M1 Finance Review: Invest, Borrow, Spend, It Does It All — But How Well?

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M1 Finance
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Quick Take: M1 Finance's intuitive "pie" portfolio construction, dynamic rebalancing and auto-invest features make this financial services platform ideal for self-directed and even beginner investors. However, the lack of financial tools and access to financial advisors might make it unappealing to those who don't want such a do-it-yourself approach. While M1's Invest-Borrow-Spend bundle of tools is convenient, the M1 Spend functionality falls flat compared to M1 Invest and M1 Borrow.
  • Portfolio Construction
  • M1 Borrow
  • Fees
  • Dynamic Rebalancing
How did we calculate this?


  • No account management fees
  • No trading commissions
  • Portfolio customization
  • Auto invest options
  • Margin loans that can be used for any purpose


  • No tax-loss harvesting
  • No human advisors
  • Small selection of financial tools
  • Inability to link external accounts
  • Only buy or sell orders

    M1 Finance Overview

    M1 Finance is a commission-free, self-directed brokerage that lets investors customize portfolios and automate investing mostly through its simple-to-use app. The app provides investing, spending and borrowing functionality to M1 users all on one platform.

    Using M1 Invest’s intuitive construction, users can create a custom portfolio, choose a curated one or try both. Portfolio management is easily automated.

    M1 Borrow allows eligible users to take out a low-rate margin loan on up to 40% of the total value of investments held in their M1 Invest account.

    M1 Spend is a little less impressive. This function boasts an interest-bearing checking account with an attached cash-back card, but only users who pay the $125 annual M1 Plus fee get these perks. The M1 cash-back credit card is also available to eligible users but requires a $95 annual fee unless the user pays for M1 Plus.

    M1 Finance Review: 4 Features That Stand Out

    The M1 platform may lack features some investors need. However, these four features make M1 Finance worth considering.

    Portfolio Construction

    An M1 portfolio is called a “pie” — much like a pie chart — and each pie can have up to 100 slices. Each slice represents an individual stock, ETF or even another portfolio. Users control what percentage of the portfolio each pie slice represents. Even though the M1 platform is self-directed, users can construct a pie, choose a curated pie or combine these options into one pie.

    More than 60 Expert curated pies are available, created around specific investment goals like responsible investing or retirement planning. Community pies are shareable and allow users with like-minded values and goals to support a particular group of companies. For instance, the Women-Led pie comprises public companies that are all run by female executives.

    The simple pie concept is ideal for new investors or anyone new to self-directed investing needing a user-friendly platform.

    Good To Know

    The default Auto Invest setting is “on” for all new M1 Finance accounts. Investors who want to manually manage their portfolio before automating can turn this feature off.

    M1 Borrow

    All M1 brokerage accounts extend a line of credit to any user with an investment account balance of at least $2,000. M1 Borrow is a margin loan, and borrowed money can be used for just about anything. Whereas most borrows use margin loans to buy more securities, M1 borrowers are not limited on how they can use the money. Users can borrow up to 40% of the total value of investments held in an M1 Invest margin account.

    There is no application process or credit check for M1 Borrow, and it’s automatically available the day after eligibility requirements are met. There isn’t even a repayment schedule. Interest is billed monthly on the borrowed amount and can be paid back at any time. Borrowed funds can be transferred to an external bank account or added to an M1 Invest or M1 Spend account.


    For those seeking a low-fee platform, M1 Finance delivers. Because M1 doesn’t provide access to financial experts or financial advice, they can forgo commissions and account management fees.

    So is M1 Finance actually free? Yes, users have access to most of the M1 platform for free. However, for a $125 annual fee, users can upgrade to an M1 Plus plan that includes:

    • Ability to set up smart transfers through automated if/then rules
    • Choice of a morning or afternoon trade window or both depending on whether the account’s trade equity is greater or less than $25,000
    • An M1 Borrow at 2.25%
    • A 1% APY M1 Spend checking account and 1% cash-back debit card
    • Access to custodial accounts
    • Annual fee waived on M1 credit card

    Dynamic Rebalancing

    Once users have their portfolio constructed and determine the balance of the slices, rebalancing becomes a hands-free process. M1’s Dynamic Rebalancing algorithm takes over and auto-invests new cash into imbalanced portions of the pie.

