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Synergy25 Live Series - Episode 01 - Democratizing Wealth Management
17 Plays3 days ago
Historically, trading was a game of survival of the fittest, where the largest and loudest dominated. Access to investing tools and advice came at a cost, often leaving millions on the sidelines.
So Robinhood’s mission was born: “Democratize finance for all.”
In this first episode of the Synergy25 Live Series, Bill Coppel, Director of Client Growth at TradePMR, and Ryan Neal, Senior Editor at TradePMR, sit down with Vlad Tenev, Chairman and CEO of Robinhood Markets, to discuss the past, present, and future of wealth management.
Listen as they explore:
- Robinhood’s three-arc strategy for reshaping the wealth management landscape
- TradePMR’s role in driving this transformation
- What democratized finance means for clients and advisors – now and in the future
Recommended
Transcript
Introduction and Robinhood's Impact
00:00:06
Speaker
Hi, I'm Bill Capelle, Chief Growth Officer for TradePMR, a Robinhood company. And I'm Ryan Neal, senior editor at TradePMR slash Robinhood. And you're listening to the Synergize podcast live. We're at the JW Marriott here in Tampa. It's real hot outside, but cool in here.
00:00:24
Speaker
We're at the Synergy 25 conference where we had a chance to sit down with Robinhood co-founder and CEO Vlad Tenev. So for those of you that couldn't make it to the conference this week, we're excited to share some of the conversation that he shared on stage with Rob about transforming the financial landscape.
00:00:40
Speaker
That's right, Ryan. From serving active traders to becoming a financial hub for the next generation, we'll explore Robinhood's 3Arc strategy and how innovations in tokenization and AI are likely to shape the future of wealth management.
Vlad Tenev's Motivation and Transition
00:00:56
Speaker
So, Vlad, welcome. Thank you for having me, gentlemen. Excited to be part of the part of the group here. Yeah. It's an honor to have you ah with us. So I'm going to flip it over to my partner to kick off our conversation. I saw what you did with the title there. They're our chief growth officer. you're all right You're already using it. I love it. yeah So for for our viewers, this is my ultimate boss, and he just allowed me to change my title. So why not take advantage of it? Don't look a gift horse, as they say.
00:01:25
Speaker
Well, I guess where we could start is, you know I've been following Robinhood for a long time as a tech reporter, way back from like the Finnovate days back in San Francisco. um And I'm curious, where is the drive to move beyond DIY investors, DIY retail investing to the advisory world and start building into the wealth management
Algorithmic Trading and Innovations
00:01:43
Speaker
space?
00:01:43
Speaker
Where does that come from? I think that, you know, as a... ah creator and company builder, what drives me ultimately is figuring out new stuff.
00:01:57
Speaker
Sure. It's, you know, I started my career as an academic. I was an aspiring mathematician. So I went to get my math PhD at UCLA. And the reason that I wanted to do that was,
00:02:10
Speaker
I got into math through physics. The reason I got into physics was i cared a lot about answering the big questions. Why are we here? What happened before the big bang?
00:02:21
Speaker
And i think company building is another expression of creative energy. I think it's important for society. Any successful company has to solve a big problem.
00:02:36
Speaker
But I think the act of expansion and company building itself is motivated by a desire to figure things out, ah engage with new customers, figure out how customers can ah derive more value and use for for my products.
Democratizing Finance Globally
00:02:52
Speaker
And I think that naturally lends itself to being a little bit more dynamic, moving, learning new things, launching new products, expanding to new businesses. um I think I would just be much too bored if it if it was just optimizing what we already have and making it you know incrementally better. Sure.
00:03:12
Speaker
I couldn't agree more. I mean, you know I've been in the business for a while and it was ripe for disruption. And so when you think about the motivation that you had to start Robinhood, which was obviously you parlayed your intellectual capabilities, particularly around math and engineering to get into, I think it was al al algorithmic trading. That's right. Yeah. High frequency algorithmic trading. Right.
