Robinhood UK: Expansion Roadmap and Alternatives for 2023

You have probably heard about the Robinhood app on YouTube and want to know if it’s available in the UK, 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, alongside its biggest rivals, Webull, E-Trade, and TD Ameritrade.

Want to know if Robinhood is available in the UK, its expansion plans, and the alternatives available? We’ve got you covered!

Robinhood account opening – Robinhood doesn’t work in the UK

1# eToro

Established in 2006, eToro is a well-known worldwide fintech startup and the leader in social trading (following 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 stock trading in the UK.

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, so you’ll be charged currency conversion fees upon deposit and withdrawal if you deposit in GBP.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

2# Interactive Brokers

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 (IB SmartRouting), 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.

Want to know more about Interactive Brokers? Check our Interactive Brokers Review.

3# Plus500

Founded in 2008, Plus500 is an online broker offering a wide range of financial products, including real shares and CFDs on forex, indices, shares, commodities, options, ETFs, and cryptocurrencies. It is available in over 50 countries and is listed on the London Stock Exchange.

There are two distinct account types:

• Plus500 CFD: It only focuses on CFD products;
• Plus500 Invest: Where you can trade stocks (real shares);

The web platform you will use is the WebTrader, Plus500’s proprietary platform, offering a stable trading experience and easy access from multiple devices, including a mobile app. All platforms are easy to use and responsive, and you can start testing the features by opening a demo account.

Their customer support is helpful and easy to assess through a chat that is always shown on the trading platform. Their spreads are low, and they offer accounts in sixteen currencies, including USD, EUR, and GBP. Still, they charge a 0.70% currency conversion fee and a $10 monthly fee following three months with no activity. On Plus500 Invest, they only charge a small commission per trade (US market: $0,006/share).

Finally, it is regulated by financial regulators like the FCA and CySec, meaning that Plus500 is appropriately supervised and that there is an investor protection scheme under the entity you open an account with. For instance, If you open an account as a European investor through Plus500CY Ltd, you are protected up to €20,000. Additionally, Plus500 provides negative balance protection for CFD trading on a per-account basis – only to retail clients from the European Union.

As a side note, Plus500 Futures, a platform only available for US users and where you can trade Futures, is also part of the Plus500 group.

Want to know more about Interactive Brokers? Check our Plus500 Review.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 86% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

4# InvestEngine

InvestEngine is a UK-based broker and robo-advisor launched in 2020. It provides users with access to low-cost, diversified portfolios of exchange-traded funds (ETFs) designed to meet their investment goals and risk tolerance. InvestEngine offers both managed portfolios and a do-it-yourself (DIY) option for investors who prefer to build and manage their own portfolios.

Pros:

1. Low-cost investing: InvestEngine provides a low-cost solution for investing, with competitive fees for both managed portfolios and the DIY option.
2. Diversification: The platform offers a range of ETFs, enabling investors to create a diversified portfolio tailored to their risk tolerance and investment objectives.
3. Auto-rebalancing: For managed portfolios, InvestEngine periodically rebalances the portfolio to maintain the desired level of risk and diversification.
4. User-friendly interface: The platform is easy to navigate and provides helpful tools, such as risk assessment questionnaires and educational resources.

Cons:

1. Limited investment options: Compared to some other platforms, InvestEngine offers a smaller selection of ETFs. Investors looking for a wider range of investment options might find this limiting.
2. No individual stocks or bonds: InvestEngine focuses exclusively on ETFs, which might not be suitable for investors who wish to invest in individual stocks, bonds, or other types of instruments.

All in all, it is a great solution for buy-and-hold investors looking to only invest in ETFs for the long term.

Want to know more about InvestEngine? Check our InvestEngine review.

5# Freetrade

Freetrade is a mobile-only commission-free UK stockbroker founded in 2016 that lets you invest in more than 6,000 stocks (US, UK, German, Finnish and Dutch), as well as ETFs, for free.

Freetrade came to revolutionize the traditional brokerage industry. A lot of brokers still present high complexity over their platforms and product offer. Freetrade is on a mission to help customers achieve better long-term financial outcomes and, for that purpose, it wants to be as transparent and trustworthy as possible. Ultimately, their goal is to allow everyone to benefit from wealth creation.

In the Freetrade app, you will not find CFDs and other related complex products; it does not promote day trading and has no hidden fees. The accounting opening process is quick and smooth. The mobile app is remarkably user-friendly. The main drawback is the limited product offering (no options, Forex, CFDs, Commodities or Cryptocurrencies).

As displayed on their website, Freetrade makes money through 3 revenue streams: ISA, £3/month, their premium service (£9,9/month), a fee of 0.45% of the Base FX rate on each US order placed, and a small amount of interest earned from banks on customers’ cash.

They operate under a freemium (free+premium) business model. For £9,9/month, users get extra features, such as limit orders, the ability to set stop loss, more stocks, etc. If you’re interested, you can also read our full Freetrade Review.

Which platform should you choose?