Sargent Investment Group, a Bethesda, Md.–based registered investment advisor with $1 billion in assets across 400 clients, has added Goldman Sachs Advisor Solutions as one of its custodians. While the RIA currently custodies primarily with TD Ameritrade Institutional, which will be merged into Schwab during Labor Day weekend, SIG expects to move the majority of its assets to Goldman Sachs by the end of this year.
SIG was founded in August 2018 by Brian McGregor, Christopher Sargent and Ricardo Rosenberg, after breaking away from Wells Fargo Advisors.
McGregor, co-founder and managing principal at SIG, said his firm chose TD Ameritrade as its primary custodian in 2018 because, at the time, it was the only one of the big custodians that didn’t also offer advisory services. But the firm saw the TD/Schwab conversion as an opportunity to take the firm to the next level.
“The way Goldman is structured, they do not offer advisory services in the same universe as the custodial services, which for us, is an attractive prevention of what we would almost see as kind of an inherent competition,” McGregor said.
Goldman’s Personal Financial Management group, which includes the old United Capital business, sits in a segregated division from custody, which is housed in global banking and markets.
“Given some consolidation in the custody space, we’re seeing a tremendous amount of opportunity to move assets to the Goldman Sachs Advisor Solutions platform,” said Jeremy Eisenstein, co-head of the RIA custody sales team within Goldman Sachs Advisor Solutions, in a May 2023 interview with WealthManagement.com. “Existing independent RIAs are looking for additional choice; they found one with Goldman Sachs Advisor Solutions.”
McGregor said his firm was also attracted to Goldman’s “white-glove” service. With the Schwab conversion, the vast majority of communication has been via prerecorded tutorials.
“And that is how guys and gals who sit in our seat are supposed to understand how to take the next steps and what’s going to happen,” he said. “What happens at Goldman is we ask questions, we set up calls, and we’ll walk through step by step what to expect through the transition, how to prepare for it.”
“Having the capacity to speak with the directors and decision-makers in the various product lines that we will use is very, very different than working with a large custodian,” he added. “That is, as we see it, what it means to be ‘white-glove.’”
Goldman Sachs has been an active custody provider since its acquisition of Folio Financial in September 2020 and has onboarded many new RIA teams beyond the legacy Folio clients.
In June 2021, Goldman Sachs Advisor Solutions scored its first custodial client since the Folio acquisition, hybrid RIA Steward Partners. In August, WealthManagement.com reported that Steward was in the process of adding BNY Mellon’s Pershing as a custodian. Steward remains a custodial client of Goldman’s.
Last October, a $1 billion breakaway team, Beverly Hills Private Wealth, chose GSAS as its sole custodian. In January, a team of advisors led by Margaux Fiori departed Raymond James’ independent contractor division to form their own RIA, Fort Lauderdale, Fla.–based Fiori Financial Group, with GSAS as custodian. Then in February, a group of founding advisors came together to form United Advisor Group, a new RIA and RIA aggregator, with GSAS as its primary custodian.
Most recently, Prime Capital Investment Advisors, a rapidly growing RIA firm with more than $20 billion in client assets, added GSAS as custodian, with plans to move $1 billion in assets to the custodial platform.
Some published reports say that Goldman is lagging behind a deadline it had for the RIA custody service, but Goldman executives said the firm has never publicly expressed any "time line" and there is not likely going to be a ribbon-cutting type of unveiling at any specific date in the future; instead, Eisenstein said to expect a quiet, continuous iteration of the service.
“We knew that it would be big news,” Eisenstein said. “We knew it was our first foray into the custody space, but there was never, ‘Hey in a year from now, we’re all of a sudden going to open the doors.’ We knew that we were buying a business that had assets on it. It may not be exactly the firms that we were ultimately going to go after as we are now. But it was a great way to jump-start us into this space—great technology, great people.”
Executives say the custodian has been very selective in the teams it brings onto the platform; specifically they’re looking for growth-oriented, professionally managed teams.
“We don’t want to dilute the brand, and we certainly don’t want to dilute the service because we all know service is the No. 1 point of frustration that advisors are focusing on,” Eisenstein said. “We’re a little bit later to the space—or what I call ‘strategically tardy’—but we know what not to do or where not to focus. And that’s helping us as we think about what this looks like in a space that is massively dominated by three or four players today.”
