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Betterment and M1 Finance digital investment advisors have more differences than similarities, which may simplify the decision of which investing platform is best for you. Betterment won the Best for Beginners and Best for Cash Management categories in our overall 2022 review. M1 Finance won the Best for Low Costs and Best for Sophisticated Investors categories.

Betterment is one of the oldest robo-advisors and follows the index fund investment approach with rebalancing and tax-loss harvesting. Betterment Premium adds unlimited financial planner meetings. M1 Finance, in contrast, assumes a degree of investor knowledge and provides dozens of prebuilt investment portfolios along with individual stocks and ETFs.

  • Account Minimum: $0, $10 minimum to start investing
  • Fees: 0.25% (annual) for investing plan accounts with at least $20,000 or at least $250 per month in recurring account deposits. Otherwise, the fee is $4/month. An additional 0.15% (annual) fee on accounts with at least $100,000 in assets provides account holders with unlimited access to certified financial planners. This additional fee is applied to assets in the investment and cryptocurrency accounts, but not cash accounts. For accounts with at least $2 million, there is a fee discount of 0.10%. Crypto accounts are charged a monthly fee of 1% plus trading expenses.
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  • Provides excellent goal-setting and tracking, plus integration with outside investment accounts
  • May be ideal for clients seeking digital investment management and financial planning guidance 
  • Three sustainable ESG portfolio options, a smart-beta portfolio, and an income portfolio provide strategies for different types of customers 
  • No account minimum ($10 to start investing)
  • Tax-loss harvesting available for all customers

Pros & Cons

  • Easy to start using, with basic questionnaire

  • Invest with as little as $10

  • Low-cost planning packages

  • Plan and track different goals

  • Great for beginning investors

  • Tax-loss harvesting available

  • No borrowing options

  • Must create account before viewing your portfolio

  • No REIT exposure

  • No custodial account option

  • Prebuilt portfolios only

  • No weekend customer service

  • Account Minimum: $100 ($500 minimum for retirement accounts)
  • Fee: 0%
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  • 60+ prebuilt portfolios offer a range of strategies for investors with various goals including retirement, income, and hedge-fund investing 
  • Cash accounts and lending are available
  • Higher yields and lower borrowing rates for M1 Plus clients
  • Screeners enable targeted stock and ETF selection
  • No tax-loss harvesting or financial advisor access make M1 better for knowledgeable investors

Pros & Cons

  • Quick startup, with no questionnaire

  • Dozens of prebuilt portfolios

  • Add your own choices from 6000+ stocks and ETFs

  • Borrowing available

  • No fee for basic account

  • Automated and manual rebalancing

  • Assumes investing knowledge

  • $100/$500 minimum required for brokerage account/IRA

  • No financial advisor option

  • No external account syncing

  • No specific goal planning tool

  • No tax-loss harvesting feature

Betterment Vs. M1 Finance: Account Setup

Overall, the account setup is painless with either Betterment or M1 Finance. Before funding an account, you can peek at the services to determine which digital investment advisor is best for you.


Betterment, judged Best Robo-Advisor for Beginners, is a breeze to launch. Simply create a login and password, then add personal details like address and Social Security number. Next, complete the brief initial questionnaire which considers goals, time frame, and risk level. Based upon the questionnaire responses, you’ll receive a personalized investment portfolio, comprised of U.S. and international stock and bond ETFs. You must create an account before you can view your portfolio.

Users can modify the recommended portfolio by adjusting the recommended asset allocations. They can opt for a fixed income, smart beta, or ESG sustainable portfolio.

With $10 to start, small investors can begin investing immediately. The opportunity to view investment choices before funding is an advantage, although you need to create an account first. Clients can purchase low-cost financial planning packages for personal advice.

Those with $100,000 or more can choose Betterment Premium, which includes unlimited access to certified financial planners (CFP). Weekday phone representatives can also assist with basic questions.

