Is M1 Finance or Vanguard Better for the Long-term?

Vanguard vs M1 Finance Compare

Both M1 Finance and Vanguard offer traditional as well as retirement accounts (Including Roth IRA’s) and while they’re both good platforms one is definitely better than the other.

The better one in my opinion is M1 Finance, as someone who’s used both platforms and now only uses one of them (M1 Finance).

We’ll go into detail as to why this is the case, but essentially M1 Finance has essentially all the functionality of Vanguard, but without all the restrictions and fees that Vanguard has. You can just sign up for M1 Finance and buy Vanguard funds, or mirror them, which really eliminates any reason to use Vanguard over M1 Finance.

Which Platform has Lower Fees?

This is hands down M1 Finance, as Vanguard not only has trading fees ranging from $2 or so per trade up to $20 per trade, but also forces you to use their ETF’s, which means you’ll be stuck paying a management fee on top of the trading fees Vanguard makes you pay them.

Meanwhile M1 Finance has no trading fees period, regardless of if you’re trading their “expert funds” or if you’re trading individual stocks, or an ETF you made yourself using the tools M1 Finance provides you for free. The only fees you’ll pay is if you decide to use branded ETF’s, such as iShares or Vanguard ETF’s. You can get around those fees by mirroring most of them and simply duplicating them yourself if you want though.

This is the main reason I prefer M1 Finance to Vanguard. But there are a few other reasons.

Which Platform has more flexibility?

This is also hands down M1 Finance, as Vanguard restricts you to using only their funds and restricts your ability to invest in certain investment products (ETF’s & Stocks). While M1 Finance limits you to some degree, as in not allowing no-name penny stocks nobody else on the platform wants to buy (due to how their partial-shares purchasing/selling works), they have far fewer limitations and restrictions compared to Vanguard.

Is There Any Reason to use Vanguard over M1 Finance?

While I’ve been negative and beating down on Vanguard in this article, I have to say, there are reasons to use Vanguard over M1 Finance in certain cases. If you want to have special accounts like a 529 college savings plan, or a 401k plan, or want annuities, then M1 Finance doesn’t offer those products — yet at least, so Vanguard would be your next best bet.

However, if you want a traditional taxable investment account, a Roth IRA, or a traditional IRA, I don’t see a single benefit in using Vanguard over M1 Finance in such cases.

If you want to sign up for M1 Finance you can do so by clicking here. If you use that link you should receive between $10 and $25 or so after making your first investment of $100 or more, which is a bonus M1 Finance offers to readers of Greenery Financial.

Vanguard however doesn’t offer a bonus for signing up, and I’ve never seen one, but if you want to signup for them I’ll leave a quick link to Vanguard here for you to do so.