[{"@context":"http:\/\/schema.org","@type":"Article","publisher":{"@type":"Organization","url":"https:\/\/moneydoneright.com\/","founder":"https:\/\/moneydoneright.com\/author\/logan-allec\/","publishingPrinciples":"https:\/\/moneydoneright.com\/methodology\/","sameAs":["https:\/\/twitter.com\/moneydoneright","https:\/\/www.facebook.com\/moneydoneright\/","https:\/\/www.instagram.com\/moneydoneright\/","https:\/\/www.linkedin.com\/company\/money-done-right\/","https:\/\/www.pinterest.com\/moneydoneright\/","https:\/\/www.youtube.com\/c\/MoneyDoneRight"],"email":"support@moneydoneright.com","legalName":"Allec Media LLC","address":{"@type":"PostalAddress","streetAddress":"23890 Copper Hill Dr Ste 139","postalCode":"91354","addressRegion":"California","addressLocality":"Valencia","addressCountry":"United States","name":"Money Done Right Address","@id":"https:\/\/moneydoneright.com\/#PostalAddress"},"additionalType":"Blog","naics":"519130","logo":{"@type":"ImageObject","width":"60","height":"488","name":"Money Done Right Logo","url":"https:\/\/moneydoneright.com\/wp-content\/uploads\/Money-Done-Right-Personal-Finance-and-Investing-Blog.png","@id":"https:\/\/moneydoneright.com\/#ImageObject"},"parentOrganization":"https:\/\/moneydoneright.com\/#ParentOrganization","foundingLocation":"https:\/\/en.wikipedia.org\/wiki\/Santa_Clarita,_California","name":"Money Done Right","@id":"https:\/\/moneydoneright.com\/#Organization"},"author":{"@type":"Person","name":"Katherine Peach","gender":"Female","givenName":"Katherine","description":"Katherine Peach is the former managing editor of Money Done Right.  She has more than 12 years of experience in the financial industry. She particularly enjoys writing about stocks and the markets, as well as investing in art and antiques.  Experience Katherine didn\u2019t always intend to write about money. She\u2019s a classically trained pianist who graduated from university with a degree in archaeology and ancient Greek and Latin. However, in 2007 she began working in financial publishing as an editor for Agora Inc. (Apparently, unearthing ideas about improving your personal finances isn\u2019t such a bad career alternative!)  Since then, her writing has been featured in Truth & Plenty, Independence Monthly, NICHE, AmericanStyle, AntiqueWeek, InvestorJunkie.com, TheStreet.com, Sure Dividend, and many others.  Personal Katherine lives in Baltimore, Maryland, where she and her husband own an independent record store.  She also enjoys spending time in the woods, recording and composing music, and goofing off with her three kids.","sameAs":"https:\/\/www.linkedin.com\/in\/katherine-peach\/","url":"https:\/\/moneydoneright.com\/author\/katherine-peach\/","alumniOf":"https:\/\/moneydoneright.com\/masterworks-review\/#CollegeOrUniversity","familyName":"Peach","@id":"https:\/\/moneydoneright.com\/masterworks-review\/#Person"},"mainEntityOfPage":"https:\/\/moneydoneright.com\/m1-finance-review\/","dateModified":"2020-06-19","headline":"M1 Finance Review 2020: A Free, Flexible Robo-Advisor","image":"https:\/\/moneydoneright.com\/wp-content\/uploads\/2019\/11\/M1-Finance-Review.jpg","datePublished":"2020-01-16","articleBody":"Robo-advisors are among the hottest trends in the fintech (financial technology) space. These algorithm-driven apps let you totally \u201cset it and forget it\u201d when it comes to your investments. Just trust the computer and don\u2019t think about your money.  But I\u2019m too much of a control freak. I want to have more of a say about where my hard-earned cash is going. That\u2019s where M1 Finance comes in.  M1 Finance is a hybrid of a robo-advisor and a traditional stock-broker platform. It invests your money into pre-built portfolios that you can completely customize. The service sets you up with a passive strategy, but you take an active approach if you want.  Sounds like the best of both worlds, right?  We took a further look at the platform. In our M1 Finance review, we\u2019ll discuss the benefits \u2014 as well as the limitations \u2014 of investing with this service.  What Is M1 Finance? M1 Finance opened up to investors in April 2015. Its headquarters are in Chicago, and as of 2019 it had more than $500 million in assets under management (AUM).  M1 Finance usually gets classed among the robo-advisors. Like Betterment and Wealthfront, the service uses pre-built portfolio templates based on Modern Portfolio Theory.  Only in the case of M1 Finance, these templates are referred to as \u201cPies,\u201d and each investment that\u2019s part of a Pie is called a \u201cSlice.\u201d Maybe a bit cutesy, but it\u2019s actually an effective way to help new investors visualize how portfolios and asset allocation work.  