M1 Finance vs. Fidelity vs. Vanguard: Fractional Shares, Fees, and Best Fit in 2026

Three of the most recognized names in U.S. retail investing—M1 Finance, Fidelity, and Vanguard—have each made notable moves in 2026. M1 Finance introduced a $3/month platform fee for smaller accounts, Fidelity is rolling out service fees on 120+ specific ETFs starting June 1, 2026, and Vanguard cut expense ratios across 53 funds in early 2026. If you’re choosing between them now, the differences matter more than ever.

This comparison covers fractional share access, fee structures (including the changes you may not have seen yet), platform strengths, and a direct recommendation by investor profile. No platform is universally best—but one is almost certainly better for your specific situation.

Quick Overview: Which Broker Fits Your Investing Style

Before diving into specifics, here is a plain-English summary of what each platform is actually optimized for:

• M1 Finance: Best for passive, long-term investors who want automated portfolio management using “Pies” (pre-built or custom diversified portfolios) and commission-free trading. The tradeoff: a $3/month platform fee applies to accounts under $10,000, which adds up to $36/year.
• Fidelity: A full-service platform capable of serving beginners through advanced traders on the same interface. Zero commissions on U.S. stocks and ETFs remains in place—but a new service fee of up to $100 per transaction on 120+ specific ETFs takes effect June 1, 2026. Check the affected fund list before committing.
• Vanguard: Designed for cost-conscious, buy-and-hold investors. Vanguard’s average expense ratio is the lowest in the industry (under 0.20%), and the firm reduced fees on 53 more mutual funds and ETFs in early 2026. Trade-off: fractional shares are limited to Vanguard-branded ETFs only.

All three now offer fractional shares, but availability and minimums differ significantly—covered in detail below.

Fractional Shares: Access and Minimums Compared

Fractional shares let investors buy a slice of a stock or ETF rather than a full share. A $1,000 stock like Amazon becomes accessible with $50, for example. Here is how each broker handles it:

M1 Finance

M1 Finance offers fractional shares on all stocks and ETFs available on its platform. The minimum to begin investing is $1. Fractional positions are built automatically when you add funds to a Pie—you never have to manually specify fractions. This makes it one of the most friction-free fractional share experiences available.

Fidelity

Fidelity offers fractional shares starting at $1 across more than 7,000 stocks and ETFs, available through both its mobile app and web platform. This is the broadest fractional share access of the three brokers, covering both domestic and international names. Fidelity does not restrict fractional purchases to proprietary funds.

Vanguard

Vanguard allows fractional share purchases, but only on Vanguard ETFs. You cannot buy fractional shares of individual stocks or third-party ETFs through Vanguard. For investors who want to hold a diversified mix of Vanguard index products—VTI, VXUS, BND—this is sufficient. For anyone wanting fractional access to individual equities or non-Vanguard funds, this is a genuine limitation.

Fractional Share Verdict

Fidelity and M1 Finance both offer broad, unrestricted fractional share access with a $1 minimum. Vanguard trails significantly, restricting fractional purchases to its own ETF lineup. If fractional share flexibility is a priority, Vanguard is not the right choice.

Fee Structures and Hidden Costs in 2026

Fee structures across all three brokers look similar on the surface—$0 commissions—but the details diverge sharply once you look at platform fees, ETF-specific charges, and account minimums.

M1 Finance Fees

• Trading commissions: $0 on stocks and ETFs
• Platform fee: $3/month for accounts with a balance under $10,000 (approximately $36/year)
• M1 Plus: Discontinued; premium features have been folded into the standard account
• Paper statements: $5 per statement
• Margin: Available; M1 Finance is consistently cited as offering some of the lowest margin rates among retail brokers

The $3/month fee is a meaningful cost for beginners. On a $3,000 account, $36/year represents a 1.2% annual drag before any investing returns. Once an account crosses $10,000, the fee disappears entirely.

