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Goldman Sachs said last week it was considering a sale of its Personal Financial Management business, formerly United Capital, which the firm acquired in 2019 for $750 million in cash. At the time, Goldman’s acquisition had industry observers scratching their heads, given that these fiercely independent advisors, many of whom left the large wirehouses to pursue United Capital founder’s Joe Duran’s vision of financial advice, had found themselves right back where they started.
Ultimately, the RIA never really found a home at Goldman, according to industry observers and one former United Capital advisor.
“When we got there, they killed the firm,” said Cary Carbonaro, a senior vice president and director of women and wealth at Advisors Capital Management. Carbonaro, who was a top advisor at United Capital, with about $200 million in assets under management, left Goldman Personal Financial Management in May 2022, and many of her clients followed. “They killed everything the firm stood for. They put so many restrictions around people that they couldn’t walk, they couldn’t move, they couldn’t breathe, they couldn’t function.”
In particular, Carbonaro said the firm prevented her from appearing in the media and using social media channels even though in 2015 she published an Amazon bestseller, “The Money Queen’s Guide: For Women Who Want to Build Wealth and Banish Fear,” which she wanted to promote.
Life at Goldman was also just slower, with more bureaucratic tape and compliance measures in place, she added.
“United Capital was an entrepreneurial firm, based on doing great things and having freedom and being able to function with autonomy,” Carbonaro said. “And then you go to a firm where you are completely locked down.”
A spokeswoman for Goldman declined to comment.
“There are certainly more constraints around marketing and everything else,” said a former Goldman Sachs PFM employee, who declined to be named. “Goldman Sachs is a global brand. Most advisors had very little concern about not being able to do their own personal marketing because they were getting so much brand advantage. But a couple advisors who left—it was very, very important to them to brand themselves. That was never going to work at Goldman.”
RIAs are used to having fewer limitations in how they can invest and do business, said Daniel Bryant, operating partner at Vistria Group, a Chicago-based private equity firm, which backs The Mather Group. And some clients prefer RIAs because they’re unconflicted and unencumbered.
“I think that’s why people leave banks; that’s why banks always have a little bit of a challenge historically on building a wealth business that is viewed as independent,” he said. When Goldman first bought United Capital, those advisors probably went to their clients and said, “‘Hey, look, we’re now not independent.’ And that’s a lot different than saying, ‘I’m with The Mather Group, or Creative Planning, or Mariner,’ or whatever.”
“[United Capital] never seemed to find a home there,” said Larry Roth, founder and managing partner of RLR Strategic Partners. “Joe Duran was a super executive, and a charismatic-type leader. So, once he became Mr. Goldman Sachs employee, I think it kind of lost its way.”
In February, Duran announced he was leaving the Wall Street firm, saying his work integrating the advisory business into the organization was finished. Duran helped to integrate Goldman’s workplace-based planning firm Ayco with his old United Capital business to create an investment management unit for clients across the wealth spectrum.
Carbonaro said she has heard from several advisors looking to leave, on the news that the firm is looking for a buyer.
It’s unknown how many advisors have left over the last several years. Some publications have pointed to PFM’s Form ADV, which lists the RIA’s assets at about $13 billion. But a former United Capital employee, who declined to be named, says that does not include the accounts being managed by Goldman Sachs Asset Management. In fact, Part 2 of the firm’s ADV says it had $29 billion in assets as of Dec. 31, 2022, up from $25 billion when Goldman first acquired the business. Ayco has about $30 billion.
“There hasn’t been huge advisor attrition,” the former employee said. “Most of the advisors are still there; most of the clients are still there. Maybe it should’ve grown a little bit more than it has.”
A couple large broker/dealers were in conversations to buy the RIA over the weekend, he said, including Osaic (formerly Advisor Group) and LPL Financial, but those negotiations didn’t pan out.
“That’s just such a different landing spot for both advisors and clients than Goldman Sachs. I just imagine they’d lose some advisors, they’d lose some clients in the process. You’re going from such a retail brand to no retail brand,” he said. “Apparently now it’s just going to go into a fast-track formal process, getting a few, I would think, more logical acquirers for the business.”
He says they’ll likely look to some of the larger RIAs backed by private equity firms, such as Creative Planning, Beacon Pointe, Mercer Advisors or Hightower.
“They’re going to try to make it happen as quickly as possible, because the more it hangs out there, the more risk they have that some advisors will just want to make a decision on their own and decide to just depart.”
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