M1 Finance Review

M1 Finance Overview

Righteous Money’s unbiased and semi-informed M1 Finance review – a personal finance and investing “super-app”… M1 Finance is an investing tool that combines market insight, direct access to public assets, and bundling of public assets for a semi-guided investing experience. Like Aspiration, the platform also offers a checking account and debit account for those investors that want to consolidate their personal finance bidness. To boot, they also offer private personal loans (like a SoFi or LendingClub) and IRA accounts. 

I have been using the M1 Finance investing product for a little while. It’s review-o-clock!

The Impact Can this product credibly help to build your ESG portfolio?

Is M1 Finance an ESG investing product? Not really! I first took note of M1 Finance in this article on top robo advisors for ESG investment. The tool isn’t really a robo advisor, per se, or at least not like WealthSimple or Betterment… it’s designed for a more self-directed investor. I would say that M1 is more like a cross between a robo advisor and a broker with a slick UI (a la Robinhood). Whereas Betterment, say, asks some initial questions about your risk tolerance and investment timeline and generates a portfolio for you (including an ESG option), M1 Finance allows you to fine-tune your portfolio while adding “Pies” that align with particular investing strategies or objectives, including ‘Responsible Investing’ pies. 

The company itself is fairly young, so it’s not really like there’s much to assess at the corporate level regarding ESG practices and standards. It seems like the company does right by employees. Beyond that I’ll reserve judgment for now and check back in before too long. 

There are certain ESG or SRI assets that may not be available via M1 Finance (e.g. the Vegan Index, which I found and invested in via Robinhood). But on the plus side, you can allocate toward companies that have strong ESG practices easily and fee-free, including fractional shares. 

Investment Performance Does this ESG investment provide a level of bottom-line performance so as to be viable in a growth portfolio long-term?

Again, more a brokerage than a robo advisor or discrete investment vehicle. So it is not a thing in itself that does or does not perform. You will do as well investing through M1 Finance as the constituent assets that you access through their platform. HOWEVER, there are a few of features to the product that can potentially boost take-home returns at the margin:

  • No management or brokerage fees: this is pretty much what it sounds like. Unlike traditional brokerages, there is no commission on each trade, and no recurring management fees. In an age when automated investing has become the truth and there isn’t much daylight between many trading platforms, this is a solid differentiator. (Keep in mind, though, that an asset management fee from Betterment, say, covers algorithmic portfolio management – you should consider net returns in any case.) According to their blog post, they plan on making money in other words – their model seems to be to draw a large user base into their investing product and grow revenue streams through their checking account, IRA, and personal loan lines of business.
  • Tax-Efficient Trading: When you liquidate assets via M1 Finance, the platform sells positions in a tax-efficient order: losses that offset future gains, then long-term gains, then short-term gains. 
  • Fractional Shares: This allows investors to a) gain some exposure to goliaths (Tesla, say) that they wouldn’t otherwise have the liquidity to tap into and b) put idle cash to work, even if that found-between-the-couch-cushions change isn’t enough to buy an asset on your watch list. 

So again, M1 Finance isn’t really an asset manager, so can’t be judged on the performance of its funds. Because of the fee-free pricing model, the efficient UI, and the learning and research tools, M1 Finance sets up the self-directed investor well to select ESG and SRI assets.

All that said, performance of the ESG portion of my M1 Finance portfolio, as of late 2020, has been strong. I started allocating to securities via M1 at a time when markets dipped, then went into bull territory, so most ETFs will exhibit strong performance over this timeframe. Nevertheless, the ‘sustainability’ slice of my pie has gained 11.39%, an annualized 91% return, handily beating the S&P 500 over this timeframe  (again, this is a short period wherein markets have been very strong)*. 

The User Experience Does investor support, the web app (if applicable) and product features help make your investment experience easier and more fulfilling?

M1 Finance has one of the smoothest UX’s of any investing platform I’ve encountered. Signing up, connecting an account, and creating an initial basket of assets is extremely easy. For a non-professional investor, the platform also provides a wealth of objective, educational articles that are easy to navigate. 


  • No Management Fees
  • Easy signup and funding wizard
  • Excellent insights and performance reporting
  • Solid UI and usability
  • In-house debt/checking account, which offers the ability to auto-invest and do “sweeps” to invest excess cash. 


  • No real built-in asset management; it’s easy to pick assets yourself, but there are no people (or robots) managing your asset allocation. 
  • Fairly limited guidance or product offering in the ESG realm. 

M1 Finance Review – The Bottom Line

M1 Finance is a great, low-cost (really a no-cost) option for active investors looking to self-direct some or all of their stock portfolio. It isn’t necessarily the place to start for the ESG-minded investor looking for simplicity of portfolio management or “hands-off” ESG/SRI investing. That said, M1 Finance makes it very easy and cost-efficient to allocate to assets that you have already identified for your ESG portfolio. 

Overall an excellent app for an investor that wants autonomy, efficiency, and low-barrier-to-entry access to trades.

*All investments involve risk. Righteous Money does not give investment advice and none of this should be construed as investment advice.