With so many investing and trading platforms, it can be difficult to choose which is best for you. Recently, a variety of commission-free trading platforms have emerged. In this article, we are going to review two of the top trading platforms available today: Webull and M1 Finance.
The platforms are similar in many respects. However, they are tailored toward two very different types of investors.
Let's break these two platforms down to determine which one is best for you.
If you prefer watching instead, check out our video on this topic below!
Webull is best for intermediate to advanced investors because of its focus on in-depth analysis and a wide variety of tools. This platform is sleek and easy to use although it may be overwhelming for beginner investors. Think of Webull as a more advanced version of Robinhood. Webull offers fractional shares and other services like a free virtual trading simulator and crypto trading.
M1 Finance is colloquially known as the finance super app because it aims to provide all the necessities of a healthy financial life. This platform offers tools for those interested in investing, borrowing, and spending their cash. The investing features are unique with the ability for users to create their own portfolios and invest in several hand-picked stocks at once.
Robinhood is a popular "all-in-one" investing app.
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M1 Finance was launched in 2015 and is an online robo-advisor and brokerage hybrid for everyday people who want to invest in stocks or exchange traded funds (ETFs).
M1 Finance combines features of a traditional brokerage account with a modern robo-advisor. First, you select your investments and your allocations. Then, you automate the entire portfolio! Check out our detailed review of M1 Finance here.
M1 Finance focuses on low-cost passive investing with additional features such as automatic rebalancing, professionally built portfolios, and tax minimization strategies. The only fees you pay are the fees associated with any ETFs you invest in. M1 Finance is a completely free investing platform!
The comprehensive feature set of M1 Finance makes it an attractive choice compared to many of the other free investing apps on the market.
M1 Finance operates by creating portfolios of stocks and ETFs called “Pies”. You can customize your pie and choose the specific stocks and ETFs that you want to add to your portfolio. For example, you could build a pie with 50% Tesla stock and 50% Google stock.
Within each pie, you can have up to 100 stocks or ETFs. Each can carry a different weight in the portfolio. There is no limit on the number of pies you can have in your M1 Finance account! For example, you could have one growth-oriented pie and one income-oriented pie in your M1 Finance account.
M1 also offers pre-built pies that are free to invest in, these are called expert pies. You can invest in these pre-built portfolios based on your investment time horizon and personal preferences.
It is important to understand that these portfolios or expert pies are not tailored to any one person. Each investor has a unique set of circumstances. If you want a personalized portfolio, you should consider a robo advisor like Betterment or a financial advisor. Betterment is another cutting-edge platform that saves investors money by leveraging technology.
Most investing platforms charge an asset management fee in exchange for any kind of investment guidance. M1 Finance offers these pre-built pies for free. They do not charge any fees outside of the ETF expense ratio. This expense is present regardless of the platform you choose to invest with.
M1 Finance also allows you to buy fractional shares of a corporation within your pie. For example, if your M1 Finance account has a balance of $1,000 but you would like to buy a share of Amazon for $3,000+, you can purchase a partial share of Amazon to hold in your portfolio. With fractional shares, you can buy as little as 1/10,000th of a share!
This keeps more of your money invested and less idle cash sitting on the sidelines. It also prevents a high share price from being a barrier to your investing.
M1 Finance offers investors the ability to take advantage of retirement accounts including IRAs, Roth IRAs, SEP IRAs, and even trust accounts.
These accounts allow for a reduction in the tax liability due on your investment gains provided you don't withdraw your cash until retirement. Additionally, trust accounts provide the ability to plan for future generations and ensure your wealth lives beyond your life.
The M1 Finance platform offers a free checking account, called M1 Spend, in addition to the investment tools available. With the M1 Finance basic account, you won't earn any interest or be eligible for any cash back when spending on the debit card you are issued.
However, by upgrading to M1 Plus ($125/year), you'll earn an above-average APY on the account and get 1% cash back on all of your spending on the card. This comes in addition to multiple other features and perks exclusive to M1 Plus users.
Either way, the checking account is fully integrated with your M1 Invest account, meaning transfers occur instantly and investing can be easier than ever.
In addition to a debit card, M1 also offers a credit card, called the Owner's Rewards Credit Card. This card is available to all M1 members (pending application) but M1 Plus members get the $95 annual fee waived!
This credit card offers members up to 10% cashback! All purchases provide 1.5% cashback. However, if you own stock with the company that you are making a purchase with, then you can qualify for more, up to 10%. There are over 70+ participating companies. Companies such as Walmart, Amazon, and Netflix are all on the list. These companies are split into 3 tiers. The first tier of companies makes 2.5% cashback, the second 5.0%, and the third 10.0%.
M1 Borrow is a flexible line of credit with no application and very low rates. Members can borrow up to 35% of the value of their portfolio. The interest rate is 5.0%, but for M1 Plus members, the rate falls to 3.5%.
For example, if you have $10,000 invested with M1, then you would be able to borrow up to $3,500.
This personal loan can be a great way to pay off credit card debt, wipe out student debt, and more. Check out our full M1 Borrow review.
