People who invest with Robinhood can transfer some of their assets out of the app and to other brokers for a price, according to the company’s website.
Assets, excluding cryptocurrency, can be transferred out of the website and to another broker for a $75 fee, according to the company’s website. Another broker must initiate the transfer of assets by submitting the transfer instructions to a clearing partner at Robinhood who will oversee the user’s transfer of available assets and funds.
Last week, the company blocked users from purchasing stock in companies such as GameStop and AMC because of market “volatility” after members of a subreddit called Wall Street Bets pushed investments in the video game retailer, CNBC reported. Most users were unable to purchase more shares in the companies but could sell what they already owned.
“We shouldn’t have one rule for rich hedge funds in Manhattan and a different set of rules for every other American,” Republican Texas Sen. Ted Cruz said in a tweet.
We shouldn’t have one rule for rich hedge funds in Manhattan and a different set of rules for every other American.
— Ted Cruz (@tedcruz) February 1, 2021
Democratic Massachusetts Sen. Elizabeth Warren criticized Robinhood for “abruptly changing the rules” when it temporarily prohibited users from purchasing stock in Gamestop, AMC and other companies circulating on a Reddit subchannel, CNN Business reported.
“The public deserves a clear accounting of Robinhood’s relationships with large financial firms and the extent to which those relationships may be undermining its obligations to its customers,” Warren wrote in a letter obtained by CNN Business.
Robinhood’s website says the mission of the service is to “democratize finance for all” and that the financial system “should work for everyone.”
Robinhood does not allow the transfer of cryptocurrency and recommends the user to liquidate all positions prior to transferring brokerage, according to the company’s website.
“After you initiate a full transfer, your account will be restricted to ensure the transfer is processed smoothly,” according to Robinhood’s website.
Users won’t be able to trade assets they’ve requested transfers on while it is being processed, according to the company’s website. Users will “still own the securities or positions during this time, and they’ll update in the app to reflect their current market value.”
Robinhood users can only initiate asset transfers through an Automated Customer Account Transfer Service and are asked not to request stock delivery through any other method, according to the company’s website. If a user chooses to transfer all assets to another brokerage, their Robinhood account will be closed.
A fee associated with transferring brokerage account assets is not uncommon, according to Motley Fool. Fees usually range between $50 and $100, though some brokers don’t charge transfer fees.
Sometimes new brokers will cover the transfer fee as an incentive for new clients, according to Motley Fool. Benefits to switching to a new broker can include free trade or account bonuses that outweigh the transfer fee.
Robinhood did not respond to the Daily Caller News Foundation’s request for comment.
Colby McCoy contributed to this report.
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