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I always find surprising that Robinhood was able to build such a large business with such mediocre customer support. I switched to Charles Schwab and just the

I always find surprising that Robinhood was able to build such a large business with such mediocre customer support. I switched to Charles Schwab and just the fact that there's a 24/7 phone number compensates for the lack of simplicity. I used to think that I wanted the simplicity of something like Robinhood. But I have learned to appreciate the complexity of Schwab. The reality is that behind Robinhood's simplicity there's a lack of sophistication and process in their operation. I commend what they built, but Robinhoood it's too exposed to the cross winds of retail trading and regulatory scrutiny. I feel that by having my investments in Robinhood, I'm adding some sort of risk multiplier that has nothing to do with the nature of my investments. It has to do mainly with how amateur-ish their brokerage operation feels.

AznHisoka 5y ago
Beware that Robinhood also miscalculates wash sales, which they've admitted to me. I typically don't care about customer support, as I don't do a lot of trades, but messing up tax forms is a huge no-no for me.
- thebean11 5y ago
  Hmm, mess them up in whose favor? Robinhood messing it up seems like plenty of plausible deniability to not pay a penalty if you get audited..
  - AznHisoka 5y ago
    Mess them up in the IRS' favor, and it was clearly a mistake, and something they've had to fix for me.
- dataflow 5y ago
  Could you elaborate on what scenarios it would get messed up in? I expect it would happen if you're working across multiple brokerages, but is there any other scenario? It'd be helpful for us to know and watch out for it.
  - AznHisoka 5y ago
    The most basic scenario. I bought X shares of a stock for the first time ever, and sold it < 30 days later for a loss. That loss should not be a disallowed wash sale, but Robinhood claims it is. facepalm
foo92691 5y ago
> I always find surprising that Robinhood was able to build such a large business with such mediocre customer support You must be new to the tech industry. :-)
- TeMPOraL 5y ago
  Yup. The playbook of modern tech companies seems to be: 1. Solve the easy 80% of the problem. 2. Deploy that "solution" - which would not be considered acceptable in just about any other industry - as widely as possible. Do not offer proper customer support. 3. Take the money you save on not solving the hard parts and not having customer support, and funnel it into marketing, to stimulate growth. 4. Continue until you fail, get acquired, or dominate the market. 5. If anyone asks what kind of outfit you're running, make a sad puppy face and say "scaling is hard!".
  - giantg2 5y ago
    It's too bad sad puppy face doesn't work in year end reviews
    - phone8675309 5y ago
      Depends on how close to the C-suite you are
      - fumar 5y ago
        Exactly, sad puppy face because my personal growth is my career growth and my career growth is my financial growth. So please more money.
      - giantg2 5y ago
        I'm about as far away as one can be.
  - quacked 5y ago
    You must work for my company! The primary issue is that these 5 steps work.
colordrops 5y ago
It wasn't that surprising - they just went after a new market, that being those who rarely if ever did any sort of investment or trading.
- tobinfricke 5y ago
  It's not really an entirely new market, but definitely a "second wave" attempt to capture that market. Back in the Web 1.0 boom, seemingly dozens of online brokerages (ETrade, Ameritrade, Scottrade, etc) sprang up overnight to fuel easy consumer access to the "meme stocks" of the day (Pets.com, Yahoo, etc). Those are the new legacy players and I guess Robinhood is the new generation.
gruez 5y ago
>I feel that by having my investments in Robinhood, I'm adding some sort of risk multiplier that has nothing to do with the nature of my investments. It has to do mainly with how amateur-ish their brokerage operation feels. In the sense that they'll collapse and you'll lose your portfolio, or that they'll be down at a critical time you want to make a trade? For a buy and hold type of investor, the latter isn't really a concern.
- hangonhn 5y ago
  Even if they collapse you shouldn't lose your portfolio. These people https://en.wikipedia.org/wiki/Depository_Trust_Company https://en.wikipedia.org/wiki/Depository_Trust_Company keeps track of what you own.
  - vageli 5y ago
    Aren't there limits to the amount covered? Even the FDIC limits recovery amounts.
    - gruez 5y ago
      AFAIK DTCC provides zero coverage, that's handled by SIPC and is limited to 500k
      - tedunangst 5y ago
        Even if RH fails in some spectacular way, it'd be hard for all the customer assets to actually vanish. If you have 10000 shares of AAPL, but only 9000 shares are there, should still be good. For funsies, the open SIPC cases: https://www.sipc.org/cases-and-claims/open-cases/ https://www.sipc.org/cases-and-claims/open-cases/
hangonhn 5y ago
