M1 Finance integrates with Turbo Tax and H&R Block for easy financial reporting.
A free consultation is available from a specialist and over 2000 ETFs are available.
All dividend income is reinvested into client portfolios.
M1 Finance Cons
There are few disadvantages associated with M1 Finance.
The way that “pies” are customized within the application can be a little confusing.
But aside from this the application is easy to use.
M1 Finance does not offer tax loss harvesting or mutual fund investment.
Additionally, investments with M1 Finance are not FDIC insured.
Besides this, it is the perfect application.
Who is M1 Finance good for?
The M1 finance application is the best all-around investing application on the market.
It’s free, customizable, and flexible.
People can get the benefits of robo investing while still retaining the ability to modify their portfolio.
People who need to utilize tax loss harvesting are the only people the application will not suit.
Robinhood is a US-based trading platform.
The Robinhood ethos is aligned around helping regular individuals access the trading marketplaces, and they don’t believe that it should be the exclusive domain for the privileged.
Robin Hood, was, of course, a mythological figure who stole from the rich to give to the poor, a hero of the people.
There are multiple benefits to the Robinhood trading platform.
The first and most obvious benefit is that it is free.
They offer zero commission trading so that regular investors are allowed access to the market.
Unlike the Robin Hood of legends, this Robinhood is fully compliant and regulated.
Robinhood Financial is a member of the Securities Investor Protection Corporation (SIPC).
This means that all securities in the account are insured up to $500,000.
If anything does happen to your account, the SIPC will step in.
Robinhood is registered with the Financial Industry Regulatory Authority (FINRA).
FINRA regulates broker-dealers and operates independently from the government, though it has been given authorization by Congress to regulate broker-dealers.
They ensure that all registered firms are in compliance with regulations and work to foster market transparency.
The app also provides a wealth of information about how to trade and has a very slick user interface.
The application is simple, easy to use, intuitive, and very fast.
It is a perfect starter kit for beginner investors due to its design.
Best of all, is that Robinhood offers exposure to cryptocurrency.
Cryptocurrency is on track to largely replace legacy fiat as a dominant means of exchange. Blockchain news has been dominating the headlines recently and this trend is set to continue. Robinhood offers a Robinhood crypto application specifically for cryptocurrency investment. Robinhood is free, fast, intuitive and provides exposure to cryptocurrency.
Unfortunately, Robinhood Crypto is only available to certain states in the USA — Arizona, California, Colorado, Florida, Indiana, Massachusetts, Michigan, Mississippi, Missouri, Montana, New Jersey, New Mexico, Pennsylvania, Texas, Utah, Virginia, and Wisconsin.
The application is available on both IOS and Android and more states are to be added soon.
The app does not support ICO tokens for people wishing to avail of up and coming cryptocurrencies.
For traders looking for more advanced features, Robinhood may not be the best option. IRA-based accounts are not available from Robinhood, only taxable accounts.
Robinhood does not have any dividend reinvestment plan or retirement accounts.
Who is Robinhood good for?
Robinhood is great for people who need a clean and easy trading experience without any advanced analytical tools. Robinhood is a modern trading application that is orientated towards younger generations in their twenties and thirties. It is perfect for young individuals with limited capital and little trading experience. Free stock can also be attained as a sign-up bonus through our link.
#3 – Acorns ($5 Sign-Up Bonus)
Acorns is more of a savings application than a trading platform.
But it is one neat, cool, and slick application.
The focus of Acorns is to help everybody become wealthy using a few simple steps.
It is one of the more modern investing ideas that is also be very popular with young individuals.
Bank accounts are linked to the application and the spare change of transactions are rounded up and invested into a select portfolio of your choosing.
The micro-investment strategy is very popular among certain types of investors and over 3,000,000 people are using Acorns to grow their own money tree.
The obvious benefit of Acorns is that is automates saving and investment, so people do not have to worry.
It is an easy way to consistently invest smaller dollar amounts.
This can be contrasted with having to invest a lump sum with a traditional institutional investment firm, with all of the associated fees.
Investing smaller amounts of money with a brokerage firm is a quick route to bankruptcy.
Acorns is free for college students.
The standard fee is $1 a month, $2 a month, or $3 a month, depending on the package selected.
The application is very easy to use and shares tips on daily habits that can be adopted to get rich.
The application can be downloaded and set up in under 10 minutes.
It is very easy to use, and the process is incredibly streamlined. There is no minimum deposit for using the application.
From a psychological perspective, the money is being invested immediately.
You are always investing and saving money.
The best way to encourage people to save money is to simply automate the process so it does not require any conscious input. It just becomes a healthy habit.
Five different types of portfolios are offered to investors from conservative to aggressive. Each portfolio has six exchange traded funds in it for maximum diversification.
