Gen Z. A new report shows that generation is leaning on their parents for more financial help.
Can we actually make broad ownership a reality? A future with relatively few owners is inherently fragile. We're building a financial super app.
Are you setting them up in a situation where the odds are stacked against them to actually make money?
A lot of people criticize us because they think we incentivize active trading and prediction markets. That's when you can kind of get into trouble.
Get this. The richest 1% controls more wealth now than at any time in more than a half century.
Alarm bells have started ringing. There's a small circle of wealthy insiders that's benefiting from all the growth.
How much has AI changed the game?
Humans overseeing agents, seeing how many you can actually employ, including when you're sleeping.
So, do you think though with Robinhood eventually you could have just a few people running the entire company? Um, it's that's just dangling the carrot, huh?
Vlad from Robinhood. Thank you so much for coming on the Iced Coffee Hour.
Great to see you guys again.
Last time you sat here, you still drove a used car. Since then, your app Robinhood has grown 125 billion with a B in assets under custody, which is 50% in one year. Today, Robinhood stock is up 3%. Which some people are like, 'Oh, 3% whatever, whatever, whatever.' Maybe I'm up $3,000. You're up $150 million or whatever just in one day. I have to know, are you still driving a used car?
I can afford a new car now. No. Uh yeah. Uh I had a used 911 Turbo S last year. It was kind of a holdover because I had ordered a new GT3 which is a very fun car and so now I drive that. So I have a GT3 Touring manual transmission. The thing cooks.
Do you have a long commute?
No, not too long. I mean much shorter now that I got this new car. Uh yeah, anywhere from 10 minutes to 20 minutes depending on traffic.
Now, when you walk into Porsche, do they just give you any car that you want, or do you have to kind of play the game a little bit to work your way up?
A lot of brands reward loyalty. So, if you're loyal to a particular car maker or a dealership, they take care of you. And not a lot of them just, I mean, some do this differently, but I think for a lot of them, they do actually value loyal customers relative to just a random famous person reaching out to them who wants something. So to answer your question, I don't think it has helped me very much. I kind of had to wait over a year just like everyone else.
So as the CEO and founder of Robinhood, if not the stock price, what is the metric that you obsess over every day?
I don't think there's one metric really because I mean Robinhood works on many things. We have lots of businesses. Increasingly, my job is kind of I have folks that effectively function as CEOs of their businesses reporting to me. And if I had to think about what idea or what concept is associated most with Robinhood, what we can own, it's really ownership. This idea of a world or a future with relatively few owners is inherently fragile and can we actually make broad ownership a reality. Can we make it so that you know more people own equities and also all the other assets around us. So one thing that I have been talking about recently is percentage of households in America that own equities. So right now that's something like 65%. Before Robinhood came along it was in the low 50s. So I think we meaningfully contributed and now the question is can we get to 95% plus which I think with initiatives like the Trump accounts with our work on private markets it makes that increasingly likely and can we also force the rest of the world to catch up which is where things like tokenization come in. Can we actually make it so that it's really easy for the best stocks and other real world assets from the US to be distributed globally so that everyone can kind of benefit from all the great work we're doing here?
Now, how much of that though is an ownership problem, an education problem, or just a most people don't have enough money problem?
Yeah, that's a problem too. Most people don't have enough money and I think that's where forced ownership or default ownership has been really impactful. Like one of the things that really moved the needle in the US was the employer sponsored 401k where if you have an employer and they have a 401k program effectively it's like free money to participate and get the employer salary match and that by itself moved ownership by tens of percentage points and now you see countries all over the world trying to replicate this. Trump accounts as ownership by default too. Every single child born in this country gets $1,000 funded by Treasury. And then now you're seeing philanthropists like Michael Dell, Ray Dalio sponsoring their states. Michael Dell obviously is a much bigger sponsorship where he targets lower income zip codes all over the country. The solution to a lot of people not having enough money is making it by default and having sort of like these employer and government sponsored programs coupled with philanthropy to help the ones that are kind of living paycheck to paycheck or have less means to own stocks as well.
So in order to grow $125 billion in assets under custody in one year, I mean that's just honestly unfeasible. Like I can't even imagine that that is congratulations on the success. I'm curious. You can't just say okay well we're going to grow in assets under custody. Like there's and then grow like there are certain things that you have to do in order for that to ensue. And so I'm curious what are the things that like the main things you focused on that have made that big of an impact on your company.
Well, we have sort of three ways that we're furthering ownership and really what assets under custody is is a measure of how well we're succeeding. If more assets are on the platform, then that's more things that people are owning. The first thing is serving our active traders. Active traders still very much the core of the business. A lot of the asset growth is just people bringing in money so that they can trade different things. So if we make the assets that we offer great and if we have a great options trading experience, great equities trading, we've added futures more recently and prediction markets as well. People will bring in money to trade and they'll tell their friends about it as well. So we've seen a lot of growth there. And you know, you can also look at our market share across all of the core assets, the volumes. We hit lots of records in Q2 which we just reported on, you know, record in equities trading that's really the engine right, equities is our core business what we started with and you know last quarter people were trading more equities in Robinhood than back in 2021 when we saw GameStop which was also like a crazy high period right so organically through compounding of our business we've exceeded that sort of like peak options trading all-time high. We're now the top options trading platform in terms of retail market share. So, we've surpassed all of the incumbents who keep just combining with each other. So, the task at hand gets harder, but we've crossed over into number one in options. And then futures and prediction markets have been super high as well. So, I'd say that that's one bucket.
