💰 M1 Finance Review: A Smart Hybrid for Modern Investors

tl;dr: M1 is a hybrid robo-advisor/brokerage. Build custom "pie" portfolios (stocks/ETFs), auto-rebalanced with fractional shares. Best for long-term investors wanting control, not active traders or mutual fund lovers. No fees, user-friendly.

Overview

M1 Finance is a hybrid investment platform that combines the simplicity of robo-advisors with the control of traditional brokerages. It’s designed for long-term, buy-and-hold investors and offers a range of features that make it a compelling choice for certain types of users. However, it also has notable limitations that may not suit everyone.

Key Features and Benefits

• ✅ Customizable Investment Pies: M1 Finance allows users to create personalized portfolios using its intuitive "pie" interface, enabling them to allocate investments according to their preferences.

• ✅ Fractional Shares: Investors can buy fractional shares, making it easier to diversify even with smaller amounts of capital.

• ✅ Automation and Rebalancing: The platform supports automatic deposits, reinvestments, and dynamic rebalancing, which are ideal for hands-off investors.

• ✅ Low Costs: M1 Finance operates with zero commissions and offers competitive margin rates through its "M1 Borrow" feature.

  Additional Financial Tools: Beyond investing, M1 provides an FDIC-insured high-yield cash account (M1 Earn) and a credit card (M1 Spend), making it a financial hub.

Strengths

• 💪  Ease of Use: The platform’s clean interface and automation tools simplify portfolio management.

• 💪 Tax Efficiency: Built-in tax minimization strategies help reduce tax liabilities when selling assets.

• 💪 Dividend Dashboard: A dedicated section for tracking dividend activity appeals to income-focused investors.

• 💪 Low Margin Rates: M1 Borrow offers one of the lowest rates in the market, making it attractive for those needing portfolio-backed loans.

Drawbacks

1. 👎 Limited Trading Features: M1 is unsuitable for day traders or those who need advanced order controls or options trading.

2. 👎 Customer Support Concerns: Many users report slow or unresponsive customer service, particularly during fund transfers or account closures.

3. 👎 Withdrawal Issues: Complaints about delays in transferring funds and high fees for account closures have been raised on platforms like the Better Business Bureau and Reddit.

4. 👎 No Real-Time Trading: Trades are executed during limited daily windows, which may frustrate investors seeking more flexibility.

Who Should Use M1 Finance?

M1 Finance is best suited for:

• Long-term investors who value customization and automation.

• Dividend-focused investors looking for tools to reinvest earnings efficiently.

• Those interested in consolidating financial services under one platform.

Who Should Look Elsewhere?

Investors who prioritize:

• Real-time trading or advanced order types.

• Robust customer support and seamless fund transfers.

• Low-cost margin rates as their primary criterion (alternatives like Interactive Brokers or Robinhood may be better).

M1 provides a variety of account types:

• Cash Accounts: High-Yield Cash Account, Joint High-Yield Cash Account

• Brokerage Accounts: Individual, Joint, Custodial 

• Retirement Accounts: Traditional IRA, Joint IRA, SEP IRA

• Other Accounts: Crypto, Trust

Final Thoughts

M1 Finance excels as a platform for long-term, hands-off investing with its customizable pies, automation features, and low fees. However, potential users should weigh its drawbacks, particularly in customer service and withdrawal processes, before committing significant funds. For those who value simplicity and automation over active trading features, M1 Finance remains a strong contender in 2025.

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