Webull vs eToro vs M1 Finance Photo-min.png

Webull vs eToro vs M1 Finance: Best Commission Free Trading Apps

Publish Date: 06 Dec 2019

Today, market conditions are considered perfect, the reason for this is because of the numerous free investing options available. When it comes to picking the best brokerage there are 3 market leaders that you need to consider. Webull, eToro, and M1 Finance. It’s completely up to you which one you choose, but we’re going to help you decide which one fits your investing goals best.

 

Summary of Basic Features

  • eToro has the best customer support with telephone and email support, whereas Webull and M1 Finance lack in immediate support, one of the trade offs of using free platforms.
  • M1 Finance has the best features for long term and dividend investors.
  • Webull is better for an intermediate to advanced traders or investors.
  • eToro has an extensive education program to help beginners.
  • The only one that offers retirement accounts is M1 Finance.
  • Only Webull has a trading simulator, meaning a demo account.
  • Minimum deposits of each are:
    • Webull - $0
    • M1 Finance - $100
    • eToro - $200
  • Business Minded readers get a FREE stock when signing up with Webull! You just need to use the link below.

 

Webull Button

 

eToro Button

 

M1 Finance

 

Disclaimer: 75% of retail investor accounts lose money when trading CFDs with this provider.

The Start of Commission Free Trading

Founded in 2007 and based in Cyprus, eToro’s narrow focus on social and copy trading has underpinned rapid growth that now hosts more than 10 million clients worldwide. This brokerage is trusted and authorized by CySEC and is compliant with ESMA rules, eToro is also licensed by the U.K’s Financial Conduct Authority.

M1 Finance followed the example set by eToro and in December 2017 they ditched the traditional business model of charging an asset management fee. They made a bold prediction that the future of finance is free, and they were right.

Finally Webull appeared on the scene in May 2018, they officially launched their trading app. Following the same business model as M1 Finance, Webull managed to identify a demand for a more robust trading platform, and so Webull are now on of the top free trading platforms on the market.

 

Signup incentive

Webull

Webull Logo

 

One of the biggest incentives to to sign up to Webull is that Business Minded readers get a free stock when they register! Just do these two things:

  1. Open an account HERE! And get a stock worth up to $500
  2. Fund the account with at least $100 and get a second stock worth up to $1200

You must use our link to get the free stocks. Click Here to start investing!

 

M1 Finance

M1 Finance Logo

 

There are no real incentive to sign up to M1 Finance, however I would highly recommend this broker to anyone is starting with less than $100.

 

eToro

eToro Logo

 

Like M1 Finance there are no real incentives to sign up, this platform is the best for beginners, once you are signed up you will have access to their education center. Also eToro adopts the model of copy trading, where you get information on what the top traders are doing, so you can try and do the same.

 

So how do free trading apps make money?

You might be hesitant to invest in something you don’t know about. So here I will let you in on the secret of how these apps make their money.

One way Webull makes money is by offering a premium subscription to those who want it, it is not needed and I wouldn’t personally buy a subscription to a trading app. You don’t get much, they are called the NASDAQ programs, all they are is more news output and a slicker looking chart.

All three apps earn interest on the uninvested cash held in brokerage accounts, they also use margin in trades, which allows them to earn margin interest. Another way they earn interest is by offering loans against securities held within the account, they earn interest on the loan.

The final way they make money is by earning fractions of pennies on each trade by directing order flow, this is still no extra cost to you.

 

Are these apps safe?

The most common questions we get from readers is whether or not these trading apps are safe. You’ve probably been told before ‘don’t trust anything on the internet’. I don’t want to discourage being cautious, do extensive research before investing your money anywhere, but the good news is that the apps on this list are all members of the FINRA with SIPC insurance that protects you in the event the company goes under. EToro is also backed by the U.K’s FCA and Cyprus’ CySEC. In plain English, that means if they lose your shares or money, you are insured. You are not insured against any losses from investments you make.

 

Is Webull best for you?

Webull Sign up screen

Webull is the newest free investing app on the list, but they are gaining market share fast and with good reason. eToro was the pioneer in the commission free trading niche, but there was still a gap that Webull could fill. That void is a robust, data-driven free trading platform. EToro offers a beginner friendly trading app that anyone can use and understand. As a result, eToro is lacking the more complex data analysis that the more confident traders would understand.

Bearing in mind all the data and tools held within the Webull app, they have still created an excellent user experience. Where it is not a beginner friendly platform, it is similar to taking a drink from a fire hose. The amount of data available at your disposal can be very overwhelming.

Webull has created a great platform for intermediate to advanced traders and investors. These investors are looking for more fundamental and technical data. With the demo trading account you can open, you can really hone your skills.

 

Webull’s best features

  • Real-time market data: The main positive of this platform is the robust data available to traders. This includes over 22 different technical indicators, investors will find all the numbers they need to make a decision, including key financial documents, earnings dates, and analyst recommendations.

  • Commission free short selling: For people wanting to start short selling, Webull offers this commission free. The only problem with this, is that you have to open a margin account, which has a minimum balance requirement of $2,000.

  • Extended trading hours: Webull offers both pre-market and after-market trading. Normally you can only trade stocks from 9:30am to 4:30pm EST, With Webull you can place trades before the market opens and after it closes.