The second bucket is just how can we be your financial home for life? So it's this idea of lifelong ownership. Can we get someone from when they're born to teenage years to college, first job, when they have kids, can we help them with all their financial needs as well all the way through to like an inheritance event. So we've been building things to fill out that entire life cycle. Trump accounts and custodial being a great example, but also recently we've added trust accounts which make it really easy to if you have a trust onboard into Robinhood. We've got joint accounts, so if you have a spouse or partner, you can bring them into Robinhood as well. And Robinhood banking has been huge there. That's been scaling really really rapidly. Billions of assets, really high direct deposit attach rate. And that's really about can we get someone to put in their paycheck into Robinhood? And that allows us to help them do things like how much of your money should go into retirement, how much should go into your self-directed taxable brokerage account, how much should go into strategies. So, it's kind of been putting together all the pieces so that we can actually serve all of your financial needs and that if they're at Robinhood, you benefit rather than having them dispersed among lots of other banks and kind of siloed.
How much of that is just the deposit bonus where I see crazy bonuses like 3% on crypto, 1% for retirement accounts? I think I've even seen one and a half percent on something.
The deposit bonuses help, but it's a minority of it. I mean I think we share numbers on you know what percentage of AATS for instance come in via deposit incentives versus otherwise and you know it's a good chunk of AATS activity but still AATS is kind of a minority of the overall money moving in and out of the platform.
Congrats on launching the AI investing. As soon as I saw you guys launch that I was looking over Twitter or X and I saw it everywhere. Everyone was talking about it all over Reddit. Congrats on that. That I felt like was a huge leap forward in terms of what brokerages are able and willing to do. I'm curious, how does a deal like that actually come to fruition and with AI investing agents? Are people actually making money?
Yeah. Um, so we don't really have a partnership per se. Um, basically I think what you're referring to is we launched two things, Agentic trading and a Agentic card. And what that allows people to do is if you have your Claude Code or your Codex or your other AI agent, you can access the Robinhood tools. And the idea is anything that you can do on your phone with Robinhood, you should be able to have your AI agent do through kind of the paved path of the MCP server. So, we launched with equities trading. And since then, we've expanded into options. We've announced crypto, so that's coming soon. And we keep adding little tools here and there, like recently, we rolled out the ability to see your tax lots. So for those that can use AI agents and are reasonably sophisticated, it gives you kind of the power of Robinhood at your disposal.
And what data are you seeing with people that are using AI agents to invest? Like are they making money? Are they losing money? How like how does that work out with broad data?
I don't really look too closely at their returns. Um but we're getting a lot of people trying it out. Uh we've had over 100,000 people actually create Agentic accounts and they're driving decent volume and they're doing really sophisticated things like you know they're pulling together all kinds of data sources from all over the internet and kind of combining it into strategies. I'd say my background is from algorithmic trading. So before I started Robinhood, I would write trading strategies and it was an incredibly challenging thing because you'd have to be a programmer. You'd have to worry about all sorts of things and you needed really deep integrations with legacy financial companies to even get access to the markets because back then you couldn't trade through a normal broker. They were charging you $10 every trade. So, I think what's happening is it's making that power, the ability to trade algorithmically much more democratized, but there's still challenges. For example, sometimes these agents themselves aren't optimized for trading. They'll tell you, 'I don't want to trade right now. I don't think this is a good idea.' And then you really have to work hard to make sure it does the thing you want to do.
Well, what if it's trying to save the person from losing money and it just sees something, it's like, 'Hey, this is a bad trade.' Most of the time when they don't trade, it's not actually for that reason. I think it's just doesn't want to. It just doesn't feel like it.
Yeah. It just doesn't feel like it.
Didn't have coffee that morning.
Yeah. It's like, you know, I recommend that you actually open up your Robinhood app and put the trade in that way. Yeah. Because I don't think that trading activity is in the training data. Like you don't have Agentic trading traces like you would programming traces. So this is just a new thing that hasn't been done before.
Given the way things are going though, do you think eventually financial advisers are going to be obsolete? And really quick, I just got to say that if you're running your business out of your personal bank account, you are one bad client away from a real problem. We're talking your personal savings, your home, everything you own is on the line. That of course is why we're partnered with Northwest Registered Agent. For $39 a month plus state fees, they form your LLC and make sure you're actually protected. You get your state filing, operating agreement, membership certificates, and banking resolutions. All the paperwork that makes it official. Once you're an LLC, your personal assets are generally kept separate from whatever happens in the business. Plus, with Northwest's free identity services, you get a domain, website, email, phone line, brand protection, and mail forwarding, all included, so your business looks like a real company from day one. And Northwest uses their own address in your filings instead of yours, so your home address never goes in public record. If you've been running your business out of your personal accounts for too long, it is finally time to fix it. Just go to northwestregisteredagent.com/ic today to get started. That's northwestregisteredagent.com/ic or click the link down below in the description to get your LLC filed. Thank you so much to Northwest Registered Agent for sponsoring this episode. Given the way things are going though, do you think eventually financial advisers are going to be obsolete?
Um, I think there's always going to be some need for humans. Um, like a financial advisor provides very different services. It's kind of like a concierge to you, right? And it's someone that is responsible and can help you make life decisions. A lot of people have financial advisers and they're like almost a member of the family. I think in that sense some people will always want a human. I don't know if that type of like close emotional relationship is going to be replaced by AI. I think right now people are using AI to sanity check certain things and you know they say okay is my adviser are they telling me something that makes sense but there's like a human need that makes it really really hard to trust machines for everything because at the end of the day you want someone to be responsible and I think it's hard to have the AI take responsibility. In fact, you know, if you can own something, if you're a fiduciary, it's a different bar. So,
Yeah, but even if someone is held responsible for something, it doesn't necessarily fix the actual problem if they make a mistake. Like, I've had mistakes made before for myself. And it's like, yeah, they might make a problem, but then actually correcting that problem is more work than just dealing with the problem.
Yeah. I mean at a certain level you're always responsible for your own financial decisions even if it's like hey I've hired this adviser I choose to keep working with them so it's my responsibility as well.
