Digital investment startup M1 Finance is making a big bet that no fees are the future. The Chicago-based company, which launched its platform two years ago, decided to drop its assets under management fees to zero in December. Investment companies can make as much as 70 percent of revenue from services that don't involve charging customers commission, like lending and transaction fees for third parties, according to its CEO, Brian Barnes. Instead of subscriptions, Barnes added that revenue from other services is more than enough to sustain a profitable business: lending to banks based on the securities it holds, interest from loans to customers who borrow from M1 using their portfolio as collateral, and transaction fees paid to the company from exchanges. While it's free to use the platform and execute trades, M1 charges customers other miscellaneous fees for services like paper statements, transferring an account to another brokerage, and wire transfers. "It's taking a similar approach to how the rest of financial services works," Barnes said. "Banks make money on cash, assets, transaction revenue and the ability to cross sell -- the more users, the more assets, and the more money M1 will make." The company said it's seen an uptick in interest since it removed fees. It currently holds $100 million in assets under management, which is still relatively small compared to the largest robo-advisers. Betterment and Wealthfront each have more than $10 billion. The no-fee trend is what investment companies and brokerages will eventually move towards as transaction costs go down, Barnes said. Betterment charges 0.25 percent of assets under management for its digital-only service and 0.4 percent for unlimited access to human advisers, while Wealthfront charges 0.25 percent, the first $10,000 of which is managed free. "You can make enough money on backend and ancillary services. [Incumbents] know that in 10 years they will not charge commissions for trades." But making "enough" won't necessarily determine which players will win. Unlike other robo-advisers, however, M1 caters to customers seeking a more hands-on approach to building their portfolios. While robo-advisers typically recommend ETFs to accommodate customers' risk tolerance, M1 lets customers take more of an active role in determining what their portfolios look like. It offers pre-built investment portfolio "pies" like its peers but lets clients customize them as they see fit. "M1 has taken the automated investing platform of a robo-adviser and said, 'you shouldn't be limited to 10 portfolios -- you should be able to alter it and add your own stocks and personalize it to your investment objectives," Barnes said. M1 doesn't receive fees from fund managers, though Barnes didn't rule it out as a future possibility. For now the company is focused on providing the best customer experience, he said. Grant Easterbrook, co-founder of Dream Forward Financial and robo-advice analyst, said free platforms aren't truly free when you consider the revenue generated from other services, and customers should be aware of this. Lowering or eliminating fees doesn't necessarily mean businesses won't survive either, he added. In 2011, people argued low-cost robo-advisers were making very little, were subsidized by venture capital dollars and would never succeed. "Some of the robos have succeeded," he said. "Many of the major players have copied the low-cost robo model." Barnes said his typical customer is one that has at least $10,000 in investible assets and knows a little about investing. The customer base skews towards older millennials and Gen Xers. So instead of looking at robo-advisers as competition, most of M1's customers come from online brokerages. M1's strategy to go after somewhat seasoned, better-resourced investors has its risks. "With no fees, it's a gamble because there's a cost to everything," said Davis Janowski, senior analyst at Forrester. "If you just get a critical mass of people joining and get that reverse hockey stick growth, it could work. But that's betting the whole farm on that."