US Investing app Robinhood has targeted the wealth management sector in America with the acquisition of TradePMR.
Robinhood’s move to buy a custodial and portfolio management firm for $300 million deal will enable it to market its services to registered investment advisers (RIAs), which are akin to regulated financial advisers in the UK.
In the view of Robinhood, the RIA market is attractive due to representing one of the fastest-growing sectors in wealth management, which TradePMR estimates is worth around $7 trillion.
The acquisition will see the combined firms work together to build a referral program, by which Trade PMR’s RIAs will be able to access a new client base through Robinhood.
The firms plan to develop their technology platform to make it easier for RIAs to reach Robinhood customers and grow their business at scale.
Robinhood chairman and CEO Vlad Tenev said: “The TradePMR team has one of the strongest RIA networks in the industry.
“We’re excited to join forces to build a category-defining advisory platform for the next generation.”
The acquisition is expected to close in the first half of 2025, subject to conditions including regulatory approvals.
TradePMR has more than $40 billion in assets under administration, around 25 years after it wasfounded.
TradePMR founder and CEO Robb Baldwin said: “For many years, the advisor industry has discussed the issue of losing customers when assets transition to a spouse or to heirs.
“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.”
US-headquartered Robinhood launched in 2013. According to data from May, globally it had 24.1 million funded accounts and $129.6 billion assets under custody for clients.
The acquisition follows recent additions to Robinhood’s services for customers in the UK, where it recently relaunched.
In October, the firm made margin trading available to UK users of its platform, with customers required to apply and meet eligibility requirements.
Robin has more than six years of experience as a financial journalist, most of which were spent at Citywire, and covers the latest developments in the investing, trading and currency transfer space. Outside of work, he enjoys reading literature and philosophy and playing the piano.
You can contact Robin at robin@goodmoneyguide.com
