M1 vs Vanguard Robo Advisor Comparison
Although both M1 Finance and Vanguard are considered investment brokerage firms, this article will focus predominantly on their robo-advisory managed investment offers. Both M1 Finance and Vanguard Digital Advisor are great for investors who want their investment portfolios rebalanced and managed for free or low fees. Each platform is good for those seeking a smidge of active management as well. If you want a managed portfolio with access to financal advisors, then you’ll need to choose the Vanguard Personal Advisor, an automated investment manager with financial advisors to guide the process.
So whether you’re seeking an all digital robo advisor or one with access to financial advisors, you’ll find what you need here. Plus, both M1 Finance and Vauguard also offer brokerage services like stock and ETF investing, margin borrowing, and cash management through their platforms. Though, only M1 has digital coin cryptocurrency investing.
The Vanguard robo-advisor is part of a full-service brokerage, founded in 1975. The two Vanguard robo-advisors; Digital Advisors and Personal Advisor Services charge reasonable fees and offer two distinct services.
While M1 Finance is an investment platform with management, trading, borrowing, and a cash account. This upstart launched in 2015. The service offers free investment management with additional fees for an upgraded service.
*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.
Today we’re looking at M1 Finance vs Vanguard Robo Advisors — two investing options that come with different price tags and features.
|Features||M1 Finance||Vanguard Digital and Personal Advisor|
|Overview||Free investment manager with opportunity to customize investments. ETFs, stocks, crypto and custom portfolios (pies)||Digital Advisor-Computerized investment manager |
Personal Advisor Services-Hybrid live financial advisor and computerized investment manager
|Minimum Investment Amount||$100 for investment account. |
$500 for retirement account.
|Digital - $3000 |
Personal Advisor - $50,000 (can be spread across multiple Vanguard accounts)
Stock and funds trading.
Digital-Low-fee Vanguard ETFs with index and actively managed portfolios.
FREE investment management.$125 for M1 Plus with more features.
Digital - 0.20% AUM
|Investment Funds||Over 6,000 ETFs and stocks. |
Diversified, low-fee fund in pre-made portfolios.
Digital coin - cryptocurrency.
|Digital - Active and passively managed funds |
Personal Advisor - Low fee stock & bond mutual funds and ETFs selected from among the scores of Vanguard funds. Includes passive and actively managed.
|Accounts Available||Individual and joint taxable brokerage. Roth, traditional, rollover and SEP IRAs. Trust. Business. High yield cash account with debit card.|| |
Individual and joint taxable investment. Roth, traditional, SEP, Simple and rollover IRAs. Trusts.
|Contact & Investing Advice||Phone 9:30 am–4:00 pm EST M-F |
|Customer support - Phone 8 am - 8 pm EST M-F, Email 24/7. |
Digital - No live financial advisor available.
Personal Advisor - Live online appointment with advisors.
|Cash Management||High yield cash account with debit card.|
Cash back credit card.
|None available for robo-advisory clients. |
Vanguard platform offers money market accounts and CDs through brokerage account.
|Free Services||Free investment management.|
|Many calculators and educational resources at Vanguard.|
Each of the platforms are unique and will appeal to distinct investors. You’ll discover the top features, who benefits and finally a deep dive into the specific features of each service.
What is M1 Finance?
M1 Finance is a customizable robo-advisor that offers “pie” style investing: that is, investors select from over 6,000 investment options, with each investment in their portfolio making up a slice of the overall pie. The total pie, is your investment portfolio. Users can trade shares commission free.
- Pre-made expert pies or portfolios
- Choose your own investments of stocks and ETFs
- Tax minimization
- M1 Spend – Cash management
- M1 Borrow – Margin or lending account
- M1 Credit Card
- Cryptocurrency investing
What is Vanguard Personal Advisor Services and Digital Advisor?
The Vanguard brokerage financial firm is known for low cost investment products. And the robo-advisors are a low-fee alternative to higher priced financial advisors.
Vanguard Digital Advisor:
- Computerized investment manager
- Investment portfolios in line with your risk tolerance
- Portfolios include passive index funds and actively managed funds
Vanguard Personal Advisor Services:
- Live financial advisor led hybrid investment manager. Incorporates both computer algorithms and live advisor guidance.
- $50,000 minimum
- Various investment styles including stocks, ETFs, and mutual funds
M1 Finance is best for:
- Investors who prefer FREE investment management
- Long term investors seeking commission free trading
- Small investors to larger more experienced traders
- Those who prefer fee-free investment management and trading
- Those seeking pre-made expert pies along with individual stock, fund and crypto trading
- Those who favor borrowing and cash management
Vanguard is best for:
- Those who prefer investment management from a comprehensive financial firm.
- Investors with at least $3,000 for the digital platform and $50,000 for the hybrid model.
- Those seeking basic investment management for a low management fee for digital.
- Wealthier investors seeking live financial planning combined with digital investment management for management fees lower than those at traditional financial advisors.
M1 Finance vs Vanguard Robo Advisors: Deep Dive
Fees and Minimums
Winner: M1 Finance wins on both accounts.
