Goldman Sachs continues to gain traction in its RIA custodian business, coming off its best-ever month in terms of asset gathering, according to the firm's executives. And while the firm would not provide specific growth numbers, it said it was seeing an increase in the number of requests from advisers in a captive environment. In November, for example, a The Morgan Stanley team with about $650 million in client assets left the office to start their own RIA with Goldman Sachs Advisor Solutions as their lead custodian.
And for the first time, the watchdog is giving some details on its tech stack. Some of the firm's large technology partners include Black Diamond, Orion Advisor Solutions, Advyzon and Amplify, said Richard Lofgren, GSAS head of advisor engagement. It also has API integrations with 42 technology vendors.
The reason behind the growing number of technology integrations is to support advisor choice, Lofgren said. The firm is also working on increasing skills around account opening.
“Me as a custodian pushing that data, pushing positions, activity, all that data back and forth, I'm just empowering the advisor with added choice,” he said. “And they don't just depend on the custodial platform to be able to perform their daily tasks. That's a powerful place because again, it's about their choice, their experience, and less about “Hey, if you want a Goldman experience, it's only in the Goldman ecosystem.”
Lofgren has said the firm is not building a soup-to-nuts technology platform in-house. Much of the engineering work has been on integration with external technology providers, including CRM platforms, trading order and portfolio management software, and financial planning systems.
Richard Lofgren of Goldman Sachs
According to Q3 2024 Insider/Advisor Software Surveywhich surveyed nearly 3,000 firms, GSAS saw the biggest increase in advisor satisfaction, with average satisfaction increasing 22.7% from 2022 to 2023. Custodian assets grew 40% year over year, the survey found.
Goldman first got into the custody business in 2020, when it bought Folio Financial's cleaning and janitorial business, which had $11 billion on the platform from 450 advisors. Since then it has iterated and evolved its care offering.
The Q3 survey shows that GSAS now has a market share of 0.72% in the custody space. Of RIAs maintaining custody with Schwab, 0.89% are considering switching or adding Goldman; this percentage increases to 1.65% for Fidelity users.
Lofgren said the firm is seeing success with advisers who want to take advantage of Goldman's alternatives and trading opportunities. For example, many RIAs are interested in talking to the trading desk about creating a cap and collar around concentrated equity positions, or other ways to create liquidity around large equity positions.
And while the firm is seeing more interest from employee advisors, there is also interest from existing independent advisors looking to transfer some of their business to Goldman.
“They're coming to us and saying, 'Hey, my custodian might be good for this percentage or part of my business, but I have this expanding demographic that says, I need something that maybe my current custodian can't handle. or I can't address,'” he said.