 

Is M1 Finance best for you?

M1 Finance Sign Up Screen

 

You have two types of investors in the stock market. The trader that will get in and out of stocks as they move over a matter of weeks or months, then you have the long term investor who will buy shares and hold them for years and either draw dividends, or reinvest them back into their initial stock.

M1 Finance has created the ideal free investing platform for long term investors. Dividend investors should be particularly interested, as they offer a portfolio level dividend reinvestment. They are also one of the only free investing platforms that offer retirement accounts.

The best part of M1 Finance is the fractional shares, which I will describe better below. They allow people that don’t have thousands of dollars to still invest in the top stocks on the market.

 

M1 Finance’s best features

  • Portfolio level DRIP: When a stock within your pie earns a dividend, that dividend is reinvested across your entire portfolio. This is a little different than a stock level DRIP, where 100% of the dividend goes back into the issuing stock. Still, this is an entirely free way to reinvest dividends and earn compound interest. M1 Finance to my knowledge is the only free investing app that has this feature.
  • Custom & expert pies: With M1 Finance, you are creating a portfolio or pie. You have the option of creating your own from scratch or investing in one of the prebuilt expert pies they offer. They do not charge any fees to invest in these expert pies. Within each pie, you can hold stocks or ETFs. Each pie can hold up to 100 stocks or ETFs, and you can have multiple pies within the platform!
  • Fractional shares: When you buy shares of stocks on eToro, Webull, and most other apps, you have to buy whole shares. This can become a problem when you look at companies like Amazon. This stock trades at over $1,000 a share. If you do not have enough to purchase a whole share, you can’t buy one through these other apps. M1 Finance offers fractional shares on its platform. This means that you can invest in as little as 1/10,000th of a share of any stock or ETF that trades on the NYSE or NASDAQ. If you wanted to, you could invest as little as $10 in Amazon through fractional shares.
  • Automatic rebalancing: For those who are not familiar, rebalancing is something that you must do to keep your portfolio at your target allocations. Not all assets within your portfolio will move the same way. You might start out with 50/50 allocations between two stocks and a month later find it is 40/60. As you add more money to your account or earn dividends, M1 Finance will invest in whatever assets you are underweight in within your portfolio to bring you back to your target allocation. If you are looking to take money out of your account, they will sell whatever you are overweight in. This means that M1 Finance is automatically buying low and selling high on your behalf.
  • Retirement accounts: Finally, a free investing app that offers retirement accounts! Through M1 Finance, you can open a variety of different IRA’s including the Roth IRA and Traditional IRA. To open a taxable account with them, you just need a minimum balance of $100. To open a retirement account with them, you need a minimum balance of $500. You can also rollover an IRA or 401k to your M1 Finance account.

 

Is eToro best for you?

eToro Sign up screen

 

eToro offers both short and long-term options for traders, all accessible through the CopyPortfolios™ service which allows traders to set up a diversified portfolio. eToro also offers trading instruments with a varying degree of associated risk, while the platform is also available on its web interface and mobile app.

In addition, eToro has also created the CopyTrader™ system which allows individuals to copy the trades of other users, enabling its clients to potentially benefit from the collective experiences of its network of traders. Beginner traders will also receive a series of guidance when taking their first steps into online trading. For example, eToro offers new traders a free practice account enabling them to practice trading online without risking any real money.

eToro is fully regulated and conforms to the guidelines of CySEC, the FCA and ASIC, and has partnered with major financial institutions, such as Russia’s Sberbank and China’s Ping An Group, to promote online trading and financial education in these markets.

 

eToro’s best features

  • Custom trading platform: eToro offer a user-friendly custom trading platform, available as both a downloadable program or as a browser based WebTrader. eToro also offer mobile apps for Android and iOS, making it easier to keep an eye on and execute your trades while you are on the move.
  • Client support: eToro has the best customer support of all the apps outlined in this article, you can contact via email, live chat on the website, or telephone. Brokernotes has given eToro a triple A support rating because they offer a wide range of support options.
  • CopyPortflios and CopyTrader: The eToro CopyPortfolios program is a managed portfolio account system where traders can simply put funds in and have a top trader make all the trading decisions. All a trader needs to do to participate is to fund the trading account, find a CopyPortfolios that fits their investment objectives and strategy, and click to join the desired portfolio. CopyTrader is similar, but you are responsible for the management of the investment.

 

Final thoughts

All three of these apps offer a different experience. They all offer commission free trading with small minimum account balances. The only thing that sets them apart are what you are looking for.

Like I’ve mentioned, M1 Finance is built for long term investors, people who want to build their wealth using stocks and shares. Webull has the beat features for advanced traders, and offer a free stock when you sign up using our link. Then eToro is the most user friendly and is great for beginners because of all there educational tools.

Because they are free, you could sign up and try them all out, or just to see the platform interface. Check out the links below and you’ll get a warm welcome upon arrival, there’s a free stock with your name on!

Webull Button

 

eToro Button

 

M1 Finance

 

Make sure you check out our other posts about the stock market:

 

Head over to our Recommended Tools page for more information about the products we like!

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