Goldman Sachs has positioned itself perfectly to become the next big RIA custodian, and it’s about to cause some headaches for the biggest RIA custodians currently serving the market.
Right now, Fidelity, BNY Mellon Pershing, and Charles Schwab are the big three when it comes to RIA custodians. But it now looks like it’ll be growing into a group of four since Goldman moved to sell of Folio Investments’ DIY brokerage business and keep their RIA clearing and custody business.
With its most recent moves, Goldman now has all the components necessary to make it a major player in the custodian game. The poached top executives from Pershing and TD Ameritrade and now have Folio’s technology. Throw on top their name and it’s essentially a bat signal for wealthy investors.
It’s a move that, surprise surprise, Goldman seems to be making at just the right time. RIAs who worked with Ameritrade, but don’t want to world with Schwab, and those who worked with E-Trade, but don’t want to work with Morgan Stanley, now have a new option with a shiny name to choose.
Goldman is also bound to attract brokers looking to set up their own RIAs, who might also be looking to offer other private wealth services. That’s because Goldman has services like a capital markets presence; an extensive banking business that serves institutions, ultra-high net worth clients, and retail clients; lending; asset management; and an RIA business.
Add on Goldman’s recently announced partnership with Stripe, which could be used as a way for RIAs to receive payments from clients and to offer banking services of their own, and you have a company that’s perfectly positioned to make a huge splash in the RIA custodian world.
