2022 Review of M1 Finance: Advantages and Disadvantages

Pros:

• Low Fees: M1 Finance has one of the lowest fees in the industry. The platform charges zero commission for trading stocks and ETFs and has a $0 account minimum. Additionally, there are no management fees, account fees, or hidden fees. This makes it an attractive option for those looking to invest without having to worry about high costs eating into their returns.
• User-friendly Interface: M1 Finance has a clean and easy-to-use interface that makes it accessible for both novice and experienced investors. The platform's dashboards and tools are intuitive and easy to navigate. Furthermore, M1 Finance offers a variety of educational resources to help users understand the platform's features and how to invest effectively.
• Wide Range of Investment Options: M1 Finance offers a wide variety of investment options including stocks, ETFs, and fractional shares. The platform also offers the ability to invest in M1 Finance portfolios, which are pre-built portfolios that are managed by the platform's robo-advisory algorithm. These portfolios are diversified and automatically rebalanced to help manage risk.
• Flexibility: M1 Finance allows investors to customize their portfolios and make trades whenever they want. Investors can also set up automatic investments and withdrawals, making it easy to manage their investments on a regular basis. Additionally, M1 Finance offers the ability to borrow against your portfolio to invest in other opportunities such as real estate, without having to liquidate assets.

Cons:

• Limited Research and News: M1 Finance does not offer as much research and news as some of its competitors. This may make it less appealing for those who want access to a wide range of information to inform their investment decisions.
• Limited Investment Options: While M1 Finance offers a wide variety of investment options, it does not offer access to more exotic assets such as options or derivatives. This may limit the investment opportunities for more advanced traders.
• No Human Advisors: M1 Finance is a robo-advisory platform, which means that it does not offer access to human financial advisors. This may be a disadvantage for those who prefer to have a human advisor to help guide their investment decisions.
• No Mobile App: M1 Finance currently only has a web-based platform, which can make it difficult for users to manage their investments on the go.

All in all, M1 Finance is a solid online investment platform that offers a great combination of low fees, user-friendly interface, and wide range of investment options. It is a great option for beginner investors looking for an easy-to-use platform, those with long term investment horizon, or those who value low fees. However, more advanced investors or those who value human financial advice or access to a wide range of research and news may want to consider other options.

In addition to the features outlined above, M1 Finance also offers a unique feature called M1 Spend which allows users to open a checking account and debit card linked to their investment account. This allows for seamless spending and investing, as users can invest their spare cash automatically through round-ups on purchases made with the debit card. It's a great way to build wealth over time without having to think about it, as users can make small investments into their portfolio every time they make a purchase.

Another noteworthy feature of M1 Finance is its Pie system, which is a simple and visual way for users to organize and manage their investments. Users can create their own custom Pies, which are essentially portfolios made up of different investments. For example, a user could create a Retirement Pie made up of low-cost index funds, or a Growth Pie made up of individual stocks in high-growth companies. The Pie system makes it easy for users to see their overall investment portfolio in one place and make adjustments as needed.

M1 Finance also has a strong commitment to social responsibility, they offer Socially Responsible Investment (SRI) and Environmental, Social and Governance (ESG) options in their Pies, those options allow investors to align their portfolio with their values, such as renewable energy, gender diversity and human rights, it's a great way to make an impact with your investment.

However, one downside to M1 Finance is that it doesn't offer any tax-loss harvesting (TLH) feature, which can be a drawback for investors looking to minimize their tax liability. Tax-loss harvesting is the practice of selling securities that have decreased in value to offset any capital gains and lower overall taxes. It's a technique used by many robo-advisers and financial advisors to maximize returns for investors.

In conclusion, M1 Finance is a great online investment platform for those looking for low fees, a user-friendly interface, and a wide range of investment options. With the unique feature of M1 Spend and Pie system, it makes it easy for investors to manage their portfolio and saving money at the same time. It also offers socially responsible options and it is a great choice for beginner investors, long-term investors or those who value low fees. However, it does not offer access to human financial advisors, tax-loss harvesting, or a mobile app and the lack of research and news options may not be suitable for advanced investors.