That\u2019s the main goal of M1 Finance \u2014 to help beginning investors learn how to build a portfolio. It does this with a whole lot of visuals and a lack of the potentially confusing terminology you\u2019d find on most trading platforms.  That brings us to our next question\u2026  How Does M1 Finance Work? Signing up for M1 Finance is totally free. There are no account or advisory fees, and you need only $100 to get started. This adds to the attraction for beginners.  As part of the sign-up process, M1 allows you to design your first Pie. Your introductory Pie is made of three Slices, which you can search and choose from M1 Finance\u2019s database. You can also adjust the weighting of each security in your Pie.  Once you\u2019ve created your Pie, M1 Finance informs you what your Pie would have returned over the last five years. Your first Pie is really just a demonstration of how M1 Finance works. But you can retrieve it and invest in it for real later.  Once you\u2019ve entered the personal information required for opening an account with any FINRA broker-dealer, you\u2019ll need to connect your bank account. This is a very straightforward process. And as soon as your bank account is connected, you can start investing right away.  You can open an account with no required deposit and even set up a few Pies. However, in order to start funding your Pies, you\u2019ll need at least $100 transferred into your M1 account.  M1 Finance Review - Pies M1 Finance lets you select individual stocks and funds or pre-built Pies to build your portfolio. Pies Of course, the main attraction of M1 Finance is the Pie, which is the platform\u2019s clever way to refer to a segment of your portfolio.  Your portfolio can have one or many Pies. And you\u2019re not limited to Pies that you create yourself. M1 Finance also offers Expert Pies, which are pre-built Pies based on the strategies of successful brokerages and advisors.  These Expert Pies are created to help you meet specific investment goals. For example, there\u2019s a Moderately Aggressive Pie that holds eight diversified stock ETFs. There\u2019s also a Berkshire Hathaway Pie that mimics the investments of legendary investor Warren Buffett.  It\u2019s a bit confusing, but you can also hold pre-built Pies within your own Custom Pie.  You can create several different Custom Pies \u2014 for instance, you can have a \u201cTech Pie\u201d that\u2019s comprised of technology stocks. Or you can have a separate Pie for socially responsible companies.  You can also invest in more than 6,000 ETFs and individual stocks. With M1 Finance, you can even invest in fractional shares \u2014 meaning you can buy a smaller portion of a company than one share. You\u2019d want to do this if you wanted to invest in, say, Amazon, but didn\u2019t want to spend the more than $1,700 required for one share of Amazon stock.  It also comes in handy when you allocate your Pies.  Pie Allocation When you select new investments for your Pies, you\u2019ll be able to adjust their allocation. For example, you can have a Pie made of four Slices, each equally weighted (25%), or you can devote 50% of your Pie investment to one particular stock, etc. When you fund your Pie, the money will spread across the Pie according to your allocation. You don\u2019t need to figure out how much you need for each stock.  So, if you put $100 into a Pie and you have one stock set at 20%, one at 30%, and one at 50%, those investments will each receive $20, $30, and $50, respectively.  Through the course of your investing with M1 Finance, your Pie\u2019s allocation ratios will change as stocks gain and lose value. If you want it to go back to your original allocation, you need to rebalance your Pie. This can be done easily on the app.  (However, keep in mind that some other robo-advisors will automatically rebalance your portfolio to keep it at your ideal allocation.)  When it comes time to sell a stock or fund, you simply remove the Slice from the Pie. And you can always continue to add more Slices. You can have a Pie created of 100 fractional-share investments\u2026 although we wouldn\u2019t recommend it.  M1 Finance Review - Allocation M1 Finance uses fun visuals to teach new investors about asset allocation. M1 Finance Fees and Features M1 Finance doesn\u2019t charge any fees for a basic account \u2014 not even if you set up 50 Pies.  However, there are a few fees for stuff like requested paper copies and wire transfers (however, note that ACH deposits to or from your connected bank are always free).  Note that there are a few tiny regulatory fees applied to the sale of your Pie\u2019s securities. These fees are collected by the SEC and FINRA and are mandatory whether you invest with M1 Finance or another platform.  