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Why M1 Finance Needs SSN (Social Security Number) When Signing Up For Account


2021: why is M1 Finance asking for my SSN (Social Security Number), address, personal and employment info when opening a brokerage account?



Why Does M1 Finance Ask for My Social Security Number?


If you’re trying to open an investment account at M1 Finance (hopefully by using their promotion offer), you probably have noticed that the brokerage firm asks for your Social Security Number, address, personal and employment info. There are several legitimate reasons why it does this.

First, it is required by the USA PATRIOT Act of 2001 to verify the identity of anyone who opens an account. A Social Security Number is one way of doing this. M1 Finance and other brokerage firms could also ask for a driver’s license number or a passport number. M1 must comply with federal law, so there’s no way around this requirement at this point.

Second, like other financial institutions, M1 needs to keep track of account ownership. The firm needs to know which account belongs to which person, persons, or entity. Trusts, for example, can open brokerage accounts at M1. The broker also offers joint accounts, which of course will require two Social Security Numbers to open.

Third, the IRS wants to know how many dividends and capital gains every Social Security Number is earning each tax year. It would want to know that, wouldn’t it? Taxes are connected to a Social Security Number, or to an Employer Identification Number in the case of a trust; so every investment account must have a tax number connected to it.

This is true even for nontaxable retirement accounts. These accounts have all sorts of regulations surrounding them, from how much money can go into them per year, to how funds can be withdrawn, and when; so Uncle Sam definitely wants to know who owns an IRA.

Remember that other brokerage firms in the U.S. operate by the same rules.


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Open M1 Finance Account


Safeguarding of Information at M1 Finance


As you probably already know, forking over your Social Security Number is a pretty big deal. So you don’t want to do that flippantly, and whoever is getting that information better protect it. M1 Finance uses 4096-bit encryption to safeguard your information on its servers.

The investment firm also offers two-factor authentication when logging in. It’s not set up by default, though. You’ll need to enable it after logging into your account.

To do this, click on the icon in the upper-right corner that has your name on it. Then select View Account Settings. Next, click on Security in the new menu that appears. Now you’ll be able to turn on two-factor authentication.


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