Robinhood rolls out new Amazon-inspired subscription model

Robinhood has unveiled a new subscription strategy that could see users enjoy perks similar to what Amazon Prime or Costco offers its customers.

Vlad Tenev, chief executive officer of Robinhood, said during an interview with CNBC that the company sees the loyalty market as a huge opportunity for growth.

This could be big news for crypto as it means adding more services, including digital assets, wealth management and tax advice to the company’s monthly subscription service.

If the portfolio offers a suite of products that investors see as valuable, more people will be willing to pay the subscription fee, the Robinhood CEO noted.

According to him, this is a model that Amazon has perfected and one that Robinhood finds very interesting. It’s a model that could drive the loyalty market across the financial services, Tenev said.

Loyalty in the financial services market, in Tenev’s opinion, is significantly crucial. Mainly , it is because it can be equated to wallet share.

“My philosophy behind it is subscriptions are about loyalty. So if you’re a subscriber to something, then that service is sort of the first in mind when you think about trying something else from that category.”

Robinhood’s Gold subscription currently charges a monthly fee of $5 or $50 annually.

With this, subscribers enjoy perks such as a 4% interest on their uninvested cash. They also get access to professional research, among others.

The company is now revamping the offer with the new Robinhood Strategies, adding wealth management to bring exchange-traded funds and top handpicked stocks. Subscribers to Gold will pay a 0.25% management fee, with this capped at $250.

Robinhood hopes this strategy will see its users access loyalty perks similar to what has Amazon Prime or Costco members hooked. If the customer base feels the offerings justify the monthly fee, they will pay and keep coming back, he noted.