Goldman pouring resources into revamped FinLife platform: Duran
MIAMI BEACH — Joe Duran is thinking big again.
After building up United Capital to a $25 billion RIA and then selling it to Goldman Sachs for $750 million earlier this year, Duran now has his sights set on converting United’s FinLife third-party wealth management platform to an “end-to-end” solution for advisors.
Using Goldman Sachs’ considerable resources, the new digital offering, which will include a robo advisor, banking, a tech stack for advisors and a variety of tools for clients, is currently being built out by some 200 engineers in New York and will be unveiled in around 18 months, Duran said at the annual MarketCounsel Summit.
Mike Capelle, United’s chief platform officer, is overseeing the tech development of the buildout. Veteran Goldman manager Rachel Schnoll will manage the business side.Duran, who remains CEO of the RIA, is now also a partner at Goldman. At a press conference after his talk, he said United would be re-branded next year. United will continue to acquire firms, but M&A won’t be as high a priority as it was before the firm was bought by Goldman in May.
Acquisitions will be more concentrated geographically, Duran said, adding that future growth for the RIA will come primarily from referrals from Goldman and Goldman-owned Ayco.
Those firms, which cater to high-net-worth and ultrahigh-net-worth clients, are currently sending referrals for mass affluent prospects and clients with between $1 million and $10 million in investable assets, Duran said.
Banking will be a huge element of what we’re doing.
FinLife’s next iteration is clearly in line with Goldman’s push into the mass affluent market. Duran compared the effort to the way firms like Apple and Amazon use their products to build an ecosystem that “owns the consumer.”
Similarly, Duran envisions the revamped FinLife platform as a “portal to deepen the relationship” between an advisor and the client. Goldman’s open architecture, he said, is being designed to offer independent advisors a middleware “solution set” that will allow them to compete with large financial service companies.
“Banking will be a huge element of what we’re doing,” Duran told reporters at MarketCounsel.
In addition, clients will be able to open an account with the new robo with as little as $5,000 to create “a pipeline for future clients to experience the Goldman Sachs way,” he said in an interview with the Financial Times. The robo will be offered to United clients and outside advisors who use FinLife.
[Goldman's move] is not unexpected. The well capitalized firms are recognizing the opportunity.
Duran, not known for understatement, asserted that the new platform will have “a huge impact on the industry.”
Goldman’s deep pockets and human capital will enable FinLife’s developers to build out their platform “deeper and wider” than would have been possible under United, said Joel Bruckenstein, president of Technology Tools for Today. He cited Envestnet as another company that wants to build a “full one-stop shop” for independent advisors.
Envestnet interim CEO Bill Crager said in an interview with Financial Planning that he wouldn’t be surprised if Goldman became a competitor.
“It’s not unexpected,” Crager said. “The well capitalized firms are recognizing the opportunity.”
Goldman may have a “unique potential advantage … and is thinking about [the platform] in the right way,” Bruckenstein said. “But it’s not as easy as it sounds, or someone would have done it already.”
Duran also squelched speculation that Goldman may use FinLife as a stalking horse to become a custodian for advisors. “There’s no reason to be a custodian,” he said at the press conference.
And despite speculation that he wouldn’t remain for long at Goldman, Duran gave every indication that he would be sticking around, noting that he recently bought an apartment in New York and is spending half of his time there.
Describing an entrepreneur’s career as a voyage, Duran told attendees that “you might think you know where you’re going, but you will get someplace else.”