Apex Perspective on the Goldman/Folio Deal

According to Reuters, Goldman Sachs plans to acquire Folio Financial and the deal is expected to close in the third quarter.

This shouldn’t come as much of a surprise to our industry. Large global banks and financial institutions have continued to consolidate their power by absorbing sub-scale competitors and expanding their capabilities with select acquisitions. At the same time, legacy organizations with legacy technology have struggled to innovate, implement and integrate new technical solutions that improve the client experience, and are forced to look to third-parties for ways to bridge the gap. 

From the outside, this specific deal looks smart for a number of reasons – it will help Goldman vertically integrate its client-facing offerings like United Capital, Marcus, Ayco and Honest Dollar, and better connect the dots between their front-end platforms and the back-office. It could also allow Goldman to compete against Fidelity, Schwab and Pershing for RIA custodied assets – if it chooses to.

If so, that has the potential to change the dynamics in wealth management and add yet another firm (and global brand) against which advisors would need to compete for retail clients. This is another hurdle for advisors who are already facing economic pressures and challenges due to an over-reliance on traditional business models and antiquated processes.

From the Apex perspective, I see this deal as further validation that technology is revolutionizing the front, middle and back office to deliver better, smarter, more streamlined and operationally efficient experiences to clients and, eventually, the entire industry will get there. Amen.