M1 Finance Investing Review, Plus Up to $3,250 Brokerage Bonus and $20 Referral Bonus

Update 10/7/20: Brokerage bonuses have been increased by 25% (up to $3,250) for October. Hat tip to reader SamL

Update 9/1/20: Referral bonus back up to $20.

Update 5/1/20: Offer is back for the month of May. Though the referral bonus is down to $10 for each the referrer and the new customer (down from $20 in January).

[Below is a guest post from reader A M.]

M1 Finance Introduction

M1 Finance is an investing service with a unique approach: fractional share investing of a “pie” of stocks and/or ETFs (funds consisting of many stocks, like ticker VGT) of your choosing, for no fee. Think of it as making your very own ETF in a way, with no expense ratio (except if you add actual ETFs to it, which have their own expense ratios). M1 has been around for at least a year, and has a fairly active subreddit and a thorough help section with detailed articles on all of the things I will cover below. I’ll then explain the $100-$2,500 brokerage transfer bonus and the current $20 referral bonus for January 2020.

First, the pie. Your entire portfolio is considered your “pie.” When you set up your “pie,” you can break it up into “slices,” each of which you can allocate from taking up 1% all the way to 100% of total dollar value of your pie (you can have a maximum of 100 slices, then, and minimum of just 1). Each slice can be a stock or an ETF, and basically every stock and almost every ETF is available at the same expense ratio as you would find anywhere else (no additional fees from M1 finance). As a neat little feature, your slices can themselves be “pies” with those smaller pies having slices of their own. For instance: Your portfolio pie contains two “slices” that are actually pies called “CAR STOCKS” and “TECH STOCKS.” The “CAR STOCKS” slice can contain TSLA as well as, say, KARS, which is an ETF. Your “TECH STOCKS” one can also have any number of slices with either ETFs or stocks within it, allocated from 1% all the way up to 100%.

Importantly, your “pie” represents your target portfolio. When you schedule an investment into your pie, you invest into your “pie” as it’s set up by you at that very moment. You can change the pie and all of the slices within it at any time — this would mean you are just changing the target allocation of all the slices. It does NOT mean that you’d instantly be selling off any stocks — this only happens when you choose to “rebalance” one of your pies and both sell and buy to get all of the slices at your target allocations. If you increase the target allocation of TSLA, M1 will of course buy TSLA in the allocation you set for it. And, of course, if the value of TSLA rises and it consists of less of your pie than the target percent, M1 will buy more of it for you to bring it up to the target allocation. M1 shows via color-coded and differently sized slices what both your target pie and your current allocations look like in both the app and the website, both of which have essentially the same functionality.

The rest of the app is pretty straightforward as a sort of mix between a robo-advisor that can autoinvest for you during one set trading window daily at 9 AM and a Robinhood type pick and choose stocks and ETFs app. Poke around and it’s pretty easy to pick up how it all works. One note: If you intend to use a pie you make pie as a “slice” in your portfolio, then you make that pie beforehand in the “Research” tab under “My Pies” and then add it to your actual pie as a slice under the “Invest” tab.

For the help section with detailed articles, see: https://support.m1finance.com/hc/en-us. The subreddit is r/m1finance. Also see the full fee schedule here, notably a $20 fee for accounts with less than $20 in them which go inactive for 90 days.

Brokerage Bonus

The brokerage bonus essentially involves transferring your assets, starting at minimum of $20,000, over to M1. Here are the current bonus tiers, and of course do consider doing the referral bonus (see below) when opening for the brokerage bonus.
  • Get $100 for $20,000 – $100,000
  • Get $250 for $100,001 – $250,000
  • Get $500 for $250,001 – $500,000
  • Get $1,000 for $500,000 – $1,000,000
  • Get $2,500 for $1,000,001 and higher
Full instructions of what the transfer entails and the terms and conditions: https://support.m1finance.com/hc/en-us/articles/360036067694-Transfer-Promotion-earn-up-to-2500

Referral Bonus

Referral bonus is usually $10 for the new member and $10 for the referrer. To qualify for the bonus, referred family and friends must make an initial deposit of $100 for taxable accounts (or $500 for IRAs) within 30 days of signup, and not withdraw that initial deposit for 30 90 days.

