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 we prefer one more 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), this is because they have better customer service in our opinion and better platform features.

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. Not to mention on M1 Finance you can buy into vanguard funds for the same price you could on vanguard’s platform — this removes any reason to use Vanguard in our opinion, at least if you aren’t already with Vanguard and happy with the platform.

Which Platform has Lower Fees?

With 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 — such fees range anywhere from 0.04% to 0.65% annually.

Meanwhile M1 Finance has no trading fees or account management fees period — This is 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.

Which Platform has Better Tools & Functionality?

M1 Finance wins this category hands-down — This is because in terms of functionality 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.

Tools-wise they’re both alright, however neither one’s research platform really stands out — instead if you’re trying to research stocks we’d say it’s better to use a dedicated research platform like seekingalpha — at least that’s what we do.

Which Platform has Better Customer Service?

In our experience M1 Finance’s customer service is a bit better — to be specific we’ve had quicker responses from them that are more concise than Vanguard’s answers, 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 if you email them.

This isn’t to say Vanguard has bad customer service, it’s very responsive and they know their platform and can help you — our problem with it is the support is by phone only, which is annoying if you are traveling abroad outside the USA or just prefer email/chat as I do — their support is also, I don’t know how to say it differently, boomer-oriented and corporate-feeling in our experience. Regardless, as we said, they can help if you have an issue with the platform, and if you contact them your call will be picked up quickly and generally whatever problem solved nearly immediately.

Which Platform has The Better Sign-Up Bonus Offers?

Currently Vanguard doesn’t offer a sign-up bonus as far as we know — This is because they’re an old-time brokerage that never has dabbled in rewarding users for referring new clients to them, as back in the day things were usually word-of-mouth and they didn’t need to pay people to refer others to them. So if you decide to go with vanguard what you get is what you get — there’s no free money in it for you just trying their platform out.

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.

Is M1 Finance or Vanguard Better for Your Roth IRA?

M1 Finance’s Roth IRA accounts are better than Vanguard’s currently as they offer all the same product-features with less fees, no account minimums, and more flexibility in what you invest in, as Vanguard restricts your options to their products, while M1 Finance allows you to invest in Vanguard’s products, their own M1-finance branded products, and others such as iShares products/etfs/funds.

While Vanguard’s Roth IRA isn’t bad compared to other Roth IRA’s out there they just don’t really compare to M1 Finance’s in our opinion — but it’s not a very fair comparison as in our opinion M1 Finance offers the best commission-free IRA currently.

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. This is due to M1 Finance accounts being able to invest in the same products a Vanguard account can, but with less fees and other investing-options.

If you want to sign up for M1 Finance you can do so by clicking here. If you use that link you should receive the listed sign-up bonus on that page — it should be about $30 currently 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.