M1 Finance

M1 Finance, the winner of our Best for Sophisticated Investors designation, has a quicker setup than Betterment because there’s no initial questionnaire. Create a username and password to begin the onboarding process.

M1 Finance assumes that you understand the type of portfolio you’re seeking. So the crafting of a portfolio is in your hands. You’ll have the opportunity to choose from thousands of stocks and ETFs along with more than 60 prebuilt and customized portfolio options. Portfolios are called “Pies” and can include up to 100 slices of individual stocks, ETFs, and customized portfolios.

Potential M1 Finance clients can explore the platform without funding an account. You need $100 to open a brokerage, custodial, or trust account, and $500 for individual retirement accounts (IRAs). M1 Finance doesn’t offer financial advisors.

Betterment Vs. M1 Finance: Goal Planning

When it comes to goal planning, there’s no comparison between Betterment and M1 Finance. Goal planning is Betterment’s forté, while M1 Finance leaves this aspect of investing to the user.


Betterment is a top firm in the digital investment management space, offering flexible goal-planning features. Clients can set multiple goals and choose separate asset allocations for each goal type and timeframe. For example, your retirement will usually have a longer time horizon and more aggressive asset allocation than your home down payment or upcoming vacation goals.

Moreover, the Goal Forecaster tool helps you calculate approximately when you’ll achieve the goal and guides you to adjust the portfolio to increase your likelihood of success.

Betterment users can also link outside accounts and receive a 360-degree view of all their assets.

M1 Finance

M1 Finance assumes that you can handle goal planning on your own. Their nod to goal planning is included in the wide variety of articles on the M1 Finance blog which spans a range of financial education investing topics. Beyond that, M1 Finance lacks any specific goal-planning features.

Betterment Vs. M1 Finance: Account Services

Both Betterment and M1 Finance offer typical auto deposits and free withdrawals, as well as cash management services. Both platforms also offer a premium level with added services for an additional fee, although the services are distinct.

M1 Borrow is the loan option available at M1 Finance. Betterment does not provide margin or other lending features.

Betterment Premium customers with $100,000+ in assets have unlimited access to CFPs for a 0.40% AUM fee. This management fee is lower than the average 1.0% fee charged by traditional financial advisors.

The M1 Plus premium service costs $125 per year and includes additional benefits. For example, Plus users can access an additional daily trading window, higher cash account interest payments, and added fee-free ATM withdrawals for M1 Spend customers. M1 Plus customers also have access to lower-margin interest rates. 

Betterment Vs. M1 Finance: Cash Management


Betterment offers two cash accounts. This stands out among digital investment managers that typically offer only one cash management option. The Cash Reserve cash account and checking accounts are available separately from the Betterment investment accounts. The checking account includes an ATM and Visa cash-back debit card, while the high-yield Cash Reserve account provides higher-than-average interest rates. Users also can set up automatic funds transfers for specific goals and direct deposits.

M1 Finance

M1 Spend is M1 Finance’s cash management option with a debit card. M1 Plus users receive interest on this account. The Owners Reward card is available to all users and provides up to 10% cash back for spending with companies whose stock they own. M1 Plus users can also implement a rules-based strategy to allocate extra cash toward spending or investing.

Which platform you prefer depends upon the account services you’re seeking. If you want access to margin and a credit card, then M1 Finance makes sense. If you’re seeking a complete cash management option and checking integrated with your investment account, then Betterment is the better option.

Cash Reserve is only available to clients of Betterment LLC, which is not a bank, and cash transfers to program banks are conducted through clients’ brokerage accounts at Betterment Securities. For Cash Reserve (“CR”), Betterment LLC only receives compensation from our program banks. Betterment LLC and Betterment Securities do not charge fees on your CR balance.

Checking accounts and the Betterment Visa Debit Card provided and issued by nbkc bank, Member FDIC. Checking is made available through Betterment Financial LLC. Neither Betterment Financial LLC, nor any of its affiliates, is a bank. Betterment Financial LLC reimburses ATM fees and the Visa® 1% foreign transaction fee worldwide, everywhere Visa is accepted.

