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M1 Finance vs. Wealthsimple Brokerage Comparison (2023)

Last Updated: March 22, 2022 No Comments – 7 min. read

m1 finance vs wealthsimple

“Robo-advisors” like Wealthsimple are surging in popularity recently with low fees, convenience, and modern apps and interfaces. Here we’ll compare Wealthsimple and M1 Finance. I wrote a separate comprehensive review of M1 Finance here if you’re interested in that.

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. Wealthsimple – Summary Comparison

M1 Financed

Wealthsimple

Commissions

$0

$0

Fees

$0

0.50% of AUM*

Account Types

3/5
3/5

Investment Products

3/5
2/5

Customer Service

4/5
4/5

Education

4/5
4/5

Margin

5/5
0.5/5

Mobile App

5/5
4/5

Interface/Usability

5/5
5/5

Checking Account

Yes

No

Fractional Shares

Yes

No

Dynamic Rebalancing

Yes

Yes

Order Control

No

No

Summary Score

4/5

4.2

3/5

2.8

Summary Review

M1 Finance is great for both novice and experienced long-term investors who want full portfolio customization, zero fees, access to cheap margin, the ability to invest in individual stocks, and automatic rebalancing. M1 has "Expert Pies" in which you can invest, but they do not offer professional financial advising.

Wealthsimple is a true robo-advisor and is completely hands-off, just like Betterment but with higher fees. It has extremely limited investment options, annual fees, and no margin. You can invest in the exact same funds with M1 or in M1's expert-built "Expert Pies" for free. If you're looking to pay for professional financial planning and advising, that's where Wealthsimple would win out.

Learn More


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*Wealthsimple’s Basic plan charges 0.50% of your annual invested balance. Their Black and Generation plans have a reduced 0.40% fee of your annual invested balance.

M1 Finance

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

Summary

M1 Finance is great for both novice and experienced long-term investors who want full portfolio customization, zero fees, access to cheap margin, the ability to invest in individual stocks, and automatic rebalancing. M1 has “Expert Pies” in which you can invest, but they do not offer professional financial advising.

4.3

Wealthsimple

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

Summary

Wealthsimple is a true robo-advisor and is completely hands-off, just like Betterment but with higher fees. It has extremely limited investment options, annual fees, and no margin. You can invest in the exact same funds with M1 or in M1’s expert-built “Expert Pies” for free. If you’re looking to pay for professional financial planning and advising, that’s where Wealthsimple would win out.

2.8

*Wealthsimple’s Basic plan charges 0.50% of your annual invested balance. Their Black and Generation plans have a reduced 0.40% fee of your annual invested balance.

Contents

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

M1 Finance vs. Wealthsimple – Commissions and Fees

M1 Finance offers fee-free investing; no account fees and zero commissions, plain and simple. There are obviously miscellaneous one-time fees for things like paper statements, outbound account transfers, inactivity, etc.

Wealthsimple carries a 0.50% annual fee for their Basic plan. Upon reaching an invested balance of $100k, you qualify for their mid-level “Black” plan that has a reduced 0.40% annual fee and a financial planning session. Once you reach a $500k invested balance, their premium “Generation” plan includes dedicated advisors, in-depth financial planning, and a personalized portfolio made just for you.

These annual fees from Wealthsimple are based on a percentage of your invested balance, also known as assets under management (AUM). These fees may look extremely low at first glance, but let’s examine how they affect a portfolio’s value over time:

wealthsimple vs m1 finance fees
Source: dinkytown.net

Using a starting balance of $100,000, $1,000 contributed monthly over 30 years, and an annualized rate of return of 8%, Wealthsimple’s reduced 0.40% fee costs you $208,615 in fees.

Notice how the value differences become more pronounced near the end of the investing horizon when the account value is larger. Such is the power of compound interest, in this case unfortunately working against you.

So obviously M1 wins out on fees. But what if you still want to pay for expert investing? Luckily, you can still access experts via M1’s “Expert Pies” for free. More on that later.

M1 Finance vs. Wealthsimple – Account Types

In the United States, M1 Finance and Wealthsimple offer all the same account types:

  • Taxable
  • Joint
  • Traditional IRA
  • Roth IRA
  • Rollover IRA
  • SEP IRA
  • Trust

They currently do not offer:

  • SIMPLE IRA
  • Solo 401(k)
  • 529
  • Custodial
  • HSA
  • Non-Profit

Wealthsimple offers a broader range of accounts in Canada since they are based in Canada.

It’s important to note too that Wealthsimple does not offer any type of self-directed investment account; you cannot select your own funds.

M1 Finance vs. Wealthsimple – Investment Products

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

Wealthsimple only offers a small handful of low-cost broad index ETF’s that are assembled in their pre-built portfolios based on the investor’s risk tolerance, much like Betterment and Acorns. As with most robo-advisors, these pre-built portfolios seem to be based on modern portfolio theory.

You can easily access all these on your own with M1 Finance using low-cost Vanguard funds. You can also use M1’s “Expert Pies” for free. M1’s Expert Pies include target date funds with different risk tolerances, sustainable investing (ESG) portfolios, dividend-focused pies, and more. Wealthsimple include themed portfolios such as socially responsible investing and Halal investing.

As an aside, I question Wealthsimple’s comparatively large allocation to municipal bonds in its low-risk portfolios; it just seems odd when they could use treasury bonds instead.

Wealthsimple does not offer sector ETF’s or individual stocks. Also note that Wealthsimple does not allow self-directed investment; you cannot select your own funds.

