Fidelity Baskets vs. M1 Pies

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LLeaff
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Joined: Wed May 15, 2019 10:37 am

Fidelity Baskets vs. M1 Pies

Post by LLeaff »

I'm looking to invest some play money and I'd like to use something like M1 Finance's Pies implementation (https://www.m1finance.com/how-it-works/invest/pies/) I like how I can pick misc stocks and funds, assign a percent weight to each and then just through money in it and everything is taken care of.

However, I'm not sure I want M1. I'd prefer one of the big brokerage firms and it looks like Fidelity is the only possible choice with their baskets.

My question is: Can you combine Fidelity's baskets with their fractional shares and their free trades to achieve M1 Pies feature?

There are a few threads discussing baskets, but I can't find a definitive answer. Anyone have any experiences they can share?
DesertMan
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Re: Fidelity Baskets vs. M1 Pies

Post by DesertMan »

I'm interested in this topic. I tried the Fidelity baskets a few years ago and found they did not auto rebalance. Hopefully they do now.
Jags4186
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Re: Fidelity Baskets vs. M1 Pies

Post by Jags4186 »

While I can’t speak to the functionality of Fidelity Baskets, I would tell you that there is an almost 100% chance that M1 gets sold off or closes at some point which means its functionality may not remain the same forever. Fidelity isn’t going anywhere.
arf30
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Re: Fidelity Baskets vs. M1 Pies

Post by arf30 »

I don't use M1 but I don't think baskets is intended to be comparable - it's pretty basic and has been around forever with minimal changes/updates.
wodahSShadow
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Re: Fidelity Baskets vs. M1 Pies

Post by wodahSShadow »

Jags4186 wrote: Tue Aug 25, 2020 9:05 am While I can’t speak to the functionality of Fidelity Baskets, I would tell you that there is an almost 100% chance that M1 gets sold off or closes at some point which means its functionality may not remain the same forever. Fidelity isn’t going anywhere.
What makes you feel this way? I have been debating on switching taxable brokerage from Vanguard to M1 for their auto-rebalancing feature (and auto-investing into ETFs), and am looking to hear all sides.
RomeoMustDie
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Re: Fidelity Baskets vs. M1 Pies

Post by RomeoMustDie »

Even fidelity fractional shares annoy me because they can only be done on the self phone app.
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jason2459
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Re: Fidelity Baskets vs. M1 Pies

Post by jason2459 »

wodahSShadow wrote: Tue Aug 25, 2020 2:31 pm
Jags4186 wrote: Tue Aug 25, 2020 9:05 am While I can’t speak to the functionality of Fidelity Baskets, I would tell you that there is an almost 100% chance that M1 gets sold off or closes at some point which means its functionality may not remain the same forever. Fidelity isn’t going anywhere.
What makes you feel this way? I have been debating on switching taxable brokerage from Vanguard to M1 for their auto-rebalancing feature (and auto-investing into ETFs), and am looking to hear all sides.
I really like the pies, auto etf investing, auto balancing on new money in or out, easy manual rebalancing, etc

I would not be surprised if they did get bought out. I do not believe they will just close up. In both situations though your holdings are protected to the limits of and via SIPC. I pay attention to both SIPC and FDIC limits...

I've been through multiple brokerage buy outs and every one of them went smoothly. Only fractional shares had to be liquidated.
Jags4186
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Re: Fidelity Baskets vs. M1 Pies

Post by Jags4186 »

wodahSShadow wrote: Tue Aug 25, 2020 2:31 pm
Jags4186 wrote: Tue Aug 25, 2020 9:05 am While I can’t speak to the functionality of Fidelity Baskets, I would tell you that there is an almost 100% chance that M1 gets sold off or closes at some point which means its functionality may not remain the same forever. Fidelity isn’t going anywhere.
What makes you feel this way? I have been debating on switching taxable brokerage from Vanguard to M1 for their auto-rebalancing feature (and auto-investing into ETFs), and am looking to hear all sides.
Because M1 is a gimmicky service. It does what it does very well, but it isn’t close to being a full service brokerage—or hell even a limited service brokerage. To me its plainly obvious they are trying to build infrastructure and a customer base that one of the big guys — TD, Vanguard, Fidelity, Schwab, Empower, etc. — will then buy and incorporate. No guarantee they will incorporate that technology as it is currently being implemented at M1.

Don’t confuse this with your shares at M1 not being safe. I would think you have little to no worries that money you hold there has institutional risk. And my money is where my mouth is, I use M1. But I started with them before other brokerages started offering similar features.
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LLeaff
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Re: Fidelity Baskets vs. M1 Pies

Post by LLeaff »

Thanks for all the insight

Continuing my research Schwab has something similar with slices:

https://www.schwab.com/fractional-shares-stock-slices

However it seems to be that its use is only in purchasing. Once the shares are bought they are simply added to your holdings and no auto balancing is available.

