Betterment vs. Wealthfront vs. M1 Finance – What Are the Differences Between These Robo-Advisors?
Sometimes it seems like robo-advisors are all just variations of one another: there are multiple free robo-advisors on the market, and many offer affordable minimum balances. So how do you choose from a list of three similar robo-advisors – Betterment vs. Wealthfront vs. M1 Finance Robo-Advisor?
- Betterment vs. Wealthfront vs. M1 Finance – What Are the Differences Between These Robo-Advisors?
- Betterment vs. Wealthfront vs. M1 Finance Top Features
- Betterment vs. Wealthfront vs. M1 Finance Who Benefits?
- Fees and Minimums
- Betterment vs. Wealthfront vs. M1 Finance Deep Dive
- Betterment vs. Wealthfront vs. M1 Finance Comparison: The Takeaway
Instead of drawing names out of a hat, this comparison of Betterment vs Wealthfront vs M1 Finance will help you see the differences between these three robo-advisors so you can make an educated choice.
Betterment vs Wealthfront vs M1 Finance
|Overview||Goals based automated investment advisor with access to human financial planners.||Goals based all-digital robo advisor with online financial planner and customizable investments.||Free robo-advisor with opportunity to choose from 1,000s of investments.|
|Top Features||SRI, smart beta and income portfolios. Human financial advisor access. Cash management.||Daily tax loss harvesting. Cash account and borrowing. Smart beta, risk parity, and customizable strategy ETFs.||Free investment management. Pre-made and customizable portfolios. Cash account and borrowing.|
|Free Services||Free investment management promotion||First $5,000 investment - managed for free.||No management fees. Includes free rebalancing + buying and selling securities.|
|Fee Structure||Digital-0.25% AUM Premium-0.40% AUM||0.25% AUM - First $5,000 managed for free||Zero fees for investment management. M1 Plus-$125 per year. (special promotion available)|
|Accounts Available||Single + joint taxable brokerage. Roth, traditional, rollover + SEP IRA. Trust.||Single + joint taxable brokerage. Roth, traditional, rollover + SEP IRA. 529 College Savings Accounts.||Single + joint taxable brokerage. Roth, traditional, rollover + SEP IRA. Trust. Business accounts.|
|Investment Funds||Low-cost, commission-free ETF from diverse asset classes.||Diversified low-cost ETFs. Individual stock investing for accounts over $100,000. Scores of strategy ETFs.||1000's of stocks and ETFs. Pre-made, strategy investment portfolios.|
|Contact & Investing Advice||Phone M-F and Email-24/7. Financial advisor access.||Phone for clients & Email 24/7. All client services reps have minimum of Series 7 license and some are certified financial planners.||Phone M-F and Email-24/7.|
|Minimum Investment Amount||Digital-No minimum. Premium-$100,000.||$500.||$100.|
These three robo-advisors are all low-fee, relatively low-minimum investment robos. Actually, M1 Finance does not charge investment management fees for its basic service.
They’re also all highly ranked robo-advisors on Robo-Advisor Pros and show up frequently on lists like best robo-advisors for millennials. They do have some differences, however, and one of the ways they differ is in what they choose to emphasize for their clients.
Betterment is a goals-based robo-advisor. Investors can set up multiple goals depending on their financial needs (such as retirement, a wedding, or sending a child to college). Betterment also offers different account levels; Digital clients get basic robo-advisor services, while Premium clients are able to meet with human financial advisors. For quick investment questions, all Betterment clients can text with financial advisors.
M1 Finance is a customizable robo-advisor that makes it easy for investors to curate their investment portfolios. This free robo-advisor offers pre-made portfolios for those who want to go with a simpler option; however, investors who want full control of their investments will find that M1 Finance offers over 5,000 stocks and diversified ETFs.Please tell your friends about this robo-advisor comparison.Click To Tweet
Wealthfront focuses on ensuring its clients are making the most of their money through daily tax-loss harvesting and portfolio review. This robo-advisor makes use of automated investment management, and artificial intelligence powered advice with a comprehensive digital financial planner. Wealthfront also offers you the chance to change out some of the funds in your portfolio or create your own investment mix. And, Wealthfront recently added two cryptocurrency funds so investors can now invest in bitcoin and ethereum.
Of course, all three robo-advisors are secure and offer regular investment rebalancing.
Betterment vs. Wealthfront vs. M1 Finance Top Features
In the Betterment vs. Wealthfront vs. M1 Finance debate, it’s easy to see that each robo is a good value for investors. However, they differ in some of their top features.
- Goals-based investing strategies.
- Tax-loss harvesting.
- Access to human financial planners.
- Smart beta, income and socially responsible investing.
- Betterment Savings Account – High Yield Cash Management.
- Zero account minimum.
- Path Financial Advisor helps with life changes and future planning.
- Tax-optimized direct investing (for investors with over $100k).
- Daily tax-loss harvesting.
- Create your own investment portfolio or tweak the recommended one.
- Wealthfront Borrow – line of Credit
- Wealthfront high yield cash account
- Free investment management
- Pre-made portfolios for investing, retirement, income, hedge fund model and more.
- Portfolio customization-can design own portfolio and choose from 1000’s of stocks and ETFS.
- Borrowing and cash management for customers.
- M1 Plus offers more features for investors (for $125 per year).
Bonus: M1 Finance Promo Codes
Betterment vs. Wealthfront vs. M1 Finance Who Benefits?
M1 Finance is best for:
- DIY investors who want to create their own portfolios and have M1 manage the investments.
- Those seeking re-made investment portfolios and investment management.
- Cost conscious clients looking for fee-free investment management.
- Those who want borrowing and cash management.
