Is M1 Finance Legit? (2024)

M1 Finance is an innovative investment platform that offers a combination of automated investing and self-directed trading. With features like fractional shares, tax-loss harvesting, and automatic rebalancing, it has attracted many investors looking for a modern, user-friendly solution for managing their portfolios.

However, the question remains: “Is M1 Finance legit?” In this article, we will explore M1 Finance’s features, fees, and reputation to help you determine if this investment platform is right for you.

M1 Finance Company Background

M1 Finance LLC is a Chicago-based fintech company founded by Brian Barnes in 2015. The platform aims to provide comprehensive and user-friendly investing services for individuals looking to grow their wealth. M1 Finance combines the best of traditional brokerage services with the modern convenience of robo-advisory technology to offer a unique investing experience. The company has experienced rapid growth since its inception and has attracted millions of users and billions of dollars in assets under management.

The M1 Finance platform stands out due to its “pie” investing concept, which allows users to create a customized portfolio consisting of various investment “slices.” This innovative approach simplifies the process of investing and makes it more accessible for both experienced and novice investors. Additionally, the platform offers a range of features like fractional shares, automatic rebalancing, and M1 Borrow, which lets users borrow money against their investments at competitive rates.

M1 Finance’s commitment to providing a user-friendly and feature-rich investment platform has contributed to its positive reputation and significant growth in the financial industry. The company has raised substantial funding from investors and continues to expand its offerings to cater to the evolving needs of its user base.

Customer Reviews: A Testament to M1 Finance’s Legitimacy and Value

M1 Finance has received outstanding ratings from its users, demonstrating the platform’s reliability and value in the world of investment. With a 4.7-star rating from 51.7K Apple Store ratings and a 4.5-star rating from 22.2K reviews on Google Play App Store, it’s clear that a significant number of users appreciate and trust M1 Finance as their go-to investment platform. The app’s 500K+ downloads further emphasize its widespread appeal and popularity among investors.

Customer reviews play a crucial role in assessing a company’s credibility and the quality of its products or services. In the case of M1 Finance, the positive reviews not only reinforce its legitimacy but also highlight the platform’s innovative features, such as the unique “pie” concept that simplifies investing and promotes wealth growth. Users have also commended M1 Finance’s “borrow” feature, which enables investors to access cash without liquidating their investments. These testimonials from satisfied customers provide valuable insight into M1 Finance’s commitment to delivering top-notch investment tools and services.

Here are some customer reviews that offer insight into the experiences of M1 Finance users:

“Best App for Path to Financial Freedom – M1 finance outperforms every other brokerage/brokerage app by a long shot. I have used/currently use Robinhood, Fidelity, and Acorns. M1 is the clear winner in terms of wealth growth. The “pie” concept is the most efficient and ingenious idea for investing. They have made this simple. Another aspect that sets M1 invest apart is their “borrow” feature. I am a gold member on their service (I got it at $75 for the first year, normally $125 a year). For me, the borrow feature has provided me the means to make a down payment on my car without withdrawing from my investments. Borrow also allows the user to receive cash without the liquidation of your investment account and it allows my investments to keep growing. Borrow for Gold members is at a cool 2% interest rate (cheap money). My money is starting to compound and the scale they use (total account value) allows the user to have a visualization of the “8th wonder of the world” (compounding). I’m only 21 and the future is bright thanks to tools like M1. This app is beautiful offspring of a capitalistic society and this app will be the reason for many future millionaires. Keep up the great work.”

“Overall a good investment platform for certain investor types. Definitely not for traders. The pie system is what I find the most interesting and in a good way. I also use TD, but find M1 more suited to my goals. I wanted to comment in part because I see some neg comments regarding hidden fees and difficulty using the pies. Their membership fee is optional and I’ve never been charged more than that. The pies have a small learning curve but it’s really not that difficult.”

Features and Functionality

M1 Finance offers a unique approach to investing, allowing users to create customizable “pies” consisting of individual stocks, exchange-traded funds (ETFs), and mutual funds. The platform’s automated investing feature allocates funds based on the target percentages set by the user and automatically rebalances the portfolio as needed. This feature, combined with the ability to purchase fractional shares, ensures that users can maintain a well-diversified portfolio even with limited funds.

