M1 Finance doubles assets to $2bn in six months

Personal finance platform M1 Finance has reported 100% growth (US$1bn to $2bn) in its asset under management (AUM) portfolio in just six months.

Since reaching the $1bn milestone in February 2020, the company has introduced 229,000 brokerage accounts, itself representative of an 83% increase, and secured $33m in a Series B funding round led by Left Lane Capital.

Reaching $2bn AUM in such a relatively short timeframe (the company was founded in 2015) appears to verify M1 Finance’s ‘super app’ approach, which allows self-directed investors to control multiple aspects of the investment experience on one platform. 

There are three tools that the company offers to manage investment: M1 Invest, M1 Borrow and M1 Spend, covering portfolio balancing, reinvestment and money movement respectively.

On a mission to automate investment

FinTech Magazine had an exclusive interview with Brian Barnes, CEO and Founder of M1 Finance, wherein he outlined the origins of the company, its ongoing mission and speculated on the future of investment:

“I was fortunate to have the opportunity to invest very early, at around age 10,” he explains. “By the time I got to college, I knew I loved investing, but I really hated the administrative work required whenever I put money in or took money out.

“So, I set out to build the money management app of my dreams, one that automated my investing according to my preferences. Five years later, M1 has over 229,000 customer accounts, more than 60 employees, and we’ve reached $2bn in customer assets.”

How does M1 provide users with a unique investing, borrowing and spending experience?

“Before M1, people were forced to use a mix of brokers, money apps, and banks to manage all aspects of their finances. Not only is that time consuming, but it can also lead to worse financial outcomes overall.

“M1 is working to become a single ‘finance super app’ that manages all financial needs, including building long-term wealth, meeting financial needs, and managing spending.”

Part of any tech-first, digital-native company's strategy should be cybersecurity. What tech do you have in place to ensure customer peace of mind?

“As a newer player in the financial services sector, M1 recognizes how crucial it is that our customers are confident in our abilities to be responsible stewards of their data.

“M1 encrypts all data, both in-transit and at rest, utilising military-grade 4096-bit encryption, which provides customers with two-factor authentication, and adopts a variety of different industry security best practices around monitoring, alerting, and automated remediation playbooks.”

How do you envision the future of investing?

“We want to be the super app for money, the one app that any investor needs for all of their investing, saving, spending and borrowing.

“Our next new innovation is related to that, and, while I can’t go into too much detail yet, it will be focused on making it even easier for people to put their money to work the right way. We will let our customers set up rules for how each invested dollar should be used, helping build up savings, pay down debt, and get fully invested. 

“The idea is to automate good financial habits. No other fintech, legacy bank, or broker has come close to this, so we are incredibly excited,” Barnes concludes.