With Robinhood’s initial public offering, financial advisors see everything from gambling to the future of wealth management

Robinhood founders Vladimir Tenev and Baiju Bhatt ring the opening bell on the New York Floor … [+] Exchange ideas with the employees.


Financial advisors watch with interest as Robinhood prepares to go public in one of the most anticipated IPOs of the year, not as an investor but as potential competitors and doubters.

Chris Cooke, an Indianapolis-based advisor to the Cooke Financial Group of the same name, expects a robinhood effect among clients that will only grow over time. He believes portfolios full of index and mutual funds may not be alluring to a generation of investors who cut their teeth with the free brokerage app. This could lead to separate managed accounts that allow customers to better monitor the underlying stocks. Additionally, he is already seeing an increased emphasis on user experience and data accessibility, which have been key to Robinhood’s success.

“People expect to have up-to-the-minute information and a fast and effective user interface,” says Cooke. “The coming generations will fully expect this customer experience, be it with Robinhood or with a consultant.”

Cooke is no stranger to upheavals in the industry. In addition to his consulting work, he and his brother Brian were among the first users to join the RIA aggregator Sanctuary Wealth.

He does not expect a direct disruption of his business with customers between 2 and 200 million.

Cooke compares a Robinhood account with a “cash” account that he keeps with his customers so that they can invest in popular stocks through a broker. It’s more fun for clients to tell friends they bought Apple AAPL stock over a beer than to say their money manager did, he says.

While he believes Robinhood could be the place where a new generation of clients get their first taste of the stock market, Cooke expects them to knock on his door when they make more serious investments.

“There’s a number where people decide their money matters,” says Cooke. “I don’t think Robin Hood will be the winner when it comes to this type of investor.”

Michael Miller, a top advisor at Wellesley Asset Management in Massachusetts, admits that the typical Robinhood client today is young and more focused on trading than investing. However, he still believes it is possible that startup brokerage could adapt to a more serious investor audience.

“Robinhood is such a great platform for kids in their twenties, but this customer base is turning 30 and 40 and Robinhood will want to scale their business,” he adds.

Considered young in an aging industry, 38-year-old Miller knows people who have made big bucks risking businesses on Robinhood and has started interacting with younger relatives of customers who have used the app. In these discussions, he supports her limited investment experience, but praises the virtues of a more holistic financial plan.

Jeff Grinspoon, a Virginia-based top advisor to VWG Wealth Management on the Hightower platform, sees much of Robinhood’s success as the result of a seemingly endless bull market.

“When the markets rise, everyone feels smart,” he says, adding that this is a breeding ground for future customers.

Grinspoon wonders what will happen to these new, risk agnostic investors when a bear market hits, and fears that a prolonged retreat will leave them with a misguided and negative impression of the markets.

His involvement with Robinhood by younger family members has encouraged him through the newfound interest in investing but discouraged that it is about speculative investing like bitcoin and meme stocks. Grinspoon sees Robinhood more involved with online sports betting on DraftKings than with the financial planning he does with his clients.

While there is still a tremendous difference between the work of Cooke, Grinspoon, and Miller and the self-directed trading of Robinhood users, Cooke gives credit where he sees fit.

“I admire what Robinhood has built,” he says. “There’s a place for innovation, they found a niche that they took advantage of.”

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