Robinhood stakes unlimited cash to pay RIA clients for the 'pain of repapering' to custody at TradePMR, and 40 big RIAs so far have taken the bait; its no 'gimmick,' says custody chief

Robinhood kneecapped Schwab, Fidelity and TD Ameritrade with zero-fee commissions in 2013, won a spot in the oligopoly, and brought the whole industry to zero fee trades in the bargain.  

Now Vlad Tenev, CEO of the maverick brokerage, is applying its Freakonomics-style freemium pricing strategy to RIA custody – with intriguing early success.

It's staking cash to its newly acquired RIA custodian, TradePMR, to offer what amounts to an initial negative fee to RIA clients with a pay-back offer. See: Robinhood closes TradePMR deal.

You'd better believe that RIAs appreciate the funding of their growth, says TradePMR Founder and General manager Robb Baldwin in an interview. 

“Custodians hardly do anything to help advisors grow organically, and this is the first thing any [custodian] has been able to do to actually promote [asset inflows],” he says. 

It “maybe happened when you worked at a wirehouse, but I don't think it's ever been done for an independent RIA, to have someone step up and say, ‘We want to see you grow, and we're willing to put money behind it to make that happen.'”

Robinhood is fully funding the asset match offer, which launched Sept. 23. It will have “no caps” on the amount it will pay out during the program's six-month run, Oct. 1, to Mar. 31, 2026.

Too much pain?

The deal tops most of the custody giants, who already offer free RIA custody. Schwab even “pledges” it like a vow. See: Fidelity Investments will broaden custody fees in July, while Schwab counters with pledge: ‘No custody fees and no intention to raise them

The TradePMR program offers a 50-basis-point, or 0.5%, cash match on new assets, including cash, going into TradePMR accounts, regardless of the account type. 

The scheme is also applicable to all inflows to accounts of a prospective or current RIA client, including family member accounts.

A high-net-worth (HNW) client with $10 million in assets would reap $50,000, or a tenth of the value of a 5% annual investing return, should they avail of Asset Match.

An RIA managing $500 million (AUM) on behalf of 500 clients with an average balance of $1 million would bring in $5,000 per client, or $2.5 million overall, bumping up their own income from the standard 1% fee by $25,000.

But the asset match could still be too little for too much pain and end up looking RIA-inappropriate, says Andrew Besheer, principal of Albany, N.Y. consultancy, Besheer & Associates, in an email.

“If I have clients with accounts, say, in the $500,000 to $1 million range, is it really worth it to them – and to me – to run through the process of transferring [assets] for a bonus of $2,500 to $5,000?” he asks.

And, strings are attached. Private placements and annuities are not eligible and clients must agree to keep their assets at TradePMR for five years, or have payouts reduced through a pro-rata clawback.

Decision tree

Still, people from all economic strata react positively to good deals, says Baldwin.

“People say ‘gimmicky,’ but when it's a two-for-one special in a bar, no one questions you, and it doesn't matter what [a client's] wealth is … it doesn't keep them from grabbing two, and this is in the same light,” he adds.

“That’s two-for-one, this is more like one and an extra sip,” Besheer says.

“But it’s definitely interesting. It’s definitely one factor in the decision tree – and a real factor at that. 

"If I had a $4-million to $5-million IRA, and I was under 60, and not going to be touching the assets for five-years, I’d probably want a deal like that,” he says.

It follows Robinhood's other goody-bag custody offering – referrals of unmanaged millionaires to RIAs through TradePMR – and a gee-whiz factor… advisor's faces appear on its mobile app. See: The anticipated Robinhood to TradePMR 'bridge' is being erected that makes RIAs -- and their faces -- part of the mobile app

One analyst who asked not to be named says Robinhood has an astounding number of millionaires because so many of its clients went big on Bitcoin and won. 

But it also gives Robinhood incentive to get those assets under RIA management, so the assets can be diversified and leave Robinhood less vulnerable to a Bitcoin downturn.

Boosting engagement

Introducing bare-knuckle economics into RIA custody conversation is both novel – and potentially effective, says Joe Duran, founder and managing partner of Rise Growth, ($10 billion), in an email exchange.

“Custodians have typically competed on technology, service and education rather than direct economic incentives. By reducing costs for investors, the program could boost visibility and engagement for [RIAs] – especially for advisors already considering a move from a broker-dealer," he explains.

Along with Duran, TradePMR lists three big-time RIAs that are willing to endorse its new cash-back program:  David Hohimer, managing partner, Hohimer Wealth Management ($1 billion) in Seattle; Watts Ha, managing director, EP Wealth Advisors ($35.5 billion) in Torrance, Calif., and Alex Barthold, director of partner programs, Merit Financial Advisors ($10.5 billion) in Alpharetta, Ga.

