United Capital CEO Joe Duran. United Capital CEO Joe Duran. (Photo: United Capital)

There’s good and bad news for RIAs in today’s announcement that Goldman Sachs is buying United Capital for $750 million, according to United Capital founder and CEO Joe Duran and others who work in the wealth business.  

First, “having a unified client experience that is unique and special is really, really important,” he said in an interview. “I believe it at my core, and Goldman Sachs is buying us for what we do for clients and how we built [the experience].”

Second, technology is king — to a point. “Having bionic, deeply embedded tech means you can get a robust multiple,” Duran said. “But it’s the combination of the human heart and the tech brains, the bionic combo that we have been a promoter of, for a decade, that matters [most].”

Third, United Capital will be able to grow with its new owner, as can other RIAs working with firms that have deeper pockets and other resources. “We will make this the dominant firm for RIAs [serving] the roughly $1 million to $15 million client … and the white-label [partner] for individual advisors …, who don’t have to go it alone.”

New Playing Field

These trends mean the competitive field for RIAs is becoming much more difficult.

Looking at United Capital, Carson Wealth and Edelman Financial Engines, “These franchises are going to become the big way to go,” said Craig Iskowitz, CEO of the consultancy Ezra Group. “It’s going to be harder and harder for small RIAs, with these franchises [taking in] all the assets.”  

Others agree.

“Those building technology stacks around financial planning and client experience … are going to have a scale advantage on what is a very fragmented RIA market,” said consultant Gavin Spitzner.

“It gives those [RIAs] that align with them a huge advantage in terms of their market [or brand] awareness, technology and more,” Spitzner added.

For Duran, this is the reality of today’s RIA marketplace.

“The idea that anyone can build a meaningful brand [alone] in the retail space is an illusion,” he explained. “You have to work with us or our peers, or you will not have the scale or budget to be a retail brand.”

Looking ahead, Duran says, it’s possible that the United Capital brand might fade away and the Goldman Sachs brand take over. “It could happen as time and the strategy move forward; it will evolve,” he said.

“We are just a rounding error” in the broader global wealth business versus “the big guys” on Wall Street, he said, referring to firms that have $1 trillion or more in client assets.

RIAs working with United Capital’s full wealth platform or its white-label CX program, which each have about $25 billion in client assets, should see “exponential growth as they … compete” in the marketplace with backing from Goldman Sachs. To others, “We say, ‘Join us or be partners,’ ” Duran said.

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