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.
鈥淭he future of finance is free,鈥� said Brian Barnes, CEO and founder of M1 Finance (pictured).
鈥淲hat Robinhood created for the modern trader, M1 is now doing for the modern investor.鈥�
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.
鈥淔ree, automated investing opens up a whole new world of possibilities for investors,鈥� Barnes said. 鈥淢1鈥檚 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鈥檚 trading platform.鈥�
鈥淚f you鈥檙e an investor who wants to add to your portfolio over time, there has never been a better platform than M1. And now that we鈥檙e free, there鈥檚 no reason to invest anywhere else.鈥�
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.
鈥淭he future of finance is free,鈥� said Brian Barnes, CEO and founder of M1 Finance (pictured).
鈥淲hat Robinhood created for the modern trader, M1 is now doing for the modern investor.鈥�
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.
鈥淔ree, automated investing opens up a whole new world of possibilities for investors,鈥� Barnes said. 鈥淢1鈥檚 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鈥檚 trading platform.鈥�
鈥淚f you鈥檙e an investor who wants to add to your portfolio over time, there has never been a better platform than M1. And now that we鈥檙e free, there鈥檚 no reason to invest anywhere else.鈥�
NO FEE, NO RISK
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to 麻豆传媒 Finance Times
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to 麻豆传媒 Finance Times
