A social media contest to win a cash prize has investors hailing M1 Finance, an automated advice platform that eliminated fees for all of its investors last year.
Until Oct. 5, M1 Finance is encouraging users to share on Twitter, Facebook and Reddit why they invest through the company and it will later choose one to win $500.
Everyone manages their money differently, and we want to hear your story! Tell us how you use M1 and you could win $500. Follow us, then tweet your story with the hashtag #MyM1Story and tag us to enter. Complete list of rules here: https://t.co/oPgcZxI5hj
— M1 Finance (@M1_Finance) September 25, 2018
“We were thinking into the future and came to the conclusion that investment platforms and brokerages are going to sort of mirror personal finance platforms,” Brian Barnes, the founder and CEO of M1 Finance, said in December.
Most of those participating in the contest have pointed to the cost of other robo advisors and discount brokerages as the reason they chose M1 Finance. “Having every single dollar deposited invested without a fee makes a huge difference to the speed and efficiency of our account growth,” an investor wrote on Reddit.
Not paying anything to trade is nice, but the ability to purchase fractional shares also makes M1 Finance more accessible to those with less investable assets, a full-time student and investor posted.
One investor said on Reddit that he was using Robinhood, another zero-fee brokerage, but he immediately moved his entire portfolio to M1 Finance because he could purchase fractional shares, enabling him to create the portfolio he wanted.
Barnes said, if an investor wanted to invest in the FAANG stocks—Facebook, Amazon, Apple, Netflix and Alphabet—a single share of each would cost them roughly $4,000 in total. Without offering fractional shares, the retail investor would have to decide whether to invest in those stocks and have a significantly concentrated portfolio, or invest their money in a diversified vehicle like a mutual fund or exchange traded fund, which “massively decreases engagement and participation in your finances.”
“The ownership and engagement with one’s investing increases participation and makes people much more likely to invest 80 percent of their investible assets rather than 20 percent, the difference maker in most people’s financial success,” Barnes said.
In addition to purchasing individual securities, investors can also choose model portfolios to invest in based on their goals and risk tolerance.