This platform requires on $100 to begin investing. IRA investors will need $500.
The basic investment management service is free. This includes commission-free stock, fund, and expert pie trading.
M1 Plus charges $125 per year and includes:
- A super charged checking account. The M1 Plus account offers a high yield checking account and a debit card with 1% cash back. Finally, M1 plus customers get 4 ATM withdrawal fees reimbursed per month.
- Lower borrowing costs
- Two daily trading windows, instead of one
M1 offers a lot of value in the basic plan, which we believe is suitable for most investors.
|Digital Advisor||Personal Advisor Services|
|Fees||0.20% AUM||0.30% to 0.05% AUM Declining fees for larger accounts.|
The fees for Personal Advisors Services are lower than several competitors that offer financial advisors. Although SoFi Invest offers fee-free investment management along with financial advisors and career coaches.
The ETFs and mutual funds included in the investment portfolios always charge small fees. These fees go directly to the fund manager. When Vanguard ETFs or mutual funds are used, the management fees go to Vanguard.
Winner: M1 Finance
M1 Finance offers over 6,000 investments including individual stocks, ETFs and ready-made expert pies.
We love the expert pies as investors who don’t want to choose funds on their own can be confident that the expert pies are well-constructed investment portfolios.
Sample M1 Finance Expert Pies:
- General Investing – Perfect for well-balanced investments that match up with your risk level (like a typical robo-advisor).
- Plan For Retirement – Similar to a target date fund.
- Responsible Investing – Socially Conscious Investing.
- Income Portfolios – Great for cash flow.
- Hedge Fund Followers – Copy investing strategies of well-known investors, like Warren Buffett.
- Just Stocks and Bonds – 9 Pre-made investment portfolios of just 2 funds from most conservative to very aggressive.
Vanguard Digital Advisor
Vanguard Digital Advisor offers three portfolio options:
- Index fund portfolio
- ESG – Sustainable investment portfolio
- Active and passively managed combination portfolio
Vanguard’s robo advisor provides enough diversification and the actively managed portfolios are a nice addition for those investors who strive to outperform the market averages.
Vanguard Personal Advisor Services
After meeting with your financial advisor, your portfolio is constructed to fit your goals, financial situation, and risk tolerance. The are many fund options including:
- Total Stock Market Index Fund (VTSMX)
- Total International Stock Index Fund (VTIAX)
- Total Bond Market Index Fund (VBTLX)
- Total International Bond Index Fund (VTABX)
- Intermediate-Term Investment Grade Fund (VFIDX)
- Short-term Investment Grade Fund (VFSUX)
- Intermediate-Term Tax-Exempt Fund (VWIUX) (for taxable accounts only)
Winner: M1 Finance
Fractional shares means that if a stock is trading for $100, you can buy a partial share of that stock for $50 or another amount. This is handy if you’re a beginner investor creating a diversified portfolio.
With $100 you could buy 10 individual stocks or funds for $10 each.
M1 Finance, enables investors to trade fractional shares when trading stocks or funds.
The computerized algorithms within the Vanguard robo-advisors handle all of the trading and may buy fractional shares based upon the dollar amount you invest. Additionally, fractional shares may be purchased when dividends are reinvested.
Winner: It’s a tie.
Both platforms offer rebalancing, back to your preferred mix of investments.
With Vanguard, rebalancing is automated.
At M1, you can choose automatic rebalancing or you can initiate rebalancing at any time with the push of a button.
Rebalancing is the most common service available at robo-advisors and one of the best features.
Winner: M1 Finance
M1 Borrow allows anyone with an account balance of at least $2,000 to borrow up to 40% of their account value. The money can be used for any purpose. Margin borrowing rates are comparatively low.
This is helpful if you need to pay for a home repair and want to allow your investments to continue compounding.
The Vanguard Investment Brokerage firm offers margin account. But, the robo-advisors don’t have access to borrowing.
Winner: M1 Finance
M1 Finance Plus members have access to M1 Spend.
This service offers:
- FDIC-insured checking account
- Debit card with 1% cash back
- 4 fee-free ATM withdrawals per month
- Bill pay
- Direct deposit
Only Vanguard brokerage clients have access to cash management. Separate cash management isn’t available with the robo advisory platforms.
Winner: It’s a tie.
Both Vanguard and M1 Finance robo-advisors have account types broad enough for most investors.
|Individual, Joint taxable |
Rollover, SEP IRAs
|High yield cash |
**Vanguard brokerage offers cash management.
Winner: Vanguard Personal Advisor Services
This is the only option in the Vanguard vs M1 contest that includes live financial advice.
Vanguard Digital platform clients can speak with financial services representatives, who may be able to assist with basic financial questions, although this is not “advertised” as a feature on the platform.
Vanguard Personal Advisor Services really takes the “personal” part of their name seriously. Investors collaborate with the financial advisor and get tailored investment advice and support. The real benefits kick in when an investor’s AUM tips over $500,000. While all investors get access to a team of financial planners, those with AUM over $500,000 get access to a dedicated financial planner.
M1 finance offers a roll-over concierge to help with account transfers. They also offer helpful customer service representatives during normal business hours.
