• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer

Optimized Portfolio

Investing and Personal Finance

  • Start Here
  • Investing 101
    • Beginners Start Here – 10 Steps To Start Building Wealth
    • What Is the Stock Market? How It Works & How to Invest in It
    • How To Invest in an Index Fund – The Best Index Funds
    • Portfolio Asset Allocation by Age
    • How To Invest Your Emergency Fund
    • Portfolio Diversification – How To Diversify Your Portfolio
    • Dollar Cost Averaging vs. Lump Sum Investing (DCA vs. LSI)
    • How To Invest Your HSA (Health Savings Account)
    • Factor Investing and Factor ETFs – The Ultimate Guide
    • more…
  • Lazy Portfolios
    • All Weather Portfolio
    • Bogleheads 3 Fund Portfolio
    • HEDGEFUNDIE’s Excellent Adventure
    • Warren Buffett Portfolio
    • Golden Butterfly Portfolio
    • Paul Merriman Ultimate Buy and Hold Portfolio
    • Ben Felix Model Portfolio
    • Permanent Portfolio
    • David Swensen Portfolio
    • 60/40 Portfolio
    • more…
  • Funds
    • VOO vs. VTI – Vanguard S&P 500 or Total Stock Market ETF?
    • The 7 Best International ETFs
    • The 8 Best Small Cap ETFs (4 From Vanguard)
    • The 5 Best REIT ETFs
    • The 5 Best EV ETFs – Electric Vehicles ETFs
    • VIG vs. VYM – Comparing Vanguard’s 2 Popular Dividend ETF’s
    • The Best Vanguard Dividend Funds – 4 Popular ETFs
    • The 5 Best Tech ETFs
    • The 7 Best Small Cap Value ETFs
    • The 6 Best ETFs for Taxable Accounts
    • The 5 Best Emerging Markets ETFs (1 From Vanguard) for 2023
    • more…
  • Leverage
    • What Is a Leveraged ETF and How Do They Work?
    • How To Beat the Market Using Leverage and Index Investing
    • The 9 Best Leveraged ETFs
    • Hedgefundie’s Excellent Adventure
    • Leveraged All Weather Portfolio
    • Leveraged Permanent Portfolio
    • Leveraged Golden Butterfly Portfolio
    • NTSX – Review and Summary
    • TQQQ – Is It A Good Investment?
    • PSLDX – A Review
    • SWAN – A Review
    • RPAR Risk Parity ETF Review
    • more…
  • Dividends
    • The Best M1 Finance Dividend Pie
    • The 11 Best Dividend ETFs
    • The Best Vanguard Dividend Funds – 4 Popular ETFs
    • VIG vs. VYM – Comparing Vanguard’s 2 Popular Dividend ETF’s
    • 8 Reasons Why I’m Not a Dividend Income Investor
    • QYLD – A Harsh Review
    • more…
  • Brokers
    • The 5 Best Stock Brokers
    • The 4 Best Investing Apps
    • M1 Finance Review
    • Brokers with the Lowest Margin Rates
    • M1 Finance vs. Fidelity
    • M1 Finance vs. Vanguard
    • Webull vs. Robinhood
    • Stash vs. Robinhood
    • M1 Borrow Review (How M1’s Margin Loan Works)
    • more…
  • Retirement
    • The 10 Best ETFs for Retirement Portfolios in 2023
    • The 4% Rule for Retirement Withdrawal Rate – A Revisitation
    • Sequence of Return Risk in Retirement Explained
    • Traditional IRA Explained
    • Roth IRA Explained
    • 401k vs. Roth IRA
    • Roth IRA vs. Traditional IRA
    • Backdoor Roth IRA Explained
    • more…
  • My Toolbox

M1 Finance vs. Charles Schwab Brokerage Comparison (2023)

Last Updated: March 22, 2022 No Comments – 8 min. read

m1 finance vs charles schwab

Traditional brokerages like Charles Schwab are slashing fees and adding features to compete with modern platforms like M1 Finance. Here we’ll compare the two. I would argue that Schwab is perhaps M1’s closest competitor. 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. Schwab – Summary Comparison

