Trading app Robinhood Markets has reached a cash-stock deal worth around $300m to acquire TradePMR, a custodial and portfolio management platform for registered investment advisors (RIAs).
TradePMR, with over 25 years of industry experience, has more than $40bn in assets under administration.
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The partnership between Robinhood and TradePMR is expected to create a referral programme connecting investors to a network of fiduciary advisors.
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.”
TradePMR’s RIAs will gain access to Robinhood’s client base, as the companies plan to enhance their technology platform and facilitate growth for RIAs.
Millennials and Gen Z hold a significant portion of Robinhood’s 24 million funded customer accounts.
It addresses the investment needs of these demographics, particularly as they stand to inherit an estimated $84tn in wealth over the coming decades.
The acquisition also enables continuity for RIAs using TradePMR’s services. TradePMR’s partnership with Wells Fargo Clearing Services will be preserved, ensuring minimal disruption for RIAs and their clients.
The RIA market, a $7tn sector, is one of the fastest-growing in the wealth management space, highlighted Robinhood.
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 deal is expected to be completed in the first half of 2025, pending regulatory approvals.
For this transaction, Citi and Lazard served as exclusive financial advisors to Robinhood and TradePMR, respectively.
In June this year, Robinhood agreed to acquire Bitstamp, a global cryptocurrency exchange, in a deal valued at around $200m.
