Robinhood Markets Inc., renowned in the stock and crypto space, is set to acquire TradePMR, a Florida-based custodial and portfolio management platform for registered investment advisors (RIAs). The trading platform initiated this move to attract wealthier clients. This deal is valued at approximately $300 million in cash and stock.
Significance of Robinhood’s Latest Deal
Moreover, it is expected to close in the first half of 2025, according to a statement released by Robinhood. Through this acquisition, the trading platform aims to bridge the gap between its clients and TradePMR’s RIAs. The integration will allow advisors to connect with Robinhood’s client base, facilitating seamless interactions for investors seeking professional financial guidance.
TradePMR manages over $40 billion in assets under administration, and its team will become part of Robinhood upon completion of the transaction. Robb Baldwin, TradePMR’s CEO, highlighted the long-standing industry challenge of retaining clients during generational wealth transfers. “For years, advisors have struggled with losing clients when assets pass to spouses or heirs. Robinhood’s platform connects directly with the next generation of investors,” Baldwin said in the announcement.
This move aligns with Robinhood’s plan to compete with established players like Charles Schwab and Fidelity in the rapidly expanding wealth management market. Steve Quirk, Robinhood’s Chief Brokerage Officer, emphasized the importance of catering to younger investors poised to inherit significant assets.
“We’re facing a historic wealth transfer. Advisors who traditionally focused on older generations are now shifting to capture the younger demographic,” Quirk said during an interview, according to a Bloomberg report.
The trading platform’s expansion into wealth management is part of a larger effort to diversify its offerings in the competitive retail investment space. In recent years, the brokerage has introduced cryptocurrency trading, a credit card, and even tools for speculating on political outcomes.
The acquisition of TradePMR also underscores the platform’s intent to position itself as a preferred platform for both individual investors and professional advisors. For further context on the deal, Citigroup acted as Robinhood’s financial advisor for the transaction, while Lazard represented TradePMR.
HOOD Stock Performance
After the latest announcement, the Robinhood stock gained significantly in the pre-market trading session today. As of writing, the HOOD stock gained 1.57% to $35.55. However, the stock fell immediately afterwards, reaching $34.88. Nonetheless, it doesn’t reflect the actual market performance, hence, it is yet to be seen if the stock can mirror Monday’s impeccable rally or falls short of it.
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