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M1 Finance vs. Fidelity Brokerage Comparison [2021 Review]

Last Updated: February 21, 2021 No Comments – 6 min. read

m1 finance vs fidelity

Financially reviewed by Patrick Flood, CFA.

Low-cost investment brokers like M1 Finance and Fidelity are becoming more popular as investors are wisening up to fees and commissions that have traditionally been largely overlooked. Here we’ll compare the two. I wrote a separate comprehensive review of M1 Finance here if you’re interested in seeing the specifics of the platform.

Disclosure:  Some of the links on this page are referral links. At no additional cost to you, if you choose to make a purchase or sign up for a service after clicking through those links, I may receive a small commission. This allows me to continue producing high-quality, ad-free content on this site and pays for the occasional cup of coffee. I have first-hand experience with every product or service I recommend, and I recommend them because I genuinely believe they are useful, not because of the commission I get if you decide to purchase through my links. Read more here.

M1 Finance vs. Fidelity – Summary Comparison

M1 Finance

Fidelity

Commissions

$0

$0

Fees

$0

$0

Account Types

3/5
5/5

Investment Products

3/5
4/5

Customer Service

4/5
4/5

Research Tools

3/5
4/5

Margin

5/5
3/5

Mobile App

5/5
4.5/5

Interface/Usability

5/5
4/5

Checking Account

Yes

Yes

Fractional Shares

Yes

Yes*

Auto Rebalancing

Yes

No

Order Control

No

Yes

Summary Score

4/5

4.2

4/5

3.9

Summary Review

If you don't need account types like Solo 401(k), SIMPLE IRA, and 529, and if you want access to fractional shares, automatic rebalancing, and cheaper margin, M1 Finance would likely be the better choice. For beginner long-term buy-and-hold investors who need expert help, M1's Expert Pies will also allow you to avoid Fidelity's advising fees.

Fidelity has made huge strides recently to improve and modernize its apps and features. Fidelity has all-day trading and order control, and is thus the better choice for traders. Similarly, if you need access to options contracts, a Solo 401(k), SIMPLE IRA, or 529 accounts, Fidelity is the platform for you. Fidelity offers fractional shares, but only through their mobile app. Fidelity's margin is more expensive than M1's.

Learn More

Learn More

*Only available through the mobile app.

M1 Finance

Commissions
Fees
Account Types
Investment Products
Customer Service
Research Tools
Margin
Mobile App
Interface/Usability
Checking Account
Fractional Shares
Auto Rebalancing
Order Control

Summary

If you don’t need account types like Solo 401(k), SIMPLE IRA, and 529, and if you want access to fractional shares, automatic rebalancing, and cheaper margin, M1 Finance would likely be the better choice. For beginner long-term buy-and-hold investors who need expert help, M1’s Expert Pies will also allow you to avoid Fidelity’s advising fees.

4.2

Fidelity

Commissions
Fees
Account Types
Investment Products
Customer Service
Research Tools
Margin
Mobile App
Interface/Usability
Checking Account
Fractional Shares**
Auto Rebalancing
Order Control

Summary

Fidelity has made huge strides recently to improve and modernize its apps and features. Fidelity has all-day trading and order control, and is thus the better choice for traders. Similarly, if you need access to options contracts, a Solo 401(k), SIMPLE IRA, or 529 accounts, Fidelity is the platform for you. Fidelity offers fractional shares, but only through their mobile app. Fidelity’s margin is more expensive than M1’s.

3.9

**Only available through the mobile app.

Contents

  • M1 Finance vs. Fidelity – Summary Comparison
  • M1 Finance vs. Fidelity – Commissions and Fees
  • M1 Finance vs. Fidelity – Account Types
  • M1 Finance vs. Fidelity – Investment Products
  • M1 Finance vs. Fidelity – Margin
  • M1 Finance vs. Fidelity – Mobile App
  • M1 Finance vs. Fidelity – Interface/Usability
  • M1 Finance vs. Fidelity – Extra Features
  • M1 Finance vs. Fidelity – Summary and Conclusion

M1 Finance vs. Fidelity – Commissions and Fees

Fidelity and M1 Finance both offer commission-free trades and zero account fees, aside from miscellaneous fees for things like paper statements, outbound account transfers, inactivity, etc. We’re seeing a race to the bottom for brokerage fees and commissions, and even traditional brokers like Fidelity and Schwab are following suit. Fidelity announced zero-fee trading in January 2020.

