Question
The average account balance of Robinhood users is significantly lower than that of Charles Schwab users. The average Robinhood user has around $5,000 per account, while the average Charles Schwab user has around $100,000 per account. The median amount in a Robinhood account is even lower, at $240.
This question was asked on:
Now for some weaknesses. The average Robinhood user has around $5,000 per account vs the average Charles Schwab user, which has around $100,000 per account. The Median amount in a Robinhood account is even lower at $240. This limits Robinhood's resources to grow. By contrast, Charles Schwab makes 50% of its revenue purely off interest from its users' accounts, which reached as high as $6.1 billion in 2020. Another way Charles Schwab makes money off account management fees, while Robinhood makes 80% of revenue from payment for order flow. This payment structure is also an external threat against Robinhood, as the SEC recently fined the company $65M for misleading users with the process.
Receive new free presentations every Monday to your inbox.
Full content, complete versions — No credit card required.
