M1 Finance

Is M1 Finance a Safe and Legitimate Firm? Is it a Scam? M1 Finance Complaints and BBB Rating.



Is M1 Finance a Scam?


If you are thinking about opening an account with M1 Finance, you might be asking yourself whether it is a safe and legitimate broker to put your money and assets into.

The short answer is yes. M1 Finance is a safe broker that is fully regulated and trustworthy. Read on to see how M1 Finance protects your investments and your personal details.


Ownership of M1 Finance


M1 Finance is a privately held brokerage based in Chicago, Illinois. The company was founded by Brian Barnes in 2015 and since then has grown into one of the fastest growing brokerage/fintech companies offering investment services. Worth more than $1.5 billion in 2023 and with over $5.9 billion in managed funds, M1 Finance provides a wide variety of products geared towards investors of many kinds.


Is M1 Finance Safe?


History


Within the time of operation, the brokerage has reached several important milestones. In part, it is those achievements that have helped the company become as reliable and trustworthy as it is today.

In 2015, M1 Finance started as a brokerage with a focus on robo-investing. After two years of building a base of nearly 12,000 users. M1 Finance amped up its services by lowering fees for its primary services. That decision would double the user base in a few short months. Just two years later, M1 Finance was managing more than $1 billion.

From 2020 to the first half of 2023, the company added additional features to its already well-developed platform. These new features, along with its continual growth in other areas helped the company more than quadruple the number of assets under management.


Is M1 Finance Legitimate?


To determine the legitimacy of any brokerage, there are a few areas to look for evidence that prove that the company is, in fact, reliable. You want to make sure that the brokerage has gone through the proper steps to ensure user safety.

Two places to start are insurance and licenses.

M1 Finance provides insurance to its investors and is also registered with the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC). The brokerage is licensed to operate in every U.S. state and territory, and the license numbers are: CRD# 249787/SEC#: 801-106511.

When checking FINRA’s BrokerCheck tool, other useful information about brokers can also be found. For example, ‘Disclosures’ are listed on the company profile within the tool. Disclosures are essentially remnants of past issues that the company had. Whether it was missed payments, judgements, investor complaint, or anything else that the company had to deal with, the Disclosures offer clues into how some companies operate. In the case of M1 Finance, there are zero disclosures as of 2023 and that is a very good sign.


Is M1 Finance a Scam?


M1 Finance Promotion



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M1 Finance SIPC/FDIC Insurance


At M1 Finance, investor assets are protected by insurance in most cases. The company uses different insurance strategies for its different products. M1 Invest accounts enjoy insurance provided by SIPC on securities held within the account. Securities valued up to $500,000 are covered. M1 Spend accounts are covered by FDIC up to $250,000.


Supplemental Insurance


While insurance on assets and securities ranging from $250,000 to $500,000 may be more than enough to cover the average user, some investors demand more from the safety net provided by their brokerage.

For these situations, M1 Finance offers supplemental insurance through its clearing house and partner bank.

Both Apex Clearing and Lincoln Savings Bank provide additional insurance on assets and securities once the initial insurance offered by M1 Finance is exhausted.


M1 Finance Better Business Bureau


The Better Business Bureau can also shine some light on whether or not a company is legitimate. And, while M1 Finance does not hold accreditation from the BBB, they do have a profile on the website. M1 Finance currently has an A- rating from the BBB which is based on a score between 90 and 94 on BBB’s rating criteria.


Verdict: Is M1 Finance Safe?


M1 Finance is certainly not a scam. Although fairly new in the financial industry, the company has proven on multiple accounts that it can protect user assets while providing a secure platform for its investors to take advantage of. As the company is registered with both FINRA and SEC, you can be sure that M1 Finance has gone through all the necessary steps to ensure a quality investing experience for its members.


M1 Finance Promotion



Open M1 Finance Account


About the Author
Chad Morris is a financial writer with more than 20 years experience as both an English teacher and an avid trader. When he isn’t writing expert content for Brokerage-Review.com, Chad can usually be found managing his portfolio or building a new home computer.