Summary: M1finance.com is the latest online robo-advisor to enter the market. It features $0 trades with a 0.25% annual fee on all investments up to $100,000 (the first $1,000 are invested for free). Investors build “pies”, which are made up of individual stocks, mutual funds, REITs (Real Estate Investment Trust), as well as replications of hedge funds, such as Icahn Capital and Berkshire Hathaway. Each stock or fund can then be assigned a weight, or percentage, in the overall pie.
Minimum investment: $100
Fractional shares allowed: Yes.
Customized financial advice: No.
24/7 customer service: No. Email support only at this time.
Fees: 0.25% annual fee between $1,000 and $100,000. (Accounts with more than $100,000 are charged 0.15%.) No cost to purchase securities.
Investment options: Large selection of stocks, mutual funds, and REITs.
Automatic rebalancing: No. M1 Finance does, however, use “dynamic rebalancing”, which rebalances the portfolio when money is added to or taken out of one’s account. Also, users can rebalance their account manually at any time.
Tax-sheltered retirement accounts: Yes (IRAs and Roth IRAs).
Smartphone app: Yes (Android and iPhone).
Tax loss harvesting: No.
Bottom line: M1 Finance’s large number of investment options and low fees make them a welcome addition to the robo-advisor world. The one drawback is the lack of customized advice, which is provided by other robo-advisors, such as Betterment. M1 Finance does offer target date portfolios but for the most part, investors have to make their own investment decisions on this platform.
Last updated: 4/26/2017
Full disclosure: At this time, the author has an account with M1 Finance.