Lawrence Glazer makes his living preaching prudence.
The co-founder and managing partner of Mayflower Advisors, a Boston-based registered investment advisory, spends his days crafting retirement portfolios built to withstand market cycles and impulsive financial decisions.
To manage the wealth of his mainly boomer clients, he depends on an old-guard brokerage giant, the kind of firm that prizes financial fundamentals over flashy talk about democratizing finances.
Yet Glazer can’t help but marvel at the gravitational pull of Robinhood Markets — the fast-growing, app-based brokerage that has swept up millions of young investors by fusing stock trading with entertainment.
“We have to acknowledge change,” says Glazer. “Financial advisers who don’t like change will dislike irrelevance even more.” Registered investment advisers like Glazer sit at the center of a coming upheaval in wealth management. As over $100 trillion moves from baby boomers and older generations to their millennial and Gen Z heirs, these independent RIAs are becoming the gatekeepers for where that money goes — and which platforms capture it. Traditional brokerages and fintech challengers alike are racing to win their business, betting that whoever secures the advisers will command the next generation of investors.
Robinhood, once dismissed as a trading app for dabblers, wants a seat at that table. The company is building out products aimed at attracting even more millennials, expanding into retirement accounts, and positioning itself as a low-cost, tech-savvy alternative to the incumbents that still dominate the advisory market.
As a firm built on zero-commission trades and mobile design, Robinhood’s pitch to RIAs is simple: The same ease of use that hooks hordes of retail investors can power their clients’ wealth management as well.
“What an adviser really wants is to establish a relationship with the next generation of investors — and those investors live at Robinhood,” says Steve Quirk, Robinhood’s chief brokerage officer.
The incumbents aren’t standing still. Charles Schwab, Fidelity, and BNY Pershing have poured billions into digital upgrades, hybrid advisory models, and next-gen onboarding programs designed to keep assets from drifting away. They’re betting that clients who’ve trusted them for decades will steer their heirs toward the same platforms, where human advisers and algorithmic tools can coexist.
“We’re making tremendous investments in our app, continuing to make it more user-friendly and attractive for younger clients,” says Andrew D’Anna, chief operating officer for Schwab’s Retail business. “But as they evolve from trading and investing to broader
wealth management, they also want a balance between people and technology. When they have questions, it’s nice to be able to walk into a branch and look someone in the face.”
For now, the incumbents hold the advantage: Schwab alone custodies almost $5 trillion in assets for independent advisers.
That’s a scale Robinhood can only envy — but also one it clearly aims to disrupt.
Robinhood’s bet is that it can keep and grow its base of millennial and Gen Z investors by layering on more of the products they once turned elsewhere for. In the past two years, it has added individual retirement accounts with matching contributions, a high-yield cash sweep program, and a credit card — all of them tied directly to its brokerage app.
The company is also building tools for advisers and long-term savers, edging closer to the traditional wealth-management model. Each addition moves Robinhood further from its roots in no-fee trading — and closer to becoming a one-stop financial platform for the investors it helped create.
Advisers like Glazer see promise in Robinhood’s evolution but remain wary of its pedigree. The platform’s early reputation for gamified trading and meme-stock mania still lingers. More recently, it is offering bets on everything from politics to playoffs. For many in the profession, Robinhood represents both a threat and a test case — proof that younger investors want autonomy and speed, but also that they may need guidance when markets turn volatile.
“Robinhood was a rule breaker and moved very quickly, while traditional financial service firms just stood around observing,” says Glazer. “But the big test of its business model will come when there’s a protracted market downturn.”
Robinhood began in 2013 and launched its app in 2015, riding free trading to mass adoption. Instead of charging customers commissions, Robinhood made its money by collecting fees from the trading firms competing to execute its orders — a model known as payment-for-order flow. Those market makers earn their profits by matching buyers and sellers and taking a sliver of each trade, making it a pure volume business for both sides. By
removing commissions and building an easy-to-use app, Robinhood stripped away two of the biggest barriers for new investors with little money or market experience.
Critics asserted that payment-for-order encouraged more trading, not responsible investing. They also derided Robinhood’s gamifying antics, such as digital confetti exploding on the mobile screen whenever a customer completed a trade.
The model showed cracks in early 2021, when the GameStop frenzy forced trading curbs and massive collateral calls. GameStop, a struggling video-game retailer, became the target of an online meme campaign by retail traders — many of them on Robinhood’s platform — who drove up its stock to punish hedge funds betting against it.
The sudden surge in trading volume and volatility forced Robinhood to post billions in extra collateral with clearinghouses — cash it didn’t have on hand. This exposed how much its zero-commission model depended on thin capital buffers and outside market makers. Over the last five years the company has also had to pay more than $200 million in fines and settlements.