I think still a lot of people just don't want to think about it. You know you come across a lot of people and a lot of them have made money and they say I just want to spend very little of my time thinking about finances and they're probably not going to prompt a Claude agent or OpenAI. They just want a person that takes that entirely off their plate.
I think the more likely scenario is you'll see fee compression in that industry. You'll see fee compression because basically for a while there have been two models. There's been kind of robo advisory, which is asset management, but you don't actually have at your disposal the full comprehensive estate planning, financial planning, tax planning. It's just very siloed toward financial advice and investment management. And then you have full service financial advisers that kind of take over. They're a person that abstracts all of your finances, including budgeting and spending for a lot of people. And you know the robo advisor market has kind of consolidated around something like 25 basis points of your assets. So a quarter of a percent of all of your assets are charged as fees typically. Some are more, some are less. And full service financial advice has been in like the 1% plus range. And if I had to guess, probably there's some middle ground where on average as more AI tools come in and start to blur these two. I think it'll probably consolidate to somewhere in between.
Really quick, I got a fun story here. I uploaded my entire portfolio to Claude about a week ago and I said, 'Rate my portfolio. Tell me everything I'm doing wrong or any improvements.' It gave me a whole list and believe it or not, it saved me $16,000 a year after tax because it said one of the funds that I was holding was paying a slightly higher expense ratio than a near identical fund that I could buy from Vanguard. Yeah. And it said if you sell this fund, you could realize it was a very small loss. Realize this tax loss, move it into this other fund that has a lower fee, and that fee works out to $16,000 a year. I did it. I mean, I researched myself in addition to that, but that pointed in the right direction. It's like, wait a second, that's such a no-brainer. I didn't think of that. I just wasn't paying attention. There you go. 16 grand a year saved.
Yeah. And I think for a lot of things where it's really clearcut, it's super super useful, right? Like yeah. If you have a fund with a high expense ratio and there's a similar fund with a lower one, of course, that's a straightforward one. Or, you know, if you've got cash in a savings account earning 0% and there's this other account here that can get you north of three, of course, the rational thing is to move all of that cash. A lot of that doesn't even need AI to be honest. It's just a very very simple algorithm to just see, you know, if you have funds that are underutilized and can be moved elsewhere. So, a lot of our investors ask us about this like cash sorting AI idea, which is, you know, is in the future is the AI just going to move your cash to places that have high interest? Um,
Oh, eventually you'll lose track of that. Oh gosh, imagine if it just
Well, my thought is that's not even AI. You can just have a screen that says, well, and we try to do this. Hey, we offer 3.5% APY. you could be making incrementally tens of thousands of dollars per year just by doing this. Um, and despite the fact that those products exist, people still like their legacy banks and, you know, banks still have trillions of assets that are earning almost zero because, you know, the inertia and the strength of that relationship is so high.
Do you think investing will fundamentally change when everyone is using like an AI investing agent and these AI agents can tap into all publicly available information instantly? And so like it automatically just knows like is that sometime down the time horizon? If so, like how long? Or do you think that's just not even feasible?
There's lots of different investing behaviors. I don't think that someone who is buying a stock of a company that makes a product they use is going to be all that affected by AI. If you're like I use the iPhone, great product, I believe in it. I want to own some Apple stock. AI is unlikely to change that investment behavior significantly. What are you going to ask it? Right? I mean, maybe if you're really kind of having second thoughts and you're not sure whether it's a good one, you'll ask some questions. But by and large, I think that's durable. Active trading, I think active trading is going to look significantly different. A lot of active trading is now geared towards technical analysis on charts. AI tools will certainly augment that quite a bit. Um and then you can bring in more data sources. Uh passive long-term investing and portfolio construction. Yeah, I don't think it'll change very much because in that particular example, it's really about making an infrequent asset allocation decision. And maybe you'll have more data communicating the decision and what's going on, which is what we're doing with Robinhood products, like what's going on in your portfolio? Why did we make those changes? Um, but I think fundamentally the asset allocation process has been automated and streamlined pretty well and I don't think there's juice there. So, yeah, it's really trading. I think trading is where you're going to see the biggest change and the biggest disruption, which is why we're focused on agentic trading first.
What about for productivity within Robinhood as a company? How much has AI changed the game?
I changed it very deeply. I mean I think our AI adoption is close to 100%. If you're a software engineer and really software engineers are building all the products. I think the workflow has shifted from, you know, humans writing the code and humans reviewing the code to generally humans overseeing agents and those agents are writing the code and reviewing the code. And your job as an engineer is shifting to making sure your agents are well managed and seeing, you know, how many agents you can employ and can you keep them busy all the time, including when you're sleeping.
So, do you think though with Robinhood eventually you could have just a few people running the entire company from home?
It's not our goal for sure. Um, I think sometimes we do think about these things. Um, but I think that someone still has to be running the agents and at the end of the day it's like my financial fiduciary point. Uh it's hard to imagine a world where a human is not like responsible for decisions. Yeah. And so I think we've been focused on doing more with the teams that we have and giving people more leverage. Um but yeah, less focused on just reducing headcount.
What's the biggest mistake that you've made over the last year?
