Is M1 Finance Only for US Citizens? (Everything You Need To Know)

In the world of investments, more people than ever are turning to popular fintech platforms and robo-advisors to simplify and streamline their investment portfolios. One company that has made a huge splash in a very short time is M1 Finance. The convenience of M1 Finance’s platform, and its lack of fees for investing, have allowed the company to grow its assets very quickly.

But many people are wondering if the platform is only available to United States citizens. In this article, we will discuss what M1 Finance offers its customers. We’ll Also go over what the requirements are to obtain an account. Lastly we will explain why they have yet to expand their services to non-U.S. citizens at this point.

What is M1 Finance

M1 Finance is an online trading and investment management platform. The company, founded in 2015, offers customers an easy-to-use online trading and investment management system and online lending and banking features, including digital checking accounts and debit card access.

It relies on a robo-advisor system, which allows users to allocate a percentage of their investments of their choosing and uses an automated portfolio balancing system to make adjustments that match the market. Customers can also make direct orders and trades through the system, but the real advantage for users is that the system automatically manages investments without human intervention.

What Are the Requirements?

To sign up for an account with M1 Finance, you must be a U.S. citizen or permanent resident (aka Green Card holder) over the age of 18. The company requires a U.S. residential address and phone number to apply. Permanent residents who are temporarily living outside the company are also eligible if they still meet the above requirements, such as a current U.S. address and phone number.

Requirements for Account Holders

  • Be 18 years of age or older
  • Must be a U.S. citizen or legal permanent resident with a green card
  • You must have a current residential address in the United States (a P.O. box does not count)
  • You need a valid U.S. phone number (M1 Finance does not accept VolP phone numbers)
  • Why doesn’t M1 Finance Accept Foreign Customers

M1 users must first acquire an Individual Taxable account before registering for the platform. This includes individual accounts, joint accounts, IRAs, Trusts, and for M1 Plus users, a custodial account. It’s this security and identity verification protocol that currently prevents M1 from accepting customers from foreign countries.

When Will M1 Finance Be Available for Non-U.S. Citizens?

M1 has expressed interest in expanding its platform internationally, but the company says security and regulatory issues have prevented it so far. M1 requires a W8 form, or in other words, a Taxpayer ID from the IRS from investors. This precaution helps prevent fraud and combat terrorism. Users can register multiple accounts with M1 Finance as long as they have a combination of individual, retirement, and trust accounts.

While M1 has claimed that it will expand its offerings to international markets sometime in the future, there is no official statement from the company on when or how this might happen. However, the success and rapid growth of the company over the past few years should be a sign that things are headed in the right direction.

In July of 2021, M1 announced that it had raised over $150 million from its investors, including SoftBank Vision Fund 2. At that time, the company claimed over $300 million in funding and managed over $4.5 billion in assets. By January of 2022, that number had increased to over $5 billion. With that kind of rapid growth, perhaps the company will feel more secure investigating strategies to expand globally.

What’s Stopping M1 From Expanding Internationally?

For the most part, the hurdles the company faces regarding accepting foreign customers come in relation to regulatory issues. Most countries have their own regulatory bodies and their own set of rules relating to the activity of financial firms. M1 would need to alter its operational practices to ensure compliance with the laws and regulations of each foreign country.

On top of that, M1 needs to streamline its processes and technology to accommodate international money exchanges. The way different countries move money between banks and organizations varies as well. So, M1 Finance faces not only regulatory roadblocks, but a need to reorganize its technology and operations to accommodate an international market.

What About Visa Holders?

While there is no official statement on the company’s reasons for not expanding at this point, one can assume it faces issues with verifying customer identities. The company is working toward finding ways to automate these processes before expanding its offerings to visa holders.

What Does M1 Finance Offer its Customers?

M1 Finance is an easy way for beginner investors to enter the market. Because M1 is considered a robo-advisor platform, it enables users to start building a portfolio without advanced knowledge of the market. It also utilizes a sort of “set it and forget it” system, which balances and manages itself once the user sets their preferences.

M1 has also expanded its offerings for customers who want an all-in-one finance managing system. Customers have access to a menu of options to help them streamline and manage their financial needs.

M1 Invest – Users can invest in individual stocks, REITs, ESGs, and EFTs. Customers can set up separate accounts for individual, retirement, trusts, and even custodial accounts (through the M1 Plus account). Users can create their own portfolios or choose from over eighty automated portfolios designed by expert investors. It’s free to invest and minimum account balances are only $100 for individual accounts and $500 for retirement accounts.

M1 Spend – This feature provides a digital checking account with a linked debit card, ATM access, and fee reimbursement. The debit card offers a 1% APY, and M1 Plus customers have access to up to 10% cashback rewards benefits through the Owner’s Rewards Card.

M1 Borrow – Basic and Plus members get access to a line of credit. M1 allows customers to borrow against their investment funds, as long as they have at least $10,000 in the account and it’s not an IRA. The funds you can borrow cap at 35% of your portfolio’s value. Interest rates do apply, but at very competitive rates between 2.75% and 4.25%

In Conclusion

M1 Finance has only been around for a short time but has already proven to be a stable market offering for investors. The simplicity of their platform allows even beginners to build a portfolio. Although the company has yet to expand into the international market, one can assume that if it continues to grow, it won’t be long before they find a way to capture that global market share.

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Is M1 Finance Only for US Citizens? (Everything You Need To Know)
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