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M1 Finance vs TD Ameritrade

Financial robo-advisors are here to stay and they are changing how we manage our wealth.

There’s no denying that AI has drastically changed the way we invest money and how we manage our wealth. Investment apps and robo-advisors have become all the rage these days, with almost 100 different robo-financial advisors to choose from in over 15 countries. Today, the financial forecast of assets being held with robo-advisors has reached a whopping estimate of US$16 trillion.  

For those that have yet to venture into the world of investing, getting started can feel overwhelming with the amount of options to choose from. With the vast amount of information available online, it becomes confusing to know how to start and what the first step should be. Luckily, with today’s technology, there are resources available that can give you the jumpstart you need to begin investing. 

In this post we’ll compare two popular robo-advisor platforms: M1 Finance and TD Ameritrade. Both platforms facilitate investments in the stock market by utilizing AI and robo-advisor based algorithms.

If you’re curious to know how the two stack up against each other, keep reading.  

M1 Finance Breakdown

M1 Finance is an American financial services company that utilizes robo-advisor technology to vet and generate investment opportunities. The company was founded in 2015 by Founder and CEO Brian Barnes, and is headquartered in Chicago, Illinois. The company has seen a steady growth since its inception back in 2015, and has approximately $6 billion in assets under management. 

A signature feature and key selling point of M1 Finance is its automated profiles. The automation algorithm helps expose users to a wide array of sound investment opportunities that are included in their expert-recommended portfolios. 

M1 Finance has made its presence known in the industry by going against the grain and handing the control over to its users by allowing them to customize portfolios from scratch, choose from an unlimited number of pies, and even includes pies that contain other pies. 

Check out our comprehensive review on M1 Finance’s platform.

M1 Finance Details 

Account Minimum $0
Management Fees $0-$125 per year
Account Types Individual and joint brokerage accounts; Roth IRA, SEP IRA, and traditional IRA; trust accounts; custodial accounts
Investment Type Stocks and exchange-traded funds (ETFs)

M1 Finance is a great option for people that are looking to get started with investing because it’s both-user-and-beginner-friendly. To get started, all you have to do is create your account, enter some basic details, and make the first deposit. 

With M1 Finance, you don’t have to pay trading fees, there are no ongoing management fees, and zero commissions. They also support a wide variety of account types, including trust, custodial and several types of IRAs, along with individual and joint brokerage accounts. 

People new to investing will find a lot of value by using their platform since the M1 Expert Pies are especially helpful for learning how investing works.

M1 Finance Pros

  • Makes investing simple and beginner-friendly
  • Utilizes a no-fee investment model
  • High-performance M1 Expert Pies

 M1 Finance Cons

  • No financial advisors
  • Limited investment classes
  • Tax-loss harvesting unavailable 

M1 Finance makes building your portfolio for the first time easy by streamlining the entire process. Click here to get started.

TD Ameritrade Breakdown

TD Ameritrade is a traditional brokerage service with online, electronic trading platforms which allows for the exchange of financial assets. TD Ameritrade also has low-cost investment options for regular, middle-class Americans so that they too can get started on their finance goals. 

TD Ameritrade offers a variety of investment products, such as mutual funds, options, penny stocks, forex, and cryptocurrency. They have three robo-advisors available to investors. Though the TD Ameritrade robo-advisors perform adequately, they are not as flexible as M1 Finance’s offerings. M1 Finance comes out on top when you compare the two robo-advisor portfolios and their offerings. TD Ameritrade does offer tax-loss harvesting; however, this is only available within certain account types and for certain assets.

TD Ameritrade Details

Account Minimum $0
Management Fees $0
Account Types All account types supported.
Investment Type Stocks, bonds, ETFs, mutual funds, options, penny stocks, forex, and cryptocurrency

Though M1 Finance my not have the same range of investment options as TD Ameritrade, their other product offerings and services give them a competitive advantage nevertheless. One advantage is that they offer fractional shares, which means that every dollar in your portfolio will be working for you at all times. M1 Finance also does automatic rebalancing; which is a hugely common and important feature for most brokerages. It’s unclear and confusing why it’s not included in TD Ameritrade’s services, and is a reason why people prefer M1 Finance. 

TD Ameritrade Pros

  • All account types supported
  • No fees on stocks and ETFs
  • Huge range of investment options

TD Ameritrade Cons

  • High fees on riskier assets
  • No automatic portfolio rebalancing
  • Limited robo-advisor portfolios

M1 Finance vs. TD Ameritrade: Which One is Right for You?

Determining which platform best suits your needs hinges on the kind of investor you consider yourself. If you’re new to investing and looking for a platform that is ideal for beginners and more hands-off, M1 Finance is the better bet because it runs on autopilot and is incredibly easy to setup. 

If you’re a more active, hands-on investor, then TD Ameritrade may be more suited to your preferences. With the investment classes that they have available, experienced investors can take advantage of higher-risk and higher-reward investment classes, should they choose to do so. 

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