Startup investment platform scraps fees in favour of securities lending revenue
19 December 2017 Chicago
Image: Shutterstock
Automated investment platform startup M1 Finance has removed fees for all investors by turning to a securities financing revenue-based model.
M1 previously offered a three-tier fee system that was free for first $1,000 invested and then added a fee of 0.25 percent for balances between $1,000 and $100,000. Balances over that limited then received a 0.1 percent fee.
The new free model means M1 will instead rely on revenue generated from back-end services such as securities lending and repo.
M1 also promises that new services in 2018 will further contribute to earnings.
According to M1, this is the first time individual investors can automatically buy and lend stocks, cash and exchange traded funds (ETFs) for free.
“The future of finance is free,” said Brian Barnes, CEO and founder of M1 Finance (pictured).
“What Robinhood created for the modern trader, M1 is now doing for the modern investor.”
M1 allows client to invest any company or ETF that trades on the NYSE or Nasdaq.
The platform will then keep portfolios on track automatically with each deposit or withdrawal.
M1 also offers fractional shares allowing investors to build diversified portfolios, as well as offering professionally designed portfolios.
“Free, automated investing opens up a whole new world of possibilities for investors,” Barnes said. “M1’s decision to eliminate fees marries the convenience and long-term investing strategy of a robo-advisor with the same cost-free innovation and investment choice as Robinhood’s trading platform.”
“If you’re an investor who wants to add to your portfolio over time, there has never been a better platform than M1. And now that we’re free, there’s no reason to invest anywhere else.”
M1 previously offered a three-tier fee system that was free for first $1,000 invested and then added a fee of 0.25 percent for balances between $1,000 and $100,000. Balances over that limited then received a 0.1 percent fee.
The new free model means M1 will instead rely on revenue generated from back-end services such as securities lending and repo.
M1 also promises that new services in 2018 will further contribute to earnings.
According to M1, this is the first time individual investors can automatically buy and lend stocks, cash and exchange traded funds (ETFs) for free.
“The future of finance is free,” said Brian Barnes, CEO and founder of M1 Finance (pictured).
“What Robinhood created for the modern trader, M1 is now doing for the modern investor.”
M1 allows client to invest any company or ETF that trades on the NYSE or Nasdaq.
The platform will then keep portfolios on track automatically with each deposit or withdrawal.
M1 also offers fractional shares allowing investors to build diversified portfolios, as well as offering professionally designed portfolios.
“Free, automated investing opens up a whole new world of possibilities for investors,” Barnes said. “M1’s decision to eliminate fees marries the convenience and long-term investing strategy of a robo-advisor with the same cost-free innovation and investment choice as Robinhood’s trading platform.”
“If you’re an investor who wants to add to your portfolio over time, there has never been a better platform than M1. And now that we’re free, there’s no reason to invest anywhere else.”
NO FEE, NO RISK
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