Headquarters: Chicago, Illinois
M1, The Finance Super App, helps people manage and grow their money with control and automation – for free. With over $5.5 billion in assets under management, M1 empowers hundreds of thousands of self-directed investors to open accounts and improve their financial well-being through investing, digital checking, and portfolio lines of credit. M1 is an SEC-registered investment platform, as well as a member of the Financial Industry Regulatory Authority (FINRA) and Securities Investor Protection Corporation (SIPC).
M1 was first launched to the public in late 2016 with the mission of building a platform that would help people manage and grow their money with control and automation – for free.
M1 is a money management investment app offering self-directed trading, automated investing, fractional shares, margin lending, IRAs, and more.
M1 combines three different traditional fintech services into one (automated investing, borrowing and banking/spending) and has seen rapid growth over the past couple of years.
M1 Invest is a commission-free, automated, and customizable brokerage, which now also trades crypto. M1 makes money on its Invest product through interest on brokerage cash, interest on lending securities, and payment for order flow.
M1 Borrow gives users access to a flexible line of credit in just a few taps, with some of the lowest rates on the market. M1 makes money on its Borrow product by charging interest on a line of credit using the customer’s portfolio as collateral (margin lending). Despite having a low rate, M1 still makes money because its costs are lower than the capital it loans out.
M1 Spend provides a free high yield checking account and the Owner’s Rewards credit card where customers can earn up to 10% cash back on brands they invest in. M1 makes money on its Spend product through interest from cash balances and interchange fees. M1 also makes money on its M1 Plus membership program through the $125 annual fee.
The app uses pie-based models that let customers choose which stocks, ETFs, or portfolios they want to invest in and what percentage of their money they'd like to allocate toward each investment. It also offers more than 80 professionally created portfolios.
M1 uses a proprietary trading system to automate each customer's trading activity. The investment app aggregates and executes all trades during a morning trade window that begins at 9:30 a.m. EST. Clients who upgrade to M1 Plus accounts can take advantage of an afternoon trade window that makes it possible to invest whenever they want.
M1's Plus accounts cost $125 per year to upgrade, and these plans offer additional perks such as custodial investment accounts, smart transfers, 1.5% loan reductions, and banking perks.
If customers prefer self-directed trading, the app also lets users buy or sell individual securities or slices of their pie portfolio. Self-directed investors can build portfolios from more than 6,000 ETFs and stocks listed on the New York Stock Exchange (NYSE), Nasdaq and BATS stock exchanges. M1 also offers fractional shares, auto-invest settings, portfolio rebalancing, and tax-minimization features.
M1 allows users to set up traditional IRAs, Roth IRAs, or SEP IRAs at no additional cost. Each retirement account gives customers the option to pick their own investments, select professional portfolios, purchase fractional shares, or automatically reinvest dividends. M1 also offers IRA transfers and 401(k) rollovers. Customers need at least $500 to open a retirement account.
The platform's commission-free rule also applies to its crypto offerings. It offers Bitcoin, Ethereum, and other digital assets. M1’s custodian, Apex Crypto, assesses a 1% fee on all transactions. Users can create their own customized portfolios as long as they've funded their M1 brokerage account. The platform will also be launching Expert Crypto portfolios, so users are able to both invest with their own customized portfolio, utilize its expert-crafted portfolios, or trade with both.
Automated trading and asset allocation also apply. Users can set a percentage or allocation of each portfolio in their account and can automate trading. This gives M1 Finance permission to rebalance portfolios when funds are deposited.
M1 offers custodial or UTMA/UGMA investment accounts for minors, and users need to be enrolled in the M1 Finance Plus account to access this product. Once the user’s child or dependent reaches their state's age of majority (usually 18 or 21), M1 will restrict all trading on the account. The custodial account beneficiary has two options once they reach the age of majority: withdraw the funds or transfer them to another taxable investment account.
M1’s offers Trust accounts that require at least $5,000 to get started. The investment app supports both revocable and irrevocable trusts that are authorized to invest in securities, but all trusts must be US domestic trusts in good legal standing.
As of its latest financing round in July 2021, M1 had $4.5 billion in AUM, which is up more than fivefold compared to the prior 18 months. Since July 1, 2020, the company had more than doubled its user base and tripled its AUM. As of November 2022, M1 had over $5.5 billion in AUM.
In December 2020, M1 launched Smart Transfers, allowing M1 Plus clients to automate financial goals based on pre-set rules.
In June 2021, M1 launched Send Check, which allows M1 Plus clients to send physical checks from their M1 Spend Plus checking accounts.
In July 2021, M1 launched the Owner’s Rewards Card, which is the first ever credit card where M1 Plus clients can earn up to 10% cash back when they shop at select companies whose stock they own. Some of the best-known companies in the world are eligible including Amazon, Netflix, Starbucks, Spotify, Nike, Target, AMC, Tesla, Delta, and DoorDash.
Card holders' cash back can be automatically invested into their portfolio, allowing them to maximize rewards and grow their wealth with everyday transactions. They can also automatically pay their balance from their M1 Spend checking account, allowing for a seamless, connected experience across the M1 platform.
In September 2022, M1 made a few changes to the rewards card. M1 removed the annual fee and announced that all cardholders can enjoy cash back from the Owner’s Rewards brands without holding shares. As an M1 Plus member, customers have access to all the Owner’s Rewards Card benefits. This includes earning 2.5%, 5%, or 10% cashback on qualifying brands and 1.5% flat cashback for other purchases.
In October 2021, M1 acquired First National Bank of Buhl, a tiny Minnesota bank with approximately $29.4 million of deposits and, most importantly, status as a federally regulated bank. This acquisition will allow M1 to provide its users with the capabilities of a bank. With First National Bank of Buhl, M1 plans to provide personal loans, and then others like mortgages and auto loans, to its customers. It’s also investing in the bank’s capabilities to become the premier banking as a service (BaaS) bank, primarily serving fintech clients such as M1.