I think you're only highlighting my point that it's woefully misunderstood
The fact that 70k people signed a statement making a bunch of strong but vapid claims is umm telling
Let's take a longer money stuff excerpt:
>>>
Some retail brokerages seem to make a lot of their money from payment for order flow. Others make less. Some big retail brokerages do not accept any payment for order flow at all: They still use this system (routing their orders to market makers), but they take 100% of the value in the form of price improvement for their customers instead of payments for themselves. Intuitively, you might think that the brokerages that get a lot of PFOF would get worse price improvement.
But, nope! Here is Bill Alpert in Barron’s:
Critics of retail brokers like Robinhood Markets condemn those companies for routing customers’ orders to market makers like Citadel Securities in exchange for payments. ...
The suspicion is that greater payments to brokers must be offset by less favorable execution prices. But that isn’t what a new study finds.
In an Aug. 13 working paper, five finance professors analyzed 85,000 stock trades they made through five leading retail brokers. They did get significantly different pricing through different brokers for identical orders to buy or sell at the current market price.
But their best pricing came from a broker that takes payment for order flow, namely TD Ameritrade, now a unit of Charles Schwab. Fidelity, which takes no order payments, got worse prices on the professors’ trades than did TD Ameritrade. And its prices were no better than those from the E*Trade unit of Morgan Stanley, which does take payments. Robinhood, which used revenue from order-flow payments to subsidize the industry’s first commission-free trading, delivered middle-of-the-pack pricing. Interactive Brokers ranked last in the execution pricing of the professors’ orders.
The fact that 70k people signed a statement making a bunch of strong but vapid claims is umm telling
Let's take a longer money stuff excerpt:
>>> Some retail brokerages seem to make a lot of their money from payment for order flow. Others make less. Some big retail brokerages do not accept any payment for order flow at all: They still use this system (routing their orders to market makers), but they take 100% of the value in the form of price improvement for their customers instead of payments for themselves. Intuitively, you might think that the brokerages that get a lot of PFOF would get worse price improvement.
But, nope! Here is Bill Alpert in Barron’s:
Critics of retail brokers like Robinhood Markets condemn those companies for routing customers’ orders to market makers like Citadel Securities in exchange for payments. ...
The suspicion is that greater payments to brokers must be offset by less favorable execution prices. But that isn’t what a new study finds.
In an Aug. 13 working paper, five finance professors analyzed 85,000 stock trades they made through five leading retail brokers. They did get significantly different pricing through different brokers for identical orders to buy or sell at the current market price.
But their best pricing came from a broker that takes payment for order flow, namely TD Ameritrade, now a unit of Charles Schwab. Fidelity, which takes no order payments, got worse prices on the professors’ trades than did TD Ameritrade. And its prices were no better than those from the E*Trade unit of Morgan Stanley, which does take payments. Robinhood, which used revenue from order-flow payments to subsidize the industry’s first commission-free trading, delivered middle-of-the-pack pricing. Interactive Brokers ranked last in the execution pricing of the professors’ orders.
That's from https://news.bloomberglaw.com/mergers-and-acquisitions/matt-...
Excerpted Barron's: https://www.barrons.com/articles/payment-for-order-flow-sec-...
Paper: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4189239