Integrated investing, banking and borrowing
An M1 Finance account gives you access to a variety of investment products, an interest-bearing checking account, and a portfolio line of credit that gives you access to revolving credit against your portfolio balance. Manage the bulk of your finances in one place with perks like low-interest borrowing without a credit check and automatic transfers into your investment accounts.
M1 Finance watches costs at every turn: no commission fees, no account management fees, no checking account maintenance fee, no application or origination fees for borrowing. It’s conscious of expense ratios to keep investment fund fees low and even reimburses ATM fees.
When you deposit money into your account, M1 Finance’s algorithm identifies the segments of your portfolio that are underweight and puts money there first to help you stay on target with the allocation you chose. And when you withdraw money, the algorithm sells the portions of your portfolio that are overweight first.
In addition to traditional stock brokerages and trust accounts, M1 Finance offers traditional, Roth, and SEP IRAs.
What could be improved
Access to advisors or recommendations
Unlike other online brokerages, M1 doesn’t provide investment advice or recommendations. It also doesn’t provide access to human advisors.
Investors in high tax brackets or with large investment accounts will miss out on tax-loss harvesting, which could reduce their tax liability by offsetting taxable capital gains.
M1 Finance’s Dynamic Rebalancing helps to maintain your target asset allocation using the funds flowing into and out of your account. However, M1 Finance will not automatically reallocate the funds you’ve already invested; you must instruct the app to do so. That means you have to keep an eye on your asset allocation and ask for a rebalance if your portfolio starts to get out of whack. This brokerage isn’t as hands-off as some competing robo-advisors, though its design makes it easy to see how your portfolio’s allocation compares with your target so you know when to ask for a rebalance.
View more information: https://www.fool.com/the-ascent/buying-stocks/m1-finance-review/