Robo-advisors: M1 Finance vs. Vanguard Digital Advisor
Quick Verdict
M1 Finance is suitable for users who want more control over their investments and are comfortable with manual rebalancing, while Vanguard Digital Advisor is better for those seeking automated tax-loss harvesting and a more hands-off approach.
- M1 Finance offers more customizable portfolios and fractional shares.
- Vanguard Digital Advisor provides automated tax-loss harvesting and more frequent rebalancing.
- M1 Finance has a $3 monthly fee for smaller accounts, while Vanguard charges an advisory fee.
Key features – Side-by-Side
| Attribute | M1 Finance | Vanguard Digital Advisor |
|---|---|---|
| Minimum Investment Requirement | $100 (Taxable Accounts), $500 (Retirement Accounts) | $100 (Retail Brokerage), $5 (Eligible 401(k)) |
| Annual Advisory Fee | No advisory or commission fees; $3 monthly platform fee for accounts under $10,000 (with exceptions) | Approximately 0.15% (all-index), 0.11%-0.20% (ESG/Active-Index) |
| Investment Options | Stocks, ETFs, Cryptocurrencies (limited), Professionally managed portfolios | All-Index ETFs, Active/Index ETFs & Mutual Funds, ESG Funds |
| Automated Tax-Loss Harvesting | No | Yes |
| Access to Human Advisors | No | No (available through Vanguard Personal Advisor with higher minimum) |
| Rebalancing Frequency | Manual or upon deposit/withdrawal, dynamic rebalancing | Daily evaluation, rebalance when asset class deviates >5%, cash >$300 |
| Customer Support Channels and Availability | Contact form, email, phone, M-F 9am-4pm ET | Phone and email, M-F 8am-8pm ET |
| Socially Responsible Investing (SRI) Options | Yes, select SRI funds or create your own SRI-focused portfolio | Yes, ESG portfolio option |
Overall Comparison
Fees: M1 Finance potentially lower; Tax-Loss Harvesting: Vanguard wins; Customization: M1 Finance wins
Pros and Cons
M1 Finance
Pros:
- No advisory fees
- Customizable portfolios
- SRI options available
- Fractional shares
- Mobile app
- Financial planning tools
Cons:
- No automated tax-loss harvesting
- No human advisors
- Rebalancing is not automatic
- Limited customer support hours
- $3 monthly platform fee for small accounts
Vanguard Digital Advisor
Pros:
- No notable advantages reported.
Cons:
- No major disadvantages reported.
User Experiences and Feedback
M1 Finance
What Users Love
- Easy to use mobile app
- Offers a variety of investment options
- Customizable portfolio options
Common Complaints
- No automated tax-loss harvesting
- Limited customer support availability
- Platform fee for smaller accounts
Value Perception
- No value feedback reported.
Vanguard Digital Advisor
What Users Love
- No highlights reported.
Common Complaints
- No major complaints reported.
Value Perception
- No value feedback reported.