Free investing apps have taken the world by storm since Robinhood launched in 2013. It’s hard to remember, but free trading was largely unheard of back then, and Robinhood was a pioneer. However, since 2013, multiple new apps have launched, which I why I decided to do a comprehensive review of three of the biggest players: Webull vs Robinhood vs M1 Finance.
These investment apps largely cater to millennial investors thanks to their sleek trading platforms and low fees. Though, when diving deeper into Webull, Robinhood, and M1 Finance I found benefits that I wasn’t necessarily expecting, such as:
- The ability to trade in low-cost exchange traded funds (ETFs)
- In-depth analysis and trading tools
- New investing strategies: Pie Investing
There are some major differences between the apps, as well. Below you’ll learn more about the details of Webull vs Robinhood vs M1 Finance to determine which is the best free investing app for you.
Webull Overview
Webull was founded in 2016 and serves a clear audience of advanced traders. Out of all three investment apps, they provide the most thorough suite of research tools including 50 technical indicators and 12 charting tools. On their website, they state that:
Clients can configure the trading panel as they like to discover trends and potential opportunities for their own investment strategy.
The platform is one of the best for getting real time market data to inform investment strategies.
While Webull does offer a lot of advances features, it still offers the basics to benefit beginner investors as well. Webull has a wide variety of stocks and ETFs to choose from, all with $0 commissions and no trading fees.
Webull Details:
| Core Pricing and Fees: | Free |
| Minimum Deposit: | None |
| Types of Investments: | Stocks, ETFs, Options |
| Account Types: | Brokerages, IRAs |
| Security: | SIPC Insured |
| Sign-Up Offer: | Two Free Stocks |
One of the coolest features that Webull offers is “paper trading” through its free trading simulator. You can simulate various trades to practice without risking any real money. For someone new to active trading, options trading, and short selling, it’s definitely worth considering.
While paper trading sounds fun, personally, I’ll still to the low-risk strategy of long-term investing ETFs and index funds.
Two last things to note on Webull, they do offer extended hours for trading and margin trading, but borrowing money on margin comes with a cost.
Webull Pros:
- Free Trading: Commission-free trading.
- Advanced Platform: Great for day traders and active investors.
- Paper Trading: The only platform to offer simulated trading.
Webull Cons:
- Can be Over-Complicated: Beginners might find the platform cumbersome to navigate.
- No Cryptocurrency, Yet: Although, Webull does say that this feature is coming soon.
Get Started with Webull:
Robinhood Overview
Robinhood, founded in 2013, is the original zero-fee investment app offering free trades (stock trades and ETF trades) to the masses. Robinhood’s platform is geared more towards beginner investors looking to invest in the stock market, but it is growing to offer more features to compete with large brokerages, including:
- A Cash Management bank account
- Fractional Shares
- Options Trading
- Extended Trading Hours
Most importantly, Robinhood is best known for its commission-free trading and sleek, easy-to-use investment platform.
Robinhood Details:
| Core Pricing and Fees: | Free |
| Minimum Deposit: | None |
| Types of Investments: | Stocks, ETFs, Options, Cryptos |
| Account Types: | Brokerage |
| Security: | SIPC Insured |
| Sign-Up Offer: | Free Stock Bonus |
One feature that sets Robinhood apart from the rest is they offer the ability to invest in cryptocurrency. It’s the only “traditional” brokerage account in which you can invest in cryptocurrency to my knowledge, and if I was to invest in crypto, I’d do it through Robinhood.
Plus, by upgrading your account to Robinhood Gold, you will gain access to margin trading. Just remember, margin trading is very risky and not ideal for beginner investors.
Robinhood Pros:
- Free Trading: Commission-free trading.
- Modern Platform: Easy to use and navigate for beginners.
- Cryptocurrency: The only platform to offer crypto trading.
Robinhood Cons:
- Bare-Bones Platform: Lacks in detail in some areas.
Get Started with Robinhood:
M1 Finance Overview
M1 Finance was founded in 2015 and is one of the few hybrid brokerage accounts on the market. It is a hybrid account because you can choose to take a passive robo-advisor approach, invest in your own stocks and ETFs, or do a mix of both.
This is made possible because of M1 Finance’s Pie Investing strategy. In simple terms, with M1’s Pie strategy, you set your asset allocation, and your funds automatically invest into this desired allocation.
