30 days without Robinhood
If you have an account on Robinhood (RH) and want to switch to a different broker, the process is pretty straightforward, or at least it was for me.
I have heard people transferring by selling all of their shares, or stopping initiating new buys in RH and doing so only in the new brokerage. Both methods feel very inefficient. Especially selling your holdings, if you are up, you will be paying the tax on the gains.
Your new broker should have an interface in their system for account transfers and really the only thing you need is your RH account number. You enter the number to initiate the transfer (and your name to make sure the name matches exactly) and the process begins.
For me, when I initiated the transfer, the RH account went into a locked mode where you can’t sell your existing positions. All the stop-limit orders, for instance, get canceled and nothing can be sold. Within three days the stock tickers and the share number were accurately reflected in the new account. That’s it — at that point you can trade your stocks and the only that is missing is the cost basis information. It takes another week or a bit more for that to get accurately reflected. So just sit tight and wait and you will see the accurate cost information.
Am I missing anything since the transfer?
RH definitely makes it easy to buy and sell, especially options. Everything in RH is simplified when you compare it to something like TDAmeritrade. But that simplification comes at a cost: you don’t really see the true picture of what exactly is going on behind the scenes.
Robinhood’s charts are pretty but at the same time, they are quite deceptive if you ask me. First, that blinking point where the current price is shown makes you want to watch the chart longer. A useless activity but you get sucked in. The charting is also rendered in a way that smooths out price movements and it’s hard to see an accurate picture of what the stock is doing at different stock levels. In short, that’s the thing I feel the most: an easy mind of not having to see that chart shoved in your face when you open your account.
Buying and selling options transaction is SUPER easy with RH and I think that was one of their main goals of the product. But it comes at a cost of execution time and pricing. I can tell you that my option transactions get executed quicker and at better prices now that I am away from the platform.
In short, I cannot think of anything that I miss on RH since the move. If anything, I feel much more in control now than I was before.
And the biggest thing I gained since the move is the visibility into the tax implications of my transactions. It is VERY clear what is short term vs long term but forget about that. The wash sale information I have now is excellent.
If you are new to the concept, this article is superb: https://www.schwab.com/resource-center/insights/content/a-primer-on-wash-sales
All in all, very happy that I had moved on from the platform. The noise that I am hearing today about what it has to do to deal with GME saga and questions about its ability to stay afloat makes me feel even more comfortable with the decision.
One last thought: outages
If you think RH is the only one that experiences outages, you will be mistaken. I am not as hot and heavy about that side of things and I understand that under intense volume situations the things will slow down and won’t be accurately reflected. I never got upset with Robinhood whenever it experienced outages and stability problems. They are usually short-lived and people make a much bigger deal out of them than it really is. Now, don’t get me wrong, there are examples of people not being able to cash out their big gains at a very specific time or orders not coming through for purchases. But to me, that’s part of doing business.