You know, I'm sure I've made lots of little mistakes. I think my approach to things is really just how can I move forward? Like I don't like thinking about the past very much. I think we can kind of get stuck relitigating decisions, but really it's about okay, where are we now? You know, I even in some cases prefer to be behind and to be an underdog because I think it gives us something to work towards and to really push on. I mean the past year if I had to think about what we've done okay, for active traders we've launched prediction markets and that's an interesting business for us because usually we're not the first to launch a new asset class. You know equity trading was a thing for multiple decades even electronically before Robinhood came along. We improved it, we brought it to the smartphone, we brought it to zero commission, but you know, we weren't early to it. Crypto trading, we weren't particularly early either. I mean, we launched in 2018, which was early relative to the TradFi companies, but a lot of crypto native companies started in 2012 or even earlier. Bitstamp, which we acquired, was, you know, I think the longest continuously running crypto exchange. So, we were not the earliest there. Prediction markets. We were one of the first to roll out that product as soon as they got legalized for the presidential election. We were kind of there within weeks with a product and then we had to really expand over time and you know it's grown to hundreds of millions of annual revenue or fastest growing business line of all time. Um so active traders we've done well. Banking has been a really quick roll out. I think that the challenge that I'm spending a lot of time thinking about is now that we're doing all of these things, how can we make sure the core experience is coherent? And we've been investing a lot more in personalization in making like the app clean. And you know, I can say, well, maybe I should have thought more about these problems earlier, but a year ago, we probably didn't have so many new products shipping. So
That's what I've noticed as a daily user, probably hourly user of Robinhood app. Every time I log on, it's like there's more things to swipe through. And a lot of the things I'm not using, but what I find really interesting is you guys launch the prediction markets, but then people could just email customer support and then say, 'Hey, can you like remove this from my account?' And I know people that have actually gotten that removed from their account both for the simplification and also because they don't want to be involved with prediction markets, which I found really interesting. You guys were able to like engineer the app for a specific user experience, which is like I mean like I don't know of I can't name another company that would do that.
Yeah. Yeah. And now at first it used to be customer support and now you can actually like flip a switch if you want prediction markets to not show and also a lot of our core surfaces. It used to be that, you know, Robinhood had only a couple types of accounts. We had, you know, your brokerage account, crypto, retirement, spending. Each of those accounts were kind of their own tab, but not everyone used retirement, not everyone used crypto. And there's another problem of well, we added 13 additional accounts, right? Um so we had to completely redesign things around this idea that you know every tab in the app should have a use case for every customer. So now we have like investment watch list search account and it's taken a lot of iteration to find the solution that is optimal because every change you make affects tens of millions of existing customers. So it's highly consequential.
I do want to say just because I absolutely loved this, not that it will necessarily lead to any conversation, but I love the fact that you can open up multiple individual investing accounts. Yeah. Like ever since you guys had that, like it has completely changed the game for me because now I don't have one strategy in one account and you know like or multiple strategies all consolidated to one account like that and the UI for it is like from a user experience phenomenal. I am curious though on the personality trait of not litigating prior decisions. Do you think that that's an essential trait of an effective CEO?
Not necessarily. I think a lot of people, and I should make it seem, I shouldn't make it sound like I don't really think about you know what happened in the past. Of course, we do postmortems and reviews and things of that nature, but I think a lot of people just live in the past and spend, you know, 80% of time worrying about things that have already happened. Um and a little bit less time thinking about, okay, what do we do now? I try always to think about the current state and what my options are rather than saying, oh, if I had changed this 6 months ago, things would have been different. I think it's also impossible to a certain extent to think through what would have happened if you'd done something differently in the past because there's just so many inputs in those decisions you know like it's a trap sort of it's a trap and yeah things are the important things are never clean in the sense that oh if I had just like made this one decision differently my entire life since that point would have been different.
A lot of people say that you are one of the most effective CEOs and founders alive today, which I mean you see it all over X.
Well, it probably feels cool to know that. If you were to distill that job description down to one thing, I could see it being problem solver. And so, I mean, would you agree with that sentiment? Running a podcast is honestly a lot more work than people may think. From sponsor contracts and invoices and clipping, it piles up so quickly. I'm not kidding when I say we literally use Claude for everything now and that's why we are so excited to be partnering with them. Claude is the AI for problem solvers. It's the collaborator that understands your entire workflow and thinks with you, not for you. Whether you're debugging code at midnight, building a financial model, or strategizing your next business move. Claude extends your thinking to tackle the problems that matter. And Claude goes way beyond the chatbot. It's not answering questions. It's actually doing the work. Real spreadsheets, formatted reports, organized files directly on your computer with no uploads and no cleanup. Plus, Claude's newest model, Opus 4, is live and ready to help you solve your most complex problems. For us, it was actually taxes. We uploaded our bank statements and Opus 4 went through every document incredibly fast and gave us an organized spreadsheet that was ready to send straight to our accountant. It saved us hours, if not at this point, days. We also use Claude for generating invoices, writing emails, titling videos, setting up test projects, and even editing videos for our clips channel. The sheer amount of time and money that we have saved from using Claude for our business is just unreal. I kid you not. Literally yesterday, I was on the phone with my dad driving to pick up and I said, 'Dad, sign up for the Claude Max plan, upload all of your financial statements, and Claude will literally pay for itself with the amount of value it gives you.' You should definitely see what tasks you can take off your plate with Claude. For problems worth solving, get started with Claude at claude.ai/icedcoffee. That's claude.ai/icedcoffee and check out Claude Pro, which includes access to all the features mentioned in today's episode. claude.ai/icedcoffee. AI is going to transform your business. Look, we've all heard this, but if you've actually rolled it out in your company, you know how this usually goes. You make the investment, everyone gets onboarded, and a few months later, no one's using it, including you. Well, thankfully today's sponsor, Superhuman Go, is actually built to stick. Superhuman Go is an AI chat that sits right on the side of your browser, ready to help with any task you're working on. It's actually from the makers of Grammarly, and it works inside the tools and sites your team already uses. Whatever's on your screen, an email, a doc, a website. It already knows what you're looking at. You're not opening new tabs, pasting stuff in, or explaining yourself from scratch. All you have to do is ask and it'll summarize a long email thread, draft you a reply, or prep you for a meeting without you spending hours. It also searches across all of your tools, so you're not clicking through five different apps trying to remember where something is. Plus, since nobody has to learn anything new, everyone on the team ends up using it. It's the easiest way to get AI into your business. So, if you're finally done paying for tools that nobody touches, give Superhuman Go a shot. To find out more, just go to superhuman.com. Again, that is superhuman.com or click the link down below in the description to get started. Thank you again to Superhuman Go for supporting the podcast. A lot of people say that you are one of the most effective CEOs and founders alive today, which I mean you see it all over X.