I've been a long time critic of RH but you can see the value to their business. They mainly target millenials who are largely shut out of the investment market because of their poor financial situations. Tiny portfolios and game-ified trading is a good way to capture that audience. Millenials won't stay poor forever so RH's customer base is actually quite valuable. A more mature company can either acquire RH for those customers or RH itself can transform into a more stable and reliable operation with a large customer base that will acquire more assets over time.
- hef19898 5y ago
  IMHO targeting financially less than robust people with a gamified solution is a real problem. An not a feature.
  - hangonhn 5y ago
    100% agree with you. Not at all condoning their business practices. I'm just saying their business has value because of their large customer base that they've already acquired. Its a customer base that becomes more valuable over time as millenials become wealthier and acquire more assets.
- Grim-444 5y ago
  I don't really buy this argument, since you can sign up at most traditional brokerages for free, with no minimum balance, and zero or almost zero trading fees on most trades. There's absolutely no more barrier to entry than with Robinhood.
  - hangonhn 5y ago
    Agree with you on that. I don't see any advantages to RH at all but they were the first to really target that group and has already acquired them as users. That group of users is worth a lot and will be worth even more over time.
  - kyawzazaw 5y ago
    Robinhodd started that push, no? They were comission based before
toastal 5y ago
I love that you get on a call with real native speaker in the US with Schwab; that part of customer support has been stellar. I like that they cover international ATM fees too. I don't care for how they handle security though. I really wish they supported WebAuthn or at least TOTP that didn't require Symantec's proprietary TOPT solution. I wish they supported PGP for messages as well (I know those GMail users are having their financial data read by Google). When I asked about what "SchwabSecure" really is and what sort of encryption they use gave me marketing fluff, even stating "The reason you may not find more detailed information available online which supports this is so that we can prevent criminals from obtaining this information, and using that to get a foothold"--as opposed to my recent evaluation of email providers to see the competition who could provide the MOST transparency about how they set up their security.
- websap 5y ago
  "I love that you get on a call with real native speaker" Wow! Seriously? How do you feel the same way about the people you work with, if they aren't native speakers?
  - tick_tock_tick 5y ago
    Talking over the phone, which doesn't have great voice quality to begin with, about a potentially stressful and time critical situation is not something accents help with there is nothing wrong with that statement.
    - wpietri 5y ago
      A counfounder here is that a strong accent is correlated with outsourcing customer support to low-cost providers to companies with far-away, underpaid staff who lack cultural context and social power within the company they nominally work for. Personally, I think the much bigger problem is the shitty outsourcing. But semi-sensical corporatese excuse-making is definitely not improved by language and accent barriers.
      - 5y ago
ramesh31 5y ago
>I always find surprising that Robinhood was able to build such a large business with such mediocre customer support. This is the standard people have become trained to expect. Google does the same thing. The idea is basically that a certain level of scale, you can completely ignore customer support. There's always new users signing up, and placating any single one is no longer worth your time. Anyone who does serious trading knows the value of actual 24/7 human customer support, and uses a platform like Schwab or Fidelity. But Robinhood is arbitraging the naivety of the millions of people who've never invested.
- fumar 5y ago
  That is right Google operates under the assumption of people as in large groups of individuals. Their primary drive is to add billions of more people to their graph, https://nextbillionusers.google https://nextbillionusers.google If you read through the marketing material, you will notice that they use the word people and not individuals or persons or you. "People are at the center of everything we build." For what is worth, Fidelity customer service is quick and reliable. They've always answered by questions or solved my issues over the phone.
- hef19898 5y ago
  During my time at Amazon we used to joke about an, alleged, Bezos quote: He hates CS and wished he could live without. The narrative was, that operations weren't good enough to make CS unnecessary. Well, it sometimes seems it was just a question of scale, as you said. And maybe Amazon is just figuring out whether or not they can get away with it, little by little.
- bawolff 5y ago
  I've never used customer support (for consumer software) that was actually worthwhile, so not missing much.
- andrewmutz 5y ago