I guess I'll sign up with M1 and deal with the eventual headaches if/when they get bought
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jason2459
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Re: Fidelity Baskets vs. M1 Pies

Post by jason2459 »

LLeaff wrote: Tue Aug 25, 2020 6:53 pm Thanks for all the insight

Continuing my research Schwab has something similar with slices:

https://www.schwab.com/fractional-shares-stock-slices

However it seems to be that its use is only in purchasing. Once the shares are bought they are simply added to your holdings and no auto balancing is available.

I guess I'll sign up with M1 and deal with the eventual headaches if/when they get bought
Yeah Schwab is stock only slices. Fidelity is app only fractional shares with ETFs but no automation.

M1 is awesome for what it can do. Keep in mind it is an automation buy and hold oriented platform. It is not a traditional day trading brokerage and is not marketed to reach Robinhood type traders. They only allow investments during set trading windows.

Fractional share investing is becoming more popular and if M1 is bought out I would think their fintech approach would be why and would be adopted. I could see someone like Schwab or Vanguard buying them.
DesertMan
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Re: Fidelity Baskets vs. M1 Pies

Post by DesertMan »

:happy
Jags4186 wrote: Tue Aug 25, 2020 3:17 pm
wodahSShadow wrote: Tue Aug 25, 2020 2:31 pm
Jags4186 wrote: Tue Aug 25, 2020 9:05 am While I can’t speak to the functionality of Fidelity Baskets, I would tell you that there is an almost 100% chance that M1 gets sold off or closes at some point which means its functionality may not remain the same forever. Fidelity isn’t going anywhere.
What makes you feel this way? I have been debating on switching taxable brokerage from Vanguard to M1 for their auto-rebalancing feature (and auto-investing into ETFs), and am looking to hear all sides.
Because M1 is a gimmicky service. It does what it does very well, but it isn’t close to being a full service brokerage—or hell even a limited service brokerage. To me its plainly obvious they are trying to build infrastructure and a customer base that one of the big guys — TD, Vanguard, Fidelity, Schwab, Empower, etc. — will then buy and incorporate. No guarantee they will incorporate that technology as it is currently being implemented at M1.
M1 doesn't really have infrastructure, they are one of many brokers that uses Apex for clearing (SoFi does as well). They are basically a front end to Apex with unique features.
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arcticpineapplecorp.
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Re: Fidelity Baskets vs. M1 Pies

Post by arcticpineapplecorp. »

It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
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jason2459
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Re: Fidelity Baskets vs. M1 Pies

Post by jason2459 »

arcticpineapplecorp. wrote: Tue Aug 25, 2020 8:59 pm i own the whole basket and the whole pie.

10,921 stocks:

https://investor.vanguard.com/mutual-fu ... file/VTSAX
+
https://investor.vanguard.com/mutual-fu ... file/VTIAX
Same here.

With M1 it's very easy to setup that pie and automate investing into the ETF versions of those by dollar amounts.

Example would be setup an equities pie (let's call it Equities) with VTI and VXUS. Set the desired allocations to each in that pie. Say, 70% to VTI and 30% to VXUS.

Then let's say you do want some bonds and use municipal bonds as let's say it's a taxable account. So you setup another pie for bonds (let's call this pie Bonds). You could setup for a short and intermediate term funds. Examples would be like SHM and VTEB. Say 20% to SHM and 80% to VTEB.

Then your main portfolio you would add your pies (Equity pie and Bonds pie) and set what allocation you want to those. Let's say 80% to Equities pie and 20% to Bonds pie.

Then you hook up a bank connection and how much you want to invest. Say we set it up to invest $1000 every 2 weeks. Every 2 weeks that will automatically happen and automatically make sure your desired allocations are in line. If equities go up more then more of that $1k will go to bonds. If VXUS goes up higher then VTI more will go to VTI.

If some major volatility happens like back in March and your bi weekly additions can't keep up and you really want to rebalance you can rebalance a single pie or the entire portfolio with a click of a button.

All an example and not a recommendation on AA or a portfolio. :sharebeer
aqan
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Re: Fidelity Baskets vs. M1 Pies

Post by aqan »

I just started using M1 3 months ago and so far I’m loving it. Although I don’t like being restricted to two trading windows during the day (M1 Plus), it actually forces you to be disciplined in your investment approach for the long term. I like how you’re able to follow the expert slices by hedge funds and other options. Super easy to deposit money, edit pie, add slices. The App is very intuitive and works very well.
Never used the fidelity Basket but Schwab factional shares don’t even come close to M1. Also, it is a lot better than schwab intelligent portfolio.
Highly recommended!!
I’d like to hear BH opinions about other services like Betterment, personal capital etc.
core4portfolio
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Re: Fidelity Baskets vs. M1 Pies

Post by core4portfolio »

For fidelity baskets, you need to have whole share puchased.
For example, if you put 1000 to buy SHOP, NFLX, AMZN,BRK-B AS 25% each then fidelity basket will not buy SHOP and AMZN but buys only NFLX and BRK-B. so no fractional investment in fidelity baskets.
M1 does fractional according to your allocation but no real time.

