Now that one of the most entertaining market frenzies is finished, and $GME and $AMC have fallen from their all time highs (though still much higher than before), Robinhood is under a lot of pressure.
At the peak of the frenzy, Robinhood banned what stocks could be bought by their customers, including GameStop and AMC. This caused a huge uproar, with customers threatening to close accounts and move their money off of the trading platform. Now that the market conditions have settled, many are looking for Robinhood alternatives.
Robinhood changed the trading landscape by offering no commission fees with trading, as well as a modern and easy to use experience. However, there are now many different alternatives to Robinhood that users can look into that offer a similar experience with no fees. The following are a few of our favorites, but definitely are not the only other platforms you can check out.
Public (formerly known as Matador) is a stock investing app that shares many of the similar philosophies of Robinhood. It offers free stock trading, a nice user interface, and basic stock analysis charts. However, a differentiator from other apps is that Public has a social media feature.
Within the app you can follow friends, investors, and other influencers to learn what they are investing in. This is great for bouncing investing ideas off of each other, as well as getting new ideas from major investors that you follow. It is a unique spin on investing, even if it isn’t the most sound investing strategy.
For a new investing strategy, check out 5 Steps in Picking Winning Stocks here!
Overall, Public is a great alternative to jump to from Robinhood. In response to the fallout from Robinhood, Public posted a blog article claiming that they will no longer participate in Payment for Order Flow, or PFOF, any longer. PFOF is essentially the way Robinhood operated, and was partly the reason they were forced to shut down certain stocks.
If you are interested in trying Public, you can download it here!
Similar to Public and Robinhood, Webull is another online brokerage that is offering commission free trading. However, what is different about Webull versus Public and Robinhood is the sophistication of the app. Webull is not just available on the phone, but also has a browser and desktop application.
While apps like Public and Robinhood are great for beginners, you should move to more powerful platforms once you become more familiar with investing.
Webull is also slightly more complicated when it comes to its fee schedule. For basic stock trades, it is commission-free. However, when looking into margin trading and short selling, there will be some additional fees involved. This is pretty normal for an exchange, as regulators do have different requirements for brokerages offering these types of trades.
As said above, though, margin trading and short selling can get complicated and quite risky, and it definitely is not recommended for a new investor to dabble in this.
For more information on option and margin trading, check out our article on it!
Overall, Webull is a great option for investors that feel that they have gained enough experience to move to the next step of their investing journey.
Probably the most recognizable name on this list, Charles Schwab has a long history of offering brokerage services for retail investors. However, traditionally Schwab has charged a commission for stock and options trades (along with Fidelity, E*Trade, and others). However, many of these large and traditional brokerages have dropped their fee in favor of a more modern approach to better compete with the likes of Robinhood, Public, and Webull.
While Schwab is not as trendy as some of the tech alternatives above, they offer advising, support, and other services that the competition cannot. For someone looking for a more hands-on and communicative approach, Schwab should be considered.
Additionally, Schwab offers more account types than a simple “stock trading” account. There are many types of accounts that might be a better fit for your investment needs. This includes:
- Normal Brokerage Accounts
- Retirement (IRA) Accounts
- Automated “Robo” Portfolios
- Trust Accounts
Schwab also recently introduced a High Yield checking account, offering 0.03% on any funds in the checking account. While not a huge APY, it is still more than what others are offering.
Finally, for the really traditional investors, Charles Schwab has physical locations located across the United States that you can visit. Here you can chat with a live financial advisor, discuss what strategies are best for you, and get the confidence of human interaction instead of depending on technology. Personally, I feel that this is a lost art in financial advising.
If you are interested in learning more about what Charles Schwab can offer, check out their website here!
While the above three firms are some of our favorite brokerages, there are a ton of other options out there that should be explored. It often costs nothing to open a new brokerage account, so feel free to explore and see which is best for you. (A word of caution: you shouldn’t sign up for too many brokerages, as many require personal information, and you should not be giving away your personal information to too many companies).