M1 Finance Review 2017

M1 Finance Review 2017

M1 Finance is a Web and Mobile based investing platform. They distinguish themselves by using an automatic balancing portfolio made of "pies" which allow unlimited diversification and fractional trading. On top of that, it's 100% free (Updated 12/13/17). Not sure what that all means or why we call it the best investing app for beginner investors with small amounts of cash? Read on...

Fees and Commissions

M1 Finance is a totally commission-free investing app. That means it doesn't cost you a dime to add or remove securities (stocks, ETFs, Mutual Funds) in your portfolio. For an in-depth look at the fee structure of M1 Finance and how much it will cost you, see our M1 Fees Article.

UPDATE (12/13/17): M1 Finance announced today that it is removing fees altogether. It is now 100% free for all users at any account size.  I will do my best to update other articles on the site to reflect this. Learn More.

Because there are no commissions this makes M1 the perfect app for investors with only a little money. Commissions mean that buying a $100 stock will actually cost you (stock price + commission) and commissions are usually ~$10. That means you'll pay $20 to buy and sell the stock and at $100 you'll need a 20% gain on your investment just to break even with commissions!



Instead of commissions, M1 Finance keeps fees low by only executing trades once per day in the "trading window". This means you cannot buy and sell instantly. This could seem like a red flag for some, but it's really not at all. Here's why.

M1 is geared toward investors and not traders. For our purposes, an investor is someone with a longer term strategy in the market. That's why trading within a window doesn't matter. If you're trading on a weekly, monthly, or yearly time-scale then trading windows won't bother you and you'll be able to benefit from the reduced cost. 

Because trades cannot be executed any less than 24 hours apart, this means you can execute short term trades and avoid being flagged as a Pattern Day Trader.

Here are the M1 Finance fees as of the writing of this article. If you are interested in learning more about the fees and their breakpoints, see our in-depth M1 Finance Fees article.

Available Promotions and Free Cash

Currently, M1 Finance is not offering free cash for you to get started investing. They will, however, give us a kickback for referring you. Because we sincerely love the M1 Finance platform so much, we're simply asking you to consider using our link when you sign up. It costs you nothing and helps us keep the site running.

Account Minimums & Maximums

M1 Finance currently has an account minimum of $100. M1 is the only platform we know of where it's even remotely possible to build a diversified portfolio for $100. How is it possibly to diversify for just $100? We'll cover that in detail in the Unique Aspects heading further down.

There is no account maximum that we know, but if you're going to exceed $100,000 we advise that you contact M1 Finance directly.

Be aware that SIPC coverage only extends to $500,000 per brokerage. Read more about SIPC protection for your investments.

Fractional Shares

Taken from the M1 Finance website.

Taken from the M1 Finance website.

As you probably already know, fractional trading is one of our absolute requirements for new investors with low capital amounts to invest. Why? Because it's the only way to reasonably diversify your assets without a large sum of money to invest.

M1 Finance allows fractional trading.

Imagine this: You've only got $500 to invest. So, you buy two shares of Apple stock (AAPL) at $150 and 3 shares of Vanguard High Dividend Yield (VYM) at $76. You're now out of cash and you only own two securities. No reasonable investor would consider this a well-diversified allocation.

A single share of Google stock sells for more than $900 today. Without fractional shares, an investor with a small amount of capital couldn't even own a share of GOOG outright.

Of course, we can get around this by purchasing ETFs and Mutual Funds which are comprised of many underlying assets, but many of these cost well over $100 anyways.

Why M1 Finance Rules Fractional Trading

A snapshot of the M1 pie creation dashboard.

Because M1 is based on a system of "pies", you can easily own shares of Google, Apple, a few shares of a total-market fund like VTI for ultimate diversification, and maybe a REIT. All with as little as $100 and suddenly you have a portfolio tailored exactly to your preferences.

M1 goes a step beyond, however, by allowing investors to create a pie-within-pie system. You can create your own pies, consisting of any combination or weighting of any stock, mutual fund, or ETF and then nest that inside another pie. Pie-ception!

M1 allows investors to own as little as a single penny of any stock or security. That means you can diversify to your heart's content!

Unique Features

M1's most unique feature, by far, is the ability to build pies. On top of that, the interface on both web and mobile rank as the most powerful and simple designs we've used. The app looks slick and professional and it's as intuitive as it is powerful.

M1 also features automatic portfolio rebalancing based on your pies and the weightings you've set for each security. Once you've set your weights (percentages) M1 will automatically buy and sell each security to keep them appropriately balanced. You can even manually tell M1 when to rebalance.

Because M1 allows easy creation of daily, weekly, or monthly account transfers it makes dollar cost averaging as easy as, well... pie. Adding a small amount of money to ETFs or Stocks can be very costly with a commission trading platform. M1 charges zero commissions so that makes it easy to add as little money as you want, even on a weekly basis. 

M1 has gone a long way toward removing any hidden fees, costs, or expenses and integrating everything into one easy to use web and mobile platform that's perfect to get started.

Best For:

Investors with just a little money looking to get started building a portfolio that's well diversified without getting cut up by commissions on trades.

By far M1's two biggest advantages are the lack of commissions and almost unlimited diversification offered by the pie interface and fractional share ownership.

Pros & Cons


  • Fractional Shares
  • Pies
  • 100% free for all users
  • Free commissions
  • Automatic rebalancing
  • Easy dollar cost averaging


  • Daily trading window
  • Market buy/sell order only
  • No ability to day-trade


Let us know you loved our review of M1 Finance by checking out our tutorial videos and reviews of the best investing apps on our YouTube channel.

If you found our review helpful please consider using our link to sign up for M1 Finance. It costs you nothing and the referral kickback helps us keep this site going.

Remember that as of December 2017 M1 Finance is now free to use for any user with any account size.

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