An opinion from a former Merrill Lynch Trust Company portfolio manager
I spent my career inside one of the most storied names in American finance. I managed portfolios at Merrill Lynch Trust Company, SunTrust and SouthTrust Bank at the peak of my investment journey I solely managed a trust investment department in Florida with assets over $850 million (when that was considered a lot of money). I sat in the meetings, saw the org charts, walked the branch offices, and watched the machine work from the inside.
So understand that what I’m about to say is not the hot take of a Reddit day trader or a fintech evangelist who’s never read a 10-K. It’s the conclusion of someone who spent years serving the legacy financial system and finally admitted what the numbers have been screaming for a decade.
If you are going to own one financial services company for the next twenty-five years, there is only one worth owning: Robinhood.
Not JPMorgan. Not Bank of America. Not Morgan Stanley, Wells Fargo, or any of the marble-lobby institutions that have defined American finance for a century. Those firms are not building the future. They are managing the decline of the past — and the past, I can tell you from experience, is expensive to maintain.
Legacy Finance Invested in Decaying Assets
Walk into any bank branch in America on a Tuesday afternoon. Count the customers. I’ll wait.
The legacy financial industry has hundreds of billions of dollars sunk into physical infrastructure that fewer and fewer people use: branch offices in strip malls, regional headquarters, trust departments with wood-paneled conference rooms designed to impress clients who now do everything on their phones.
These are decaying assets. They generate cost, not growth. Every branch is a lease, a staff, a security system, a compliance apparatus — a fixed expense justified by foot traffic that peaked before the iPhone existed.
And it’s not just the real estate. Look at the product shelf. The core offerings of legacy finance — the home mortgage, the savings account, the certificate of deposit — are products that have not meaningfully evolved in a hundred years. A 30-year mortgage in 2026 works essentially the way it did in 1936.
A savings account still pays you a fraction of what the bank earns on your money and calls it a relationship. The industry’s response to a century of technological change was to take the same products and put a slightly worse version of them behind a login screen.
Legacy firms will tell you their moat is trust, history, and full-service advice. What they actually have is inertia — trillions in assets held by clients who opened their accounts decades ago and haven’t gotten around to leaving. Inertia is a real asset. But it is a melting one, and it melts one funeral, one inheritance, one frustrated phone call at a time.
Robinhood Built the Architecture of the 21st Century
While the incumbents were renovating branches, Robinhood was building something else entirely: financial infrastructure native to the century we actually live in.
The architecture of 21st-century finance is not a building. It is frictionless, low-fee, high-performance product delivered with precision to a laptop or a phone. Robinhood didn’t bolt an app onto a 1950s business model. The app is the business model. There are no branches to subsidize, no legacy mainframes from the Reagan administration, no army of middle managers whose job is to protect fee structures invented when trades were shouted across a floor.
That difference isn’t cosmetic. It’s structural, and it shows up in every economic decision the company makes. When your cost base is software instead of square footage, you can do things the incumbents mathematically cannot:
You can charge zero commissions on stock and ETF trades — a move Robinhood made standard and the entire industry was dragged into copying, at enormous cost to their own revenue lines.
You can pay retail customers a genuinely competitive yield on uninvested cash, at rates that make the traditional savings account look like the insult it always was. You can offer matches on retirement contributions — actually paying customers to move their IRAs — a promotion no legacy firm can stomach because their margins are already committed to overhead.
You can hand out a percentage back on transfers, on deposits, on gold subscriptions, and still come out ahead, because the marginal cost of serving one more customer is close to zero.
This is the point legacy executives refuse to internalize: Robinhood’s rewards aren’t a marketing gimmick funded by burning venture capital. They are the natural output of a superior cost structure. When it costs you almost nothing to serve a customer, you can give the customer almost everything. When it costs you a branch network to serve a customer, you have to take from the customer to survive.
The incumbents can’t match Robinhood’s fee structure and rewards without detonating their own income statements. So they don’t.
The Only Metric That Matters: New Accounts
“Here is what my years in the industry taught me, and what a 25-year bull market has hidden from almost everyone: the future of financial services will be won and lost on one metric. New accounts.” Brian French
Not assets under management. Not revenue per client. Not brand prestige. New accounts.
Why? Because assets are a lagging indicator and accounts are a leading one. Assets tell you who won the last generation. Accounts tell you who is winning the next one. A 24-year-old with $3,000 in a Robinhood account looks like a rounding error next to a 68-year-old with $3 million at Merrill. But the 24-year-old has forty years of earnings, contributions, inheritances, and compounding in front of them.
The 68-year-old’s assets are, actuarially speaking, on their way out the door — into estates, distributions, and, increasingly, into the accounts of children who have never set foot in a branch and never will.