  If consumers are not willing to pay for the product, it makes sense that they would not get good customer service. The users are not customers of Robinhood or Google. The users are the product that Google sells to advertisers and Robinhood sells (in the form of data) to hedge funds and HF traders. Schwab and Fidelity can deliver a good product with good customer service because users pay money for the product and are actually customers.
jermaustin1 5y ago
> such mediocre customer support. I agree 1000% with this. I "recently" switched from RH to ally since I already have a decent chunk of cash there, and I am STILL waiting on my cost-basis to transfer. It has been over 75 days since they transferred my stock and cash, and every time I reach out to customer service they feed me the same canned response that due to volume of transfers it is taking longer than expected and they have no ETA on when my cost-basis will transfer.
- whoisjuan 5y ago
  This happened to me when I transferred to Schwab. Surprisingly it was Schwab the one that eased my mind. I called them and they put me through the cost basis department which told me that RH basically has to prepare the cost basis manaually and pass it to them/ They told me that it had been taking a while but that they were indeed receiving the Cost Basis for other customers. So I just had to wait. Of course this sucks because it blocks you from selling, but it will eventually show up.
  - xyzelement 5y ago
    Does it actually block you from selling? I think you really need to have the cost basis figured out for tax time - you sure Schwab won't let you? Even with a manual request?
- jackson1442 5y ago
  Same deal here, switched to Vanguard. After a few weeks I called in to ask about it and they offered to send a letter to RH on my behalf to get that information transferred. Sure enough, about 2 weeks later all my information was in Vanguard!
  - MiddleEndian 5y ago
    Baffling that the US financial market is simultaneously run by supercomputers built as close to the physical stock market as possible to reduce latency, and then also manual letters and people personally mailing checks and such.
lumost 5y ago
Most consumers do not want to pick up the phone these days. I do not trust that an inbound phone number isn't just a spam call. I get concerned that the number I get when I google "schwab support line" will turn out to be a fake line setup on a good looking website designed to harvest personal details. I strongly suspect that the SaaS/consumer trend of having fewer human interactions will continue. The necessary caveat of this is that many firms will have less developed procedures for managing interesting situations.
- Aea 5y ago
  Okay, why not start with https://www.schwab.com https://www.schwab.com? Their phone number is literally one-click away at the top of the site.
- deleted 5y ago
  [deleted]
pbreit 5y ago
Vast majority of customers prioritize cost and product over customer service.
Taylor_OD 5y ago
If you make trading as easy as playing candy crush you don't have to have good CS to get customers.
rajup 5y ago
While I am really glad Robinhood existed back when I started working to introduce me to investing, their amateurish ops (see their outages in the past few years) and customer support (they managed to bungle a position transfer costing me a few hundred bucks) pushed me to more established players. Most of these established players now have low to zero commissions with much better customer support, order execution etc. I doubt any serious investor uses (or should be using!) Robinhood.
zzt123 5y ago
Maybe I’m wrong and there’s a better company that offers this, but the reason I use RH is so that I can trade both cryptos and regular securities out of the same account, with 0-day settlement on trades (without opening a margin account) since every RH account is an implicit margin account. I also like the instant deposits that scale with account size. RH’s trading hours for securities is more limited than anyone else, but I don’t find myself trading outside of those hours anyways. I also don’t like their naive tax accounting and don’t expect them to handle wash sales properly, which are two very big negatives, but I haven’t found a better broker for my main use case.
duped 5y ago
> I always find surprising that Robinhood was able to build such a large business with such mediocre customer support. Because the interface is much easier to use. Particularly for options, which are dangerously easy to trade with Robinhood compared to their competitors like Think or Swim.
- sitzkrieg 5y ago
  it is misleading really. so many people who didnt understand legged , or options in general got into really bad positions which is hilarious to watch the revolving door
dillondoyle 5y ago
+2 for schwab especially investor checking card. Though they did have hiccups in trading peak GME/AMC. It's refreshing being able to chat, or call a native english speaking call center where they will bend over backwards to help, waive fees, etc. No offense meant to ESL speakers, but I think we've all experienced 'support' that is hard to understand and communicate. I can't even get TCF on the phone.
Black101 5y ago
Charles Schwab is nice except for their reliability... TD Ameritrade and Fidelity's sites have much better uptimes.

