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If you have any amount of money or equity held by Robinhood, you should seriously consider moving it to another broker. This has the potential to end the compa

If you have any amount of money or equity held by Robinhood, you should seriously consider moving it to another broker. This has the potential to end the company financially (at least until another round of funding bails them out) or regulatory (if they lose their licence over this).

AznHisoka 7y ago
Let's say RobinHood went out of business tomorrow. What would happen to all the stocks held by their customers?
- TheHypnotist 7y ago
  This should explain it. https://www.investopedia.com/articles/investing/050515/what-happens-when-stock-broker-goes-bust.asp https://www.investopedia.com/articles/investing/050515/what-...
  - AznHisoka 7y ago
    OK, that's sensible. So I guess there's really no need to do anything dramatic if you're a Robinhood customer, if you don't have over $500K in cash/securities.
    - brisance 7y ago
      Robin Hood customers absolutely should consider switching. These are the basics, and they can't even get it right. Would you trust a GP who didn't know how to use a thermometer? What happens if it's the other way around, and the customer's account shows a net profit but their books don't reflect that?
      - AznHisoka 7y ago
        It's a bug with a non-normal use case. Most people don't use margin, and they don't sell covered calls, let alone do both. I just buy and hold regular shares, so I don't forsee how they can mess that up in anyway. If they do, I definitely will move my account elsewhere. But for now, it's still a huge hassle to move everything to another brokerage.
- cma 7y ago
  https://en.wikipedia.org/wiki/Securities_Investor_Protection_Corporation https://en.wikipedia.org/wiki/Securities_Investor_Protection... https://www.barrons.com/articles/testing-the-limits-of-brokerage-account-insurance-1430529930 https://www.barrons.com/articles/testing-the-limits-of-broke...
shillbot-1234 7y ago
Who? I have tried with a couple of other brokerages, but found the entire UX to be absolutely horrendous. As much as RH is in the news for screwing up, I think that they have stumbled onto something that the more established brokerages either (a) just don't get, or (b) cannot replicate without the risk of losing existing customers.
- jquery 7y ago
  I’m pretty happy with Schwab. I find Robinhood cartoonish in comparison. Schwab provides so much more information.
- kccqzy 7y ago
  Schwab, Fidelity… Many of the more established brokerages just have slightly old-fashioned UX while being perfectly usable.
jakenberg 7y ago
Just because RH is in legal/regulatory trouble does not mean your money is just going to disappear. It's a fiduciary, not an ICO. Financial firms must have disaster plans that involve giving or transferring all of your assets back to you if it all ends. Selling your positions because of this would be a misinformed decision.
- awinder 7y ago
  point of clarification, you don't need to sell any positions to perform a ACATS transfer
- tenpies 7y ago
  > Selling your positions because of this would be a misinformed decision. That is why I specified moving. That should not be parsed as "sell everything". My concern would not be losing my money/positions. My concern is Robinhood losing its license and then being stuck on a comically long cue while they hire 5 under-motivated temps to handle hundred of thousands of account transfers. Their customer support is already terrible now. I can only imagine what that incompetence + financial collapse + end of operations would look like. I am assuming the prospect of being locked out of your accounts for several weeks/months would be stressful, not to mention the monumental task that may be involved in getting certain records back in place for tax season.
  - jakenberg 7y ago
    I worked at a fiduciary that went down so feel confident speaking to this. You're still not getting it. It's not like other startups that fail where you just get some temps and hope it solves itself. You have a specific timetable from the moment you lose your license to transferring every cent out. Past that window, there are penalties and further legal problems with the SEC. It's safe to say anybody – even slimy companies – are in full overdrive as this is going down. ACAT is not that simple. Most brokerages charge you a fee of upwards of $50 to do it. If the brokerage is going down and they must invoke an ACAT for you, they eat the fee. Again, it's misinformed to be incurring charges and even potentially taxable events because of your philosophical beliefs in the success or failure of a company.
awinder 7y ago
I'm amazed anyone is sticking on that platform now that td / etrade / schwab went to free trades. There's no reason left, other than you want dumbed down tools / don't know better.
- bob1029 7y ago
  Maybe its just me, but these "dumbed down tools" are working fine over here. What fantastical brokerage experience are you guys expecting here that Robinhood doesn't support? Are some of you actually concerned that your money is going to disappear overnight because it's in RH? I can assure you this is not a thing, unless you legitimately made very poor investment decisions with said money. Also, if this is the case, any of the above platforms will provide a virtually identical journey into poverty.
  - awinder 7y ago
    1. No dividend reinvestment tools so you’ll have cash drag unless you hand hold it 2. Inferior research tools 3. Fewer investment options (just stocks / etfs, no bonds or mutual funds) 4. Lacking support (ideally you don’t need this but having fantastic support can be nice over the long haul and most established firms have excellent support) 5. It’s only brokerage whereas pretty much anywhere else is going to allow you to consolidate retirement accounts 6. Tax reporting is a lot better in established firms but I might be dated here, looks like they built out some syncing tools in last year or so I’m sure robinhood is fine & I wouldn’t be worried about losing money, and if it works for you great. But you can get a lot more from a bigger brokerage and I don’t know what they’re going to be able to do to differentiate now that free trades are mainstream.