Basic steps from the website for opening with referral:

  • Create an account using your friend’s unique referral link
  • Fund your account within 90 days of signing up
  • If you opened a retirement account, you must also open a non-retirement account to receive your referral credit.”
“Refer and earn” under your name in top right hand corner of M1 shows referrals you’ve made. All of the detailed terms can be found here.

Final Thoughts

Thanks to reader A M for submitting this guest post. We’ll add this to our list of brokerage bonuses. Feel free to comment below with your thoughts on M1 Finance. You can also leave and find referral links on this dedicated page by following the rules outlined there.

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raj
raj

I think it’s noteworthy that, with m1 plus they offer 2% margin (up to 35% of your portfolio), that can be used for whatever you want. In theory you could refinance debt, buy a used car, etc. Also I just signed up and got an offer for $25 for the first year instead of $125. $300 for 100k transfer isn’t too bad either, considering the opportunity cost is basically nothing but some effort, as long as you are not an active trader.

doc_newbie
doc_newbie

Annual fee
$125
….
lol

Lukas
Lukas

“This offer is only valid for M1 customers who have completed an Automated Customer Account Transfer Service into an M1 account before October 1, 2020.”

What does this mean? Not available if you want to sign up today then?

lilurbanachiever
lilurbanachiever

“M1 Finance may charge the account for the cost of the offer at its sole discretion. M1 reserves the right to restrict or revoke this offer at any time. “

AndreRamirez
AndreRamirez

25% improvement on a weak deposit bonus is still a weak deposit bonus 🙁

SamL
SamL

Offer is boosted by 25% for October https://www.m1finance.com/earn-up-to-3125/
(I’m not interested in this brokerage, but just reporting the info.)

Xatos
Xatos

Referral bonus back up to $20 each when funding $100 William Charles Chuck

SamL
SamL

I absolutely HATE the “pie” idea. Can you use this as a regular brokerage, where you directly choose your transactions, and totally opt out of their “pie” nonsense? I’m mainly looking at higher tier bonus with buy and hold mutual funds, with little or no transaction, and I definitely don’t want them doing random trades on my portfolio to maintain some stupid “pie”.

SamL
SamL

Nevermind, looking more through their website, there is absolutely no way I’d go near this place. It’s not a regular brokerage at all.

James N
James N

What about it makes it “not a regular brokerage”? You can buy and sell securities individually, just like anywhere else. Trying to make sure I’m not missing anything, but I can’t figure out what you’re concerned about?

James N
James N

Ah, I see — transactions all only occur once a day, as a market order at that time (no limit, stop-loss, etc. — to say nothing of options and the like). So you’re right, I wouldn’t consider it a “regular” brokerage either, since it doesn’t offer the ability to make intra-day trades on your own terms.

Still might be a good candidate for a lot of people, what with the fractional share purchases and automated reinvestment. I might give it a shot, to get the bonus, and see how much I miss the traditional brokerage features.

SamL
SamL

I wouldn’t care about “once a day” (I use mutual funds), but I want to only have exactly the transactions I specify, and not have some algorithm messing with my account.

ec on
ec on

Cannot get M1 Finance to load in 4 different web browsers nor Blue Stacks mobile emulator. Unlike major brokerages whose sites and apps in Blue Stacks work. Managed to get an e-mail address for customer service which has given exactly zero help in 3 months of trying. Experienced investor who has invested online for all this century here.

SamL
SamL

That sounds absolutely atrocious. You can’t have a brokerage where you can’t be sure of getting in and taking the actions you want. Even if you transact rarely, when you do need to, you have to know you can take your desired actions, without glitches.

Josiah
Josiah

I’ve used for several years and really like it. Pretty straightforward and most importantly free. I have a Roth IRA and a traditional IRA with them