What to look for in an AI financial advisor

M1 Team
M1 Team October 5, 2026

Evaluating an AI financial advisor comes down to six questions: how it’s registered, which of your accounts it can see, whether it can trade or only recommend, what it costs, what it does with your data, and who reviews its answers. Registration is where to start, because it’s the one you can check yourself — in public records, before you give a provider a single account number. 

1. Is the provider registered, and as what?

An AI financial advisor is generally registered as an investment adviser, as a broker-dealer, as both, or as neither. Which one it is determines what the provider owes you. 

  • Investment adviser. A firm that provides investment advice for compensation. It generally registers with the Securities and Exchange Commission or with state regulators, depending mainly on how much it manages and where it operates, and it owes its advisory clients a fiduciary duty. 
  • Broker-dealer. A firm that buys and sells securities for customers. It is subject to Regulation Best Interest when it makes a recommendation to a retail customer, which requires it to act in that customer’s best interest at the time of the recommendation and not put its own interests first. 

The difference is scope. The adviser duty runs across the relationship; Reg BI attaches to each recommendation. Neither speaks to results, and neither extends to someone who isn’t a client yet. 

A provider can be both, and then the standard depends on what it’s doing for you at the time. It can also be neither, in which case its terms of service set what it owes you. 

Note: Registration is not a quality rating. It tells you who is accountable and to what standard. Whether the advice is any good is a separate question. 

How to check a provider’s registration 

You can check a provider’s registration yourself in four steps. None of them requires an account. 

  1. Search the adviser database. Look the firm up on the SEC’s Investment Adviser Public Disclosure database, then open the record and read the status and its date. A search hit alone isn’t the answer: the database also carries firms that file without being registered, and firms whose registration has ended. 
  1. Search BrokerCheck. FINRA’s BrokerCheck carries broker-dealer records, and it also surfaces adviser records from the same filings — so appearing in both databases is not evidence a firm is registered as both. Read what each record says. If a firm genuinely is both, ask which capacity it’s acting in when it deals with you, because that sets the standard. 
  1. Open the relationship summary. SEC-registered advisers and broker-dealers serving retail investors publish a Form CRS (for advisers, Form ADV Part 3) — a short plain-language document covering services, fees, conflicts, the standard of conduct and disciplinary history. A state-registered firm may not have one; go to the brochure instead. 
  1. Read the brochure and the record. Advisers file a Form ADV Part 2A setting out fees and conflicts. Broker-dealers don’t, so that detail sits in their Form CRS and fee schedule. Check the disciplinary history, not just the profile. 

Steps 1 and 2 tell you a firm is accountable. Steps 3 and 4 tell you what for, at what price, and with what conflicts. 

2. What can an AI financial advisor actually see? 

What an AI financial advisor can see ranges from every individual holding in every account you link, to balances only, to nothing beyond what you type in. Advice built on a partial picture can be reasonable and still wrong for you. 

“Connected” covers all three: 

  • Full holdings. Reads the individual positions inside accounts you link elsewhere, so it can see where holdings overlap. 
  • Balances only. Reads its own accounts in full, but sees outside accounts as totals. It has your net worth, not your overlaps. 
  • Nothing. Works from what you type. The data footprint stays small and the accuracy of the picture is entirely on you. 

Ask what a tool reads, not whether it links. And none of the three can reason about facts no account holds — a job change, a business sale, a divorce, how much loss you can sit through — unless you say so. 

3. Does an AI financial advisor recommend, or does it act? 

Some AI financial advisors can place trades on your behalf; others only recommend and leave every transaction to you. The difference decides whether money can move without you. 

  • Discretionary. Once a profile is set, the provider can trade on your behalf without asking each time. 
  • Non-discretionary. It recommends and leaves execution with you, so nothing happens unless you act. 

Each carries a cost. With discretion, money can move without a decision from you. Without it, a recommendation can sit unexecuted, or go stale, while you decide. Know which one you agreed to. 

4. What does an AI financial advisor cost, and how is it charged? 

AI financial advisor pricing usually takes one of two shapes, and they behave differently as a balance grows. 

  • A percentage of assets rises in dollar terms as the balance rises. The same rate costs more each year on a larger portfolio. 
  • A flat fee, or a cost bundled into a platform charge, doesn’t move with the balance. 

Neither is automatically cheaper. It depends on the balance, the rate, the holding period and what the fee includes, and a percentage fee may buy services a bundled one doesn’t. Compare what each costs over a long holding period, and what you get for it today. 

Advisers publish fee terms in Form ADV Part 2A, though they may be a range or negotiable rather than a single number. 

5. What happens to your data? 

What a provider does with your data is set out in its privacy policy: what it retains, whether your information trains models, whether you can turn that off, and what happens when you close the account. Not every policy addresses model training, and policies change, so read the current one. 