At this time, neither platform offers mutual funds, options, futures, forex, or cryptocurrency. They are not built for day trading.

M1 Finance vs. Wealthsimple – Margin

Wealthsimple does not offer margin loans. Margin is simply a collateralized loan on your invested securities to provide enhanced exposure for investing.

M1 Finance offers extremely cheap margin rates:

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

M1 Plus is a $125/year premium membership that gets you access to a 1.5% lower margin rate as shown, and a second trading window.

The margin loan from M1 Finance can be used for whatever you want – refinancing higher-interest debt, major purchases, unexpected expenses, etc.; it’s just a low-interest collateralized loan.

Since Wealthsimple offers neither margin nor leveraged ETF products, it’s not possible to apply leverage to your Wealthsimple investments.

M1 Finance vs. Wealthsimple – Mobile App

M1 Finance has a sleek, modern, intuitive, robust mobile app for both Apple iOS and Android. Wealthsimple has a good app too, but Android users specifically seem to complain of problems with the app.

Here are some screenshots of the M1 app:

m1 finance mobile app

Here are some screenshots of the Wealthsimple app:

wealthsimple mobile app screenshots

M1 Finance vs. Wealthsimple – Interface/Usability

Similarly, both M1 Finance and Wealthsimple have intuitive, easy-to-use desktop interfaces.

Here’s M1 with its pie-based visualization:

m1 custom pies
m1 finance research filters screenshot

And here’s Wealthsimple:

wealthsimple interface

M1 Finance vs. Wealthsimple – Extra Features

M1 Finance offers an FDIC-insured checking account, making it a suite of financial tools instead of just an investing platform. With their premium M1 Plus option, you can earn interest and cash back on M1’s checking account. Wealthsimple has a “savings” account that is still invested in ETF’s and is not FDIC-insured but is SIPC-insured as an investing account.

Neither M1 Finance nor Wealthsimple offer robust charting and analysis tools but both do have educational articles and regular tips via their blogs. M1’s research tools are pretty basic – stock and ETF screeners, technical indicators, etc. Wealthsimple doesn’t allow you to choose your own investments, so they have no research tools.

Both M1 Finance and Wealthsimple offer “dynamic rebalancing,” an automatic rebalancing feature that uses new deposits to keep your portfolio at its target asset allocation.

M1 Finance offers fractional shares, a feature that allows every penny to work for you. This means you can buy a fraction of a single share of a stock or ETF. This is especially important for young investors with a small amount of capital. Wealthsimple does not support fractional shares.

M1 Finance vs. Wealthsimple – Summary and Conclusion

  • M1 Finance and Wealthsimple are both built for passive, long-term, buy-and-hold investing.
  • M1 Finance offers free investing; plain and simple. Wealthsimple carries a 0.50% fee for their Basic plan and a reduced 0.40% fee for their premium plans after you reach a $100k invested balance. While they may not look like much, these fees shave off a massive amount of money from your portfolio over the long-term.
  • M1 and Wealthsimple offer all the same account types at this time in the U.S. Wealthsimple offers a broader range of accounts in Canada, where it’s based.
  • Wealthsimple is available to U.S., Canadian, and U.K. investors. M1 Finance is only available in the U.S.
  • M1 Finance offers most ETF’s and individual stocks. Wealthsimple only offers a small collection of broad index funds inside their pre-built portfolios. Wealthsimple do not offer individual stocks, and do not allow self-directed investing.
  • Wealthsimple does not offer margin. M1 offers some of the lowest margin rates on the market.
  • M1 Finance and Wealthsimple both have sleek, modern, intuitive, robust mobile apps and desktop web interfaces. Android users seem to have some complaints about the Wealthsimple app.
  • M1 Finance has an optional FDIC-insured checking account. Wealthsimple does not.
  • Both M1 and Wealthsimple employ automatic rebalancing.
  • M1 Finance supports fractional shares. Wealthsimple does not.
  • Wealthsimple offers expert financial advice. M1 offers Expert portfolios that you can invest in for free.

M1 Finance offers the aforementioned expert-built, quantitatively-analyzed and optimized “Expert Pies” that you can invest in for free and be completely hands-off. Wealthsimple obviously has the pre-built portfolios ready to go, but M1 allows you to buy the exact same ETF’s commission- and fee-free, thereby avoiding those fees that drag down your portfolio’s returns. You can also simply use M1 to invest in a “lazy portfolio” and have it rebalance automatically.

Moreover, Wealthsimple makes it sound like they’re actively managing your portfolio. They’re not. Recall that they’re simply investing your money in a small handful widely-available low-cost index ETF’s and shifting the allocations based on risk tolerance, which I would argue you can easily do yourself anyway with M1 Finance. You can buy the exact same funds; they mostly use low-cost Vanguard and iShares ETF’s. For the most part, Wealthsimple appears to invest your money upon initial deposit and then doesn’t do much after that aside from gradually adjusting your asset allocation, so I don’t understand the need for the hefty ongoing annual fees.

Consequently, I don’t see a good reason to choose Wealthsimple over M1 Finance in the U.S., unless for some reason you absolutely believe you can’t complete the steps of setting up and investing in a portfolio on M1, or if you specifically need and want to pay for professional financial planning advice within the platform. If you’re purely looking for an investing platform, I would suggest that the marginally greater effort of investing with M1 Finance is more than worth the savings on fees over the long-term.

Obviously, if you’re in Canada or the U.K., you’d have to go with Wealthsimple over M1.

I wrote a separate comprehensive review of M1 Finance here if you’re interested in seeing the nuances of the platform.

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
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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.

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