Is Robinhood planning to move into wealth management with new acquisition?

Fintech firm Robinhood has announced a new acquisition which will give it enhanced capabilities including AI-powered investment research.

But the deal to acquire Pluto Capital Inc. may also signal a push into the wealth management space, due to Pluto’s algorithms that produce tailored investment strategies based on individual customer profiles to offer highly customized recommendations.

Pluto CEO Jacob Sansbury specifically mentioned advisory in his statement about his firm joining the headline-grabbing stock trading and investment platform.

“Robinhood is the ideal destination to build products that democratize access to financial services like wealth management and financial planning through state of the art AI. I look forward to innovating at the company which has inspired me and so many others,” he said.

Sansbury has joined the Robinhood team with responsibility for accelerating its product roadmap and integrating AI-powered capabilities throughout the platform.

“We are thrilled to welcome Pluto and Jacob Sansbury to Robinhood” said Mayank Agarwal, VP of Engineering at Robinhood. “They have built an impressive platform that is highly regarded in the financial services industry. Importantly, their expertise in artificial intelligence coupled with a mission-aligned passion to democratize finance will complement our team’s effort to bring AI powered tools to our customers.”

Along with personalized investment strategies, Pluto’s technology enables enhanced data analytics, helping investors to gain a competitive edge through the identification of emerging trends and opportunities. Investors are provided with real-time insights with AI-driven analysis.

Robinhood also recently announced its intention to acquire Bitstamp and bring its globally scaled crypto exchange to its platform.  

CRYPTO BUSINESS

The acquisitions are some good news for Robinhood following criticism of its crypto business in May.

The firm revealed that the SEC’s enforcement staff had sent a Wells notice indicating that it made an initial determination to recommend enforcement action and giving the firm a chance to respond.

“After years of good faith attempts to work with the SEC for regulatory clarity including our well-known attempt to ‘come in and register,’ we are disappointed that the agency has decided to issue a Wells Notice related to our U.S. crypto business,” Dan Gallagher, chief legal, compliance and corporate affairs officer, Robinhood Markets, Inc. said at the time.  “We firmly believe that the assets listed on our platform are not securities and we look forward to engaging with the SEC to make clear just how weak any case against Robinhood Crypto would be on both the facts and the law.”