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Robinhood UK (Review, What To Expect, Delays!?)

In late 2019, robo investing app Robinhood announced that it would soon become available to UK customers. In 2020, the world was flipped upside down with a global health pandemic. To the dismay of many, the tech company recently announced that it would be delaying Robinhood’s UK launch indefinitely.

As early access to the online investing platform is being removed from Robinhood’s website, we feel that a lot of UK residents may be wondering what to expect from the California-based financial service company. Below, we will provide a background on Robinhood before outlining what to expect from the platform when it eventually becomes available in the UK.

Who is Robinhood?

Robinhood is a digital financial service company in Menlo Park, California in the United States. Since 2013, Robinhood has been a market leader in the US and now has over 6 million active users investing today. 

Robinhood’s financial services are primarily done online, with access via their website or mobile app. In addition to stock, ETF, and cryptocurrency trading, the company has also recently started to offer banking services. 

Is Robinhood Legit? Is Robinhood Trustworthy?

Robinhood is famous for its commission-free trading opportunities, which leads many people to wonder, “is this a scam?”

The company is no a stranger to controversy, like a recent 2-day usage outage and a 2019 data breach, each losing a bit of public trust. Despite this, Robinhood is still heralded as a trustworthy platform to invest on.

Skeptics can rest assured that in the US, Robinhood is a member of the Financial Industry Regulatory Agency (FINRA), FINRA is a Congress-authorised non-profit created for transparency and fairness in the financial industry. 

Here in the UK, Robinhood has taken the correct steps by becoming authorised and regulated by the Financial Conduct Authority.

Additionally, all of the securities UK customers invest (under $500,00) are completely protected by the US-based Securities Investor Protection Corporation (SIPC). More information on the SIPC can be found here. For UK Citizens more commonly familiar with the similar Financial Services Compensation Scheme (FSCS), click here.

Where is Robinhood Currently Available?

Obviously, Robinhood is available to US customers, however as they say in the States, “the buck stops here.” They have their eyes firmly planted on opening up their services to the UK next, and there are also rumours surrounding an Australian debut (though nothing is confirmed).

Eligible users are able to manage their account from anywhere in the world except for a few countries (Cuba, Iran, North Korea, Syria, and the Crimea region of Ukraine).

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What We Can Expect With Robinhood’s UK Debut

Of course, with a worldwide pandemic changing plans for most of us, Robinhood UK has officially been put on hold indefinitely. The company made this announcement in July 2020 with deep regret, expressing the decision was difficult to make with so many UK residents excited about the service’s expanded territory. 

In a conversation with Techcrunch, a Robinhood spokesperson has stated that plans for global expansion are “on hold for now,” however the company looks “forward to the day when [they] can bring [the platform] to the UK.” 

Robinhood UK Launch Date

Robinhood’s UK launch date is currently unknown. Although it was set to debut in early 2020, the company issued a statement to their early access customers stating that the platform would not become available until after 2020.  

Robinhood UK Services 

Robinhood is entering the UK financial market with an incredible chance to invest in international companies. Namely, Robinhood showcases the scrolling logos of market giants like Netflix, Nike, Amazon, Apple, Tesla, Google, Snapchat and more. 

Robinhood UK Fees and Commissions 

Of course, what truly makes Robinhood different, is their fee (or lack thereof) structure. More than anything, customers will enjoy the lack of account minimums, foreign currency exchanges fees, or commissions.

That’s right, you will be able to invest with Robinhood with as little as £1. Plus, you can invest all you want in whatever you’d like. Even when investing in foreign companies, Robinhood does not take any commissions or currency exchanges fees while you invest. 

Robinhood Gold For UK Customers

In addition to its basic platform, UK investors can choose to upgrade to Robinhood Gold, the level II premium version of the company’s investment software. For as little as $5 (US) per month, gold customers can access more advanced data on stock performances and market forecasts.

Robinhood UK Waiting List

As of July 2020, the Robinhood UK waiting list has been officially closed by the California based company. Although it had been previously open, Robinhood has decided to postpone the early access and launch of services in the UK. It is expected to reopen in 2021.

Robinhood UK ISA

In general, things are a little bit easier when they are all in one place. So for investors of all shapes and sizes, having an ISA (an Individual Savings Account) tied closely to their stock portfolio is extremely handy. 

Unfortunately, Robinhood UK does not offer an ISA as a part of their services. Instead, UK customers will only be able to invest in US based stocks once the service is launched here, across the pond. 

How Does Robinhood Make Money?

For most flabbergasted by a lack of fees, many people are left wondering, “how does Robinhood make money?” The company is able to turn a profit and pay its employees in a few different ways. They are as follows:

  • Interest from Idle Customer Accounts
  • Microtransactions from Stock Orders with Electronic Trading Companies 
  • Premium Accounts 
  • Marginal Lending & Interest
  • Rebates
  • Order Flow for High Frequency Trading
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So clearly, Robinhood knows how to stay in business. Of course, they should not be faulted for this, as they are in the business of making you more money with smart investment solutions.

Robinhood UK Alternatives

Of course, with the indefinite delay of Robinhood UK’s service, there are probably many investors out there itching for the next best thing. Although this is not a complete list, here are some of the UK’s best Robinhood alternatives for smart and digital investing:

Final Thoughts

As a pioneer in commission-free trading, Robinhood is an exciting company to watch in the 2020’s. With no foreign exchange fees, no account minimums and an easy to use online platform, Robinhood’s UK platform is sure to attract a lot of users from every level of investment experience. 

Ultimately, Robinhood UK is set to become one of the UK’s industry leaders by making it truly easy to invest worldwide. However, we will just have to wait and see when this can become a reality.

Tom
About author

Fully qualified CISI Investment adviser for 5 year. Managed UK private client portfolios.
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