Welcome to Synergize. I'm Bill Capel, director of client growth at Trade PMR by Robinhood.
And I'm Ryan Neil, editorial manager at Trade PMR by Robinhood. And welcome to our Synergy Summer Series. We're taping these from the conference floor at Synergy 26 in Washington DC.
That's right, Ryan. We're live here in Washington DC and all summer long we're going to be sharing plenty of insights and actionable ideas that you can use to build your business. So let's get into the episode. You're listening to the Synergize Podcast. We're coming to you live from the Synergy 26 conference here in Washington DC. And stopping by the podcast booth now is head honcho here, Rob Baldwin, our boss. So Rob had his keynote speech today on the stage and had a panel with Steven Quirk, the head of Robinhood brokerage. So Rob, thanks for stopping by and look forward to chat a little more.
Always like to hang out with you guys. This is good.
It's good to have you with us, Rob. You know, one of the things you mentioned today is that, you know, it's not by mistake that we're here in Washington DC, particularly in coinciding with the 250th anniversary of our country's independence. You know, and in your keynote speech, you actually referenced this as very important relative to the independence of the RIA. Talk to us about why that's important and why it's so purposeful for us to be here to do this particular event.
Yeah. You know, well, we've been all over the country with this event for, you know, years now, years and years and years doing our Synergy and, you know, when the subject came up of, hey, where are we going to do it next year and we were, you know, looking at different venues and so forth and the ability to come to Washington DC when we're celebrating our independence of 250 years and yet we're in the independent space in the financial sector. So, you know, it was just kind of hand in hand and we said, boy, this is the time to do this. If there's ever going to be a time to do it in DC, this is it. And we thought advisors would also like to take part in the independence celebration of the United States as well as come and hear our pitch on independence and really what we believe in as being the best channel in the financial services sector, the RIA business because it is totally about independence, not a broker-dealer independence channel, but true independence of owning your own business, being an entrepreneur, growing it, you know, to the size that you choose to put in your work ethic to build something great. That's true independence. That's the RIA space in our sector matched up perfectly with what our country stands for. So that's why we're here.
That's great. And you know, it's a great point about independence because ultimately they're fiduciaries, right?
And they're operating in a world where it gives them the ability to serve their clients the best way they believe is effective and appropriate for that person.
You know it because we are big advocates of being a fiduciary. I think it's a key important sector that still goes under the radar to the end consumer. They don't know the difference between, you know, fiduciary and non-fiduciary very well. It's starting to break the mold a little bit to where they're gravitating towards it. But those who have caught the vision understand that if I want somebody who's going to work in my best interest at all times, a fiduciary is the key. So, you know, we're a big believer in that model. I've been a believer of that model now for, you know, 30 years plus and really happy to be able to serve that sector of the business with what we do.
Well Rob, we've been a part of the Robinhood umbrella now for about a year, a little over a year. So for those that weren't able to attend the conference, what can you say about where we're at now, where we've come and where we're going?
Well, right now, you know, we're really excited that we have the stability of our current relationship with Wells Fargo. That was a key component to lay that foundation to go forward. And now we have the ability to build on Robinhood and to continue to iterate Robinhood. And we've got a little ways to go yet before we're ever going to be able to custody there. But that's going to be a key moment that we're driving for because we want to get to that point where we're having a dual custodial relationship, have Wells Fargo on one side, Robinhood on the other, and we have such demand for the Robinhood side that I know we're going to try our best to get it out sooner than later. But building a wealth channel takes time. It's not something you do overnight as everyone who's ever been in this kind of situation understands. So, we got some time to go and in the meantime, we just want to make sure everybody understands we have a great firm foundation. We're going to continue to do business as normal. We're going to continue to service advisors in a unique way in our industry and have SLAs that are unfounded in our industry. All those kind of key components that make advisors feel special because we understand their business and we want to be great servicing them. And then we'll continue to iterate, be able to bring products and services from Robinhood to the table as we've announced this week. And that's the iteration starting to come up and to be able to say this is what Robinhood's bringing to the table right now. It's bringing, you know, IPO access. It's bringing the Robinhood Ventures funds. It's bringing Robinhood Cortex for advisors. It's bringing these things together so that we have tools that we didn't have on our own to the table. And, you know, the major one that I think everybody's really, really excited about, those are three really key ones, but to have the growth aspect that we're bringing up to advisors to be able to provide growth capital to them as they grow their business I think is going to be a game changer and we've had a lot of demand already for that and a lot of meetings set up and everyone that I'm seeing in the conference is stopping me asking me questions.
You know, following along on that, one of the things I really wanted to drill down on with you is so this combination of a very sophisticated and successful technology company with a firm that's rooted deeply for years in serving independent RIAs, independent fiduciaries. The marriage of these two companies, how does that set us up for this great wealth transfer that's on the horizon?
You know, I said this in my keynote and I can't iterate it more. I couldn't imagine if I could go back in time to the days when everyone was building their RIA channels, you know, all the majors, and if any one of them would have had the head start of having 27 million customers that were the average age of 36 at that time.
They'd have a huge head start and that's the head start that I believe Robinhood has. Very excited to be a part of this team. It's why this combination of Trade PMR and Robinhood worked so well when we thought about it initially and here we see and are bearing the fruit of it.
And it's likely that that generation that wealth transfer is going to take place is not really going to be accepting the ways we've always done it. So this kind of positions the organization uniquely and spend a moment just talking a little bit about how that integrated experience is going to change the dynamic of the industry.
