Robinhood announced Wednesday that is has closed its acquisition of TradePMR, a registered investment advisor custodial platform with approximately 350 firms and more than $40 billion in assets under administration.
News of the acquisition first broke in November, when Robinhood said it would acquire TradePMR for about $300 million in cash and stock. Total consideration and post-close equity compensation was unchanged prior to customary closing adjustments, consisting of approximately 60% cash and 40% stock-based compensation, according to the firm.
“The TradePMR team has one of the strongest RIA networks in the industry,” said Vlad Tenev, chairman and CEO of Robinhood, in a statement. “We’re excited to join forces to build a category-defining advisory platform for the next generation.”
Robb Baldwin, founder and CEO of TradePMR, said his organization will benefit from Robinhood’s access to the “next generation of investors.”
“For many years, the advisor industry has discussed the issue of losing customers when assets transition to a spouse or to heirs,” Baldwin said. “We believe this acquisition allows us to build a multi-generational platform that will help introduce financial advisors to this next generation.”
Tenev observed that the needs of Robinhood customers are evolving as they seek advice on how to build and manage their growing portfolios, noting that this strategic acquisition combines the skills of fiduciary advisors with Robinhood’s scalable technology.
According to the closing announcement, Robinhood and TradePMR plan to build a “best-in-class referral program,” through which TradePMR’s RIAs will be able to access a new client base through Robinhood. Likewise, the combination of the firms should give Robinhood customers the ability to easily find and connect with RIAs.
The announcement further clarifies that the combined entity will continue TradePMR’s long-standing partnership with Wells Fargo Clearing Services, which provides clearing, execution and lending services to TradePMR advisors.
“Robinhood and TradePMR intend to preserve and deepen this relationship going forward,” the announcement states, “helping ensure business continuity and minimal disruption for TradePMR’s RIAs and their clients.”
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