Robinhood Australia – Expansion Roadmap and Alternatives
You probably heard about the Robinhood app on Youtube and want to know if it’s available in Australia, am I right?
Robinhood is a modern and easy-to-use investment app from the US, which has introduced the concept of commission-free trading in financial products such as stocks and ETFs.
Do you want to know if Robinhood is available in Australia, its expansion plans, and the alternatives available for Australian investors? We’ve got you covered!
What is Robinhood?
Robinhood was founded in 2013. Since then, it has played a major role in disrupting the brokerage industry by allowing US retail investors to trade with no commissions, alongside its biggest rival, Webull. Robinhood is defined as a commission-free online broker that offers the possibility of trading stocks, ETFs, options, and cryptocurrencies.
The results are clear: over 20 million users! The competitors of Robinhood have been monitoring this exponential growth closely, and, in October 2019, some major well-established brokers in the US, such as E-Trade, TD Ameritrade, and Charles Schwab, announced in quick succession that they were eradicating trading fees.
Is Robinhood available in Australia?
Unfortunately, Robinhood is not yet available outside the US and the UK.
It has opened in the UK in early 2024.
But do not lose hope! Meantime, you can still find some Robinhood Australian alternatives that have proven reliable (and perhaps even more reliable than Robinhood!). The covid-19 stock crash during the first quarter of 2020 showed some vulnerabilities of the Robinhood platform. The app collapsed several times, and investors could not trade during the most volatile markets in history. The company is facing some lawsuits due to these outages.
Besides, Robinhood has faced several security breaches in revealing sensitive information about its clients, and, at one point, it even allowed “infinite leverage” that was shortly corrected afterwards. Still, it did not avoid significant losses for some clients.
Robinhood Alternatives in Australia
To help you answer this question, we focused on low-cost online brokers available in Australia. Given that, here are our suggestions:
Interactive Brokers
Founded in 1978, IBKR is one of the world’s most trustworthy brokers. It offers an enormous range of financial products (stocks, ETFs, Options,…), and low currency conversion fees (FX fees).
💡 Interactive Brokers also launched IBKR GlobalTrader, a modern mobile trading app to trade Stocks, Options and ETFs, ideal for novice investors.
Tiger Brokers
A popular choice for retail investors and traders in Australia, Tiger Brokers focuses on providing an intuitive platform, superb execution, and a smooth trading experience.
Stake
Australian broker that offers access to +6000 US stocks and ETFs, with no trading commissions.
1# eToro
eToro at a glance
Founded in 2006, eToro is a well-known worldwide fintech startup and the leader in the social trading field (follow other people’s trades), with over 30 million users worldwide. You can also invest in other products through their platform, which is intuitive and simple to use, making it a good choice for beginners. Plus, they have started offering commission-free stocks and ETFs trading (not all ETFs are commission-free).
Opening an account and depositing is easy, and you can even try it out with virtual money. On the downside, spreads can be high for some products. The only currency accepted is the USD, which means that you’ll be charged currency conversion fees upon deposit and withdrawal if you deposit in AUD. For more information, read our review of eToro in Australia.
This content promotes copy trading and stocks traded on US stock exchanges and is of a general nature only. Stocks are offered through eToro Service (ARSN 637 489 466), operated by Gleneagle Asset Management Ltd. ABN 29 103 162 278, AFSL 226199, and promoted by eToro Australia Pty Ltd. CAR 001281634. All other stocks are offered as derivatives and bear commission. Copy trading is offered by eToro AUS Capital Pty Ltd. (AFSL 491139) and cannot be construed as financial advice. Use at your own risk, and we are not liable for losses incurred. This information has been prepared without taking your objectives, financial situation, or needs into account. You should obtain advice independently and refer to FSG and PDS before trading with us. Trading stocks may not be suitable for all investors. Your capital is at risk.
Zero commission does not apply to short or leveraged positions and means that no broker fee has been charged when opening or closing positions. Other fees may apply. For additional information regarding fees, visit stocks.etoro.com.
2# Interactive Brokers
Interactive Brokers at a glance
Founded in 1978 and publicly listed in NASDAQ (ticker: IBKR), Interactive Brokers is a global online broker which surpassed major financial crises, showing resilience and a rigorous risk management process.
