Robinhood ventures into the RIA space with $300M TradePMR deal

Robinhood, the online trading giant that's been the vehicle for an army of individual investors to get into the stock market, is throwing its hat into the multi-trillion dollar RIA market.

On Tuesday, Robinhood announced a $300 million agreement to acquire Gainesville, Florida-based custodial platform TradePMR, which supports 350 advisory firms with over $40 billion in assets under administration. The transaction, a mix of cash and stock, is expected to close in the first half of 2025, pending regulatory approval and standard closing conditions.

The deal represents a revolutionary push for Robinhood to diversify its offerings and tap into the growing wealth management sector. The RIA market, which by at least one estimate by Cerulli represents an $8.5 trillion opportunity, with the potential for even more growth ahead, has gained traction as investors increasingly seek fiduciary financial advice tailored to their unique goals and circumstances. 

TradePMR’s integration is expected to position Robinhood as a player in a sector already dominated by the likes of Charles Schwab, Fidelity, and Pershing, subsidiaries of BNY Mellon.

In a statement, Vlad Tenev, Robinhood’s chairman and CEO, emphasized the alignment of the two firms’ missions.

“The TradePMR team has one of the strongest RIA networks in the industry,” Tenev said on Tuesday. “We’re excited to join forces to build a category-defining advisory platform for the next generation.”

The acquisition also enables Robinhood to create a unified technology platform that merges advisor-managed assets with the company’s self-directed investment tools. This integration aims to serve investors as their financial needs mature. TradePMR’s Fusion platform, known for its open architecture and high-touch service, will form the foundation of Robinhood’s new advisory services.

TradePMR, which provides technology and custodial services, has made several moves to bolster its appeal to RIAs this year. In August, it bolstered its bench with industry veterans whose bona fides include Apex, Schwab, Goldman Sachs, and Ameritrade. In October, the firm sharpened its focus on supporting advisor growth with client onboarding updates and rolled out a new AI-based tool designed to help simplify the custodial transition process for advisors making the switch into TradePMR.

The firm’s founder and CEO, Robb Baldwin, underscored the acquisition’s multigenerational potential.

“For many years, the advisor industry has discussed the issue of losing customers when assets transition to a spouse or to heirs,” Baldwin said. “Robinhood’s client base is the next generation of investors. We believe this acquisition allows us to build a multi-generational platform that will help introduce financial advisors to this next generation.”

Robinhood plans to expand TradePMR’s reach by creating a referral network that connects its 24 million funded accounts to RIAs. Approximately 75 percent of Robinhood’s customers are Millennials or Gen Z, making it an attractive partner for advisors seeking to engage younger investors.

The move comes during a transformative year for Robinhood, which has evolved from a brokerage app to a full-service financial platform.

As Barron’s reported, Robinhood has seen its stock rise 175 percent in 2024, far outpacing the S&P 500’s 25 percent gain. The company, which entered mainstream consciousness and captured the wider public imagination during the meme stock trading frenzy of 2021, also manages $160 billion in assets across its user base.

TradePMR has a longstanding partnership with Wells Fargo Clearing Services, which provides clearing, execution, and lending solutions. Both firms plan to preserve and deepen this relationship, ensuring business continuity for TradePMR’s advisors and clients.

Baldwin and his team will join Robinhood upon the deal’s completion, continuing their focus on supporting RIAs. Both companies have committed to transparency throughout the transition, with Robinhood positioning itself to compete in a sector poised for sustained growth.