AznHisoka 5y ago

Beware that Robinhood also miscalculates wash sales, which they've admitted to me. I typically don't care about customer support, as I don't do a lot of trades, but messing up tax forms is a huge no-no for me.

thebean11 5y ago
Hmm, mess them up in whose favor? Robinhood messing it up seems like plenty of plausible deniability to not pay a penalty if you get audited..
- AznHisoka 5y ago
  Mess them up in the IRS' favor, and it was clearly a mistake, and something they've had to fix for me.
dataflow 5y ago
Could you elaborate on what scenarios it would get messed up in? I expect it would happen if you're working across multiple brokerages, but is there any other scenario? It'd be helpful for us to know and watch out for it.
- AznHisoka 5y ago
  The most basic scenario. I bought X shares of a stock for the first time ever, and sold it < 30 days later for a loss. That loss should not be a disallowed wash sale, but Robinhood claims it is. facepalm

foo92691 5y ago

> I always find surprising that Robinhood was able to build such a large business with such mediocre customer support You must be new to the tech industry. :-)

TeMPOraL 5y ago
Yup. The playbook of modern tech companies seems to be: 1. Solve the easy 80% of the problem. 2. Deploy that "solution" - which would not be considered acceptable in just about any other industry - as widely as possible. Do not offer proper customer support. 3. Take the money you save on not solving the hard parts and not having customer support, and funnel it into marketing, to stimulate growth. 4. Continue until you fail, get acquired, or dominate the market. 5. If anyone asks what kind of outfit you're running, make a sad puppy face and say "scaling is hard!".
- giantg2 5y ago
  It's too bad sad puppy face doesn't work in year end reviews
  - phone8675309 5y ago
    Depends on how close to the C-suite you are
    - fumar 5y ago
      Exactly, sad puppy face because my personal growth is my career growth and my career growth is my financial growth. So please more money.
    - giantg2 5y ago
      I'm about as far away as one can be.
- quacked 5y ago
  You must work for my company! The primary issue is that these 5 steps work.

colordrops 5y ago

It wasn't that surprising - they just went after a new market, that being those who rarely if ever did any sort of investment or trading.

tobinfricke 5y ago
It's not really an entirely new market, but definitely a "second wave" attempt to capture that market. Back in the Web 1.0 boom, seemingly dozens of online brokerages (ETrade, Ameritrade, Scottrade, etc) sprang up overnight to fuel easy consumer access to the "meme stocks" of the day (Pets.com, Yahoo, etc). Those are the new legacy players and I guess Robinhood is the new generation.

gruez 5y ago

>I feel that by having my investments in Robinhood, I'm adding some sort of risk multiplier that has nothing to do with the nature of my investments. It has to do mainly with how amateur-ish their brokerage operation feels. In the sense that they'll collapse and you'll lose your portfolio, or that they'll be down at a critical time you want to make a trade? For a buy and hold type of investor, the latter isn't really a concern.

hangonhn 5y ago
Even if they collapse you shouldn't lose your portfolio. These people https://en.wikipedia.org/wiki/Depository_Trust_Company https://en.wikipedia.org/wiki/Depository_Trust_Company keeps track of what you own.
- vageli 5y ago
  Aren't there limits to the amount covered? Even the FDIC limits recovery amounts.
  - gruez 5y ago
    AFAIK DTCC provides zero coverage, that's handled by SIPC and is limited to 500k
    - tedunangst 5y ago
      Even if RH fails in some spectacular way, it'd be hard for all the customer assets to actually vanish. If you have 10000 shares of AAPL, but only 9000 shares are there, should still be good. For funsies, the open SIPC cases: https://www.sipc.org/cases-and-claims/open-cases/ https://www.sipc.org/cases-and-claims/open-cases/

hangonhn 5y ago

I've been a long time critic of RH but you can see the value to their business. They mainly target millenials who are largely shut out of the investment market because of their poor financial situations. Tiny portfolios and game-ified trading is a good way to capture that audience. Millenials won't stay poor forever so RH's customer base is actually quite valuable. A more mature company can either acquire RH for those customers or RH itself can transform into a more stable and reliable operation with a large customer base that will acquire more assets over time.