Yeah, you know, past referral programs that have introduced the next generation to advisors or any generation to advisors has always been a manual process of involving three or four human beings that the couple gets introduced to or the client gets introduced to as they're transitioning to find their advisor. They go through the branch office. They go through the branch office manager. They go through the person who handles the referrals. They get passed off to the firm. And then the firm decides which advisor they should choose. You know, the generation of tomorrow, they want things done right here on a device at their choice. They don't want to have to go through four or five introductions to reach an advisor that somebody else selected for them. They want to be able to go on, see interviews, meet the advisors on their device and choose that end advisor. And that can be done in moments instead of days or in human meetings. And that's the next generation that we all need to look at and say that's how this is going to work in the future. It's not going to work like it did in the past. This is going to be so fast moving compared to the old system. And we're going to be able to generate so many more leads to advisors and really help them grow their businesses and really introduce them to their next future clients like never before. And we've got 20 plus years of this ahead of us. So, this is going to grow and grow and grow.
That's right. And secure their future.
Right. You know, one thing that you talked about on stage was the math problem that you see in our industry, right? And we've seen some of the data I think from McKinsey just sort of predicting a shortage of advisors as the workforce ages and few are coming in and that, you know, one of the things you believe is that advisors will have to serve more clients, more clients and take on larger business and you mentioned Robinhood Cortex for advisors. How do you see that and AI playing a role in helping advisors serve more clients?
It's going to play such a large role more than anyone I think even estimates at this point. This is where AI is going to come into play. It's going to help advisors run their practice. I just have to give you a visual. Can you imagine? We have social media people who have built, you know, millions of followers and they reach out to them routinely. They touch base with them. They do all the things necessary to grow that business. Financial advisors are not going to be far away from that in the future. They're going to grow their business via social media or through introductions like we're talking about with our RAN program. And they're going to have to communicate very efficiently via AI and other tools and lots of videos and so forth to get their messaging out and as they do that they'll be able to scale and be able to take on more and more clients. Well, you can't take on a lot of clients unless you have incredible automation on onboarding, right? I mean, you can't just expect somebody to wait on a package to come in the mail, fill out paperwork, and send it back to the advisor. That's not really scalable. So, you're going to see everything automated to where a client can open an account, hire an advisor within minutes, send their money to them within minutes, and get it asset allocated according to the risk tolerance of that client. It's going to be so incredibly seamless. It's just going to happen. So we're going to see small firms in the long run that are created to managing billions of dollars in assets with a very few people because they put the automated process in place. And at Robinhood, that's exactly what we're trying to create right now is to build that infrastructure to where every firm that does business with us in the long term can have that kind of automated process in place and be able to scale their business.
Right. And when you say RAN, you're referring to the Robinhood Advisor Network.
That's correct. The referral program that we've created. Yes.
Great. Giving a shout out to our compliance professionals over there. I want to make sure I throw that note in, but I'm glad to take it away.
So, Rob, you know, one of the things you mentioned over and over again here is how technology and particularly artificial intelligence, the work we're doing at Robinhood to build out these very integrated capabilities. How does that play against the value of advice being delivered by an actual human being?
You know, humans are always going to play a key important role in so many facets of an individual's life. There's always times, and we've recognized this just from our business, and we've seen it over and over again, and even Robinhood has recognized it with their concierge program that they rolled out. They realize there's always that human advice that people want to talk to to do the complicated, complex things. It doesn't really matter what the question is. We had a real life client appear on video today in front of our whole audience, you know, and they stated some very important facts. They said, you know, it doesn't really matter whether I want to talk to him about, you know, what I should do for my children, what kind of educational fund I should try to create, what kind of money should I try to leave my clients, how should I do that? All of those are questions that you want a human who's done this over and over again and let them talk you through the nuances. You're not going to do that by, you know, asking ChatGPT. That's just not going to be something you do. The same thing with, you know, medical, financial are the two areas we really feel like you're going to get a lot of assistance with AI, but, you know, you're not going to go into surgery with AI. So, you know, this is surgical to some degree from a financial standpoint. And you got to have somebody who really understands where that knife's going to go because everybody cares about their health and everybody cares about their money. So you want the right knife, you know, analyzing and telling you what to do.
That's right. That's a fantastic metaphor. I like that. We have to use that in the future. Well, Rob, as you know from our podcast, we like to wrap it up with a piece of actionable advice. So we've talked about a lot of stuff at this conference. You've talked about a lot of stuff throughout your time here, but if there's one thing that you want people to take away from Synergy 26, what would you say that is?
You know, I think there's so much innovation going on right now. There's so much talk about the speed of which things are happening and I think we're still underestimating how fast we're transitioning. I look back at a year ago when we did Synergy and I said some things that I think scared a few people and we didn't even really go too far in my opinion but I said some things that people went, really, that's crazy and, you know, within 3 months it was everywhere, you know, everybody was talking the same game it was all over all the financial industry publications and you just start to recognize that the speed is a lot faster than we think it is and we think it's fast. I think it's faster than we recognize. And if we don't take away this key component when we leave here, we're going to be left behind. And that is we have to figure out how to scale our businesses. Now, we got to figure it out. Now, Robinhood Cortex is a key component to that. And that's what we're going to iterate on to make sure we can build that to feed that for these advisors. But advisors need to put on a different lens and say, 'If I'm going to compete in this business long term, I got to figure out how to scale. I got to be able to figure out how to reach more clients, take on more clients, and scale my business.' And that's going to make them incredibly valuable in this marketplace.
There you go. Well, Rob, thank you for stopping by the podcast desk. It's always good to have you.