Fidelity Fees

• Trading commissions: $0 for U.S. stocks and ETFs
• New 2026 ETF service fee: Up to $100 per transaction on purchases of 120+ specific ETFs, effective June 1, 2026
• Options: $0.65 per contract
• Non-Fidelity mutual funds: $49.95 per trade
• Account minimum: $0
• Annual account fee: $0

The June 2026 ETF service fee is the most significant change for Fidelity users. If you regularly invest in funds on the affected list, a $100 transaction fee on a $500 purchase equals a 20% one-time cost—effectively erasing any long-term expense ratio advantage. Check Fidelity’s blocked ETF list before opening an account or initiating recurring investments.

Vanguard Fees

• Trading commissions: $0 on stocks and ETFs
• Annual brokerage account fee: $25 (waivable with e-statements or $5 million+ in assets)
• Non-Vanguard mutual funds: Up to $20 per trade
• Options: $1 per contract
• Fund expense ratios: Industry-lowest average, under 0.20%; 53 additional funds reduced in early 2026

The $25 annual fee is easy to waive—simply opt in to electronic statements. For long-term holders of Vanguard index funds, the ongoing expense ratio savings dwarf any account-level fee concern. A 0.03% expense ratio on VTI costs $3/year per $10,000 invested. Comparable ETFs at competitors often run 0.10–0.20%.

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M1 Finance: Automated Investing and Passive Management

M1 Finance operates differently from traditional brokers. Rather than placing individual buy orders, investors build “Pies”—visual, percentage-based portfolio templates. When you deposit money, M1 automatically allocates it across your Pie’s holdings, including fractional shares, to maintain your target weights.

Core Strengths

• Automatic rebalancing: No manual trades needed; deposits and dividends rebalance toward targets at no cost
• Expert Pies: Pre-built portfolios based on strategies like dividend growth, general investing, or retirement by decade—useful for beginners who don’t want to build from scratch
• Cheap margin: Among the lowest margin rates available to retail investors
• Fractional shares from $1: Fully integrated; no manual calculation required

Limitations

• No options trading
• No Solo 401(k) or SIMPLE IRA accounts
• No all-day trading window: Trades execute in one or two windows per day, not in real time
• Platform fee: $3/month on accounts under $10,000 penalizes beginners with smaller balances
• Limited crypto exposure: Expanding, but still limited compared to full-service competitors

Who M1 Finance Is Best For

Passive, long-term investors—particularly those with $10,000 or more—who want a set-it-and-forget-it experience with automatic rebalancing. M1 is not a fit for active traders, options users, or investors who need account types like Solo 401(k)s.

Fidelity: Full-Service Trading for All Experience Levels

Fidelity is one of the few brokers that genuinely serves both a 22-year-old investing $50/month for the first time and a 55-year-old managing a $2 million portfolio. The platform hasn’t compromised depth for simplicity—it offers both.

Core Strengths

• Full trading suite: Stocks, ETFs, mutual funds, options, bonds, CDs, crypto, and precious metals
• Options trading: $0.65 per contract
• Retirement accounts: Traditional IRA, Roth IRA, SEP IRA, Solo 401(k), SIMPLE IRA, 529 plans
• All-day trading and order control: Real-time execution with limit, stop-loss, and advanced order types
• Fractional shares on 7,000+ securities: Available through both mobile and web platforms starting at $1
• Advisory services: Fidelity Go (robo), Fidelity Advisory Services ($50,000+), Fidelity Wealth Management ($500,000+), and Private Wealth Management ($2 million+)
• Educational resources: Among the strongest in the industry for beginner investors

2026 Caveat: New ETF Service Fees

Starting June 1, 2026, Fidelity will charge a service fee of up to $100 per purchase transaction on 120+ specific ETFs. These are not Fidelity-proprietary funds—they are third-party ETFs that Fidelity has chosen to surcharge. If your investment strategy relies on any of these funds, this fee could materially increase your cost basis. Always check the blocked ETF list before executing purchases at Fidelity in 2026 and beyond.

