Creative Planning is joining Goldman Sachs Advisor Solutions, marking perhaps the largest victory yet for the investment bank’s growing custody business.
The Overland Park, Kansas-based registered investment advisor with $210 billion in combined assets under management and advisement announced Monday that its advisors will have access to Goldman’s investment products and technology. The firm declined to specify whether it's the largest RIA to join its custodian.
While the deal gives Creative’s advisors an additional choice of custodian for new client accounts, the RIA plans to move "multiple billions of dollars" in client assets from existing custodians to Goldman Sachs over the next 18 months, said Jim Williams, chief investment officer at Creative Planning. The firm will continue to work with other large custodians in the industry: Charles Schwab Advisor Services, Fidelity Institutional and BNY Mellon Pershing.
“In general, keeping clients where they are at makes more sense more often than not,” Williams told InvestmentNews. However, the firm does anticipate accelerating the movement of assets to Goldman Sachs’s custodian after building an initial base of clients, he added.
After significant growth and two big acquisitions in 2023, the deal with Goldman ensures Creative Planning can continue providing the tools and services that clients need, Williams said. Creative Planning is specifically interested in Goldman’s ability to provide operational efficiency with digital onboarding and electronic lending.
“I think the advantage that Goldman Sachs has is thinking about today’s technology with the today’s needs in mind,” Williams said. “They are starting fresh rather than building on top of a legacy platform.”
Goldman also brings a unique skill set for addressing the needs of ultra-high net worth investors, especially with its singular access to private investments, he added. The democratization of access to alternative investments over the last decades has caused some commoditization of the products, but Goldman offers particular value in being able to provide liquidity.
Prime Capital Investment Advisors, a $20 billion RIA also located in Overland Park, also cited Goldman’s capabilities with nontraditional assets as reason for choosing Goldman Sachs’ custodian in May.
“Goldman Sachs has structures in place for clients to borrow against private investments, which is not typically available at most platforms,” Williams said. “In a world where something is commoditized, if you can offer something that is unique, it can change the nature of the value proposition.”
Goldman acquired digital custodian Folio Investing in 2020 for an undisclosed sum to jump-start its presence in the RIA space. The company declined to disclose how many assets or accounts it has attracted to its custodian but it has a “robust pipeline,” said Richard Lofgren, a managing director with Goldman Sachs.
“A foundational block of independent [advisors] is predicated around choice,” Lofgren said. “We’re seeing increased inbound dialogue around the capability, the platform and the choice.”
While disruption in the existing custodian space, such as the ongoing merger between TD Ameritrade and Charles Schwab, could be driving some of that interest, Goldman focused on proactively growing its business rather than reacting to the rest of the industry, Lofgren added.
He declined to say whether Creative Planning is the largest firm to join Goldman’s custodian.
While Goldman’s recent earnings report indicated a retreat from its ambitions in the retail investment space, the RIA market appears to remain a part of Goldman’s plans for growth. Lofgren declined to comment on Goldman’s other business, but said the firm is being “very intentional” in where it invests.
“There is definitely a lot of interest for us in the [RIA] space and a recognition that the independent space is continuing to grow,” he said. “We want to be in front of that.”
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