What Public.com Is

Public.com is an investment platform that combines brokerage services with a social networking component, aiming to make investing more accessible and transparent. Launched in 2019, Public offers commission-free trading of stocks, exchange-traded funds (ETFs), options, and cryptocurrencies. The platform also provides access to U.S. Treasuries and corporate bonds, allowing investors to diversify their portfolios beyond traditional equities.

A distinctive feature of Public is its social aspect. Users can follow other investors, share insights, and discuss investment strategies within the app. This community-driven approach is designed to foster a collaborative environment where both novice and experienced investors can learn from each other. The platform curates “Themes,” which are collections of stocks centered around specific topics like “Green Power” or “Space Exploration,” enabling users to explore investments aligned with their interests.

Public emphasizes transparency in its operations. Unlike many brokerages that earn revenue through payment for order flow (PFOF), Public has shifted away from this practice, opting instead for a tipping model where users can voluntarily tip the platform for executing trades. This approach aims to align the platform’s interests more closely with those of its users.

The platform is accessible via mobile applications for iOS and Android devices, as well as through a web interface. The user interface is designed to be intuitive, catering to investors who prefer a straightforward and engaging experience. Public also offers educational content and real-time market data to help users make informed investment decisions.

Who Public.com Is For

Public.com is tailored for a broad spectrum of investors, particularly those who value transparency and community engagement in their investment journey. Beginners will find the platform’s user-friendly interface and educational resources helpful in understanding the basics of investing. The social features allow new investors to observe and learn from more experienced community members, providing a supportive environment for building confidence in investment decisions.

Intermediate investors who seek a platform that offers a diverse range of assets, including stocks, ETFs, options, cryptocurrencies, and bonds, will appreciate Public’s comprehensive offerings. The ability to invest in fractional shares makes it easier for users with limited capital to build diversified portfolios.

Investors interested in thematic investing will find value in Public’s curated “Themes,” which group stocks based on specific sectors or trends. This feature enables users to align their investments with personal interests or beliefs, such as renewable energy or technological innovation.

However, Public may not be the ideal choice for advanced investors who require sophisticated analytical tools, extensive research reports, or access to a wide array of account types, such as custodial accounts, trusts, or business accounts. The platform’s focus on simplicity and community engagement may not meet the needs of those seeking more complex investment strategies or account structures.

The standout features in practice

Public.com offers several features that distinguish it from traditional brokerage platforms. Below are some of the standout features and how they function in practice.

Commission-Free Trading

Public provides commission-free trading for stocks and ETFs during regular market hours. This means users can buy and sell these securities without incurring traditional brokerage fees, making investing more cost-effective, especially for those who trade frequently or with smaller amounts. For options trading, Public not only offers commission-free trades but also provides rebates ranging from $0.06 to $0.18 per contract, depending on the user’s trading volume. This rebate program effectively reduces the cost of options trading, which can be particularly beneficial for active traders.

Social Investing Community

The platform integrates social networking features, allowing users to follow other investors, share insights, and participate in discussions about various investment topics. This community aspect enables users to learn from each other’s experiences and strategies. For example, a user interested in renewable energy investments can follow and interact with others who have expertise in that area, gaining valuable insights and perspectives. The “Themes” feature curates collections of stocks based on specific topics, such as “Green Power” or “Space Exploration,” helping users discover investments aligned with their interests.

Fractional Shares

Public allows users to invest in fractional shares, meaning they can purchase a portion of a share rather than a whole one. This feature lowers the barrier to entry for high-priced stocks, enabling investors to diversify their portfolios without needing substantial capital. For instance, if a single share of a company costs $1,000, an investor can choose to invest $10 in that company, acquiring 1% of a share. This flexibility is particularly advantageous for those looking to invest in high-value stocks without committing large sums of money.

Transparency and No Payment for Order Flow

Public has moved away from the common brokerage practice of earning revenue through payment for order flow (PFOF), where brokerages receive compensation for directing orders to specific market makers. Instead, Public operates on a tipping model, where users can voluntarily tip the platform for executing trades. This approach aims to align the platform’s interests more closely with those of its users, promoting transparency in trade execution. Users can see the reasoning behind each trade and have confidence that their orders are executed with their best interests in mind.

Pricing

Public.com offers a straightforward pricing structure designed to make investing accessible and affordable. Here’s a breakdown of the key components:

  • Commission-Free Trades: Users can trade stocks and ETFs without paying commissions during regular market hours. This allows investors to buy and sell securities without incurring additional costs, making it easier to manage and grow their portfolios.

  • Options Trading Rebates: Public offers commission-free options trading and provides rebates ranging from $0.06 to $0.18 per contract, depending on the user’s trading volume. This rebate program effectively reduces the cost of options trading, benefiting active traders.

  • Cryptocurrency Trading Fees: For cryptocurrency transactions, Public charges a 1.25% markup on the order amount. This fee applies to all crypto trades and is transparently displayed during the transaction process.

  • Public Premium Subscription: For users seeking enhanced features, Public offers a Premium membership at $10 per month or $96 annually. Premium members gain access to advanced data and insights, extended-hours trading, and expanded portfolio management tools. Accounts with a balance of $50,000 or more receive complimentary access to Premium features.

  • Inactivity Fee: Accounts with no activity for six months and balances below $70 are subject to a $3.99 monthly inactivity fee. This fee encourages users to maintain active engagement with their investment accounts.

  • Outgoing Transfer Fee: If a user decides to transfer their account to another brokerage, Public charges a $75 fee for outgoing Automated Customer Account Transfer (ACAT) transfers, applicable to both partial and full transfers.

  • Margin Interest Rates: For users utilizing margin accounts, Public offers competitive interest rates starting at 4.9% for balances up to $50,000, with rates decreasing for higher balances. This allows investors to leverage their positions at relatively low borrowing costs.

Honest Limitations

Public.com does not offer custodial accounts, trusts, or business accounts, which may limit options for investors managing family assets or business-related investments. Advanced analytical tools and extensive research reports are also limited, potentially falling short for experienced investors seeking in-depth analysis.

Verdict

Public.com stands out as a user-friendly investment platform that combines commission-free trading with a social networking component, making it particularly appealing to beginners and those interested in community-driven investing. The platform’s emphasis on transparency, including its move away from payment for order flow, aligns its interests with those of its users, fostering trust and confidence.

The availability of fractional shares, a diverse range of assets, and thematic investing options provides flexibility for investors to build portfolios that reflect their financial goals and personal interests. The social features offer opportunities for learning and engagement, creating a supportive environment for both new and experienced investors.

However, advanced investors seeking sophisticated analytical tools, extensive research reports, or a wide array of account types may find Public’s offerings limited. The platform’s focus on simplicity and community engagement may not meet the needs of those requiring more complex investment strategies or account structures.

Overall, Public.com is well-suited for individuals looking for an accessible, transparent, and community-oriented investment platform that offers a broad range of assets and the flexibility to invest according to their interests and values.