The biggest disadvantage associated with Acorns is the .25% fee for accounts over $5000.
This fee is taken from the overall account balance.
The fee is still not huge and is far lower than fees associated with index funds and ETF’s.
Another possible disadvantage is that there is a definite lack of investment options.
But this is due to the design of the application.
It was created for passive simplicity.
The issue with many other trading applications is there is too much information and decision paralysis can set in.
Similar to Robinhood, there is a lack of other tax beneficial accounts.
Who is Acorns good for?
Acorns is perfect for people who want to invest but do not want to worry about investing.
It is ideal for passive investors, as the worry and stress of selecting stocks has been taken out of the equation.
For conservative investors who want to make money with little risk, Acorns is ideal.
It is also good for college students who need to learn how to save but do not have the willpower to do it.
It is a really smart, sensible, and risk-free way to start on the road to wealth. Acorns also has a $5 sign-up bonus.
#4 – Wealthfront
Wealthfront is an automated investing tool much like Acorns.
But while Acorns is better suited to smaller investors, Wealthfront is ideal for both beginners and experienced traders.
Wealthfront is a robo-advisor, and currently manages over $10 billion in funds.
They are commonly regarded as the best robo-advisor on the market.
It is also one of the oldest, launching in 2011.
The benefits of Wealthfront are the same as other automated tools, in that users can avail of a passive investment strategy to generate wealth without any active management.
Wealthfront uses modern portfolio theory like other robo-advisors to take into account risk tolerance and client preferences.
But Wealthfront is arguably a little more technically advanced than its competitors.
Wealthfront uses a saving model known as “Path”, developed by a team of PhDs.
Users set savings goals and include all of their accounts and loans.
Path then suggests ways to achieve the goals.
The Path model is a core component of all Wealthfront activities.
It is like a robot personal financial advisor.
Wealthfront is free under $5,000 much like Acorns, and then charges a .25% fee.
It also charges a .15% fee for ETFs.
Technically you have to get a referral link to get the first $5000 managed for free.
But they are not difficult to find online.
It also offers a number of tax accounts unlike other trading applications.
Wealthfront offers a generous referral program, a portfolio line of credit, smart beta, tax loss harvesting, tailored transfers, and risk parity.
Like all passively managed funds, investment options are limited with Wealthfront.
The minimum amount required to qualify for tax loss harvesting is $100,000.
Using Wealthfront can be a headache in terms of taxation.
You will receive a lengthy printout as you have a lot of different holdings.
If you already have investments, you may pay capital gains when liquidating an account at Wealthfront.
Who is WealthFront good for?
Wealthfront is excellent for people who are serious about long-term financial goals and want to save for the long term.
For parents who need to save for their kid’s tuition or people who want to save for their retirement, then the Path model works excellently.
Over the long term, tax harvesting and other Wealthfront features can make them more attractive than Acorns and other platforms geared towards smaller investors.
#5 – Betterment
Betterment is a robo-advisor and is similar in many ways to Wealthfront.
In many respects, they are direct competitors and often compared.
Betterment is the largest independent robo-advisor.
They have around 300,000 clients and over $11 Billion in assets under management.
There is no minimum investment with Betterment and the fees are .25% a year, much lower than most financial outlets.
It offers a range of accounts such as IRA accounts, joint and taxable.
It is possible to avail of a promotion, where the first year is free.
Like WealthFront, Betterment has a goals based investment strategy which advised people on their goals and how to achieve them financially, without using the Path based model.
The goals-based investment approach is proven to be much more effective than simply “investing” or “saving”.
When people have something to save or invest towards they are more likely to be successful.
The Betterment application is easy to use.
The signup process is also very easy to accomplish.
It also features tax loss harvesting, fractional shares, low transaction fees, hands off investing, a socially responsible portfolio investing, custom asset allocation, and a tax coordinated portfolio.
Betterment maintains a flat .25% fee with no additional costs, unlike many competitors.
Using Betterment can mean that users may need the help of a tax accountant.
With the increase in owned assets comes more tax overhead and lots of documents to manage.
To access the help of an expert human advisor can cost a lot.
Betterment is generally better suited to larger investors who can benefit from tax loss harvesting.
Who is Betterment good for?
Betterment is more suited to sophisticated investors with moderate amounts of funds to allocate.
Robo-advisors like Betterment and WealthFront are a little more hands-on and active than Robinhood and Acorns.
For people who want to keep taxes to a minimum, with a moderate investment portfolio and an eye to the future, Betterment is a better option.
#6 – Coinbase ($10 Sign-Up Bonus)
Coinbase is best known as a cryptocurrency exchange.
It was initially started in 2012 by former Goldman Sachs employees.
