RIA referrals, tech and service: How TradePMR by Robinhood pitches advisors

Robinhood's acquisition of wealth management custodian TradePMR didn't carry as big of a price tag as Vanguard's deal to buy Altruist, but the industry may be watching it just as closely.

That's because, after completing the roughly $300 million deal last year , TradePMR by Robinhood represents the union of a dominant self-directed investing service with 28.5 million clients and $355 billion in assets with a custodian that started 20 years before Altruist with a similar bet that it could disrupt the giants of the channel. TradePMR's now 15-year relationship with Wells Fargo's First Clearing and the June launch of client referrals to registered investment advisory firms through the new Robinhood Advisor Network respectively add an interesting third party and a constant topic of industry discussion on organic growth to the mix. Vanguard's Altruist deal involves much different parties and a reported price north of $4 billion , but TradePMR had already blazed trails as a startup custodian with big-name collaborators.

As part of Financial Planning's ongoing series on the fees and business models of the industry's custodians, a review of TradePMR's website shows its starting rates for clients and financial advisors at 400 RIAs with $50 billion in assets under administration (a 15% jump since the Robinhood deal).

But the firm rejects a "cookie-cutter approach" that applies the same transaction or asset-based fees to every RIA, according to Scott Victoria, who the firm promoted to the role president in May from his prior post as chief operating officer. TradePMR gives each RIA an "annual lookback" to review possible changes to their negotiated rates with the firm in light of any shifts in their businesses, and the firm strives to "work with firms that value that relationship, value that level of support and want to grow their business," said Rob Dilbone, who leads TradePMR's advisory practice recruiting efforts as the firm's chief revenue officer.

"It's a very open discussion in the beginning — we just want to understand where they are now. We get some information from them to understand their business," he said, citing criteria such as assets under management, trading volume, business mix and account volumes. "We know we've got to be competitive. … We know we can't have barriers to entry in the form of pricing, so our whole mindset around pricing is to, sort of, get it out of the way."

TradePMR, Wells Fargo extend their agreement