M1 Finance is an ideal robo-advisor for individuals who want access to both pre-made investment portfolios and the ability to customize their portfolios. Users can make their portfolios as personalized or simple as they’d like! This is the only robo-advisor which allows investors to buy individual stocks and funds. Like Wealthfront, M1 Finance also offers a loan feature.
Betterment is best for:
- Investors seeking diversified, goal based investment portfolios.
- Anyone who wants access to financial advisors.
- Those seeking tax-loss harvesting.
- Investors who want socially responsible and smart-beta portfolios (to try for market-beating returns).
Betterment makes it easy for investors to visualize their path to their goals, and text with financial advisors for quick questions. Those with more than $100,000 will appreciate the premium program with access to Certified Financial Planners. Digital customers can purchase low cost financial planning meetings for specific questions like retirement or college planning. If you’re just getting started, Betterment has no investment minimum. If you need cash flow, you can select an income portfolio.
Wealthfront is best for:
- Investors seeking an all digital platform with the opportunity to customize portfolios or create their own-including access to cryptocurrency.
- Those who would like a risk parity fund or individual stocks.
- Those comfortable with an all-digital platform with exceptional online financial planning guidance.
- Individuals who want access to cash management and borrowing.
- Investors who also want a 529 college planning account.
Wealthfront markets themselves to millennials, and it’s easy to see why. This robo-advisor boasts low fees, and emphasizes helping users save on taxes through tax-optimization strategies and tax-loss harvesting. The Path digital financial planner is quite comprehensive and ideal for the tech-savvy investor who’s happy with an all-digital investment manager. The Wealthfront portfolio line of credit is handy if you need cash and don’t want to sell investments. M1 Finance also offers a loan feature.
Fees and Minimums
Winner: M1 Finance.
All three of these robo-advisors are in the top four robo-advisors with the lowest fees, which is great news for investors who want to use Betterment, Wealthfront, or M1 Finance for their investment needs.
M1 Finance is the leader in terms of fees; this robo-advisor offers zero account management fees!
Wealthfront and Betterment Digital aren’t too far behind, charging only 0.25% AUM on their accounts.
Betterment charges 0.25% AUM for their Digital accounts, but this amount jumps up to 0.40% for users who would prefer the Premium account with access to financial advisors. However, Betterment might be a better deal for larger investors; clients with over $2mil in their accounts get a discount on their fees and will pay only 0.15% and 0.30% for Digital and Premium, respectively.
Minimum Investment Amounts
Winner: Betterment, with M1 Finance a close second.
When it comes to minimum investment amounts, Betterment doesn’t have a minimum investment amount.
M1 Finance investors need a $100 minimum balance.
Wealthfront investors will need $500 to start a portfolio,
Since these three robos vary so much in terms of fees and minimum balance requirements, it is difficult to rank them in terms of value; each brings something unique to the table while still offering affordable service.
Although if you’re seeking free investment management, and have $100, then M1 Finance might be for you.
Betterment vs. Wealthfront vs. M1 Finance Deep Dive
Learn the details of where each platform shines or falls short. Review this information with an eye towards the features that you find most important.
Winners: It’s a tie.
All three platforms have access to socially responsible investments. In fact, wealthfront just added several new socially responsible ETFs.
Wealthfront has several distinct strategy-oriented ESG platforms. While M1 Finance has a variety of pre-made socially-responsible portfolios or you can craft your own. Betterment also offers a socially responsible investment option.
Wealthfront offers daily tax loss harvesting. For investors with large accounts Wealthfront goes beyond basic tax-loss harvesting offered by other robos; Wealthfront’s US direct investing for clients with portfolios valued over $100,000 claims to increase returns through strategic TLH.
Betterment also offers tax loss harvesting.
Human Financial Planners
All Betterment clients can text with financial advisors. This is great for quick investing questions. Digital customers have access to a variety of low-fee financial planning meetings for retirement, college, or a portfolio review conversation.
Premium customers, with $100,000 or more to invest get unlimited access to Certified Financial Planners for more in depth finance and investment advice.
College Savings Plans
Wealthfront is the only one of these robo-advisors to offer College 529 accounts. While Betterment and M1 Finance certainly offer a large spread of account types (including business accounts, IRAs, and trusts), investors who want to help put their children through college will be drawn to this unique offering.
If you are seeking access to financial advisors and no minimum investment amount, then Betterment is better than Wealthfront. Otherwise, both Wealthfront and Betterment are feature-rich, well regarded digital investment managers. We are confident recommending both platforms.
Yes, M1 Finance is a well-respected investment management company. If you’re seeking managed investment portfolios and the opportunity to invest in funds and stocks on your own, then M1 Finance is a sound company to investigate.
Yes, we have a Robo-Advisor Selection Wizard that can help you choose a digital investment manager.
Betterment vs. Wealthfront vs. M1 Finance Comparison: The Takeaway
These three robo-advisors are much different than they seem on the surface. Each one is affordable, with low (or no!) management fees and minimum required investments of no more than $500.
However, each robo-advisor has a unique emphasis that makes them appealing to diverse groups of investors:
Betterment is best for new investors with little money and those seeking financial advisor access.
M1 Finance is best for investors seeking fee free investment management and access to thousands of individual investments.
Wealthfront is best for those seeking to customize their investments-including cryptocurrency-with hundreds of additional ETFs and daily tax-loss harvesting.
Before choosing Betterment vs. M1 Finance vs. Wealthfront for your financial needs, it’s crucial to look closely at these differences to determine which of the three robo-advisors is most likely to help you reach your goals.
In sum, we like each of these robo-advisors and the best way to make your decision is to consider what you are seeking in an investment manager.
Read the expert robo-advisor reviews or go directly to the individual websites:
For Free Investment Management:
Read the Complete Betterment Review
Read the Complete M1 Finance Review
Read the Complete Wealthfront Review
*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.
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.P