AznHisoka 7y ago

Let's say RobinHood went out of business tomorrow. What would happen to all the stocks held by their customers?

TheHypnotist 7y ago
This should explain it. https://www.investopedia.com/articles/investing/050515/what-happens-when-stock-broker-goes-bust.asp https://www.investopedia.com/articles/investing/050515/what-...
- AznHisoka 7y ago
  OK, that's sensible. So I guess there's really no need to do anything dramatic if you're a Robinhood customer, if you don't have over $500K in cash/securities.
  - brisance 7y ago
    Robin Hood customers absolutely should consider switching. These are the basics, and they can't even get it right. Would you trust a GP who didn't know how to use a thermometer? What happens if it's the other way around, and the customer's account shows a net profit but their books don't reflect that?
    - AznHisoka 7y ago
      It's a bug with a non-normal use case. Most people don't use margin, and they don't sell covered calls, let alone do both. I just buy and hold regular shares, so I don't forsee how they can mess that up in anyway. If they do, I definitely will move my account elsewhere. But for now, it's still a huge hassle to move everything to another brokerage.
cma 7y ago
https://en.wikipedia.org/wiki/Securities_Investor_Protection_Corporation https://en.wikipedia.org/wiki/Securities_Investor_Protection... https://www.barrons.com/articles/testing-the-limits-of-brokerage-account-insurance-1430529930 https://www.barrons.com/articles/testing-the-limits-of-broke...

shillbot-1234 7y ago

Who? I have tried with a couple of other brokerages, but found the entire UX to be absolutely horrendous. As much as RH is in the news for screwing up, I think that they have stumbled onto something that the more established brokerages either (a) just don't get, or (b) cannot replicate without the risk of losing existing customers.

jquery 7y ago
I’m pretty happy with Schwab. I find Robinhood cartoonish in comparison. Schwab provides so much more information.
kccqzy 7y ago
Schwab, Fidelity… Many of the more established brokerages just have slightly old-fashioned UX while being perfectly usable.

jakenberg 7y ago

Just because RH is in legal/regulatory trouble does not mean your money is just going to disappear. It's a fiduciary, not an ICO. Financial firms must have disaster plans that involve giving or transferring all of your assets back to you if it all ends. Selling your positions because of this would be a misinformed decision.

awinder 7y ago
point of clarification, you don't need to sell any positions to perform a ACATS transfer
tenpies 7y ago
> Selling your positions because of this would be a misinformed decision. That is why I specified moving. That should not be parsed as "sell everything". My concern would not be losing my money/positions. My concern is Robinhood losing its license and then being stuck on a comically long cue while they hire 5 under-motivated temps to handle hundred of thousands of account transfers. Their customer support is already terrible now. I can only imagine what that incompetence + financial collapse + end of operations would look like. I am assuming the prospect of being locked out of your accounts for several weeks/months would be stressful, not to mention the monumental task that may be involved in getting certain records back in place for tax season.
- jakenberg 7y ago
  I worked at a fiduciary that went down so feel confident speaking to this. You're still not getting it. It's not like other startups that fail where you just get some temps and hope it solves itself. You have a specific timetable from the moment you lose your license to transferring every cent out. Past that window, there are penalties and further legal problems with the SEC. It's safe to say anybody – even slimy companies – are in full overdrive as this is going down. ACAT is not that simple. Most brokerages charge you a fee of upwards of $50 to do it. If the brokerage is going down and they must invoke an ACAT for you, they eat the fee. Again, it's misinformed to be incurring charges and even potentially taxable events because of your philosophical beliefs in the success or failure of a company.

awinder 7y ago

I'm amazed anyone is sticking on that platform now that td / etrade / schwab went to free trades. There's no reason left, other than you want dumbed down tools / don't know better.

bob1029 7y ago
Maybe its just me, but these "dumbed down tools" are working fine over here. What fantastical brokerage experience are you guys expecting here that Robinhood doesn't support? Are some of you actually concerned that your money is going to disappear overnight because it's in RH? I can assure you this is not a thing, unless you legitimately made very poor investment decisions with said money. Also, if this is the case, any of the above platforms will provide a virtually identical journey into poverty.
- awinder 7y ago
  1. No dividend reinvestment tools so you’ll have cash drag unless you hand hold it 2. Inferior research tools 3. Fewer investment options (just stocks / etfs, no bonds or mutual funds) 4. Lacking support (ideally you don’t need this but having fantastic support can be nice over the long haul and most established firms have excellent support) 5. It’s only brokerage whereas pretty much anywhere else is going to allow you to consolidate retirement accounts 6. Tax reporting is a lot better in established firms but I might be dated here, looks like they built out some syncing tools in last year or so I’m sure robinhood is fine & I wouldn’t be worried about losing money, and if it works for you great. But you can get a lot more from a bigger brokerage and I don’t know what they’re going to be able to do to differentiate now that free trades are mainstream.