Paul Merriman
Sound Investing For Every Stage of Life 

Fractional-Share Brokerages — Motif Investing & M1 Finance

Today, we know of two fractional-share brokerages that can help simplify investing in Paul’s recommended portfolios — Motif Investing and M1 Finance.  Both recently announced changes to their fees.  Motif announced they will be increasing fees for real-time trades and requiring a next-market open trade for today’s $9.95 fee starting February 16, 2018, while M1 Finance announced they lowered commissions to $0 last December.  
Here’s how they compare today. (January 2018)

Click here for M1

Click here for Motif

 

Motif Investing

M1 Finance

Company Focus — Their Words

Low-Cost, Thematic Investing

Free, Automatic, Intelligent Investing

Pre-Built Merriman Portfolios

Yes

Yes

Portfolio Allocation Model

“Motif” allocations drift so we periodically reset them to desired %s

The “Pie” allocations you create are fixed and stable

Maximum ETFs / Purchase

30 Stocks or ETFs / Motif

500 Stocks or ETFs / Pie

Minimum Initial Investment

$300

$100 ($500 for retirement accts)

Minimum Purchase

$300

$10

Purchase and Rebalance Commissions

$9.95 for next-market open,

$19.95 for real-time trades

$0

New Purchases Help Rebalance?

No (tracks asset values)

Yes (aims for target allocation)

Platform Fee

For accounts <$10k, $10 for every six months w/o commission trade

None

Automatic Deposit / Purchase

No (Yes w/ $9.95/mo Blue Svc)

Yes, when >$10

Automatic Dividend Reinvesting

No

Yes, when >$10

(helps rebalancing)

Cash Drag

~2% Cash held back during market hours, 5% for trades at market open

<$10/account

Trade Timing

At market open for $9.95,

$19.95 for trades during day

9:00 AM Everyday

Limit Orders

No

No

Tax-Loss Harvesting

No

No — Tax-Minimization Instead

Custodial Accounts

No

Yes

Cost to close or transfer IRA

$95

$100

Custodial Holding Firm

Pershing LLC

Apex Clearing Corporation

Insurance

SIPC $500,000 per account

SIPC $500,000 per account

Possible low-cost trading steps

Deposit & purchase in January, rebalance in July

Setup auto-deposit to account and increase it over time

Other Considerations

Young company, minimal support, lack of automation & cash drag are bad, but convenience of pre-built Motifs is a definite plus

Young company, minimal support, ease-of-use not best, fixed trading window may not be optimal, but automation & tax-minimization are definite pluses