M1 Finance Pie Investing Explained
For a simple example, let’s say your desired asset allocation is:
- 50% in a bond ETF
- 50% in a stock ETF
Using an M1 Finance Pie, when you invest your first $100, it will automatically invest $50 into each section of your pie. You don’t need to allocate $50 to the bond ETF and $50 to the stock ETF, you simply allocate $100 towards your pie and the money is automatically dispersed to the proper investments.
It’s a nice setup for passive investors, and becomes even more helpful in two scenarios:
- When you have a complex asset allocation. Say you want to invest in bond funds, stock funds, and many individual stocks. Instead of doing the math and purchasing each one individually, you simply invest in your pie, and the math is done for you by M1 Finance.
- When your asset allocation needs to be adjusted. Using the 50/50 example above, if your stock fund takes a nosedive down to $30 and the bond fund rises in price to $70, you wouldn’t invest your second $100 the same as your first. Instead, you would invest more in stocks to right-size the 50/50 relationship. With pie investing, this rebalancing is done automatically for you.
M1 Finance Details:
| Core Pricing and Fees: | Free |
| Minimum Deposit: | $100 |
| Types of Investments: | Stocks, ETFs |
| Account Types: | Brokerages, IRAs, Trusts |
| Security: | SIPC Insured |
| Sign-Up Offer: | $10 Referral Credit |
While I think the pie investing strategy is a unique and beneficial offering, the downfall with M1 Finance is that it does not offer automatic tax-loss harvesting, which is a commonly offered service from robo-advisors. Although, M1 Finance is free, which is also unlike other robo-advisors.
Plus, M1 Finance offers other services on top of M1 Invest:
- M1 Borrow: You can borrow money at a low-interest rate to trade on margin or use for other personal finance needs. The standard interest rate is 3.5% unless you upgrade to M1 Plus.
- M1 Spend: A digital bank that offers both a checking account and debit card.
- M1 Plus: A premium offering that charges $125 per year. In return, offers 1% APY on checking account balances, 1% cash back on debit card purchases, 2% interest on loans, and an afternoon trading window.
One last thing to note, you can buy fractional shares through M1, which is a nice benefit.
M1 Finance Pros:
- Free Trading: Commission-free trading.
- Unique Pie Investing Strategy: Great for passive investors.
- Hybrid Platform: The only platform to offer both passive and active investing options.
M1 Finance Cons:
- No tax-loss harvesting: Which many other robo-advisors offer.
- Limited to One Daily Trading Window: Unless you upgrade to two windows with M1 Plus.
Get Started with M1 Finance:
Webull vs Robinhood vs M1 Finance Comparison
Fees and Costs
- Webull: Commission-free trading.
- Robinhood: Commission-free trading.
- M1 Finance: Commission-free trading.
All three accounts offer commission-free trading on stocks and ETFs. However, it’s good to review each platform’s pricing in detail because in some cases there are various transfer fees, bank fees, and inactivity fees, to be aware of outside of trading fees.
In addition, as we’ll discuss further below, Robinhood, Webull, and M1 Finance all offer margin trading, but with a cost.
Last, all three platforms also pass along both an SEC (Securities Exchange Commission) Fee and TAF (Trading Activity Fee) Fee. Typically, these fees are very small, but you can learn more about them using the links above.
Investment Accounts Offered
- Webull: Brokerages, IRAs
- Robinhood: Brokerage
- M1 Finance: Brokerages, IRAs, Trusts
M1 Finance and Webull both offer a wider variety of investment accounts, with both taxable and retirement accounts available. That means you can open a brokerage account, traditional IRA, or Roth IRA, as well as a few others.
With Robinhood, you can only use their taxable trading account.
Investment and Asset Class Options
- Webull: Stocks, ETFs, Options
- Robinhood: Stocks, ETFs, Options, Cryptos
- M1 Finance: Stocks, ETFs
Opposite to the above, Robinhood offers the widest variety of asset classes and investment vehicles for you to invest in. Their addition of cryptocurrency trading is what sets them apart in the investment options category.
It’s important to note, while all three brokers offer the ability to trade in stocks and ETFs, none offer the ability to trade in index funds or mutual funds. While disappointing, they all offer high-quality ETFs that match broad markets with low fees, which is usually good enough for most passive investors.
Trading Platform and Ease of Use
- Webull: Best for advanced traders.
- Robinhood: Best for beginner traders.
- M1 Finance: Best for passive traders.
The bottom line here is that all three platforms are sleek and user-friendly, but there are some distinct differences between them:
Webull, as mentioned, is best for advanced traders and day traders, offering real-time charts, technical analysis tools, and the most robust stock research tools of the three.
