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Fidelity vs. M1 Finance

Byline profile imageWritten by Eric Reed
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Byline profile imageEdited by Marie White, CEPF®
Updated on
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Fidelity and M1 Finance both offer online brokerage opportunities, but provide very different services. With Fidelity, investors get a mainstream, full-service trading platform that allows you to execute your own trades. With M1 Finance, investors get an online brokerage that offers algorithmically managed portfolios made of assets you can change at will.

A financial advisor can help you determine the best ways to automate the management of your portfolio 

Overview of Fidelity vs. M1Finance

Fidelity is a well-known brand when it comes to personal finance and investing. With its online brokerage, Fidelity offers a standard, but comprehensive, full-service trading platform. You can buy and sell assets, conduct market research and get advice from Fidelity’s range of personal financial advisors.

It’s free to trade most mainstream assets, although the fees for investment advice can get relatively steep depending on what you’re looking for. With its personal management combined with particularly strong access to advisor services, Fidelity is an excellent choice for new investors who would like to manage their own assets.

M1 Finance is an outlier in the online trading world. This is an online brokerage that offers a hybrid model between robo-advisors and individual trading. With M1 Finance, you don’t actively trade your own assets. Instead, you either create your own portfolio or select one of the firm’s automatically managed portfolios.

You can then increase or decrease an individual asset’s proportion in this portfolio directly from your mobile device. With its portfolio-based approach to investing, combined with the ability to add specific assets, M1 is a potentially good choice for passive investors who would still like a degree of control over their investments.

Fidelity vs. M1Finance: Fees

Like most online brokerages, Fidelity now uses a no-fee trading model. The firm has no account minimums and does not charge a fee or commission to trade most assets. The only two exceptions to this are options contracts and some mutual funds. It costs $0.65 per option to trade options contracts with Fidelity. With mutual funds, Fidelity offers 10,000+ funds and charges $49.95 to trade any fund, not on their free list.

Fidelity also charges users to access its financial advising services. The fees for financial advice range based on your specific needs, but they begin at $32.95 per broker-assisted trade.

M1 Finance is unusual as a portfolio-based product in that it does not charge any commissions or trading fees. However,tM1 Finance charges some miscellaneous costs, such as a $5 fee for paper account statements, a $3 platform fee for accounts under $10,000, and a $125 annual charge for its premium service M1 Plus.

Fidelity vs. M1Finance: Services and Features

An investor reviewing the differences between Fidelity vs. M1 Finance.

Fidelity offers a full-service online trading platform. Users can build and manage their own portfolios, including tax-advantaged products such as IRA retirement accounts. This is an individually managed platform, meaning that you make your own investments and trades based on your own judgment.

Fidelity’s service supports mainstream financial assets, including stocks, bonds, ETFs, mutual funds and options contracts. The most significant exception is that you cannot trade futures contracts or foreign currencies. You can also access some minor algorithmically-balanced portfolios that Fidelity has begun to construct, although they are generally not as good as simply buying a mutual fund or an ETF. Fidelity also has a crypto ETF available to retail investors.

Where Fidelity particularly stands out is in its educational and advising services. This brokerage offers a strong range of educational and research-based resources for investors. You can access financial advisors through Fidelity’s online system, and can also seek financial advice through the company’s range of retail locations.

M1 Finance offers an unusual, if not unique, product. As an online brokerage, M1 Finance is built around portfolios that it calls “Pies.” Each pie is a portfolio template that represents its mix of assets. In this way, M1 Finance builds individual investment portfolios with the same approach as managed funds, which are structured around their balance and mix of assets.

Investors with M1 Finance can choose between building their own portfolios or selecting pre-built and managed portfolios. You can also select or build multiple portfolios, investing different amounts of money in each one. In this regard, M1 Finance is similar to other robo-advisories, although it offers both portfolios that are algorithmically managed and professionally managed.

However, unlike standard robo-advisors, with M1 Finance you can adjust the asset mix at will. You can add or remove individual stocks and ETFs to your portfolio by adjusting their proportion in your account. You cannot directly buy or sell assets with M1 Finance.

Instead, for example, if you were interested in XYZ Corp. shares, you would change the balance of your portfolio to include 5% XYZ Corp. Stock. The system would then buy and sell assets in order to reach that asset balance. M1 Finance supports stocks and ETFs, it also allows users to build “crypto pies” out of cryptocurrency. 

