Wells Fargo vs Betterment vs M1 Finance
2023: Betterment vs M1 Finance vs Wells Fargo for online investing. Compare cost, brokerage fees, IRA accounts, and differences. Which firm is better?
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Overview of Betterment, M1 Finance, and Wellstrade
Now that most online brokers offer $0 trades, you have to look in other parts of the business to discover which firm is the best. All 3 brokers in this survey offer different types of investment services.
Category #1: Cost
| Broker Fees |
Stock/ETF
Commission |
Mutual Fund
Commission |
Options
Commission |
Maintenance
Fee |
Annual IRA
Fee |
|
M1 Finance
|
$0
|
na
|
na
|
$0
|
$0
|
|
Betterment
|
na
|
na
|
na
|
0.25%
|
0.25%
|
|
Wellstrade
|
$0
|
$35
|
$0.65 per contract
|
$0
|
$0
|
Obviously, M1 Finance wins the most important category. They make money by offering optional premium
services.
Promotions
M1 Finance:
Up to $500 cash bonus for making a deposit at M1 Finance.
Betterment:
Get up to one year managed free.
Wellstrade:
Open a Wells Fargo investment account.
Category #2: Investment Methods
M1 Finance customers buy and sell Pies. They are groups of stocks, closed-end funds, and ETF’s. The company creates its own Pies, and customers can create their own as well.
M1’s Pies have various themes, like income or retirement. Whole-dollar amounts can be invested, a notable advantage. However, there are no other assets available.
At Betterment, we get even fewer securities. There are only ETF’s. Moreover, only low-cost ETF’s are available. In return, Betterment clients get to sign up for investment-advisory services. The company offers both robo and human choices.
WellsTrade has both robo and human advisors as well. Unlike Betterment and M1, however, WellsTrade offers mutual funds, option contracts, and fixed-income securities (on top of closed-end funds, ETF’s, and stocks).
We propose WellsTrade here.
Category #3: Financial Education
WellsTrade customers have access to a large treasure trove of articles in pdf format from Wells Fargo Advisors. The WellsTrade website hosts screeners for bonds, equities, and funds. Asset profiles have analyst ratings, among other data.
Because Betterment only offers managed accounts, there are no security profiles or other self-directed resources. Even the funds the broker offers have scant information. The company’s website does host articles and videos, although these tend to revolve around the Betterment style of investing.
M1 Finance has a screener that is able to look for investments based on sector, market cap, P/E ratio, and dividend yield. It’s not quite as thorough as WellsTrade’s, and profiles have limited data.
WellsTrade again.
Category #4: Desktop Software
After you’ve studied up on trading with your broker of choice, it’s time to submit an order. This will require software, which does vary significantly here.
Betterment has a user-friendly website with essentially no tools because everything is handled by its in-house robot.
At M1, there is an order request form. It’s not quite a trade ticket because M1 clients don’t actually send orders to the exchanges. Instead, they send them to the broker, who then sends them to the exchanges at specific times.
WellsTrade is a different story altogether. It has a website with decent charting (something we didn’t find at the other two). There are multiple charting tools. And the firm’s order ticket offers several options.
WellsTrade snags another one.
Category #5: Mobile Trading
And what about mobile apps? It’s the same story with Betterment. There are account management tools, but no trading capability.
M1 Finance has an app with basic charting, something that’s missing on Betterment’s platform. Although there is no actual trade ticket, it is possible to search through available Pies or create a custom one. News articles also make an appearance.
The WellsTrade app offers trading in option contracts, the only app in this survey to do so. The platform also has charts, but they are very basic with no tools. We do like the app’s trade ticket, which is the only one in this contest.
Another success for WellsTrade.
Category #6: Other Services
Dividend Reinvestment Program: WellsTrade is the only broker-dealer in this contest to offer a traditional DRIP program. The other two do reinvest dividends into underperforming portfolio holdings.
Automatic mutual fund investing: WellsTrade offers it.
IRA’s: All three brokers have IRA’s. WellsTrade and Betterment offer the SEP IRA.
WellsTrade is the overall outperformer in the concluding category.
Our Recommendations
ETF and Stock Trading:
Although individual stocks and funds can be traded in Pies at M1, we think WellsTrade’s tools are
better.
Mutual Fund Investors: WellsTrade is the only choice.
Beginners: WellsTrade has robo and human management services in addition to self-directed learning materials. Combined with 24/7 customer support, it gets our recommendation.
Long-Term Investors and Retirement Savers: With target-date mutual funds and a 401(k), it’s WellsTrade again.
Small Accounts: M1 Finance.
Promotions
M1 Finance:
Up to $500 cash bonus for making a deposit at M1 Finance.
Betterment:
Get up to one year managed free.
Wellstrade:
Open a Wells Fargo investment account.
Summary
WellsTrade outperformed its rivals in this survey. We do like M1’s impossible to beat pricing and
whole-dollar investing, though.
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