Many people, especially younger generations, are frustrated with powerful people and institutions benefiting themselves while conditions worsen for most. Everyday choices, including spending and platform use, can increase inequity by supporting systems that favor the wealthy. Robinhood launched in 2013 eliminating commissions and minimums, claiming to democratize finance, yet derived a majority of 2024 revenue from payment for order flow and significant payments from Citadel. Regulatory fines, lawsuits, trading gamification concerns, outages causing user losses, and the January 28, 2021 purchase halt of certain stocks illustrate conflicts between platform practices and retail investor interests.
Take Robinhood, for example. When the investment platform launched in 2013 as the first major broker eliminating commissions and minimums for stock trading, it positioned itself as "democratizing finance for all." The supposedly "disruptive" trading platform got 56% of its 2024 revenue from payment for order flow from large financial institutions. Another 12% came from Citadel, an extremely successful hedge fund controlling 40% of trades from nonprofessional individual investors, called retail investors. Yet it purported to democratize investing for retail investors.
Not to mention, the platform has been fined and sued over issues like the trading gamification, misleading communications, and risk oversight. Robinhood incurred outages and technical difficulties during high market volatility periods, costing users substantial losses. And don't forget January 28, 2021, when Robinhood halted the purchase (but not the sale) of certain stocks that were the focus of grassroots retail trading campaigns, notably GameStop and AMC, citing "risk management" and clearinghouse deposit requirements.
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