Introduction
If your online savings account is paying just 1%, maybe it’s time to open a brokerage account and
start investing. But which firm should you choose? Robinhood and J.P. Morgan Self-Directed Investing definitely want your business. Let’s see how these two broker-dealers compare to each other.
Cost
| Broker Fees |
Stock/ETF
Commission |
Mutual Fund
Commission |
Options
Commission |
Maintenance
Fee |
Annual IRA
Fee |
|
Robinhood
|
$0
|
na
|
$0
|
$0
|
$0
|
|
Chase
|
$0
|
$0
|
$0.65 per contract
|
$0
|
$0
|
Services
| Broker Review |
Cost |
Investment Products |
Trading Tools |
Customer Service |
Research |
Overall Rating |
|
Robinhood
|
|
|
|
|
|
|
|
Chase
|
|
|
|
|
|
|
Promotions
Robinhood: Free stock worth up to $200 and 3% match when you open an account.
J.P. Morgan: No promotions at this time.
Who Is Better for Investment Styles?
J.P. Morgan Self-Directed Investing provides self-directed brokerage accounts, while J.P. Morgan Wealth Management also offers advisor-led investment services. Self-directed accounts have no account minimum and offer $0-commission online trades for U.S.-listed stocks and ETFs. The investment lineup includes:
- Options
- Mutual funds
- ETFs
- Closed-end funds
- Stocks
- Fixed-income securities
Certain OTC stocks and ADRs are available for purchase and sale inside a J.P. Morgan account, but penny stocks trading below $5 are not available for purchase.
Inside Robinhood self-directed accounts, customers can trade the following assets:
- Stocks
- Options
- Exchange-Traded Funds (ETFs)
- Closed-End Funds (CEFs)
- Cryptocurrencies
- Futures
- Real Estate Investment Trusts (REITs)
- American Depositary Receipts (ADRs)
There is a selection of available account types at both brokerage firms. J.P. Morgan Self-Directed Investing
has individual, joint, retirement, custodial, and trust accounts. Robinhood has individual and joint taxable accounts,
Traditional and Roth IRAs, managed accounts through Robinhood Strategies, trust accounts, and custodial accounts.
Overall, we think the brokers are about equal here.
Which Broker Is Better for Security Research?
On the Robinhood platform, stock profiles have basic trade data like volume and 52-week high and low prices. There are also trade recommendations from stock analysts. Robinhood now has customizable stock screeners on its app and classic website, with more than 20 available filters. Robinhood Legend goes further with a scanner that has more than 60 filters for stocks, ETFs, cryptocurrencies, and futures. Trending Lists are also available, with securities grouped into categories like Daily Movers and Technology.
The J.P. Morgan Investing website has multiple screeners for stocks, ETFs, mutual funds, money market funds, bonds, and CDs. Combined, they provide a lot of useful search variables. Examples include:
- Sector
- EPS (earnings per share)
- 3-year beta
- Daily volume
- 10-year return vs. category (%)
During our testing, we found the screeners to be easy to use. Clicking on an entry produces the asset’s profile. Like Robinhood, J.P. Morgan Investing delivers only a small amount of data. There are news articles, press releases, and trade recommendations from professional stock analysts. For Boeing, we found a total of 5 recommendations. By comparison, Robinhood’s site has 23 analysts. But J.P. Morgan Investing’s site offers pdf stock reports from CFRA for free.
For its security screeners and research resources, we pick J.P. Morgan Investing in this category.
For Website Trading, Is It Robinhood or J.P. Morgan Investing?
Robinhood’s classic website emphasizes simplicity and is easy to use. A column on the right-hand side stores multiple watchlists. Clicking on an entry generates the asset’s profile with an order ticket. Available equity orders include market, limit, stop, stop-limit, and trailing-stop orders. There are two time-in-force choices for applicable orders: day and GTC.
Robinhood’s advanced charts can be expanded for a full-screen view and include technical indicators and candlestick charts. The broker also offers Robinhood Legend, a free advanced browser-based platform with customizable layouts, drawing tools, chart-based trading, and more than 50 technical indicators.
