The online brokerage has about 18 million funded investment accounts on its platform, most of which are held by retail traders.
Offering individual retirement accounts (IRAs) and Roth IRAs, which offer tax advantages to those saving for retirement, would allow Robinhood to tap a vast market. Americans held $12.6 trillion in IRAs at the end of March, up 2.8% from the end of December, according to the Investment Company Institute.
“We are interested in building more account types, including IRAs and Roth IRAs, we’ve been hearing that a lot from our customers. We want to make first-time investors into long-term investors,” Tenev said in response to an investor question.
Due to the penalties involved in withdrawing money, IRAs tend to attract long-term investments, rather than the quick flip in stocks, options, and cryptocurrencies that some investors turn to Robinhood for.
Robinhood, which is targeting a valuation of up to $35 billion in its IPO, has said it will allocate 20% to 35% of shares offered to its users, an unusual move for a high-profile offering. One of the reasons many IPOs enjoy a first-day trading pop is because the retail investors that Robinhood has invited are excluded and must buy shares in the open market.
Robinhood launched its IPO Access platform earlier this year to enable users to buy into the IPOs of other companies if it can negotiate deals with the investment banks handling them.
