Robinhood vs. Vanguard 2019

It's hard to imagine the prospective brokerage client who has narrowed her prospects down to Robinhood and Vanguard since they appear to be at opposite ends of the investing spectrum. Robinhood started out as a mobile app, touting trades with zero commission, then adding a web platform in 2017. Vanguard is a reluctant participant in the online brokerage space, preferring to house its customer's assets in its proprietary mutual funds and exchange-traded funds (ETFs) rather than place frequent -- or even occasional -- trades. In spite of their different pedigrees and platforms, both landed at the bottom of our online broker review in 2019, for different reasons.

In our 2019 Best Online Brokers Awards, Robinhood received an award for Best for Low Costs.

Vanguard received an award for Best for ETFs.

Robinhood's overall simplicity makes the app and website very simple to use, and charging zero commissions is appealing to extremely cost-conscious investors who trade small quantities. Trade tickets are very simple for equities – just fill in the number of shares you want to trade. Both the app and the website default to sending market orders, though you can change that with some tapping or clicking. Options trading capabilities are fairly simple, and there is little help for choosing a strategy. Quotes are delayed unless you are in the process of entering an order. To update the current pricing, you have to refresh the screen -- quotes do not stream.

Vanguard focuses its considerable energy on helping its high wealth clients plan for retirement and other long-term goals. As such, its trading technology is lacking. Fulfilling their long-term focus, there is little of interest to active traders or derivatives traders.  There are no streaming quotes; you have to manually refresh the screen to get updates. You cannot trade complex options strategies on Vanguard.

Robinhood

• No streaming quotes
• No complex options
• Robinhood Instant gives you immediate access to buying power when you initiate a deposit or sell a long position

Vanguard

• No streaming quotes
• No complex options
• Very simple trading experience with few creature comforts

Robinhood was launched as an easy-to-use mobile app. Click on the search icon to view collections of stocks if you are looking for trading ideas. Watchlists are synched between the app and the website. Quotes are, however, delayed.

Vanguard offers mobile apps for iOS, Android and Kindle Fire devices. The layout is actually much nicer and easier to use than the website. They added mobile check deposit in the last year. Quotes, however, are delayed. There is no online chat capability for contacting customer service.

Robinhood

• Very simple app, native to both iOS and Android
• Watchlists synch from web to app
• No streaming quotes

Vanguard

• Very simple app, most useful for checking balances
• Data is delayed
• Mobile check deposit available

Robinhood's news feed includes stories from Yahoo Finance, Seeking Alpha, Associated Press, Marketwatch and several other sources. Clicking on a news headline on the website opens a new window. Research capabilities are on the light side -- there are no screeners at all -- but since you're not paying commissions, you can look for research elsewhere. Charting is extremely basic, and there are only 5 years of price history available.

Vanguard offers a stock screener, and a separate ETF screener. The mutual fund screener is very basic, and focuses on finding Vanguard funds even though they carry funds from many more fund families. Options research is limited to looking at options chains, which are significantly less informative than chains on other broker sites. Charting is extremely basic and includes no customization or technical studies.  There are plenty of calculators and planning tools for the long-term investor.

Robinhood

• News feeds from Yahoo Finance, Seeking Alpha, AP, and a few others
• No screeners, though you can view "collections" of stocks
• Extremely basic charting with just 5 years of data

Vanguard

• Stock, ETF and mutual fund screeners available
• Planning tools for long-term investing are plentiful
• Extremely basic charting that lacks customization or technical analysis

There are limited education offerings in Robinhood's Help center. Most of the content is dedicated to using the app or website, with little to say about learning to trade. The firm does not hold live events and has no plans for webinars. The Robinhood app supports all major third-party security apps, including Google Authenticator.

Vanguard's education offerings are fairly basic, and are aimed at very long-term investing. They host occasional webinars that focus on the longer term. The website is encrypted according to industry standards, and you'll face a security challenge when logging in from an unrecognized device.

Robinhood

• Limited education offerings, mostly devoted to how to use the app or website
• No live events or plans for webinars
• Mobile app supports all major third-party authenticators

Vanguard

• Education is basic, aimed at long-term investing and goal setting
• Webinars offered occasionally for long-term planning
• Security features include a challenge when logging in from an unrecognized device

Robinhood's main claim to fame is free trades, but you will pay a monthly fee to trade on margin in a Robinhood Gold account. Paying in advance for margin trading is an unusual offering. If you're not using the margin you're paying for, the cost can be quite high. Most brokers charge a percentage of the actual amount you are borrowing.

Vanguard's standard commission schedule is very high, at $7 per equity trade, and $7 plus $1 per contract for options. Margin rates are on the high side.  There are 1,800 ETFs you can trade without paying a commission, though, and clients with very high account balances are treated to much lower commissions.

Robinhood

• Stocks/ETF trade fees: $0
• Options fees: $0
• Futures fees: Futures trading not enabled

Vanguard

• Stocks/ETF trade fees: $7
• Options fees: $7 per leg plus $ per contract
• Futures fees: Futures trading not enabled