The Robinhood share trading app allows everyday people the ability to buy shares, with no brokerage fees, from within an easy to use mobile app.
The Robin Hood app allows you to socially track shares and stocks with your friends via watch lists, while also giving you in-depth information on each of the companies you are looking to buy or sell.
Robinhood Australia will be launching in 2018; the companies headquarters is based out of Palo Alto in California.
The premise of Robinhood is to make it super easy (and cost effective) to buy shares and stocks on the ASX (Australian share market) and that of other international markets in the US; all within the easy to use mobile app. Like many other investment apps, the simplicity comes by allowing people to sign up from within the app itself with no manual forms or processes that are common with old fashioned share trading platforms in Australia.
Here is what you need to know about the Robinhood share trading app launch in Australia (based on what we know of the US product today).
Robinhood brokerage fees (or lack thereof)
The Robinhood share trading app does not charge fees to buy or sell shares. This will save you between $20 and $65 per trade when compared to existing Australian share trading platforms (depending on how much you are wanting to invest).
Instead, Robinhood app makes its money in three ways:
- The money you have in your investment account, when not invested, earns them interest.
- The spread of exchange rates on internal shares (which include a margin for them)
- A special ‘paid’ version called Robinhood Gold for additional features
This means that buying and selling shares will incur no brokerage fees.
Why is this important?
For example, if you bought and sold $1,000 worth of shares – this would cost you on average $40 (2x $20). To recover this cost, your shares would need to grow by a minimum of 4% to simply cover the brokerage fees.
Using Robinhood, you would not incur these fees and thus any growth in share value is simply upside for your returns.
Robinhood investment app is made for mobile
This means you can sign up, buy, sell and manage your shares all within the easy to use mobile app. No more rigorous manual sign up processes on websites or submission of ID documents; it’s all done within the app itself.
Within the Robinhood mobile app, you can:
- Buy shares
- Sell shares
- Research shares
- Create watch lists and follow companies
- Receive notifications ahead of important events (like when a dividend payment will occur)
This means you have full share trading ability within the app. The notifications feature will prove quite useful, giving you real time updates when shares you own (or wish to own) receive market updates or new information.
Robinhood app provides real time pricing, data and market insights
Many share trading platforms offer delayed pricing, data and market insights. This means the price you wish to buy or sell can often change at the last second. Using Robinhood, you will be able to buy shares in real time, sell shares in real time and receive up to the minute market insights and data to use when looking to research shares and stocks.
Track shares and stock through ‘Collections’ and watch list favourites
The Robinhood investment app will give you access to collections of shares that other people own, add favorites to your watch list (for monitoring) and generally discover new and unknown companies that may be of interest to you. This ‘social’ aspect of share trading is sorely missing in the Australian market, with most investors keen to invest in the market – but not sure where and how to start.
Robinhood also uses a concept called ‘Cards’. Cards show relevant news and information to you on your home screen from within the app; be it additional features, updates to your account, changes in the market or general company news. Cards allow you to stay on the pulse of your investments.
Buying international shares just got easier
Given there are no brokerage fees, buying international shares on the US stock market will become far easier. You will have full transparency of the purchase price in Australian Dollars and hopefully the ability to execute real time trades in Australian hours.
How do you fund your Robinhood investment app?
Robinhood will allow you to link your bank account as a funding source. This means you can manually deposit money from your bank account into Robinhood, or setup a recurring debit to have money transferred at regular intervals. As Australia moves to real time bank transfers (aka money that instantly transfers bank account to bank account) – the time for your funds to arrive inside the Robinhood app should be near instant.