M1 Finance vs Robinhood 2025: Which Commission-Free Broker Is Right for You?
M1 Finance vs Robinhood 2025: Which Commission-Free Broker Is Right for You?
Choosing between M1 Finance and Robinhood is one of the most common decisions facing new investors in 2025. Both platforms revolutionized the brokerage industry with commission-free trading, but they take fundamentally different approaches to investing. In this comprehensive comparison, we'll break down everything you need to know to make the right choice for your financial goals.
Quick Overview: M1 Finance vs Robinhood
Before diving into the details, here's a high-level look at how these two platforms stack up:
| Feature | M1 Finance Best Choice | Robinhood |
|---|---|---|
| Our Rating | 4.6/5 | 4.3/5 |
| Starting Price | Free (Plus: $125/year) | Free (Gold: $5/month) |
| Commission-Free Trading | ||
| Fractional Shares | ||
| Auto-Rebalancing | ||
| Cryptocurrency Trading | ||
| Options Trading | ||
| Margin Trading | M1 Plus only | Gold only |
| Trading Windows | 1-2 per day | Extended hours |
| Research Tools | Basic | Basic |
| Mobile App | ||
| IRA Accounts | ||
| Try M1 Finance | Try Robinhood |
What is M1 Finance?
M1 Finance is a hybrid robo-advisor and brokerage platform that launched in 2015. It's designed for investors who want to build long-term wealth through automated, hands-off investing. The platform's signature feature is its "Pie" system, which allows you to create customized portfolios or choose from expert-curated templates.
M1 Finance Best For
Passive investors, retirement savers, and anyone who prefers a set-it-and-forget-it approach to building wealth.
Key M1 Finance Features
- Pie-Based Portfolios: Create custom portfolios with up to 100 stocks and ETFs, or choose from 80+ expert-curated templates
- Automatic Rebalancing: Your portfolio automatically stays on target without manual intervention
- Fractional Shares: Invest with any amount, even in expensive stocks
- Smart Transfers: Automatically invest excess cash or set up recurring deposits
- M1 Borrow: Access portfolio lines of credit at competitive rates (M1 Plus members)
- M1 Spend: Integrated checking account with 1% cashback (M1 Plus members)
What is Robinhood?
Robinhood launched in 2013 and quickly became the poster child for commission-free trading. The platform is designed for active traders who want to buy and sell stocks, ETFs, options, and cryptocurrency quickly and easily. Robinhood's clean interface and gamified experience made investing accessible to millions of first-time investors.
Robinhood Best For
Active traders, options enthusiasts, crypto investors, and those who want maximum flexibility and control over their trades.
Key Robinhood Features
- Commission-Free Trading: Trade stocks, ETFs, options, and crypto without fees
- Extended Trading Hours: Access pre-market (7 AM) and after-hours trading (until 8 PM)
- Cryptocurrency: Buy and sell popular cryptocurrencies directly in the app
- Options Trading: Access to options with no contract fees
- Cash Management: Earn interest on uninvested cash with Robinhood Gold
- IPO Access: Get early access to IPOs before they go public
M1 Finance Pros and Cons
Pros
- Automated portfolio rebalancing saves time and keeps your investments on track
- Pie system makes diversification simple and visual
- No account minimums for taxable accounts
- Free dividend reinvestment (DRIP)
- Excellent for retirement accounts with tax optimization features
- M1 Plus offers compelling benefits like lower margin rates
Cons
- Limited to 1-2 trading windows per day (unless you have M1 Plus)
- No options or cryptocurrency trading
- Limited research and analysis tools
- Cannot place limit orders or stop-losses
- Customer service can be slow to respond
Robinhood Pros and Cons
Pros
- True real-time trading with extended hours access
- Cryptocurrency trading built into the platform
- Options trading with no contract fees
- Clean, intuitive mobile app design
- IPO access for eligible customers
- Robinhood Gold provides strong value at $5/month
Cons
- No automated portfolio management or rebalancing
- Limited account types (no joint accounts until recently)
- Gamified design may encourage overtrading
- Past service outages during high-volatility periods
- Limited educational resources compared to traditional brokers
Pricing Comparison
Both M1 Finance and Robinhood offer free base accounts, but their premium tiers differ significantly:
M1 Finance Pricing
-
M1 Basic: Free
- 1 trading window per day
- Basic portfolio features
- Standard customer support
-
M1 Plus: $125/year (or $12.50/month)
- 2 trading windows per day
- Smart Transfers automation
- Lower M1 Borrow rates (starting at 6.25%)
- M1 Spend checking with 1% cashback
- Custodial accounts for minors
Robinhood Pricing
-
Robinhood Basic: Free
- Standard trading features
- Cryptocurrency trading
- Options trading
-
Robinhood Gold: $5/month
- Higher instant deposit limits ($50,000)
- Professional research from Morningstar
- 4.5% APY on uninvested cash (as of 2025)
- Margin trading access
- Level II market data
Pricing Verdict
Robinhood Gold offers better value at $5/month compared to M1 Plus at $125/year, but the features serve different needs. Choose based on your investing style, not just price.
