There are few fintech standouts that have changed the rules of the game more than Robinhood, the retail trading app that, for better or worse, has put investment into the hands of people who previously were shut out of the financial world altogether. And with the waitlist already filling up for its new IRA account, for which the company announced it will match 1% on every dollar invested, it’s a good bet that its latest development will continue this trend of disruption.
As the company’s Co-Founder and Chief Executive Officer Vladimir Tenev put it in a recent interview about the new service, Robinhood has built this completely novel IRA program specifically for employees of the new gig economy, “who are contractors or who are working multiple jobs that don’t have access to a traditional safety net pension plan or 401(k)s with a match.” While traditional 401(k) accounts are still the gold standard for retirement savings, Tenev said, “not everyone is privileged enough to be eligible for one.”
Robinhood’s move into the world of retirement saving comes at a critical time for the company. With two major rounds of layoffs and a $30 million fine issued against its crypto trading division in the recent past, the company’s stock has dropped sharply to below $10 per share, down from $23.74 earlier in the year.