M1 Finance Review 2024 » Is M1 Finance Reliable or Scam?

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M1 Finance is a modern broker with a wide range of features that traditional brokers do not have. In our article we will try our best to give a neutral view on this M1 Finance review. We also try to figure out whether M1 Finance is a safe broker or not. Stay with us.

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M1 Finance is not like any traditional brokerage. It's an investment broker designed for traders who do not have much extensive experience to handle their own investment. M1 Finance deals with stocks and ETFs. They have one easy-to-use platform where you can invest, borrow and spend. They have a unique feature of personification and automation of your portfolios. In this M1 Finance review, we are going to figure out how they work and whether they are a legit broker or not.

Let's be honest, this review on AtoZMarkets is not a sponsored review. We are giving this review of M1 Finance for our loyal and curious readers who are here to know the details of M1 Finance.

Let's dig into the depths of M1 Finance to know more about the company.

M1 Finance Overview

M1 Finance LLC is a subsidiary company of M1 Holdings, a technology company that offers financial services through M1 Finance and M1 Spend LLC. According to The Financial Industry Regulatory Authority (FINRA), M1 Finance is situated at 200 N LASALLE STREET, SUITE 800, CHICAGO, IL 60601, United States of America.

M1 Finance, a robo-advisory investment platform, was founded in 2015 by Brian Barnes. It's an American investment broker headquartered in Chicago, Illinois, United States.

Services Offered by M1 Finance

Opening account with M1 Finance

Without telling how to open an account, the M1 Finance review would be incomplete.

Let's see the procedure of opening an account.

• First you have to submit an application.
• Then you will get an email from them within one business day. It could be a confirmation email or they may ask you for more information.
• If they ask for more information, follow their instructions to send your documents. It will take 5 to 7 days to review your documents and open your account.

They have 2 types of subscription

M1 Basic: It's a free account without any annual or monthly subscription fee.

M1 Plus: 125$/Annual Fee (1st year FREE)

Qualifications

If you are not from the USA, M1 Finance is not for you. To open an account with M1 Finance, you have to be a US Citizen or Green Card Holders (Permanent Resident). You also have to be over 18 year old with a US Residential Address and a US phone number.

M1 Finance Review: Types of Accounts

Brokerage accounts

Individual brokerage accounts - An Individual brokerage account is owned by a single individual. You can use this account to buy and sell stocks, ETFs, bonds and other types of investments.

Joint brokerage accounts - A joint brokerage account can be opened by couples, parents and their 18 year above children and also adults can open for their parents.

Retirement accounts

Individual retirement account (IRA) - An Individual retirement account (IRA) is opened for retirement savings. It gives you tax benefits. M1 has different types of retirement accounts. Those are Traditional IRA, Roth IRA, and SEP IRA.

Traditional IRA - Traditional IRA is a tax-advantaged account made for people to save for their retirement. If a person meets the income eligibility, he can get a tax deduction facility. If you withdraw after the age of 59.5, you will not be taxed.

Roth IRA - Roth IRA is also a tax-benefited savings account that gives you a tax free growth facility. After 5 years if you are at least 59.5 year old, you can get the distribution. Payments are made after-tax income.

Simplified employee pension (SEP) IRA -

Simplified employee pension IRA is a retirement savings for small business owners or self employed people. M1 Finance only allows SEP IRA only for self-employed people.

To open an IRA account with M1 Finance, First you have to open your individual account with them. It may take up to 24 hours to process your account.

Trust accounts

To open a trust account, you have to go through their paper account opening procedure. During your sign up if you choose "trust", they will send you a form to be filled out and send them back.

Once your application is processed, you can manage it on their platform same like their taxable brokerage account.

Custodial Accounts

A Custodial account is set up for minors for their future benefits by their custodians. The fund of a Custodial account is irreversible until the minor reaches at the age of maturity/adult. Only M1 Plus users can have the facility to open a Custodial account.

Pros and Cons Of M1 Finance

In this M1 Finance review, let's find out their pros and cons.

Pros

• No commission

• A fully regulated broker

• You can build your own Pies.

• Margin rate is good

• They offer IRAs

• M1 Finance gives you a wide variety of options of 100+ tailor-made portfolios which includes a wide range of investment strategies.

• You can make your personalized portfolios by picking stocks and ETFs over 6000.

• They have tools that can aid you to put your extra cash into investment accounts.

• In margin accounts, M1 Finance provides competitive rates.

• With M1, you can trade fractional shares.

• They provide a free debit card (Visa).

Cons

• They have only two windows for trading during the day
• To get margin you need a minimum $5,000.
• M1 Finance doesn't have full features like online brokerages. Their assets are restricted to only stocks and ETFs.
• They don't have forex and other assets.
• Their software is very limited.
• It also does not have full fledged service like other existing robo-advisors.
• They do not have the facility to have live financial advisors.
• Customer service is not easily accessible. Live chat is run by bot.
• They do not allow short (sell).
• They don't have advanced trading tools.
• They don't allow outside US customers.

Some Other Features of M1 Finance

M1 Finance offers investing, borrowing and spending in one platform. Let's see how their INVEST, BORROW and SPEND work.

M1 Invest

image source: M1 Finance

Through M1 Invest you can build your wealth. You can decide how much you want to invest and predefine your risk tolerance level.

M1 has very user friendly tools that let you make your own investing strategy. Their automated system will implement the strategy on behalf of you.

• Customization

M1 Invest allows you to make a custom portfolio of your own from more than 80 expert portfolios. It's a very easy process to do.

• Fractional Shares

M1 Invest gives you the opportunity to buy fractional shares regardless of the price of the stocks and ETFs. It allows you to make your portfolio more diversified.

• Automation

M1 Finance is a fully automated robo-advisor. You can choose to make everything automated. If you want, you can also do manual trading by turning off auto investing.

• The Pie

image source: M1 Finance

The most unique feature of M1 Finance is their Pie investing system.

The Pie is the dashboard where you can see your investment, returns and much more. The Pie has made it easier than ever to build your portfolios.

To make your own Pie, you can choose from over 6000 stocks and Exchange Traded Funds (ETFs). You can also choose your Pie from M1 Finance's expert made Pies. They have over 100 pre-made 'Expert Pies' according to your financial goals.

• Custom Pies

M1 Invest allows you to customize your Pies. You can make it organized as you wish. You can make more than one Pie with different themes and strategies. Then you can add them to your main portfolio Pie.

M1 Borrow

image source: M1 Finance

M1 Borrow of M1 Finance allows you to get credit at a lowest rate without doing extra paperwork. M1 Borrow is only available in their margin account provided that you have a minimum balance of $5,000 in your account. They give you up to 35% margin of your account balance. You can set your repayment schedule. With extra borrowed funds, you can invest in stocks or ETFs.

What makes the difference between M1 Borrow from other similar brokers is the interest rate. M1 Borrow has a lower interest rate. If you are a M1 Basic account holder, your annual interest rate would be 3.5%. But if you have M1 Plus membership, you have to pay only a 2% annual interest rate on your borrowed money.

But if you have M1 retirement or custodial accounts, you are not eligible for M1 Borrow.

M1 Spend

image source: M1 Finance

M1 Spend of M1 Finance is an insured checking account (insured by FDIC). It has zero monthly fee with no minimum balance to maintain. But those who have M1 Plus membership earn 1% APY on their balance available on M1 Spend and 1% cash back on debit card expenditures. They also get ATM fee reimbursement for up to 4 transactions.

Things to be noted here is that M1 Finance is not like a bank. All their M1 Spend balances are with Lincoln Savings Bank. They provide insurance of $250,000 on deposits through FDIC (Federal Deposit Insurance Corporation).

M1 Credit Card

image source: M1 Finance

They give credit cards to their M1 Plus membership holders. If you are a M1 Plus account holder, you can apply for a credit card. The credit card comes with a lot of facilities. You can get up to 10% cash back when you shop from certain brands. To know more about the facility click here.

M1 Finance Trading Platform

In M1 Finance, you can get access to your account by their desktop platform. They offer you both Android and iOS apps with all the necessary features.

M1 Finance Education

M1 Finance offers a number of tools that you could utilize to get more information about investing to save for retirement and the many security options that are available. Let's take a look at some of the tools that you can utilize to gain knowledge about M1.

Expert Portfolios

When you invest through M1 it is not necessary to select your own mix of assets or select specific stocks. Instead, you're able to select one of the 80 expert portfolios that automatically divide the funds into an individual asset mix that is tailored to your investment risk tolerance, preferences, and much more. M1 is an important benefit for novice investors who're still learning various types of investment vehicles that are available.

Education Center

The M1 Finance education center has numerous videos and articles to help you learn how to invest and how to utilize features and tools of M1 Finance tools and features. Topics range from providing answers to specific questions regarding investing (for instance, "What is a mutual fund?" and "What is the beta value?") to offering enjoyable and easily digestible financial advice and tips.

Customer Support of M1 Finance

They don't have any phone number or email address on their website. To resolve your query, you have to submit a form from their support page. Their support team is only available from 9am-5pm ET on days when the United States Stock Market is open. They usually take one business day to respond to your query. They have a live chat option but run by bot. I didn't get any human chat assistants.

Is M1 Finance Reliable Or Scam?

To answer the question- is M1 Finance a scam or is M1 Finance safe, let's find out how they are regulated.

M1 Finance is a registered company under Security And Exchange Commission (SEC), it's an independent authority of the Federal Government US.

M1 Finance is also a member of The Financial Industry Regulatory Authority (FINRA). Their job is to protect investors and market integrity. M1 Finance is also a member of Securities Investor Protection Corporation (SIPC).

So M1 Finance is a well regulated broker in the United States of America. So there is no chance of being scam or fraud.

Is M1 Finance Trusted by Customers?

The M1 Finance got an A- rating from The Better Business Bureau. Their lowest rating is F and highest rating is A+. Considering that we can say M1 Finance is going well with their customers.

Summing Up

Hope you have liked our article on M1 Finance Review. M1 Finance is for those who do not want to trade on their own. It's a robo-advisor broker that lets you manage your fund and build a Pie based portfolio. With the M1 Finance Pie system, you can diversify your investment in different stocks and ETFs. You can also choose their pre-curated Pies. If you want to do day trading, M1 Finance is not for you.

If you are from outside the USA, M1 Finance is not for you. M1 Finance is not like a traditional online broker. It doesn't have all the features of a normal stock/forex broker. They also do not have human finance advisors to consult with. One thing I didn't like about M1 Finance is you can not get instant support even on weekdays. You have to submit a form to know anything or to get your questions or problems resolved.

But if you are looking for a robo-advisor based broker which is flexible and free, M1 Finance is for you. It is a fully regulated broker by reputed regulatory authorities in the United States of America. You can fully trust them.