Robinhood Alternatives You Should Seriously Consider: 8 Options That are Growing in Popularity in 2021

Last Updated on June 4, 2021

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Robinhood alternatives are becoming increasingly popular as investors start to turn on the best known mobile-only online brokerage app.

Robinhood offers commission-free investing. Yet that fact itself fuels suspicion. There was a saying in the early days of social media, “if you’re not paying for the product, you ARE the product,” and there is a widespread sense among those who are not its fans, that Robinhood’s users are the product. And it lacks educational resources, which are especially valuable for its target audience.

We’ll get a better sense of that controversy as we proceed with this list of Robinhood alternatives: other ways to trade with robo-advisors with analogous convenience. Each of the eight alternatives we will discuss has its own pros and cons.  Let’s look at the advantages and disadvantages of Acorns, Ally Invest, Betterment, E*Trade, M1 Finance, Public.com, TD Ameritrade, and Vanguard. 

Acorns

Acorn, like Robinhood, has no account minimum. It does charge fees, though, beginning at $1 a month and going no higher than $5 a month, and a 0.25% management fee. This helps alleviate the sense that the user is the product.

Acorns is easy to use, and is both savings and family friendly (for the $5 rate, you get Acorns Early, an investment account for children). 

One disadvantage, its portfolio is smaller than the average robo-advisor portfolio, consisting of from just five to seven asset classes.

Ally Invest

Ally Invest, which has no trading costs and for most transactions, does have a fee for options contracts, but keeps that very low ($0.50).  It offers a robust platform, with forex trading, automated portfolio management tools, margin lending, and a customizable trading dashboard.

It doesn’t offer fractional shares: something that Robinhood does have, and that traders looking to get started by dealing in small amounts often want.

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Increasingly frustrated with Robinhood, young investors are looking for other alternatives. Photo credit: Shutterstock.com

Betterment 

If you believe in social responsibility as an obligation or strategy, Betterment could be the robo advisor for you. It offers a “Broad Impact portfolio” looking to companies that meet specific social, environmental and governance goals.

E*Trade

A review at StockBrokers.com described E*Trades trading platform as “great for beginners, active trading and options trading.” Advantages include the availability of educational and research materials, both third party and in house. Disadvantages? Although the educational content is there, it isn’t as engaging as it is within some of the competitors.

M1 Finance

As a “pro,”M1 Finance gets great praise from reviewers for the flexibility it allows users in the design of their own portfolios. It does come with the ability to purchase fractional shares. As a “con,” it excludes mutual funds, working via ETFs and stocks. Also, Investor Junkie dings it for the absence of retirement planning tools.

Public.com

Public recently made some news with a change in its revenue model. Many free stock apps generate income with payment for order flow (PFOF) — a practice that confirms the “you ARE the product” suspicion. Public has given up on that. It has introduced a “tipping” in its app, so users can offer it de facto but optional commission payments.

TD Ameritrade

TD Ameritrade Essential Portfolios has a strong advantage in its free, and automatic, tax-loss harvesting (a way of offering value out of money-losing investments). As a disadvantage, it requires a deposit of at least $5,000 to get started or $500 plus a commitment to make automatic deposits.

Vanguard

Vanguard’s ETFs are among the least expensive available. The average expense ratio is only 0.10 percent, where the industry average is 0.45 percent. Since high expense ratios can do a number on savings, this is an important pro. But, on the con side, it does not offer crypto trades, a contrast with Robinhood.