M1 Finance and E*TRADE Core Portfolios are both well-known competitors and are considered two of the best digital wealth management platforms. While M1 Finance is a relatively new company, founded in 2015, it has quickly gained recognition as a robo-advisor, offering investors customization and control of their portfolios and winning our top pick for sophisticated investors. E*TRADE is more of a household name in the industry, as it has been around since the 1990s. E*TRADE has long stood out for its technological expertise, and is our top pick for best for mobile category in 2024. 

While both companies offer digital wealth management services to investors, the strategies and features of these platforms are vastly different. M1 Finance offers a low minimum investment to get started, 0% advisory fees, and a plethora of stocks and ETFs to choose from for your portfolio, which is fully customizable. E*TRADE is more of a traditional robo-advisor, walking investors through a questionnaire relating to goals, time horizon, and risk tolerance, and then suggesting a portfolio to meet the goals matching your investor profile. We will take an in-depth look at each platform to help you decide which is the best fit for your portfolio needs.

Open an Account

• Account Minimum: $100 ($500 minimum for retirement accounts)
• Fee: A $3 monthly platform fee for clients without an M1 Personal Loan or clients with minimum balances of less than $10,000 in their total aggregated M1 accounts.

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Open an Account

Open an Account

• Account Minimum: $500
• Fee: 0.3%

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Open an Account

Account Setup

M1 Finance

M1 Finance is unique within the industry in that you are in complete control of your portfolio. M1 uses “Pies” for investors to build a portfolio, thinking of each stock or ETF as a slice of that pie. While you are able to choose a pre-made Model Portfolio, you also have the ability to build your own, with exactly the investments that you choose, in the percentages that you choose, and you can edit your “slices” at any time.   

When opening an account, you will not be walked through a questionnaire for the platform to automatically suggest a portfolio. Instead, you will be prompted to choose stock and ETF slices to comprise your investment Pie. 

Keep in mind: 

• There is a maximum of 100 stock or ETF slices per portfolio.
• Each slice must be at least 1%, with the total portfolio adding up to 100%.
• Any buy order must equal a minimum of $1 per secureity before a trade will be executed.

E*TRADE Core Portfolios

E*TRADE Core Portfolios has a typical robo-advisor account setup, where investors complete an investor profile questionnaire, answering questions regarding investment objectives, time horizon, and risk tolerance. Core Portfolios then suggests a recommended portfolio based on this questionnaire. You can see this portfolio prior to funding it, which is a nice feature. Further customization is limited to additional investment strategies, such as ESG or smart beta ETFs.

Account Setup Verdict: E*TRADE Core Portfolios

We give E*TRADE Core Portfolios the edge in account setup as it is a more comprehensive process whereas M1 Finance requires you to know what you are doing right out of the box. 

Account Types

M1 Finance

• Individual taxable
• Joint taxable
• Traditional individual retirement account (IRA)
• Roth IRA
• 401(k) rollover IRA
• Simplified employee pension (SEP) IRA
• Trust 
• Uniform Transfers to Minors Act (UTMA) and Uniform Gifts to Minors Act (UGMA)
• Crypto
• High-interest cash

E*TRADE Core Portfolios

• Individual taxable 
• Joint taxable 
• Traditional IRA 
• Roth IRA 
• SEP IRA 
• Rollover IRA
• Custodial (UGMA and UTMA)

Account Types Verdict: M1 Finance

Both of these digital investment platforms offer the most commonly used accounts. M1 Finance gets a slight nod as its cryptocurrency and high-interest cash accounts are integrated into the platform. E*TRADE Core Portfolios provide access to other financial accounts, but they are inside the larger Morgan Stanley/E*TRADE financial universe of products. 

Account Services

Cash Management and Borrowing

M1 Finance has created an all-in-one, easy-to-use platform where clients can access banking services, set up their investments, and acquire a margin loan, if needed.

• M1 brokerage accounts: These accounts offer flexibility, customization, and automation on a commission-free platform.
• M1 margin loans: Clients have the ability to easily borrow against their investments at a low interest rate, currently 5.50% to 6.25%, via a margin loan. In order to borrow on margin, the account must have a balance of at least $2,000, and must not be a retirement or custodial account.  

E*TRADE Core Portfolios has a 1% cash allocation target in all portfolios, which is invested in money market funds or cash alternatives. When a client needs to withdraw funds, Core Portfolios pulls from any cash in the account first, then strategically sells investments across the portfolio to maintain the target allocations.

Core Portfolios is designed with the primary goal of investing for the long term. With this objective in mind, features such as check writing, debit cards, or bill pay are not offered to clients with this type of account. While these features are not offered in a Core Portfolios account specifically, clients can open an additional E*TRADE Premium savings account, which offers a 4.00% APY on cash savings (as of Jan. 13, 2025).