Well, it probably feels cool to know that if you were to distill that job description down to one thing, I could see it being problem solver. And so I mean would you agree with that sentiment?
I think it depends on the company. I think the job kind of changes dramatically depending on what you're responsible for. So I'll give you an example. If the company is small and you're the CEO and you're just trying to like ship your one product to customers and make sure it works, the job is really how quickly can I ship code, right? That's essentially the problem. Uh if you think about it on a base level, problem solver probably does fit. But problem is a very broad term. So small company, how much code can I ship? And I went through this evolution myself because when I started at Robinhood, I was writing a lot of code. Then you kind of get to a point where, okay, maybe we have to do two products at a time and it's not just shipping them, but marketing them, designing them, right? Uh and there you're kind of leading a small team of engineers and maybe dealing with a couple of domains that aren't really in your core competency. And I think the challenge there is how do you stay close enough to the work that's being done by the folks that you're managing and also learn enough to be useful about these other domains that you're not an expert in. Right? And a lot of times it's just can you put in the hours and sort of like the mental effort to learn about things that aren't your core competency. A lot of engineers don't really have an interest in learning about marketing or legal or ops and I think it's limiting because if you don't know anything about the domain, how can you actually make improvements, right? Or you have to know enough to like realize what's working, what's not working, what you can change. And then you know at every layer of scale it becomes um yeah it becomes harder in a sense because you have more groups of people working on things that you're less directly involved in. And there it's about building systems. Okay. How can I efficiently if I wanted to spend like
Five minutes on something, how can I get the best and highest signal five minutes possible? What are the tools to do that? Do I have the metrics? Do I have customer verbatims? Do I have just like AI tools that are plugged into the right data so that you know you can actually make every second that you spend on something as like high signal and useful as it could be and so that you're not kind of making decisions based on anecdote. So a lot of it is building these systems, organizing things effectively so that you kind of know the person to ask or to probe if something's going wrong or you have a question, and also spending time on the right things.
That's fascinating. I mean, effectively, you just distilled down the blueprint of like building a huge company and like how to organize your life as an operator or executive. If you were to identify one trait or belief that a lot of operators have that are not working at maximum efficiency, like something that's sort of holding them back, what similarity do you see among those people? Like what should the primary question CEOs, operators, executives should be asking themselves in order to become more effective?
I think one is being able to get into the details of every team, every work stream. And you know, a lot of people just rely on assessments of people in management, right? But sometimes it's really helpful to get both ends of the barbell so to speak, you know, the senior executive's view of a situation and also the people on the ground because you could have the problem of like if something breaks somewhere up in the chain and bigger organizations, this is a problem. If you have like individual contributors, managers, directors, senior directors, you know, if something's broken in the chain, you could get bad information about what's happening. So that's why I find it very helpful sometimes to go as close to the ground as possible. You know, look at the code, be able to look at the code, look at the actual copy that's shipping to the website, talk to people who are individual contributors or interns. Spend a lot of time talking to interns. And so, I think being able to get extremely deep into the details is important. Not a lot of people do that. And that goes to the work. I think the other thing is just hiring well, making sure that the people around you, in my case, it's like the general managers and the functional leads are incredibly strong. And I think I've been fortunate to evolve to a place where it's just incredibly capable people that are running really big businesses and growing alongside the businesses that they're running.
You know, it's a hilarious parallel to draw there, like staying close to the problem. So, we have a friend, his name is Ben Mala, and he buys huge commercial apartment complexes or just commercial real estate. Like he just bought a new place that's like hundreds of units and he gets his son to move into the complex to be close to the problem to know what it's like to actually be a resident at the complex to know where to make improvements where to spend money to have the highest possible return on quality of life for the residents there. And that's kind of similar to what you're saying here. It's like you need to talk to everybody in the food chain. You need to get like the executive opinion as well as like the person who's actually going and like you know assembling the product's opinion.
Yeah. And also you need to talk to the customer and it's both the customers that are loud on Twitter, the ones that are loud on customer support, which are not always the same. You need to look at what the Redditors are saying, you know, on the different subreddits. But also, there's a lot of customers that are quiet and will just silently stop using the product and aren't going to go talk about it on social media or write in a support ticket. So, you have to figure out how to get to those customers, too. I think it really helps to be obsessed with your business, right? And to really feel like, you know, every little problem is just going to be on my mind until I figure out a way to solve it. And, you know, if I figured out a way to solve it and it's actioned, then I can kind of put it away in a little drawer, check up on it later. But, I think something I've noticed about myself is I spend a lot of time obsessing about every little detail. And I think in some cases that can be annoying and sort of not ideal for maybe staying calm and having great mental health, but I think is actually really really good for the business.
What's the next thing you want to do that regulation currently blocks?
Oh, that's a great question. I'm sure the regulators will love that one. Yeah, I mean I think generally we've had really really strong constructive relationships with the regulators, particularly in the last couple of years where they've been much more keen to support innovation. I think that the couple of things that have been sort of like fresh new issues and you know one of the other things we're doing now is we're starting to think about how we can push change in all these policies rather than just being a participant in them, right? PDT rule. You guys might be familiar. That rule change came in. We're very supportive of that. So, this is a rule where if you don't have $25,000 in your account, there's restrictions to day trading.
