There are two main things any trader wants from a brokerage. First, your funds and assets should be secure. Second, you should be able to trade what you want during market hours quickly. Unfortunately for customers of brokerage Robinhood, it seems they can no longer count on their broker for timely trades, and they’ve started to look for appropriate Robinhood alternatives.
Robinhood made headlines when it emerged with no fees to buy or sell stocks and ETFs. While its list of tradeable assets and customer base have grown, the company apparently neglected to keep its digital platforms up-to-date.
Here’s a look at what’s going on at Robinhood and what you may want to do about your Robinhood account.
Our Recommended Robinhood Alternatives
What’s Wrong With Robinhood?
At the beginning of March, Robinhood experienced back-to-back outages that locked investors out of trading on its platform. This occurred during one of the most volatile periods in market history as investors began to comprehend the long-term effects of novel coronavirus and other economic headwinds.
While the brokerage is free for most users, there is still an expectation it should work as advertised. Markets were busy plunging and bouncing back, and investors at Robinhood had to sit on the sidelines without access to the markets.
According to a letter from the founding team dated March 3, the downtime was ultimately caused by a mix of high order volume and high account signups. This record level of traffic took down an important behind-the-scenes system that routes web traffic.
The founders admitted the mistake and committed to rectifying it, but whatever they are doing isn’t enough. After the outages on March 2 and March 3, it went down again on March 9. Again, the app’s infrastructure was to blame. That’s three strikes, and many investors are not happy.
Angry Investors Abound
Traders don’t like losing money. When they lose money because of a technology glitch, they get furious. Beyond just grumbling on social media, at least one disgruntled user is taking legal action. On March 4, Florida-based client Travis Taaffe filed a federal lawsuit on behalf of himself and other Robinhood traders. The suit alleges that, in addition to negligence, the brokerage committed a breach of contract by failing to “provide a functioning platform.”
Robinhood Alternatives to Consider
If you’re considering a new brokerage to replace Robinhood, you’re far from alone. You’re also in luck. In the last six months, a number of the top online brokerages have eliminated commissions for most stock and ETF trades.
Here are some popular online brokerages that give you comparable experiences with no cost to trade stocks or ETFs.
A newer entrant to the online investing space, WeBull is a technology-first platform that offered no trading fees before the big brokerages were doing it. WeBull is best for active traders. If you’re into options or active stock trading, for example, WeBull could be a good choice.
2. Ally Invest
Ally offers an easy-to-use platform that is ideal for casual investors and people learning the ropes of active trading. However, it is short a few features the most experienced traders look for. Read our full review.
Public is an easy-to-use brokerage that supports fractional shares. If you want to start investing with a small portfolio, Public is perfect for your needs. It is also noteworthy for its public profiles that allow you to track other investors. But it is not ideal for advanced trading features. Read our full review.
4. TD Ameritrade
5. Charles Schwab
Schwab is a disruptor in the discount brokerage space. It has pioneered lower costs for investment funds and commissions. While it entered the no-commission-trade space after Robinhood, it was the first of the major brokerage firms to do so. Read our full review.
The pioneer of online investing, E*TRADE is still a top choice thanks to great platforms and good customer service. Note that this brokerage has agreed to be acquired by Morgan Stanley. Read our full review.
Some quick comparison we’ve made you may find interesting:
Trust is essential when it comes to a brokerage account for your money. Right now, it’s very hard to trust that Robinhood will be up and running when you need it. If you’re fed up with downtime or simply want to upgrade your brokerage experience, it may be time to start working with one of the great Robinhood alternatives mentioned above.
Written by Eric Rosenberg.
View the original article at here.