I have an account with a "traditional" stock broker but recently discovered Robinhood which is quite convenient to use and is commission-free. Is it considered safe to keep all my investment money with Robinhood or should I keep my money with multiple brokers to be safe? My main concerns are:

  1. Robinhood might go bankrupt (though they are insured by the government)
  2. Robinhood might be hacked, causing chaos
  3. My own account might be hacked despite 2FA being active
  4. Robinhood might have a glitch of some kind that erases my money

Are the fears justified? Note that this question applies to any stock broker, not just Robinhood.

  • 1
    When weighing the risk, consider that Robinhood has multiple class-action lawsuits against it because it apparently colluded with a large hedge fund by stopping its users from making trades that would cause the hedge fund's value to go down. Commented Feb 6, 2021 at 23:44
  • 2
    "There's nothing new to look at there" said the drive by rubbernecker as he passed Robinhood's latest 'accident' ;->) Commented Feb 7, 2021 at 1:12
  • Different jurisdictions may have different laws / rules regarding how shares are held.
    – Lawrence
    Commented Feb 7, 2021 at 11:12
  • JonathonR, hope you don't go down this path! :O
    – Fattie
    Commented Feb 7, 2021 at 14:42

2 Answers 2


The pro

  • reporting one account/one broker for taxes is easier than multiple
  • It is easier to gauge your performance and spare cash if there is only one place to check

The cons

  • A single point of failure can be problematic. If your broker goes bankrupt the shares are still yours. But it may take some time to claim ownership and transfer them to another broker while you are still exposed to market risk. (And remember, bankrupcty rarely happens in the good times)
  • As an extension of the first bullet point, some (neo-)brokers are not very profitable. It is not guaranteed that they will be around for long. For example, the German counterpart of Robin Hood is estimated to run on 16 million Euro a year (Source, German only)
  • depending on jurisdiction capital gains by shares might be taxed differently depending on when they were bought. Keeping two accounts helps to tax them correctly
  • one might have different risk profiles for different accounts. Let's say one account that runs long term ETF plans and another one that includes stock picking for the fun of it. Separating these allows to limit gambling to one dedicated account
  • different brokers have different cost structures. This seems to be less of a problem in the US but here in Germany standard provisions for an ETF plan are 1.5-2% range and only some ETFs will be on provision free plans. Having multiple accounts can help you to minimize provisions
  • "reporting one account for taxes is easier than multiple". But you can have multiple accounts at the same broker (and not just one each of multiple types).
    – RonJohn
    Commented Feb 7, 2021 at 22:36
  • 1
    Yes one can. But the question was about having everything in one broker
    – Manziel
    Commented Feb 7, 2021 at 22:43
  • the two "pros" here don't make much sense. Sure, use "one broker". But don't use the worst broker - Robinhood. For goodness sake.
    – Fattie
    Commented Feb 8, 2021 at 13:37

Other than the convenience of a phone app, it eludes me why anyone with a decent amount of assets would use Robinhood. I provided the reasons for that belief in response to the question: Why is Robinhood a second rate stock broker?. Robinhood is often in the news with bad press (outages, SEC settlements, payment for order flow issues, the "Robinhood Glitch", etc.). Google for details.

Note that SIPC insurance covers the custodial function of your broker. If your account becomes inaccessible due to hacking, broker bankruptcy, etc., you are not protected against if market prices move against you.

If you're a buy and hold investor, having only one account might be acceptable. Personally, I think that it's a good idea to have at least two funded accounts because if one broker's platform is down, you can trade at the other if you need to defend an existing position.

  • 2
    +1, and you are especially right for the fact that the big brokers all seem to have gone zero commission. Commented Feb 7, 2021 at 0:50
  • 1
    @RonJohn - I knew that you were going to ask that. There are a number of explanations too lengthy to get into but a simple one is that I have some custom legacy software with a data feed that won't run on current computers. While there may be a better solution to this, not only do I not want to spend the bucks on another programmer but this works and I don't need the hassle of the time necessary to reprogram my routine. If it ain't broke, don't fix it. Commented Feb 7, 2021 at 18:37
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    @BobBaerker useful legacy software is the bane of hardware upgrades... Maybe try running a Windows (presumably 7?) VM on your new PC using VirtualBox.
    – RonJohn
    Commented Feb 7, 2021 at 18:51
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    @RonJohn - It's Windows 10 now. I'm not too swift with computer technology so bear with me if my explanations are awry. I used a program called DOSBox (a VirtualBox?) on a previous Windows 7 computer. The results were not satisfactory. I tried to get DOSBox to run on the Windows 10 but couldn't get it to work. I didn't spend a lot of time on it so not sure if it was me or it just won't run on a 10. I got hold of an original set of Windows 7 installation disks so I'm going to see if I can pull the previous Win 7 64 bit and reinstall with 32 bit. The only thing lacking right now is motivation. Commented Feb 7, 2021 at 19:04
  • 1
    VirtualBox is a VM (virtual machine) which perfectly emulates a generic PC; any OS can run inside it. DOSBox is a similar to a VM, but not exactly. If the legacy software is DOS-based, then you should be able to install DOS in VirtualBox (if you can find a way to install it on a system without floppy drives. "The only thing lacking right now is motivation." I hear that.
    – RonJohn
    Commented Feb 7, 2021 at 19:09

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