00:03:41
Speaker
And what did you discover after you were in there and you realized the dichotomy between what you were able to do and what the general investing public was able to do? I think that when I grew up and i imagined what trading was like,
00:03:58
Speaker
I thought of trading places. You know that sure Eddie Murphy, Dan Aykroyd movie. Great movie. Amazing movie where they were trading ah orange juice and pork belly futures that's right in in Chicago on the floor.
00:04:15
Speaker
So back then, you know trading involved exchange of paper tickets. And in a lot of shouting. A lot of shouting. And the people that would do well were like these big jock, like former football player types.
00:04:29
Speaker
Because if you're literally towering above the other people in the pit, your ticket's gonna be exchanged more readily.
Wealth Management and Partnerships
00:04:37
Speaker
And I was there. So algorithmic trading really took off.
00:04:42
Speaker
during and after the 2008 global financial crisis. And it was a huge disruptive force, mainly in the in the institutional market. I mean, entire teams and trading desks at the big banks were disrupted and I'd say eventually ah subsumed by technology. And if you go to the floor of the New York Stock Exchange now, you'll see the CNBC broadcast, right? Jim Cramer is there doing mad money.
00:05:11
Speaker
there's There's relatively few people that are trading. All the action happens in data centers across the Hudson River there. And So how I was able to parlay, as you as you said, my mathematics knowledge ah to to trading and the big surprise that that I found is I thought that this was this this manual thing, but by the mid 2000s, all the exchanges had APIs.
00:05:38
Speaker
And the big surprise was I could just read this API and it's right here, the instructions for how to interface with the trading engine. And then it turned into almost a math problem.
00:05:52
Speaker
and And the bet that we made was if we built the fastest system, like if we actually minimize the latency between ah when you could process an update to a stock quote or you know volume or some other market data signal,
00:06:08
Speaker
and when you could respond with a trade, if you could actually minimize that time and that latency, ah that was that was essentially the, you could build a big business because that was the name of the game.
00:06:19
Speaker
And so we could kind of distill success to that one metric, which which we called the tick to trade latency. And so we were able to actually turn our mathematics knowledge into
Technology and AI in Financial Advisory
00:06:30
Speaker
a useful product.
00:06:31
Speaker
And then that ended up being useful for Robinhood as well. because that directly translated, so so building low latency trading software and the type of automation that would be necessary to replace a large trading desk with software actually is the same fundamental innovation that is required to optimize and improve a giant you know brick and mortar brokerage and turn it into a nice smooth mobile app that lets you process trades at no commission.
00:07:07
Speaker
So that directly led to the zero commission revolution, which not only lowered trading costs for our clients and advisory clients, but changed that industry-wide for hundreds of millions of of investors at this point. And hence the birth of the mission to democratize investing for all, right? So you were essentially- It's even even broader now. It started out like that, but now it's democratize finance for all. Finance. ah Yeah, actually- i don't want i don't want to lose points for that now.
00:07:38
Speaker
No, no, no, it's okay. It actually, it used to be democratize America's financial system, but- Yeah, we we made a broader across two axes. ah Obviously, it's much more than investing and we want to be the place where ah customers can buy, sell or hold any financial asset or conduct any financial transaction. And we want to do that for ah customers everywhere, not just in the US.
00:08:04
Speaker
It should be retail everywhere and advisors in business and institutions as well. and And I understand we just started in the UK yesterday with- We- we've been there. Robinhood Legend in the UK yesterday. Legend was there. rob Yeah, which is our active trader offering.
00:08:22
Speaker
Right. So now how does Trade PMR fit and into this ah goal now, this new goal, democratize finance ah for everyone? You know, obviously you guys probably could have gone a lot of routes with your expansion into the the wealth game and serving RAAs. So why Trade PMR and how do we how do we fit into the broader picture?
00:08:42
Speaker
Trade PMR fits into but the plan in two different ways. And that's really why we got so excited about the partnership with ah with Trade PMR.
00:08:54
Speaker
One is particularly as customers get a little bit older and you know they get into older millennial like you and I. yeah and you know, if if you're getting a little bit of wealth, your finances are getting slightly more complicated.
