Investing > M1 Finance vs. Robinhood

M1 Finance vs. Robinhood

If you're a DIY investor, both platforms have something to offer. This guide outlines which broker packs the better punch overall.

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Updated January 04, 2024

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While both Robinhood and M1 Finance offer similar simple investing strategies for DIY investors, they approach their target audiences in different ways. Semi-experienced investors and long-term passive investors can also use these apps for low-cost investing on their terms.

With the rise of online brokerage platforms and mobile trading apps, Robinhood was a major disruptor for mobile investing. The app allowed investors to trade stocks, ETFs, and options without fees since 2013.

The platform catered – and caters – to millennial investors and beginners looking for a simple and cost-effective to start investing in stocks and other assets. Shortly after Robinhood was making waves in the investment space, M1 Finance came out with another platform that allowed investors to craft a portfolio and access automated investing strategies. 🤖

Let’s take a quick look at how they stack up against each other.




Account minimum



Minimum initial deposit

$0 to open an account, $100 to start investing


Best for

Socially responsible investing & low fees

DIY stock trading


No-cost automated investing

Pioneer of commission-free stock trading



Free stock





Account minimum



Minimum initial deposit

$0 to open an account, $100 to start investing



Best for

Socially responsible investing & low fees

DIY stock trading


No-cost automated investing

Pioneer of commission-free stock trading



Free stock

Investor Warning: All securities trading, whether in stocks, exchange-traded funds (“ETFs”), options, or other investment vehicles, is speculative in nature and involves substantial risk of loss. Robinhood Financial encourages its Customers to invest carefully and to use the information available at the websites of the SEC at and FINRA at

Robinhood may have pioneered the free mobile stock trading app in 2013, but M1 Finance lets you build portfolios quickly and offers account management.

Overview of M1 Finance and Robinhood

M1 Finance

  • M1 Finance combines automated investing with tons of customization options, making it easy to create a portfolio with “pies”
  • Your pies contain low-cost ETFs and stocks that are tailored to your specifications or you can pick from 80 different expert portfolios
  • There are no trading fees or asset management fees
  • Automatic rebalancing allows you to continuously invest, as funds are added or withdrawn
  • You can access your portfolio via the mobile app or desktop platform
  • You can also place individual stock and ETF orders
  • There is a minimum of $100 investment for brokerage accounts, and $500 for retirement accounts, which include traditional IRAs, Roth IRAs, and SEP IRAs


  • Robinhood offers a simple mobile trading app for investors only interested in stocks, ETFs, options, and cryptocurrency trades
  • All trades cost $0 including $0 base plus $0 per contract options
  • Both the app and website offer ease-to-use trading tools
  • There isn’t much research or screener tools provided, but there are synced watchlists, news feeds, stock snapshot pages, and candlestick charts available

Fees and Commissions 💰

Robinhood kicked off the commission-free trading craze with $0 fees for stocks, ETFs, and options. Even option contracts can be traded for $0. Now there is also Robinhood Crypto, which also offers cryptocurrency trades for $0 – one of the reasons crypto-asset investors (like ourselves) speak highly of the app.

There are no minimum account balances with Robinhood, and you never have to pay an inactivity fee. However, this changes if you upgrade to Robinhood Gold, which is for margin traders.

Robinhood’s commission-free trading offer inspires many to kick-off their career as investors.

To access this feature, investors must pay $5 per month and deposit $2,000. In exchange, traders get access to a 5% margin rate and more research tools, such as Morningstar reports and NASDAQ Level II quotes. This is comparable to what most top online stock brokers currently offer.

On M1 Finance, investors can trade for free, but a minimum balance of $100 is necessary to keep in your taxable account. This amount goes up to $500 if you have an IRA account.

To trade on margin with M1, you have to sign up for their M1 Borrow program, which offers a 3.75% APR fee. It also maintains that investors must have an account maintenance balance that equals to 35 percent of the initial loan amount. You can use this to borrow against any of the securities in your account.

🏆 Winner: For now, there are more investment opportunities at cheaper rates with Robinhood.

Investment Selection 📃

With Robinhood, the investment offerings are pretty simple, and you only have one taxable account. You can trade in stocks, ETFs, options, and cryptocurrencies. If investors decide to trade in cryptocurrencies, then they can use Robinhood Crypto to access Bitcoin, Bitcoin Cash, Dogecoin, Litecoin, Ethereum, and Ethereum Classic.

