Robinhood Markets, Inc. has just announced an exciting new move. They are acquiring TradePMR, a portfolio management platform. This acquisition boosts Robinhood's presence in the wealth management space.
TradePMR manages about $40 billion in assets and serves the $7 trillion registered investment advisor (RIA) market. With this deal, Robinhood aims to tap into TradePMR’s expertise. They want to offer personalized financial advice through RIAs to their customers.
What’s even more interesting? This acquisition gives TradePMR advisors access to Robinhood’s 24 million accounts, mostly consisting of Millennials and Gen Z users. This is a fantastic opportunity for both platforms.
A crypto influencer on X said, “This opens up a brand new market for Robinhood. The wealth transfer will involve $90 trillion being passed down from Baby Boomers to younger generations. That wealth will likely need guidance, and if Robinhood can provide a top-notch RIA platform, they should see significant growth.”
TradePMR has been around for over 25 years and currently manages about 350 firms. This acquisition marks Robinhood’s third in 2024, following their purchases of the global crypto exchange Bitstamp and Pluto Capital, an AI-driven finance tool.
Robinhood plans to integrate TradePMR’s highly-rated platform, Fusion, into their app. This will allow customers to view both their self-directed investments and managed assets all in one place. It simplifies financial management.
Additionally, Robinhood will maintain its partnership with Wells Fargo for clearing and execution services. They also plan to create a referral program to connect fiduciary advisors with their vast customer network. This initiative aims to provide Robinhood users with easy access to professional financial guidance while helping advisors grow their client base.
One commentator on X noted, “This is a big new service they will start offering to attract the wealth management industry. Robinhood has captured much of the younger generation, especially Gen Z. This is huge!”
At the time of writing, Robinhood's shares had jumped 1.5% before the market opened and had gained an impressive 332% in 2024. Their Q3 2024 earnings reached $14.4 billion, marking a 114% increase compared to Q3 2023.
This acquisition involves a mix of cash and stock and is expected to close in early 2025 after receiving regulatory approval. Once finalized, Robinhood aims to build a comprehensive platform that connects advisors with customers while continuing to enhance its wealth management services.