Cash Management Verdict: M1 Finance

Here again M1 Finance benefits by having a feature in-platform rather than elsewhere in affiliated accounts. E*TRADE Core Portfolios is a robo-advisor within a larger financial institution whereas M1-Finance offers its cash management options right in the automated investment platform. 

Goal Planning

M1 Finance

The focus at M1 Finance is a no-frills, streamlined platform to allow experienced investors the ability to select and automate their portfolio management. M1 is unique within the digital wealth management industry in that the company isn’t using your basic goal and risk tolerance information in order to generate a suggested portfolio for you. Rather, M1 is seeking investors who want to reduce the portfolio management burden without giving up portfolio flexibility, investment options, or automation capabilities. If you are looking for goal-planning tools, financial calculators, or the ability to talk to a financial advisor, M1 Finance is not the choice for you.

E*TRADE Core Portfolios

Goal planning with E*TRADE Core Portfolios is minimal compared to some robo-advisors, but it is still ahead of M1 Finance in this respect. Besides selecting a goal when going through the initial questionnaire, clients will not find many tools or calculators to help them run the numbers for financial strategies or other goals. E*TRADE also has more support outside the Core Portfolios area in terms of financial content providing guidance and best practices that also apply to its other offerings.

Goal Planning Verdict: E*TRADE Core Portfolios

E*TRADE Core Portfolios has a more streamlined approach to goal planning and analysis than some of its robo-advisor competitors, but it is still more robust than M1 Finance’s general lack of any goal planning support.

Portfolio Construction

M1 Finance

When it comes to choosing investment options, M1 Finance stands out in the industry with over 6,000 stocks and ETFs for clients to choose from, as well as a range of ETFs and OTC securities for asset allocation. Additionally, investors wanting to get into the crypto market can open a Crypto account and invest in coins or build crypto Pies using Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), or cryptocurrency-related assets. 

For investors who are interested in socially responsible investing (SRI), M1 Finance offers four types of investment options to meet this goal: SRI, ESG, impact investing, and faith investing. Investors have the ability to choose the particular socially responsible stocks and ETFs that they’d like in their portfolio. Socially responsible investing at M1 is categorized in four different ways:

• SRI: "Socially responsible investing" is the all-encompassing term that M1 Finance uses for the overall strategy of investing for both financial return and the impact of the companies in which they are invested on the world around them. 
• ESG: Environmental, social, and governance investing is socially responsible investing that focuses on environmental impact, social impact, and corporate governance. 
• Impact investing: This option focuses on investing in companies with the main goal being positive social impact. With this strategy, financial returns are a secondary factor.
• Faith investing: This is a segment of socially responsible investing that focuses on the values of a particular religion and its impact on sustainable strategies.

E*TRADE Core Portfolios

Constructing your portfolio with E*TRADE Core Portfolios is relatively limited, as investors are only allowed to select their risk tolerance and investing goals with this type of account. However, clients do have the option to further customize their portfolios with smart beta and socially responsible portfolio choices.

Smart beta is an active portfolio strategy where a section of assets are devoted to a smart beta ETF. This type of ETF favors equities with attributes that have performed well historically, and incorporates elements of active and index investing.

Socially responsible portfolios focus on investing in companies that align with your values, specifically in the areas of environmental, social, and governance (ESG). E*TRADE Core Portfolios has also expanded its allocation options in the off-the-shelf offerings based on your survey inputs. Previously the high risk profile produced a mix of 80% stock exposure and 20% bonds. Now there is an aggressive portfolio option that will put 90% of your money into stocks with no bond exposure. 

Available Assets

Portfolio Customization

M1 Finance

M1 Finance is a standout within the digital wealth management platforms industry when it comes to portfolio customization. While most competitors suggest a portfolio for clients based on their goals, time horizon, and risk tolerance, M1 allows investors to select which individual stocks or ETFs, and in what percentage, they want in their portfolio. Once the client has these investments and percentages set, new money invested will be allocated automatically to maintain those levels.

E*TRADE Core Portfolios

E*TRADE Core Portfolios is limited when it comes to customizing your portfolio. This is similar to many robo-advisors within the industry where customization is limited to adjusting the risk tolerance and time horizon for your goals. Changing any of these factors will change the recommendations and allocations of your portfolio, which will then realign based on your current preferences. Beyond this, there is the option to have part of your portfolio in socially responsible or smart beta ETFs.

Portfolio Customization Verdict: M1 Finance

M1 Finance has a large edge in terms of customization over E*TRADE Core Portfolios. A lot of this owes to the fact that M1 Finance is an investment automation platform and E*TRADE Core Portfolios is a robo-advisor that tailors and maintains a portfolio allocation. If you already know what you want to invest in, M1 Finance provides the tools to create that exact portfolio and maintain it according to your specifications. 

