Consolidating fundamentals sows the seeds of controversy Robin Hood Securities extends its reach to college campuses

As the first choice for young U.S. investors to enter the market, Robinhood Markets is taking action to make the user base younger.

According to media reports, starting wednesday, the controversial Internet brokerage will launch a national marketing campaign for college students. According to public information, for new users who register for an account using the campus mailbox, the "retail base camp" will give them $15 for trading, and these new users will also have the opportunity to participate in the $20,000 lottery. Throughout the fall, Robin Hood Securities executives will shuttle across the country to universities and community colleges.

At the beginning of this year, after the Reddit community investors discovered the opportunity to force the game station short, the crazy income also attracted a large number of young people who had never participated in securities trading to open an account and speculate. According to Robin Hood Securities, the median age of platform users is 31 years old, and more than half of users open securities accounts for the first time. There are already 3.8 million student users on the company's platform.

For the originator of the zero-commission brokerage that has just completed the listing, in the process of gradually fading the frenzy of securities trading, how to avoid the rapid decline of business data is the top priority at present. The student body, which is sensitive to price and incentive policies, is the best target for expansion.

Aparna Chennapragada, head of product at Robin Hood Securities, said in an interview with the media that the latest move will also help the company realize its vision of helping zero-experience investors enter the market. Aparna stressed that the latest event is like meeting the next generation of investors at home, while also instilling in young college students the meaning of compounding interest in the medium and long term of investing.

<h3>(How much can an annualized 6% yield of $25 invested in a monthly investment turn into, source: company promotional page).</h3>

Although from the perspective of operational strategy and corporate image, it is completely in line with business logic to attract college students to open accounts and speculate in stocks, this move is also full of dangers. Robin Hood Securities has recently been criticized by the U.S. Congress and the SEC, which has seen the Internet brokerage as a "representative of the game of trading" and criticized it for encouraging investors who are not yet involved in the world to take risks that they do not understand.

For Robin Hood Securities, encouraging reckless, frequent trading, and short-term student users to enter the market naturally also has unstable factors that lead to reputational risk. A 20-year-old U.S. sophomore committed suicide in June after trading options on the platform and losing $730,000, and his bereaved family took Robin Hood Securities to court early this year, accusing brokers of luring young investors to take risks on complex financial instruments. In a prospectus disclosed by the company in July, the company said it had reached an out-of-court settlement with the plaintiffs, but did not disclose the specific amount of the settlement.

Also in June, the Financial Industry Regulatory Authority (FINRA) reached a settlement with Robin Hood Securities, which would be required to pay a $70 million settlement fee, but the company would not need to admit or deny the allegations of "misleading customers". Chennapragada said the company has invested heavily in educating young investors this year and launched a newsletter subscription service, but the product executive acknowledges that most young people are not ready to think about investing.

It is worth mentioning that although there are risks in attracting young people to the market, the Robin Hood family is not the only one trying to grasp this trend. According to media reports, JPMorgan Chase, the largest on Wall Street, is refining its online trading products, and Fidelity Investment has allowed the company's existing customers to open trading and savings accounts for their children aged 13-17.