Now that cryptocurrency is becoming regulated and derivatives are being created, Coinbase has made its way into mainstream financial trading.
Coinbase offers lots of cryptocurrencies and its Coinbase Pro has recently launched, targeting traders.
It has also launched one of the worlds first regulated crypto index fund and is tightly watched by the Securities and Exchange Commissions.
Bitcoin, Bitcoin Cash, Litecoin, and Ethereum can be bought directly on the exchange.
Coinbase is the safest and most secure cryptocurrency exchange in the world.
Fiat deposits are FDIC insured, so if anything happens customers will get their money back.
A team of Silicon Valley experts secures the network and 90% of cryptocurrency is kept in cold storage.
Coinbase is rapidly expanding with new offices, new regulatory announcements and new products and platforms.
They recently launched a suite of institutional products for larger investors.
The Coinbase application is available on Android and IOS and is fully secure as well as easy to use.
While buying cryptocurrency from the Coinbase exchange directly is extremely expensive (4% for credit card purchases), using the Coinbase Pro exchanges cuts fees down to 0% for maker and .3% for taker orders. Coinbase is currently offering a $10 bonus for new users.
Coinbase is a cryptocurrency exchange breaking into the financial market.
Most other investment applications are financial firms starting to offer cryptocurrency.
So Coinbase is definitely lacking in financial features, though it is rapidly adding new products.
Coinbase, as a cryptocurrency exchange, has been known for awful customer service and slow verification times.
However, this is changing as it becomes more legitimate.
The Coinbase is really an application to manage a wallet, buy bitcoin, and securely access accounts.
It is not a fully fledged trading application.
It simply makes it easy to buy and sell cryptocurrency.
Who is Coinbase good for?
Coinbase is perfect for people who want to gain access to cryptocurrency with the safest and most regulated exchange possible.
There have been many hacks and scams in the industry and funds are safe with Coinbase.
For people with a pre-existing Coinbase account, downloading the application definitely makes sense.
#7 – Fundrise
Fundrise is an investment application that focuses on providing exposure to the real estate industry without a high dollar commitment.
It is marketed as a new way to invest in real estate and a real alternative to stocks and bonds.
It is the first service that makes the benefits of private market real estate investing available to investors in one easy to use platform.
Investors can gain access to the real estate market with limited exposure, something that is historically difficult to do.
But one of the biggest advantages of Fundrise is that the returns are typically larger than other markets.
The portfolios are engineered to deliver higher returns in a lucrative industry with an approach called eDirect investing.
The returns were 11.44% in 2017 and 8.7% in 2016.
The reviews of the company are world class, with a 9.6 rating on Trust Pilot and a 4.9 rating on Google. They are also a Better Business Bureau accredited investment platform.
Investors have the choice of three plans – Supplemental income, balanced investing, and long-term growth. The minimum investment is $500. Investors can cash out of the property portfolios at quarterly intervals.
Fundrise offers an incredible 90-day money back guarantee.
If you are not satisfied with them within 90 days, Fundrise will buy back the initial investment amount.
This is unheard of in the industry.
The account fees are .85% asset management fee per year, compared to .25% for robo-advisors.
REIT fees are 1% per year.
There are only 4 periods where investments can be withdrawn from an illiquid property market.
So there is no real active trading in this platform.
Distributions are taxed as ordinary income, which can be high for some.
Who is Fundrise good for?
Fundrise is perfect for both beginner and experienced investors who would like to see good returns year on year, but do not have the money to invest directly in the real estate market.
For people who want to invest in real estate, it is ideal.
#8 – LendingClub
LendingClub is a loan platform that provides loans to eligible applicants.
They are loan specialists who have considerable expertise in the market.
Personal loans of up to $40,000 can be provided and it is easy to apply.
LendingClub has been in operation since 2007 and brings borrowers and lenders together, revolutionizing the way people access credit.
But Lending Club also provides investment opportunities.
When investing with lending club, people are investing in the consumer credit market.
Over $35 billion has been burrowed through the platform with 2.4 million customers serviced.
Customers have access to a market that has historically been the domain of large institutions — the consumer credit market.
LendingClub offers traditional IRA, Roth IRA, and 401(k) rollovers. They also offer trust, corporate, and joint accounts.
The accounts are safe and well diversified.
LendingClub uses a form of automated investing where investors can choose one of five types of portfolios.
The riskier the portfolio, the greater the reward. When investing with Lending Club, people are putting their money in “notes”.
LendingClub Notes have little correlation to the stock market, which can mitigate volatility.
The portfolios are very well-diversified, and the credit industry has historically generated returns of 3-8%.
LendingClub has a rating of 4.8 out of 5 stars from nearly 40,000 reviews.
Investing with LendingClub requires a $1000 deposit.