M1 Plus However, you can choose to sign up for a premium membership, called M1 Plus. This level of membership costs $125 per year and gives you a few bonuses.  Unless you want to explore M1\u2019s banking features (which we\u2019ll discuss in just a minute), there\u2019s really no reason to sign up for a paid account. The only bonus it gives when it comes to investing is a second trading screen.  And frankly, if you need a second trading screen, you might be better served by a more advanced free trading platform such as E*TRADE.  M1 Spend M1 Spend is a free checking account with a debit card that integrates with your M1 Finance account to give you a one-stop financial shop. The basic M1 Spend account charges no fees and will reimburse you for ATM fees once per month.  However, if you sign up for an M1 Plus account, your M1 Spend account will pay interest \u2014 currently 25 times the national average APY. This account also gives you 1% cash back on all purchases made with your debit card.  Plus, with M1 Plus and M1 Spend, you can get up to four reimbursed ATM withdrawals per month.  M1 Borrow M1 Borrow is a new flexible line of credit. If you have an M1 Plus account, you can get a better base rate (3.25%, rather than 3.50%). Payback terms on these Borrow accounts are flexible, meaning you can pay it back when you can and in whatever amounts you decide.  Perhaps best of all, M1 doesn\u2019t pull a hard line of credit or report to the major credit bureaus. So there will be no impact at all on your credit score.  However, note that you must have at least $10,000 deposited in an M1 Finance account to take advantage of M1 Borrow.  M1 Finance Review: Pros Free: Trading on M1 Finance is totally free.  Low Minimum Deposit: You don\u2019t need a minimum deposit to open an M1 Finance account. To start investing, you\u2019ll need only $100.  Easy-to-Use Mobile App: M1 Finance has a streamlined app for Android and Apple devices.  IRA Investing: M1 Finance will let you hold investments in a tax-advantaged retirement account. This sets it apart from other beginner-friendly services such as Robinhood.  Fractional Share Trading: You can invest in smaller portions of stock than one share. This means you can enjoy holding high-priced stocks in your portfolio without paying out big bucks.  Customizable Pies: You can totally customize your M1 Finance Pies\u2026 or not, if you so choose. Pick what investments you want to hold and decide how much of each you want in your portfolio.  M1 Finance Review: Cons Not Much Hand-holding: If you\u2019d prefer some more advice for setting up your investment account, M1 Finance is not a great choice for you. Although the company provides users with educational opportunities, you\u2019re largely on your own.  Can\u2019t Time Trades: M1 Finance makes trades at the end of the day, so you can\u2019t time the price movements of your stocks. Think before selecting risky, liquid stocks that could zig-zag during the day.  No Tax-Loss Harvesting: The tax-loss harvesting strategy can help you reduce your tax liability. It involves selling losing trades to offset your gains. M1 Finance doesn\u2019t offer tax-loss harvesting services, unlike some other robo-advisors.  Who Is M1 Finance Best For? M1 Finance is best for new investors who want more control over their investments than what they\u2019ll find from a typical robo-advisor such as Betterment or Wealthfront. Being able to pick individual securities and build Pies is undeniably fun. You can also learn a lot about asset allocation and portfolio rebalancing from M1.  However, if you have any interest in learning how to really trade, M1 is not the best platform. It lacks many of the investment options you can find at other brokerages (such as options, mutual funds, cryptocurrencies, forex, etc.). Plus, you can\u2019t time your trades since all trades are made at the close of the day.  But if you\u2019re looking for a fun and simple way to invest and learn a bit while doing so, M1 Finance is a fine platform for you.  Sign up for a free M1 Finance account today.","description":"This article is a review of M1 Finance, a free robo-advisor and traditional stock-broker platform.","name":"M1 Finance Review Article","@id":"https:\/\/moneydoneright.com\/m1-finance-review\/#Article"},{"@context":"https:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"Passive Income","item":"https:\/\/moneydoneright.com\/passive-income\/#breadcrumbitem"},{"@type":"ListItem","position":2,"name":"Stock Investing","item":"https:\/\/moneydoneright.com\/passive-income\/\/stock-investing\/#breadcrumbitem"},{"@type":"ListItem","position":3,"name":"M1 Finance Review: A Platform That Offers Customizable, Automated Investments With No Fees","item":"https:\/\/moneydoneright.com\/passive-income\/stock-investing\/m1-finance-review\/#breadcrumbitem"}]}]