00:09:12
Speaker
You're starting to think about things like trust in estate, your will, ah life insurance. Your taxes become a little bit more complicated. You start getting a bunch of kids and you have to figure out, you know, what's going to happen with your money.
00:09:27
Speaker
um ah human advisor is becomes necessary. it's It's not only a luxury, but it comes it becomes a necessity.
00:09:38
Speaker
And you know we we saw the limitations of what we currently had, and we recognized that we need to actually have a solution to allow ah customers to get their money managed by an advisor who can give them a more comprehensive, holistic service.
00:09:56
Speaker
More like family office, but democratized. And the idea that ah anyone can have the same type of family office experience that a high net worth individual could have, um to me is almost like the purest ah encapsulation of what democratizing finance for all could mean.
00:10:18
Speaker
Because wealthy people have a lot of services, they pay a lot of money for them, they have people that can handle all of their finances for them.
00:10:29
Speaker
And if we can if we can use technology to provide that to the mass market, ah serve more of our customers' wallets as they get older and and more wealthy, that was exciting.
00:10:42
Speaker
And then also, advisors as a customer base is interesting to us because advisors are entrepreneurs. Many of our best retail customers are entrepreneurs as well.
00:10:53
Speaker
And, um, Helping more people start and scale their businesses, I think is just, ah yeah, it's it's just been a passion of mine for a while. I do that on individual basis, but if helping advisors grow their businesses, get more ah incremental AUM onto their platforms, increase revenue per hour worked, yeah, those those are all exciting problems that that I think I can help advisors solve.
00:11:24
Speaker
um Let's take a step back, Lad, and talk about the three arc strategy of Robinhood. And I think that'll fit nicely into this conversation because it's going to touch on those things that are really reshaping yeah what I believe to be wealth management globally.
00:11:41
Speaker
Yeah. So ah our strategy can be described as three arcs. I call them arcs because ah they actually overlap with one another and kind of compound and synergize with with one another, no pun intended. Hey, that's why they call it that.
00:12:02
Speaker
Yeah, so ah or we have a short-term arc which reaches its climax basically over the next year. We're kind of in its climax right now in a sense.
00:12:14
Speaker
ah sort of a medium term five year arc and then our long term 10 year arc. And we're making progress towards all three simultaneously. So I think when a lot of companies describe their strategy, it's like, this is what we're gonna do now.
00:12:27
Speaker
Five years from now, we're gonna do something else. 10 years from now, it's gonna expand to do this. But the reality is you have to plant the seeds for what you wanna be in 10 years today, right? You can't you cant you can't put that off And so arc number one is being number one in active traders. So basically ah ah being the best platform, the platform of choice for anyone who actively trades.
00:12:53
Speaker
Arc number two, number one in wallet share for the next generation. So in short, if you're a millennial or Gen Z and beyond, we want Robinhood to be the place where you can custody all of your financial assets and conduct all of your financial transactions.
00:13:07
Speaker
Arc number three, which I think builds off of the first two, is how do we take the technology we've built and the products we've built during the first two arcs and expand it from u s primary to fully global and from retail only to ah business and institutional. And if you notice, TradePMR fits into arc number two and number three because it helps us get more wallet share by providing advisory services to our retail investors.
00:13:39
Speaker
But it also expands the infrastructure and the offerings from being retail only offering to also serving advisors. um which which is which is an expansion because like I said, these are businesses, entrepreneurs, they have a lot of the same goals.
00:13:57
Speaker
I mean, I saw in the the earlier presentation that a technology entrepreneur would would have. Sure. They want to make more revenue. They they want to keep their employees happy and you know loyal staff that is long lasting is important.
00:14:12
Speaker
And they want to be efficient and keep costs low and utilize all the existing technologies in an effort to achieve that. yeah So I know that you're probably just getting into it, learning advisors business and the technology they use every day and all that stuff, but can you give ah where you're looking to improve the the infrastructure or technology that advisors are using?