The range of financial options is limited while investing with LendingClub, focusing on the credit industry.
Even in within the credit industry, investors are limited in their investment options.
LendingClub specializes more in the lending industry than it does in the investment sector.
Who is LendingClub good for?
LendingClub is ideal for people who wish to gain access to the consumer credit market.
It is also useful for people who need to take out a loan or refinance.
#9 – Swell Investing
Swell Investing (or just Swell) is a robo-advisor with an emphasis on socially conscious investing.
Swell was created to help people invest in socially conscious stocks.
These stocks can include renewable energy, clean water, healthy living, health companies and more.
Swell focuses on companies that are in socially responsible sectors only.
It was launched in 2015.
Swell Investing Pros
The obvious benefit of Swell Investing is that it provides people with the capability to invest in socially responsible stocks.
So the investments are linked to a better economy, environment, and society.
Swell has a minimum deposit of $50 for newcomers, which can make it attractive to new investors.
Swell differs from some of the other socially focused robo-advisors on the basis of portfolio allocation.
Swell invests in stocks, while other platforms invest primarily in Exchange Traded Funds.
Each portfolio consists of between 37 and 68 securities.
Investors have more choice with Swell Investing than other robo platforms.
They are given the option to choose which portfolio to invest in, as well as the portfolio allocation.
They can also choose, to a limited extent, the stocks within the portfolio.
When you invest with Swell, you are a shareholder in each company, and can attend shareholder meetings.
Swell Investing Cons
The management fees for Swell investment are a little more than other advisors at .75%.
This is the higher end of the robo-advisor spectrum, typically .25%.
However, the .75% fee is all-inclusive.
Swell only offers individual accounts and there is no tax loss harvesting function or 401(k) rollover capacity.
It is also a new platform that is still working out some bugs.
The platform is not particularly tax friendly.
It is also highly concentrated in US small company stocks right now, which can increase volatility and risk.
Who is Swell Investing good for?
People who care about social investing would do well to invest in Swell.
They have a unique model with a stock based portfolio.
It could generate higher returns, but it could also generate losses due to a lack of diversification.
#10 – NextSeed ($20 Sign-Up Bonus)
NextSeed is based in Texas.
They are neither a broker-dealer nor a funding portal.
NextSeed provides business owners with the ability to invest in debt financing.
They have found a niche financing new restaurants, particularly in college towns.
Only debt investments are offered through NextSeed.
Investment overviews are easy to understand, a there is a low minimum investment of $100. Investments are open to all investors.
All companies offering investments on NextSeed are extensively vetted by regulatory authorities.
Investors can gain access to high-quality local businesses through a new model.
Local people in the community can support local projects easily with minimal regulation or fuss.
It is bringing back regional investing, which can be attractive for many. People who set up an account can take advantage of a $20 bonus.
A relatively low number of investment options is available. NextSeed only offers debt instruments under Regulation CF.
The only open investments are in California and Texas. The potential upside is capped, which is a huge disadvantage.
Almost all offerings are in restaurant and retail outlets.
NextSeed retains a 1% fee on all payments made by the business.
Who is NextSeed good for?
The NextSeed revenue model is perfect for businesses where cash flow is unpredictable, and investors of all kinds looking for a good rate of return, advertised between 8-12%.
It is also good for those who prefer to invest in local business outlets instead of massive corporations.
It is its own type of socially responsible investing.
#11 – Ally Invest
Ally Invest is the online brokerage firm of Ally Bank.
It is relatively new to the brokerage market and is a one stop shop for all financial activities, offering seamless integration into Ally Bank deposit accounts.
Ally Invest Pros
The main advantage is that Ally Invest offers it all.
Stocks, options, funds, and a wide variety of accounts including Trusts, SEP IRA, Roth IRAs, Custodial, Partnership etc.
Accounts are protected up to $500,000 and further coverage is available.
There are a huge variety of trading tools and accounts are serviced by a clearing agency.
Ally Invest also offers a managed portfolio service, which is similar to a robo-advisor.
Fees are lower compared to typical fund managers.
The fees are competitive compared to other platforms, at $4.95 per trade.
Ally Invest Cons
It can take a long time to fund the account, depending on the particular type of payment method.
There are no local branches and no commission free ETFs.
While the managed portfolio option is available, pure robo-advisors such as WealthFront or Betterment do a better job with a smaller initial deposit.
Who is Ally Invest good for?
Ally Invest is good for experienced traders.
It is a comprehensive suite that has everything a trader or serious investor could ask for.
But it is not really designed for beginner investors. There is too much going on, and it could be overwhelming.
Summary — Best Beginner Trading Applications
The best all-around application is M1 Finance.
Acorns is perfect for people who want to llearn to save money and need to establish good habits.
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