M1 combines some of the automated features of a robo advisor with the traditional features of a standard broker. M1's primary investing strategy revolves around "Pies." A "Pie" is simply a group of investments. Your "Pie" is made up of slices which can be an individual investment or another "Pie"

When you first sign up for an account with M1 Finance, you are able to select the individual stocks and ETFs that you want to make up your "Pie." You can create "Slices" within your "Pie" to better organize different classes of investments.

You can then tell M1 how you want your funds to be allocated to your slices within your pie. For example, let's say that you had three slices in your pie. One slice was made up of large cap stocks, the other growth stocks, and the final medium cap stocks.

You could tell M1 that you want a 50% allocation towards large cap stocks, 30% towards growth stocks, and the final 20% towards medium cap stocks. This means that every time you invest $100 into your portfolio, $50 would go towards large cap stocks, $30 towards growth stocks, and $20 towards medium cap stocks.

M1 also helps keep your allocation as you desire by offering portfolio rebalancing. Let's continue with the example above. If for whatever reason your pie drifted to where you held 55% large cap stocks, 30% growth stocks, and 15% medium cap stocks, you can ask M1 to rebalance the portfolio to the original allocation with the click of a button.

If building your own investment portfolio sounds intimidating, you can use one of M1's pre-built "Pies." These pre-built portfolios focus on a specific investing goal such as saving for your retirement. M1 says you can use a pre-built "Pie" as your entire portfolio or use it as a "Slice" of a larger portfolio.  

M1 currently offers five account types. These accounts simply hold the investment portfolio that you build at M1 and are not investments themselves.

Individual or joint brokerage account: A brokerage account simply allows you to deposit funds and start investing. This account does not have any special tax features, but anyone can open one. You can own this account as an individual or jointly with another person.

Custodial account: A custodial account is an account that a custodian sets up for the benefit of a minor. The funds in the account are considered an irrevocable gift until the minor reaches the age of majority

Traditional IRA: A Traditional IRA allows you to contribute dollars to save for your retirement. The contributions you make to a Traditional IRA may be tax deductible depending if you or your spouse contribute to a 401k and what your income is.

A Traditional IRA is a tax deferred account. This means that all the money you earn from the investments in the account is not subject to taxes in retirement. Once you are 59 and a half years old you can start to withdraw from the account at which point you will owe taxes.

Roth IRA: A Roth IRA is just the opposite of a Traditional IRA. The contributions that you make to a Roth IRA are not tax deductible. Instead, you contribute to the account with dollars that you have already paid tax on. However, a Roth IRA is a tax-free investing account.

This means that you will not owe taxes as the account grows, and you will not owe taxes when you pull the money out in retirement. In general, the account must be at least 5 years old and you must be at least 59 and a half years old before you can pull money out of the account.

SEP IRA: Simplified employee pension (SEP) IRAs are retirement accounts for business owners in which the contributions are tax deductible. Investments grow tax deferred and are taxed as income upon withdrawal in retirement.

Trust account: A trust account is a legal arrangement in which funds or assets are held by a third party for the benefit of another party.   

Crypto account: This is an account offered by M1 designed to hold crypto. It is the only way to buy crypto on M1. To qualify, you must also have a funded brokerage account with M1.

M1 finance offers two ways to borrow money:

The first is through a margin loan. A margin loan allows you to borrow against the value of your investment portfolio. You can borrow up to 40% of the value of your portfolio if it is in a brokerage account. M1 currently charges between 7.25% and 8.75% interest on margin loans depending on if you have upgraded to M1 Plus or not (see cost section for details).

It is important to understand that the interest rates that M1 charges fluctuate so be careful if you use this feature. Second, you can borrow through a personal loan. M1 offers personal loans from $2,500 up to $50,000 over 2 to 7 year loan terms. Interest rates currently range from 7.99% to 21.75% depending on if you have upgraded to M1 Plus or not (see cost section for details).

M1 offers their own rewards credit card. The card has tiered cash back rewards of 2.5%, 5% and 10% when you upgrade to the M1 Plus membership. Rewards can be earned when you use the card to shop at 70+ popular brands.

The card is designed to work in tandem with your investing portfolio as you can opt to have your cash back rewards automatically invested into your portfolio. There is no annual fee and the APR ranges from 20.24% to 30.24% depending on your creditworthiness.

In order to use the card and earn rewards, you must upgrade to M1 Plus. Cash back is limited to a maximum of $200 per month.

M1 does not currently offer a tax strategy to minimize the impact of taxes as you invest. Other popular robo advisor typically offer a tax strategy called tax loss harvesting. This is a strategy where a robo advisor will intentionally sell investments in a taxable account at a loss.

This might sound counterintuitive, but selling investments at a loss can help reduce the amount of taxes you owe from other investments that were profitable. In the future, it would be nice to see M1 add a tax strategy to complement their investing service.  

M1 does not currently offer access to human advisors.

M1 currently offers a high yield savings account that you can use to store your uninvested cash. The account currently earns a 5.00% APY and is FDIC insured up to $5 million. To get access to the APY, you need to upgrade to M1 plus.

M1 Finance has two pricing tiers. M1 does not charge any fees for their standard investing service, but to unlock all the other features M1 offers, you need to upgrade to M1's premier service called M1 Plus.
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M1 has an online help center to answer generic questions. If you need more support, you can reach out to M1's client success team. You can reach them via email and expect a response within one business day or schedule a phone call Monday through Friday from 9 am to 4 pm ET.  

The main advantage of M1 Finance when compared to other robo advisors is the ability to customize your investment portfolio. When you sign up for other robo advisors, you will typically be given a pre-built portfolio designed to meet your needs.

This is great when you are an inexperienced investor who wants help choosing investments. However, if you are an investor that wants more control over your investments, M1 can be a viable option as you get to choose your asset allocations.

Keep in mind that M1 Finance is not a full service broker like Charles Schwab or Fidelity. The idea is to provide investors with automated investing tools like a robo advisor, while allowing for the flexibility to tailor your investments to your liking.  

A secondary advantage to using M1 is that it is affordable. The investing portion of the service is free. If you want access to other services M1 offers, you must upgrade to M1 plus. However, the premium subscription does not cost an arm and a leg. It is a reasonable $3 per month.

The main disadvantage of using M1 finance is that it does not function like other popular robo advisors. Most other robo advisors have you fill out a questionnaire before using the service and build an investment portfolio based upon your answers.

In this sense, M1 is slightly more of a do it yourself option as you do no fill out a questionnaire when you sign up. Instead you get to build your own "Pie" or choose a pre-built "Pie" based around a specific investing goal or theme. If you want an investing service that does everything for you, M1 is not your best bet.

M1 Finance can be a good option if you are an intermediate investor that wants both control over your investments and the support of digital tools as you invest. M1 is not quite a robo advisor and is not quite a broker. It is a good in between option for some investors.