As a platform that focuses on passive investing, M1 provides a host of features that aim to simplify and automate the investing process.
First, you are able to set up automatic recurring deposits into your M1 Finance pies. This allows you to follow a dollar-cost averaging strategy without the discipline or time that doing so would typically require.
Personally, I have a recurring deposit set up every 2 weeks to deposit $100 into my M1 Finance portfolio. This keeps my portfolio growing without me needing to do anything.
The next automation feature that sets M1 Finance apart is Smart Transfers. Smart Transfers take recurring deposits up a notch by creating logic-based rules for your M1 Finance account.
For example, if you know you want to keep $1,500 in your checking account at all times and invest any money above that amount, Smart Transfer is a great solution. M1 will monitor your checking account and whenever the balance is over that threshold, the rest will automatically be moved to your investments.
Currently, this feature is only open to M1 Plus investors but it's possible that over time it could be rolled out to a wider audience.
For investors looking for additional features beyond what M1 Finance Basic offers, they can choose to subscribe to M1 Plus. This $125 per year service will provide four main benefits not included in the standard M1 Finance Basic features.
Clearly, most users won't need M1 Plus. However, for some these features will be well worth the price tag.
M1 Finance has a great platform for long-term investors. In most cases, the ideal user for M1 Finance is someone who is a somewhat passive investor, relatively fee sensitive, and does not want to spend a significant time managing their investments.
M1 Finance offers a greater amount of flexibility because you can choose exactly what you invest in. Most other robo-advisors limit you to a handful of ETFs.
M1 Finance is also a great platform for dividend investors. Your dividends will be automatically reinvested back into your portfolio once the cash balance exceeds $10. Other free investing platforms like Robinhood and Webull do not offer any kind of automated dividend reinvestment. Typical brokerage accounts that offer dividend reinvestment and fractional shares charge a fee for this service.
Webull is a commission-free stock and ETF trading platform. It is ideal for the active trader who is looking for a more dynamic user interface. Webull has a variety of features that benefit traders such as technical indicators, research agency ratings, financial calendars, and free margin trading as well as short selling, options trading, and crypto trading.
With easy access to margin, research tools, and live data, Webull has built an ideal platform for active traders. Check out our detailed review of Webull here.
Webull is a platform that is designed for the intermediate trader who already has some experience with the stock market. If you are a complete beginner, you might experience information overload.
New to Webull? Check out my full tutorial below!
Webull was designed for the active investor. It offers investors free trades like other platforms such as Robinhood but comes with a feature-rich platform. Three notable benefits of investing Webull are commission-free trades, extended hours, and Fractional shares.
Traditional investing hours are from 9:30 am to 4:00 pm. With Webull, investors can invest from 4:00 am to 8:00 pm. This certainly gives Webull the edge for active investors or day traders.
Webull has an impressive array of stock research and charting tools. When it comes to active investing or day trading, Webull definitely has the edge.
Webull has a useful feature called the virtual trading simulator. This feature lets you create a virtual portfolio with fake money to test out strategies before risking real money. This is an ideal feature for someone just starting out who may need to gain more investing knowledge and know-how before investing real money.
Webull allows margin trading on its platform to certain users. You must have a minimum account balance of $2,000 for margin trading access. Check out this site for Webull's margin interest rates.
When it comes to cryptocurrency, Webull clearly would be the better option as M1 does not support this asset just yet. Webull currently allows trading of 21 cryptos as well as monitoring for many more.
The list of 21 includes the following: BTC, DOGE, SHIBU, ADA, ETH, SOL, LTC, BCH, ETC, DASH, XLM, ZEC, BAT, LINK, UNI, ALGO, MATIC, AVAX, SUSHI, LUNA, and REN.
Trading crypto on a popular platform like Coinbase actually costs you trade commissions. With Webull, these trades are offered commission-free!
Another great feature of Webull is its community. This is a social media type feature that lets you follow other investors and comment on various stocks. This can be helpful to guage social sentiment around a particular stock or see what others are purchasing.
Webull is ideal for active traders who focus on investment research. Webull provides an array of research tools for both technical and fundamental investment researchers.
In most cases, this platform is best for those with some prior investment experience. If you are completely new to investing in the stock market, you might be overwhelmed by the number of research tools available to you.
But if you have experience trading in the market, Webull will likely have many of the features you have been missing out on with other free investing apps.
If you sign up via our link and fund your account with at least $100, you will get 2 free stocks!
M1 Finance and Webull are both very powerful investing platforms. A decade ago the features available on these platforms were only offered by the best and most advanced investment companies to wealthy individuals. Now, with so many platforms available to the retail investor, people have a wide variety of options to choose from.
We believe M1 Finance and Webull offer two different services that each meet its own target user. In most cases, M1 Finance is a good platform for someone who is investing for the long term and using a relatively passive investing approach.
Whereas Webull fits best with more of an active trading style. Investors who use technical indicators and those who need to make more frequent trades would be better off using the Webull platform. In the end, both platforms are free so you can always give both a try and see which is best for you!
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