Robinhood has a bare-bones mobile app that is easy to navigate but sometimes lacks vital information. My one major complaint is it does not show the expense ratio on ETFs.
M1 Finance is unique in that it offers pie investing. We dove into this a lot earlier, but I like this layout and strategy and think anyone who wants to take a more passive investing approach would too.
Customer Support
- Webull: [email protected]
- Robinhood: Contact page.
- M1 Finance: Support page.
As expected with low-cost financial tech companies, all three online brokers offer an in-depth FAQ page, but make contacting a human a little more difficult. Although, it is possible, and I provided the starting page or email above to help as needed.
In order, Webull was the easiest to find a customer service email, and with M1 Finance I couldn’t find any contact info outside of social media handles.
Security
- Webull: SIPC Insured.
- Robinhood: SIPC Insured.
- M1 Finance: SIPC Insured.
All three brokers are SIPC Insured, which covers up to $500,000 and includes a $250,000 limit for cash. In addition, all three are a member of the Financial Industry Regulatory Authority (FINRA).
This is standard, and you shouldn’t consider a broker who doesn’t meet these standards.
Margin Trading
- Webull: Offered.
- Robinhood: Offered through Robinhood Gold.
- M1 Finance: Offered.
All three brokers allow you to invest on margin, but all three charge different prices to do it. Remember, investing on margin is a risky, advanced trading strategy that should likely not be used by beginners.
Webull offers the ability to trade on margin but charges a tiered interest rate depending on how much money is in your account.
Robinhood allows you to invest on margin when upgrading to Robinhood Gold for $5 per month.
With M1 Finance, you can invest on margin through M1 Borrow. This is M1’s service that allows you to borrow up to 35% of your portfolio’s value with a 3.5% interest rate (2% interest rate if you upgrade to M1 Plus).
Other Investment Broker Options
While understanding the differences between Webull vs Robinhood vs M1 Finance is important when determining a brokerage firm to go with, they are not your only options. Below are three other great brokers to consider:
Charles Schwab
Charles Schwab is a traditional online broker offering mutual funds, index funds, and ETFs with low expenses.
- Fees: $0 per online trade of Charles Schwab funds, ETFs, and stocks
- ETFs/Index Funds: 20+ top tier funds with expense ratios as low as 0.02%
- Other Notes: Great customer service
Betterment
Betterment is a leading robo-advisor offering a low management fee and automatic tax-loss harvesting.
- Fees: 0.25% management fee (plus the expense ratio of investments)
- ETFs/Index Funds: Variety of Vanguard, Schwab and other index funds and ETFs
- Other Notes: Provides tax-loss harvesting
Vanguard
Just as Robinhood is the pioneer for commission-free trading, Vanguard is the pioneer for low cost index fund investing.
- Fees: $7.00 per trade ($0 for Vanguard funds)
- ETFs/Index Funds: 20+ top tier funds with expense ratios as low as 0.04%
- Other Notes: Founder of Vanguard, John Bogle, invented the low-cost index fund
Summary: Webull vs Robinhood vs M1 Finance Review
Determining whether Webull vs Robinhood vs M1 Finance is right for you depends on your familiarity with stock trading and investment goals.
All three trading platforms have something unique to offer, or you might be better off with a traditional broker like Charles Schwab or a different robo-advisor like Betterment.
However, in general, these are the types of users that fit each brokerage best:
- Webull: Advanced traders.
- Robinhood: Beginner traders.
- M1 Finance: Passive traders.
If you don’t think you match up with any of the options above, then do some more research on your other online brokerage options and find the right one so that you can start investing today.
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I worry that the ease of trading will make speculative behavior even more rampant just as the market is getting more volatile. I recognize that individuals bear personal responsibility but I’m sure the marketing engines of these apps have deep pockets and have conflicting interests. We use a Tactical Asset Allocation service myself and only rebalance twice monthly max so Vanguard works just fine.
Agreed with your concern. While free trading is a great perk to take advantage of when making your normal trades (monthly, quarterly, or whatever cadence you use), but should not necessarily be an excuse to place “bets” on a more frequent basis. On top of Vanguard, I think that Schwab and Fidelity are two other good choices for index investors.
Great article, I was contemplating opening a Vanguard / Schwab account versus using Robinhood. Since my plan is simply to invest in Total Stock Market Index Funds, I don’t think my choice matters much but, went with Charles Schwab due to the reported customer service.