Who Fidelity Is Best For

Beginners who want no friction getting started, active traders who need real-time order control, options traders, and investors who need full retirement account flexibility (Solo 401(k), SIMPLE IRA, 529). Fidelity is also the safest default choice for anyone who isn’t sure yet what they need—it’s easier to stay at Fidelity as your needs grow than to migrate accounts later.

Vanguard: Low-Cost Index Investing Leadership

Vanguard’s core proposition has not changed since John Bogle founded it in 1975: own the market cheaply and hold for the long term. What has changed in 2026 is that Vanguard is actively reinforcing this position by cutting expense ratios across 53 more mutual funds and ETFs—moves that widen its cost advantage over competitors.

Core Strengths

• Lowest average expense ratios in the industry: Under 0.20% on average; flagship funds like VTI and VXUS often under 0.05%
• 2026 expense ratio cuts: 53 funds reduced in early 2026, including both ETFs and mutual funds
• Fractional shares on all Vanguard ETFs: Practical for building a diversified all-Vanguard portfolio without large minimums
• Personal Advisor Services: Available for accounts with $50,000+; combines robo-advisory with access to human advisors at a competitive 0.30–0.40% fee
• Passive, low-turnover index approach: Minimizes capital gains distributions and tax drag in taxable accounts

Limitations

• Fractional shares limited to Vanguard ETFs only: No fractional access to individual stocks or third-party ETFs
• $25 annual account fee: Easily waived, but it exists
• Non-Vanguard mutual fund trades: Up to $20 per transaction
• Options: $1 per contract (higher than Fidelity’s $0.65)
• Platform modernization: Historically slower to update its interface and mobile app than Fidelity or M1

Who Vanguard Is Best For

Long-term, retirement-focused investors who want to hold diversified index portfolios at the lowest possible ongoing cost. Vanguard is particularly compelling for investors with $50,000+ who can access Personal Advisor Services, and for those building taxable investment accounts where low turnover and minimal distributions matter.

Side-by-Side Comparison: Which Fits Your Profile

Key 2026 Takeaways

• Vanguard’s 2026 fee cuts make it the cheapest long-term hold for index investors—and the gap is widening, not narrowing.
• Fidelity’s new ETF service fees are a hidden cost that may affect investors who rely on specific third-party ETFs. Verify before transacting.
• M1 Finance’s $3/month fee is only a problem for accounts under $10,000. Above that threshold, it’s one of the most cost-efficient platforms for passive investors.

What to Do Next

Use this five-step process to finalize your decision without overcomplicating it:

1. Clarify your investor profile. Are you a passive investor or an active trader? What is your current account size? Are you investing in a taxable account, IRA, or employer-type retirement account like a Solo 401(k)? The answers filter out at least one of the three brokers immediately.
2. If considering Fidelity: review the June 2026 blocked ETF list. If the funds you plan to buy appear on the surcharge list, your actual cost will be significantly higher than the advertised $0 commission. Fidelity publishes this list on its website; check it before placing any ETF purchases.
3. If considering M1 Finance: confirm your balance will stay above $10,000. The $3/month fee disappears once your account exceeds this threshold. If you’re starting with $2,000–$5,000 and plan to grow quickly, calculate whether the fee drag outweighs M1’s automation benefits during the ramp-up period.
4. Test the interface before committing. All three brokers allow you to open an account and make a fractional share purchase for $1–$10. Do this first. Platform usability matters for consistency—the best broker is the one you’ll actually use.
5. If you cannot decide, start with Fidelity. Its zero minimums, broad account types, and fractional share access make it the lowest-risk starting point. You can open an M1 Finance or Vanguard account later as your balance grows and your investing strategy becomes clearer. Moving assets between brokers is possible but inconvenient—starting at Fidelity keeps options open.

This article is for informational purposes only and does not constitute personalized financial, tax, or legal advice. Fee structures and product offerings are subject to change; verify current terms directly with each broker before making investment decisions.