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M1 Finance vs Vanguard 2020: Best Investing Platform?

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Written by Ryan Scribner
Updated on April 21, 2020

M1 Finance vs Vanguard 2020

Unless you have been living under a rock, you have heard of Vanguard. In fact, if you have a 401k there's a good chance this is through Vanguard!

They are the largest provider of mutual funds in the world, with over $5.3 trillion in assets under management.

Then we have M1 Finance, an up and coming brokerage offering an array of helpful features to investors all commission free and fee free. So the question is, which platform is better for investors?

Here's the differences between M1 Finance vs Vanguard.

m1 finance vs vanguard investing platform review


  • M1 Finance offers commission free stock and ETF trading.
  • In January 2020, Vanguard switched to commission free trading for all stocks and ETFs.
  • M1 Finance has a $100 minimum while Vanguard has no account minimums.
  • Vanguard has a $0 minimum, however fund minimums start at $1,000 (except for ETFs).
  • Vanguard charges an annual $20 account service fee, however this is waived if you opt for electronic statement delivery.
  • M1 Finance has just one trading window per day, unless you have M1 Plus which gives you two.
  • Vanguard has an open trading window.
  • M1 Finance offers about 30 expert portfolios that are 100% free to invest in.
  • M1 Finance has useful features like fractional shares, automated rebalancing and tax minimization selling.
  • If you are just looking to trade stocks and ETFs commission free, Vanguard is probably best for you due to the open trading window.
  • If you want to take advantage of fractional shares, automated rebalancing, expert pies and other great features, M1 is probably best for you.
FeatureM1 FinanceVanguard
Minimum Balance$100 ($500 Retirement)$0
FeesNone$20 Service Fee (Waived With Electronic Statement Delivery)
AssetsStocks, ETFsStocks, ETFs, Mutual Funds, Bonds, Options, CDs
Fractional SharesYesNo
Automated RebalancingYesOffered On High Value Accounts
Checking AccountYesNo
Tax MinimizationYesNo
Trading Window1 Per Day (2 With M1 Plus)Open
Best ForAutomation FeaturesBuying Stocks/ETFs As Well As Vanguard Funds

Sign up with M1 Finance Here!

Sign up with Vanguard Here!

What Is M1 Finance?

M1 Finance is a relatively new investing platform that launched in 2016. This app is designed to be a brokerage/robo-advisor hybrid, offering a number of features that allow investors to automate their entire investment portfolio.

A few examples of these features are fractional shares, expert pies, automated rebalancing and more!

Vanguard charges trading commissions for stock trades. M1 Finance takes a different approach to making money. Instead of charging fees and commissions, they make money in a few different ways. Here's our article on how M1 Finance makes money!

M1 Finance offers a free online investing platform and mobile app for its users.

It is easy to open an account and you can begin investing with as little as $100. You start by creating your portfolio which M1 Finance calls a pie. You can customize your pie with a variety of stocks and ETFs offered on M1’s platform, including Vanguard ETFs. All trades are 100% commission free.

M1 Finance has a number of tools for passive investors including the expert pies.

M1 Finance Features

We are going to highlight some of the key features here. If you want to read about all of the features, check out our comprehensive M1 Finance review here!

Fractional Shares

When you buy shares of stocks or ETFs with M1 Finance, you are buying fractional shares.

In fact, you can purchase as little as 1/10,000th of a share of any stock or ETF that trades on the platform.

This is very handy for stocks that trade at a high share price like Amazon. This stock is currently over $2,000 per share. Other brokerages would require you to purchase an entire share. With M1 Finance, you can buy as little as 1/10,000th of a share.

If you wanted to, you could invest $10 in Amazon stock with this platform. If you buy shares of Amazon through Vanguard, you will pay a commission for the trade and you will have to purchase whole shares.

Automated Rebalancing

When money is added to your portfolio, M1 Finance will automatically rebalance your portfolio.

They will accomplish this by buying more of what you are underweight in and less of what you are overweight in.

Your portfolio will always move away from the target allocations, and this is a phenomenon known as portfolio drift.

They will also rebalance as you sell. This is accomplished by selling more of what you are overweight in and less of what you are underweight in.

A lot of investors forget to rebalance their portfolios, or they do it very infrequently. This could result in your portfolio being too conservative or aggressive. M1 Finance does their best to keep you as close to your target allocations as possible.

Expert Pies

If you want to build your own portfolio from scratch, M1 Finance allows you to do that with the Custom Pies feature.

However, if you are looking for some help when it comes down to what to invest in, they offer over 30 different expert portfolios that are completely free to invest in.

This includes stock and bond portfolios, target date retirement funds and more! Most of the ETFs in these portfolios are offered by Vanguard, BlackRock or iShares. These are all reputable fund companies known for having low fees.

Free Retirement Accounts

This is one of the only brokerages we have come across that offers free retirement accounts.