00:14:32
Speaker
Any ideas, um whether it's AI, helping them with workflows or onboarding, anywhere specifically that you're excited about to to get in there and and improve things for advisors?
00:14:43
Speaker
Yeah, I think actually, ah i look at the things that Robinhood already offers to retail. um and And the two big ones are lower fees and a nice mobile interface.
00:14:59
Speaker
And I think if you look at the advisory market today, if i have an advisory relationship with an RIA that uses one of the legacy custodians, ah the experience of actually looking over your portfolio and managing your financial life, particularly on mobile,
00:15:24
Speaker
is is very, very poor. So I think step one is actually making a delightful experience on mobile yeah where the end customer can plug into the advisor and see what's going on, have that transparency around fees and actually what's happening.
00:15:41
Speaker
And the advisor should be able to make that happen for for customers. and also take advantage of mobile real estate to establish a really nice connection, both messaging and also marketing.
00:15:56
Speaker
So we we showed a demo yesterday of what this could look like in its first instance. The audience was very excited, by the way. There was a buzz in the crowd. Yeah, and and we wanted to make it as as real as possible. So Abhishek, who's the product lead for our brokerage business and is like overseeing the product side, ah we had a debate over how much of the guts should we show? like Do they really need to see all the disclosures?
00:16:22
Speaker
um But yeah, we wanted to show as as realistically as possible at this stage what it would look like to incorporate advisors into the retail experience.
00:16:33
Speaker
And of course, I think if if people can see it, hopefully it'll it'll get the advisors and and retail more excited to ah and and and it'll increase the speed at which we make it happen.
00:16:48
Speaker
but But yeah, i think I think a really nice mobile experience for advisory is sorely lacking and together we can help deliver that. Well, what I think is important, and I've heard you talk about this before, Vlad, um and I know our listeners will appreciate this. Obviously, Robinhood, I would say, is a technology company at its core.
00:17:08
Speaker
What you've been able to do to change the trajectory of certainly high-frequency trading for individual investors, but as you move deeper into the financial space, as you put it,
00:17:22
Speaker
um begs the question of the value of the intermediary. Is the advisor going to continue to be relevant in this business as technology continues to further influence how we manage wealth, not only here in the United States, but around the world?
00:17:39
Speaker
As far as I can see, the answer is yes. And i think all of us, me me certainly grapple with ah these existential questions of, well, these AI models are getting smarter and smarter. you know OpenAI's model is at a 130 IQ, um which is in excess of the average individual. So, you know, over time, is it going to be the case that like our our jobs are affected by this technology?
00:18:12
Speaker
And me too, you know, it's like, will AI be eventually more of an effective CEO than a human? So will I be replaced by by some super intelligent AI that's just better at interfacing and setting goals? and ah That's one step from Skynet, man. I don't know.
Cryptocurrency and Financial Services
00:18:31
Speaker
Yeah, so I think there's these existential questions of like, well, what happens if ah you know AI gets so good that eventually all all work is being automated?
00:18:41
Speaker
And i think I think that's a tough one, but what I tell you is um people have been trusting human advisors for managing their money for like thousands of years, right?
00:18:56
Speaker
um And I think to some extent that explains the sort of like limited penetration of pure digital advice only offerings into the space.
00:19:09
Speaker
mean, digital advice offerings, like your wealth fronts came out ah over a decade ago. i mean, close to 20 years ago at this point. right And traditional human advisors have been ah have not only been larger, um but have have actually seen a tremendous growth rate as well.
00:19:33
Speaker
So ah there's there's something resilient about engaging with humans. ah so So I think it's, it's it's unlikely for that to be replaced by machine in the same way that I think any relationship.
00:19:47
Speaker
um there's There's talk about will people still have girlfriends in 10 years or will the AI fill that fill that goal? And um I'm skeptical.
00:19:58
Speaker
I think- Maybe for some folks. and Maybe for some folks. I mean, it could help democratize it for folks that are having trouble. But I think there will always be- Yeah, there there will always be a need for human advisors that that can help manage money.
