Robinhood continues to shake up the financial services landscape, but its latest moves have sparked concern among industry professionals who question the company's direction and regulatory track record, according to InvestmentNews.

In late 2024, Robinhood acquired the RIA custodial platform TradePMR for $300 million. The acquisition came as part of its push into wealth management, including new subscription-based advisory services and a robo-advisor offering. However, Robinhood also rolled out March Madness prediction markets – that is, betting -- within its app.

InvestmentNews reports that regulatory scrutiny of Robinhood is not new. The firm paid a $45 million penalty to the SEC for violations spanning 2018 to 2022. It also faced a $70 million fine and restitution order from FINRA in 2021, a $65 million SEC settlement in 2020, and additional payments to regulators in California and Massachusetts in 2024. Critics argue this pattern shows a disregard for fiduciary principles.

Financial advisors agree that gambling generally does not belong in serious financial planning. According to InvestmentNews, Robinhood's gamification tactics also have raised eyebrows. Critics argue that app features like confetti animations and celebratory messages trivialize the risks of investing.

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