Betterment Vs. M1 Finance: Portfolio Construction


Betterment's portfolios include Core, ESG socially responsible, Smart Beta, and Income Portfolios. The Core portfolio provides typical market-cap weight diversified U.S. and international stock and bond ETFs. It includes value and small-cap equity funds which outperform the broad stock market index during long time periods, according to factor research. Betterment also includes an international bond ETF in its fixed-income holdings.

Betterment investors looking for alternate investment style options might consider the Goldman Sachs Smart Beta, BlackRock Target Income, or three ESG portfolios. In addition, similar to full-service investment platforms, Betterment Cash accounts offer the opportunity to save for emergencies and short-term goals.

The only customer customization allowed is the adjustment of specific asset class weightings.

M1 Finance

Although we consider M1 Finance a member of the digital investment advisory space, it also has features common to self-directed brokerage accounts. Investors can choose from over 60 different prebuilt Expert Pies with multiple investment strategies including robo-like general investing, hedge fund-like styles, socially responsible investing, income portfolios, and more.

M1 Finance users also can choose from over 6,000 stocks and ETFs to invest in, for a Custom Pie or to add to an Expert Pie. The screening tool helps investors find securities that meet specific criteria. M1 Finance will rebalance your Pie to keep the allocation percentages consistent as funds are added or withdrawn.

Account Types

Betterment Account Types:

M1 Finance Account Types:

  • Individual taxable
  • Joint taxable 
  • Traditional IRA 
  • Roth IRA
  • 401(k) rollover IRA
  • SEP IRA 
  • Custodial (available to M1 Plus users)
  • Trust
  • High-interest checking (higher yields for M1 Plus users)

Both Betterment and M1 Finance offer common account types that can satisfy most investors. That said, if you’re a parent seeking a custodial account, then M1 Finance is the only option. M1 Finance also offers an IRA concierge for onboarding help. Retirement investors with less than $500 to invest may prefer Betterment, however, as it requires just $10 to start investing.

Assets Available
  Betterment M1 Finance 
Individual Stocks No Yes
Fixed Income  ETFs ETFs
REITs  No Yes
Socially Responsible or ESG Options  Yes Yes 
ETFs  Yes  Yes 
Non-Proprietary ETFs  Yes  Yes 
Mutual Funds No No
Forex  No  No 
Crypto  Yes  No 

Betterment Vs. M1 Finance: Portfolio Customization


Betterment users can adjust their asset allocations if they don’t agree with the allocations they're offered. That said, Betterment doesn’t offer the ability to add additional ETFs or other assets to their existing options, as M1 Finance does. It’s also worth noting that Betterment doesn’t offer access to REIT ETFs.

M1 Finance

M1 Finance is one of the most customizable robo-advisors that we reviewed. In addition to accessing the 60+ customized prebuilt portfolios, users can modify their Pies by adding individual stocks and ETFs. You choose the percentages for each investment in accordance with your personal risk tolerance and goals. This does, of course, require investment knowledge to ensure that your choices aren’t overly conservative or aggressive.

Overall, M1 Finance provides much more in terms of portfolio customization.

Betterment Vs. M1 Finance: Portfolio Management


At Betterment, rebalancing occurs automatically when assets deviate above or below the desired asset allocation percentage. You can also link outside financial accounts to view and analyze your investments holistically. Betterment will offer suggestions based on all linked accounts, but the portfolio asset allocation is crafted without considering the outside assets.

M1 Finance

After setting up your asset allocation at M1 Finance, the platform will rebalance your Pie when funds are deposited or withdrawn. You can also initiate a rebalance manually. In addition, M1 Basic supports one trading window in the morning. M1 Plus members with over $25,000 can place trades during a morning and an afternoon trading window.

While both M1 Finance and Betterment offer automated rebalancing, Betterment’s is initiated on rules-based movements while M1 Finance only rebalances when funds are added or removed from the portfolio (unless you conduct a manual rebalancing).