hef19898 5y ago
IMHO targeting financially less than robust people with a gamified solution is a real problem. An not a feature.
- hangonhn 5y ago
  100% agree with you. Not at all condoning their business practices. I'm just saying their business has value because of their large customer base that they've already acquired. Its a customer base that becomes more valuable over time as millenials become wealthier and acquire more assets.
Grim-444 5y ago
I don't really buy this argument, since you can sign up at most traditional brokerages for free, with no minimum balance, and zero or almost zero trading fees on most trades. There's absolutely no more barrier to entry than with Robinhood.
- hangonhn 5y ago
  Agree with you on that. I don't see any advantages to RH at all but they were the first to really target that group and has already acquired them as users. That group of users is worth a lot and will be worth even more over time.
- kyawzazaw 5y ago
  Robinhodd started that push, no? They were comission based before

toastal 5y ago

I love that you get on a call with real native speaker in the US with Schwab; that part of customer support has been stellar. I like that they cover international ATM fees too. I don't care for how they handle security though. I really wish they supported WebAuthn or at least TOTP that didn't require Symantec's proprietary TOPT solution. I wish they supported PGP for messages as well (I know those GMail users are having their financial data read by Google). When I asked about what "SchwabSecure" really is and what sort of encryption they use gave me marketing fluff, even stating "The reason you may not find more detailed information available online which supports this is so that we can prevent criminals from obtaining this information, and using that to get a foothold"--as opposed to my recent evaluation of email providers to see the competition who could provide the MOST transparency about how they set up their security.

websap 5y ago
"I love that you get on a call with real native speaker" Wow! Seriously? How do you feel the same way about the people you work with, if they aren't native speakers?
- tick_tock_tick 5y ago
  Talking over the phone, which doesn't have great voice quality to begin with, about a potentially stressful and time critical situation is not something accents help with there is nothing wrong with that statement.
  - wpietri 5y ago
    A counfounder here is that a strong accent is correlated with outsourcing customer support to low-cost providers to companies with far-away, underpaid staff who lack cultural context and social power within the company they nominally work for. Personally, I think the much bigger problem is the shitty outsourcing. But semi-sensical corporatese excuse-making is definitely not improved by language and accent barriers.
    - 5y ago

ramesh31 5y ago

>I always find surprising that Robinhood was able to build such a large business with such mediocre customer support. This is the standard people have become trained to expect. Google does the same thing. The idea is basically that a certain level of scale, you can completely ignore customer support. There's always new users signing up, and placating any single one is no longer worth your time. Anyone who does serious trading knows the value of actual 24/7 human customer support, and uses a platform like Schwab or Fidelity. But Robinhood is arbitraging the naivety of the millions of people who've never invested.

fumar 5y ago
That is right Google operates under the assumption of people as in large groups of individuals. Their primary drive is to add billions of more people to their graph, https://nextbillionusers.google https://nextbillionusers.google If you read through the marketing material, you will notice that they use the word people and not individuals or persons or you. "People are at the center of everything we build." For what is worth, Fidelity customer service is quick and reliable. They've always answered by questions or solved my issues over the phone.
hef19898 5y ago
During my time at Amazon we used to joke about an, alleged, Bezos quote: He hates CS and wished he could live without. The narrative was, that operations weren't good enough to make CS unnecessary. Well, it sometimes seems it was just a question of scale, as you said. And maybe Amazon is just figuring out whether or not they can get away with it, little by little.
bawolff 5y ago
I've never used customer support (for consumer software) that was actually worthwhile, so not missing much.
andrewmutz 5y ago
If consumers are not willing to pay for the product, it makes sense that they would not get good customer service. The users are not customers of Robinhood or Google. The users are the product that Google sells to advertisers and Robinhood sells (in the form of data) to hedge funds and HF traders. Schwab and Fidelity can deliver a good product with good customer service because users pay money for the product and are actually customers.

