Skip navigation
Wealth Management EDGE Diana Britton Joe Duran Photo by Ledd Lens LLC

Wealth Management EDGE: Duran Says PE Demands Bring National RIAs Closer to Wirehouses

During a conversation at Wealth Management EDGE, the former CEO of United Capital called private equity “economic creatures” that may add leverage and unnecessary changes.

The influx and demands of private equity in the RIA space increasingly leave little difference between the largest national RIAs and the wirehouses, according to Rise Growth Partners Joe Duran.

During a conversation with Managing Editor Diana Britton at Wealth Management EDGE at the Diplomat Beach Resort in Hollywood Beach, Fla., Duran said the industry was operating in an environment where everyone who wants a planner can get one, including from the large, national firms.

However, many of these firms are partly owned by private equity, which Duran deemed “money with no instinct or desire to help underlying consumers;” smart people run them, but they are “economic creatures” at heart.

“So they’ll add leverage, they’ll force changes that are not necessarily good for clients, and there’s not a huge difference between the large national RIAs and the wirehouses, other than that they have slightly different regulations,” he said.

Since advisors are available everywhere, Duran said the RIA space shouldn’t be seen as a growth industry but a struggle for market share. He worried the plethora of firms buying other firms could leave both parties in a worse position by diluting their brand. Large firms have done well with operational excellence.

“Sadly, as soon as they do one sponsor-to-sponsor deal, they sell their souls, they’ve got to do a mountain of acquisitions, they don’t integrate them, and now you have a hodgepodge of advisors under one brand, but no consistent delivery, no promise made, serving every client the same way,” Duran said. “How can they win?”

Duran acknowledged that his former firm, United Capital, had done acquisitions but said the firms it bought were invariably better for having done the deal. However, Duran’s concern for the largest RIAs is they may not see an exit if they want to be acquired. The largest wirehouses won’t buy them, he surmised, and the public market won’t pay what they desire.

“So is it sponsor to sponsor to sponsor? How many times can that happen before somebody says ‘There has to be an exit sign here somewhere,’” Duran said. “I look, and I don’t see anything in these large national firms, something that I wish I’d built.”

Duran founded United Capital in 2005, and in 2019, Goldman Sachs acquired the firm for $750 million as an attempt by the bank to broaden its wealth management services into the mass affluent market. Duran joined Goldman, and United Capital rebranded as Goldman Sachs Personal Financial Management.

But in 2023, Duran left Goldman, and within months, the bank was unloading the former United Capital business. Creative Planning opted to buy the company, expanding its total assets to nearly $275 billion. Observers told the RIA had “never found a home” at Goldman Sachs, with one former United Capital advisor saying Goldman had “killed everything the firm stood for.”

In his conversation at EDGE, Duran said Goldman had decided they needed to “get to their core” and that the strictures inherent in operating in that environment were a strain for all involved.

“The brand is powerful, but if you’re a global bank, there’s a set of controls that have to be in place that are the reason Goldman has the reputation it has,” he said.

Notably, the controls and systems in place at Goldman put a “huge tax” on the individual United Capital businesses and the broader institution, a cost that was ultimately too high.

“Every business that buys a business has a right to change its mind,” Duran said.

Duran launched Rise Growth Partners earlier this year. The company will take minority investments in next-gen RIAs with between $1 billion and $5 billion in managed assets and help them become national platforms with more than $10 billion in assets. 

In February, Rise Growth Partners announced it had raised $250 million from private equity firm Charlesbank.

TAGS: Industry
Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.