Fidelity vs. M1 Finance: Online and Mobile Experience

Fidelity is a traditional firm with a well-designed product. Like all full-services brokerages, Fidelity works best through its website. It’s clean and presents information well, without drowning the user in unnecessary details or complexity.

The Fidelity app is also well-received and has a clean design, but it suffers from the limitations of its form. Users on a smartphone will have less information available or at least will have to jump through several more hoops to access the same information, just because of the app’s smaller screen. The app is well-designed, but a full-service brokerage simply works better on a larger screen.

M1 Finance has an outstanding website and app. Although the firm has a non-traditional approach to investing, users can quickly learn how the product works and how to use it. Creating a portfolio is easy, as is playing with the asset balances in any given portfolio. This is a service that works very well on an app, given its streamlined process for adjusting your portfolio.

Fidelity vs. M1 Finance: Investment Options

One of the biggest differences between Fidelity and M1 Finance is the variety of investments you can access.

Fidelity offers a full suite of asset classes, giving you the flexibility to build a highly diversified portfolio. You can invest in:

  • Stocks
  • Exchange-traded funds (ETFs)
  • Mutual funds (including thousands of no-transaction-fee options)
  • Bonds and fixed income products
  • Options contracts
  • Crypto ETFs
  • CDs
  • IRAs
  • 529 Savings Plans
  • Health Savings Accounts (HSAs)

This broad range makes Fidelity appealing for investors who want to explore beyond just stocks and ETFs. For example, by adding bonds for stability or mutual funds for simplified diversification.

M1 Finance, on the other hand, keeps things simple. It only supports:

  • Stocks
  • ETFs
  • Bitcoin, Ethereum, and Litecoin

You can’t trade mutual funds, bonds, or options on M1. If your investment strategy involves those asset classes, Fidelity may be a better fit. But if you’re comfortable sticking with stocks and ETFs, and you value automation, M1 still delivers a strong experience.

Fidelity vs. M1 Finance: Tax Efficiency and Tools

Taxes can eat into your investment returns, so it’s smart to consider how each platform helps you minimize them.

Fidelity offers robust tools to support tax-efficient investing. You can:

  • Set up an automatic dividend reinvestment plan (DRIP) to keep your money working.
  • Use tax-advantaged accounts like IRAs and HSAs alongside your taxable brokerage account.
  • Access guidance on tax-loss harvesting strategies through educational resources or by working with an advisor.

M1 Finance takes a more automated approach, which may help some investors avoid common tax mistakes. It automatically reinvests dividends and can help you maintain your desired asset allocation without triggering unnecessary trades. Plus, it offers IRAs for tax-deferred or tax-free growth.

However, M1 doesn’t currently offer sophisticated tax-loss harvesting tools like you might find with other robo-advisors or with an advisor at Fidelity. If minimizing taxes is a top priority, Fidelity’s broader set of tools and guidance may give you the edge, but M1’s automation still promotes good tax habits in a hands-off way.

Who Should Use Fidelity and M1 Finance

Fidelity is an excellent full-service trading platform for anyone who wants to individually manage their own portfolio. In particular, its strong educational and advisor resources make this an excellent choice for individual investors who are still relatively new to the world of investing. You can build your portfolio while learning about this industry as you go.

M1 Finance is something of a niche product. Investors who would like to manage their own accounts will generally be better off with a full-service trading platform that lets them build their own portfolios directly. Meanwhile, those who would like a hands-off, passive approach to investing will generally do better with an index fund or a fully managed portfolio.

However, many investors may fall in the middle. M1 Finance can be a great option for investors who want to take an overall passive approach to investing but would like the option for individual management from time to time.

Bottom Line

An investor decides between Fidelity vs. M1 Finance.

Fidelity and M1 Finance are both online investment platforms, but that’s where the similarities end. With Fidelity, you can trade your own assets and can invest in most mainstream financial products. With M1 Finance you generally build a passive portfolio but can adjust your asset allocation at will.

Tips for Investing

  • Picking individual stocks is a tricky business. The best way to approach any risky investment is with good advice and with investing means working with a financial advisor. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • M1 Finance is a hybrid, offering portfolios managed by both robo-advisors and professional advisors. Find out which one you might prefer between using a robo-advisor or working with a professional.

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