Goldman Sachs is steadfast in its burgeoning commitment to its RIA custodian business, as articulated by President and COO John Waldron.
Breaking into this sector is challenging, yet Goldman aspires to achieve a stature akin to Charles Schwab, the leading RIA custodian in the nation. Waldron envisions a future where Goldman is indispensable to RIAs, stating, "In five to 10 years, we hope to be as integral to your operations as Schwab is today."
Addressing a group of independent advisors, many of whom currently partner with Schwab, Waldron emphasized that Goldman is not looking to supplant Schwab but to complement its services. He outlined a broad spectrum of offerings including safeguarding client assets, extending credit, and providing access to alternative investments, aiming to become "embedded, trusted, and important" in the RIA landscape.
Goldman's strategy involves leveraging its acquisitions like United Capital in 2019 and Folio Financial in 2020, which laid the groundwork for its RIA custody services. The disposal of United Capital to Creative Planning was a strategic move to sharpen focus and resources on enhancing their RIA platform, which distinctively serves both high-net-worth individuals and institutional advisors separately.
The transition to Goldman’s platform, though daunting due to the cumbersome process of repapering client accounts, is seen as feasible due to Goldman’s robust capabilities and strategic acquisitions. These moves underscore Goldman’s commitment to scaling its RIA operations by tapping into a broader retail investor base through intermediary RIAs.
Marc Nachmann, Goldman's Global Head of Asset and Wealth Management, clarified their refined approach to the RIA market, stressing that Goldman will now focus on supporting RIAs rather than owning them. This shift enables Goldman to leverage its high-net-worth advisory strengths without directly competing with most RIAs. He pointed out the strategic timing for acquiring new RIA clients, particularly when advisors are transitioning between platforms and already undergoing the repapering process.
The landscape of RIA custodians has seen significant consolidation, notably with Schwab's acquisition of TD Ameritrade in 2020. Despite the competitive market dominated by giants like Schwab, Fidelity, and BNY Mellon’s Pershing, Goldman sees potential in carving out a niche. This is particularly relevant for advisors leaving national brokerage firms or those seeking to diversify their custodian relationships.
Goldman acknowledges the challenges ahead in scaling its RIA custodian services but remains optimistic about its strategic positioning and the unique value proposition it offers to the RIA community.