Fidelity does offer a robo-advisor option called Fidelity Go®, which has a fee of 0.35%, and a hybrid robo-advising and coaching (in their words, “digital planning and professional investment management with advisors when you need them”) for a fee of 0.50%.

M1 Finance is entirely self-directed, but they do offer expert-built “Expert Pies” that you can invest in for free.

M1 Finance vs. Fidelity – Account Types

M1 Finance offers taxable, joint, Traditional IRA, Roth IRA, Rollover IRA, SEP IRA, Trust, and Custodial (M1 Plus members) accounts. They currently do not offer SIMPLE IRA, 401(k), Solo 401(k), 529, HSA, or Non-Profit accounts.

Fidelity offers all of M1’s account types plus Solo 401(k), SIMPLE IRA, 529, and HSA. Employers can also set up a 401(k) plan through Fidelity.

If you need any of the latter accounts, Fidelity would be the better choice.

Both M1 and Fidelity also offer an FDIC-insured checking account.

M1 Finance vs. Fidelity – Investment Products

M1 Finance offers most ETF’s and individual stocks that are traded on major exchanges.

Fidelity offers ETF’s, individual stocks, their own mutual funds, and options contracts.

M1 Finance vs. Fidelity – Margin

M1 Finance wins on margin rates. Margin rates are as follows for a $100,000 margin loan:

  • Fidelity – 6.83%
  • M1 Finance – 3.50%
  • M1 Plus – 2.00%

M1 Plus is a $125/year premium membership that gets you access to a lower margin rate as shown, as well as a second afternoon trading window.

Perhaps the most important difference though is the fact that margin from Fidelity can only be used to apply leverage to your portfolio (i.e. buy more securities), whereas a margin loan from M1 Finance can be used for whatever you want – refinancing higher-interest debt, major purchases, unexpected expenses, etc.

M1 Finance vs. Fidelity – Mobile App

M1 Finance has a sleek, intuitive, user-friendly, robust mobile app for both Apple iOS and Android:

m1 finance mobile app

Fidelity has recently overhauled their mobile app, likely in a bid to capture more of today’s young, tech-savvy audience. I would suggest it’s slightly less intuitive than M1’s. Also note that for some reason, Fidelity’s fractional shares feature is only available through the mobile app. Here are some screenshots from the Fidelity app:

fidelity mobile app screenshots

M1 Finance vs. Fidelity – Interface/Usability

The Fidelity desktop web interface is still pretty antiquated. I’d like to think they’re working on updating it to reflect their mobile app. It may be a little more confusing for a beginner investor. This is to be expected somewhat, as Fidelity obviously has more account types and investment products, as well as advanced order control. The Fidelity user interface looks like this:

fidelity user interface screenshot

The interface for M1 Finance, on the other hand, is sleek, modern, simple, and intuitive with its pie-based visualization. It is great for beginner and experienced investors alike:

m1 custom pies
m1 finance research filters screenshot

M1 Finance vs. Fidelity – Extra Features

Both M1 Finance and Fidelity offer an FDIC-insured checking account with a debit card.

As a full-fledged trading brokerage, Fidelity offers more robust charting and analysis tools than M1 Finance, and obviously has an all-day trading window and order control. Since M1 Finance is built for long-term, buy-and-hold investing, M1 has a once-daily trading window and no order control.

Fidelity does not employ M1’s famous “dynamic rebalancing,” which automatically allocates new deposits to maintain your portfolio’s target allocations. M1 Finance offers fractional shares or “dollar-based investing,” which allows every dollar to work for you. The mechanics that underlie the clearing of trades from Fidelity’s mobile app may be different than its desktop web interface, because Fidelity only offers fractional shares through its mobile app.

