Robo-advisors: Vanguard Digital Advisor vs. M1 Finance

Quick Verdict

Vanguard Digital Advisor is suitable for investors seeking a straightforward, low-cost robo-advisor experience with Vanguard ETFs and a hands-off approach. M1 Finance is better for investors who desire more control over their portfolio construction and want to create custom portfolios with individual stocks and ETFs, especially if they are comfortable with a DIY approach.

Vanguard Digital Advisor offers a simpler, more hands-off approach with a focus on Vanguard ETFs and a low advisory fee, while M1 Finance provides more customization and control over portfolio construction with its 'Pies' feature.
Vanguard Digital Advisor has a higher minimum investment requirement ($3,000) compared to M1 Finance ($100 for taxable accounts, $500 for retirement accounts).
M1 Finance's basic service has no advisory fees, whereas Vanguard Digital Advisor charges approximately 0.15%.
Both platforms support various account types, including individual, joint, and retirement accounts.
Tax-loss harvesting is available on both platforms, but the requirements and availability differ (Vanguard: taxable accounts over $50,000; M1 Finance: M1 Plus members).
Vanguard Digital Advisor provides goal-setting and retirement planning tools, while M1 Finance offers budgeting and cash management tools.
Access to human advisors is limited or requires a premium subscription for both platforms.
Both platforms offer socially responsible investing options through ETFs.
Both platforms have mobile apps for account monitoring.
Vanguard Digital Advisor rebalances quarterly, while M1 Finance automatically rebalances portfolios.

Key features – Side-by-Side

Attribute	Vanguard Digital Advisor	M1 Finance
Minimum Investment Requirement	$3,000	$100 for taxable accounts and $500 for retirement accounts
Annual Advisory Fee	Approximately 0.15% (or 15 basis points)	No advisory fees for its basic service
Investment Options	Primarily Vanguard ETFs (Exchange Traded Funds)	Stocks and ETFs
Account Types Supported	Individual and joint taxable accounts, Traditional IRA, Roth IRA, SEP IRA, and rollover IRA	Individual and joint taxable accounts, trust accounts, and retirement accounts (Traditional, Roth, and SEP IRAs)
Automated Tax-Loss Harvesting	Yes, available for taxable accounts with balances over $50,000	Available for M1 Plus members
Financial Planning Tools & Resources	Goal setting tools, retirement planning calculators	Tools for budgeting and cash management
Access to Human Advisors	No direct access is included in the standard Digital Advisor service, but access to financial advisors is available through Vanguard Personal Advisor Services for accounts with higher minimums.	Not available for basic service; available for M1 Plus members
Custom Portfolio Options	Limited customization; portfolios are built based on risk tolerance and goals.	Users can create custom portfolios ('Pies')
Socially Responsible Investing (SRI) Options	Not explicitly offered as a standard option, but clients can invest in socially responsible ETFs within their portfolio.	Users can invest in socially responsible ETFs
Mobile App Availability and Features	Yes, Vanguard's mobile app allows users to monitor their Digital Advisor accounts.	Available on iOS and Android
Rebalancing Frequency	Quarterly	Automatically rebalances portfolios
Customer Support Channels	Phone and online help center	Phone and email
User Friendliness	User-friendly platform with straightforward account setup, intuitive interface	User-friendly interface, ease of account setup and management
Customer Support	Responsive and helpful customer support	Customer support responsiveness varies; some users report delays

Overall Comparison

Vanguard Digital Advisor: 0.15% advisory fee, $3,000 minimum. M1 Finance: No advisory fee (basic), $100 minimum (taxable).

Pros and Cons

Vanguard Digital Advisor

Pros:

User-friendly platform with straightforward account setup
Intuitive interface for managing accounts
Responsive and helpful customer support
Tax-loss harvesting for taxable accounts above $50,000
Easy withdrawal of funds
Low expense ratios for Vanguard ETFs
Employs standard security measures, including encryption and two-factor authentication

Cons:

No direct access to human advisors included in the standard service
Limited portfolio customization

M1 Finance

Pros:

User-friendly interface
Ease of account setup and management
Custom portfolio options
Socially responsible investing options
Automated rebalancing
Educational resources available
Tax-loss harvesting for M1 Plus members

Cons:

Customer support responsiveness varies
M1 Plus has an annual fee
Potential inactivity fees or fees for paper statements
Limitations on the frequency or amount of withdrawals

User Experiences and Feedback

Vanguard Digital Advisor

What Users Love

Platform is generally considered user-friendly
Customer support is generally considered responsive and helpful

Common Complaints

No major complaints reported.

Value Perception

No value feedback reported.

M1 Finance

What Users Love

User-friendly interface
Ease of account setup and management

Common Complaints

Customer support responsiveness varies; some users report delays

Value Perception

No value feedback reported.