![]() On the one hand, they have arguably “democratised” investing by allowing people with relatively small amounts of money to access financial markets.Ĭertainly that is what their news releases say and what they tell angry Babyboomer politicians when compelled to respond to their concerns. No platform in Australia offers commission-free trading on ASX-listed stocks – mainly because there is an actual cost to trade on the local sharemarket so the economics doesn’t stack up for platforms – but low-cost player Superhero does offer free trades on exchange-traded funds (ETFs).įees on trades, known as “brokerage”, have been the traditional source of revenue in the stockbroking industry for decades. Robinhood is the most prominent of a number of trading platforms marketing themselves as “free”, meaning they do not charge any fees or commissions on trades.Ī number of these players have set up shop in Australia including Stake and eToro, although they are limited to US stocks and, in the case of eToro, a range of investments including some that are complex and risky like cryptocurrencies and contracts for difference (CFDs). Charles Schwab is an advertising partner. It’s not dissimilar from the treatment Facebook is getting, with founder Mark Zuckerberg trying to fend off expensive new regulations from governments around the world, including Australia’s. Unless Robinhood stabilizes those ongoing losses, investors will continue to avoid its stock - regardless of what the SEC decides to do about PFOF trades. Robinhood is under investigation in Massachusetts for targeting young investors who don’t know what they’re getting into and its CEO, Vlad Tenev, has been hauled before the US Congress to explain the platform’s role in last month’s Reddit trading saga that led to stocks like GameStop artificially pushed to record highs. Legendary investor Charlie Munger, Warren Buffett’s long-time business partner, last week slammed Robinhood and other online share-trading and broking platforms as being essentially a “gambling service” and a “dirty way” to make money.īerkshire Hathaway vice-chairman Charlie Munger has slammed “commission-free” trading. ![]() First, it is coming under serious pressure over its powerful, and some might say irresponsible, influence over society, and vulnerable consumers especially. With a valuation at last count of about $US11.7 billion ($15.1 billion), Robinhood is still a fraction of the size of tech giants such asFacebook and Google.īut the US investing app can be compared to the Big Tech players in a lot of ways.
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