Robinhood was one of the first investment platforms to try to make investing more accessible to the public. Using fractional shares and no fees, Robinhood could lower the total cost of investing and made it seem easy. But since its initial rise to fame, several competitors popped up. Whose best when you compare Robinhood vs Webull or Robinhood vs Acorns? With so many Robinhood alternatives, is Robinhood still the best choice for you?
What Is Robinhood?
Robinhood is an online stock broker that prides itself on offering commission-free trading of stocks, ETF’s, cryptocurrencies, and stock options, all through an easy-to-use mobile app.
Robinhood’s lack of account minimums or trade-based fees combined with their accessible and user-friendly mobile app makes them a solid choice for the new, casual investor who wants to engage in some DIY experimentation in the stock market or invest in cryptocurrency.
The ability to purchase fractional shares also provides a cheap introduction to buying and selling stocks and removes many barriers to entry that often keep out prospective investors.
Who Should Use Robinhood?
Though it may lack the same available information or investment options that other brokerage services offer, Robinhood’s commitment to commission-free trades, no minimum deposits, and fractional shares, all of which are put into one user-friendly app, makes them a good choice for someone looking for a low-commitment introduction to investing in the stock market.
As a low-cost, introductory tool to get started in the stock market, Robinhood is a good choice, albeit one that the more serious or long-term investors may find themselves outgrowing in favor of more feature-rich alternatives.
If you want a low stakes way to get involved in the stock market and learn more about how to invest, consider signing up for Robinhood.
That said, I recommend avoiding any of the paid premium accounts unless you’re an experienced investor and want to do a lot of active trading or buying on margin.
Whether or not Robinhood is a good fit for you will depend on what kind of investing you hope to do and how advanced you plan to get.
Who Should Look At Robinhood Alternatives?
If you were looking for a quick and easy place to practice your day trading, you might want to look at Robinhood alternatives. Robinhood limits the number of day trades to three trades per five business days unless you change your account from the standard one and pay a monthly cost.
Also, the current lack of educational resources and limited research information compared to what you could find elsewhere make other alternatives shine above Robinhood.
For the long-term investor, the limited account and investment options start to reduce your benefits compared to other tax-advantaged options.
Ultimately, unless you’re looking for a casual, low-stakes, short-term introduction to investing, you’ll likely want to look at Robinhood alternatives.
What I Wish Was Different About Robinhood
My main issues with Robinhood are its lack of certain features. Though this doesn’t have to be bad since it makes for a clean UI and simple app, it limits Robinhood’s functionality as a serious investing platform.
If Robinhood had more educational material or walkthroughs, it might better fill the niche of a beginning investor’s go-to app.
On the other hand, if Robinhood gave you more analytical tools and day trades, it could break out as a platform for more experienced investors.
Or, Robinhood could let users use IRA accounts and index funds and try to become the ideal app for long-term investors who don’t want to get overly involved in their investments.
Unfortunately, because Robinhood focuses so strongly on simplicity, it ends up being a jack of all trades but master of none. It has a few features to offer almost everyone, but it gets outclassed by more specialized alternatives.
Now, all of these complaints are related to the features Robinhood offers. But, there’s another subject where more serious concerns lie. Robinhood has a big problem with outages.
Robinhood’s Technical Problems
During periods of heavy traffic, which also happens to be where timely access to your investments can be most important, Robinhood often experiences delays. Even worse, some users are completely unable to access their accounts for a brief period of time.
These issues of consistency have made a lot of investors very upset. And it’s easy to see why. When you lose money through no fault of your own without the chance to do anything about it, nobody will be very pleased.
But, these technical issues go even further than merely losing a bit of money. There’s a nasty little technical bug that sometimes shows only part of a trade executed. While this doesn’t have anything to do with the real value of your account, it can still cause some scary moments.
In the case of a 20-year-old, this glitch made his Robinhood balance look like it had dropped drastically. The final balance was around -$700,000. That’s right, negative seven hundred thousand dollars.
Unfortunately, this particular 20-year-old saw that balance and took extreme measures, ultimately committing suicide over the matter.
While this tragedy was obviously not the direct fault of Robinhood, I felt this article would be incomplete without mentioning this flaw and the sometimes drastic impacts that go along with it.
Features Of A Good Robinhood Alternative
Consistency issues aside, broadly speaking, you should look for apps that combine Robinhood’s most useful features with improved functionality.
One of Robinhood’s main selling points is their commission and fee-free trading. This might be tough to find completely free alternatives, but you should always aim for as low fees as possible. Though 5$ a trade might not seem like much, those costs can add up fast over the long haul.
Robinhood’s other key feature that many other platforms are starting to adopt is the level of simplicity. A common complaint against the worlds of finance and investing is that they’re overly complicated.
While a simple and straightforward platform doesn’t necessarily equal an easier time investing, the visual appeal and readability of a platform matter a ton. It’s easy to feel intimidated by a bunch of charts, graphs, and jargon. If you’re looking for a good Robinhood alternative, look for simple UIs.