The minimum to get started with a retirement account is just $500.

M1 Finance also offers target date retirement funds as part of their expert pies, and this is a great option for passive retirement investors!

Dividend Reinvestment

If you use the auto-invest feature, you will be able to take full advantage of dividend reinvestment and earn compound interest.

When you earn dividends on M1 Finance, those dividends go towards your cash balance. If you have auto-invest turned on,  that money will be automatically invested across your entire portfolio once your balance exceeds $10.

This is considered to be a portfolio level DRIP or dividend reinvestment plan.

Click Here To Invest With M1 Finance!

What Is Vanguard?

Vanguard is the largest mutual fund provider in the world and the second largest provider of ETFs.

They are a massive fund company with over $5.3 trillion in assets. They were founded by John Bogle.

Vanguard still holds true to their original mission statement, which is to take a stand for all investors, to treat them fairly, and to give them the best chance for investment success. The goal of Vanguard has always been to make money for the clients.

As an investor, you can purchase Vanguard products in a number of different ways.

  • First of all, you can invest directly on their site and purchase their index mutual funds.
  • Second of all, you can purchase ETFs or exchange traded funds.

Vanguard funds have some of the lowest fees in the industry.

Vanguard was the pioneer of low fee investing for the people.

Vanguard Features

Commission Free

All stocks and ETFs trade commission free. This is new as of January of 2020.

You are also able to trade individual stocks and ETFs at any time during the trading day since Vanguard has an open trading window.

No Minimum

There is a $0 minimum to open a Vanguard brokerage account. However, the minimum investment for the Vanguard funds is $1,000.

The minimum to invest in stocks or ETFs is the cost of a single share, since they do not offer fractional shares.

Research Tools

Vanguard does offer some basic research tools for stock and fund analysis, however a common complaint about this brokerage is the lack of research tools.

The Verdict

Both M1 Finance and Vanguard are designed for long term passive investors. If you are an active trader, neither platform is going to be a good fit for you. For that, we recommend the free trading app Webull. M1 just isn't going to cut it with the 1 trading window per day, and Vanguard is severely lacking when it comes to research tools.

That being said, M1 Finance does offer a number of features that long term, passive investors have found to be very helpful. Most of the expert pies that are offered on M1 Finance actually hold Vanguard ETFs in the portfolios since the fees are so low on these funds.

Trade Commissions

Vanguard used to charge hefty commissions on trades. However, in January 2020 they went commission free.

So, both Vanguard and M1 Finance offer 100% free stock and ETF trading.

Account Minimums

On the other hand, the minimum to get started with Vanguard is $0 while M1 Finance has a $100 minimum for taxable accounts and a $500 minimum for retirement accounts. That being said, you do need to purchase whole shares on Vanguard. M1 Finance offers fractional shares, meaning you can buy as little as 1/10,000th of a share.

If you decide to purchase the Vanguard Index Mutual Funds through the site, pay attention to the fees. In most cases, the fees are actually higher for this product. It is also significantly more required as an upfront investment. For TDFs it is a $1,000 minimum and for most of the other funds it is a $3,000 minimum.

Hidden Fees

M1 Finance is very transparent about how they make money. They do not make money by charging customers hidden fees.

If you do end up going with Vanguard, make sure you opt for electronic delivery of statements. If you do not, you will end up paying a $20 annual account service fee.

Customer Service

M1 Finance offers a number of different options for customer service. The service team is available during the open market hours, which are typically Monday to Friday from 9:30am to 4:00pm EST. They offer phone support during set hours and email support.

Vanguard offers similar options, offering both phone support and email support. However, their phone support hours are Monday to Friday from 8:30am to 9:00pm EST. This is a greater time window.

At the end of the day, it comes down to the features here. If you plan on taking advantage of the portfolio rebalancing, dividend reinvestment, tax minimization strategies and expert pies, M1 Finance is probably a better choice for you. However, if you are just strictly looking to trade stocks and ETFs commission free, as well as invest in Vanguard funds directly on their site, the Vanguard brokerage account is probably better for you. This is largely due to the open trading window.

Click Here To Invest With M1 Finance!

Sign up with Vanguard Here!

m1 finance vs vanguard investing platform review
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  • Hi, Can I use vanguard for retirement plan and, M1 for individual stocks as well as purchase some vanguard portfolio?
    Also, do you offer personal financial advice and how much do you charge?

  • Hi Ryan, I agree that Vanguard is lacking in features as a platform these days. But there are a couple of big omissions in your review. A big advantage of Vanguard and most brokers over M1 Finance is that you have control over when and at what price you transact. Inconsequential for long-term investors, yes, but still a major difference.

    Also, Vanguard no longer charges fees for stock trades, as well as for non-Vanguard ETFs. This is as of the beginning of 2020, I believe.

  • Hey - did you take down your M1 Finance google slide? My account finally activated today and was going to review it! 🙁

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