00:20:14
Speaker
And I also think like it it's likely to get more competitive. I mean, other advisors are gonna use AI technologies to grow their businesses. It's an inevitability that that'll happen.
00:20:26
Speaker
And so, Probably competition for serving clients will intensify a little bit. client Advisors that are able to use AI more effectively are at at the front of the curve.
00:20:38
Speaker
We'll be able to increase incremental AUM, increase revenue per hour worked relative to their competitors. And at the end of the day, the end customer will benefit.
00:20:50
Speaker
Just like they did with Robinhood removing commissions. right I mean, the brokers... probably did not like that to begin with because commission revenue was a decent chunk of the revenue of the business that affected their margins.
00:21:05
Speaker
um But you know the client benefited and those who were able to adapt, ah not just Robinhood, but you know the technology forward discount brokers are bigger than than ever as a result of this this technology shift. Right.
00:21:21
Speaker
Well, it's good to hear. and i and I think that's one of the myths that we wanted to you know kind of dismiss here is that this isn't in place of. But what you're talking about here is The ability for us to deliver to an end client, either directly or through their advisor or a combination, a full picture of their financial profile and help them manage the stress and anxiety and friction that exists in the system today by removing it, leveraging technology, which leads me to this.
00:21:52
Speaker
We talked at the top of the conversation about two things, tokenization and crypto. um Robinhood's taken a ah leap forward in in in that space.
00:22:05
Speaker
Share with our listeners your view and vision for how this will play out in clients' lives, portfolios, and how we even transact down going forward.
00:22:16
Speaker
Yeah, yeah. um Yeah, these are frontier technologies. They're two technologies that are fundamentally reshaping financial services and it's cryptocurrency and artificial intelligence.
00:22:30
Speaker
And basically, Our job as as product builders is to abstract the details from the customer. You shouldn't have to know you know what AI models we're using under the hood or whether you know your your money or stocks are tokenized or held in street name or any of these details that people don't I think, don't really care about, but you should get better service at lower cost.
00:23:02
Speaker
And so tokenization, You asked the question of how that's gonna affect an end client. And one of the most direct things, and we can look at two sides, ah the trading side and the advisory side.
00:23:17
Speaker
I think on the on the advisory customer side, ah it'll make it so that the private assets, the alternatives, the illiquid assets,
00:23:28
Speaker
actually pretty much turn liquid. So we see a world where once you put private stocks, real estate, ah other alternatives, perhaps private credit,
00:23:42
Speaker
um on blockchains, they become tradable just like stocks. So what that means is you'll get an accurate mark to market price, real time portfolio view of every asset you own, not just your stocks and bonds that that trade every day, but every asset.
00:24:01
Speaker
And also, um yeah, you will, ah Yeah, you will you will you will get access to 24 seven liquidity and fractionalization.
00:24:13
Speaker
Things that are very, very hard for traditional ah financial services. i mean, we've done a lot of work to make twenty four five equities trading available through traditional means. That's 24 hours a day, five days a week.
00:24:26
Speaker
Yeah, but still not open on Saturdays, not open on holidays when a lot of things happen. And you look at blockchain technology, there's a reason why crypto assets trade 24-7 round the clock and are fractional by default. It's because they're at the technological frontier.
00:24:44
Speaker
But customers won't care that it's crypto powering it. They'll just like the fact that they'll get mark to market immediate real time pricing. They'll be able to get in and out of positions seven days a week.
00:24:57
Speaker
ah And it'll just be a modern technology experience, just like using any technology native products is. you don't You don't expect your Uber to stop working at 6 p.m. on a Saturday. um yeah so So why should your financial advisor or your broker?
00:25:16
Speaker
That's great. So it's gonna effectively really reset what it is to be a custodian at a point in time where blockchain becomes more prevalent within our industry. Yeah, I think it'll it'll fundamentally transform the custody industry for sure.
00:25:30
Speaker
Well, Vlad, I think we'd love to have you. we've probably got lots more questions we can then ask you, but we're gonna move to wrap it up. I've got one kind of curve ball, and if you wanna cut this, my team can, but I've gotta ask, what was it like to be played by Sebastian Stan?
