Robinhood is launching plain-vanilla robo-advisor, an RIA that allocates with algorithms, but walks back intent to use AI and will rely on human teams to pick investments

The Menlo Park, Calif. online broker filed an SEC ADV to launch an RIA 30 days after announcing deal to buy RIA custodian, TradePMR.

Author Brooke Southall February 7, 2025 at 4:02 AM

2 Comments

Vlad Tenev is holding off on applying AI to robo-advising, for now.

Keith Girard contributed to the editing of this article.

TradePMR

Robinhood

Pete Giza

February 7, 2025 — 3:36 PM

It will be some time before AI will play a significant role in RIA investing. It's far too error prone. This is not to say it is not being used at other steroids along the way to the market by custodians and trade execution. But no RIA, semi-automated robo-advisor inclusive will take the risk AI will get it right. Even if AI were 99.999999% accurate which is probably far better the human trader record is, people aren't ready for it. It's early yet. Sit in the cat bird seat for a while and watch the pretty AI lights flash like a Vegas slot machine. Eventually they will come up with something that is a trustworthy research "agent" 😂😎 -pete

Brian Murphy

February 11, 2025 — 11:27 PM

I agree 100% w/ Peter...AI is not ready for prime-time yet as it pertains to research of individual investments and portfolio construction. My personal belief at this time is that it will become a viable research tool for individual securities first, but augmented with more formally designed portfolio construction/risk analytics algorithms that allow the advisor an opportunity to oversee the recommendations of AI. I'd suggest that AI's first foray will be "top of the funnel" (like screening tools used today) and then evolve to encapsulate additional chores. But, then again, what do I know?

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