Instead of taking commissions from customers, Robinhood receives them from the trading venues to which it steers their orders, a controversial but common practice. It also earns returns from the cash clients leave in their accounts, and plans soon to offer margin trading—the buying of stock with borrowed money—for which it will charge a fee.
The Economist reports about a US study on shady financial advisors. Over a ten year period, 7% of financial advisors were disciplined for misconduct. Typically, they took a pay cut and moved on to the next firm. A third became repeat offenders. BrokerCheck, run by the US Financial Industry Regulatory Authority, lets you check your local broker.