M1 Finance

Schwab

Commissions

$0

$0*

Fees

$0

$0

Account Types

3/5
5/5

Investment Products

3/5
4.5/5

Customer Service

4/5
4.5/5

Research Tools

3/5
5/5

Margin

5/5
2/5

Mobile App

5/5
4.5/5

Interface/Usability

5/5
3.5/5

Checking Account

Yes

Yes

Fractional Shares

Yes

Yes**

Auto Rebalancing

Yes

No***

Dividend Reinvestment

Yes

Yes

Order Control

No

Yes

Summary Score

4/5

4.2

4/5

4.1

Summary Review

M1 Finance will be easier to navigate than Schwab for beginner investors. If you don't need account types like Solo 401(k), SIMPLE IRA, and 529, and if you want access to fractional shares for all investments, free automatic rebalancing, and cheaper margin, M1 Finance is the better choice, especially for novice investors. For beginner long-term buy-and-hold investors who need expert help, M1's Expert Pies will also allow you to avoid Schwab's professional advising fees.

Schwab has made huge leaps recently to modernize its apps and features in a bid to attract a younger audience, but it still hasn't caught up to M1 Finance in certain aspects. Schwab does offer auto-rebalancing, but only with a premium fee-based option, and their fractional shares feature only applies to S&P 500 companies. Schwab has all-day trading and order control, and is thus the better choice for day traders. Similarly, if you need access to things like options and futures contracts, a Solo 401(k), or 529 accounts, Schwab is a solid choice.

Learn More

Learn More

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

M1 Finance will be easier to navigate than Schwab for beginner investors. If you don’t need account types like Solo 401(k), SIMPLE IRA, and 529, and if you want access to fractional shares for all investments, free automatic rebalancing, and cheaper margin, M1 Finance is the better choice, especially for novice investors. For beginner long-term buy-and-hold investors who need expert help, M1’s Expert Pies will also allow you to avoid Schwab’s professional advising fees.

4.2

Schwab

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

Summary

Schwab has made huge leaps recently to modernize its apps and features in a bid to attract a younger audience, but it still hasn’t caught up to M1 Finance in certain aspects. Schwab does offer auto-rebalancing, but only with a premium fee-based option, and their fractional shares feature only applies to S&P 500 companies. Schwab has all-day trading and order control, and is thus the better choice for day traders. Similarly, if you need access to things like options and futures contracts, a Solo 401(k), or 529 accounts, Schwab is a solid choice.

4.1

*Schwab does have commissions on things like options, mutual funds, OTC stocks, and futures.
**Schwab only offers fractional shares on S&P 500 companies.
***Schwab only offers automatic rebalancing with their robo-advisor Intelligent Portfolios®.

Contents

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

M1 Finance vs. Schwab – Commissions and Fees

M1 Finance and Charles Schwab both offer commission-free trades for stocks and ETF’s, and zero account fees, aside from the obvious miscellaneous fees for things like paper statements, outbound account transfers, etc.

Schwab does have commissions for other securities types:

  • Options: $0.65 per contract
  • Mutual funds not in Schwab Funds®: up to $49.95 per purchase
  • Futures: $1.50 per contract

It’s exciting that we’re currently seeing a race to zero for brokerage fees and commissions, at least for “normal” stocks and ETF’s, which is great for the average retail investor, and even traditional brokers like Schwab are following suit. Schwab and TD Ameritrade both announced zero-fee trading in October 2019.

Charles Schwab actually announced in November 2019 that it was acquiring TD Ameritrade, but the merger is expected to take at least a couple years to finalize.

Charles Schwab does offer a free robo-advisor option called Intelligent Portfolios® with a premium option that incorporates 1-on-1 guidance from a Certified Financial Planner, a digital financial plan, and interactive planning tools for a one-time signup fee of $300 and $30/mo. This service requires a minimum investment of $25,000.

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

M1 Finance vs. Schwab – 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.

Charles Schwab has basically every account type you can think of. They offer all of M1’s account types plus Solo 401(k), SIMPLE IRA, 529, Coverdell, and more specialty accounts.

