Bloomberg: âThe company says it makes most of its money from subscriptions to its Robinhood Gold service, as well as from rebates from market makers and stock loan incomeâ
I.e. RH makes money from subscriptions, payment for order flow (not allowed in UK) and leverage. Theyâll be supplying tools for trading and encouraging leverage, rather than tools for long term investing. This is why Iâd choose Freetrade, itâs unique and customer first
TechCrunch, argues it could help other challengers:
âFreetrade was first out of the gate, and has since been joined by Revolut and Bux. However, arguably, regardless of Robinhoodâs deep pockets, a rising tide could lift all boats in the neo broker space since these upstarts are trying to grow the market by introducing new, younger people to investing, not just stealing customers from incumbents that are charging higher feesâ
How do they intend to get payment from order flow if itâs illegal here in the UK? Will they route their orders through the US and execute them there? If yes, how did they even get FCA authorisation to operate here?
That generates more questions: I assume (by assume I mean near certain) with most investment services here in the UK, if any disputes arise, they are going to be decided in UK courts, according to UK law, because the assets and the agreements are under UK law.
If they route their orders through the US, which jurisdiction are your assets under? If I have a legal feud with them, which court do I go to? Can the US seize my assets for any reason, since itâs in their jurisdiction and they do what they want with them?
They canât do payment for order flow in the UK, theyâll have to adapt their business model in some way or theyâll just be less profitable in the UK than in the US
but having said that, FT are a British London based company, and I do like supporting my local startups. ETFs not on launch, hmmmâŠ
one thing I do love is the Level 2 data, and reportingâŠbut L2 is only really decent if your buying a tone of stock. But itâs a good offering for sure.
This is another reason I probs wonât be touching RH, although I have signed up. I donât like that a company built for helping millennials invest (when some donât have any financial knowledge of savviness) trade on margin. Yes the exposure is more, but if it goes sideways it really goes sidewaysâŠand that will just increase the young debt. IMO.
It is going to be interesting on how would the big brokerages react to the news. In the US almost all the big brokerage firms removed their commissions, I doubt that HL and the rest are just going to keep charging ÂŁ10+ a trade.
Thatâs an interesting point. What if the likes of IG / HL etc were to remove their Fees. Would people then move to the bigger more established brokers?
Id love to see the FT road map beyond 6 months and see what they are thinking about bringing to the table in the future, because if the bigger brokers do remove fees, the smaller brokers such as FT will need something super sticky id imagine.
Lots of excitement about Robinhood but does anyone think theyâll be trading anytime soon in the UK given their bad PR over the past month? The FCA would be mad not to insist on significant safeguards before they can start onboarding customers.
I donât think they are offering options in the UK so I donât think the whole Personal Risk Tolerance / Infinite Leverage stuff is going to be an issue here.
Robinhood will almost certainly do a free share referral scheme after launch. Donât bother wasting your referrals just to go higher in a pointless queue. They have 6m in the US they can handle someone who is 20,000th in a queue
FT is very slow adding new ETFs. Emphasis seems to be on individual companies. Maybe RH will match/overtake their range of ETFs in a single update. I imagine this news will have increased urgency in Revolut dev teams too
What makes you think T212 and FT are different? Theyâre exactly the same except a couple feature differences, colour scheme and ETFs available
The default option is instant order still (ÂŁ1 fee). All companies try to make money somehow
AbsolutelyâŠthereâs a 0.12% TIF where the similar ETF is 0.2% (SWDA).
A lot of people are saying that itâs great to see competition even freetrade! But this is not competition. In My eyes, Unfortunately Robinhood are miles ahead of freetrade and thatâs the reason a lot of people are going to Jump ship when they arrive.
I love freetrade and want to stay loyal to them, but if they havenât introduced fractional shares and many many more US stocks by the time robinhood come, then a lot of people have got important decisions to make including me. Cmon freetrade lets show robinhood that you can Match whatever they bring.
Worth checking out the Freetrade Building a fintech platform with serverless video overall, but if you donât want to sit through the whole video then look at 25:32 where they demo purchasing fractional shares, it then goes onto explain some of the other things coming soon from the new Investment Platform like quicker top-ups, more securities.
At the end of the video they announced that they have started migrating to the new platform which means we will more than likely be using the things we have been waiting for before Robinhood even starts on-boarding people in the UK.