Robinhood is increasing into the wealth administration house with the launch of the Robinhood Advisor Community. This marks a shift in the direction of serving high-net-worth prospects by means of a market mannequin.
Quite than constructing an in-house advisory division, the corporate connects certified customers with impartial registered funding advisors (RIAs). This construction reveals a transparent concentrate on rich prospects.
The service will initially be obtainable to Robinhood customers with at the very least $250,000 in investable property, however collaborating advisory corporations should handle at the very least $500 million in property and function on the TradePMR platform.
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Constructing on the acquisition of TradePMR
The launch builds on Robinhood’s acquisition of TradePMR, an RIA administrator and expertise supplier. Via this transaction, Robinhood gained entry to a community of greater than 350 advisory corporations that oversee greater than $40 billion in shopper property.
The referral market idea was central to the TradePMR acquisition. In a current publish marking his one-year anniversary at Robinhood, TradePMR founder Rob Baldwin described the Advisor Community as a gradual rollout geared toward connecting certified traders with impartial RIAs whereas preserving advisor autonomy.
This construction means that Robinhood is positioning its community much less as an inner advisory arm and extra as a distribution layer that gives impartial firms with entry to a big, mobile-first buyer base.
Wider income combine
The advisor community displays a step change in Robinhood’s enterprise mannequin. The corporate has historically relied on transaction income from its buying and selling actions, however is transitioning to recurring fee-based income streams associated to wealth administration.
The enlargement will put Robinhood in better competitors with established wealth platforms equivalent to Charles Schwab and Constancy. By combining impartial buying and selling and advisory companies, the corporate is increasing its position within the monetary lives of its purchasers.
The rollout will start with a pilot amongst Robinhood workers and will probably be rolled out extra broadly to eligible prospects within the second quarter.
