Betterment vs. M1 Finance: Which Automated Investing Platform Fits You in 2026?

Betterment vs. M1 Finance (2026)

"Automated investing" means two different things depending on which platform you choose. Betterment is a true robo-advisor — it builds and manages a diversified portfolio for you based on your goals and risk tolerance. M1 Finance takes a more hands-on-hands-off hybrid approach — you (or a pre-built template) design the target allocation, called a "Pie," and M1 automatically invests new deposits and rebalances to match it. Both aim to remove the day-to-day work of investing, but they charge — and operate — very differently.

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Why Two Platforms Built Such Different Models

Betterment and M1 Finance emerged from different premises about what investors actually want. Betterment bet that most people want to answer a few questions and never think about their portfolio again — full delegation, wrapped in a percentage fee that scales with your balance. M1 bet that investors want some ownership over their specific holdings without the daily hassle of manual trading — a hybrid model charging a flat fee regardless of balance size. Neither premise is wrong; they simply serve different psychological relationships with investing, which is worth reflecting on honestly before picking based on fees alone.

Fees

• Betterment: 0.25%/year (Digital plan) or 0.65%/year (Premium plan, includes human advisor access)
• M1 Finance: $3/month ($36/year), waived if you hold $10,000+ across M1 accounts or subscribe to M1 Plus

On a $20,000 portfolio, Betterment's Digital plan costs about $50/year; M1 charges $36/year unless you clear the $10,000 waiver threshold, in which case it's free. For larger balances, M1 can end up meaningfully cheaper since its fee doesn't scale with your account size.

Winner: M1 Finance, especially for balances above $10,000.

Investment Approach

Betterment builds your portfolio from diversified index funds based on a questionnaire about your goals and risk tolerance, then manages it — including automatic tax-loss harvesting on taxable accounts — with essentially no ongoing input from you. M1 lets you choose (or customize) a "Pie" of stocks, ETFs, and pre-built expert portfolios, then automates deposits and rebalancing around whatever allocation you've set.

Winner: Depends on your preference — Betterment for true hands-off management, M1 for hands-off *execution* with your own allocation choices.

Account Minimum

• Betterment: $0
• M1 Finance: $100

Betterment has no minimum to open an account, while M1 requires $100 to get started — a small but real difference for someone starting with very little.

Winner: Betterment.

Options and Individual Stock Trading

M1 supports buying individual stocks and ETFs directly inside your Pie structure, including fractional shares. Betterment is a managed-portfolio platform — there's no self-directed stock picking beyond a limited stock/crypto add-on. Neither platform supports options trading.

Winner: M1 Finance, for investors who want some say in individual holdings.

Borrowing Against Your Portfolio

M1 offers M1 Borrow, letting you borrow against your invested portfolio at a competitive rate, with a lower rate available to M1 Plus subscribers. Betterment doesn't offer a comparable portfolio-backed lending feature.

Winner: M1 Finance.

Tax-Loss Harvesting

Betterment includes automatic tax-loss harvesting on all taxable accounts at no extra cost — a feature that can meaningfully improve after-tax returns over time. M1 doesn't offer automated tax-loss harvesting.

Winner: Betterment.

Using Both Together

Some investors don't pick just one — it's fairly common to keep retirement accounts (IRA rollovers, Roth IRAs) on Betterment for the automated tax-loss harvesting and hands-off management, while running a separate taxable account on M1 Finance for a custom Pie of individual stock and ETF picks. Since the two platforms serve genuinely different jobs — full delegation versus semi-custom automation — using both isn't redundant the way holding two nearly identical brokerages might be.

Who Should Choose Betterment?

• You want a true "set it and forget it" experience with no allocation decisions to make
• You're investing in a taxable account and want automatic tax-loss harvesting
• You might eventually want access to a human financial advisor (Premium plan)
• You're starting with a smaller balance and want $0 minimum to open

What Happens to Your Account If You Switch Platforms

Neither platform locks you in permanently. Moving from Betterment to M1 (or vice versa) generally involves either an in-kind transfer of your existing holdings, where supported, or liquidating and re-investing — the latter potentially triggering a taxable event in a non-retirement account. Before switching, ask the receiving platform whether it can accept your specific holdings via ACATS transfer without selling first, since that avoids an unnecessary tax bill on gains you haven't actually decided to realize.

Who Should Choose M1 Finance?

• You want some control over your specific holdings without manually placing every trade
• Your balance is $10,000+ and you'd rather avoid a percentage-based advisory fee
• You're interested in borrowing against your portfolio (M1 Borrow)
• You like the idea of building a custom allocation once and letting it auto-invest going forward

Bottom Line

Betterment is the better fit for pure hands-off investors who want a robo-advisor to handle everything, including tax optimization. M1 Finance is the better fit for people who want some input into their holdings while still automating the deposit-and-rebalance grind — and its flat fee structure gets cheaper, relatively speaking, the larger your balance grows. Neither platform is right for active traders or options strategies; if that's your goal, look at a full-service broker instead. See the full Betterment review → and the M1 Finance review →.

Frequently Asked Questions

Is Betterment or M1 Finance better for beginners?

Both are beginner-friendly, but Betterment requires fewer decisions since it builds the portfolio for you. M1 asks you to choose or customize a Pie, which involves a bit more initial setup.

Can I avoid M1's monthly fee?

Yes — M1 waives its $3/month fee if you hold $10,000 or more across your M1 accounts, or if you subscribe to M1 Plus.

Does either platform offer tax-loss harvesting?

Betterment includes automatic tax-loss harvesting on all taxable accounts at no extra cost. M1 Finance does not currently offer this feature.

Fees and features shown are illustrative as of 2026 and subject to change — always confirm current terms directly with the broker before opening an account. Compare all brokerage accounts →