Robinhood Launches Robo, Private Banking Capability
Robinhood has launched a robo advisor platform, Robinhood Strategies, featuring zero management fees for accounts over $100,000 for Robinhood Gold members. The company also announced plans to introduce a private banking platform later this year, which will provide traditional checking and savings accounts with luxury benefits to Gold members. The new features were announced at the company’s invite-only event for Robinhood customers, held this week in San Francisco.
The new robo advisor will charge 0.25% a year for all customers, with a yearly cap of $250 for Robinhood Gold members. Gold members will pay zero management fees on every dollar over $100,000. Non-Gold members with $250,000 or more will be charged 0.1%, while those with $500,000 or more will pay 0.05%.
“When building Robinhood Strategies we realized the existing digital advisory model was broken, with limited features and fees that grow as you do better,” said Steph Guild, president, Robinhood Asset Management and senior director of investment strategy, Robinhood Financial. “We designed Robinhood Strategies to give everyone incredible service and low fees with a cap, meaning you don’t have to pay more to invest more.”
Robinhood had 2.6 million Gold members as of the end of 2024, with the Gold Credit Card reaching over 100,000 cardholders. This week, the company will remove another 100,000 people from the waitlist for the credit card. Customers pay $5 a month or $50 a year to subscribe to the premium Gold features.
Robinhood’s broker/dealer, Robinhood Securities, will custody the assets for the robo, according to its Form ADV.
Robinhood Strategies customers will access portfolios consisting of a mix of both single stocks and ETFs, with allocations based on their risk tolerance, time horizon and other factors.
The portfolios will be curated and actively managed by Guild’s team using a combination of quantitative analysis and a qualitative overlay. The team uses proprietary factors to analyze and select stocks that fit pre-defined criteria, including income, value and growth, among others. The qualitative overlay incorporates macro analysis, third-party research and a review of financial data.
Users can see their portfolio performance over time and drill down into individual returns and drivers of those returns. They can also set up recurring investments and simulate future returns using the Monte Carlo method. The application will also feature market and portfolio insights in writing and via audio recording.
The app also helps users select tax lots to sell to minimize taxable gains, incorporate external assets transferred in and incorporate turnover limits for taxable accounts. The tool will also total gains and losses at year-end for harvesting losses.
Robinhood said the tool will also soon be able to manage individual and retirement accounts.
Robinhood Gold members can use the platform today, while other customers get access in April.
Robinhood Banking will be available in the fall exclusively to Gold members, who can get a 4% annual percentage yield in a cash sweep account and private banking services such as estate planning and professional tax advice, which will be powered by third-party vendors. The company declined to say what third parties it will use.
The service offers other perks, such as cash delivered to clients’ doorsteps or tickets to exclusive events like the Met Gala, Oscars, F1 Monaco Grand Prix and The Masters. Customers may also access private jet travel, global private chauffeurs, luxury helicopter rides and members-only vacation clubs. They can also open children’s accounts with allowances and spending controls.
The accounts will feature up to $2.5 million in FDIC insurance.
“Robinhood Banking is thoughtfully designed to be as easy to use as possible, while still delivering cutting edge features historically reserved for the ultra-wealthy,” said Deepak Rao, general manager and vice president, Robinhood Money, in a statement.
The company also announced the launch of Robinhood Cortex, an AI investment tool that will provide real-time analysis and insights to help users navigate the markets. When it rolls out later this year, it will be exclusively available to Robinhood Gold members. The tool will feature Stock Digests, short summaries of what’s happening in the world to impact a particular ticker. A Trade Builder tool will screen the market for trades to consider based on the user’s inputs.
“High quality, premium investment and market analysis has historically been reserved for institutional investors and the rich,” said Abhishek Fatehpuria, vice president of brokerage product at Robinhood. “Over time, Robinhood Cortex will completely transform the Robinhood experience as we strive to bridge that gap and put a premium research assistant right in your pocket.”
Earlier this year, Robinhood closed on its acquisition of TradePMR, the Florida-based technology and custodial services provider for RIAs with over $40 billion in assets under administration across 350 firms. Robinhood’s robo advisor currently does not integrate with TradePMR, but the firm sees opportunities for the two to work together in the future.
This week, Robinhood’s prediction markets business received a subpoena from Massachusetts’ Secretary of State Bill Galvin, who’s looking into links to gambling for its sports-event contracts, especially for younger users.
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