Goldman Sachs continues to gain traction in its RIA custody business, coming off its best month ever in terms of asset gathering, according to firm executives. And while the firm would not provide specific growth numbers, it did say it’s seeing an increase in the number of inquiries from advisors in a captive environment. In November, for instance, a Morgan Stanley team with about $650 million in client assets departed the wirehouse to launch their own RIA with Goldman Sachs Advisor Solutions as their primary custodian.
And for the first time, the custodian is providing some details on its technology stack. Some of the firm’s big tech partners include Black Diamond, Orion Advisor Solutions, Advyzon and Amplify, said Richard Lofgren, head of advisor engagement of GSAS. It also has API integrations with 42 technology vendors.
The rationale behind the growing number of tech integrations is to support advisor choice, Lofgren said. The firm is also working on increased capabilities around account opening.
“Me as the custodian pushing that data, pushing the positions, the activity, all that data back and forth, I'm just empowering the advisor with increased choice,” he said. “And they're not dependent upon just the custodial platform to be able to do their day-to-day duties. That's a powerful place because again, it's about their choice, their experience, and less about, ‘Hey, if you want an experience with Goldman, it's only in Goldman's ecosystem.’"
Lofgren has said the firm is not building a soup-to-nuts tech platform in-house. Much of the engineering work has been on integrating with outside technology providers, including CRM platforms, trade order and portfolio management software and financial planning systems.
Goldman Sachs' Richard Lofgren
According to the T3 2024 Inside Information/Advisor Software Survey, which polled nearly 3,000 firms, GSAS saw the largest boost in advisor satisfaction, with its average satisfaction increasing by 22.7% from 2022 to 2023. The custodian’s assets grew 40% year-over-year, the survey found.
Goldman first got into the custody business in 2020, when it acquired Folio Financial’s clearing and custody business, which had $11 billion on the platform from 450 advisors. It has been iterating and evolving its custody offering ever since.
The T3 survey shows that GSAS now has a 0.72% market share in the custodial space. Of RIAs who custody with Schwab, 0.89% are considering switching or adding Goldman; that percentage jumps to 1.65% for users of Fidelity.
Lofgren said the firm is seeing success with advisors who want to tap into Goldman’s alternatives capabilities and trading chops. For example, many RIAs are interested in speaking to the trading desk about creating a cap and collar around concentrated equity positions, or other ways to create liquidity around large stock positions.
And while the firm is seeing more interest from employee advisors, there’s also interest from existing independent advisors looking to move a portion of their business to Goldman.
“They're coming to us and saying, ‘Hey, my custodian might be fine for this percentage or portion of my business, but I've got this expanding demographic that says, I need something that perhaps my current custodian can't solve or can't address,’” he said.