Robinhood wants to be your bank and wealth manager

Robinhood Markets has moved past its meme-stock days to become known as the go-to trading platform for retail investors of all stripes – crypto zealots, novice financiers, and sophisticated speculators alike. And now it’s taking it a step further - it also wants to be your bank.

Robinhood will roll out checking and savings accounts later this year to its paying “Gold” subscribers, but with a few twists. The Menlo Park, California-based firm aims to be less of a traditional bank for its customers and more of a private banking-like experience, according to Deepak Rao, vice president and general manager of Robinhood Money and to achieve this at scale it’s going to be leaning into Artificial Intelligence (AI).

“You get these crazy products, you get really high interest rates,” Rao said in an interview. “Why don’t we do that, but we give it to everybody?”

The Future of Financial Services, by Futurist Speaker Matthew Griffin

While Robinhood is introducing bank-like services, it’s not an FDIC-insured bank itself. Instead, it will work with a partner institution to offer Federal Deposit Insurance protection on consumers’ money. The company said on its website that banking services will be provided by Coastal Community Bank.

The annual percentage yield on the high-yield savings account will likely hover around 4% when the product rolls out, customers will have access to estate planning and tax advice, and clients will be able to request cash to be delivered to their doorstep that day via the app, according to a statement Wednesday. The last service is one that some legacy banks still have, but with a several-day lag time, Rao said in the interview.

The core banking services are another step in Robinhood’s ambitions to become a one-stop shop for consumers’ financial needs, bringing investing, banking, retirement and other products all under the single brand. Chief Executive Officer Vlad Tenev outlined this goal at the firm’s investor day in December. Since then, the company has also rolled out sports-event contracts.

“It’s really about giving you the power of a financial team through Robinhood across your entire financial journey,” Tenev said Thursday in a Bloomberg Television interview. “Robinhood should help you manage your finances with the best experience and the lowest possible costs.”

More in Robinhood’s traditional investing lane, the company is also unveiling a tailored wealth-management service, capping fees for its Gold subscribers at $250 a year. The offering will give consumers access to both single stocks and exchange-traded funds and minimize taxable gains, with Gold customers able to use the advisory service now and all customers able to tap into it next month. All clients will pay a 0.25% management fee, according to the statement.

“How can we take the best of all the models that are out there, from a human adviser who can provide you guidance and reassurance to robo-advisers that don’t provide you guidance and reassurance but at least give you a low-cost, easy way to access advice,” said Steph Guild, president of Robinhood asset management and senior director of investment strategy for Robinhood financial, in an interview. “We thought we’d take the best of those models and create something that doesn’t exist today.”

The wealth-management services will be augmented by an AI offering, called Robinhood Cortex, which will give investors analysis and insights to optimize their portfolios.