J.P. Morgan Investing has not forgotten about technical indicators. During our examination, we found more than twenty of them. Examples include:
- Williams %R
- Ultimate Oscillator
- Ichimoku Cloud
J.P. Morgan Investing’s software also delivers more plot styles. We counted seven of them (dot and HLC are examples). And drawing tools are icing on the cake. The one downside of the broker’s charting program is that a graph cannot be displayed the full width of the monitor.
J.P. Morgan Investing’s order form has four main stock trade types: market, limit, stop, and stop limit. Limit orders have the largest number of duration choices.
The primary difference between the sites of these two firms is that J.P. Morgan Investing uses the same website that Chase Bank uses, while Robinhood now has Robinhood Legend for advanced browser-based trading. For this reason, we choose Robinhood in this category.
Who Wins for Other Software?
Neither broker-dealer in this assessment has a downloadable desktop trading program. Robinhood does, however, have the browser-based Robinhood Legend platform. Robinhood’s mobile app is available for iPhone, Android, and Apple Watch. Although tablets aren’t specifically supported, the mobile app may run on them. J.P. Morgan Investing is integrated into the Chase Mobile app.
Overall, it’s pretty even here.
Which Firm Is Our Pick for Margin Trading?
Robinhood charges 5% for debit balances up to $50K.
The rate drops to 4.5% for balances from $100K up to $1 million and falls further at higher balance tiers.
Robinhood now permits short selling for eligible margin accounts. Its software also displays margin-maintenance information for individual positions, including the maintenance ratio and dollar requirement.
J.P. Morgan Investing also offers margin accounts. Its margin interest schedule is tiered, with rates based on Prime for balances below $3 million and SOFR for larger balances.
Robinhood wins.
And Do We Pick Robinhood or J.P. Morgan for Miscellaneous Services?
Banking Tools: J.P. Morgan Investing clients can link Chase Bank accounts. Robinhood has a cash
card with a round-up feature that can invest spare change from purchases. Robinhood Gold customers can earn
3.35% APY
on eligible brokerage cash through the High-Yield Cash Program.
Extended Hours Trading: Both firms now offer extended-hours trading. Robinhood offers 24/5 trading in select stocks and ETFs. J.P. Morgan Self-Directed Investing has pre-market trading from 7:00 am to 9:30 am ET and after-hours trading from 4:00 pm to 5:45 pm ET.
Periodic Mutual Fund Investing: Available with J.P. Morgan.
Individual Retirement Accounts: IRAs are available with both J.P. Morgan and Robinhood.
Robinhood offers a 1% match on eligible self-directed IRA contributions, or 3% with Robinhood Gold.
DRIP Service: Available at both firms.
Fractional Shares: Orders for securities at Robinhood can be entered with dollar amounts,
starting at $1.00 for securities. J.P. Morgan now offers fractional shares of eligible S&P 500 and Nasdaq-100 stocks and ETFs starting at $5.
Initial Public Offerings: Robinhood clients, but not J.P. Morgan Investing customers, can trade IPOs.
Robinhood still has an advantage in the final category.
Recommendation
Small Accounts: Both firms now offer fractional-share trading, but Robinhood’s minimum fractional stock trade is lower and its eligible universe is broader.
ETF/Stock Trading: J.P. Morgan Investing has strong search tools and now offers fractional shares and extended-hours trading. Robinhood has a broader fractional-share program, 24/5 trading in select securities, and Robinhood Legend. Take your pick.
Mutual Fund Trading: J.P. Morgan is the only horse in the race here.
Beginners: Both brokers would be a very good place to start.
Long-Term Investors & Retirement Savers: Robinhood offers a 1% match on eligible self-directed IRA contributions, or 3% with Robinhood Gold.
J.P. Morgan vs Robinhood: Results
Overall, Robinhood has an edge in this comparison. Robinhood is the
better firm for cryptocurrency, futures, and more active trading, while J.P. Morgan Investing has a good mutual fund and fixed-income program.
|