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

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

M1 Finance vs. Schwab – Investment Products

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

Charles Schwab offers every investment product except forex and crypto: ETF’s, individual stocks, mutual funds, options contracts, futures, and over-the-counter (OTC) stocks aka “penny stocks.”

M1 Finance vs. Schwab – Margin

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

  • Schwab – 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.

You can use that cheap margin loan from M1 Finance for whatever you want – major purchases, refinancing higher-interest debt, unexpected expenses, etc.

Remember that margin is an additional risk, including the risk of losing more than you invest. Margin is not available for retirement or custodial accounts. Rates may vary.

M1 Finance vs. Schwab – Mobile App

Both M1 Finance and Schwab have sleek, intuitive, user-friendly, robust mobile apps for both Apple iOS and Android:

m1 finance mobile app

Charles Schwab has recently overhauled their mobile app, but I still found it slightly less intuitive and more clunky than M1’s. Of course we should expect this somewhat, as Schwab offers more account types, investment products, and research tools, and has order control. Here are some screenshots from the Schwab mobile app:

charles schwab mobile app interface screenshots

M1 Finance vs. Schwab – Interface/Usability

While the mobile app is solid, the Charles Schwab desktop web-based interface is still somewhat antiquated. Again, we’d expect this to some degree, as they have a much more complex offering and a much larger, broader user base. The sheer number of tools and options may very well make this desktop interface overwhelming and more confusing for new, young investors, an audience that Schwab is working hard to attract. If you only plan to use the mobile app, you should be fine.

I’d like to think that Schwab will work on renovating the desktop interface to reflect their mobile app and the new features they’ve rolled out. In its current state, I think it would definitely be more confusing than M1’s interface for a beginner investor. The Schwab user interface looks like this:

charles schwab desktop interface screenshot 1
charles schwab desktop interface screenshot 2

The M1 Finance interface is modern, simple, and intuitive with its pie-based visualization. With fewer features and tools than Schwab, it is much easier to navigate, especially for novices. It is great for beginner and experienced investors alike:

m1 custom pies
m1 finance research filters screenshot

M1 Finance vs. Schwab – Extra Features

As a full trading brokerage, Charles Schwab naturally has much more robust charting, news, education, and analysis tools than M1 Finance. Again, their sheer number of resources can and likely will be overwhelming for new investors.

Charles Schwab obviously has an all-day trading window and order control. Since M1 Finance is built for long-term, buy-and-hold investing, and not for day trading, M1 has a once-daily trading window and no order control.

M1 Finance features “dynamic rebalancing,” an automatic rebalancing feature that automatically directs new deposits to specific assets to maintain your portfolio’s target weights. Charles Schwab does offer this feature in their free automated robo-advisor service called Intelligent Portfolios®, but this limits you to their pre-built ETF portfolios; you cannot select your own investments. The free, basic version also requires a minimum investment of $5,000.

The Schwab Intelligent Portfolios® service also has a premium option that incorporates 1-on-1 guidance from a Certified Financial Planner, a digital financial plan, and interactive planning tools for a one-time signup fee of $300 and $30/mo. This level of the service requires a minimum investment of $25,000. These Intelligent Portfolios® also incorporate automatic tax-loss harvesting if your balance is above $50,000.

M1 Finance offers fractional shares for all investment products, which allows every dollar to work for you and allows you to buy small pieces of high-share-price stocks. This is especially important for beginner investors with a small amount of capital. Schwab announced in May 2020 that they would begin offering fractional shares, but only for stocks in the S&P 500. This feature will launch in June 2020.

M1 Finance also brings a cool social aspect to investing, allowing you to share your Custom Pies via a hyperlink.