M1 Finance combines the features of a traditional brokerage account with a robo-advisor tool to offer automated, passive investing. But note, you can only trade in ETFs and stocks, which M1 calls “pies.” You can customize a pie to suit your preferences for shares and ETFs.

With a pie, the platform divides your investments into two categories called MyPies and Expert Pies. You can access eight groups that pertain to your investment goals with Expert Pies. However, MyPies offers an intuitive way to create your own investment plan, allowing you to choose what you want to invest in with each pie segment.

Picture showing M1 Finance customizable pie chart with educational text beside explaining how to use The Pie
M1 Finance compensates their limited investment selection with excellent robo-advisor services.

You can customize your investments with one of the pre-made portfolios. Each pie may contain one stock or up to 100 different stocks and ETFs.

It’s up to the investor what kind of pie they choose to invest in. For example, some are best for lower incomes, while others are best for growth.

You can also buy fractional shares of a company within the pie. This means investors can purchase as little as 1/10,000th of a particular stock, and you do not have to pay the entire stock price.

M1 Finance also has multiple account types. You can set up a brokerage taxable account with a minimum of $100, or you can set up a traditional IRA, SEP IRA, Roth IRA, or a Rollover IRA. These accounts require a $500 minimum deposit.

🏆 Winner: M1 Finance has more investment options for DIY investors who want to spice things up with stocks, ETFs, and fractional shares. Robinhood may be best for those who want to trade in options as well as stocks and ETFs. Ultimately, you can only open taxable accounts with Robinhood, so you will pay taxes on any capital gains.

Online Advisors and Educational Offerings 👨‍🏫

Robinhood does not offer a robo-advisor tool/feature, and its research, analysis, and stock screener tools are not competitive to other brokerages. You can set up candlestick charts and watchlists within the app, and investors can look at “People Also Bought” to get more ideas for stocks.

However, savvy investors will probably do their research outside of Robinhood and just use the app to take advantage of the commission-free trades for options.

M1 Finance was built, in large part, as a robo-advisor tool to help people automatically invest in stocks and ETFs that pertain to their interests and goals. With M1 Custom pies, you can hold up to 100 different ETFs and stocks. 🗃

You select what stocks and ETFs you like, and what percentage of your portfolio you want to go into each stock. The robo-advisor automatically rebalances your portfolio and divides up your account according to your selections.

However, with expert pies, passive investors can take advantage of the robo-advisor even more. The experts do all the work with this method.

You can set up an expert pie in minutes by selecting when you want to retire and choosing the portfolio type, whether that’s aggressive, moderation, or conservative. 🚀

M1 Finance definitely offers an advantage for new investors with hundreds of financial education articles, blogs, and videos.

However, there aren’t really any other screener tools, charts, or analysis software. This is due to the passive investment approach that M1 Finance takes for all customers.

🏆 Winner: There are more research tools and watchlists available with Robinhood. M1 Finance does not seem to provide any research tools within the app.

Trade Experience and Security 🤝

Robinhood and M1 Finance approach trading in very different ways. With Robinhood, you can use the mobile app or website to trade stocks, ETFs, options, and cryptocurrencies. You can place trades using a variety of different market orders, and you are never charged a commission.

The app is streamlined and made to be quick to use for on-the-go traders. Trade tickets are pretty simple for all equities. You simply fill in the number of shares you want and tap submit.

Both the website and app set the default to sending market orders. You can change the order type by tapping “Order Type.” While there is no real-time data or streaming quotes, you can refresh to update the pricing.

M1 Finance has a completely different approach that utilizes automated investing with customization options. Clients can create a portfolio that is tailored to their exact specifications using stocks and low-cost ETFs. You can choose from over 80 different expert portfolios or build one on your own. 🏗

M1 allows you to create your own pie, which means a collection of stocks and ETFs that make up your portfolio. You can also choose one that already includes ETFs and individual stocks that relate to your interests.

One thing that is missing from M1 Finance is goal-setting, which is a common feature for most robo-advisor tools. This is because M1 advertises automated investing based on DIY investor preferences. The tool expects that the investor knows somewhat of a strategy and understands what stock types and ETFs they like.

On the website, you can move from step-to-step choosing different pies and diversifying your investments. Once you have created the portfolio nad funded it, you can view the pie’s performance easily.

