- Robinhood now available to UK investors, offering 6,000 US stocks and no fees
- UK investors will be able to trade in fractional shares on the platform
- How to choose the best (and cheapest) stocks and shares Isa
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Share trading app Robinhood has opened its trading platform to all UK investors as it looks to take on established incumbents for the third time.
The US giant will initially offer free trading in over 6,000 US stocks, with no annual charges or fees for dealing or foreign exchange.
Robinhood found itself at the centre of the GameStop frenzy in 2021, when investors flocked to the platform to back so-called 'meme stocks'.
Third time lucky: Robinhood is launching in the UK again and hopes to take some market share
It is the third time the US company has tried to launch in the UK. It first announced a move into the market in 2020 before quickly shelving plans, and made a failed bid for crypto trading app Ziglu in 2022.
Jordan Sinclair, president of Robinhood UK told This Is Money: 'We've certainly learnt from those experiences. We decided not to launch previously and focused on the US business, which in hindsight was great.'
Robinhood reported a surprise profit in the fourth quarter after higher interest income from customers paying back loans, and a rebound in trading.
'Robinhood is 10 years old - that means there's things we've built over time and we can deliver a mature experience. What we're launching is more developed,' Sinclair said.
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What is Robinhood offering investors?
UK investors will be able to trade in fractional shares and Robinhood is offering 24-hour trading five days a week on certain stocks, something Sinclair says is a major barrier.
'We're so constrained when the US market opens. The market moves, something happens and the UK has to wait until tomorrow lunchtime. What we see with [trial] customers already is a third of trading happens out of market hours.'
Investors will be able to open a general investment account but not an Isa, although there are plans to launch this, alongside UK stocks, in the future.
While foreign exchange fees have been waived, UK investors will have to deposit sterling into their accounts, which is converted to dollars. They will be charged a 0.03 per cent FX charge.
The broker hopes that features like fractional stock rewards between $7 and $175 will tempt investors away from other DIY investment platforms.
One of Robinhood's standout offers is a 5 per cent rate on uninvested cash, on an easy-access basis with no cap, which is currently offered to its Gold customers in the US.
Freetrade offers 5 per cent on £3,000 uninvested cash for its Plus customers, who pay £11.99 a month, while other platforms offer around 3 per cent.
Robinhood refused to disclose the number of UK investors who signed up to its waiting list at the end of 2023.
But it will be a big ask to challenge the established platforms like Hargreaves Lansdown and AJ Bell, as well as more established challenger Freetrade, which offers no-commission trading although charges foreign currency fees.
Sinclair said: 'In the UK, there is opportunity in the addressable wealth and needs not being met, which creates some barriers that hinder participation. Fees are a big one… if it's your first £100 to invest and £15-20 goes to fees I understand why people are reticent to engage.'
Cash deposited with Robinhood will be eligible for Federal Deposit Insurance Corporation insurance up to a maximum of $2.25million.
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