M1 Finance vs. Schwab – Summary and Conclusion

  • Both M1 Finance and Schwab offer zero-commission trades and zero fees in the context of stocks and ETF’s traded on major exchanges. Schwab does have commissions on things like options, OTC stocks, and futures.
  • Schwab has many more account types than M1 Finance, but I’d imagine most average retail investors won’t need or utilize that difference.
  • M1 Finance offers most ETF’s and individual stocks. Schwab offers ETF’s, stocks, OTC stocks (“penny stocks”), mutual funds, futures, and options contracts.
  • M1 Finance offers much lower margin rates than Schwab.
  • Schwab has a more confusing desktop user interface that would be more suitable for seasoned investors and traders. This is to be expected, as Schwab offers a broader range of account types and investment products. M1 Finance has a simple and intuitive desktop interface.
  • Both M1 Finance and Schwab seem to have great mobile apps.
  • Both M1 Finance and Schwab offer FDIC-insured checking accounts.
  • M1 Finance offers fractional shares on all investment products. Schwab only offers fractional shares on S&P 500 stocks.
  • M1 Finance has automatic rebalancing. The only way to get automatic rebalancing with Schwab is via their robo-advising program called Intelligent Portfolios®, which requires a $5,000 minimum investment for the basic account and a $25,000 minimum investment (and extra fees) for the premium account.
  • Schwab has the typical order control and all-day trading window that we’d expect from a traditional brokerage platform. M1 does not offer order control and only uses one trading window per day.
  • Schwab offers robo-advising and professional advising through their Intelligent Portfolios®. M1 Finance does not have a dedicated advising service but 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.
  • M1 Finance brings a social aspect to investing, allowing you to share your Custom Pies via a hyperlink.

Again, I would suggest that Charles Schwab is perhaps the closest competitor to M1 Finance at this time. Your choice between these two platforms should depend on how you want to invest and what account types, products, and features you need. To some degree, it may also depend on your level of investing experience. Schwab inarguably offers many more options than M1 Finance in terms of account types, investment products, and research tools. But I maintain that this higher number of resources comes at a cost of increased complexity and decreased intuitiveness, making it potentially overwhelming and more difficult for a beginner investor to navigate successfully.

Moreover, I would argue that most of these extra account types, products, and tools aren’t needed or even wanted by the average retail investor, especially a long-term, buy-and-hold investor. That said, you can be completely hands-off with either platform, using either Schwab’s Intelligent Portfolios® or M1’s Expert Pies (or a lazy portfolio through M1).

If you need access to things like options contracts, a Solo 401(k) or 529 accounts, and/or an all-day trading window, for example, Schwab is the platform for you. If you don’t need those things and want access to fractional shares on all investments, automatic rebalancing on all accounts, and cheaper margin, M1 Finance is the better choice. I wrote a separate comprehensive review of M1 Finance here if you’re interested in seeing the specifics of the platform.

I have to applaud Charles Schwab for making huge strides to improve and modernize its apps and features, even in just the past few months. I suspect they will continue to renovate and innovate to attract the younger, more tech-savvy audience who seem to naturally gravitate more to modern platforms like M1 Finance. Schwab is no longer just the brokerage for the older generations’ retirement accounts. It will be interesting to see the future offerings of the platform.

I’ve actually talked to people who have accounts across both brokers – Schwab for mutual funds or robo-advised Intelligent Portfolios® in retirement accounts, and M1 for a taxable account to access extremely cheap margin and “fun” stock picking. About 5% of M1’s transfers are from Schwab:

m1 finance transfers

M1 Finance currently has a promotion for up to $250 when initially funding an investment account, as outlined below:

m1 seed promo 2022

They also currently 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
Learn More

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

Don't want to do all this investing stuff yourself or feel overwhelmed? Check out my flat-fee-only fiduciary friends over at Advisor.com.

77 percent of millenials report their finances are a source of anxiety

Related Posts

  • The 10 Best Large Cap Value ETFs (4 From Vanguard) for 2023
  • 6 Best ESG ETFs for Responsible Investing (2 From Vanguard)
  • AOR ETF Review – iShares Core Growth Allocation ETF (60/40)
  • David Swensen Portfolio (Yale Model) Review and ETFs To Use
  • Early Direct Deposit with M1 Spend from M1 Finance

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.

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

  • Facebook
  • Instagram
  • Reddit
  • Twitter
  • YouTube
  • Patreon

Email Newsletter

Sign up to receive email updates when a new post is published.

