M1 Finance vs Betterment
Last updated July 2026
M1 Finance
Custom pie-based investing with no advisory fee
Advantages
- No advisory fee on M1 Invest, pay $0/yr on any balance
- Custom Pies let you build fully personalized portfolios with automatic rebalancing
- Fractional shares included
- M1 Borrow: margin at 6.75% on M1 Plus (competitive rates)
- High-yield checking (M1 High-Yield Cash Account paying 5.00% APY as of mid-2026)
Drawbacks
- No tax-loss harvesting (a real gap for taxable accounts)
- Only one trading window per day on the free plan
- M1 Plus is now $3/mo, previously free
- No human advisor access
Betterment
Fully-managed robo-advisor with goal-based investing
Advantages
- 0.25% annual fee on Digital tier
- Automatic tax-loss harvesting on all taxable accounts
- Goal-based investing UX helps allocate money across multiple goals
- Access to CFPs on Premium tier ($100K+ minimum, 0.40%/yr)
- 4.75% APY on Cash Reserve
Drawbacks
- 0.25%/yr fee vs M1's $0
- Limited portfolio customization vs M1's pies
- Premium tier's $100K minimum is a barrier to human advisor access
M1 Finance and Betterment sit in similar orbits but differ fundamentally in philosophy. M1 hands you the wheel with customizable pies and dynamic rebalancing at zero advisory fee. Betterment does the driving for you at 0.25%/yr. Hands-on or hands-off decides the pick.
Feature Comparison
| Feature | M1 Finance | Betterment |
|---|---|---|
| Advisory Fee | $0 | 0.25% Digital; 0.40% Premium |
| Minimum Investment | $100 for taxable, $500 for retirement | $0 to open; $10 to invest |
| Rebalancing | Automatic based on your custom pie targets | Automatic based on target allocations |
| Tax-Loss Harvesting | No | Yes on all taxable accounts |
| Borrowing/Margin | M1 Borrow at 6.75% (M1 Plus) | None |
| Portfolio Customization | High, fully custom pies | Themed portfolios (SRI, Innovative Tech, etc.) |
| Human Advisor | No | Yes on Premium |
| Cash Account APY | 5.00% APY (M1 High-Yield Cash Account) | 4.75% APY on Cash Reserve |
Too Close to Call
Pick M1 if you want full portfolio control at zero fee; pick Betterment if you want automated tax-loss harvesting and goal planning.
The choice is philosophical. M1's $0 fee saves ~$25/yr per $10K invested vs Betterment, but Betterment's tax-loss harvesting typically recovers 0.5-1% in after-tax returns for taxable accounts, often more than the fee. In tax-advantaged accounts (IRAs, Roths), M1 is the clear cost winner. Buyers who want to customize their allocation take M1; buyers who want to hand off the whole decision take Betterment.
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