Betterment Vs. M1 Finance: Tax-Advantaged Investing

Both Betterment and M1 Finance offer tax-advantaged retirement accounts, but the support for taxable accounts is different.


Betterment offers tax-loss harvesting in taxable accounts. This strategy offsets capital gains with losses to minimize tax payments. Betterment’s tax-loss harvesting methodology is comprehensive and seeks to maximize tax savings by constantly monitoring for tax-saving opportunities. It also uses client withdrawals and deposits to trigger loss-harvesting.

Essentially, tax harvesting occurs in two ways in a Betterment account. One way is based on dividend reinvestments and regular rebalancing activities. The other is driven by an investor's actions. This means a withdrawal will be used to exclusively sell off any losses, and the subsequent rebalancing will position the portfolio through substitutions to further lessen the tax burden.

M1 Finance

M1 Finance doesn’t have a tax-loss harvesting feature but does strive to minimize taxes when withdrawals are made. The platform does this by prioritizing sales in order of the lowest tax burden to the highest and selling in that order. This is similar to Betterment’s user-triggered tax-loss harvesting, but not backed up by seeking ongoing tax-loss harvesting opportunities.

While Betterment has a clear edge in tax-advantaged investing thanks to its comprehensive tax-loss harvesting methodology, it is not a licensed tax advisor. Learn more about Betterment's Tax Loss Harvesting+ (TLH+) and whether it's suitable for you.

Betterment Vs. M1 Finance: Key Portfolio Management Features

  Betterment M1 Finance
Automatic Rebalancing When allocation deviates from target When funds are added to or withdrawn from the account or at user's discretion
Reporting Features  Monthly and tax statements available; goal progress viewable online  Monthly and tax statements available 
Tax-Loss Harvesting  Yes No
External Account Syncing/Consolidation Yes, automatically updated after synching; not included in asset allocation, only for analysis No 

Betterment Vs. M1 Finance: Security

When it comes to security, Betterment and M1 Finance are evenly matched. Both enable top-level financial institution-grade security protocols. They provide two-factor authentication, Securities Investor Protection Corporation (SIPC) insurance for securities, and Federal Deposit Insurance Corporation (FDIC) insurance for cash accounts.

It is important to note that insurance and security features protect against company failure and infiltration attempts. They do not protect against market volatility which can result in lower account values.

Betterment Vs. M1 Finance: User Experience


Betterment and M1 Finance offer user-friendly websites and easy access to most platform screens. You can typically find what you’re seeking within a click or two from the home page. Betterment clients also can monitor and adjust planning goals from the dashboard.

Mobile App 

Betterment and M1 Finance mobile apps provide functionality nearly identical to their respective websites. In general, users report favorable experiences on each, with the occasional technical problem such as difficulty linking accounts. Each of these well-regarded platforms enables users to do nearly anything on mobile that they can accomplish on the desktop version.

Betterment Vs. M1 Finance: Customer Service

Access to customer service is nearly identical at Betterment and M1 Finance. The exception is the later weekday phone hours at Betterment. This additional phone consultation time from 4–6 p.m. makes it easier for customers to contact the firm after work.

  Betterment M1 Finance 
Phone contact available  M-F, 9 a.m.–6 p.m. ET  M-F, 9 a.m.–4 p.m. ET
Pre-funding phone consultation with certified advisor  No  No
Online chat available  Chatbot  Chatbot 
Website FAQ section  High-quality help center articles  High-quality help center articles

Betterment Vs. M1 Finance: Fees


Betterment charges a flat 0.25% AUM for all Investing plan clients or $4 per month for accounts under $20,000. Premium users with more than $100,000 will pay 0.40%. This covers unlimited financial advisor access.

Investing plan customers can purchase financial planning packages to discuss goals like retirement, college planning, and a portfolio check-up. Fees for these packages range from $299 to $399.

