Robinhood thread

Turns out the money is invested in bonds to get that return, so not really what people think of when talking about a bank account.

An update from the founders here:

Many US banks and investment companies offer money market accounts which are invested in low risk investments such as US treasury bills. From a consumer viewpoint they are considered to be a savings account because they perform in the same manner as a UK savings account. The accounts support cheque payments and immediate transfers between accounts. Technically there is an investment risk but that risk is minimal and normally ignore by consumers.

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I, on the other hand, await the rather less flashy, slightly understated, yet elegant, new Monzo card :star_struck:

(Too many commas…?).

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You ordered a new investor card then Graham.

I did indeed. :sunglasses:

A post was merged into an existing topic: Freetrade: Free Share Trading

Well that didn’t last long!

https://www.bloomberg.com/opinion/articles/2018-12-17/robinhood-checking-moved-fast-and-broke

A quote from the article:

Looks like they didn’t work with the regulators at all. And it turns out they can’t offer a current account/accept deposits because they’re not a bank. Who would have thought? :man_shrugging:t2:

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Reassuring at least to see that regulators still have some sort of bite and can rein in attempts to blur boundaries like this. I suspect they’ll reintroduce it with different clearer naming, making it clear it is a prepaid card attached to an account which is able to purchase certain products (which I imagine would be covered by SIPC if the customer invested directly).

I have mixed feelings about this - it was shady and troubling for RobinHood to offer this as a checking/savings account as they are not a bank (i.e. a bank account, which have very stringent requirements), it wasn’t even clear at first what they were doing and the entire story only came out slowly, but in our current negative real interest rate environment, it’s a shame that more people don’t look at other places to invest than cash if they have larger amounts to park. Customers do need to be cognizant of the risk though and informed about what they are purchasing.

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Looks like a UK launch is on the cards…

Yikes. Will be interesting to see how they can compete against Freetrade. Hopefully ‘eventually’ means 2021 at the earliest, by which point Freetrade are an established incumbent.

If they rush it through and ‘eventually’ is ‘late 2019’, then quite possibly it’s anyone’s game…

Robinhood gets UK broker license

They can have my ISA and SIPP as soon as they open for business, though I assume the latter won’t be available straight away. It’s took Vanguard well over a year and no sign yet.

Freetrade has as ISA already? Isn’t it effectively the same service?

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There’s a fun but still informative thread on Robinhood here that covers some of the differences to Freetrade.

Essentially Freetrade are on the more ethical end, and I don’t know why someone would be waiting for Robinhood in particular, unless they like the idea of losing their money.

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No, not really. You can think of Freetrade as a copycat, cut-down, under-funded version of Robinhood. Freetrade isn’t really commission-free: it’s once per day, at a time not of your choosing. Robinhood also cater advanced investors and traders with options contracts, custom orders and the like.

On a personal note I did try Freetrade but didn’t like the product.

You seem very defensive of Robinhood, do you have a vested interest in it? or perhaps work for them?

Follow my link and read the comments. What do you disagree with there?

What features of Robinhood (that Freetrade or other UK stock brokers do not have) do you believe are beneficial, and to whom exactly?

As far as I know, and please do correct me if I’m wrong (I’ve never used Robinhood), the only features it brings to the table are those that enable and encourage day-trader like behaviour where the majority of people will lose money (either in absolute terms, or relative to the stock market average return).

These features should not be used by those looking to invest their money long term whilst having the highest likelihood of making good returns.

“Essentially Freetrade are on the more ethical end”

Please elaborate. How is Freetrade more ethical?

“I don’t know why someone would be waiting for Robinhood in particular, unless they like the idea of losing their money”

Please elaborate. I don’t like the idea of losing my money. That’s the very opposite of what I want to do.

Defensive?

To your question: no, I haven’t used the product, let alone invested in or worked for them.

They have deliberately chosen to not offer CFDs or options trading, or trading on margin, and align their fee structure with what is beneficial to their customers.

https://www.reddit.com/r/RobinHood/comments/a6uujt/the_risks_of_trading_on_robinhood/

Just one of many examples. If you don’t want to lose money, you won’t want to use any of the features that Robinhood has that existing UK brokers do not have.

So I ask again, why would you want to use Robinhood in particular?

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