Robinhood plans to acquire custodial and portfolio
management firm TradePMR. The
California-based commission-free investing firm entered into an agreement to
buy the company, which targets Registered Investment Advisors (RIA), an important segment in the wealth management services space.

A $7 Trillion Industry

According to Robinhood, the RIA market represents one of the fastest-growing sectors in wealth
management, currently valued at over $7 trillion. With this acquisition, Robinhood now plans to bridge
the gap between tech-savvy retail investors and fiduciary advisors who can
provide customized financial guidance.

TradePMR has reportedly established a network of 350 firms and
decades of experience in RIA custodial services. Robinhood aims to benefit from this by establishing a good foundation to build its new advisory capabilities.

Commenting about the planned acquisition, Vlad Tenev, the
Chairman and CEO at Robinhood, 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.”

Robinhood Markets, Inc. has signed an agreement to acquire TradePMR, a custodial and portfolio management platform for Registered Investment Advisors. Here’s why: https://t.co/qL8onQaCN0 pic.twitter.com/0eHD69opVD

— Robinhood (@RobinhoodApp) November 19, 2024

With TradePMR’s expertise, Robinhood also plans to
integrate managed assets and self-directed investments into a single platform. The company estimates that it will inherit an estimated $84 trillion
in wealth over the coming decades.

Enhancing Access for Advisors

Additionally, Robinhood and TradePMR aim to create a
referral program that connects fiduciary advisors to Robinhood’s customers. This collaboration seeks to help advisors grow their businesses
and offer Robinhood users easier access to professional financial advice.

The acquisition deal, valued at approximately $300
million in cash and stock, is expected to close in the first half of 2025,
pending regulatory approval. By acquiring TradePMR, Robinhood will diversify beyond
self-directed trading to cater to evolving customer needs with wealth management solutions.

“For many years, the advisor industry has discussed the
issue of losing customers when assets transition to a spouse or to heirs,” added
Robb Baldwin, Founder and CEO at TradePMR. “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.”

According to the official announcement, Robb and the TradePMR team will join Robinhood. TradePMR is a privately held brokerage and custodian services provider based in Gainesville City, Florida.

This article was written by Jared Kirui at www.financemagnates.com.