Table of Contents
Once the darling of young investors, Robinhood is facing growing pains…
Over 1 million accounts left Robinhood in 2021 amidst the GameStop short squeeze controversy. Complaints around withdrawal delays, website outages during high-demand periods, and poor customer service continue mounting.
Traditional brokers like Fidelity, TD Ameritrade, and Vanguard have caught up by eliminating stock and ETF commissions. Even crypto exchanges like Coinbase offer commission-free equity trades alongside digital assets.
Furthermore, the SEC continues scrutinizing Robinhood‘s largest revenue stream – payment for order flow (PFOF). Rather than send your equity, options, or crypto order to the market offering the best price, Robinhood sells your order to Citadel Securities to execute – allowing them to profit off the spread. This inherent conflict of interest around PFOF led UK regulators to ban the practice altogether.
Here are 9 rising alternatives to Robinhood worth your consideration…
How We Evaluated the Top Robinhood Alternatives
Our independent experts compared Robinhood against 9 leading contenders across 8 key categories:
| Criteria | Importance |
|---|---|
| Fees & Commissions | High |
| Account Minimums | Medium |
| Investment Choices | High |
| Tools & Technology | Medium |
| Retirement Accounts | Low |
| Cash Management | Low |
| Customer Service | Medium |
| Security & Stability | High |
Here is a summary of our analysis:
While Robinhood offers $0 equity trades like its peers, it lags across product portfolio, tools, customer service, data transparency, and financial stability. Let‘s discuss the alternatives:
1. WeBull
WeBull matches Robinhood‘s mobile and millenial focus, while exceeding it across technology, product range, research capabilities, and transparency:
- Industry leading tools and charts – Over 50 technical indicators and customization not offered by Robinhood
- Cryptocurrency offerings – Ability to trade Bitcoin, Ethereum, Doge on a regulated platform
- Desktop and web capabilities – More advanced experience than Robinhood‘s mobile focus
- Transparent order routing – Webull offers clarity around sending orders to execution platforms; no payment for order flow
- Interest on cash balances – Earn over 2% APY on uninvested cash in your account
The one red flag around Webull is its Chinese parent company. All trading infrastructure is US-based, but some question mark exists around privacy policies. Still, Webull surpasses Robinhood across multiple facets.
2. Public
Public brings a social media dimension to investing alongside fractional share offerings wrapped in a modern interface. By letting you discuss ideas and follow investors, Public emulates the past glory days of StockTwits before memes and emoji took over.
However, our experts also caution around risks of social trading platforms:
- Public displays portfolios and trades of top performers, allowing followers to mirror investors without doing their own due diligence
- Critics point to eToro having to pay millions in fines for enabling its top traders to push dubious penny stocks on followers
- Always verify information on social platforms and stick to established blue chip stocks
Public also offers startups and IPO access to accredited investors. Though not without risks, Public modernizes brokerages for the TikTok generation.
Explore Public‘s eToro‘s Platform
3. M1 Finance
M1 Finance brings automated portfolio construction and management to the table with its pie chart allocation tool. Rather than picking stocks, you allocate percentage weights and M1 handles the rest:
- Automatically diversifies across stocks, ETFs, bonds
- Rebalances your portfolio to stay on target allocation
- Lets you trade fractional shares to build your ideal asset mix
- $0 online trades and low management fee of 0.25% annually
This robo-advisor approach provides diverse exposure matching your risk tolerance without stock-picking skills. Though not suitable for day trading given its batch order processing model, M1 Finance offers welcome automation for passive investors.
Its $100 minimum balance is higher than Robinhood but not a concern for serious investors.
4. TD Ameritrade
Veteran broker TD Ameritrade has invested heavily in boosting its tech capabilities and customer experience – with clear success based on rising customer scores.
Zero equity commissions, strong tools, robust mobile apps, and 24/7 customer service make it a leading full-service brokerage:
- Intuitive platforms – Easy to use apps and world-class thinkorswim desktop hailed as best in class
- Research and education – Wealth of independent content and courses
- Diverse offerings – Stocks, funds, forex, futures, bonds, CDs
- Cash yields – Earn over 3% on uninvested cash swept to a money market fund
With over $1.2 trillion in client assets, TD Ameritrade provides scale, stability, and cutting-edge innovation unavailable from independents like Robinhood.
Compare Brokerages at TD Ameritrade
5. Fidelity
Fidelity has proven itself as the ultimate one-stop-shop for investing needs over 70+ years in business.
Fidelity brings together:
- Commission free online stock, options & ETF trades
- 5,200+ mutual funds – many rated 5 stars by Morningstar
- Retirement planning – #1 in 401k plans and IRAs
- Wealth management – Tax efficient indexing, custom portfolios
- Cash management – debit cards, 2% cash interest, ATM fee reimbursements
- Industry leading security – repeated J.D. Power certifications
With over $11 trillion under administration, Fidelity offers scale and stability unmatched by fintech disruptors.
6. Vanguard
Vanguard pioneered low-cost indexed mutual funds and ETFs – an investing revolution that has saved American households over $1 trillion in fees.
Its retirement services set the gold standard across:
- Industry leading 401k plans – Over 6 million participants
- Personal advisors – For portfolio assessment and financial planning
- Asset management – Professionally managed portfolios of funds
- Top-rated apps – For easy access across devices
With over 30 million investors trusting it with $7 trillion in assets, Vanguard promises rock-solid stability and noble ideals around fair value.
7. Merrill Edge
Merrill Edge combines discounted Bank of America banking services with $0 equity and ETF trades.
Perks include:
- 30 free monthly stock and ETF trades
- Preferred rewards program – Boost interest rates and rewards points on BofA credit cards and bank accounts
- Access to professional research – Analyst reports from Bank of America‘s Equity Research team
Merrill Edge gives the advantage of consolidation efficiency to existing Bank of America customers but remains worthwhile for those seeking robust banking integration.
8. Charles Schwab
Charles Schwab pioneered low-cost online brokerages decades ago and continues excelling across technology, service, security, and stability.
Benefits include:
- Industry leading platforms – Intuitive websites, mobile apps leveraging latest tech
- Retirement planning access – Human advisors provide guidance
- Research and education – Wealth of proprietary commentary and courses from experts
- Cash yields – Earn over 2% APY on cash; rate bump for referrals
With nearly $7 trillion under management and decades of focus on financial inclusion, Charles Schwab sets the bar on trust and transparency.
Explore Charles Schwab‘s Offerings
9. SoFi Invest
Fintech startup SoFi Invest makes investing friendly through automation and novel concepts catering to young investors.
Perks include:
- Automated investing – Get assigned ETF portfolios matching your risk tolerance
- Fractional shares – Build DIY ETF portfolios with flexible weights
- IPO early access – Among the few brokerages offering upcoming IPO share deals
- 2% interest – Earn over 20X the national average on cash balances
SoFi Invest allows hands-off or self-directed investing alongside active cash management and even career coaching resources – a refreshing financial ecosystem.
Key Takeaways
- Leading alternatives offer fully self-service investing or hybrid models bundling robo-advisors with human guidance
- Fractional share investing enables precise portfolio tuning but some disadvantages exist
- Cash management yields and margin rates deserve comparison shopping
- Carefully evaluate social trading platforms risks before following investors
- Focus on financial stability and transparency – not just technology
Conclusion
While the democratization of investing draws headlines, goals like retirement security depend tremendously on finding trustworthy stewards for your assets. Seek brokers excelling across security, stability, transparency and financial inclusion – not just slick apps enabling free trades.