M1 Finance vs. Fidelity – Summary and Conclusion

  • Both M1 Finance and Fidelity offer zero-commission trades and zero fees.
  • Fidelity has a few more account types than M1 Finance, notably Solo 401(k), SIMPLE IRA, 529, and HSA. Employers can also set up a 401(k) plan through Fidelity.
  • M1 Finance offers most ETF’s and individual stocks. Fidelity offers ETF’s, individual stocks, mutual funds, and options contracts.
  • M1 Finance offers lower margin rates than Fidelity, and M1’s margin loan can be used for anything you want.
  • Fidelity has a slightly less intuitive, older-looking user interface that would be more suitable for seasoned investors and traders. This is to be expected, as Fidelity offers a broader range of account types and investment products. M1 Finance has a simple and intuitive interface.
  • Both M1 Finance and Fidelity seem to have great mobile apps.
  • Both M1 Finance and Fidelity offer an FDIC-insured checking account with a debit card.
  • Both M1 Finance and Fidelity offer fractional shares, but with Fidelity this feature is only available through the mobile app.
  • Fidelity does not have automatic rebalancing like M1.
  • Fidelity has the typical order control and all-day trading window that you’d expect of a traditional broker. M1 does not offer dedicated order control and only uses one trading window per day.
  • Fidelity offers robo-advising for a fee of 0.35% of your invested balance, and personalized investing advice for a fee of 0.50% of your invested balance. M1 Finance offers its expert-built “Expert Pies” for free. M1 is also probably better if you want to implement a “lazy portfolio” and have it rebalance automatically.

Both M1 Finance and Fidelity will provide significant savings in fees over other brokers. I think which of these platforms you choose depends largely on what account types, products, and features you need access to. If you need access to options contracts, a Solo 401(k), and/or an all-day trading window, for example, Fidelity is the platform for you. If you don’t need those things and want access to fractional shares, automatic rebalancing, and cheaper margin, M1 Finance would likely be the better choice. I wrote a separate comprehensive review of M1 Finance here if you’re interested in seeing the specifics of the platform.

Similarly, Fidelity may be better for seasoned investors who want control and who don’t need robo-advising or investing advice from a certified professional. For beginner long-term buy-and-hold investors, M1’s Expert Pies will allow you to avoid Fidelity’s advising fees.

I have to compliment Fidelity for making strides to improve and modernize its apps and features, on par with modern, new-age brokers like M1. Again, we’re seeing a paradigm shift in investing and a race to zero for fees, with traditional brokers announcing major changes as recently as early 2020. I would argue Fidelity was one of the brokers that has long been viewed as one for an older generation. I suspect they will continue to improve and innovate into the future.

I’ve actually talked to people who utilize both – Fidelity for mutual funds in retirement accounts, and M1 for a taxable account to access extremely cheap margin. Fidelity also happens to be the brokerage from which M1 Finance sees the most transfers:

m1 finance transfers

M1 Finance is actually currently running a promotion offering a $30 bonus for a taxable account funded with $1,000+ within 2 weeks of opening. Details are here.

They also have a transfer bonus promotion for up to $2,500 when transferring an existing account from another brokerage, as outlined below:

m1 transfer bonus 2021
Sign Up for M1 Finance

Disclaimer:  While I love diving into investing-related data and playing around with backtests, I am in no way a certified expert. I have no formal financial education. I am not a financial advisor, portfolio manager, or accountant. This is not financial advice, investing advice, or tax advice. The information on this website is for informational and recreational purposes only. Investment products discussed (ETFs, mutual funds, etc.) are for illustrative purposes only. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. Do your own due diligence. Past performance does not guarantee future returns. Read my lengthier disclaimer here.

m1 finance get started

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About John Williamson

Analytical and entrepreneurial-minded data nerd, usability enthusiast, Boglehead, and Oxford comma advocate. I lead the Paid Search marketing efforts at Gild Group. I'm not a big fan of social media, but you can find me on LinkedIn and Reddit.

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