[ad_1]
Robinhood’s new partnership with the U.S. Treasury Department on children’s so-called Trump Accounts is going to drive exposure to the company among emerging investors, benefiting its future growth, according to Vlad Tenev.
On Monday, the Treasury said it has selected Robinhood alongside BNY Mellon to help power Trump accounts – tax-deferred, custodial-style investment accounts for children set to launch this summer with a $1,000 seed contribution from the government for kids born between 2025 and 2028 — and build the app linked to it.
Tenev, the CEO of the investing app, called it an evolution of the American Dream and a key part of the company’s own mission to “democratize finance for all,” speaking to CNBC’s “Squawk on the Street” Tuesday.
“This puts Robinhood in front of the next generation … this is literally going to be the first investment account for millions of people,” he said.
He added that in the near-term, the company is more focused on its government partnership rather than monetizing the account, which will be fee- and commission-free for customers.
“These are intended to be the absolute lowest cost vehicles and ways to get customers invested,” he said. However, “there may be, in the future, management fees through ETFs that are deployed in these accounts … those will be very small in terms of how we’re monetizing. The way it works is we’re actually acting as a subcontractor to BNY and so we have essentially a government subcontracting agreement.”
Robinhood will act as a broker and trustee in partnership with BNY, designing the app and providing the front end and customer support, Tenev said.
“This is our first experience really working with the government in in this way,” he added. “Our aspiration is to make this the best product the government has ever been associated with.”
As of March 31, taxpayers had signed up more than 4 million children for Trump accounts, and more than 1 million were eligible for the Treasury’s $1,000 pilot program contribution, according to the IRS
JPMorgan Chase, Bank of America, Wells Fargo, SoFi, BlackRock and Charles Schwab — as well as BNY as and Robinhood — are among the companies that have announced they will match the federal $1,000 contribution for employees’ children.
Robinhood shares gained 1% on Monday following the news.
[ad_2]
Source link
