NEW YORK – The bursts of confetti that shower screens of Robinhood investors when they make their first trade — and serve as the punchline for critics who say the popular app treats investing like a game — are going away.
Starting this week, Robinhood will begin retiring the confetti, which was meant to celebrate customers hitting milestones like making their first deposit or enabling new features, such as upgrading to its paid Gold-level membership. The last pops will go off next week, to be replaced with a suite of animations that are decidedly measured in pace, with nary a flake within them.
“They're meant to be moments of pause, moments of understanding,” said Rich Bessel, head of design at Robinhood.
Robinhood's popularity has exploded since it launched in 2013. Its commission-free trades and easy-to-use app have drawn in so many first-time investors and helped it grow so fast that the company is preparing to sell its own stock for the first time in an initial public offering.
The confetti animations have been around since 2016, and critics say it's one of a number of techniques Robinhood uses to lure unsophisticated investors and keep them engaged with the app, where they may be making too many trades that are too risky for them. Massachusetts regulators last year cited the confetti in particular as part of a complaint they filed against Robinhood, alleging that it targets and manipulates inexperienced investors.
A culture has built up on the internet where people post pictures of huge losses they took from bad trades — dubbed “loss porn” — and many show screenshots of their Robinhood account balances to prove it. Robinhood allows some investors to trade stock options and to buy using borrowed money, like other brokers, which can supercharge gains and losses.
Madhu Muthukumar, Robinhood's senior director of product management, said the confetti criticism became a distraction that took away from the encouragement the company was trying to provide as people stepped into investing for the first time.
The typical age for a Robinhood customer is 31, and many of them used to be among the nearly half of all U.S. households that don’t own any stocks or stock funds. Experts say it’s important to get more people invested in stocks, which historically have offered one of the best ways to build wealth over the long term.