6. Who reviews the answers? 

No published industry standard governs who reviews an AI financial advisor’s answers. The practice varies by firm, so you have to ask. 

Registration establishes who is accountable. It doesn’t tell you what a firm does day to day to keep an AI system’s answers inside the rules. Three questions get at that:  

  1. Does the firm test the system’s responses against its regulatory obligations before release? 
  1. Are responses reviewed on an ongoing basis rather than only at launch? 
  1. Who does the reviewing? 

One caveat applies to all six. AI systems can produce answers that sound confident and are wrong, and may not answer the same question the same way twice. That is inherent to the technology, and no amount of registration or oversight removes it. Verify anything material before you act on it. 

The M1 bottom line 

M1 Advisor is an AI financial advisor built into the M1 platform. It answers questions about your accounts, explains how the platform works, and recommends changes — it does not make them for you. 

Here are the six things to look for in an AI financial advisor, applied to M1 Advisor. 

Registered? Yes, and as both. M1 Advisor is offered by M1 Advisory Services LLC, an SEC-registered investment adviser, which owes a fiduciary duty to its advisory clients; brokerage accounts sit at M1 Finance LLC, a broker-dealer and member FINRA/SIPC. Verify both on adviserinfo.sec.gov and BrokerCheck. Registration does not imply a certain level of skill or training, or an endorsement by the SEC. 

What can it see? Your M1 accounts in full; accounts you link from elsewhere as balances only. M1 Advisor reads all your M1 accounts in detail, and sees accounts you link through the M1 Balance Sheet. 

Recommends, or acts? Recommends only. M1 Advisor is non-discretionary, so it cannot place trades or move money on your behalf. You set your own target allocation, and M1 never rebalances without your instruction. 

What does it cost? No separate advisory charge through December 31, 2027. The M1 platform costs $3 a month — never more, however many accounts you hold — waived in any billing cycle where total M1 assets reach $10,000 on at least one day, and charged whether or not you use M1 Advisor. Other fees may apply; see the M1 Fee Schedule. 

What happens to your data? M1 Advisor has no access to your data until you opt in, and that access is read-only. What M1 collects and shares is in the M1 Privacy Policy. 

Who reviews the answers? M1 reviews its own. M1 Advisory Services LLC runs a compliance and monitoring framework internally, and accounts are not reviewed by human advisory personnel. 

Frequently asked questions 

How do I know if an AI financial advisor is legitimate?

Start with the registers rather than the marketing. Search the firm by name on the SEC’s Investment Adviser Public Disclosure database and on FINRA’s BrokerCheck; a registered firm appears on one or both, and the record carries any disciplinary history.

Then open its Form CRS, which states in plain language whether it’s an adviser, a broker-dealer or both and what standard applies. A tool’s fluency tells you nothing about its registration.

Should I use an AI financial advisor or a human one?

An AI financial advisor and a human advisor do different jobs. One test: can the question be answered from your account data alone? If it turns on something no statement shows, it is generally past what software can reason about.

Many people end up using both, and the comparison is its own subject — see AI advisor vs human financial advisor.

Advisory products and services are offered by M1 Advisory Services, LLC, an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Advisory services are distinct from the brokerage products and services offered by M1 Finance LLC. Clients receiving advisory services must also maintain brokerage accounts with M1 Finance LLC, which is a separate legal entity and a Member FINRA/SIPC. For important information about M1 Advisory Services, LLC, including fees, services, and conflicts of interest, please review our Form ADV Part 2A and Form CRS. 

Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. This content is for informational and educational purposes only and does not constitute investment, tax, or legal advice, and it is not a recommendation of any particular service, provider, or strategy.

Descriptions of registration requirements, regulatory standards, advisory services, fee structures and data policies are general summaries current as of publication; what applies depends on the activity, the firm and the jurisdiction, and terms are disclosed in each firm’s own filings and privacy policy. Registered investment advisers owe fiduciary duties to their advisory clients; broker-dealers are subject to Regulation Best Interest with respect to recommendations. These standards differ in scope and application.

M1 does not provide tax or legal advice; consult a qualified professional about your situation. Brokerage products and services are offered by M1 Finance LLC, member FINRA/SIPC; a self-directed brokerage account is not by itself an advisory relationship. Investment advisory services are offered by M1 Advisory Services LLC, an SEC-registered investment adviser.

Use of the M1 platform is subject to a $3 monthly platform fee, waived in any billing cycle in which total M1 assets reach $10,000 on at least one day, and charged whether or not M1 Advisor is used; other fees may apply. See the M1 Fee Schedule and the Platform Fee Disclosure.

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