3 Things I Don’t Like About Using Robinhood

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Over the past couple of months, Robinhood has slowly become one of my favorite new investment tools. Robinhood is a stock brokerage that offers zero commission trades (buy and sell) on any U.S. listed stock.

To date, I have purchased shares of 2 different stocks that are part of the Money Sprout Index through Robinhood for a total of 4 different transactions. I have not yet sold any stock using this brokerage.

As a dividend income investor trying to stretch my investment dollars as far as possible, I try and take advantage of tools like Robinhood. Both Robinhood and LOYAL3 (also zero commission on a limited number of stocks) have helped me invest small amounts of money each month, which helps to keep my investment costs to a minimum.

While I have found Robinhood to be a valuable tool in building the Money Sprout Index, there are a few things I don’t like about the tool.

Note – Investors can only buy and sell stock using the Robinhood mobile app. There is no web functionality for this product, which certainly makes it unique. For those not familiar with Robinhood, I suggest reviewing their website FAQ’s to learn more about the brokerage.

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3 Things I Don’t Like About Using Robinhood

After investing in Robinhood for the past 3 months, I have a come across a few things I don’t really like about the tool. While these things will not prevent me from continuing to invest with Robinhood, I feel the tool is not perfect and has some limitations.

#1 – No Transaction History for Dividends

One of the most frustrating things I have encountered with the brokerage is that there is nowhere (from what I can tell) in their app where investors can see a transaction history for their dividend payments. The Robinhood app offers information on trade confirms (when you buy or sell a stock), monthly account statements, and transfer history (money transferred to and from your bank) – but nothing on actual dividends received.

Earlier this year I purchased shares of Aflac (AFL) and BHP Billinton (BHP) using Robinhood. When it came time to receive my first dividend payments from both stocks – all I could tell was that my cash balance was higher by about $13. It wasn’t until my monthly account statement was posted that I could see the breakdown of dividends received from both stocks.

When it comes to tracking my dividend income, I get a little impatient at times and want to see my income real time. I don’t want to wait until the end of the month.

#2 – Monthly Statements Hard to Read

Speaking of monthly statements posted on Robinhood, they are hard to read. This is one area where I think being able to log in to a website would help tremendously. Because investors only have access to their accounts through the Robinhood app, it can make reading a PDF document difficult on an iPhone. I do have the option to review my statements on an iPad, but not every investor would have this ability.

Overall, this isn’t going to prevent me from continuing to use the tool but I think they need to come up with a better way to review statements. I know I will have this same complaint come next tax season trying to review my statements.

#3 – No Download Functionality

I knew this when I opened my Robinhood account, but there are no download capabilities for getting at your data (i.e. transactions). I am a bit of a numbers geek and prefer to download my transactions so I can play with the data.

From what I can tell, about the only thing you can do to get at your data is to open the PDF documents that are available for your monthly statements and trade confirms. Unfortunately, that is not in a very useable format, especially from your iPhone.

I am sure there are some tricks out there to get at the data better, but I find it requires too much of my time to worry about it.

Note – At the time of this writing, Robinhood is only available to iPhone users. They are currently working on an Android app, which should be out soon. I did not list this limitation as a dislike of the product since I am an iPhone user. However, I am sure many investors would list this as a dislike of the product.

Final Thoughts

Using the Robinhood brokerage as a tool to invest certainly has some drawbacks. Over the past couple of months I have started using Robinhood to buy dividend paying stocks and have realized a few of the drawbacks of the brokerage. First, there is no real way to view your incoming dividend payments until the end of the month. I find this a bit frustrating as I want to record my dividend income as soon as possible.

Another drawback of the tool is the limited functionality it provides. Reading any of the PDF statements that are available through the app can be difficult. In addition, there is no easy way to pull your data out in a useable format.

Do the drawbacks of the Robinhood brokerage outweigh the benefits? I don’t think so – at least not yet. For now, I will continue to buy stocks using the app so I can save on commissions and fees. Just the other day I bought a single share of stock that was trading at under $50 a share! How many other brokerages could you do the same without paying a high percentage of the transaction in commissions?

As long as Robinhood continues to offer zero commissions on U.S. traded stocks, I will keep investing with them. That is not to say I won’t continue using LOYAL3 and Computershare for my automated monthly investments.

Have you used Robinhood? What drawbacks do you see of using this tool to get zero commissions?

13 Replies to “3 Things I Don’t Like About Using Robinhood”

  1. You can add that the app can sometimes be inaccurate during the day, slow to update. I wish they would also roll out the web app they’ve been promising. I’m hoping there will be more tools to use when they do.

  2. I’ve actually experienced missed dividends on the app, where I was paid for dividends on ‘some’ of the stocks I owned, but not all. As a dividend income investor I find that will just not do. I’ve since stopped using the app but continue trading stocks traditionally. Yes, you pay commissions, but at least I get ALL my dividends.

    1. I have also been denied by dividends for more than a handful of times and I had to email support to get them. However, I got my money only because I keep checking up on my investments regularly. I have been wanting to take a more passive approach and not look at my account too much but Robinhood’s history makes me wary of trusting them completely with my dividends.

  3. I don’t use it for dividend stocks but the zero commission is a great feature. Personally I’d like to see other exchanges included since I invest in a lot of micro-cap stocks and pay those high commissions on them. A lot of stocks I try to buy don’t show up in their search. Still, Robinhood is a great relief and I will continue to use them as a supplement broker to TD Ameritrade (pre and post market trades) and Capital One Investing (banking convenience).

    1. @KarlJ – I only trade US dividend stocks so don’t have to worry about not having any securities available. Glad you are taking advantage of their free trades!

  4. I have not Had an issue emailing statements to myself or reading them. Then again I am not at your level …. yet.
    My frustration is with the 3 days to purchase the stock and the 5% window they use. Also the delay is pretty frustrating as well.
    But whadda want fer nuttin? ….. rrrrrruber biscuit!!!

  5. I just started using this app and I have purchased 1 dividend stock and the p/e on robin hood is about 2 LESS than any other quote. I am interested to see if at dividend payout if it will be a little less from robinhood.

    I would like to note that I have only been in the market about a year now and consider myself new, am I reading the ratio wrong or does robinhood keep a percentage of the dividends?

    1. @Kristin – I wouldn’t trust the stats and ratios on the Robinhood app for individual stocks. I noticed the other day the yields were wrong for a couple of stocks that I own.

      I just use Yahoo! Finance to pull my financial data and Robinhood to make the trades.

  6. Robinhood on iPhone allows you to attach the statements in email, however the file appears to be without extension when you download it on Windows. All you have to do is to change (or add) ‘.pdf’ extension to the file name. Then you should be able to view in in acrobat reader.

    1. @ axg – great tip! I will have to try that next time. I don’t use the statements as much anymore now that they provide up to date dividend information.

  7. @ Guy – Yeah I could see that being an issue for those looking to trade outside of the U.S. Fortunately, that is all we really are focused on right now. Best of luck.

  8. I’m a newer investor reading through the old archives. Obviously this is years after your original post. I’m glad to say Robinhood has come a long way! I use it on an Android phone, and I can easily view my dividend history. 🙂

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