Goldman Recruits Creative, Discusses Advisor Custodial Space

With Latest Custody Platform Recruiting Win, Goldman Exec Talks Advisor Choice, Digital Onboarding And Motivation For Advisors To Seek Multiple Custodians

Julius Buchanan, Editor in Chief, Wealth Solutions Report

Creative Planning announced a multi-billion-dollar strategic custody relationship with Goldman Sachs’ custodian services provider Goldman Sachs Advisor Solutions (GSAS), which will enable Creative to provide GSAS’ custody solutions to their clients, including its lending platform, product offerings, advanced analytics and digitized middle and back office for alternative investments.

“This important engagement with Goldman Sachs comes at a pivotal moment as we continue to elevate Creative’s offering to meet our clients’ complex financial needs,” said Peter Mallouk, President and CEO of Creative Planning. “By deepening our partnership with Goldman Sachs, our custody relationship allows us to benefit from an expanded set of capabilities and access to their unique products, services, and intellectual capital.”

Peter Mallouk, President & CEO, Creative Planning

John Waldron, President and COO of Goldman, said, “We share the same vision of an elevated wealth management experience in an environment where client expectations continue to grow. Our partnership brings together Creative Planning’s differentiated and comprehensive approach to financial planning with Goldman Sachs’ institutional product access and thought leadership through our One Goldman Sachs model.”

Creative represents the latest recruitment for GSAS, following a $1 billion recruitment of Prime Capital in May and the recruitment of United Advisor Group in February, estimated initially at $750 million.

Advisor Choice

John Waldron, President & COO, Goldman Sachs

“The driver in going independent is always about choice,” said Richard Lofgren, Managing Director at Goldman. “Right now the consolidation in the industry is causing advisors to say, ‘Do I have as many choices as I did prior to some of these announcements?’ This is as good an opportunity as any to look around the landscape and say, ‘I need to reevaluate.’”

“It may not be a lack of choice. It could be a forced choice that perhaps is not ideal for advisors who hold themselves out as truly holistic,” Lofgren continued, pointing out that advisors who are motivated by client needs want to consider all available options. “Any time you make a move, there are some benefits, and the balance of advisors make custodial choices according to the clients’ best interests.”

Digital Onboarding

Lofgren states that physical repapering of an advisor’s clients during migration is not necessary. “We focus on digital onboarding using a bulk onboarding tool that allows us to minimize the amount of inefficiencies in the marketplace such that we’re leveraging technology to get rid of the ‘sign here’ stickers. In becoming more efficient, it takes human error out of the equation, too.”

Multiple Custodians For Changing Client Needs

Richard Lofgren, Managing Director, Goldman Sachs

According to Lofgren, the changing needs of clients may result in an advisor seeking out a multi-custodial arrangement. “Advisors may have clients with concentrated equity positions and needs for alternatives or lending, and their custodians might not have that as an option. That’s what I think you’re seeing now – the needs of the clients have changed so they’re having to reevaluate and say, ‘What other capabilities are out there that will solve that unique need?’”

Lofgren says this provides an inflection point where an advisor may seek out institutional-level products and solutions from Goldman to serve clients’ needs.

He concluded, “We have the ability to cover a very broad segment of clientele, which provides a nice conduit as a client’s wealth or wallet share grows. If you’re an advisor with clients that have growing wealth and changes in their lifestyle, we have the ability to grow with that client and advisor.”

Julius Buchanan, Editor in Chief at Wealth Solutions Report, can be reached at jbuchanan@wealthsolutionsreport.com.

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