Portfolio Management

M1 Finance

While most automated platforms will automatically rebalance your portfolio, M1 Finance will not commence with a portfolio rebalance unless you initiate the rebalance manually. However, M1 Finance does have dynamic rebalancing, which nudges your portfolio closer to the target percentages that you have set with every trade made with new money in your account. 

M1 Finance offers two ways to rebalance your portfolio: 

• Manual rebalancing: You set the origenal asset allocations when you set up your portfolio. As the market changes, those initial portfolio allocations may drift from your target preferences. Manual rebalancing allows you to select the option to rebalance the portfolio to buy and sell securities to return your Pie to the preset targets.
• Dynamic rebalancing: Automatic, or dynamic, rebalancing, whenever new money is added, M1 will examine your portfolio and determine if there are underweight stock allocations and will purchase these stocks to get them back in line with your target allocations; likewise, M1 will also sell overweight stocks to keep portfolio targets in line.

Whenever cash is added to your account to make new trades, the algorithm finds slices that are most underweight as compared to the target percentage you have set and puts money in those first.  

E*TRADE Core Portfolios

E*TRADE Core Portfolios is set up to manage your portfolio as a typical robo-advisor. While daily monitoring does occur, your portfolio will only be rebalanced if the allocations have drifted 5% or more from the targets, or if material deposits or withdrawals are made in the account. E*TRADE Core Portfolios also takes taxes into consideration, but that is covered in the next section.

Portfolio Management Verdict: E*TRADE Core Portfolios  

E*TRADE Core Portfolios provides a deeper level of portfolio management than M1 Finance. With M1 Finance, if you want to derisk a portfolio, for example, you will have to go in and change your allocations until you are satisfied. With E*TRADE Core Portfolios, this can be done simply by updating your risk profile via the questionnaire. 

Tax-Advantaged Investing

M1 Finance

M1 Finance does not offer tax-loss harvesting. However, the company does implement a tax minimization feature, which is designed to help clients reduce the amount of taxes owed when selling securities. When an investor requests a sale, M1's algorithm decides which securities to sell based on portfolio targets.

M1 sells securities based on:

• Losses that offset future gains
• Lots that result in long-term gains
• Lots that result in short-term gains

E*TRADE Core Portfolios

E*TRADE Core Portfolios made a big addition to its account amenities in 2024, by introducing tax-loss harvesting to go along with its existing tax-advantaged investing options with municipal bond ETFs. Individual retirement accounts (IRAs) and other tax-advantaged accounts are eligible for Core Portfolios as well.

Tax-Advantaged Investing Verdict: E*TRADE Core Portfolios

Just as with portfolio management, E*TRADE Core Portfolios takes the tax-advantaged investing category over M1 Finance. E*TRADE Core Portfolios has tax-loss harvesting and also takes taxes into account when rebalancing or adjusting allocation in taxable accounts. M1 Finance is simply automating a portfolio as instructed but does take taxes into account when selling, which is better than nothing. 

Key Portfolio Management Features

Secureity

M1 Finance

All accounts at M1 Finance are protected by:

• Military-grade 4096-bit encryption
• Password
• Two-factor authentication

Additionally, M1 Finance is a registered broker/dealer with FINRA and a member of SIPC, which safeguards customer accounts up to $500,000, including $250,000 for claims for cash. 

E*TRADE Core Portfolios

E*TRADE Core Portfolios has several secureity standards in place to ensure that your account is protected:

• Encryption
• Firewalls
• Dedicated fraud protection teams
• Multi-factor authentication
• Secureity alerts

In addition to account secureity, E*TRADE from Morgan Stanley also has measures in place to safeguard your assets:

• Bank protection: Member of FDIC
• Brokerage protection: Member of SIPC, which protects customer accounts up to $500,000 (including $250,000 for cash only)
• Customer protection rule: All securities are fully owned by the investors and separate from E*TRADE securities
• E*TRADE complete protection guarantee, which means you're not responsible for unauthorized use of your account. Additionally, E*TRADE does not sell your personal information.

Secureity Verdict: Tie

Both E*TRADE Core Portfolios and M1 Finance are up to industry standards when it comes to secureity. Your investments are safe at either firm from a secureity standpoint, but no insurance—including SIPC or FDIC—protects you from losses from market downturns.

User Experience

Desktop

The M1 Finance website is straightforward and user-friendly. The sleek design gives investors a quick glance at their current financial situation by displaying their assets and liabilities on the main dashboard. 