Investment Options
M1 Finance Investment Options
- Stocks (US-listed)
- ETFs
- Fractional shares
- Pre-built expert Pies
- Socially responsible investing Pies
Robinhood Investment Options
- Stocks (US-listed)
- ETFs
- Options contracts
- Cryptocurrency (Bitcoin, Ethereum, Dogecoin, etc.)
- Fractional shares
- ADRs (American Depositary Receipts)
Important Note
If cryptocurrency trading is important to you, Robinhood is the clear choice. M1 Finance does not currently support direct crypto trading within the platform.
Account Types
Both platforms offer similar account types, though M1 Finance has a slight edge for retirement-focused investors:
M1 Finance Account Types
- Individual taxable brokerage
- Joint brokerage accounts
- Traditional IRA
- Roth IRA
- SEP IRA
- Rollover IRA
- Custodial accounts (M1 Plus)
- Trust accounts
Robinhood Account Types
- Individual taxable brokerage
- Traditional IRA
- Roth IRA
- Rollover IRA
- Joint brokerage accounts (added in 2024)
Who Should Choose M1 Finance?
M1 Finance is the better choice if you:
- Want to build long-term wealth with minimal effort
- Prefer automated investing and rebalancing
- Are saving for retirement and want IRA options
- Like the idea of creating diversified "Pie" portfolios
- Don't need to trade in real-time
- Want to avoid the temptation of frequent trading
- Appreciate the all-in-one finance platform (invest, borrow, spend)
Who Should Choose Robinhood?
Robinhood is the better choice if you:
- Want to actively trade stocks and options
- Are interested in cryptocurrency investing
- Need real-time trading and extended hours access
- Prefer having maximum control over your trades
- Want access to IPOs before they hit the market
- Enjoy a gamified, engaging trading experience
- Plan to trade options frequently
Security and Regulation
Both platforms prioritize security and are properly regulated:
M1 Finance Security
- SEC and FINRA registered broker-dealer
- SIPC protection up to $500,000 (including $250,000 cash)
- Bank accounts FDIC insured up to $250,000
- Two-factor authentication available
- 256-bit encryption
Robinhood Security
- SEC and FINRA registered broker-dealer
- SIPC protection up to $500,000 (including $250,000 cash)
- Additional excess insurance for securities and cash
- Two-factor authentication available
- Biometric login options
Customer Support
Neither platform is known for exceptional customer service, which is a trade-off for their low-cost structures:
-
M1 Finance: Email support with varying response times. Phone support available for M1 Plus members. Live chat for basic inquiries.
-
Robinhood: In-app support, phone callback option, and 24/7 chat for Robinhood Gold members. Has improved significantly since 2021.
Mobile App Experience
Both platforms were built mobile-first and offer excellent app experiences:
-
M1 Finance App: Clean, portfolio-focused design. Easy to visualize your Pies and track performance. 4.8 stars on iOS, 4.5 stars on Android.
-
Robinhood App: Sleek, engaging design with real-time data. Quick trade execution. 4.2 stars on iOS, 4.0 stars on Android.
The Verdict: M1 Finance vs Robinhood
The choice between M1 Finance and Robinhood ultimately comes down to your investing philosophy:
Choose M1 Finance if you believe in the power of passive, long-term investing. The platform's automated rebalancing and Pie system make it easy to build diversified portfolios and let compound growth do the work. It's particularly well-suited for retirement savings and hands-off wealth building.
Choose Robinhood if you want active control over your investments and enjoy the process of researching and trading. The platform excels for options traders, crypto enthusiasts, and anyone who wants flexibility and real-time market access.
Our Recommendation
For most long-term investors focused on retirement and wealth building, M1 Finance offers the more sustainable approach. However, there's no rule saying you can't use both - many investors use M1 Finance for their core retirement portfolio and Robinhood for active trading with a smaller allocation.
Frequently Asked Questions
Can I transfer my account from Robinhood to M1 Finance?
Yes, M1 Finance accepts ACATS transfers from other brokerages including Robinhood. The process typically takes 5-7 business days and M1 Finance will reimburse transfer fees up to $200 for accounts over $10,000.
Does M1 Finance offer cryptocurrency?
No, M1 Finance does not currently offer direct cryptocurrency trading. If crypto is important to your investment strategy, Robinhood or a dedicated crypto exchange would be better options.
Is Robinhood safe after the GameStop controversy?
Robinhood is regulated by FINRA and the SEC, and your investments are protected by SIPC insurance up to $500,000. The platform has made improvements to its infrastructure since the 2021 trading restrictions. However, it's always wise to diversify your brokerage relationships.
Which platform is better for beginners?
M1 Finance is generally better for complete beginners because its automated approach helps prevent common mistakes like emotional trading and poor diversification. Robinhood's ease of use can actually be a double-edged sword, making it too easy to overtrade.
Can I have accounts at both M1 Finance and Robinhood?
Absolutely! Many investors use both platforms for different purposes. For example, you might use M1 Finance for your long-term retirement portfolio and Robinhood for shorter-term trading or crypto investments.
This comparison was last updated in January 2025. Pricing, features, and terms may have changed. Always verify current information on each platform's website before making investment decisions.
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Written by
John SmithJohn is a financial analyst and investing educator with over 10 years of experience in the markets.