Yeah. So that being repealed was very very good because essentially what it did was it penalized customers that didn't have a lot of money in their accounts which you know a lot of customers start with us so they don't have a lot of money in their accounts and they get into these situations where the intent of the rule was probably to prevent them from making rash decisions but then you get into a situation where you know if you like want to close your position for a risk management reason it gets flagged as a day trade. Then you get restricted and you basically have to make that decision. You intend to do it and you turn to another broker because actually the other weird thing about this rule is it's on a per broker basis. So if you're a pattern day trader somewhere, you can move your account elsewhere and then you start from scratch.
So that was a great positive change. Couple of other things that I'm quite keen on. One, accredited investor. And since we last spoke, we've really been pushing on the idea that private ownership is kind of the next frontier of our mission. For various reasons, but the main one like there's a lot of disruption by AI. A lot of the top AI companies like OpenAI and Anthropic, for instance, are private. They're going into the trillions of dollars of valuation and there's a small circle of wealthy insiders that's benefiting from all the growth. It's not broadly distributed. So our solution to that make it easy to own these companies or get exposure to them. In the US we have Robinhood Ventures which essentially you can think of as a basket of private companies right and we have Robinhood Ventures Fund One which started with late stage pre-IPO OpenAI is actually in that fund and it gave a low-cost vehicle for investing and getting exposure to private companies. And kind of on the heels of RV1 we started RV2, Robinhood Ventures Fund 2, which takes another angle. It's still a basket of private companies, but rather than them being ultra late immediately pre-IPO kind of companies, we went to the opposite side of the spectrum and now we're giving exposure to seed and series A, which is the earliest stage of capital formation. So rather than tens and hundreds of billions valuations in these companies, Robinhood Ventures Fund 2 typical valuations are in the tens of millions.
How do you pick those companies and what if they don't want to be a part of them?
Yeah, great question and this is one of the things we figured out this year. We have taken the position that if a company doesn't want to be in Robinhood Ventures we generally won't force them. So, every deal that we've done for Robinhood Ventures thus far, and this isn't true of some of our competitors, of which there are a couple, some of our competitors will go in and do the second layer SPV/LP interest and, you know, then announce it and then you've seen the company come in and say, 'Actually, we don't know anything about this.' Not ideal. So with Robinhood Ventures, we've taken the position that we go direct with the company's blessing in all of these cases. And that's true of all the deals that we've done thus far. And I think this was not an obvious one, right? Because there's a trade-off. What you really want is the access, but you also are creating a new product and you want that new product to be accepted by the stakeholders in the industry.
What if we take it a step further and we say that everyone gets access to these private privatized companies? Then wouldn't it be that the really wealthy people just get in even sooner?
There's always a cat and mouse game in the sense that the wealthy always figure out how to get better things and so our job is never done right. Then we have to keep working to get even earlier access and then they get in a little earlier too. But I mean, look, Robinhood Ventures 2 seed series A that's like pretty early. It's hard to get earlier. And we're partnering with YC for that fund. So, I think we'll prove out the model of seed and series A funding for retail. Now, the problem with these things is these are still baskets, right? And what we're hearing from customers is maybe I like these three companies, but I don't like these other three. So, I think the end state is going to be investing and trading for those that want to individual private names so that they feel pretty close to what trading a public stock on Robinhood would feel. And that part needs both continued product innovation and also reform of accredited investor standards which now limit direct investments to private companies to high earning wealthy people.
Is there any other product that you wish existed? Like for me I wish that you guys had or someone created a Venmo where we could send each other stocks like instead of sending Jack a hundred bucks they'd be like yo here's $100 of Google.
Yeah. And you know, last time you guys asked me for Robinhood Social, right? And I said, 'Oh, well, maybe we'll have something to announce in the future.' And you know, he said to me, the audacity of Graham to say this, he was all, you know, didn't we say something about a Robinhood Social last time and then they launched it and I was like, if you think that because you suggested Robinhood Social afterwards, Vlad was like, 'Yo, let's do it. Let's launch it. Let's launch it.' Um Yeah. Yeah. No, I thought it was funny because obviously it had been in the works. You know, we didn't just whip it up. We didn't just whip it up in a couple of weeks from when we had that conversation to Hood Summit when we announced it. But yeah, there's always sometimes I get asked about things in the works and I really want to like spill the beans right there, but then I'm like, 'Ah, well, we have these events, we're launching things.' So, if we just keep guessing, you just wouldn't say no. You can tell based on my reaction probably what's in the works or not. Even though I try to keep a very very calm poker face, but you know, Robinhood Social has done well. And now I don't know if you guys are seeing it, but people have started cross-posting Robinhood Social screenshots on X.
Yeah. And they're like, 'What's going on in this community?' And that's bringing in more.
People need to be verified, by the way, because my profile is up there. And I think people think that I'm a scammer on Robinhood Social because they don't have a check mark. Like there's no way to verify that is actually your username. Graham Stephan.
Okay. I'm JLSLBY. Follow us on Robinhood Social, guys.
Oh well.
Yeah, but that means someone else is going to create one that's very similar. And then they're going to like start like scamming. I don't know.
We'll have to figure this out. Okay. Yeah. I mean, the one thing that we think works really well with Robinhood Social is the fact that the trades and the portfolios are verified and you know, now we have P&L widgets and all these things. So in other social media platforms where people are sharing your trades, you don't really know whether they're BSing or they could be faking the screenshots. With Robinhood Social, we kind of take care of that verification as part of the platform which I think has like a really nice it's a positive and also differentiated aspect. But yeah, we'll obviously have to solve this verification problem for the profiles as well.
Is there any financial product that's not really being discussed though? Because as someone who's so on the pulse with customer demand and just broad investing data, there has to be like whispers of some sort of investment style. Like no one thought five maybe 10 years ago that we would have AI investing agents. Right. But someone may have and I feel like you would probably be the person of all to ask like what could the future of finance look like? Something we may not even be talking about right now in 5 to 10 years. Is there some sort of product or service or like something else?
