Why Move Away from Robinhood for a Better Brokerage Firm?
When considering a brokerage firm, the decision to move away from Robinhood (RH) is often justified by the need for better quality and support. Recent reports have highlighted issues with option spreads at RH, and their customer support services leave much to be desired. This article explores why investors might choose to leave RH for a superior alternative, focusing on the services offered by Fidelity Investments.
Quality and Support
Retail investors who trade small amounts may find Robinhood attractive for its commission-free trades. However, for those who are serious about their investments and trade large volumes, the issues with RH's support and service quality become critical. High volume traders demand top-tier quality and reliable support, and RH often falls short in these areas.
Risk of Odd Behaviors: Reports suggest that RH may have experienced issues with option spreads, which can have significant implications for traders. For instance, traders relying on complex strategies such as option spreads may face unexpected outcomes, leading to potential financial losses. This inconsistency in execution can be troubling for traders who depend on precise calculations and strategies.
Richer Information and Services
Brokerage firms like Fidelity Investments offer a more comprehensive experience, especially in terms of research and analysis tools. While Robinhood is suitable for small trades, it lacks the sophisticated features that serious investors need.
In-Depth Stock Research: Fidelity provides robust tools for researching stocks and exchange-traded funds (ETFs). Users can access detailed charts with a wide range of data points, including price-to-earnings ratios (PE) and moving averages. This level of information is crucial for making informed investment decisions.
Analyst Insights and Fund Analysis: Fidelity offers insights from numerous stock analysts, enabling investors to gain a thorough understanding of potential investments. Additionally, the platform has a dedicated section for Morningstar analysis of mutual funds and ETFs, providing valuable data to consider. These features are not available on Robinhood, making it a more comprehensive choice for serious investors.
Enhanced Option Analytics: Fidelity’s options trading section is particularly advanced, allowing users to visualize the profitability of various options strategies at different points in time. This tool is invaluable for understanding the impact of volatility changes on potential trades, which can help traders make more informed decisions.
Better Investment Options
Beyond just trading stocks and ETFs, Fidelity offers a wider range of investment opportunities. For example, investors can invest in mutual funds and bonds directly through Fidelity, which is not possible with Robinhood. This versatility makes Fidelity a more flexible choice for various investment strategies.
World-Class Customer Service: Regardless of the account size, Fidelity’s customer service is exceptional. Whether you are a beginner with a small account or a seasoned investor with millions in assets, Fidelity’s representatives at phone services or in their retail offices treat you with the same level of attentiveness and expertise. This personalized support is a significant advantage over Robinhood’s more impersonal service.
Bottom Line
The decision to move away from Robinhood for a better brokerage firm like Fidelity Investments is a clear choice for serious traders and investors. The benefits of better quality, more comprehensive research tools, enhanced investment options, and superior customer support make the transition a worthwhile one. If you’re looking for a brokerage firm that can grow with you, offering both depth and service, Fidelity is worth considering.