Andrew Goldman has been writing for over 20 years and investing for the past 10 years. He currently writes about personal finance and investing for Wealthsimple. Andrew's past work has been published in The New York Times Magazine, Bloomberg Businessweek, New York Magazine and Wired. Television appearances include NBC's Today show as well as Fox News. Andrew holds a Bachelor of Arts (English) from the University of Texas. He and his wife Robin live in Westport, Connecticut with their two boys and a Bedlington terrier. In his spare time, he hosts “The Originals" podcast.
Dear traveler, you must be weary from your journey searching all over Canada for Robin Hood, archer nonpareil, beau of Maid Marion and fabled denizen of the Sherwood Forest.
Oh, you seek Robinhood the commission-fee stock trading platform and not Robin Hood, the emerald-capped mischief-maker of English legend! Sorry to disappoint you.
In this guide, we’ll give you all the information you need about the Robinhood trading platform and a little bit of history as well. In case you’re looking for a Robinhood Canada alternative, we’ll point out other commission-free trading apps.
The short answer to your question “Can I use Robinhood in Canada?” is… No. Robin Hood app Canada is not available right now.
If you’re curious to know how the Robinhood trading platform makes millions of dollars each year, despite nominal trading fees, feel free to check out our brief guide on how Robinhood makes money.
Let’s dive in.
What is Robinhood?
Robinhood is a Menlo Park, California-based tech startup that created a popular stock, ETF, options, and cryptocurrency trading app for iPhone and Android devices.
From opening and maintaining a Robinhood brokerage account to transferring funds for investment, Robinhood trading doesn’t charge you any fees.
Robinhood is a FINRA-approved broker-dealer that claims to have 15.9 million active users and has around $93 billion assets under custody. It also has around 22.8 million net cumulative funded accounts.
A History of Robin Hood trading
Robinhood was founded in April 2013 by Vladimir Tenev and Baiju Bhatt, partners who had previously developed high-frequency trading platforms for various financial institutions in New York City. The organization released its app in December 2014.
On July 29, 2021, the company went public on the Nasdaq under the ticker HOOD. The opening price was $38, but it fell to $33.35 before rebounding and reaching an all-time high of $85. As of June 18, 2022, the market value of Robinhood stock is $7.19 (ouch!).
How Robinhood progressed through the years
Since 2014, the number of accounts has grown from half a million to over 22.8 million.
Besides stocks and ETFs, Robinhood has been offering crypto trading services for around three years and has made $48 million in revenue in the fourth quarter of 2021. In the second quarter of 2021, due to the all-time high of Bitcoin and Dogecoin, Robinhood trading made a whopping $233 million in revenue from crypto alone.
At its peak in Q2 2021, Robinhood’s revenue was $565 million.
On April 7, 2022, Robinhood launched their crypto wallet to 2 million waitlisted users and announced that they were planning to add support for bitcoin transactions on the lightning network. This will make the bitcoin transaction, with their app, a lot faster and cheaper.
As of June 2022, Robinhood is experiencing a downfall. Its revenue and number of users have dropped as more commission-free trading apps have entered the market. Its revenue went from $565 million to around $300 million in one year. Its stock price dropped from an all-time high of $85 in August 2021 to $7.19 on June 19, 2022.
How does Robinhood make money?
Here are some of Robinhood’s sources of income:
Service fees: sending overnight international mail, domestic overnight mail, and mailing paper statements
Transfer fees, such as international wire transfers and domestic overnight check deliveries
Robinhood Gold, a premium subscription fee
Rebates from trading venues and market makers
Interest earned on uninvested cash
Why is Robinhood not available in Canada?
As of June 19, 2022, the company is only licensed to sell securities within the US. Also, as Canadian legislation prohibits brokers from using market-makers to complete trades for a fee, foreign no-commission trading platforms like Robinhood have been unable to establish a presence in the country. To provide maximum transparency, Canadian brokers must complete trades on exchanges.
Robinhood’s account-holder requirements make clear that the service is only available in the US:
You must be 18 years or older.
You must have a valid Social Security Number.
You must be a US citizen, US permanent resident, or have a valid US visa.
You must have a legal US residential address within the 50 states or Puerto Rico. Exceptions may be made for active-duty US military personnel stationed abroad.
Robinhood equivalent in Canada
Wealthsimple Trade is a Robinhood Canada alternative. With Wealthsimple Trade you can execute commission-free trades on your behalf. Best of all, there’s no account minimum and no paperwork, and you can choose to open a TFSA or a personal investment account. Get started with only a few taps in our mobile app.