The platform also offers various account types, including taxable accounts, retirement accounts, and custodial accounts. M1 Finance’s cash management feature, M1 Spend, allows users to maintain a cash balance in their account and offers a debit card for everyday spending. Users can earn cashback on debit card purchases, and M1 Plus members can receive up to $10 in ATM fee reimbursem*nts per month.

Tax-Loss Harvesting and Responsible Investing

M1 Finance offers tax-loss harvesting, a feature that helps investors minimize their tax liability by strategically selling investments at a loss to offset capital gains. This feature can be particularly valuable for users with taxable accounts, as it can help reduce the overall tax impact of their investment activities.

M1 Finance also supports responsible investing through its Expert Pies, which are pre-built investment portfolios that focus on environmental, social, and governance (ESG) factors. Users can choose from a range of responsible investing options to align their investments with their personal values and preferences.

Fees and Pricing

One of the key benefits of M1 Finance is its low-cost structure. The platform does not charge trading fees, management fees, or commissions on individual stocks and ETFs, making it an attractive option for cost-conscious investors. However, users should be aware that mutual funds are not available on the platform, and expense ratios for ETFs will still apply.

M1 Finance offers a premium tier, M1 Plus, which comes with additional benefits such as lower margin loan rates, additional trading windows, and a higher cashback rate on debit card purchases. And with new members receiving M1 Plus membership for free for 3 months, a $31 value for a service with a $125 annual fee. It’s easy for us to say M1 Finance is worth it.

Who is M1 Finance Best For?

M1 Finance is best suited for long-term investors who are looking for a user-friendly, customizable, and low-cost platform to build and manage their investment portfolios. The platform’s unique “pie” investing concept, dynamic rebalancing, and fractional shares make it an excellent choice for investors who want a more hands-off approach while still having control over their investment choices. M1 Finance is ideal for:

• Passive investors who prefer a set-it-and-forget-it approach to investing.
• Individuals looking to build a diversified portfolio with low fees.
• Investors seeking a simple way to invest in fractional shares of individual stocks and ETFs.
• Those who want to automate their investments and take advantage of dollar-cost averaging.

On the other hand, M1 Finance may not be the best fit for the following types of investors:

• Active traders or day traders who require real-time trading capabilities and advanced charting tools.
• Investors who want access to a wide range of investment options beyond stocks and ETFs, such as options, futures, or forex.
• Those who require extensive research tools, in-depth financial analysis, or access to expert advice from financial professionals.

M1 Finance is an excellent platform for long-term, passive investors who want a simple and low-cost way to build and maintain a diversified portfolio. Active traders or those seeking more advanced features should consider other platforms that cater to their specific needs.

Mobile App

M1 Finance’s mobile app is available for iOS and Android devices, providing users with a convenient way to manage their investments on the go. The app offers a range of features, including portfolio tracking, automatic rebalancing, and access to M1 Spend. Users can also set up biometric authentication for added security.

Limitations

While M1 Finance offers many features that appeal to both beginner and experienced investors, it does have some limitations. The platform does not provide access to a financial advisor, and users seeking personalized advice from human advisors may need to look elsewhere. Additionally, M1 Finance does not support trading in options, futures, or foreign currencies.

The platform’s automatic rebalancing feature, while convenient, may not be suitable for all investors, especially those with a high risk tolerance who prefer a more active approach to managing their portfolios. Furthermore, M1 Finance does not offer margin loans to users with less than $10,000 in their accounts.

Final Thoughts – Is M1 Finance Legit?

M1 Finance is indeed a legitimate investment platform that offers a unique and user-friendly approach to investing. The platform’s innovative “pie” concept, combined with features like fractional shares, automatic rebalancing, and low fees, makes it an attractive option for long-term and passive investors.

The positive customer reviews, high app ratings, and the company’s growth and achievements in the fintech industry further testify to M1 Finance’s legitimacy and the value it provides to its users. While M1 Finance may not be suitable for active traders or those seeking advanced features, it is an excellent choice for individuals looking to build and manage a diversified investment portfolio in a simple, low-cost, and hands-off manner.

Ultimately, whether or not M1 Finance is the right platform for you depends on your investment goals, risk tolerance, and preferred level of involvement in managing your portfolio. However, given its innovative features, positive user feedback, and commitment to providing a valuable investment experience, M1 Finance is a reputable and reliable option for those looking to invest for the long term. Click here to get started today!

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