![]() ![]() Ultrahigh net worth investors, typically defined as those with at least $30 million in investable assets, outside of the family office sphere invested as much as 20% to 25% in alternatives, Goldman said in a release on the report. Goldman's custody services are "for PCIA's largest and most complex clients," the release said.Ī Goldman report earlier this month showed that clients in one segment of the ultrahigh net worth, family offices, invested on average 44% of their portfolios into alternatives. PCIA will use its newest custody provider to cater to its ultrahigh net worth clients with Goldman's offerings in areas like alternative investments. "Our clients invest extensively in alternative assets, and we need a custodian with the capability to handle these investments at the service level our clients expect," Duba was cited as saying, adding that GSAS's strong digital platform with a "sophisticated service tracker and online chat functionality" as well as direct access to a service team as compelling draws. PCIA did not respond to FP's repeated requests for comment. Scott Duba, the chief investment officer and managing director of wealth management at PCIA, said in comments to InvestmentNews that Goldman's offerings of alternative investments were appealing for clients. "GSAS offers the services, technology, and support to serve an important and growing segment of our client base with even more care and attention," PCIA CEO Glenn Spencer said in a press release announcing Prime Capital's decision. Advisors routinely cite strong tech platforms, including custody, as a key selling point to clients. Some legacy big broker-dealers, like wirehouse Wells Fargo, have been criticized for dragging their feet on upgrades of tech services for advisors. "As clients expect more from advisors, advisors will expect more from their custodians, so our shift away from legacy technology systems which often hamper innovation and growth, will be one of our core competitive advantages." "Our solution is designed with the understanding of where the advisory industry is headed, not where it's been," Cooper Rey, the head of RIA Sales & Trading, Global Banking & Markets Division at Goldman Sachs, said in an email. By riding the wave of RIA expansion through custody services, Goldman can also expand its presence in the eyes of the richest client segment. wealth management, at an annual asset growth rate of 12% since 2016 - compared to 7% on average across all other traditional advisor businesses, according to a 2021 McKinsey paper. RIAs are growing faster than any other type of firm in U.S. Independent advisors are required to hold client assets in "custody," meaning at institutions such as banks, broker-dealers, under rules set by the SEC. The bank declined to say how many RIAs it counts as custody clients but disclosed in a February presentation that it occupied 8% of the main ultrahigh net worth market, in the Americas, for wealth management assets. The custody arrangement allows Goldman to open up its cross-bank offerings to clients of the RIA through the new One Goldman Sachs program - furthering Goldman's goal of advancing in the ultrahigh net worth space. Not only does the Wall Street investment bank gain momentum in the red-hot RIA market, but it also gains ground among the ultrahigh net worth clients that larger RIAs, which include many former top wirehouse advisors, typically serve. The new client is a two-for-one for Goldman. PCIA had over $20 billion of assets under advisement as of April, according to a statement announcing the arrangement, and uses multiple custody providers, including giants Charles Schwab, Fidelity Investments, Pershing and LPL Financial. The Goldman Sachs arm, a much smaller player in the burgeoning marketplace of financial institutions that take "custody," or manage, assets and trading for clients of RIAs, aims to oversee more than $1 billion of RIA assets on behalf of PCIA's clients. Prime Capital Investment Advisors, an RIA based in Overland Park, Kansas, announced on Wednesday it had chosen Goldman Sachs Advisor Solutions, the former Folio Financial, as an additional custody provider. By Victoria Zhuang, - “As the race heats up among registered investment advisors to cater to ultrawealthy clients demanding bespoke services, Goldman Sachs has planted another flag in the rapidly growing market for RIAs serving the well-heeled. ![]()
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