Yeah, I mean Robinhood Chain I think is a good example of what the future could be if we could like rebuild the infrastructure from the ground up. I don't know if you guys are familiar with Robinhood Chain. It's basically the hottest chain in crypto right now. We rolled it out a couple of weeks ago and it's been top five in DEX volume. The TVL total value locked has been growing tremendously and one of the benefits is it has stock tokens which are tokenized representations of stocks that are available for customers outside the US for now but you know they're still available in 120 plus countries around the world and if you're on Robinhood Chain and you have stock tokens like Tesla, Nvidia or others you actually can do everything with them that you could do with another on-chain crypto. So, you can send them to people on-chain just like you would send Bitcoin or Ethereum. You can swap them in pools. Uniswap has some very very active pools on Robinhood Chain. You can do collateralization, lending, and borrowing. So, you get a picture of what it could look like if we kind of replaced it all with software.
So, when you say swapping, does that mean that let's just say I have $500,000 worth of gains in a stock that I could swap that stock for another, keeping my cost basis without realizing a gain?
The tax situation depends on where you are, right? Every one of these 120 countries has slightly different tax treatments. So, I can't really speak generally to that. But yeah, all you have to do is create a pool. If someone creates a pool exchanging a stock token with a crypto, yeah, you can just swap them directly. So we started out using stablecoin. So USDG which is the stablecoin that we partnered with Paxos and a few others to launch. That's like the core stablecoin of the chain. But then all the developers have created all kinds of unique pools that we didn't even think would exist and all kinds of protocols where for example if you hold a memecoin you just get stock tokens airdropped to you. Right. So they've like connected meme coins, core cryptos, and the stock tokens and composed them into unique products that yeah, we wouldn't have anticipated creating, we probably wouldn't have thought of to make ourselves. So it's Robinhood Chain is this combination of developer platform with financial primitives like high yield and stock tokens that we're going to add to and I think the combination of those two is going to lead to a lot of interesting things. Not to mention you know it was built for AI agents too. So a lot of people have been rolling out APIs, command line interfaces.
I'm just imagining if you tried explaining this to Warren Buffett, like what he would say, like if this is even something he would understand, it would say, 'No, this is just...'
I mean, I think to most consumers who aren't developers, the value prop is really if you're in 120 countries all over anywhere in the world. If you have a smartphone, internet connection, you can trade tokenized representations of these stocks 24/7 at relatively low cost and great user experience.
But then even if you're a US resident, then you can be trading outside of trading hours all day like it effectively opens up the optionality of an investor.
Yeah. So right now they're not available in the US but there has been movement to enable tokenization here and I think eventually it will happen. It's just the delta in value is much smaller. It would be like you know in a lot of these places overseas they don't even have functional banking systems. So they can go right to tokenized stocks and it's a huge leap, right? Whereas in the US you already have Robinhood. So going from Robinhood to like 24/7 is comparatively minor. It would be like going from your very fast train to a high-speed train, right? Expensive shift. A lot of the existing train operators aren't keen to make the investment and you can already get from New York to DC in 2 hours. So shaving it to 1 hour maybe isn't the biggest delta. And so I think that's why the rest of the world is leading here and the US is probably going to be a late adopter of some of these technologies.
What do you think the other brokerages fail to understand about investing in 2026? Now really quick I got to say that everyone has a business idea that they've been sitting on. And what stops most people really isn't the idea itself. It's everything that comes after it. We're talking building the store, taking payments, the checkout page, but it's actually very straightforward when our partner Shopify handles it for you. Everything that you need to start selling is included and ready from day one. That includes the moment your first customer is ready to pay. Shopify checkout helps more of them actually finish their purchase. Plus, when they come back, their details are already saved. It's one tap and they're done. I've personally used Shopify several times because before I was working with Graham, I set up probably five or six different Shopify stores and even me actually saw some sales and I knew absolutely nothing. Shopify is genuinely the easiest way to start an online brand and see real sales coming in. Shopify powers millions of businesses worldwide. From household names like Mattel and Gym Shark to small everyday businesses just getting started. With Shopify, nothing stands between your idea and a real business. So go make it one. Start a free trial at shopify.com/ic. Once again, that is shopify.com/ic. One more time, that's shopify.com/ic with the link down below in the description to get started. What do you think the other brokerages fail to understand about investing in 2026?
I think the other brokerages suffer from just being large. I mean, I think there's a lot of players in the space, right? There's the incumbents that are big and they have tens of trillions in assets. But yeah, I think we ship much much faster and we're more modern, which means that we've been able to capture a younger customer base that is growing wealthier over the next couple of decades as opposed to aging out. And so we're kind of the beneficiary of this great wealth transfer over time.
So, if you were a paid consultant to the other brokerages, what would you tell them?
I think to some degree, it starts with talent. Like, if you want to build really really great products that are competitive and 10 times better than what's already out there. There needs to be like a talent reset and you have to make sure really good engineers and designers and product builders, people that understand AI are in the company. So I would probably find one area and these companies are like giant elephants, right? You can't eat the elephant in one bite as they say. You have to just take it one bite at a time. You eat it very slowly. So, I'd probably find one area which maybe was small and kind of circumscribed away from the core and try to like inject a ton of talent into that one area. Run it kind of standalone separately and see if that can provide a roadmap of how we can do like a technology transformation for the entire company. And so if we get a beach head in one area and we're able to hire special forces, elite talent there, then we kind of like put more into there and see that grow till eventually the entire company is rebuilt with a stronger foundation.
In terms of the broader economy, are you worried about valuations?