M1 Finance

M1 Finance Basic is free. You get all of the features with no management fee or trading fees. M1 Plus costs $125 per year and offers upgraded trading, lower borrowing rates, and higher cash account interest rates.

Those looking for a fee-free investment platform might start with M1 Basic. Even the M1 Plus account is reasonably priced. That being said, investors may feel that the 0.25% management fee at Betterment is affordable and worth paying if they seek tax-loss harvesting.

Category Betterment Fee M1 Plus Fee 
Management fees for $5,000 account Investing: $48  Basic: $0; M1 Plus: $125
Management fees for $25,000 account  Investing: $62.50  Basic: $0; M1 Plus: $125
Management fees for $100,000 account  Investing: $250; Premium: $400 Basic: $0; M1 Plus: $125 
Termination fees  $0  $100 for outgoing transfers & IRA closures
Expense ratios  Low-cost funds chosen 0.06%–0.20% average
Mutual funds  N/A  N/A 

Final Verdict

M1 Finance and Betterment are well-regarded digital investment managers suitable for different types of investors. Investors seeking quality automated investment management and access to financial planners for reasonable fees will find that Betterment has a lot to offer. It is designed for beginning or hands-off investors who want well-constructed and well-managed portfolios. It has options for ESG, income, and factor-based smart beta investing and offers tax-loss harvesting. Betterment's two cash accounts round out the platform and make it competitive with full-fledged financial institutions. Betterment can benefit any investor who wants an investment portfolio that runs itself.

M1 Finance is for hands-on investors who know what they want. Investors select a prebuilt portfolio that can achieve their investment goals. In addition, they have access to more than 6,000 ETFs and stocks to customize their portfolios. M1 Finance's screener, margin accounts, cash accounts, and lending options make it competitive with some full-service investment brokers. Overall, an M1 Finance account may be ideal for cost-conscious investors seeking a DIY portfolio without the headache of ongoing portfolio maintenance.

Frequently Asked Questions

What Services Do Betterment and M1 Finance Offer?

Betterment and M1 Finance both are known as robo-advisors and provide automated or semi-automated investment tools. Users set investment preferences, and the robo-advisors create personalized investment portfolios. M1 Finance allows for more customization and is less hands-off than Betterment.

How Do Betterment and M1 Finance Work?

Account creation is quick and easy for both Betterment and M1 Finance. After entering personal information, Betterment provides a questionnaire used to formulate a personalized portfolio. M1 Finance requires users to create their own portfolios from a variety of stocks, ETFs, and prebuilt portfolios called pies. Both services provide planning tools, automatic deposits to fund accounts, and more.

Who Should Use Betterment Vs. M1 Finance?

Betterment may be the right choice for investors who desire help with financial planning and a choice of already-constructed portfolios to meet their investment goals. M1 Finance may be better for more experienced investors who can handle their own planning and want more flexibility in choosing their investments.


Our mission at Investopedia is to provide investors with reviews and ratings of robo-advisors that are comprehensive and unbiased. Our team of researchers and expert writers, led by Michael Sacchitello, spent months evaluating all aspects of a robo-advisor’s platform, including the account setup process, goal planning tools, account service options, portfolio construction offerings, portfolio management, mobile and desktop user experience, educational content, fees, and security. As part of this evaluation, we extracted critical data points that are weighted by our quantitative model that produces a powerful star-scoring system.

With the individual investor in mind, we’ve designed a comprehensive ranking methodology to find the best overall robo-advisors and the best robo-advisors across nine key categories. Each advisor is then scored across multiple variables to rate performance in every applicable category. The score for the overall award is a weighted average of the categories.

The above material and content should not be considered to be a recommendation. Investing in digital assets is highly speculative and volatile, and only suitable for investors who are able to bear the risk of potential loss and experience sharp drawdowns. Digital assets are not legal tender and are not backed by the U.S. government. Digital assets are not subject to FDIC insurance or SIPC protections.

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