jermaustin1 5y ago

> such mediocre customer support. I agree 1000% with this. I "recently" switched from RH to ally since I already have a decent chunk of cash there, and I am STILL waiting on my cost-basis to transfer. It has been over 75 days since they transferred my stock and cash, and every time I reach out to customer service they feed me the same canned response that due to volume of transfers it is taking longer than expected and they have no ETA on when my cost-basis will transfer.

whoisjuan 5y ago
This happened to me when I transferred to Schwab. Surprisingly it was Schwab the one that eased my mind. I called them and they put me through the cost basis department which told me that RH basically has to prepare the cost basis manaually and pass it to them/ They told me that it had been taking a while but that they were indeed receiving the Cost Basis for other customers. So I just had to wait. Of course this sucks because it blocks you from selling, but it will eventually show up.
- xyzelement 5y ago
  Does it actually block you from selling? I think you really need to have the cost basis figured out for tax time - you sure Schwab won't let you? Even with a manual request?
jackson1442 5y ago
Same deal here, switched to Vanguard. After a few weeks I called in to ask about it and they offered to send a letter to RH on my behalf to get that information transferred. Sure enough, about 2 weeks later all my information was in Vanguard!
- MiddleEndian 5y ago
  Baffling that the US financial market is simultaneously run by supercomputers built as close to the physical stock market as possible to reduce latency, and then also manual letters and people personally mailing checks and such.

lumost 5y ago

Most consumers do not want to pick up the phone these days. I do not trust that an inbound phone number isn't just a spam call. I get concerned that the number I get when I google "schwab support line" will turn out to be a fake line setup on a good looking website designed to harvest personal details. I strongly suspect that the SaaS/consumer trend of having fewer human interactions will continue. The necessary caveat of this is that many firms will have less developed procedures for managing interesting situations.

Aea 5y ago
Okay, why not start with https://www.schwab.com https://www.schwab.com? Their phone number is literally one-click away at the top of the site.
deleted 5y ago
[deleted]

pbreit 5y ago

Vast majority of customers prioritize cost and product over customer service.

Taylor_OD 5y ago

If you make trading as easy as playing candy crush you don't have to have good CS to get customers.

rajup 5y ago

While I am really glad Robinhood existed back when I started working to introduce me to investing, their amateurish ops (see their outages in the past few years) and customer support (they managed to bungle a position transfer costing me a few hundred bucks) pushed me to more established players. Most of these established players now have low to zero commissions with much better customer support, order execution etc. I doubt any serious investor uses (or should be using!) Robinhood.

zzt123 5y ago

Maybe I’m wrong and there’s a better company that offers this, but the reason I use RH is so that I can trade both cryptos and regular securities out of the same account, with 0-day settlement on trades (without opening a margin account) since every RH account is an implicit margin account. I also like the instant deposits that scale with account size. RH’s trading hours for securities is more limited than anyone else, but I don’t find myself trading outside of those hours anyways. I also don’t like their naive tax accounting and don’t expect them to handle wash sales properly, which are two very big negatives, but I haven’t found a better broker for my main use case.

duped 5y ago

> I always find surprising that Robinhood was able to build such a large business with such mediocre customer support. Because the interface is much easier to use. Particularly for options, which are dangerously easy to trade with Robinhood compared to their competitors like Think or Swim.

sitzkrieg 5y ago
it is misleading really. so many people who didnt understand legged , or options in general got into really bad positions which is hilarious to watch the revolving door

dillondoyle 5y ago

+2 for schwab especially investor checking card. Though they did have hiccups in trading peak GME/AMC. It's refreshing being able to chat, or call a native english speaking call center where they will bend over backwards to help, waive fees, etc. No offense meant to ESL speakers, but I think we've all experienced 'support' that is hard to understand and communicate. I can't even get TCF on the phone.

Black101 5y ago

Charles Schwab is nice except for their reliability... TD Ameritrade and Fidelity's sites have much better uptimes.