    M1 Finance also allows manual rebalancing on an entire portfolio or just part of it. With one click of the Rebalance button, the platform sells overweight securities to buy underweight ones. A portfolio’s target percentages become actual.

    Other Notable M1 Finance Features

    Here are a few other features worth a mention.

    • Fractional Shares: M1 allows the purchase of fractional shares as small as 1/100,000th of a share. This ability is beneficial to investors without a lot of capital who can invest as they get money rather than waiting until they have enough money.
    • Dividend Reinvestment: Paid dividends are applied to a user’s cash balance. Dividends will automatically reinvest once the cash balance reaches $25 over the user’s cash balance threshold unless this feature is disabled.
    • Shareable Portfolios: Users can share their custom pies with other users. Shareable portfolios are part of the M1 Refer and Earn program, which offers both parties $30 to invest when the requirements are met.

    Features M1 Finance Lacks

    While M1’s pie and borrow features make it unique, it lacks a few basic functionalities that some users might miss.

    Traditional Tax Harvesting

    M1 Finance doesn’t have a traditional tax harvesting functionality. Instead, it minimizes taxes by selling securities following a specific order, from the lowest tax burden to the highest.

    Linking External Investment Accounts

    M1 Finance doesn’t link to external investment accounts. That means users can’t get an overall snapshot of their total portfolio diversification.

    Financial Tools

    One thing M1 lacks that many other investing platforms have is financial tools. Anyone in need of money management tools will not find them on the M1 app. Those who don’t want to use multiple platforms to manage their money and investments might want to consider another platform.

    Personal Capital, for example, is a platform that has these features. It has a high minimum investment requirement and higher fees than M1 Finance but offers some of the features that M1 lacks.

    M1 Finance: Best for New and DIY Investors

    New investors who need the low minimum to get started and the ability to buy fractional shares are the ones who stand to benefit the most from M1 Finance. So are the do-it-yourself types who want control over every aspect of their portfolio.

    M1 Finance also benefits passive investors who want a buy and hold strategy as well as the fee-conscious and the socially-responsible types who may appreciate community pies.

    Anyone looking to access mutual funds, cryptocurrencies, futures, options or individual bonds won’t find them on M1 Finance. That’s why day traders may want to avoid M1. The company states clearly on its site, “We don’t believe in day trading or speculating as viable ways to build long-term wealth so we didn’t build M1 to do that.”

    How To Apply

    Getting started with M1 Finance is straightforward. Here’s how it’s done:

    1. Create an account with a username and password.
    2. Follow the onboarding prompts to complete the application process.
    3. Open an M1-supported account and fund it.

    Supported accounts include individual taxable accounts, joint accounts, IRAs — Traditional, Roth, SEP — and trusts. M1 Plus subscribers can also open custodial accounts.

    The minimum initial deposit to open an IRA is $500. All other account minimums are $100.  

    Trustworthiness and Security

    Founded in 2015, M1 Finance now has over $5 billion in client assets under management. M1 is a registered broker with the Financial Industry Regulatory Authority and a Securities Investor Protection Corporation member.

    Regarding security, M1 protects user data with military-grade 4096-bit encryption and offers two-factor authentication.

    Final Take

    The M1 Finance app was built for long-term, automated transactions, which is ideal for both passive and active investors. While no investment account should be set-it-and-forget-it, M1 Finance enables users to automate their portfolio management. The low account minimum and ability to buy fractional shares make M1 a great choice for beginning investors to get started with, reviewing expert pies until they’re confident enough to create their own.

    While M1 Finance may excel in the invest and borrow categories, the spend category could use some enhancements for those who choose not to subscribe to M1 Plus.

    Information is accurate as of May 2, 2022.

    Editorial Note: This content is not provided by M1 Finance. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by M1 Finance.

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