Don't worry, I hate spam too. No ads.

Most Popular

Ray Dalio All Weather Portfolio Review, ETFs, & Leverage (2023)

HEDGEFUNDIE’s Excellent Adventure (UPRO/TMF) – A Summary

Golden Butterfly Portfolio Review and M1 Finance ETF Pie

David Swensen Portfolio (Yale Model) Review and ETFs To Use

Harry Browne Permanent Portfolio Review, ETFs, & Leverage (2023)

Corporate Bonds vs. Government Bonds (Treasuries) – The Showdown

VIG vs. VYM – Vanguard’s 2 Popular Dividend ETFs (Review)

Warren Buffett ETF Portfolio (90/10) Review and ETFs (2023)

The 60/40 Portfolio Review and ETF Pie for M1 Finance

Bogleheads 3 Fund Portfolio Review and Vanguard ETFs (2023)

m1 sidebar

rocket money

m1 sidebar

visor sidebar

retirable

Paul Merriman Ultimate Buy and Hold Portfolio Review, M1 Pie (2023)

Lowest Margin Rates Brokers (2023 Comparison)

M1 Finance vs. Vanguard Brokerage Comparison [2023 Review]

M1 Finance vs. Fidelity Brokerage Comparison [2023 Review]

The Best M1 Finance Dividend Pie for FIRE & Income Investors

Portfolio Asset Allocation by Age – Beginners To Retirees

The 5 Best Stock Brokers Online for Investing (2023 Review)

The 4 Best Investing Apps for Beginners (2023 Review)

The 7 Best Small Cap ETFs (3 From Vanguard) for 2023

The 6 Best REIT ETFs To Invest in Real Estate for 2023

The 6 Best Tech ETFs To Buy Tech Stocks in 2023

9 Best Clean Energy ETFs To Go Green in Your Portfolio (2023)

The 13 Best Small Cap Value ETFs (3 From Vanguard) for 2023

Why, How, & Where To Invest Your Emergency Fund To Beat Inflation

VOO vs. VTI – Vanguard’s S&P 500 and Total Stock Market ETFs

9 Best International ETFs To Buy (6 From Vanguard) in 2023

Ben Felix Model Portfolio (Rational Reminder, PWL) ETFs & Review

Factor Investing and Factor ETFs – The Ultimate Guide

Gone Fishin’ Portfolio Review (Alexander Green) & ETFs (2023)

TQQQ – Is It A Good Investment for a Long Term Hold Strategy?

Recent Posts

Roth IRA vs. Traditional IRA – Which Is Better for You? (2023)

VXUS vs. IXUS – Vanguard or iShares International ETF?

Tail Risk – What It Is and How To Hedge Against It

I Bonds Explained (US Savings Bonds) – Ultimate Guide (2023)

JEPI ETF Review – JPMorgan Equity Premium Income ETF

Sharpe Ratio vs. Sortino vs. Calmar – Risk Adjusted Return

Portfolio Risk Explained – How To Think About Risk and Volatility

HNDL ETF Review – Is HNDL a Good Investment? (7HANDL™ ETF)

NUSI ETF Review – Is NUSI a Good Investment?

3 Best SPAC ETFs To Invest in SPACs in 2023 – But Should You?

VOO vs. VOOV vs. VOOG – Vanguard S&P 500, Value, or Growth?

VXUS vs. VEU – Which Vanguard Total International ETF?

VT vs. VTI – Global Stock Market vs. Total U.S. Stock Market

RPAR Risk Parity ETF Review – An All Weather Portfolio ETF?

PSLDX – A Review of the PIMCO StocksPLUS® Long Duration Fund

View All...

Footer

  • Facebook
  • Instagram
  • Reddit
  • Twitter
  • YouTube
  • Patreon

Amazon Affiliate Disclosure

OptimizedPortfolio.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.

Email Newsletter

Sign up to receive email updates when a new post is published.

Don't worry, I hate spam too. No ads.

About - My Toolbox - Privacy - Terms - Contact


Copyright © 2023 OptimizedPortfolio.com

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Ok, Got ItReject Read More
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT