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M1 Finance Review: Robo-Advisor For The Engaged Investor

Disclosure: Please note that this article may contain affiliate links which means that – at zero cost to you – I might earn a commission if you sign up or buy through the affiliate link. That said, I never recommend anything I don’t  believe is valuable.

M1 Finance Review-For the Engaged Investor

“Forty years of research into behavioral finance tells us that the best way to invest is to define a strategy and then automate it, a process that enforces discipline and encourages us to ignore short-term noise and capitalize on long-term trends,” said Brian Barnes, CEO of M1 Finance.

One of the newest robo-advisor platforms to hit markets, M1 Finance, offers a unique twist to the fintech landscape. Recently showcased at NYC Finovate, M1 Finance brands itself as being geared toward an engaged investor. No passive questionnaires or blind investing here!

M1 Finance Robo-Advisor Review-DIY + Investing Automation

What makes M1 Finance stand out in the robo-advising arena is its delicious take on portfolio creation:

  • Investors create pie charts to visually design their portfolios.
  • Investors can customize up to 100 slices of pie to include EFTs, stocks, or even other pies.
  • The visual nature of this platform makes it easy to see that your investing style is reflected in the investment options you have chosen.

For investors not quite sure where to start, M1 Finance also offers pre-made pies to choose from. These pre-designed pies are also fully customizable, so you never need to worry about being locked into an investing plan that does not work for you.

M1 Finance Offers Built In Rebalancing

Whether you design your own or choose a pre-designed pie, the platform makes it visually clear which of your investments are off-target by changing the shape of the slice of pie. When new money is added or withdrawn, it automatically affects the section of your pie that is most off-target in order to rebalance itself. For example, if you want 50% of your investments to be stocks-based, but you are only at 48%, then any new money that you add to your investment portfolio will automatically go to that portion of the pie.

A recent Barron’s article compared M1 Finance’s industry lists to those of Motif by showcasing the largest 20 companies in each sector. Further, if the investor wants to cut the ETF fees, she can restrict her pie to just stocks and create her own fund, sans management expenses.

For those investors who want to be more hands on-users can also rebalance the pie themselves with a few clicks of the mouse.

How Much Does M1 Finance Require to Get Started?

Unlike many other robo-advisors, M1 only requires $100 to get started!

What Does M1 Finance Cost?

Not a lot: M1 Finance does not collect commissions, and charges only a 0.35% annual platform usage fee. This fee remains the same regardless of the complexity of your portfolio or the number of trades that you make.

M1 Finance-Goldilocks Approach-Not to Hot, Not too Cold

You choose how engaged you want to be with your portfolio management. From pre-made pies, to DIY investment pie creation, you decide which investment road to take. And the features are apt for today’s modern investor.

M1 Finance is great for on-the-go portfolio management with apps for ios and android devices.

M1 Finance is user-friendly, so once your initial portfolio is set up it is easy to manage. Just like a bank account, investors only need to worry about depositing or withdrawing money; the platform itself takes care of the trading and the money gets allotted to your pre-determined specifications.

Even with a fully customizable platform, some people worry about the lack of human touch robo-advisors usually offer. M1 Finance has a customer support team available during business hours, so if their extensive FAQs can’t answer your questions, a real human can.

M1 Finance Review Infographic - DIY + Investment Management Robo-Advisor

M1 Finance Takeaway

One thing that M1 Finance repeats often is that the money you are investing is your money, so it should be working for you. The company reinforces this over every aspect of its design: the customizable pie-chart investments, low fees, ability to withdraw most of your funds by the next business day, and extremely user-friendly designs.

M1 Finance offers a promising alternative to other investing options out there. If you’re stuck between a DIY approach and a fully automated robo-advisor, then M1 is a nice in-between solution. In particular, this platform adds depth and customization to the robo-advising market. Engaged investors, who want hands-on and easily accessible investing options, will find that M1 Finance has a lot to offer.

If you’re sophisticated enough to know what you want in your investments, but don’t want to constantly rebalance and maintain your investment portfolio, I think M1 Finance is a good alternative. (Click on the link to check out M1 Finance.) We’re all so busy today, that you need to pick and choose how you’ll spend your time. If you like to pick your investments, and like some investing inspiration as well, then I would seriously consider M1. With the low $100 entry fee, anyone can dip their toes into the investing world.

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Barbara A. Friedberg, MBA, MS

Barbara A. Friedberg, MBA, MS

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