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 18 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 in Australia, nor any other country outside the US. It had planned to open in the UK in 2020, but it was postponed indefinitely due to Covid-19. Their global expansion has taken no step further since then.
But do not lose hope! In Australia, you will find some Robinhood 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 major losses for some clients.
Robinhood Alternatives in Australia
To help us answer this question, we focused on commission-free brokers available in Australia. Given that, here are our suggestions:
Commission-free stock and ETF trading. You can also copy other traders/investors. Slick, modern, and easy for anyone to use. It is trusted by over 20 million clients worldwide.
ARSN 637 489 466, promoted by eToro Australia, Pty Ltd. CAR 001281634. Your capital is at risk. Other fees may apply.
Australian broker that offers access to +6000 US stocks and ETFs, with no trading commissions.
Commission-free stock and ETF trading (+10,000 global stocks and ETFs), 0.15% of currency conversion fee, and presents fractional shares. Over 1.5 million customers.
Disclaimer: 76% of retail CFD accounts lose money.
1 free trade every month. It charges a 0.12% custody fee per annum.
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 20 million users worldwide. You can also invest in other products such as CFDs, ETFs, stocks, commodities, Forex, and cryptocurrencies 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.
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. Furthermore, new users can get one free share after opening a Stake account and funding it within 24 hours.
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.
3# Trading 212
Trading 212 at a glance
Founded in 2006, Trading 212 is a fintech based in London that aims to democratize the entire investment process through a simple mobile application by allowing anyone to invest in more than 6500 stocks and ETFs, Forex, commodities, CFDs, and cryptocurrencies. More than 15 million people have already downloaded the app. In 2017, it was the trading app with the most downloads in Germany, and, since 2016, it remains in 1st place in the United Kingdom.
In Trading 212, you will find commission-free stock and ETF trading, fractional shares, and even an automatic investment system (Robo-advisor), if you wish. On the downside, it shows some limitations in terms of products available, such as the lack of bonds and options. Opening an account is extremely quick and easy.
Within the app, you will notice two distinct sub-platforms: Trading 212 Invest, where you can trade a range of assets free of charge, and Trading 212 CFD, where you may trade leveraged financial products (CFDs).
76% of retail investor accounts lose money when trading CFDs with this broker. It is important to understand how CFDs work and the risks involved in trading, such as losing all invested capital.
4# Revolut Trading
Revolut at a glance
Founded in 2019, Revolut Trading is part of the Revolut app (existing since 2015) and provides its users with an efficient way to invest (all in one place). It only allows investment in US stocks (+750 companies) free of charge up to 1 transaction per month, cryptocurrencies with a spread of 1.5%, and gold and silver with a spread of 0.25% when the market is open. Still, there are no inactivity or withdrawal fees.
The app is super intuitive, and the account opening process is 100% digital, fast, and secure. Unfortunately, it still has a very restricted range of financial products, and the account can only be denominated in dollars. Some of the non-accessible assets are ETFs, CFDs, Forex, bonds, and options. Furthermore, it has no educational or market research material, and it charges an annual custody fee of 0.12%.
Learn more in our in-depth Revolut Trading Review.
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.
Is Webull available in Australia?
No, Webull (Robinhood’s biggest competitor in the US) is also not available 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.