M1 Finance vs Fidelity: Automated Investing vs Full-Service Brokerage
Quick Comparison
| Feature | M1 Finance | Fidelity |
|---|---|---|
| Commission (Stocks/ETFs) | $0 | $0 |
| Investing Approach | Pie-based automated + self-directed | Full self-directed + robo-advisor option |
| Fractional Shares | Yes (core feature) | Yes (as low as $1) |
| Auto-Rebalancing | Yes — built into every portfolio | Only via Fidelity Go robo-advisor |
| Options Trading | No | Yes |
| Mutual Funds | No | Yes — including zero-fee funds |
| Research Tools | Minimal | Extensive — 20+ research providers |
| Banking | M1 Spend (checking + credit) | Fidelity Cash Management |
| Borrowing | M1 Borrow (margin at low rates) | Margin available |
| IRA Accounts | Yes | Yes |
| Premium Tier | M1 Plus ($95/year — better rates, afternoon trade window) | No premium tier needed |
M1’s Pie System Explained
M1 Finance’s unique feature is the Pie — a visual portfolio builder where you allocate percentages to individual stocks and ETFs. Each deposit is automatically invested according to your target allocations, and M1 dynamically rebalances by directing new money to underweight positions. It’s like building your own custom index fund.
You can build Pies from scratch or use M1’s Expert Pies — pre-built portfolios for different goals (retirement, income, growth). The system eliminates the need to manually buy and rebalance — deposits are invested automatically during the daily trade window.
Where Fidelity Pulls Ahead
Fidelity is a complete brokerage. You get options trading, mutual funds (including FZROX and FZILX at 0.00% expense ratios), bonds, CDs, international stocks, and institutional-grade research. M1 doesn’t offer any of these. If you want options, mutual funds, or detailed research reports, Fidelity is the only choice here.
Fidelity also offers retirement accounts with more flexibility, 529 plans, HSAs, and access to 200+ Investor Centers for in-person help. The breadth of Fidelity’s ecosystem is simply unmatched by M1.
Where M1 Pulls Ahead
M1’s automation is more sophisticated for DIY investors than anything Fidelity offers in its standard brokerage. The auto-rebalancing, dynamic cash allocation, and Pie structure make it genuinely easier to maintain a disciplined, diversified portfolio without manual intervention.
M1 Borrow is also notable — you can borrow against your portfolio at competitive rates (often lower than standard margin rates) with no approval process or fixed repayment schedule. It’s a flexible liquidity tool that Fidelity’s standard margin doesn’t quite match in simplicity.
Key Takeaways
- M1 Finance excels at automated, pie-based investing with built-in rebalancing.
- Fidelity is a full-service brokerage with zero-fee funds, options, research, and more.
- M1 is better for hands-off investors who want custom automation.
- Fidelity is better for anyone who needs options, mutual funds, or comprehensive tools.
- Both offer $0 commissions on stocks and ETFs with fractional share support.
Frequently Asked Questions
Is M1 Finance really free?
The basic M1 account is free — no commissions, no account fees. M1 Plus costs $95/year and adds a second daily trade window, lower borrow rates, and a higher-yield checking account. Most investors can do everything they need with the free tier.
Can I buy individual stocks on M1 Finance?
Yes. You add individual stocks (or ETFs) to your Pie and assign percentage allocations. M1 then buys fractional shares to match your targets. It’s not real-time trading — orders execute during a morning trade window (or afternoon with M1 Plus).
Does M1 Finance have real-time trading?
No. M1 uses a single daily trade window (around 9:30 AM ET) to execute all orders. M1 Plus adds an afternoon window. If you need real-time execution, Fidelity or another traditional broker is better suited.
Which is better for retirement accounts?
Both offer IRAs with no account fees. Fidelity has the edge with zero-expense-ratio funds, more account types (HSA, 529), and comprehensive retirement planning tools. M1 is a good choice if you want automated IRA investing with the Pie system.
Can I transfer from M1 Finance to Fidelity?
Yes. You can initiate an ACAT transfer from M1 to Fidelity. Note that fractional shares will be liquidated during the transfer — only whole shares transfer in-kind. M1 may charge a transfer-out fee.