Fintech Spotlight: M1 Finance, A Mobile Wealth Creation And Management Tool

The past few weeks in financial markets were volatile. Despite coming under scrutiny for their decisions to limit trades, brokers like Robinhood, popularized due to their no-cost, gamified investing platforms, saw an increase in account openings.

M1 Finance, an automated money management platform, too, added users in excess of four to five times its normal rate.

In light of the growth, Benzinga chatted with Bob Armour, M1’s vice president of marketing.

About: Founded in 2015 by Stanford graduate Brian Barnes, M1 Finance delivers the mass affluent digital investing, borrowing, and banking solutions.

Geared toward engaged investors, the mobile finance super app is likened for its comprehensiveness and automation which offers clients increased confidence, and access to a new level of financial wellness.

“Our perspective is to always help the person move to their next best level of financial well-being, no matter where they start from,” the marketing executive said.

Enhancements: After crossing $2 billion in assets and raising over $143.2 million, in total, Armour told Benzinga that M1 has been hard at work on platform innovation.

One of M1’s most recent platform additions was Smart Transfers, a rule-based solution that enables M1 Plus members the opportunity to move their money where and when they want it.

“Smart Transfers is the automated way for someone to set their goals and rules once, and then let the machine take over and implement those rules,” Armour said. “For example, you can set a rule that puts new money into [your] savings account, until it hits a certain number -- call it $500. Once it hits $500, then put [your] money towards the next thing -- say help pay down a credit card.”

Thereafter, users can have money settle in tax-advantaged accounts or taxable investment portfolios.

“That’s what M1’s all about. We have low or no fees for all our products, … and we give a person control over how they construct their portfolio, so it matches their risk tolerance.”

Investing: M1, despite being a holistic money management platform, started as a free automated investing platform. As a result, investing is core to the company’s mission.

“Our responsibility is to enable people to manage their wealth and personal financial well-being, at all times,” Armour said in a statement on coping with recent market volatility.

M1 markets itself as a long-term wealth creation tool; the platform isn’t designed for day-trading, so customers were not as affected by recent stock market volatility.

“We enable trading in just two windows: 9:30 a.m. ET and 4 p.m. ET,” Armour added. “If you want to be risky, we give you the opportunity to put together what assembly of stocks you want. We [also] give you prepackaged assortments of stocks that will match up with risk tolerances.”

Differentiators: Aside from its intuitiveness, M1 differentiates via the breadth and depth of its product portfolio.

“I think we’ve positioned ourselves as the finance super app because I don’t think people want to go to four, five, and six different solutions to manage their money,” Armour said. “We’re a place for investing, borrowing, spending, and credit.”

Benzinga was told that the company, aside from allowing users to check and save digitally, aims to add credit.

“We will be launching a credit card in 2021 with the goal there being a unique offering that fits into our approach of enabling people to manage their money seamlessly, across all the different products.”

Credit cards are a proof-of-concept; eventually, M1 may enable its users to finance all aspect of their lives.

“We’ll start looking at other opportunities, whether it’s mortgages or car loans,” Armour added.

Outlook: Growth, and lots of it.

Going forward, M1 is looking to be the place for managing all aspects of one’s financial lifestyle.

“I think we can own the position of the number one place for today’s long-term investor. We have a passionate user base that tells us what we’re good at, and we have a passionate user base that tells us when we’re terrible.”

“We’re going to listen to them.”