M1 Finance Reaches 100K Funded Accounts, Prepares To Launch Banking Feature: 'The Comprehensiveness Of The Platform Makes It Unique'

As M1 Finance — a robo-adviser platform that advertises its ease of use — expands its user base and moves into the traditional banking space, CEO and founder Brian Barnes spoke with Benzinga for an update on the company.

About M1 

Stanford graduate Barnes, who has hedge fund and consulting experience, told Benzinga that he leveraged his passion for entrepreneurial activities and a background in software engineering to build M1 and fill a ”big gap in the marketplace for a ... low-cost borrowing and comprehensive personal finance” solution.

M1, founded in 2015, allows for free automatic investments in custom stock and ETF portfolios.

Users have access to fractional shares, automatic deposits, checking, financing, portfolio balancing tools and dividend reinvestment plans.

Target Market

M1 “targets the mass affluent," Barnes said: users are generally older and professionally experienced.

“If you have north of $10,000 of investable assets all the way up [to] $500,000 — that’s our big sweet spot.”

M1 has smaller and bigger accounts than those figures, and its largest account is $23 million, the CEO said. 

M1 is geared toward the engaged — not hyperactive — investor, the company's founder said. 

Why M1?

“It is the comprehensiveness of the platform that makes it unique,” Barnes said.

When asked for one differentiator between M1 and other finance platforms, Barnes said there’s no single factor.

“I don’t think that it’s one thing. I think that M1 finance is the complete and holistic money management platform and it does all of your money management needs better and less costly than the alternative solutions.”

M1 started as a free automated investing platform, but now has its sights set on challenging the traditional banking space.

In addition to the addition of low-cost lines of credit, Barnes said M1 is working on an early release of M1 Spend, a traditional checking account that's set to be released in the coming months.

A Word-Of-Mouth Growth Model 

Three-quarters of M1's growth has come as a result of referrals by friends and family, Barnes said.

“The nice thing is now we have 100,000 funded accounts and [this] amount of people going and telling their friends sort of creates this viral snowball component. And that’s our path to growth, rather than just aim to advertise to everybody and anyone.”

How To Join 

It's easy to start investing with M1, Barnes said, adding that it “works the same if you have a $100 or $100 million because of fractional shares.”

To sign up, users above the age of 18 can open both an IRA and general investment account on the company's website.

“If you are interested, sign up, create a taxable account, put a $100 in and see what you think," the CEO said. 

Related Links: 

M1 Finance Has A New Feature That Lets You Borrow Against Your Portfolio

3 Robo-Advisors CEOs Explain How They're Trying To Make Investing Easier

Photo courtesy of M1 Finance.