It’s hard to find an investment product that has the potential to cater to almost every type of investor, but M1 Finance and its premium service of M1 Plus certainly come close. If you are interested in a flexible investment service that offers multiple products, including the option of portfolios designed by robo-advisors or selected by you, plus a range of different ‘smart’ features like automatic re-balancing and account transfers, it’s definitely worth considering M1. If you do, you will inevitably encounter the question of is M1 Plus worth it?
Understanding M1
Before answering is M1 Plus worth it, it’s a good idea to start with an overview of the overall platform and what it involves. M1 was founded in 2015 and currently manages over $6 billion in assets, a pretty impressive figure. As much as M1 Plus is a great service, there’s a lot you can do with just the basic M1 Finance offering. It’s free – $0 in management fees, a rare find in the online investment platform world.
You can pick portfolios designed by their experts, but you can also build out your portfolio as a pie (made up of ‘slices’ of stocks, bonds and ETFs) and customize it further if you want to. It’s worth reading about how M1 pies work and how you can use them to pick individual investment products and weight them according to your risk tolerance.
It’s not just an investing platform. Users can set up a Savings (Cash Management) Account with a debit card and cash-back benefits as well a checking account. There is also a credit service called M1 Borrow that allows you to borrow up to 35% of the value of your portfolio. It’s through additional services like this that M1 makes its money, allowing it to offer $0 management fees for investors.
M1 Finance also offers various ‘smart’ features to make the most of your investments. It will re-balance your portfolio as needed. It also will employ tax minimization strategies, though that does not include tax loss harvesting. Another option is to set up automatic deposits, starting at a minimum of $10 per deposit.
What is M1 Plus?
With that many features available through the free offering, it’s easier to understand why someone might be skeptical of the idea of needing a premium service. But it is well worth considering the more robust M1 Plus offering. In short, M1 Plus gives investors much more choice and control over their portfolio.
One feature that will appeal to many is the account transferring function that is only available through M1 Plus. For example, it can be set so that funds are automatically transferred between your savings and investment accounts when they reach or fall below certain levels.
Another benefit will be found in the fees that you pay. Checking accounts with M1 Plus pay $0 for international fees, while they can run as high as 1% under the basic plan. It will also reimburse you up to 4 ATM withdrawals per month, instead of only 1 through the basic plan.
When accessing credit through M1 Borrow, you’ll also notice a difference in fees across the two platforms. M1 Finance will cost you 3.5% to borrow, but M1 Plus only comes out to 2%. Depending on the amount of your loan this could be fairly significant.
Cost of M1 Plus
All of these factors point to some advantages to using M1 plus and help to answer the question of is M1 Plus worth it. That said, it’s important to know the cost in order to better to assess value, and this is an area where M1 Plus performs really well. It only comes out to $125 per year, and new users get the first year for $0, making it virtually risk free to explore M1 Plus and see if it is right for you.
Is M1 Plus Worth It?
That’s the big question, and it really comes down to personal preference. At $125 per year, you definitely won’t feel like you got ripped off even if you don’t fully maximize the M1 Plus offering. If you plan to borrow against your portfolio, you’ll want to look at M1 Plus carefully for the reduced interest rate. The same is true if you would be incurring a lot of international fees – M1 Plus will eliminate those for you.
If you are planning to only use the investment component of the platform and not do too much extra, then there’s a good chance that you will be just fine with M1 Finance. It’s a terrific financial product that offers lots of flexibility and there is nothing wrong with starting with it.
That said, with the great promotion of getting the first year free, all investors who are interested have a convenient and no-risk way to explore the M1 Plus platform and make a decision about is M1 Plus worth it for themselves.