Security 🛡

Both Robinhood and M1 Finance are under the supervision of the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Customer funds are also protected by the U.S. investor protection scheme, called SIPC, which means your money is covered in the event broker goes bankrupt or becomes insolvent. The limit of SIPC protection is $500,000, which includes a $250,000 limit for cash.

Robinhood offers the basics when it comes to security, including Face ID and simple verification. You may have a security challenge if you log in from a different device. On the other hand M1 Finance offers 4096-bit encryption for all data transfers, and you can set up two-factor authentication through your phone.

🏆 Winner: For those who want a traditional trading experience, Robinhood will be more your style. If you like passive investing and want the help of an AI tool, M1 Finance offers a great approach to diversifying your investments if you know what your strategy is already.

Mobile and New Trade Tech 📱

Robinhood was made for mobile and provides a simple trading app that lets you access your accounts, monitor performance, set up watchlists, and review candlestick charts. While you can trade only a few asset classes, you can set up four-leg option spreads and access multiple order types within the app.

M1 Finance has a streamlined app that was created for DIY investors who want to access automated investment tools. You can open an account, set up your pies, and fund the account all within the app.

The app is fast and takes you step-by-step through the available stocks and ETFs. While there aren’t any research tools or analysis resources built into the app, everything is made to help an investor who knows what to invest in.

For example, if you want to invest for retirement and have a target-date, you can select certain ETFs that would be best for your savings.

M1 Finance vs. Robinhood Final Thoughts 🏁

Robinhood is a DIY trader platform that allows you to buy and sell at your leisure from the web or mobile app. You have more options for investments, and you never have to pay fees.

However, the main goal is to keep you investing on-the-go in simple stocks, ETFs, options, and cryptocurrencies. You also cannot use the app for retirement accounts, mutual funds, futures, forex, or any other type of asset.

Experienced investors who have already been trading will like M1 Finance’s app more. M1 Finance is more attractive to DIY investors who know what they want to invest in, and they like stocks and ETFs.

You can set up a pie based on your interests and use the automated investing tools to grow your portfolio over time. For passive investors, M1 Finance is probably the better option.

M1 Finance vs. Robinhood: FAQs

  • Is M1 Finance or Robinhood Better for Retirement?

    There are no retirement account options with Robinhood. You have one taxable account, which means you must pay taxes on all capital gains.

    With M1 Finance, you can open traditional IRAs, Roth IRAs, and SEP IRAs. However, there are no mutual funds. Instead, clients invest in over 6,000 securities including stocks and ETFs traded on NYSE, NASDAQ, and BATs.

    Long-term investors love M1 Finance because of its tool called DRIP. The portfolio level DRIP is a dividend reinvestment plan.

    By reinvesting the dividends, M1 investors earn compound interest. With M1, when a stock you own within your pie pays a dividend, the money goes into your cash account balance inside of your brokerage account. If that cash balance hikes up over $10, then the money gets invested across your portfolio based on target allocations that you have set.

    In addition, M1 Finance offers automatic rebalancing and fractional shares, so you can put your portfolio on autopilot and stay fully invested. This creates a more diversified portfolio without having to invest extra money.

  • Does M1 Finance or Robinhood Have Better Customer Support?

    Robinhood does not provide any phone support or live chat help. M1 Finance offers limited phone support within trading hours between Monday and Friday.

    You can also access email support. There are some FAQs and a ton of education articles located on M1’s financial education website.

  • How Long Do You Have to Wait for Transfers with M1 Finance and Robinhood?

    M1 Finance recently announced changes to transfers in September 2019. Before, it was difficult to cash out, transfer balances, and reinvest due to the long waiting period. The new transfers tab allows clients to move money instantly.

    M1 Finance also launched a new feature called M1 Spend that includes a checking account and debit card to move money even faster from your investment accounts to liquid cash.

    Robinhood has had issues with “unsettled funds” in the past. These were long 3-day waiting periods in which traders had to wait for funds to transfer for a sale so that they could reinvest or cash out.

    The company removed this waiting period with Robinhood Instant, but it was not an automatic upgrade to all accounts. Many had to upgrade to Robinhood Gold to gain instant access to their money. With the Robinhood Gold plan, members pay $5 per month and gain access to instant bank transfers.

Comparison Corner

Find out how Robinhood and M1 Finance stack up against other competition.

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