Interactive Brokers offers an advanced investment platform that includes a wide range of products (stocks, options, mutual funds, ETFs, futures, bonds, and currencies) from 150 markets, solid trade execution (Smart routing), and a set of technical and fundamental tools to help you in your investment decisions.
Beginners and intermediate investors have educational tools to explore, but the learning curve will be steep. That´s why we mainly endorse it to more advanced traders. Besides, the customer service gives crystal clear answers to your doubts, so there is no need to go back and forth.
On the downside, Interactive Brokers’ fee structure is quite complex, the registration process is lengthy but fully online, and the broker doesn’t offer commission-free trading. However, when considering FX fees, narrower spreads, and the stock loan program, Interactive Brokers’ clients still get significant savings compared to most brokers.
Interactive Brokers also launched IBKR GlobalTrader, a modern mobile trading app to trade Stocks, Options and ETFs, ideal for beginner investors. Some of the features of IBKR GlobalTrader include automatic currency conversions, fractional shares, demo account, and more.
3# Tiger Brokers
Tiger Brokers at a glance
With 9 million users worldwide, Tiger Brokers is one of Australasia’s most popular discount brokers for individual and institutional investors. You can access stocks and ETFs from the ASX, America, and Hong Kong.
Its pricing is competitive and depends on the market you want to access. Tiger Brokers focuses on execution and ease of trading, and the platform succeeds with both. In addition, it serves not just as a gateway for options trading in Australia, but as an international mutual fund broker for investors who deposit at least USD 100.
This is an ideal choice for active traders who don’t necessarily need research, and like to keep their cash deposits in mutual funds instead.
4# Stake
Stake at a glance
Stake is an Australian online broker that offers commission-free trades on US stocks and ETFs.
One of Stake’s main advantages is transparency and low cost. There are no inactivity or trading fees.
Its trading platforms are modern and beginner-friendly, making it a suitable alternative for both beginners and those who want to gain exposure to US-listed stocks and ETFs.
It is regulated by the Australian Securities and Investment Commission (ASIC).
On the downside, the Stake app only works in USD, so users are charged a currency conversion fee upon deposit and withdrawal if they deposit Australian dollars. Also, the range of products and markets available is limited: it doesn’t cover Australian-listed securities, bonds, among other products.
Which platform should you choose?
Some factors you should know when choosing an online broker are the fees charged, if it is regulated by top-tier institutions such as the Australian Securities and Investments Commission, the range of products it allows you to trade (not all platforms allow you to trade Australian stocks), among others.
The best online broker in your specific case will depend on your profile, preference, and objectives. Explore the websites above and decide for yourself!
A reminder that the above should not be seen as investment advice and should be considered information only. Investors should do their own research and diligence about the services and opportunities best suited for their risk, returns, and impact strategy.
Hope we helped, and leave your comments below.
Happy investments!
Other FAQs
Does Robinhood offer options trading?
Yes, Robinhood does offer the possibility to trade options. If you want to trade options, check our article on the best options trading brokers available in Australia.
Does Robinhood give you free stock?
Yes, new users get a free share upon signing up. Check our list of brokers with free stocks available in Australia.
Is Webull available in Australia?
Yes, Webull (Robinhood’s biggest competitor in the US) recently launched in Australia.
What about other US-based investment platforms? Are Betterment and Wealthfront available in Australia?
No, Betterment and Wealthfront are not available in Australia either. Only US citizens/Green Card holders are eligible to open an account on these platforms (some exceptions apply in the case of Betterment).
How exactly does Robinhood make money?
The online broker earns money from interest earned on customers’ cash balances (money in your account not invested) by selling order information to third parties (high-frequency traders, for instance) and margin lending.
Regarding selling orders, the US Securities and Exchange Commission (SEC) is still investigating Robinhood for not fully disclosing its practice of selling clients’ orders to high-speed trading firms.
Until October 2018, Robinhood would not clearly state that it was receiving payments for order flows. By law, any financial company must reveal all the material facts an investor would want to know before making any investment decision.
Franklin is a CFA Level III Candidate with 3 years of experience in Wealth Management as a Fund Research Analyst and the Host of the "Edge Over Hedge" YouTube Channel.
