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Industry Spotlight > RIAs

Joe Duran: Why I Sold United Capital

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Joe Duran, United Capital’s CEO and founder

While the sale of United Capital to Goldman Sachs in mid-May was a financial transaction for the shareholders, “it was a bet on my part on where the industry is going,” United Capital founder and CEO Joe Duran told MarketCounsel Summit attendees on Tuesday.

Where the industry is headed is something that advisors can’t ignore, Duran said.

Being acquired by Goldman Sachs will allow Duran to continue helping advisors to compete and to deepen relationships with clients, akin to the “all-encompassing” relationship model used by companies like Apple, Amazon and Netflix.

“They view their relationship with you as a worm hole—to own you. That’s a big idea.” These companies “understand that their relationship with you is a portal to a deeper relationship.”

Advisors have yet to catch on to this strategy, however.

“We happen to be dealing with the most important thing people have to deal with – money. Money is the fuel and the currency that allows people to do everything in this world. Yet no one in our industry thinks about: How do I make my relationship with my clients so inevitable, so all-encompassing that they can never leave me? Not in a bad way; that we’ll only do great things for them.”

Goldman, Duran said, offered United Capital the ability to be competitive like the Apples of the world.

Duran acknowledged that “in order to adjust” to that Apple model he couldn’t do that as an independent firm with $25 billion in assets and $200 million in revenue. “I’m not stupid enough to think that I’ve got the resources to make that happen quickly enough that I can be competitive three to five years from now. That, for me, was a big catalyst or the reason for me going with Goldman.”

He added: “What I really believe is for us, the core success of an advisor, like any business today, is you have to view your relationship with a client as a portal.”

Citing one of United Capital’s original goals of providing resources to independent RIAs so that they can compete with big firms, Duran said that joining Goldman “allows me to do that on an even bigger stage. I’ve come in as a partner, and our goal is to fundamentally change the industry in ways that today are unimaginable.”

United Capital’s efforts in the next 18 months, Duran said, “will have a huge impact on our industry.”

Since the Goldman acquisition, United Capital now has a staff of 200 technologists. “I used to have a team of 25,” he said.

United Capital and FinLife – the firm’s white-label wealth management platform – will over the next 18 months be “investing in where we think the independent channel is going; for the folks who are part of FinLife … where we’re taking that [platform] are to places that were previously unimaginable—whether it’s banking services, or robo-solutions, or expanding to technology that’s completely integrated to the client,” Duran said.

As to the United Capital brand, it will go away.

For independent firms, Duran said, the name will likely be something along the lines of Goldman Sachs FinLife. “We have not yet resolved that.”

For our own direct to consumer the name will be a new iteration of United Capital, “but it will be a Goldman Sachs brand of some kind” which will likely be announced in the next few months, he said.

Losing the United Capital name won’t be sad? “The truth is, I invented the name so that it would sound big, like everyone had known it before; it was just a generic name. I’m not attached to it in any way,” Duran said.

He summarized: “Your brand is not a thing. It’s what you deliver and stand for that’s a thing.”


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