#ROBINHOOD APP SAFE PLUS#

He thinks Robinhood will struggle with cross-selling. Tallents said that SoFi - which is known for refinancing student loans - was having an easier time selling mortgages to its existing customers. He also points out that rivals - including SoFi Technologies - are trying to cross-sell customers.

He doubts that вЂњcustomers will change their financial behavior to integrate a lot of their financial life with a company that has been mired in scandal for a long time,вЂќ noted BarronвЂ™s. Tallents notes that the average Robinhood account has вЂњplay moneyвЂќ of $240, based on a FINRA enforcement letter. Hugh Tallents is senior partner at management consultancy cg42 which вЂњsurveyed more than 1,000 account-holders at various brokers.вЂќ According to BarronвЂ™s it withdrew a plan to offer checking and savings accounts in 2018 after вЂњmisleading marketing and a lack of insurance.вЂќ Robinhood also failed to obtain a UK bank charter.ДЄn industry consultant does not expect consumers to trust Robinhood with other financial services. Indeed, Robinhood - which wrote in its S-1 that its customers вЂњalready trust us with their hard-earned cash and assetsвЂќ - has tried to add lending and payments services.

If Robinhood can find new sources of growth that donвЂ™t raise regulatory hackles, perhaps it can keep growing faster than investors expect. Dogecoin, a joke cryptocurrency popular with Elon Musk - accounts for about 6% of RobinhoodвЂ™s revenue, according to CNBC.Д¬ould an SEC regulatory crackdown on these significant revenue sources put the brakes on RobinhoodвЂ™s growth? Uncertain sources of future revenue growth The SEC is also closely reviewing trade in cryptocurrency. Indeed, SEC Chair Gary Gensler has raised concerns about payment for order flow in the last several weeks, according to. With its rapid growth slowing down, investors should be concerned about talk of a regulatory crackdown on major components of its revenue. Is this mistreatment of users something that has been permanently eliminated after Robinhood paid its FINRA fine? Or will it continue? If it does continue, could it cause Robinhood users to switch their accounts to brokerage firms that treat them better? Risk of regulatory crackdown on its revenue sources The false and misleading information concerned a variety of critical issues, including whether customers could place trades on margin, how much cash was in customers' accounts, how much buying power or 'negative buying power' customers had, the risk of loss customers faced in certain options transactions, and whether customers faced margin calls.' FINRA found in its investigation that, despite Robinhood's self-described mission to 'de-mystify finance for all,' during certain periods since September 2016, the firm has negligently communicated false and misleading information to its customers.

#ROBINHOOD APP SAFE PLUS#

WhatвЂ™s more, it paid a $57 million find plus $12.6 million interest to the Financial Industry Regulatory Authority (FINRA). To be sure, Robinhood acknowledges slipups in its S-1. More specifically, the first of its corporate values is вЂњsafety first.вЂќ One of the biggest concerns I would have about investing in Robinhood is the huge gap between its values and its actions. As Tenev said, вЂќWe anticipate this will be one of the largest retail allocations ever.вЂќ Big fines paid after its dodgy treatment of users This means that as many as 35% of its shares will be offered to its users before the IPO. One other thing about its IPO - Robinhood is making a large chunk of those shares available to traders on its own app. For the second quarter, Robinhood estimates revenue in a range - the midpoint of which is $560 million - an even bigger growth slowdown: 130% more than the year before. In the first quarter, RobinhoodвЂ™s revenue rose a still impressive, but much slower 311% to $522 million. In the first quarter, accounts grew 150% to 7.2 million and revenue for 2020 was up a whopping 796% to $959 million, according to its S-1.

Robinhood enjoyed rapid growth in the number of accounts and in revenue. How so? 81% of its revenues come from payment for order flow - вЂњrouting customersвЂ™ trades to trading firms - that execute the trades and profit off the spread between the bid and the ask,вЂќ wrote BarronвЂ™s.

Robinhood app safe