Now, to address the areas where Robinhood is somewhat lacking. If you’re a long term investor, look for an alternative that lets you invest in IRAs. This will give you a ton of tax benefits later on.
If you’re looking for a hands-off experience, a platform that helps you automatically invest may be your best bet. By making investing your default, you can help set yourself with healthy habits without ever having to give it a second thought!
Our List Of Robinhood Alternatives
There are a ton of alternatives to Robinhood out there. We’ve taken our picks for the five best platforms and explained the niche that they fulfill.
Rather than find the app that does a bit of everything slightly better than Robinhood, this list will give you the best app for your individual investing needs.
Webull – The Robinhood Alternative For Experienced Investors
Webull is our pick as the Robinhood alternative for the more experienced investor. With a lot of useful analytical tools and information readily available, Webull lends itself better to a more active trader who is comfortable researching different investments.
The $0 commissions and fees also help make Webull a strong contender for an active trading platform. By avoiding these extra costs, day traders can save themselves a ton of money over the long run.
The sandbox mode on Webull also provides experienced traders the opportunity to test out different investing strategies. This is useful if you want to do some experimentation on your own without risking actual losses.
Webull also gives you a free stock when you sign up. And, if you deposit $100 or more into your account, you get a second free stock. Even better!
Acorns – The Robinhood Alternative For Brand-New Investors
Acorns is one of the more “gimmicky” platforms on this list. But, it’s a surprisingly good fit for someone who is brand new to investing, needs help building strong savings habits, or just wants an extremely hands-off experience.
Acorns’ main feature is its “round-up” way of investing. Whenever you make a purchase with a connected account, Acorns will round up the purchase and invest the difference.
This helps you get into the habit of saving money if you’re someone who struggles to do so. By automating this process, you take out many of the hurdles that usually stand in people’s way.
Though you probably won’t make millions using Acorns, since the amount of money invested is so small, it can still be a useful way to learn more about how to invest and the habits needed to do so.
One other important note, however, is that Acorns charges a monthly fee of $1 – $3 per month. While this isn’t much, it’s still higher than some of the other options on this list ($0).
But, Acorns still plays a valuable role in helping you build good financial habits, If you’re looking for an app that can help with the other side of saving, budgeting, check out EveryDollar.
M1 Finance – The Robinhood Alternative For New Long-Term Investors
M1 Finance is our pick as Robinhood alternative for the beginning long-term investor. Following a brief questionnaire about your financial goals and current situation, M1 Finance will provide you with a pre-built portfolio that’s perfect for long-term investors.
These pre-built portfolios are designed with long-term investing in mind. They’re also highly customizable and automatically diversified. This means you’ll have a ton of freedom when it comes to creating your portfolio, but you also have a valuable safety net to keep you diversified.
Even better, M1 Finance takes care of a lot of the nitty-gritty of long-term investing. It automatically does things like portfolio rebalancing to help make the investing and management processes easier.
Combine all of that with the ability to use IRAs and a total lack of fees and commissions, and it’s easy to see why M1 Finance is our pick for the long-term investor.
E-Trade – The Robinhood Alternative For Investors Who Want To Learn
E-Trade has a strong case to be on this list in several positions. It offers $0 commissions and fees, pre-built portfolios, mutual funds and ETFs, IRAs, options trading, etc.
While all of these features are fantastic, the reason E-Trade is on this list is because of their excellent educational resources.
In addition to being a free investing platform with a ton of features, E-Trade offers tools to help you learn how to invest. Their articles cover beginning information like, “What is asset allocation?” and give advice on how to invest based on different time periods.
As you get more experienced, E-Trade has the resources to keep up. Their advanced articles cover everything from how to diversify your portfolio using futures to how to sell covered calls.
While these articles don’t cover the most extreme trading strategies, they’ll be more than enough to introduce you to more advanced techniques and ideas.
Most impressively, however, E-Trade even has guides for retirement and tax planning. Even though these aren’t explicitly investing topics, they still have a ton of value to investors.
This commitment to going above and beyond to provide useful educational tools earns E-Trade a spot as one of our best Robinhood alternatives.
Fidelity – The Most Accessible Robinhood Alternative
If you’re new to investing, this one may come as a bit of a surprise. But, Fidelity is one of the best available options for low-cost investments.
In addition to educational resources and data, Fidelity has a handful of investment options that are incredibly attractive to investors. We’re talking about Fidelity Zero.
Fidelity Zero is the name given to investments with $0 minimum investments and a 0% expense ratio (annual fee for managing your portfolio).
Most platforms have expense ratios ranging from 0.05% to 1-2%. But, Fidelity Zero investments have none. This difference results in serious gains over several years and makes it easier than ever to start investing long term.
This focus on no fees combined with useful tools to help analyze your investment strategy makes Fidelity our choice for the most accessible Robinhood alternative.
Lucas is a personal finance expert, an undergraduate student at Harvard University and the founder of the Personal Finance and Consulting Group at Harvard College (an officially recognized student organization). He has spent much of his life working to increase financial literacy in his surrounding communities through independent financial research and curricula design, and he is currently studying economics with a secondary in music.