On-line brokerage Robinhood (HOOD) is rolling out retirement accounts for customers of its cellular app, a transfer that comes because the retail frenzy that made the corporate so profitable final yr wanes.
Robinhood will provide prospects a 1% match on its conventional or Roth IRAs, the corporate introduced Tuesday. Customers can begin investing on deposits of as much as $1,000 earlier than contributions settle of their accounts.
The launch brings Robinhood nearer to extra direct competitors with established brokerages equivalent to Constancy, Charles Schwab and Morgan Stanley’s E*TRADE, which have participated within the on-line retirement account marketplace for years.
Potential prospects can request to be positioned on the waitlist for Robinhood Retirement starting Tuesday and may count on to obtain continued entry within the coming weeks, however full availability of the provide is anticipated to start in January.
Robinhood benefited from a retail growth at first of the COVID pandemic as lockdowns and stimulus checks drove flocks of particular person buyers into on-line buying and selling. However because the economic system reopened and financial tightening by the Federal Reserve despatched inventory markets right into a rout this yr, the recognition of its exercise has pale.
In August, the platform introduced it was chopping 23% of its workforce, a second spherical of layoffs after chopping 9% of its full-time workforce in April.
Month-to-month lively customers totaled 12.2 million within the third quarter, in keeping with the corporate’s newest obtainable quarterly report, down 1.8 million customers from the earlier quarter.
Throughout Robinhood’s third-quarter earnings name, CEO Vlad Tenev mentioned retirement accounts can be obtainable to customers “simply in time for the New 12 months and the peak of IRA season.”
“I believe you will actually like how the product will look and add worth to prospects,” Tenev mentioned on the decision. “And we’re tweaking it and ensuring it seems nice, however we really feel good rolling it out simply in time for tax season.”
The corporate promised to roll out retirement account choices by mid-2022, executives mentioned in earlier earnings calls.
Retirement accounts will provide entry to shares and exchange-traded funds (ETFs), the corporate mentioned.
“By way of bonds and including further devices to Robinhood, we have not heard a number of prospects asking for them particularly,” Tenev mentioned on the Q3 name. “Having mentioned that, we perceive that with retirement and as we proceed so as to add extra instruments for long-term buyers who’re diversifying, we could begin to see extra feedback on this.”
Robinhood shares have been down about 48% year-to-date as of Monday’s shut.
Alexandra Semenova is a reporter for Yahoo Finance. Observe her on Twitter @alexandraandnyc
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