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M1 Finance vs. Fidelity – Which Should YOU Choose?

M1 Finance vs. Fidelity – Which Should YOU Choose?

It is no secret that robo-advisor services make investing a lot easier for normal people. No longer does one need in-depth knowledge of the financial markets nor pay large sums of money to a brokerage firm; truly, robo-advisors such as M1 Finance, Betterment, and Robinhood have changed the game for the better, bringing home the market’s fruits to the proletariat.

In a competitive field stretched to its seams, it’s difficult to know which robot-advisor service is the best fit for you. The field is growing so exponentially that forecasts show their market will increase to $41 billion in 2027, up from just $4.51 billion in 2017! These numbers show the wild popularity of this technology. It’s never a better time than now to sign up to one of these services and start saving for your future.

M1 Finance vs. Fidelity Go is a hot topic in investing circles. M1 Finance has a vaulted track record dating back to 2015. While it can’t claim to be one of the very first robo-advisors, it makes up for any shortcomings by offering users a simple solution to investing: pie-based investing. One can choose from a selection of automated portfolios based on future goals and personal risk tolerances, or simply create their own. With M1 Finance, investors can cruise on auto-pilot or take matters into their own hands.

Fidelity’s offering is a little bit different. Not a true robo-advisor service, Fidelity Go works to combine the best of worlds and so give their customers access to both artificial technologies and real live human portfolio management. Portfolios made through Fidelity Go are closely monitored by human representatives and consist of diverse mutual funds.

While the more conservative of the two platforms, Fidelity Go does have its advantages, especially with the addition of portfolio management – for who would put their faith entirely in a robot? But, there are some catches. Namely, the fees. M1 Finance, while sporting a disconcerting reliance on the automated, usually costs its users nothing in the way of trading fees, and has no account minimums.

Let’s take a closer look at both M1 Finance and Fidelity Go to give you a better understanding of where to start.

M1 Finance – Making Investing Simple and Fun

Using M1 Finance’s application feels a bit like child’s play, and we don’t mean to be derogative here. It’s simply that easy, seamless, and fun. In fact, M1 Finance is the perfect way to get younger people interested in the world of investing, as it allows users to visualize their holdings.

M1 Finance is the brainchild of the company’s CEO, Brian Barnes. Barnes’ mission was to create a product that was meaningful and innovative. He’s even quoted as saying that “[t]he financial services industry has lacked any meaningful innovation for far too long, and I decided it was time for change.” That change would come via M1 Finance’s pie chart investing.

Pie chart investing is exactly as the name implies: one manages their portfolios by seeing each asset as a “slice” of the total pie. In addition, each time you invest, M1 will automatically balance each slice to meet your target allocation. When combined with a stock market charting platform like TrendSpider, the average, down-to-earth user gains investing autonomy formerly reserved for high-ranking executives and brokers. 

M1 Finance Key Features

  • A multitude of account types, ranging from individual and joint brokerage accounts to custodial accounts.
  • No fees! Yes, you’ read that right: M1 Finance is in the business of revolutionizing the stock game, and comes with no trading fees or account minimums.
  • Investment types include stocks and exchange-traded funds.
  • Pie Investing – the bread and butter of M1’s platform, pie-based investing makes things simple and fun for investors of all stripes. 

Fidelity Go – New Kid on the Block

Operating as a multinational financial service company since 1946, Fidelity manages over $4.9 trillion in assets worldwide and has been a stalwart in a turbulent landscape since its inception. With this kind of storied pedigree, it’s no wonder that their launch of Fidelity Go, a quasi robo-advisor, raised many an eyebrow. 

Fidelity Go works by constructing personalized portfolios made up of mutual funds. While much of the allocation is controlled by artificial intelligence technologies, Fidelity Go comes with the added bonus of human investment experts. While not as easy to use as M1 Finance, Fidelity Go does have its perks.

Fidelity Go Key Features

  • Mutual funds are drawn from seven different asset classes, giving investors natural diversity.
  • A fair number of account types, ranging from individual and joint taxable accounts to Roth IRA.
  • $0 fees on accounts with less than $10,000 dollars, and just $3 on accounts in the $10,000 – $50,000 range.
  • $10 account minimums.

M1 Finance vs. Fidelity – A Close Call

On the surface of things, there is little difference between these two platforms. Both offer users low rates and a wide range of account types. Both platforms offer a similar level of performance, and are user-friendly and intuitive. 

M1 Finance may just edge out Fidelity Go due to the former’s pie-based investing – it really makes investing easy, and offers investors a means of grasping their portfolio as a tangible object rather than a mere idea. 

While Fidelity Go does offer users a human investment team, Modest Money’s review of M1 Finance goes so far as to suggest that its robo-advisor is so advanced that it takes human know-how out of the equation. 

Overall, we think M1 Finance is a superior product. If you are just starting out with investing, there can hardly be a better option.

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