M1 have visa restrictions if it matters.
Allocation : 80/20 (80% TSM, 20% TBM) | Need to learn fishing sooner
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FelixTheCat
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Re: Fidelity Baskets vs. M1 Pies

Post by FelixTheCat »

+1 on M1. I wish the major brokerage firms had the pie concept and auto rebalancing.
Felix is a wonderful, wonderful cat.
lane7068
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Re: Fidelity Baskets vs. M1 Pies

Post by lane7068 »

The vast majority of my investing will be at Vanguard, but I also opened up an M1 account just because I wanted to see if my stock choices (4 per pie) could out-do the market.

I enjoy just letting my small auto-investment go in each week and have M1 allocate the money toward the pies/stocks that need it the most. Its definitely not for day trading. I plan on keeping it as a little fun investment for the long term.
dru808
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Re: Fidelity Baskets vs. M1 Pies

Post by dru808 »

wodahSShadow wrote: Tue Aug 25, 2020 2:31 pm
Jags4186 wrote: Tue Aug 25, 2020 9:05 am While I can’t speak to the functionality of Fidelity Baskets, I would tell you that there is an almost 100% chance that M1 gets sold off or closes at some point which means its functionality may not remain the same forever. Fidelity isn’t going anywhere.
What makes you feel this way? I have been debating on switching taxable brokerage from Vanguard to M1 for their auto-rebalancing feature (and auto-investing into ETFs), and am looking to hear all sides.
If they get sold off, I believe the m1 branding will be kept or at least the ui and pie interface will be kept. I moved the majority of my retirement assets to m1 late last year and couldn’t be happier, I just deposit and let the dynamic rebalance keep things running smoothly. If my allocation ever gets completely out of whack, it’s a simple press of the “rebalance” button and “all is well”.
60% SCHK | 25% VIGI | 15% ILTB
dru808
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Re: Fidelity Baskets vs. M1 Pies

Post by dru808 »

aqan wrote: Tue Aug 25, 2020 9:24 pm I just started using M1 3 months ago and so far I’m loving it. Although I don’t like being restricted to two trading windows during the day (M1 Plus), it actually forces you to be disciplined in your investment approach for the long term. I like how you’re able to follow the expert slices by hedge funds and other options. Super easy to deposit money, edit pie, add slices. The App is very intuitive and works very well.
Never used the fidelity Basket but Schwab factional shares don’t even come close to M1. Also, it is a lot better than schwab intelligent portfolio.
Highly recommended!!
I’d like to hear BH opinions about other services like Betterment, personal capital etc.
This is why it’s such a great “boglehead” interface. It’s hard to deviate from, deposit, auto buy. Dynamic and one click rebalancing. It should be the perfect “boglehead” approved broker.
60% SCHK | 25% VIGI | 15% ILTB
corp_sharecropper
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Re: Fidelity Baskets vs. M1 Pies

Post by corp_sharecropper »

Fidelity baskets is kind of a half-hearted effort, almost like they had a summer intern work on it to keep busy and then the internship ended before it was completed. They've had (haven't looked in a few months) a note on the baskets page saying something along the lines of how new features/improvements are coming to baskets... Well that message has been there since the first day I ever looked into baskets. They just don't seem interested in such a service/feature (I wish they would, I think what M1 has done is great).

The cynic in me has already identified conflicts of interest for Fidelity, somewhat similar to conflicts around fractional shares and commission free trades. Fidelity has a family of mutual funds, many actively managed. Mutual funds are a major tool for brokerages to make money and lock-in/retain clients while ETFs don't as their ER must compete across the entire market and ACATs makes them convenient to move to any broker. Then commission free trades comes along tearing down one more revenue stream and making ETFs even more enticing, no way this was voluntary on the brokers' part, their hand was forced by competition from startups in the business. Then comes fractional shares, another advantage of mutual funds gone. And now the next barrier to come down is in sight, automated ETF transactions. I don't think baskets/pies/automation for ETFs will be implemented in a useful way voluntarily, it will require impressive growth by M1 or a larger broker giving in and finally getting on that bandwagon before the gigantic brokers hop on board. At that point I don't see any advantage at all from a customer perspective to using a mutual fund if an ETF exists.
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