I think in some sectors alarm bells have started ringing. I'll give you an example. I mean, we get a lot of feature requests from our customers all the time, right? And for the longest time, international stocks was not in the top 10. I mean, some people wanted international stocks, but you know, a couple maybe a month or two ago, every question I would get in interview was, 'When are you going to add Korean stocks?' That's what everyone wants. You know, nobody wants prediction markets or crypto. We just want Korean stocks. I don't know if you guys experienced this.
Very familiar with what's going on.
Or were you some of the people that were asking for them?
Probably Jack.
I'll invest in anything.
Yeah. And by the way, as long as they do options on Korean stocks, I'm in. And by the way, we will add Korean stocks. But the fact that we were hearing from so many people at the same time does raise the alarm bells a little bit of like what's going on there. And sure enough, yes, there was just...
So, what are you seeing today? Starting to ring some bells.
Yeah. And I have to be careful here because I don't want to give people investment advice. And also to be fair, traditionally our customers are like innovation first. So, we were among the first to invest in electric vehicles. They're obviously into crypto, AI even though, you know, exposure directly to AI labs is difficult and we're fixing it with Robinhood Ventures, you've got the semiconductors and now you've got a lot of people talking about energy, right? So I guess chips and energy as a category you have a very very complicated balancing act to play because on the one hand it is kind of obvious if you assume people are saying well if AI demand continues to grow of course that's going to impact chips and everything in the stack underneath it. On the other hand, what you have is the traders, and this includes, you know, there's been anecdotes of hedge funds that are just buying chips because they know, hey, even if I don't need this chip myself, I'll be able to resell it at a higher price. And whether something is undervalued or not kind of depends on many of these factors. And I could see it tipping in one direction. And you know if a lot of the supply is being bought by speculators that's when you can kind of get into trouble with you know even something that has fundamental growth potential like chips in an AI environment.
Do you think that a high stock market right now is actually bad for people in their 20s and 30s?
Everything I think is an opportunity in a sense. Back in 2020 when we had a big crash right around COVID, you saw our customers actually buying, you know, and you looked at the customers of the other discount brokers and they were selling and that was the big story. Our customers were buying because they're younger. They had a long-term horizon and they saw it as an opportunity. They were still fundamentally bullish about the country and of all the things that were being built and what the stock market offered and they kind of showed that through their activity on the platform. In a sense a lot of people say well do you worry about stock market corrections. I don't worry about them as much because we've seen in the past that having younger customers they take corrections as opportunities. Now that doesn't mean that I want a correction or I even want you know a sustained period of slightly lower prices that can be very very challenging to the economy and to people. I think everyone generally should just want things to go up smoothly up and to the right but it's not the reality and I think every market environment if you're a trader presents opportunities that you can capitalize on and if you're a long-term investor it can be hard to predict these things and time them. So we offer great tools for tax advantaged investing. I think we have the best retirement products on the market where it's really targeted towards putting money in and you know not withdrawing for many many decades. And I think dollar cost averaging and passive management is better at Robinhood than at any of our competitors. You know a lot of our competitors don't even offer good tools for these things. But we're continuing to invest and incentivize. A lot of people criticize us because they think we incentivize active trading and prediction markets. If you look at what we actually incentivize in the product, it's retirement. Retirement gives you a 3% match if you're a gold member and you make a contribution. So those are the types of products that we've really directly incentivized and had success incentivizing.
Now, what do you say to the people who criticize that it is leaning too heavy into prediction markets which might be considered too close to gambling?
Yeah, we get that criticism and of course you mentioned the switcher and being able to customize it. We get the criticism in both directions actually. You know, we have people that just don't want to see prediction markets. And for that, we have personalization and all the initiatives we have, not just for you to disable it, but also to make sure that we show you the content that you want to see in the app when you want to see it. It's a big priority not just with prediction markets but also the more different products and features we have. We have to solve the problem of you just not being aware of us offering a great feature that you can benefit from. So yeah there's both I don't want to see this product prediction markets being a great example. Also, I want to see it more like it's too buried in the product and I don't want it to be, you know, three taps away. I just want to see what's going on right now. And I think personalization is an answer. The other thing we've been experimenting with is in some cases if really the experience is very very different, we break it out into a separate app, which is what we did with banking. So if you want like a banking and a card experience, you can have that in the banking app. If you want a more trading first experience, you have like the main green Robinhood app. And if you want full crypto, the Robinhood wallet has like DeFi native experience.
What do you think the critics are getting right that you could improve on?
I mean, I think that making things cohesive and making the purpose of the company and what we stand for more understandable is a fair critique. We hear that a little bit. Everyone always wants features and it's hard for me. I mean, the Korean stocks, I think they're right. I think we probably should have Korean stocks as well as stocks from every single market. There's just a bunch of stuff that we just haven't gotten to yet because there's always more and more to build. And the way that I think about this is there's kind of three buckets of things, right? Infrastructure improvements that just make the existing experience better like faster performance like just better nicer cleaner UI/UX, reliability so that we just can handle traffic spikes better and things like that and we made tremendous progress there even in the past year actually. There's the category of like what's available at other brokers that Robinhood doesn't have and that's a big category up until recently. It's trust accounts. International stocks are available at some of our competitors. You've got things like fixed income if you want to buy direct bonds, mutual funds. You know, there's a lot of things that we don't offer that are sizable parts of portfolios of customers, right? And then there's this third bucket which I think can be easy to overlook. Not a lot of people have products here, but it's just like can we innovate and can we be the first to market with new products relative to our peer set at least. And that's where things like prediction markets, Robinhood Ventures entirely net new product things like Robinhood Chain and Robinhood Earn like we also want to put things in there that are completely unexpected. Agentic trading we were talking about. I mean, nobody big, nobody non-trivial is like working on agentic trading besides us, right? Like we're just figuring that out.
Slightly off topic, are you ever worried about the billionaire tax here in California?