M1 customers will need to look elsewhere for financial advice.
Click here for robo advisor with live financial advice.
Winner: M1 Finance
This was an easy contest as the Vanguard Investor app doesn’t offer a specific app for the robo-advisors.
The M1 Finance app is dedicated to the platform. The reviews were generally quite good.
Winner: It’s a tie with a slight edge to Vanguard.
M1 Finance and Vanguard each prioritize security and are insured by SIPC (Securities Investor Protection Corporation) against loss of cash and securities from a broker’s failure. SIPC insurance does not protect against normal investment price declines.
With Vanguard, you can be sure that a large robo-advisor with the most AUM and a premier financial firm has excellent security and offers encryption, SSL validation and: and offers:
- SSL (Secure Sockets Layer) validation
- Security codes
- Security keys
- Account activity alerts
- Trusted contact
While M1 Finance security includes:
- Military-grade 4096-bit encryption
- Two-factor authentication
- M1 Spend and M1 Plus accounts offer FDIC insurance up to $250,000 and additional insurance through Lincoln Savings Bank.
We are comfortable with the security on both Vanguard and M1.
Vanguard Investing-Brokerage Account
We’d be remiss if we didn’t touch on the full-service Vanguard investing options. Like, Schwab, Fidelity, and E*TRADE, Vanguard offers full-service investment products for those that want CD, bond, mutual fund, options, stock, and ETF trading.
These services are in addition to the Vanguard robo-advisor solutions.
You’ll find low cost investment products and services for long-term investors and short term traders at Vanguard including:
- Investor education
- Calculators and research tools
- Any type of account you might need including 529 Accounts and 403b services
- Margin accounts
In fact, investors seeking managed solutions and a full service brokerage firm can get all of their needs met at Vanguard.
In contrast, M1 Finance offers stock, ETF and crypto investing.
Does M1 Finance have Vanguard funds?
Yes. You can buy and sell Vanguard exchange traded funds (ETF). Although if you want to trade Vanguard mutual funds, you’ll need to go to the Vanguard platform.
Which is better, Robinhood or M1 Finance?
M1 Finance is best for long term investors who want to trade stocks and ETFs. M1 is also best for investors seeking pre-made portfolios with investment management including rebalancing.
Robinhood is best for active traders and those who want access to stocks, funds, options. and cryptocurrency.
For more information read M1 Finance vs Robinhood.
Is Vanguard or Charles Schwab better?
Regarding digital investing, we prefer Schwab’s Intelligent Portfolios over the Vanguard Digital offer. Schwab’s digital portfolio is managed for free and includes up to 20 diversified ETFs. Both Schwab and Vanguard’s robo advisors offer wealthier investors access to digital investment management with financial advisors, and are well regarded.
With respect to brokerage firms, I prefer Charles Schwab over Vanguard, but they are both solid choices.
Is M1 Finance a good idea?
If you’re interested in growing your wealth with investing, then we believe that M1 Finance is good platform. Just make sure to learn a bit about investment basics before diving in.
M1 Finance vs Vanguard Digital and Personal Advisor Services: Which is Best for You?
M1 Finance and Vanguard are each tailored to different audiences and offer unique features and services. Both platforms are appropriate for long term investors, not active traders.
This makes the Vanguard vs M1 Finance choice easier.
M1 Finance is the affordable, easily accessible robo-advisor that is good for new investors and expert DIY-ers alike. With customization options and pre-made portfolios, M1 Finance caters to a variety of individuals. This robo also has over 6,000 investments from which to choose including stocks, ETFs and crypto. M1 Spend cash management and M1 Borrow round out the offers.
We believe that the free M1 Finance platform is a good choice for most investors.
Both Vanguard robo advisors have higher investment minimums and fees.
The Vanguard Digital Advisor is worth a look if you would like actively managed, digital or ESG investment options. Additionally, Vanguard Digital requires $3,000 to invest and charges 0.20% AUM, in contrast with the $100 minimum ($500 for IRAs) and free investment management at M1.
We recommend M1 Finance for a basic platform, unless you’re already a Vanguard customer.
If you’re a mass affluent customer with the $50,000 minimum, there’s a lot to like about the Personal Advisor Services. The financial advisor drives the process and investment options are vast. The retirement and financial planning tools are solid. In contrast with traditional financial advisors, fees are reasonable.
Vanguard Personal Advisor Services is a good choice for investors seeking full-service financial planning at a reasonable cost.
Ultimately, the only reason to pay for a robo-advisor might be to access financial advisors.
Read the Complete M1 Finance Review
Read the Complete Vanguard Digital and Personal Advisor Services Review
*Disclosures: 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.
I have a brokerage account with Vanguard and an account with M1 Finance.
*Using margin involves risks: you can lose more than you deposit, you are subject to a margin call, and interest rates may change. To learn more about the risks associated with margin loans, please see our Margin Disclosure (https://s3.amazonaws.com/m1–production-agreements/documents/Margin_Disclosure.pdf). M1 Borrow available on margin accounts with a balance of at least $10,000. Does not apply to retirement accounts.