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Written by Logan Robison on January 27, 2022
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3 Best PFOF-Free Brokerages In 2023 (No Payment For Order Flow)

In today's world of transparency and data security, much has been said about payment for order flow (PFOF).

Simply put, this is the practice whereby a broker (think Robinhood or TD Ameritrade) sells orders en masse to a market maker (think Deutsche Bank, Morgan Stanley, and UBS) to complete a trade.

This controversial business model has been around for decades and is the brainchild of Bernie Madoff, the greatest ponzi scheme artist of our time. However, it is this practice that, in many cases, allows retail investors like you and me to trade basically for free.

PFOF is a way for brokerages to bring in additional revenues since there are no commissions on trades. But, many believe brokerages like Robinhood are choosing to route their trades through certain market makers for their own benefit, and not to the benefit of the consumer.

If this concept makes you uneasy, you're in luck! This article will focus on the top PFOF-Free brokerages! These institutions have found alternative ways to make money even though they are commission- and PFOF-free.

Companies That Use PFOF

So, what companies have been criticized for this practice. Unfortunately, most of them. Here is a list of many of the brokerages that accept PFOF:

  • Robinhood
  • E-Trade
  • Ally Financial
  • Webull
  • Tradestation
  • The Vanguard Group
  • Charles Schwab Corporation
  • TD Ameritrade.

While you may be a user of one of these brokerages, the practice of PFOF is not against the law, nor does it necessarily put you at a disadvantage.

The law is clear. PFOF is allowed as long as no other exchange is quoting a better price on the National Market System.

So, in theory, the practice of PFOF should not affect your day-to-day trading. In addition, keep in mind that financial institutions, such as the ones listed above, are under extreme scrutiny from the SEC.

Investors from all of these organizations are also protected by the SIPC, which will insure your money in the case of fraudulent activity by investment institutions.

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Should You Care About PFOF?

Besides the fact that it was created by the most notorious ponzi scheme artist of all time, payment for order flow is not bringing doom and gloom to the investment community. However, it does incentivize brokerages to route their trades through market makers who will give them the best deal, instead of you, the user.

This happens when a market maker compensates the brokerage company for using them instead of a competitor. This is the case even if that market maker might charge higher prices to the consumer than another.

How big is PFOF? In the second quarter of 2020 alone, there was more than $180M routed to four brokerages for PFOF. This is big money and is only getting bigger.

While many decry the ethics of PFOF, it is a process that allows many of these apps to keep the lights on while they allow users like you and me to trade for free.

However, that is not always the case. Many brokerages such as Public, Moomoo, and Fidelity have managed to make profits despite rejecting PFOF.

Best PFOF-Free Brokerages

1. Public

Check out our full Public Review to learn more.

What Is Public?

Public is a social investing app created by merging two completely different worlds, investing and social media.

This platform allows individual investors to collaborate with like-minded users who share a passion for building wealth and communicating online. On the platform, users can see others' trades, comment on their moves, and establish private chat groups.

Platform Features

This app is very similar to other social media outlets in that you can see the actions of others in a news feed. Users can learn from the moves of friends and followers and replicate them if desired.

While it's great that you can see the moves of other users, you are also able to put your account on private mode. This prevents others from seeing your moves so you can invest without the fear of judgment.

Public is completely free for investors and doesn't have an account minimum. These two factors allow any and all interested investors to get involved and start trading.

Public also allows users to purchase portions of full stocks called Stock Slices. These are essentially portions of full shares that are available to those who are unable or unwilling to purchase the full share.

For example, if you would like to purchase a share of Amazon, whose stock price is well above $3,000 but you don't have that cash available, buy as much as you can afford. For as little as $5, you can purchase fractions of any of the 5,000+ stocks on Public.

On Public, users are able to search for stocks by categories called investing themes. These themes include popular categories such as 'Women in Charge', 'Home & Garden', and 'Diverse Leadership'. Theme-based investing allows users to put money toward things that truly matter to them.

Public also offers 11 different cryptocurrencies on the platform. Just like a stock, users can deposit money into their account and purchase a full coin, or a slice of a coin if the price is too high.

Coins included on the platform are Bitcoin (BTC), Ether (ETH), Cardano (ADA), Dogecoin (DOGE), Litecoin (LTC), Bitcoin Cash (BCH), Shiba Inu ($SHIB), Stellar (XLM), Ethereum Classic (ETC), Dash (DASH), and Zcash (ZEC).

Public is a great platform for investors who are looking for short- and long-term strategies. It's easy to categorize your investments and learn from others who share a love for wealth building.

2. Moomoo

Moomoo is a subsidiary of venture-backed Futu Holdings and launched in 2018. This firm is based in Silicon Valley and offers commission-free trading on stocks, ETFs, and options.

