Goldman Sachs’s Independent Platform – A Platform for the Modern Advisor
When people think of Goldman Sachs, they think of the world’s most prestigious and reputable investment banks with access to world class institutional research and innovative investment solutions. As the world’s preeminent investment bank, it is known for mega mergers and acquisitions and IPOs such as Sears, Merck, General Foods, Ford, and Disney years ago, and recently Alibaba, Facebook, Snap, Spotify, and Snowflake. The firm is also known for its excellence in trading and hedging and risk management for C level executives and has a lengthy track record as sought out leaders on investment solutions. For instance, several Goldman CEOs have gone on to become US Treasury Secretaries including Hank Paulson, Robert Rubin, and Steven Mnuchin.
For decades, Goldman was the finance’s industry standard bearer for operational best practices, and indeed, to this day its name can still conjure up mental images of America’s gilded age. You don’t get the name “Golden Slacks” for no reason. Goldman has created wealth in the many hundreds of billions for those who have kept their assets at the firm.
For years, Goldman was the premier destination for finance’s finest advisors. The firm only hired MBAs from the highest ranked business schools, and for years that formula worked like magic. The prestige of Goldman brought a seemingly endless stream of clients lured by the cachet just as much as the top talent the firm attracted in its hiring rigor. Clients felt comfort in the company’s tacit value proposition that “our money is invested alongside yours,” individual investors came to Goldman in droves because for years, especially in the consumer’s mind, its name conjured a mix of growth and stability.
The allure was strong despite the fact that advisors were ultimately paid less at Goldman than they might have made elsewhere on The Street. For years, Goldman’s commercial business represented only 10% of their overall revenue – the sheer wattage of the Goldman brand was intoxicating to many UHNW clients. Goldman had some of the largest producers in the nation, a small producer did $5M, with the majority of practices at $10M-20M, and many doing $30M and as high as $75M production. Advisors at Goldman were successful for two primary reasons: they were well groomed, and private clients liked the name/prestige of the brand and equated that to excellence in wealth management.
As mentioned, this formula was successful for many years, but recently some advisors have left Goldman to start their own independent family offices or RIAs and have flourished into the nation’s largest practices. Those who have ventured out of Goldman have been very successful, to name a few: Frank Ghali who was once GS largest producer with $75M in production of Jordan Park, Jeff Friedstein and Jay Page ($17M) of Grey Street, T Bruce Bligh of Seven Post, Jeff Colin of Baker Street, Todd Morgan of Bel Air (who have made hundreds of millions selling the firm 2x ), and David Hou and Mark Sear of who have also made hundreds of millions selling the firm Luminous Capital to First Republic Bank and moving it now to Evoke Capital.
In the past, traditional advisors weren’t able to get in the door at Goldman, but now they can have full access to Goldman’s products without becoming an employee of the firm. Instead of being an in-house advisor at Goldman making roughly 20% (plus 10% in GS equity), traditional advisors in RIAs can have access to 100% of Goldman’s platform, and net 60-70% 1099 income after expenses while retaining their own equity stake in the business.
Goldman is a custodian that truly understands the needs of the UHNW client and advisors of traditional bank/brokerage firms. For the modern advisor, Goldman differs from Schwab, Fidelity, and Pershing. Goldman offers institutional grade custodian solutions, and have their sights set on creating a truly differentiated high-end experience for high end clients. Through Goldman Sachs Advisor Solutions (GSAS), the firm is offering a unique value proposition which combines the strength and reputation of the brand with safe asset custody, excellent technology, and open architecture to shop the street. The GS Independent platform is the first investment bank to launch an independent platform designed for the UHNW private wealth advisor.
Advantages of the GSAS Platform: “reimagining” and elevation of the client wealth management experience.
Leading edge global investment solutions including differentiating alternative investment solutions.
World class institutional global equity, fixed income, and economic research.
Sophisticated lending solutions, securities-backed loan platform, lending off structured notes, alternatives, exo tics, real estate, aircraft leasing, and more.
Hedging services and concentrated positions.
Access to the investment bank.
Leading edge technology, client interface, and reporting.
White glove service, support, and transition services
The platform is designed knowing where the advisor industry is heading as a digitally forward custodian working to enhance the client experience by supporting growth and optimizing efficiency. The modern advisor currently spends too much time on minutia instead of with clients, it is a consistent refrain heard across the industry. Through technology and onboarding, GSAS minimizes operational time to aid advisors to maximize time with clients.
In order to facilitate an easy transition process, many teams who leave traditional banks are utilizing supported independent service providers that offer turnkey RIA support eliminating the burden of back office, compliance/supervision operations, technology, integration/support, payroll, billing, and HR. Therefore, advisors are free to focus on delivering lead-edge, open architecture investment solutions for their clients. The independent RIA services offer transition support, incentives via economic transition packages, and private equity investments into these businesses.
Goldman Sachs Advisor Solutions offers advisors all of the glory associated with the brand name with none of the pain. Advisors can keep control of their businesses as an independent RIA, overseeing what is best for their clients, while netting far better payouts to themselves than the in-house Goldman advisor. Clients enjoy receiving statements with the Goldman brand on it, clients view Goldman as solid and sure amidst rather turbulent times with bank failures in 2023. GSAS offers the UHNW private wealth manager a golden solution.