In 2020, Robinhood paid $65 million to settle SEC charges that it misled customers about how it made money from payment for order flow and failed to deliver the best execution on trades. The following year, FINRA imposed a record-setting $70 million penalty, including $12.6 million in restitution, citing “systemic supervisory failures” ranging from platform outages to misleading communications and lapses in options and margin account oversight.
The GameStop controversy, combined with high interest rates that battered the economy, forced Robinhood to shift course. Making matters worse, Robinhood was hit hard by the market downturn in 2022 brought on by higher interest rates.
“This required the company and me personally to make many decisive changes to not just survive, but thrive in our new reality,” says Vlad Tenev, Robinhood’s co-founder and CEO. “I’d be lying if I said I didn’t question whether I was the right person to lead through that period.”
Seeking to rehabilitate its image, Robinhood removed the digital confetti animation in the weeks after the GameStop controversy erupted.
To steady its operations and navigate the regulatory fallout, Robinhood leaned on former SEC commissioner Dan Gallagher,
who had joined as chief legal officer months before the GameStop crisis. It also hired longtime Schwab executive Quirk as its chief brokerage officer in 2022.
Since then, Robinhood’s product slate has broadened far beyond trading. In fact, simple stock trades now account for less than 10 percent of revenue, while 11 different business lines each surpass $100 million in annualized revenue.
Arguably the most prominent new business line is Robinhood Gold. For a $5 monthly subscription, it offers higher cash yields, larger instant-deposit limits, and access to margin investing and research. Another key product is a cash-management program that earns customers high-yield interest on uninvested balances that are swept into a network of FDIC-insured partner banks. This effectively turns Robinhood into a hybrid brokerage-banking platform for younger investors.
There are also the company’s retirement accounts. Launched in late 2022 with a 1 percent match on every dollar contributed (and 3 percent for Robinhood Gold subscribers), it marked Robinhood’s first serious move into long-term wealth management.
Then in November 2024, Robinhood agreed to acquire TradePMR — a 25-year-old RIA custodian serving roughly 350 firms with about $40 billion under administration. This imported the adviser-facing infrastructure Robinhood previously lacked.
As of the third quarter 2025, Robinhood had about $333 billion in assets under administration and 26.8 million, mainly millennial, funded accounts — evidence that the post-2021 rebuild has turned into scale that many RIAs can’t ignore.
“To be able to form a relationship with a firm that has all those young clients on board and create a bridge to advise them is unheard of in our industry today,” says Robb Baldwin, head of TradePMR, who considered offers from traditional brokerage-wealth managers before merging with Robinhood.
Some sell-side analysts sound equally enthusiastic about Robinhood as its market value has more than tripled in 2025 to $119 billion as of December 5 — enough to gain inclusion to the S&P 500 this past September.
“They have a perfect combination of a very conservative management team and cutting-edge products and services,” says Dan Dolev, a Mizuho Securities analyst. He doesn’t believe Robinhood’s regulatory run-ins risk slowing its recruitment of younger investors. “They like its anti-establishment image,” he says.
But skeptics remain unconvinced by Robinhood’s transformations.
“An RIA is required by law to act as a fiduciary for its clients,” says Knut A. Rostad, president of the Institute for the Fiduciary Standard, a non-profit that plays an influential role in shaping the ethical and professional environment in which RIAs operate. “And based on its own record, Robinhood doesn’t have a clue about what fiduciary advice is supposed to be.”
Robinhood’s efforts to move from maverick upstart to trusted market leader echo those of its biggest competitor.
When Charles Schwab launched his eponymous firm in 1973, share trading was dominated by traditional Wall Street brokerage firms who agreed among themselves to set high commissions that only affluent investors could afford. But two years later, the SEC deregulated the securities industry — and Chuck Schwab became a legendary disrupter.
Schwab discouraged chummy relationships between investors and his brokers. There would be no wining and dining of clients, no outings on golf courses, no unsolicited (and expensive) advice on stocks. Visits to Schwab offices were unnecessary; phone calls would suffice.
Wall Street firms were outraged by the newcomer. They bad-mouthed Chuck Schwab for allegedly lacking class and financial acumen. But Main Street was enthralled.
A half-century later, Robinhood’s Tenev finds himself in a similar position. He has shrugged off the invective while gathering a vast, new following. He has set Robinhood apart from its hallowed predecessor by reimagining the financial services experience from the ground up for a tech-savvy audience.
And now Schwab has to make sure the next generation of investors doesn’t see it as yesterday’s brand.
First order of business is the age issue. On average, investors at Schwab and the other incumbents are a generation older than Robinhood investors. But Schwab executives emphasize that a majority of new clients in 2025 are millennials and Gen-Zers.
