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Do I trust this brokerage to exist in 10 years? 20? Are they going to be convicted of fraud? If I have a problem, is there a phone number that I can call to speak to a knowledgeable agent that can solve my problem?

A sampling of things that differentiate brokerages for me, price per trade is so far down my list since I buy rarely but hold for a long time.

Wait, if the brokerage goes broke do your stocks go away with it? I thought your stocks belong to you? What could (legally) happen to the stocks?

With normal brokers, your stocks are protected by SIPC insurance in that case. It plays a similar role to FDIC insurance on your bank account. This should generally apply to Robinhood too. They state that it does.

The reason I would have some doubts is they were talking recently about providing checking and savings features like a bank, only tied to a brokerage account, and they said cash therein would be SIPC insured and the SIPC had to contradict them publicly and say "nuh-uh".

This doesn't indicate your stocks aren't safe per se, but it suggests that Robinhood may not always verify that something is 100% ok with regulators before doing it, or think about all the implications, and some day we might find out "oops" they didn't do something crucial that traditional brokers do, because they were being disruptive, moving fast and breaking things.

Another point is that while Robinhood Financial appears to be a more or less normal broker that is a member of FINRA and SIPC, Robinhood Crypto is not. This isn't exactly surprising, but again, it could make a person slightly nervous that there could be drastically different consequences someday to trusting different entities that are all called "Robinhood". Maybe people will get used to trusting both of them and someday there will be a new "Robinhood XYZ" and it will not be regulated the way people expect. Or what if when Robinhood Crypto is hacked and loses their customers assets, it turns out there is some linkage that causes problems for Robinhood Financial, even though it wasn't supposed to work that way.


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