Robinhood desires your retirement cash

Robinhood Markets Inc. is providing retirement accounts to its customers for the primary time, hoping the tax-advantaged merchandise may also help reverse the brokerage’s decline in buying and selling exercise.

The firm stated it will match 1% of what customers put into their conventional or Roth IRAs till they hit their annual contribution restrict. For 2022, the Internal Revenue Service set that restrict at $6,000 for the youthful traders that make up a lot of Robinhood’s consumer base, that means the brokerage’s match would high out at $60 this 12 months.

Users might begin including their names to a wait listing for Robinhood’s IRAs on Tuesday, with normal availability coming in January.

Millions of novice merchants flocked to Robinhood throughout pandemic lockdowns and the meme-stock craze final 12 months, however excessive inflation and swooning markets have sapped customers’ enthusiasm for investing. The common day by day variety of retail trades of shares and choices on Robinhood in October declined 36% from the identical month final 12 months to 1.9 million. For crypto buying and selling, October common day by day quantity on Robinhood fell 55% to 200,000.

Robinhood isn’t worthwhile. Over the primary 9 months of the 12 months, it misplaced $862 million on income of $978 million. The firm held $6.2 billion in money and money equivalents on its books on the finish of September, giving it runway to spend money on areas of enlargement.

The brisk progress Robinhood skilled final 12 months meant that plenty of sources went towards fundamental infrastructure and customer support, Chief Executive Vlad Tenev stated in an interview. This 12 months, he added, “was extra about a few of the fundamental product gaps within the investing providing.”

Robinhood has stated that almost all of its clients have been primarily buy-and-hold traders. Until now, although, it didn’t supply an account possibility with tax advantages.

Robinhood has missed its personal timeline—the center of this 12 months—for rolling out retirement accounts. Among the merchandise and options that Robinhood launched this 12 months earlier than retirement accounts have been the power to purchase and promote Shiba Inu digital cash and the power to commerce choices in money accounts.

Mr. Tenev stated the retirement merchandise have been extra difficult than different companies Robinhood launched this 12 months. He additionally stated the large focus for the corporate was making IRAs out there earlier than the 2022 tax-filing season.

Although Robinhood lets customers commerce crypto of their brokerage accounts, it’s only permitting shares and exchange-traded funds to be purchased and offered in retirement accounts at launch.