Is M1 Finance or Wealthfront better?

M1 Finance is better for IRA accounts and investors who want to customise their own ETF portfolio at $0 fee. Wealthfront is better for taxable brokerage accounts where its 0.25% fee is offset by daily tax-loss harvesting. At high balances ($100,000+), Wealthfront's direct indexing delivers additional tax efficiency that M1 cannot match. For Roth IRA investing with a custom ETF portfolio, M1 Finance's $0 fee is difficult to beat.

Does M1 Finance do tax-loss harvesting?

No. M1 Finance does not offer tax-loss harvesting. This is its primary disadvantage for taxable brokerage accounts versus Wealthfront. In an IRA, this distinction doesn't matter — there are no capital gains taxes inside an IRA, so TLH provides no benefit. For taxable accounts in the 22%+ bracket, Wealthfront's TLH is worth approximately 0.10–0.50% per year.

Does Wealthfront really charge 0.25% more than M1?

Yes — Wealthfront's 0.25% annual advisory fee is the explicit cost difference over M1 Finance ($0 fee). On $100,000, that's $250/year. Wealthfront's tax-loss harvesting in a taxable account can generate $100–$500/year in tax savings at the 24%+ bracket — potentially exceeding its fee. In an IRA, Wealthfront's fee is a net negative versus M1 Finance's $0.

Can I build custom portfolios on Wealthfront?

Limited. Wealthfront offers a 'custom portfolio' option that lets you adjust ETF weights and exclude specific funds. However, the overall portfolio construction stays within Wealthfront's automated framework. M1 Finance offers complete flexibility — you can build any portfolio of stocks and ETFs with custom percentage targets. If custom allocation is your priority, M1 Finance is significantly more flexible.

Which is better for a Roth IRA, M1 Finance or Wealthfront?

M1 Finance is better for a Roth IRA if you want to build a custom low-cost ETF portfolio at $0 fee. Wealthfront's 0.25% fee in an IRA context provides portfolio management and rebalancing but no tax-loss harvesting benefit. For hands-off fully automated IRA investing with more fund choices, Fidelity Go ($0 fee under $25K) or Betterment are closer competitors.

M1 Finance vs Wealthfront 2026 — Control vs Tax Efficiency

M1 Finance charges $0 and lets you build fully custom portfolios from any stock or ETF. Wealthfront charges 0.25% and automates everything — rebalancing, tax-loss harvesting, and direct indexing at $100,000+. The choice comes down to one question: are you investing in a taxable account or an IRA? In a taxable account, Wealthfront’s tax-loss harvesting can be worth more than its 0.25% fee. In an IRA, M1 Finance’s $0 fee is almost always the better deal.

Side-by-Side Comparison

Feature	M1 Finance	Wealthfront
Advisory fee	$0	0.25%
Account minimum	$100 (taxable), $500 (IRA)	$500
Portfolio construction	Fully custom (any stock/ETF)	Automated (ETF-based)
Tax-loss harvesting	No	Yes (all balances)
Direct indexing	No	$100,000+
Automatic rebalancing	Yes (on deposits/withdrawals)	Yes
Fractional shares	Yes	Yes
Fund expense ratio	~0.03–0.07% (you choose)	~0.07–0.10%
Human advisor	No	No
Taxable, Roth IRA, Traditional IRA	Yes	Yes
SEP-IRA	No	Yes
Trust accounts	No	Yes

Cost Comparison

Portfolio Size	M1 Finance Annual Cost	Wealthfront Annual Cost	Net Difference
$10,000	~$3–7 (fund costs only)	$25 + ~$7 = ~$32	M1 saves ~$25
$50,000	~$15–35	$125 + ~$35 = ~$160	M1 saves ~$125
$100,000	~$30–70	$250 + ~$70 = ~$320	M1 saves ~$250
$250,000	~$75–175	$625 + ~$175 = ~$800	M1 saves ~$625

In fee terms, M1 Finance always wins. The question is whether Wealthfront’s TLH returns more than its fee costs.

When Wealthfront’s TLH Beats M1’s $0 Fee

Scenario: $100,000 taxable portfolio, 24% federal + 5% state tax bracket

Year	Est. Wealthfront TLH Savings	Wealthfront Fee	Net Benefit vs M1
Year 1	~$300–500	$250	+$50–$250
Year 5 (at ~$130K)	~$390–650	$325	+$65–$325
Year 10 (at ~$200K)	~$600–1,000	$500	+$100–$500

In taxable accounts in the 24%+ bracket, Wealthfront’s TLH likely outperforms its fee — especially as the portfolio grows. At $100,000+, direct indexing adds further advantage.

In the 12% bracket: TLH savings are minimal (long-term gains taxed at 0%). Wealthfront’s fee is a pure cost — M1 Finance wins at all balances.

When M1 Finance Beats Wealthfront

IRA accounts — No capital gains taxes inside an IRA; TLH benefit is $0. M1’s $0 fee saves $250+/year on $100,000.
Taxable accounts in 12% bracket — 0% long-term capital gains rate means TLH provides no benefit. M1’s $0 fee wins.
Custom portfolio investors — Wealthfront’s portfolio construction is largely fixed. M1 lets you weight any ETF exactly as you want.
Investors who want fractional share stock picks — M1 allows individual stocks alongside ETFs. Wealthfront does not.

Portfolio Flexibility: M1 Finance Wins

M1’s “Pie” portfolio system lets you allocate any percentage to any stock or ETF:

Capability	M1 Finance	Wealthfront
Choose any ETF	Yes	Limited
Choose individual stocks	Yes	No (direct indexing only)
Set custom allocation %	Yes	Partial (adjust ETF weights)
Multiple portfolios (“Pies”)	Yes	No
Factor tilts (value, small-cap)	Yes (choose ETFs)	Limited

Wealthfront’s customisation lets you exclude specific ETFs and adjust some weights — but the overall structure is managed by Wealthfront’s algorithm. M1 Finance gives you complete construction control.

Which to Choose: The Decision Framework

Your Situation	Best Choice
Roth IRA or Traditional IRA	M1 Finance (save the 0.25% fee)
Taxable account, 22%+ bracket, $50K+	Wealthfront (TLH likely pays the fee)
Taxable account, 12% bracket	M1 Finance (TLH has no value)
Want a custom low-cost ETF portfolio	M1 Finance
Want fully hands-off automation	Wealthfront
Want direct indexing at $100K+	Wealthfront
Want to invest in individual stocks	M1 Finance

Optimal combined strategy: Use M1 Finance for your Roth IRA (custom portfolio, $0 fee) and Wealthfront or Betterment for additional taxable investing (TLH value justifies the fee).

Written by WealthVieu

WealthVieu researches and writes data-driven personal finance guides using primary sources including the IRS, Bureau of Labor Statistics, Federal Reserve, and Census Bureau.

The content on Wealthvieu is for informational purposes only and should not be considered financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Full disclaimer · Editorial policy