Robinhood Reinvents Private Banking With 'Schwab for Everyone' Vision, Says Bernstein

Robinhood's (NASDAQ:HOOD) expansion into private banking is a strategic move to capture a slice of the $114 trillion wealth transfer heading toward younger, tech-savvy investors—and Bernstein says the plan is paying off.

What Happened: In an investor note on Thursday, Bernstein analysts called Robinhood's latest offerings "Schwab elite banking for everyone," emphasizing the platform's shift toward higher-end financial services traditionally reserved for the wealthy.

The company recently introduced three major products—Robinhood Strategies, an automated investment advisory service; Robinhood Cortex, an AI-powered research assistant; and Robinhood Private Banking, a new suite offering savings, checking, and concierge perks.

All are currently available or rolling out to Robinhood's 3.2 million Gold subscribers.

"These product launches signal Robinhood's intent to evolve from a trading-first app to a full-service financial platform," wrote the analysts. "Its Gold membership base has nearly doubled in 2024, indicating growing interest in premium services."

Robinhood Gold, the firm's subscription tier, is gaining traction with younger users.

For $5 per month, members get access to lower trading fees, high-yield savings, a 3% cashback credit card, and now, private banking features.

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Bernstein estimates the Gold platform now contributes $190 million in annual recurring revenue.

The new private banking features include a 4% APY savings account—more than nine times the national average—instant account setup, paycheck transfers, international payments, and luxury services like event ticketing and travel concierge.

Robinhood Strategies, meanwhile, offers personalized stock and ETF portfolios with a low annual fee of 0.25%, capped at $250 for accounts above $100,000.

According to Bernstein, this model undercuts traditional advisors and aims to appeal to cost-conscious investors looking for guided portfolio management.

Cortex, the AI tool, equips users with real-time price tracking, financial analysis, breaking news updates, and options strategy support—tools typically used by institutional traders but now bundled for free with a Gold subscription.

"These moves show Robinhood is focused on building wallet share, growing from low-balance active traders to high-value users," Bernstein noted.

What’s Next: The report highlights how average customer balances have nearly tripled over two years, from $2,700 in 2022 to $7,700 by 2024.

Bernstein has placed an "Outperform" rating on Robinhood with a price target of $105, citing the company's evolving business model and successful integration of disruptive technologies like crypto and AI.

"Robinhood is reimagining banking through tokenization and artificial intelligence," the analysts wrote, adding that such innovations help reduce costs and widen access to financial tools once limited to high-net-worth individuals.

As traditional brokerage models come under pressure, Bernstein sees Robinhood's new approach—rooted in user experience, automation, and low fees—as a strong contender for next-gen wealth management.

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