Robinhood IRA Nears $1B, Planning Further Retirement Push

The CEO of Robinhood Markets Inc., the stock trading platform that launched a retirement plan push late last year, says its individual retirement account offering a 1% match is nearing $1 billion in assets in part from poaching from other providers.

Robinhood, which has 23 million customers, is seeking to deepen relationships beyond trading and investing with its spending, saving, and retirement products, its CEO said on a second-quarter earnings call, noting that the company has seen “big pickup in transfers from other institutions” for its IRA.

“It’s great to see that IRA assets are now close to $1 billion,” Vladimir Tenev, CEO and president said on the August 2 call. “We believe retirement can grow into a much larger part of our business.”

Part of that push, he said, is offering subscriber’s to Robinhood’s gold subscription, which comes with a $5 monthly fee for additional brokerage services, a 3% match to money put into a Robinhood IRA.

“We believe this offer makes gold incredibly compelling for retirement customers that aren’t already gold subscribers and will also help us grow retirement business,” Tenev said.

During its first quarter earnings call, Tenev noted that Robinhood is considering a personalized advisory experience for customers similar to what is available for high-net-worth individuals, but “at a much lower price point by using technology.” The CEO referenced the advisory services again in Q2 but did not provide further information.

The Robinhood IRA 1% match, which the firm has marketed to gig workers as it does not require an employer, is eligible for participants who maintain an account for at least five years.

When asked on the call if Robinhood would consider offering employer-sponsored 401(k) accounts, Tenev said it is not currently on the road map, but that the firm “definitely wouldn’t rule it out.”

“We think it’s a space that is begging to be disrupted, frankly,” he said. “That said, there are also tons of individuals who don’t receive a match from their employer today. So if you’re an employee without a match, come to Robinhood, and we will match for you.”

The IRA market held $12.5 trillion in assets as of the end of the first quarter, the latest data from the Investment Company Institute. That tally was a roughly 9% decline in assets from the same quarter in 2022.