In a saturated fintech market, choosing the best tools and applications for managing your money can be daunting. Countless apps promise to revolutionize budgeting, investing, banking, and more for their users. Multi-layered investing app M1 Finance is one such offering, but does it live up to its hype?
To help narrow the decision-making in this widespread search, here’s our review of the popular investing app. We’ll cover everything you need to know — the good, the bad, and the questionable.
M1 Finance Overview
M1 Finance, the self-styled “Finance Super App,” brings a lot to the table for its members.
The app enables users to invest in securities, including stocks and exchange-traded funds (ETFs), with simple, no-fee trades. While the central focus of the tool is on investing, it also covers several other services, including borrowing, credit, and some banking, all under one roof.
Created in 2015, M1 Finance is a relative newcomer to the personal finance space. Still, the service has quickly amassed a large user base in that time. Over 1 million users rely on M1 Finance as a money management solution.
As a relatively modern product, M1 offers a sleek and modernized alternative to a traditional brokerage solution. Users can easily see this through the app's visual appeal and high usability factor. However, modernity isn’t just for show with M1. It further distinguishes itself from the competition with more practical modern features, such as commission-free trading and one-click rebalancing.
Pros of M1 Finance
It’s no small feat to quickly establish oneself as a significant player in an already-competitive space. Even so, M1 has earned itself a seat at the table as one of the most popular investing solutions, continuing to grow its base.
Below are some key traits and features that have helped the Finance Super App distinguish itself as a top broker for helping you reach your financial goals.
Modern, Thoughtfully Designed App Interface
Established, traditional brokerages — and indeed businesses of any kind — generally don’t need to work as hard to earn your business as scrappy up-and-coming alternatives. One of the places this distinction is often most visible is through app and interface design.
Many traditional brokerages' online presence and mobile app usability have been slow to modernize. Although most are catching up and gradually adding modern features, their apps can often be clunky, obtuse, and difficult to navigate.
Modern tools M1 set themselves apart with apps that are beautiful and easy to use. This difference goes deeper than just being easy on the eye — M1 Finance makes the features you need accessible and easy to find when you need them. Money management causes enough stress without having to worry about how to rebalance your portfolio, pick a new ETF, or make a trade.
Bonuses for New Accounts
Depending on when you open an account with M1 Finance, you may be in for a significant bonus to help kickstart your earnings.
M1 often runs promotions for signing up new accounts, and if you meet the conditions for a bonus, the payout can be considerable. At the time of writing, the service is running a promotion where new account holders can gain up to a whopping $15,000 bonus when transferring an existing brokerage account to M1. Savvy investors know that even a tiny jump in balance can massively impact their cumulative returns over time, so a cash injection of this size could be tough to pass up.
If you have been considering trying out M1 for a while, it may be worth keeping an eye out for various promotions the service runs to inject a hefty boost into your accounts when you start investing with them.
Borrow on Margin
For many investors, leveraging greater returns through borrowing is an essential strategy for maximizing returns. Knowing how central borrowing is for some customers, M1 Finance offers it directly in-house.
M1 users can borrow against their portfolio’s value for streamlined margin investing. In addition to competitive rates, the app offers a smooth, simple process for borrowing that doesn’t leave users bogged down in paperwork and hassles.
Powerhouse Rewards Credit Card
Another tool M1 Finance users have access to is the Owner’s Rewards credit card. Members have exclusive access to this powerhouse card for everyday spending.
The Owner’s Rewards Card offers competitive rewards across numerous brands, including up to 10% cash back in some cases. In addition to standard options like redeeming cash back for statement credit, cardholders also have the opportunity to reinvest their credit card rewards directly into their investment portfolio. Better yet, the card has no annual fee.
Although credit, budgeting, and everyday spending are not core components of the M1 Finance menu of services, this card is difficult to pass up. M1 users should strongly consider adding this free card to their wallet.
Cons of M1 Finance
M1 Finance offers an exciting and fresh alternative to investing with traditional banks and brokerages, but it’s far from perfect. Before you decide to move forward with the service, take a moment to consider some of its trade-offs below.
Not a One-Stop Shop for Money Management
One challenge with standing out in the present market for personal finance apps is that, in many cases, users have come to expect a single app that can do everything related to their money. Multiple solutions available today allow customers to track their budgets, bank accounts, spending, retirement accounts, credit scores, and more.
Despite what one may gather from the “Finance Super App” moniker, M1 Finance is not a one-stop shop for managing money.
M1 is a broker, first and foremost. It fills this role effectively and adds a bevy of other valuable features and offerings. However, users may do well to view the app primarily as a brokerage and treat these additional features as bonus offerings.
Monthly Subscription Fee
M1 Finance offers many of its most popular features and tools for free, but the service isn’t completely free. Many of its top features, including the best borrowing rates, crypto investing, and the maximum credit card rewards, sit behind a $10-per-month paywall for M1 Plus.
$10 per month is not an exorbitant subscription fee for an investment account, particularly considering it may directly pay for itself with the additional financial tools it unlocks. Additionally, some users may find a transparent monthly fee a comforting alternative to some of the more dubious monetization schemes of some modern fee-free brokerages. Still, with numerous free and low-cost options available, a monthly premium may be a key deciding factor for some users.
The Missing Human Touch
For a top investing app, M1 Finance lacks one of the main features many investors seek from their online brokerage: human advice and support. Investing can become complex at any level, even for the pros. Having experienced experts to guide members through the process is a luxury for some and a necessity for others.
Of course, M1 is not alone in this push toward streamlined, standardized investing. The age of robo-advisors has shown a steep rise in brokerage services offering extremely cheap investing in exchange for minimal human involvement.
Like these other options, M1 Finance looks to close the gap by offering pre-selected and diversified portfolio options to choose from and simplified features like one-click rebalancing. This tradeoff can be an excellent opportunity for users who want to save on their investing and are comfortable making high-level investment strategy decisions without professional guidance. However, those looking for a warm human touch and the security of professional advice may want to keep looking.
Assessing M1 Finance: The Verdict
M1 Finance covers a lot of ground for a young and nimble investing app. In addition to a thoughtfully designed and easily accessible app interface, it injects modern features and helpful services to help users keep their investing life straightforward. It has a lot to offer for users interested in fringe benefits like easy borrowing and a great rewards card.
Yet, it may not be the ideal solution for everyone. Monthly fees and the lack of access to a human advisor can be significant barriers to entry for users who aren’t the most serious or confident in their investing.
For those prospective members who are comfortable with a pared-down brokerage experience in exchange for a low-cost, high-functionality investing service, M1 Finance is a strong contender that is well worth a closer look.
Sam is the founder of the personal finance and self-improvement blog Smarter and Harder. His mission is to start exciting new conversations that empower people to improve their work, lives, and money, and hopefully have a fantastic time doing it. In all things, he strives to lead with positivity, understanding, and more than a bit of enthusiasm.