Top reasons why I love M1 (and couple areas of improvement)...

by Ravi

So, I really like M1 Finance and use it for my personal investing a lot. I invest X$s daily via M1 Finance's automated investing. I have created a portfolio using Paul Merriman's buy and hold strategy ( more on that in another post coming soon ).

In this post, I would like to share top reasons why I love M1 Finance.

Pros:

  1. Commission Free Investing plus no management fees in Stocks and ETFs

Yes, free as in free beer i.e. completely free, zero, nada. If it's listed on the NASDAQ or NYSE exchange then you have it available commission free on M1 Finance. You like Vanguard ETFs, check. You prefer Fidelity, check. You think Schwab ETFs are the best, check. Want to invest in Apple, Google, Facebook or any of the stocks listed on Nasdaq/NYSE exchange, check.

In other words you can buy / sell commission free, no matter the ETF provider or any stock ( listed on Nasdaq/NYSE exchange ).

  1. Fractional Shares

Let's say you are really interested in buying AAPL but don't have the monies to cough up $223.84 (price as of 9/15/2018 ) in one go. Well, you could invest 10$ in AAPL every week and buy fractional shares of it. Before you know it you would have bought a few stocks of AAPL. No other popular stock broker provides this.

  1. Automated Investing with recurring scheduled deposits

M1 Finance allows setting a recurring daily, weekly or monthly schedule. You can schedule a set day and amount to be transferred from your bank account.

For example you can set: transfer 25$ from your bank account to M1 Finance Individual account, every week on a Wednesday.

And just like that 25$ will be invested weekly into a portfolio of your choosing (by 12:30 pm central time).

  1. Custom portfolios

This is a big one for me. M1 Finance allows me to slice and dice my portfolio how I want, and not what they think is best for me (cough all other robo advisors). If you would rather choose one of the Expert Pies created by M1 Finance itself, you can do so too! Below is a snapshot of a few Expert Pies already curated by M1.

  1. Dynamic Rebalancing:

Rebalancing is a crucial ingredient of maintaining your portfolio according to the structure/percentages you want. With M1 Finance's Dynamic Rebalancing, every trade with new cash in your portfolio pushes you closer to the target percentages you set. Whenever your account makes new trades, the algorithm identifies slices that are most relatively underweight and puts money in those first.

This way you are always on track.

  1. Automatic dividend reinvestment

You can automate investing your dividends. You can turn it off too, if you want to pick and chose when to invest your dividends. Flexibility!

  1. Tax Efficiency:

M1 Finance tax efficient investing uses a lot allocation strategy when selling securities to help reduce the amount owed on taxes automatically.

  1. Account Types:

M1 Finance offers a lot of different account types:

• Individual

• Joint

• Traditional IRA

• Roth IRA

• SEP IRA

• Trust

Cons:

  1. Cannot trigger manual trades:

M1 Finance trades once during the day and it's within 10 am central time to 12:30 pm Central time window. The market could dip after that, but you can't trigger a manual buy for X$s at a certain time.

  1. Does not offer Solo 401K.

M1 Finance does not offer Solo 401K which is a big negative for me.

Summary

That's it. A lot of reasons to love M1 Finance and couple places where it could improve.

If you think I missed something, then please let me know. Comments/feedback welcome!