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Robinhood share trading app set to launch in the UK

Posted: 30 November 2023 2:08 pm

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Popular US investment platform Robinhood has announced plans to offer its commission-free stock trading app to UK investors.

After 2 previous failures to expand into the UK, US stock-trading platform Robinhood finally looks set to release its popular commission-free investing app in the UK.

This long-awaited and much-anticipated move could be a game-changer for retail investors in the UK because it would be the only platform to offer no account fees and no fees on foreign exchange (FX) or on commission.

As of today, there’s just a waiting list but the app may launch as early as January 2024.

What investments will UK investors be able to trade with Robinhood?

So far, reports and comments from Robinhood suggest that initially, UK investors will be able to buy and sell around 6,000 US stocks commission-free. And these investments could come with no FX fees to pay.

It appears that there are no plans to offer UK-listed shares initially – but this may come later as the company looks to expand its product offering further in the UK.

Also, unlike in the US, the UK version of the Robinhood app won’t allow options or derivatives trading when it first launches.

How will Robinhood UK make money?

In the US, Robinhood makes money through a system called “payment for order flow” (PFOF), which involves sending investors’ trades to a market maker and taking a slice of the profits.

However, this system was banned in the UK in 2012 because regulators believed it could lead to conflicts of interest – possibly leading to poorer outcomes for individual investors.

So, to navigate this, Robinhood plans to make money in the UK from a range of extras such as:

A premium subscription
Additional accounts like a stocks and shares ISA
Interest on uninvested cash (a reported 5% initial rate for UK investors)
Securities lending (at some stage)

When will Robinhood be available in the UK?

Robinhood plans to release its investing app across the UK in early 2024.

There’s no specific date yet, but the app may arrive in the first quarter of the year.

We’ll keep you updated with Robinhood’s plans for this hotly anticipated trading app launch in the UK.

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This article offers general information about investing and the stock market, but should not be construed as personal investment advice. It has been provided without consideration of your personal circumstances or objectives. It should not be interpreted as an inducement, invitation or recommendation relating to any of the products listed or referred to. The value of investments can fall as well as rise, and you may get back less than you invested, so your capital is at risk. Past performance is no guarantee of future results. If you're not sure which investments are right for you, please get financial advice. The author holds no positions in any share mentioned.