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Portfolio > Portfolio Construction

Goldman Sells Folio's Retail Unit, Keeps RIA Business

By Janet Levaux

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Interactive Brokers Group is buying Folio Investments’ DIY brokerage business —  which has some 70,000 retail investor clients and about $3 billion in assets — from Goldman Sachs.

The news comes just 11 weeks after Goldman bought Folio Financial and eight weeks after Charles Schwab wrapped up its purchase of former brokerage rival TD Ameritrade for $22 billion. 

As part of the deal, Goldman is keeping Folio’s RIA clearing and custody services, a business that Interactive Brokers also competes in.

“It’s a somewhat puzzling move given Goldman’s Marcus business,” which does online banking, said Gavin Spitzner, head of Wealth Consulting Partners.

“But given the small, under $50,000 average account size of [Folio's] self-directed business that they’re offloading to Interactive Brokers, Goldman is signaling they are focused on mass affluent and up — whether through their Personal Financial Management channel (… formerly known as United Capital) or through their budding RIA custody side,” Spitzner explained.

Terms of the transaction weren’t disclosed, but the parties said Friday it should close in January.

As of Nov. 30, Interactive Brokers had nearly 1.04 million client accounts, up 52% from the prior year. Client assets were nearly $270 billion, a year-over-year jump of 61%.

Folio Investments acquired the accounts of Motif Investing, when it closed its doors in April. 

“Interactive Brokers has long been recognized for its advanced technology, superior pricing, and breadth of product,” said CEO Milan Galik, in  statement. “With the transition to our firm, Folio Investments’ former clients now will be able to invest in stocks, options, futures, currencies, bonds and funds worldwide from a single, integrated account.”

Earlier this year, the firm — which has worked with RIAs for nearly two decades — launched a white-label wealth platform in partnership with TradingFront.

Janet Levaux

@Think_JanetL

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