Now look at the numbers. In 2025, by my count, Merrill Lynch opened roughly 35,000 new accounts. Robinhood opened 2.2 million. That is not a competition. That is a sixty-to-one rout. That is one firm harvesting the future while the other polishes the past.
And here is the part that should terrify legacy shareholders: the great bull market in asset values has camouflaged this collapse completely. When the S&P rises double digits a year, a wealth manager’s AUM grows even as its client base ages and shrinks. The stock price looks fine.
The dividend gets paid. The annual report celebrates “record client balances.” Meanwhile the firm is hemorrhaging the only thing that actually matters — new clients — and nobody notices because rising markets lift the corpse and make it look like it’s swimming.
Take away the market tailwind and the picture is brutal. Legacy wealth management is a business whose customer acquisition engine has failed, sustained by appreciation on accounts opened by people who are retiring, decumulating, and dying. The bull market didn’t fix that. It just delayed the day everyone has to admit it.
I watched this from the inside. The average age of a full-service brokerage client kept climbing. The recruitment of next-generation clients kept getting discussed in strategy decks and kept not happening, because the economics don’t work: you cannot profitably serve a $5,000 account with a human advisor, a branch, and a compliance stack built for millionaires. So the industry made a quiet, fatal decision — to ignore small accounts and wait for young people to get rich enough to be worth serving.
They will get rich. And when they do, they will already be Robinhood customers, with a decade of history, habit, and trust in the platform that treated them like clients when they had $500 to their name. The greatest wealth transfer in human history — tens of trillions moving from boomers to their heirs over the coming decades — is going to flow through whichever firms hold the receiving accounts. Robinhood is opening those receiving accounts at a rate of millions per year. Merrill is opening tens of thousands.
From Trading App to Full-Stack Financial Institution
The standard objection I hear from old colleagues is that Robinhood is “just a trading app for kids” — cyclical, meme-driven, a toy. That description was arguably fair in 2020. It is willfully blind in 2026.
Look at what the company has actually shipped: retirement accounts with contribution matches. High-yield cash management. Credit cards with rewards that undercut the big issuers. Margin rates dramatically below the double-digit rates legacy brokers still have the nerve to charge. Options and futures. Crypto. Advisory and managed products.
A premium subscription tier that customers happily pay for because it delivers obvious value. Piece by piece, Robinhood is assembling the full product shelf of a diversified financial institution — checking-like cash features, investing, retirement, credit, lending — except rebuilt from scratch on modern rails, without the century of accumulated cost dragging on every offering.
In other words, Robinhood is becoming everything the legacy firms are, minus everything that makes the legacy firms uninvestable. Every product it adds is another revenue stream layered onto the same near-zero-marginal-cost customer base. Every product a legacy firm adds is another initiative taxed by the overhead of the old machine.
The trajectory matters more than the snapshot. The incumbents are trying to subtract their way to the future — closing branches, cutting staff, sunsetting systems — and subtraction is slow, painful, and politically brutal inside a big organization. Robinhood is adding its way to the future, and addition on top of clean architecture is fast.
What I’d Tell My Former Clients
If I were still managing money for families the way I did at Merrill Lynch Trust, here is the uncomfortable conversation I would be having: the financial sector allocation in your portfolio is probably a museum.
It’s full of names your parents trusted, paying dividends out of businesses whose customer bases are aging out, whose cost structures cannot be fixed, and whose “digital transformations” amount to repainting the deck of a ship with a name that starts with a T and ends with a C.
The 21st century in financial services belongs to the firm that owns the customer relationship at the point of formation — the first account, the first paycheck, the first thousand dollars — and then grows with that customer for fifty years across every product they’ll ever need. There is exactly one firm executing that playbook at scale, with the cost structure to sustain it, the product velocity to extend it, and the account-opening numbers to prove it.
The legacy institutions had a hundred years and every advantage — the capital, the brands, the regulatory relationships, the client lists. They spent it defending branches and fee schedules. Robinhood spent fifteen years building the thing customers actually wanted. The market share numbers of the next two decades were decided by that choice, and I believe the verdict is already in the account-opening data for anyone willing to look.
The bull market hid the decline of legacy finance. It will not hide it forever. When the tide goes out, the firms that own the next generation will be the only ones still standing where the water was — and only one firm has been signing up that generation two million accounts at a time.
That is why, in my view, Robinhood is not just a good financial stock. It is the only financial firm worth investing in for the 21st century.
The views expressed here are the author’s opinion, based on personal industry experience, and do not constitute investment advice. Figures cited reflect the author’s own estimates and should be independently verified. All investing involves risk, including the possible loss of principal.
