[bob1029]

I've been with Robinhood for over 3 years and I have had zero issues with my portfolio or any features around managing my account day-to-day. The only thing that tripped me up was the transition from Apex to their own clearing house, so I had some extra paperwork to file w/ the IRS during that transition year.

I see a lot of people saying things like "I don't trust Robinhood with my money". I am curious what scenario you see unfolding with Robinhood that could result in loss of your assets. Especially scenarios impacting Robinhood uniquely. Are you aware that Robinhood, as well as virtually every other brokerage in America, provides SIPC insurance up to 500K USD on all (non-crypto) investment accounts? This is on-par with the same kind of protections you get with any FDIC-insured checking or savings account. In order to even qualify for this kind of insurance, Robinhood had to essentially sell its soul to the various auditors and regulators. Regulations around these kinds of businesses are incredibly stringent. You would probably feel a lot more comfortable with any arbitrary brokerage if you had to sit through one of their audits, or were simply made aware of how extensive it is.

There is certainly a lot of "controversy" around Robinhood in the press lately (surely no competitor would stand to gain from running hit pieces against a zero commission broker), but from a purely academic standpoint, it is just noise and doesn't impact the ability of the firm to carry out its fiduciary duties in a reliable and consistent manner.

[kelnos]

Not the parent you're replying to, but I don't think I'd say I wouldn't trust Robinhood with my money. As you say, they're a SIPC-insured, regulated entity.

What I would say is that I just don't trust Robinhood as a company. They feel scummy to me, and their marketing and UX pushes practices that I would not consider good investment advice. I can only assume that pushing frequent trading (and poorly-described options trading) on unsophisticated investors makes more money for them. But it's likely at the expense of those investors. Even if I "know better" and could just take advantage of the platform as-is, I don't care to support that behavior.

Take that and pile that on top of -- for example -- their misleading and factually incorrect announcement about their quickly-pulled cash management product last year... yeah, no thanks, I'll pass.

[wefarrell]

Agreed. They've adopted the addictive UX patterns of other applications, which is irresponsible for an investment platform. It encourages gambling and making poor trading choices.

Push notifications are a prime example of this. They encourage users to act on short term news rather company fundamentals, which is a dangerous mindset for novice investors. Fortunately for them they've been operating solely during favorable market conditions but when the market does crash I fully expect them to face backlash.

[qwhelan]

>SIPC insurance up to 500K USD on all (non-crypto) investment accounts? This is on-par with the same kind of protections you get with any FDIC-insured checking or savings account.

While similar, SIPC is not "on-par" with FDIC.

With FDIC, the bank is taken over Friday afternoon and your cash is available Monday morning.

With SIPC, it could very easily be five years before you have access to your assets again.

The difference in the value of the insurance also means the regulatory scrutiny behind SIPC is far lower.

[denkmoon]

Enron had to submit to auditors and regulators. Lehman Brothers too.

The mere presence of extensive auditing and regulation does not mean that it is effective.