Comparing M1 Finance and Betterment

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M1 Finance and Betterment are both industry-leading robo-advisors, though that doesn’t mean they’re made even. They both provide very different services and they differ in many very important ways.  Many times, when comparisons are done, they are between two similar services, but these two really couldn’t differ more.

It is fair to say that M1 Finance and Betterment differ so much that they are hard to confuse for the other, but it is important to remember that they are both some of the best robo-advisors that provide a great service. Both of them have their well-deserved place in the finance world, though it is essential to do your research because what may work for you won’t necessarily work for another person.

Let’s take a look at the differences, similarities, and all other aspects of M1 Finance and Betterment.

Betterment

Betterment was started in 2010 and was made to become a place to help people make better decisions with their money. It also meant, that by this standard, people would, in turn, be able to live easier and better. Betterment works hard to make your financial goals valid, real, and realistically successful. Here are some things you can do with Betterment:

  • Build your wealth
  • Invest
  • Make a plan
  • Work towards achieving your goals
  • Achieve your goals

It is ideal for people who are looking for general simplicity above all and offers spectacular transparency to all customers. The premium plan, which is available to everyone, offers people full access to a real financial advisor. If you are someone who is looking for a goal-based approach in their investing journey and portfolios, Betterment is the top option for many, and it is very user-friendly for all people.

The account minimum for Betterment is only $10, however, there are a few associated costs, so this is something to be aware of. Now, let’s take a look at M1 Finance and how it differs from Betterment.

M1 Finance

M1 Finance is a spectacular choice for people who are all about focusing on the big picture of life instead of the boring day-to-day tasks. If automation, personalization, and freedom are the things you’re looking for within your investment journey, M1 Finance is a great option for you. For no fee at all, you can begin to take control of your money moves and become more financially stable. Here are some things you can do with M1 Finance:

M1 Finance differs from Betterment mainly because of the fact that it is much better for self-directed investors who are far more comfortable with managing customized and pre-built portfolios. Money is one of our biggest assets and we treat it with a lot of care, that is why M1 Finance strive to help you make money-conscious choices. You can get a lot from this great and automated investing service.

With M1 Finance, there are no associated trading fees or asset management fees, and you are also able to borrow against the value of your portfolio. The account minimum is only $100 or $500 for retirement accounts. Next, we can take a look at how they differ between retirement planning, types of accounts, and goal setting.

Retirement planning

Though you wouldn’t really think so, Betterment and M1 Finance differ very much when it comes to retirement planning and they both have entirely different outlooks on such topics. When it comes to M1 Finance, they provide little amounts of help along the way, but at the end of the day, you are essentially let to figure it out yourself. Also, for those who are considering this, you are able to invest in a target-date portfolio made up of ETF’s.

However, when it comes to Betterment, for you to be assisted, you will have to connect external accounts to be able to provide an entire outlook of your assets. This makes it far easier to make cash transfers into your investment portfolio. When it comes to goals, you can have a variety of them and invest each one into a different strategy.

This can either make it or break it for most people as it does define a higher risk which may not be something you’re looking for when it comes to your retirement account.

Types of accounts

They do differ sometimes, but the types of accounts they have in their range are all more or less the same. Here are the account types for each one:

Betterment

  • Joint taxable accounts
  • Traditional IRA accounts
  • Trust accounts
  • High-interest cash accounts
  • Individual taxable accounts
  • Roth IRA accounts
  • SEP-IRA accounts
  • Betterment for Business, a 401(k) plan for corporations

M1 Finance

  • SEP-IRA accounts
  • Trust accounts
  • Individual taxable accounts
  • Joint taxable accounts
  • Traditional IRA accounts
  • Roth IRA accounts

Goal setting

When it comes to goal setting, it is easy to say that there is a clear winner, which is Betterment. Betterment is very much user-friendly and steps that are easy to follow. Setting goals becomes incredibly easy and with Betterment, each one is able to be monitored separately.

With M1 Finance, it is a little different. Clients are not able to directly interact with a real human or digital advisor, so the guidance provided is fairly minimal. The tools for setting goals are almost unheard of and money isn’t really used for goal setting, instead, it is used for the overall growth of assets.

Disclaimer: This article contains sponsored marketing content. It is intended for promotional purposes and should not be considered as an endorsement or recommendation by our website. Readers are encouraged to conduct their own research and exercise their own judgment before making any decisions based on the information provided in this article.

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