Wealthsimple is anything but a fly-by-night startup. In May 2021, the company raised a huge CAD $750 million investment from some of the world’s largest financial institutions like Meritech and Greylock. Many Canadian celebrities, including Ryan Reynolds, Michael J. Fox, and Drake and his company DreamCrew, also invested in this round.
After this funding round, Wealthsimple’s valuation rose to CAD $5 billion. As of June 2022, the company has raised over $900 million in funding over nine rounds. Wealthsimple’s brokerage Canadian Wealthsimple Investments Inc., which operates Wealthsimple Trade, is a member of the Canadian Investor Protection Fund (CIPF). CIPF is a program that insures all accounts up to $1 million against member firms’ bankruptcy.
Robinhood vs Wealthsimple
Now that you know there’s a Robinhood equivalent in Canada, you may wonder what makes them different. Let’s take a look at what Wealthsimple Trade has to offer compared to Robinhood trading.
Easy to use: Provides a user-friendly web-based desktop and mobile app (Apple and Android) with a streamlined interface that allows users to trade in seconds.
No account minimum: There is no minimum investment requirement, so you can start investing with as little as $1.
Zero fees: Trade stocks, options, ETFs, and cryptocurrencies without paying a commission.
Fractional shares are available: This allows you to reduce risk and customize your portfolio with different companies and funds.
High-yield cash account: You can earn 0.3% APY on your uninvested cash with the Robinhood Cash Management service. This gives you more freedom with your brokerage account. Your account is also FDIC-insured and includes a debit card.
Robinhood Gold: At only $5 a month, this premium service gives eligible investors access to reports and advanced market data, loans with a 2.5% interest rate, and higher limit instant deposits.
Robinhood Crypto: The platform lets users buy, sell, and hold 11 different cryptocurrencies.
Access to initial public offerings (IPOs): Get early access to new companies’ shares and invest in them before they go public
Robinhood Learn: Access to investing tools that will help you learn the basics of investing and expand your knowledge of the stock market and various market assets.
There is no Robinhood trading Canada, as it’s only available to American citizens for now.
It offers no retirement or tax-advantaged accounts
Regulators accused Robinhood of “game-ifying” investing and trading, exposing investors to higher trading risks.
On some sale orders, regulatory or trading activity fees may still apply.
Pros of Wealthsimple
Although only available to Canadian citizens, you can trade in Canadian and US exchanges.
User-friendly: iOS and Android mobile app with a simple interface that lets you start in minutes.
A fee-free platform: When you buy and sell stocks and ETFs on the platform, you don’t pay any fees.
Cash bonus: A $150 cash bonus is available if you open a Wealthsimple Trade account and trade at least $300 in ETFs or stocks within 45 days.
No minimum investment requirement: You can start your investing journey with as little as $1.
Various account options available: To meet the investment and saving needs of various investors, Wealthsimple offers registered and non-registered taxable accounts.
Buy fractional shares: You can own portions of many companies’ shares without spending much on costly shares.
Wealthsimple Invest: A fee-based robo-advisor that allows investors to invest in expertly managed portfolios with tax support services.
Wealthsimple Plus: This premium service includes unlimited price alerts, no foreign exchange fees on US trades, real-time market data, and up to $5,000 in instant deposits.
Trade 53+ coins with Wealthsimple Crypto: There are no fees, but bid-ask prices are subject to a 1.5% to 2% spread.
If you can’t hold USD on your account, you’ll have to pay foreign currency exchange fees when trading US markets.
No charting tools are available.
Are there any limitations to Wealthsimple Trade?
Real-time market data is not available on Wealthsimple.
To register a Wealthsimple Trade account, there is no minimum deposit required. But deposits are subject to a $50,000 maximum limitation. You’ll need to contact customer support if you want to deposit more than $50,000.
Deposits of less than $1,500 are available immediately, and this restriction is reset every three business days. Your money will get deposited within 3 business days if you deposit more than $1,500. Instant deposits will increase to $5,000 every three business days if you upgrade to a premium subscription.
Every Wealthsimple client, regardless of wealth, receives state-of-the-art technology. So what are you waiting for? Hop to it and sign up for Wealthsimple Trade.
Frequently Asked Questions
No, although they both are trading platforms offering stocks, ETFs, and cryptocurrencies. Neither Wealthsimple nor Robinhood requires a minimum investment to get started and they both offer commission-free stock trading. But before choosing one, make sure to do your own research and see what suits you better, keeping mind that Robinhood is not available to Canadian investors.
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