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M1 Finance or Robinhood - Which is Better for You?

M1 Finance vs Robinhood Comparison

I’ve used both of these brokers for many years now and while they’re both pretty good generally most folks will be suited better for one of the two brokers.

Personally M1 Finance is better suited for me, and they’re the ones I’d say are better for most people — however some people are suited better for Robinhood, particularly if you want to do basic options trading like selling covered calls against your stock.

However if you are someone who wants to do options trading, due to many events in Robinhood’s past where they’ve shut down the ability to trade options on certain stocks, or even trade shares of certain stocks, we’d say if you are a trader, especially options trader, even occasionally, you’re better off going with ‘a real broker’ like Tastyworks or Charles Schwab, as they don’t do such nonsense and they also have dedicated support that is available at a moments notice if you’re having problems trading on the platform for whatever reason.

Which Platform has Lower Fees?

This may sound like a ridiculous question, but it’s not — contrary to what most people believe Robinhood and M1 Finance DOES have some fees. While their transfer-fees are relatively similar and nothing to really make a fuss about, what is an issue is their margin fees.

If you take out margin loans then Robinhood offers between a 2.5% and 5% margin rate, which is quite good, and M1 Finance offers as low as a 0% margin rate, however for most people you’d expect a margin rate between 2% and 3.5% which makes it generally slightly cheaper than Robinhood’s margin rate — however there’s a caveat with M1 Finance’s margin: With M1 Finance’s Margin you can only lever up 33% of your account value, while Robinhood allows up to 50% of your account value.

Which Platform has Better Tools & Functionality?

This is of course entirely dependent on what you’re looking for — both platforms are extremely user-friendly and simple to use, however they’ve tailored their design and features specifically to different types of investors: Namely M1 Finance targeting more long-term & dividend-investors, while Robinhood targets a more broad basket of people new to financial markets for their platform.

Ultimately the deciding factor here is not which has the best research platform (m1 finance), as you can get that service from a research-specific platform like seekingalpha — instead what really makes the difference here is how M1 Finance has designed their trading system. You either love it or you hate it — and that’s the real deciding factor between these two brokerages.

Allow me to explain: With Robinhood it’s just like any other platform, you submit a buy or sell order and BAM — it gets executed/filled if the price is right. Little to no delay, and you can do it anytime during normal trading hours. With M1 Finance it’s not like that — instead they force all trades into 2 periods during the day, and generally how it’s intended to be used is that you have a portfolio set-up and rather than buying more of an individual company when you deposit more cash (or receive a dividend) you’ll just purchase more of your ENTIRE portfolio — you’ll get 0.03 shares of dozens of stocks for example that you’re ‘underweight’ in relative to the targets you set when you initially buy into them.

You can also set limit orders like normal, but those trades will only be executed during that trading window as well. It’s a unique thing how M1 Finance handles trading/investing, but it’s fantastic for certain types of people. If you aren’t a full-time trader or degenerate gambler (I was once as well), but rather have a full-time job and just want to set things and forget them, then M1 Finance is literally the best brokerage for that. But it’s horrible if you’re a trader or degenerate gambler.

Which Platform has Better Customer Service?

I won’t bury the lead here whatsoever — Robinhood’s customer service is just downright vile, it’s the worst I’ve ever experienced with a brokerage and in my opinion you should more or less assume you have no customer service when using Robinhood, as that’s not far off the truth. I’ve waited WEEKS for responses to simple needs at times, and days for even relatively urgent matters pertaining to options trades with them. Downright unacceptable.

M1 Finance’s customer service is much better — to be specific we’ve had quicker responses from them that are more concise, and quite frankly they’re way easier to get in contact with — not only do they have a FAQ and chat feature, but you can also email them or call them. In our experience you can get a near-instant reply/help by calling and usually within a few hours to a day or two if you email them.

Which Platform has Better Sign-up Bonuses?

While both Robinhood and M1 Finance offer sign-up bonus programs currently we can only provide you a link to one of them — don’t worry though, we’ll tell you how to get the other ones sign-up bonus if you do want it. This is because we have chosen to not work with Robinhood any longer, as we don’t agree with their business-practices overall, so we just decided to not work with them directly anymore.

With that being said, Robinhood offers a share of free stock as their sign-up bonus most of the time, usually it’s worth about $10 however it can theoretically go higher, after opening an account with a small sum of funds — as we don’t work with Robinhood anymore for reasons mentioned above if you want this sign-up bonus you’ll have to either ask friends with a Robinhood account or you can click here to go to a reddit search that will display many Stash-users affiliate links which you could use to help them out, and get a bonus yourself.

As for M1 Finance, they offer a $30 sign-up bonus for all new users, and sometimes offer a sign-up bonus up to $2500 depending on your initial deposit into your account with them — you can read all about M1 Finance’s current signup bonuses on this page of our website, or you can blindly sign-up through this link and just get their $30 basic sign-up bonus offer.

Which Platform is Better for You?

If you’re still undecided between the two we’ll try to help you decide below — ultimately it’s your choice (obviously), however we’ll describe who we think would be better off going with one of these two platforms, as well as who would be better off going with a more ‘premium’ full-service platform.

If you’re a long-term dividend-growth type of investor, or a full-time business owner or employee then generally M1 Finance is the best choice — they have great customer service, a decent sign-up bonus, and a uniquely perfect type of trading/order system for such a person.

However if you’re ‘youngling who’s just getting into investing and just want to do some commission-free trading and degenerative speculating, then Robinhood’s arguably the best choice for that — just know in due time, after a year or two, you’ll probably want to move to a broker more specific to your needs.

Alternatively, if you aren’t either of those, but someone who wants to seriously get into trading, options, futures, or anything like that then both M1 Finance and Robinhood aren’t really a great choice — instead we’d go with Tastyworks.They have little to no fees and much better service/support, which has personally saved me thousands of dollars in trading mishaps related to options/derivatives, and have much better trading and options-friendly UI that makes trading easier.

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