Moomoo allows its users, both new and experienced, to access level 2 market data for free and has no minimum investment requirement. The app comes with several technical investment tools for users who enjoy running risk and reward scenarios and diving deep into their portfolio's performance.

Unlike Public, this app may be overwhelming for new users due to the amount of information displayed on the platform. However, there are options to customize the user experience so you see only what is most relevant to you.

This platform is full of benefits for all types of users. One of these benefits is the lack of PFOF. Like Public, Moomoo does not allow for payment for order flow. This makes it stand out amongst competitors in the industry.


Platform Features

While there are many pros to trading on Moomoo, a common complaint is the lack of customer service. Currently, customers must email the company directly to speak to a customer service representative.

While this can be frustrating, there are several articles and FAQs on the company’s website that its customers can consult if questions arise.

There is also a large community of 220K users, and forums are quite popular on the site. By using forums, Moomoo traders can learn from other users about common issues or disruptions. Forums are also a great place to share education and learning opportunities with the masses.

Another benefit of using Moomoo is access to news articles and continuing education. Moomoo has financial literacy courses to bolster your understanding of the stock market as well as coverage of news articles that might be relevant to investors.

Moomoo does not charge commissions on trades of U.S. stocks, ADRs, and ETFs. This means you can trade with confidence knowing that the money you put toward your investments, does not get siphoned off by the trading platform. While US regulatory fees may apply, they are small in the big picture.

Moomoo also has extended trading hours so you can place trades even when the markets are closed. These hours are broken up into two sessions: Full pre-market (4:00 AM - 9:30 AM ET) and after hours (4:00 PM - 8:00 PM ET).

Moomoo is a great platform for those who are more serious about their investments and enjoy the research as well as the trading. This app is not the best beginner's platform as there is an overwhelming amount of information for new users.

If you have some experience and want to take your platform to the next level without PFOF, this is a great app for you!

For a full review on the platform, check out our Moomoo Review!

3. Fidelity


Fidelity is the 3rd investment platform in this article that does not use PFOF. Fidelity Investments is a titan in the investment community. 

It has long been known for its strength in helping its customers save for retirement in tax-advantaged accounts like IRAs or 401Ks. However recently, many users have been turning to the platform for help in the brokerage world.

Fidelity Features 

This app and desktop platform offers a large range of products that appeal to several investors types. Its main features include commission-free stock, ETF, and options trades, money market accounts, professional research, mutual funds, fractional shares, and educational support.

Like Moomoo, Fidelity is not known for its simple web design or user interface. In fact, even I, a user of Fidelity for over 4 years, still get lost on its webpage and app.

However, if you are looking for a product that can do it all but is PFOF-free, this may be the one. Fidelity has unparalleled features and its customer service is top notch.

Another area where Fidelity shines is in its educational offerings. On the website or mobile app, users can access articles, videos, infographics, and more. In addition, there are interactive training courses where you can ask professionals questions and learn from their experience.

Fidelity also offers the ability to make trades over the phone with a professional. While this feature does not exist on many other platforms, it does come at a cost. Currently, trades like this over the phone cost upwards of $33.

One area where the company is lacking is in its cryptocurrency offering. If your main purpose for investing is to be involved in cryptocurrency, we recommend you look elsewhere.

Likewise, if you are just looking to invest for fun and aren't planning to get too serious about it, Fidelity is not the best option. Consider Public for that.

Fidelity is an ideal platform for investors who are serious about investing in the short term and long term. With its retirement options, education, and day trading capabilities, Fidelity is hard to beat.

For a full review on Fidelity, check out this article.

Best PFOF-Free Brokerages 2022

While all of the above platforms stand out from among competitors in the fact that they do not participate in PFOF, they also are differentiated from one another.

If you are interested in stock trading as more of a social activity or something to post about on your social media accounts, then Public may be the right app for you.

For users who enjoy the money-making aspect of stock trading and are willing to put in the time it takes to do technical analysis, Moomoo is a great option.

And for those traders who care more about the long term and less about making money in the here and now, Fidelity has you covered.

All of these platforms offer investors a great product. Each is unique but is united in the rejection of PFOF as the only way to make money with a free platform.

While it is important to understand how a company makes money, never let that be the only factor in your decision. For example, just because Public does not allow PFOF does not mean it is a better platform than Robinhood for things like security, user experience, or customer service.

You must consider what is most important to you as an investor and then find the platform that will suit your needs.

Article written by Logan Robison
Logan graduated with a degree in finance from Brigham Young University and currently works in merchandising for a large retailer. In his free time he loves to hike and camp with his wife and son. Logan is also heavily involved in real estate investing and owns properties in Utah and Arkansas.

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