By Andrew Welsch
Goldman Sachs Asset Management is joining with fintech GeoWealth to help registered investment advisors provide retail investors with more personalized portfolios, a move that comes amid Goldman's efforts to drum up more business with the nation's thousands of RIAs.
Financial advisors have been striving to deliver more customized investment solutions to high-net-worth investors, but it can be a time consuming task to do so at scale, says Greg Weiss, head of wealth customized solutions at Goldman Sachs Asset Management.
"For an advisor to build a high-net-worth portfolio, including munis customized by state, mutual funds, ETFs, and so forth, it can typically include five accounts," Weiss says. "That means five statements, five tax documents and so forth. You can imagine how complex that is."
That's where Goldman and GeoWealth want to step in and help advisors using GeoWealth's unified managed account platform, he says. On Monday, they announced their partnership.
Essentially, a unified managed account can house all those different types of investments in one place. With the new partnership, an RIA will be able to access Goldman's investment solutions and asset allocation guidance via the UMA.
Advisors will be able to build custom models that reflect the RIA's investment philosophy and which takes into account each investor's tax situation, preferences, and objectives, according to Goldman. The company has plans to add additional investment products and solutions to the UMA offering, such as direct indexing. The offering is available at no additional cost to RIAs that use GeoWealth's turnkey-asset-management-program, or TAMP.
Goldman sees its target market as advisors with more than $500 million in assets who want to offer customized portfolios within a UMA. The service is available to any RIA regardless of where the firm custodies client assets (many RIAs use multiple custodians to hold assets).
"It's an augmented CIO offering," Weiss says. "I don't say outsource, because it's not intended to replace the RIA's CIO [chief investment officer], but to help them personalize at scale."
UMAs have grown in popularity with advisors who serve high-net-worth clients. Research firm Cerulli Associates estimated that UMAs held $2.5 trillion in assets as of 2023.
Since selling United Capital in 2023 ( an RIA that it bought in 2019), Goldman has sharpened its focus on expanding its business with RIAs. The company offers advisors research and asset management products and services. It also has a unit that custodies assets on behalf of RIAs. Earlier this year, Goldman emphasized its commitment to growing market share with RIAs at a New York conference it organized for top advisors. RIAs are one of the fastest-growing segments of the wealth management industry.
"Our ultimate ambition is to become the RIAs' essential partner," Weiss says.
Goldman chose to join with GeoWealth because of its technology and focus on serving RIAs, he says. Founded in 2010, GeoWealth provides RIAs with technology and a TAMP.
In July, the Chicago-based company said it had raised $18 million in funding in a round led by asset manager BlackRock. Kayne Anderson Growth Capital and J.P. Morgan Asset Management have also provided financial backing to GeoWealth.
Write to Andrew Welsch at andrew.welsch@barrons.com
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(END) Dow Jones Newswires
October 28, 2024 09:00 ET (13:00 GMT)
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