Robo-Advisors – M1 Finance vs Betterment vs Wealthfront

I have been passively investing with Betterment since 2015, but I recently opened another brokerage account and Roth IRA with M1 Finance. I also convinced my wife to open her first Roth IRA with Wealthfront so that I can use and compare all three. I have written comprehensive reviews on all three platforms so I won’t go into every feature offered by these three companies. If you want to skip the reading, scroll down to see the table comparing the three companies.

M1 Finance is a Portfolio-Pie-Chart-based Robo-Advisor that gives you the ability to customize your portfolio pies and setup automated smart transfers between your checking account, portfolio line of credit, individual brokerage accounts, and IRA accounts. You can create several portfolio pies or choose from several expert-made portfolio pies. Between M1 Finance, Betterment, and Wealthfront, M1 Finance may be the riskiest to use since most retail investors don’t know how to properly setup a portfolio. With Betterment and Wealthfront, everything is done automatically. An advantage that M1 Finance offers is Research and Data. You can research different stocks and ETF’s with M1 Finance and add them to your Watchlist. Betterment and Wealthfront don’t offer these features.

Betterment and Wealthfront are very similar to each other. They are both Robo-Advisors offering Goal Investing Accounts, Checking Accounts, 401k’s, and IRA’s. They charge the same 0.25% fee and offer the same referral bonuses. They also allow you to link your external accounts (banking, investing, and debt) so that you can see everything from their apps. M1 Finance does not offer external account management. Here are some ways that Betterment and Wealthfront differ from each other. Betterment’s checking account is a 0% APY, cash-back based account offering 2%, 3%, and 5% cash-back depending on the merchant. Wealthfront’s checking account offers 0.35% APY, but no cash back. Betterment has a 0.40% APY Cash Reserve account, which behaves similar to a savings account. Wealthfront does not offer such an account. Betterment offers a Health Savings Account through a partner bank, Optum Bank while Wealthfront offers a 529 College Savings Plan. Below my blog post reference and referral links, you will find a table comparing the three brokerages.

• To read my full review on M1 Finance, click here. If you decide to sign up with M1 Finance after reading this post, use my referral link https://financethrottle.com/M1Finance for a Limited Time Offer to get $30 when you deposit $100 within 30 days.
• To read my full review on Betterment, click here. If you decide to sign up with Betterment, get $5000 managed free for a year using my referral link https://financethrottle.com/go/Betterment
• To read my full review on Wealthfront, click here. If you want to try out Wealthfront, get $5000 managed free for a year (just like Betterment) using my wife’s referral link. https://financethrottle.com/Wealthfront

Conclusion

All three of these companies are robo-advisor’s. When it comes to advising, M1 loses. Aside from the expert made portfolio pies, you are mostly on your own. Betterment and Wealthfront both offer expert advice where you can speak to a real person. When it comes to customer service, M1 loses again. Browsing through the site and the app, I couldn’t find a phone number. When I emailed customer support, it took nearly 24 hours to get a response. With Betterment and Wealthfront, you can easily call someone without being put on hold for long periods of time. When it comes to customizability and automated transfers, M1 Finance is best. M1 Finance is also cheaper since you can use it for free or pay for the M1 Plus membership at $125/yr, which in most cases, is cheaper than Betterment and Wealthfront’s 0.25% annual fee.

Overall, Betterment and Wealthfront are the better “Robo-Advisors”. They offer more services catered to helping you grow your wealth. I would describe M1 Finance as more of a Robo-Investor instead of a Robo-Advisor. If I had to choose a winner, I would choose Betterment. Wealthfront and M1 Finance both offer a Portfolio Line of Credit, or PLOC. It does not make sense that a company whose main purpose is to help you earn more money would offer a PLOC. While Wealthfront offers a 529 College Savings Account, Betterment offers the better HSA, or Health Savings Account. You can get a 529 account from any U.S. State. In comparison, an HSA is hard to come by. Not many companies offer HSA’s and the HSA has better tax and retirement related benefits. Finally, Betterment is the only one of these three that offers an account similar to a savings account. Their 0.40% APY Cash Reserve account can be used to put your savings in buckets and set different targets for those buckets. Whatever you choose, you can’t go wrong. It is smart to focus on long term investing while maximizing your retirement accounts to set yourself up in the future.

Affiliate Link Notice: This post contains affiliate links, which means I may earn a small commission at no additional cost to you if you decide to purchase or sign up for a product through my referral links. While you can sign up through any other means, it would help support the blog if you sign up through my links. Thanks.