M1 Finance

Is M1 Finance Safe, Legitimate and Insured? Is M1 Finance Scam? M1 Finance Complaints and BBB Rating.



Is M1 Finance Safe?


A new hybrid robo/self-directed brokerage firm is trying to shake up the investment industry. With a style of financial management that incorporates features of both automated investing and self-directed strategies, this company is sure to attract a lot of interest. Some people may have concerns about the safety of the brokerage house, especially given the fact that it’s been in business for just a few years. This article will look at the M1 Finance trustworthiness and reliability, and see what safeguards are in place for its customers.


M1 Finance Better Business Bureau Rating


M1 Finance has a profile page on the Better Business Bureau’s (BBB) website. The profile shows a grade of A+, which is the highest rating on BBB. There is one complaint on the company’s profile, which was resolved to the customer’s satisfaction in December of 2016. BBB does not reveal the details of this incident other than classifying it as a problem with a product or service.

The BBB site reveals that M1 Finance is structured as a Limited Liability Company, which means, among other things, that it isn’t publicly traded. The Better Business Bureau shows that M1 started operations in February of 2015, and the company’s BBB file was opened in October of 2016. M1 is headquartered in Chicago.

M1 Finance is not accredited by BBB. This is a special status that a business must pay for. It is up to the company to apply for accreditation. The Better Business Bureau has not verified whether M1 meets minimum standards to be accredited. The issues BBB analyzes when deciding to grant accreditation include trust with customers, truthful marketing, corporate transparency, responding to customer queries, safeguarding privacy, and embodying integrity.

See details on BBB website »


M1 Finance Review


Read detailed M1 Finance Review »


Is M1 Finance SIPC Insured?


M1 Finance is a member of the Securities Investor Protection Corporation. This membership insures accounts at M1 up to $500,000. Under SIPC guidelines, 50% of this amount can be used to protect cash balances. SIPC does not protect securities against market decline; it only insures the number of securities held in an account up to the $500,000 maximum.

Beyond SIPC protection, M1 Finance does not offer any additional insurance. Some brokers do actually purchase private insurance to help protect some of its larger clients in case SIPC insurance were ever exhausted in the event of the bankruptcy of the brokerage firm.


Is M1 Finance Scam


For example, Vanguard customers get supplemental insurance from London Company Insurers and Lloyd’s of London. Brokerage accounts are protected up to $49.5 million each. Of this amount, there is a $1.75 million policy that protects cash balances. The total amount of insurance the two policies provide is $250,000,000. They would not go into effect until SIPC coverage was maxed out.


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Is M1 Finance FDIC Insured?


M1 Finance is not a bank. Therefore, it is not a member of the FDIC. It also does not offer any type of bank sweep program that would provide FDIC insurance. Cash balances above $10 are automatically invested in M1 portfolios; so there are no significant cash deposits to speak of at this broker. An account could theoretically have $99 in cash sitting in it, because the broker requires a $100 minimum to start its investment service. That’s the highest cash balance that could be in an M1 account, and it would be insured by SIPC.


Is M1 Finance Regulated by FINRA and the SEC?


Our brokerage firm under investigation is a member of the Financial Industry Regulatory Authority, also known as FINRA. M1’s license number is 281242, which is also called a CRD number. The broker’s FINRA profile page shows zero disclosures, a very good sign. It also shows that M1 was formed in Delaware, although it operates from Chicago. It is a fairly common practice for a company to be legally formed in Delaware due to the state’s business-friendly policies.

M1 is also registered with the Securities and Exchange Commission, which means it is registered in all 50 states and the District of Columbia. It is also licensed in Puerto Rico and the Virgin Islands. The company’s SEC registration number is 69670.

The founder of M1 Finance is Brian Barnes. His FINRA profile page shows zero disclosures, but just one year of experience. His CRD number is 6546822.


Is M1 Finance Safe Recap


There is no evidence that M1 Finance is a scam or engages in fraudulent securities activities. The company provides a unique method of investment management that comes with SIPC insurance. SIPC insurance guarantees that customer's money are safe and protected by the U.S. government. Because the broker eliminated all broker commissions, trying the M1 Finance’s unique service costs nothing.


Open M1 Finance Account


Open M1 Finance Account