What does the open architecture of the Goldman Sachs’ One platform mean for in-house advisors?
A Landmark Deal
Creative Planning and Goldman Sachs Forge Unprecedented Partnership. Creative Planning, helmed by visionary CEO Peter Mallouk and managing an impressive $210 billion in AUM, has entered into a strategic alliance with Goldman Sachs. Creative Planning will now be able to access to Goldman Sachs’ highly coveted Goldman Sachs’ One platform, renowned for its exclusive offerings to advisors and UHNW clients. As the deal unfolds, questions arise about its impact on Goldman Sachs’ in-house wealth management division and also how it empowers advisors with newfound opportunities.
Creative Planning’s decision to partner with Goldman Sachs represents a strategic move to enhance its financial planning capabilities further. By leveraging Goldman Sachs’ One platform, the firm gains access to alternative investment solutions, advanced portfolio analytics, and lending services that promise a more sophisticated wealth management experience. Unlike an outright move of assets, the agreement ensures that existing assets will remain with Charles Schwab, while new assets will be deployed through Goldman Sachs’ platform.
The Vision of an Elevated Wealth Management Experience
John Waldron, President, and COO of The Goldman Sachs Group emphasizes the shared vision behind this collaboration. He envisions an elevated wealth management experience, where Creative Planning’s comprehensive approach to financial planning is seamlessly integrated with Goldman Sachs’ institutional product access and thought leadership through the One Goldman Sachs model.
QUESTIONS FOR GOLDMAN SACHS IN-HOUSE ADVISORS
The “Super Exclusive” Platform is Now Available to Most Advisors – Should an In-House Advisor Go Independent?
Now more than ever, in-house advisors at Goldman Sachs face a pivotal choice between remaining inside or exploring the option of going independent.
Once the Goldman Sachs’ One platform is live, likely towards the end of 2023 are into 2024 given some delays, the Goldman platform will now be accessible to most all independent advisors, presenting an intriguing opportunity. They not only gain access to the coveted “super exclusive” platform but also enjoy the prestige of clients now seeing “Goldman Sachs” on client statements.
The firm’s current payout structure for in-house advisors offers 20% cash, significantly lower than the 50% payout offered by the nearest competitor. Additionally, Goldman Sachs supplements this with a 10%, multi-year lockup vesting stock, that has zero correlation to any advisors’ practice. No other competing firm does this and with all of the headline multibillion dollar losses, it’s no wonder why advisors are not pleased to have 30% of their comp tied to GS stock.
As Goldman moves to strengthen its enterprise stock and secure AUM and advisor practices, advisors need to weigh the benefits of staying within the firm against the potential gains of independence or even other competitive platforms. Clearly, the firm is at a crossroads with the overall business, its leadership and more focused on shareholder value. Advisors are really questioning the value proposition of the platform. Why stay for a lower payout when going independent with access to the same exact platform could yield a 70%+/- 1099 income, having 100% equity ownership using the same custodian and products?
Goldman Sachs in-house advisors are wise to think strategically about what is best for their clients and themselves, to think that advisors at RIAs accessing the GS platform for their clients and taking home considerably more compensation than those in-house is just surreal.