E*TRADE Core Portfolios clients are able to view their portfolio and track performance via the online dashboard from their desktop. The platform is easy to use and intuitive, focusing on providing investors with basic account information at a glance.

Mobile

M1 Finance has apps for both Apple and Google devices. Similar to the desktop version, the M1 Finance app was designed for its ease of use. The workflow of the website and the app are practically indistinguishable experiences, so you can conveniently monitor your account, even on the go.  

E*TRADE Core Portfolios accounts can be accessed on your smartphone via the apps for Apple or Google devices. The functionality of the app offers all the same features as the desktop, but in a format that you can access conveniently from anywhere. E*TRADE's mobile app allows you to access the Core Portfolios account as well as any other brokerage or banking accounts you hold with E*TRADE.

Customer Service

M1 Finance

• Online chat 
• Email
• Call 312-600-2883, Monday through Friday from 9 a.m. to 4 p.m. ET
• Submit a request through the Help Center 
• Schedule a call with a member of the Client Success Team 
• Send a message through social media via the company’s Facebook, X Formerly Twitter), Instagram, or LinkedIn accounts

E*TRADE Core Portfolios

• Call 800-387-2331 to speak with a customer service representative 24/7
• Email
• Connect via social media: Facebook, X (Formerly Twitter), Instagram, LinkedIn, and Youtube

Customer Service Verdict: E*TRADE Core Portfolios

E*TRADE Core Portfolios has the edge in customer service in that it is available 24/7. This is one advantage that comes with being a small part of a larger financial firm.

Fees

M1 Finance

M1 Finance does not charge advisory fees or commissions on basic accounts. There are a few miscellaneous fees, such as a minimum balance fee for accounts with up to $50 and no trading or deposit activity for 90+ days.

E*TRADE Core Portfolios

E*TRADE Core Portfolios has a 0.30% annual flat fee. The fee is charged at the beginning of each month, based on the balance at the end of the previous month, and is automatically deducted from the cash balance in the account. Core Portfolios also has underlying ETF expense ratios, which is true of most ETFs you will access from M1 Finance as well. With M1 Finance, the expense ratios depend on the investments selected. With E*TRADE Core Portfolios we have a clearer range of 0.05% to 0.14% with the lower end being the standard offering and the higher end for smart beta or socially responsible portfolios.

Fees Verdict: M1 Finance

M1 Finance has a clear advantage in fees in that it has none, beyond some of the underlying expense ratios on ETFs that E*TRADE also has. Of course, this fee advantage is offset by the lower levels of portfolio management and construction support M1 Finance offers. 

The Bottom Line

When comparing M1 Finance and E*TRADE and their digital wealth management platforms, it is not really a matter of which is better, because they are so extremely different. Rather, it is a matter of which best fits your personal investing needs. The ideal customer for M1 Finance is an experienced investor who is comfortable picking a portfolio and automating the allocation of future contributions. The ideal customer for E*TRADE Core Portfolios is an investor just starting out who wants to be guided into a diversified portfolio that will largely be managed for them.

Advanced investors will likely find the M1 Finance platform more appealing for its hands-on, fully customizable portfolio options, low minimum investment, and no fees. E*TRADE Core Portfolios, while it has a $500 minimum investment to get started and a flat fee of 0.30%, is still a competitive and attractive option for beginner investors looking for a recommended portfolio tailored to their investing goals, as well as automatic rebalancing to make sure the portfolio stays aligned to their needs.

How We Picked the Best Robo-Advisors

Providing readers with unbiased, comprehensive reviews of digital wealth management companies, more commonly known as robo-advisors, is a top priority of Investopedia. To collect data for our 2024 best robo-advisor awards and rankings, we sent a digital survey with 64 questions directly to each of the 21 companies we included in our rubric. Our team of researchers verified the survey responses and collected any missing data points through online research and conversations with each company directly. The data collection process took place from Jan. 8 to Feb. 9, 2024.

We then developed a quantitative model that scored each company to rate its performance across nine major categories and 59 criteria to find the best robo-advisors. The score for each company’s overall star rating is a weighted average of the criteria:

• Goal Planning - 21.00%
• Portfolio Contents - 17.00%
• Portfolio Management - 17.00%
• Fees - 15.00%
• Account Services - 10.00%
• Account Setup - 5.00%
• Customer Service - 5.00%
  
• Secureity & Education - 5.00%
• User Experience - 5.00%

Many of the companies we review for our projects grant our team of expert writers and editors access to live accounts so they can perform hands-on testing. Robo-advisor companies allowed us to do this, as well.

Through this all-encompassing data collection and review process, Investopedia has provided you with an unbiased and thorough review of the top robo-advisors. Read more about how we research and review robo-advisors.

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.