Goldman spins off Folio’s 70K retail accounts to Interactive Brokers

Goldman Sachs has plans for Folio Financial’s RIA custodian, but not its retail brokerage business.

The investment bank, which purchased Folio in September, is selling the self-directed retail brokerage segment to Interactive Brokers, according to a Dec. 4 announcement.

Under the deal, Interactive Brokers will acquire approximately 70,000 retail accounts and $3 billion in client equity. DIY clients will use Interactive Brokers’ trading platforms and robo advisor, Interactive Advisors, according to a spokeswoman.

“The acquisition adds both client accounts and assets to Interactive Brokers. It also affords us a way to introduce our products and services to a new group of investors,” she said.

Terms of the deal were not disclosed, and a Goldman Sachs spokesman did not return requests for comment.

The deal with Interactive Brokers underlines Goldman’s focus on Folio's clearing and custody capabilities, as well as its 450 RIAs and $11 billion in assets. The investment bank is planning its own robo advisor under the Marcus brand, although it has delayed the launch until 2021.

In recent years, Goldman Sachs has strategized to increase its market share of clients with between $1 and $10 million in assets.

“Last year we made an acquisition in United Capital that we think accelerated our expansion into high-net-worth wealth in a meaningful way. … We continue to look broadly at things that can extend our strategy and accelerate the pace,” Solomon said on the company’s latest earnings call Sept. 30.

Goldman rebranded United Capital in January, dubbing it Goldman Sachs Personal Financial Management.

That month, the company estimated that it had less than 1% market share of the HNW wealth management marketplace, according to a presentation.

Goldman has kept quiet on its intentions for its new custody division — a company spokesman has not responded to three requests for comments lodged since September.

In September, former Folio CEO Steven Wallman became Goldman’s advisory director of the global markets division and chair of its global markets and advisor and retail platforms, according to his LinkedIn profile.

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In October, Goldman brought on Darla Sipolt from TD Ameritrade as managing director, according to LinkedIn. Sipolt had been at TD ameritrade for more than 17 years, most recently as managing director of sales for TD Ameritrade Institutional.

Interactive Brokers’ deal for Folio’s retail division is expected to close in January 2021, according to the company. Folio had purchased retail accounts from Motif when it closed earlier this year.