“One of the reasons they’re turning to Schwab is because we’re meeting them in the channels where they turn for information about investing,” Schwab CEO Rick Wurster told analysts in October.
The most popular online resource for millennials and Gen-Zers is YouTube, where Schwab now claims to have more followers than its rivals. On Instagram, Schwab’s “lessons from a sneaker-head” uses a kid who collects sneakers as a way to talk about investing to younger clients.
“So any image of us being a firm only for boomers is being replaced,” insists D’Anna.
To contrast itself with Robinhood, Schwab is trying to strike a balance between staying relevant and staying reliable.
D’Anna decries the “increasing tendency in the marketplace, especially from some of our fintech entrants, to blur the lines between what it means to invest and what it means to gamble.”
But Schwab itself is considering entry into the prediction markets, where bets on election, economic, and sports outcomes have become one of Robinhood’s fastest growing revenue sources. And Schwab is following Robinhood’s lead into crypto, though according to D’Anna, his firm is interested only in “established coins that have been around a long time.”
Few in the advisory world question Schwab’s long-standing reputation for reliability. It leads the industry with nearly 15,000 RIAs under its custodial roof. It offers RIAs access to every major asset class: mutual funds, ETFs, fixed income, alternatives, options, managed accounts, and banking services. And many RIAs rely on large custodians like Schwab and Fidelity for the unglamorous but essential operational work.
“They are looking for a partner who can process the needed paperwork to open client accounts, move money, handle tax issues and answer their questions quickly by phone,” says Ben Henry-Moreland, a financial planner at Kitces.com, a consultancy for RIAs.
“Schwab and Fidelity may not be as technologically adept and up-to-date as Robinhood, but they have invested a lot on the service side over the years.”
Robinhood’s challenge is persuading advisers and younger investors that a platform built in the smartphone era can compete with the service infrastructure Schwab and Fidelity have spent decades constructing.
What makes that task less formidable is a growing desire among RIAs to have a least a partial backup to the big custodians.
“We want to make sure that custodians allow us access to the full universe of investing,” says Gabriel Shahin, founder of Falcon Wealth Planning, a Los Angeles-based RIA.
The recent controversy between Fidelity and Pontera, a software platform, underscores how constrained advisers can feel when they rely too heavily on a single incumbent. The dispute centered on Fidelity blocking its affiliated RIAs from using Pontera, a third-party platform that lets advisers manage clients’ 401(k) assets directly.
Fidelity argues that third-party tools like Pontera expose investors to unnecessary security and privacy risks by relying on credential-sharing workarounds that bypass established safeguards.
The firm says its obligation is to protect account integrity — even if that means cutting off access to outside platforms.
“Fidelity is announcing that the company will begin taking steps to prevent platforms reliant on credential sharing from accessing and taking action in customer accounts held at Fidelity,” the firm said in a September 2024 public statement. “This change is with customers’ best interests in mind to enhance security and reduce customer data exposure.”
But Glazer, for one, isn’t buying this explanation. “The RIA industry doesn’t want these big custodians to push them around,” he says. “That’s why a fast-moving, well-financed competitor like Robinhood has the potential to build market share.”
To strengthen its appeal among independent RIAs, Robinhood is positioning itself on the age question in a way that’s almost the mirror image of Schwab. While Schwab tries to project itself as getting younger, Robinhood says the median age of its investors has risen from 31 in 2021 to 35 today. And that means they will be asking Robinhood for wealth management.
“Many are having families, purchasing homes, starting retirement accounts,” says Quirk. “They don’t have as much time as they previously did to do their own self-directed investing.”
The tougher test for both Robinhood and Schwab may come from the next market downturn – and how each platform prepares its customers for it.
According to Schwab’s D’Anna, it’s difficult to convince millennials and Gen Zers, who have only lived through rising markets, that prolonged downturns are inevitable. “The hard lessons of investing are almost always learned through experience,” he says.
By contrast, Robinhood takes a more relaxed approach, suggesting that because of their youth, millennials and Gen Zers can consider market plunges as buying opportunities.
“They should be aggressive when there are downturns because they have 30 or 40 more years to invest,” says Quirk. “Whereas a Schwab or Fidelity customer who is 60 may have to depend on returns for the next couple of years.”
Glazer is preparing for the downturn in his own way. If markets turn ugly, he wants a bench of younger advisers who can talk with millennial clients on their own terms.
“We have a lot of boomers as well as their kids and even grandkids because we’ve been in operation for five decades,” says Glazer. “Younger people don’t want the call centers and cookie-cutter portfolios that are offered to older clients. They want a more personalized, customized approach.”
So, bottom-line, would he consider turning to Robinhood for some of those younger advisers?
“In a word,” he says, “Yes.”
