The biggest benefit to the dramatically changing retail investing industry is the rise of low-cost robo-advisors over traditional human advisors. Many trading platforms are self-directed and commission-free. Betterment was one of the original robo-advisers and has always been a leader of the industry. M1 Finance is a top platform that appeals to either type of investor.
Account opening bonus
Betterment and M1 Finance both have their own account opening bonuses for new customers. New customers in Betterment can get free account management depending on how much their first deposit is. The deposit needs to be within the first 45 days of the account opening. If the deposit is $15,000 to under $100,000, the first month is free. If the deposit is under $250,000, the first six months are free. If the deposit is over $250,000, the first year is free.
M1 Finance offers a transfer bonus of up to $2,500. The first deposit needs to be within 60 days of opening the account. If the deposit is $100,000 to $250,000, there is a bonus of $250. If the deposit is $500,000 or less, the bonus is $500. If the deposit is $1 million or fewer, the bonus is $1,000. If the deposit is over $1 million, the bonus is $2,500.
Account types
Betterment and M1 Finance both have several types of accounts for their users. There are three available accounts in each. Investment accounts are for long-term customers. Cash reserve accounts are for cash and have .4% yields. Checking accounts are fee-free and have a visa card connected to them. M1 Finance has Invest accounts that are good passive investors. Spend accounts have a connected debit card and are for liquid assets. Borrow accounts are for investors with portfolios of $10,000 or more.
Plans and pricing
Betterment’s digital plan has no minimum and an annual .25% fee. There are several portfolio templates to show the risk tolerance of each. There are things in place to increase diversification, and customer service is available. Portfolios have automatic rebalancing, and there is tax-loss harvesting. The account can sync with your brokerage accounts and bank securely. The premium plan has a .4% annual fee and needs at least a $100,000 balance. They offer asset allocation. They give the best advice for accounts, even when not held with Betterment. Their professionals will give unlimited financial planning advice.
M1 Finance’s standard plan includes no cash back and has a daily $10,000 transfer limit on Spend accounts. There is no yield on Spend balances. There is one investment transaction window in the morning. Borrow accounts have a base interest of 3.5% on draws. There is one ATM reimbursement a month. M1 Finances’s plus plan includes a 1% yield and cashback on Spend accounts. The daily transfer limit of Spend accounts is $50,000. There are two daily trading windows associated with Invest accounts, and they offer four ATM reimbursements a month. Borrow accounts have a base interest of 2% on draws.
Financial planning and advice
Betterment stands out with their advice services. The advice packages are topic-specific consultations with their professionals. These are one-off meetings about common life situations. The Betterment Advisor Network is for customers that want a more hands-on approach to their finances. The one-off fees for the services are on top of the normal fees.
Verdict
Both companies are great for passive investing, personalized retirement accounts, and great account opening bonuses. Betterment is best for financial planning, networking and high-yield cash accounts without extra fees. M1 Finance is best for borrowing against your portfolio, self-directed investing and fewer asset management fees.