00:25:44
Speaker
Do you get asked that a lot? It's been a while, but he's a very good looking guy. um So i realized that after that movie came out and granted it didn't see it it didn't do very well. I was disappointed that ah that it was like pulled from theaters pretty quickly after a short run.
00:26:04
Speaker
But Sebastian Stan has all of these fans and I think it's like, ah Yeah, I mean, they they like- Are they the Yeah, Stan's got Stans.
00:26:16
Speaker
And ah there's like communities of people following him on social media and reposting videos. And so the movie definitely, catered to those fans by, i don't know if you guys have seen it. have not, no. But a lot of it takes place in the bathroom.
00:26:34
Speaker
So the scenes with Sebastian Stan ah playing me are him getting out of the shower, like shaving, shirtless. So I'm like, man, i or he's like he's like worked out and he's like ah making some kind of smoothie.
00:26:49
Speaker
It's always him and yeah shirtless, essentially. That's kind of weird. So I'm like, man, really was not very reflective of how I dealt with all of these situations. I'm not like, you know, yeah in the bathroom calling calling ah the compliance and the in the regulatory folks.
00:27:07
Speaker
But, um you know, it
Pop Culture and Podcast Conclusion
00:27:09
Speaker
it was good. I think he got my mannerisms right. But by and large, the total account was was fictional. Sure. Absolutely.
00:27:18
Speaker
Entertaining anyway. Yeah. At some level. Well, Vlad, thank you very much for us yeah taking some time to drop by and and share with us. Thank you, gentlemen. Yeah, keep keep cranking, keep synergizing.
00:27:29
Speaker
yeah We hope to get you back. I would love to be back. Good deal. and for everyone listening, we hope you enjoyed today's conversation. If you like what you heard, just take a minute to like, subscribe, share, comment, all those good things. It helps the algorithm.
00:27:44
Speaker
And follow us on social media to catch the next episode. And watch for that next episode where we'll bring you even more actionable ideas and insights to help you grow your business. And remember, the challenge is yours to capitalize on what the future offers.
00:28:00
Speaker
This special episode of the Synergize podcast was sponsored by. Built for efficiency, designed for opportunity. AdviseOn is a transformative all-in-one platform that helps simplify advisor tech and modernizes the way you connect with clients.
00:28:17
Speaker
With a single source architecture, our unified platform is designed to bring portfolio management, reporting, billing, CRM, client portal, and more into one seamless experience.
00:28:28
Speaker
It's everything you need to help create a more personalized relationship with your clients and communicate more effectively without the chaos of disconnected tools. Discover more at AdviseOn.com.
00:28:39
Speaker
Trade PMR and AdviseOn are unaffiliated companies.
00:28:44
Speaker
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00:30:08
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00:30:24
Speaker
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00:30:37
Speaker
If you want to join the conversation or connect with us, please visit us at synergizepodcast.com. This content is provided for general information purposes only. The views expressed by non-affiliated guest speakers are their own and do not necessarily reflect the opinion of Trade PMR or its affiliates.
00:30:55
Speaker
Trade PMR and its affiliates do not endorse any guest speakers or their companies and therefore give no assurances as to the quality of their products and services. This channel is not monitored by Trade PMR. Trade PMR does not provide investment advice, tax advice, or legal advice.
00:31:11
Speaker
Trade PMR is a member of FINRA and SIPC. Trade PMR Inc. is registered with the Securities and Exchange Commission, SEC, and the Municipal Securities Rulemaking Board, MSRB. Trade PMR provides brokerage and account services to registered investment advisors. Custodial services provided by First Clearing.
00:31:29
Speaker
First Clearing is a trade name used by Wells Fargo Clearing Services, LLC. Member SIPC, a registered broker dealer and non-bank affiliate of Wells Fargo and Company. Copyright 2025, Trade PMR Inc. For a transcript of this episode with sources, visit synergizedpodcast.com.