“It's clever in that it speaks directly to the pecuniary interests of the end-client,” says Will Trout, director for securities and investments at Boston, Mass. consultancy, Datos Insights, in an email exchange. 

“It gives that client a real reason to move assets and also compensates the RIA for the pain of repapering,” he adds.

Making the move

Yet the novelty of the approach makes it hard to gauge its potential, says Trout.

“I assume ... the RIA is still the proverbial gatekeeper here, and can decide whether a shift in custody makes sense for any particular client or set of clients ... Let's see what this approach generates in terms of asset movement,” he says.

By one metric, the scheme is already a success, a week prior to its launch.

To capitalize on the offer, over 40 “large” RIAs are already in the process of moving some of their clients' assets to TradePMR, Baldwin told InvestmentNews, Sept. 24.

“Asset Match [and] our referral program that we're about to announce, has attracted 40 of the largest firms in the country ... I do expect this to be a game changer long-term for those who had a bad perception of how Robinhood entered the space,” he said.

TradePMR named four of the 40 new firms that now do, or likely soon will – following due diligence – custody assets at the firm. 

The firms include Austin, Texas roll-up, Rise Growth, which manages $10 billion; See: Joe Duran goes big on first-ever 'Rise' deal -- a $10-billion 'Schwab' RIA.

TradePMR would experience a major growth bump if up to 40 new RIA clients sign up prior to the end of the second quarter 2025, lifting client count by as much as 11.4%.

TradePMR custodied $43 billion of assets on behalf of 350 RIAs, June 30.

Folding in referrals

In a telephone interview, Baldwin says the scheme will help TradePMR work out some of the kinks for its forthcoming referral program with Robinhood, due to launch next March. See: The Robinhood to TradePMR 'bridge' is imminent.

"We’re still in the process of [building] the referral program ... and [Asset Match] will help us learn a little before that takes place … it gives us a good look at what the possibilities are,” Baldwin continues.

“We don't expect this to pull assets from Robinhood to the RIA channel ... [but] we believe [Asset Match] will help our new RIAs grow their business organically, and it could attract other RIAs competing for business.

There are also “cases with RIAs where it's not just wealthy individuals they're trying to land, it's non-profits; it's people who care about the bottom line and any additional benefits, and a lot of large accounts are created [this way],” he adds.

Breakaway benefits

It may prove to be beneficial for breakaway reps from broker-dealers and wirehouses. 

They're going to have to repaper all their accounts, regardless where they move their assets, Besheer says.

As a result, Asset Match "might be attractive to someone who’s about to break away and going to move their entire book anyway,” he explains.

“While switching existing clients can be tricky, initiatives like this create new opportunities to attract clients and may encourage other custodians to broaden their strategies in a competitive market,” he says.

“Truthfully, I don’t think there’s a better option for breakaway brokers," Baldwin says. 

"We offer all the banking services of Wells ... the natural services and products of the independent RIA channel, and this promotion helps them to make [a] decision.”

Dual custody 

Baldwin also clarified the state of TradePMR's custody and clearing arrangements with Wells Fargo, which some analysts had expected would end, once Robinhood developed its own RIA-specific clearing platform.

“We still custody at Wells Fargo, we still reside at Wells Fargo, and the new [Asset Match] money will, too,” he explains.

“Robinhood’s custody is [part of] a multi-year process for us to establish. It’s in design, but we plan on being dual custody forever … [and] we want our advisors to stay with Wells as long as they choose to,” he says.

Indeed, although Baldwin expects to “offer all the incentives possible” to RIAs to move their assets to Robinhood custody, once it is up and running, he accepts that some clients, particularly older investors, will have no interest in doing so.

“It will be a differentiator ... [because] some of today’s generation want that major bank [in] custody, and that’s fantastic, but we also have a line of advisors looking for Robinhood [custody] ... they’re in line, waiting for that,” he concludes.

Long-term offering

If successful, Robinhood and TradePMR intend to extend the program past its initial March close date, according to Baldwin.

"We want to try it and learn. I want to hear cases of benefits for advisors, and hear them tell stories of ‘We won this client, because [of the scheme].’ 

“[If] those scenarios ring true, [it will] help us continue to offer it,” he explains.

“I really feel like this is going to be the winning recipe, [so] hopefully we can continue to do this long-term.

"We’ll judge it a success on the success of advisors ... [and if] they win business based on the promotion,” he adds.