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Robinhood to Double Its Registered Rep Force in 2021

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What You Need to Know

  • Although Robinhood is significantly increasing its number of reps, they will provide customer service, not investment advice.
  • The recruitment growth comes as Robinhood continues to open new offices across the U.S.
  • Meanwhile, the firm faces legal battles on multiple fronts.

Robinhood plans to significantly increase the number of full-time reps it has on staff this year, according to the company.

“We plan to more than double the number of full-time registered reps at Robinhood throughout 2021,” a company spokesperson said on Thursday, confirming what InvestmentNews reported two days earlier. “In 2020, we more than tripled the size of our full-time customer support team, and hired hundreds of new registered financial representatives to support customers.”

Robinhood pointed out, however, that it is not an investment advisor and doesn’t offer financial advice to clients, noting the advisors it’s recruiting will help clients with issues related to their brokerage accounts, not give them advice.

Robinhood, which now has about 13 million users, has been opening offices across the U.S. at a fast clip in recent months.

On March 30, the company said in a blog post on its website that its newest office will be in Charlotte, North Carolina, where it plans to hire more than 100 people in 2021.

The Charlotte office “will create nearly 400 jobs in Mecklenburg County,” according to North Carolina Gov. Roy Cooper, who said in a press release that Robinhood planned to invest $11.7 million to establish the office focused on customer experience roles.

The Charlotte office boosts Robinhood’s presence to nine U.S. cities and increases its capacity to do more for clients, it said.

Robinhood already recently announced new office locations in New York and Seattle and that it expanded on its investments in customer experience, it noted.

The company is based in Menlo Park, California, and, in addition to New York City and Seattle, it also has locations in Denver; Lake Mary, Florida; Westlake, Texas; Tempe, Arizona; and Washington, D.C.

Legal Battles

Meanwhile, the firm has been fighting legal battles on multiple fronts. It recently filed a lawsuit to overturn Massachusetts’ fiduciary rule and prevent the state’s securities division from proceeding in an administrative case against the brokerage firm.

Robinhood stated in its suit that the Massachusetts Securities Division’s new fiduciary rule, which took effect in August, “exceeds its authority under both Massachusetts state law and federal law.”

Secretary of state William Galvin, Massachusetts’ top securities regulator, accused Robinhood in mid-December of violating state law by using overly “aggressive tactics to attract new, often inexperienced, investors” and “gamification to encourage and entice continuous and repetitive use” of its mobile application.

Sen. Elizabeth Warren, D-Mass., meanwhile, prodded Robert Cook, CEO of the Financial Industry Regulatory Authority, in a letter to “conduct a thorough review” of Robinhood’s activities during the GameStop trading frenzy.

A class-action lawsuit had alleged that Robinhood and other brokerages, fund companies and clearinghouses “conspired” to prevent retail investors from buying stocks like GameStop, thereby “stripping them of their rights to control their investments.”

(Image: Shutterstock)