In other news, Pershing names a new CEO, IIROC & Nasdaq partner, IHS Markit revs up onboarding, and the House Financial Services Committee takes on FinTech.
Goldman Sachs Jolts Wealth Management Strategy
Goldman Sachs Group is acquiring United Capital Financial Partners, Inc. for $750 million in cash as a way to broaden the reach of the Wall Street giant’s intellectual capital and investment capabilities, officials say.
The transaction is expected to close during the third quarter of this year, subject to customary regulatory approvals and conditions, officials say.
The acquisition is intended to expand the wealth management business of Goldman Sachs, which consists of the Private Wealth Management division which offers advice and investment solutions to high net worth individuals, families and endowments, and Ayco, which provides financial counseling and investment management services to corporate executives and employees. Together, the two divisions “have nearly $500 billion of assets under supervision,” according to the firm.
United Capital is a registered investment advisor (RIA) with $25 billion of assets under management (AUM) and more than 220 financial advisors serving 22,000 clients in over 90 offices across the United States, officials say. The firm also operates FinLife CX, a digital platform for independent advisors that need to grow their business.
The Private Wealth Management and Ayco businesses “will serve as a cornerstone of our business as we execute on our long-term strategy to offer clients solutions across the wealth spectrum,” says David M. Solomon, chairman and CEO of Goldman Sachs, in a prepared statement. “United Capital will help accelerate this strategy by broadening our reach, allowing more clients to access the intellectual capital and investment capabilities of Goldman Sachs,” Solomon says.
In particular, United Capital “will enhance Goldman Sachs’ ability to cover a broad range of clients in Ayco’s growing corporate client base with financial planning solutions through an advisor-led, tech-enabled platform with considerable scale and geographic footprint. These efforts will complement the digitally-empowered consumer platform for individuals from Marcus by Goldman Sachs, and will ultimately provide a full-range of services across the wealth spectrum,” according to Goldman Sachs.
Once the transaction is finalized, Joe Duran, founder and CEO of United Capital, will join Goldman Sachs. “The firm will also welcome the team of employees at United Capital, including its advisors in offices across the United States,” officials say.
BNY Mellon’s Pershing Picks Its Next CEO
BNY Mellon has appointed James T. Crowley chief executive officer (CEO) of its Pershing subsidiary, effective July 1, 2019.
Pershing and its affiliates provide advisors, broker-dealers, family offices, hedge-fund and ’40 Act fund managers, registered investment advisor firms and wealth managers with financial business solutions, BNY Mellon says in a statement.
Crowley, currently Pershing’s chief operating officer (COO), will report to Todd Gibbons, vice chairman and CEO of clearing, markets and client management.
Crowley succeeds Lisa Dolly, who will be Pershing’s chairman through the end of the year.
As of March 31, 2019, BNY Mellon had $34.5 trillion in assets under custody and/or administration, and $1.8 trillion in assets under management, officials say.
IIROC & Nasdaq Launch Market Surveillance System
The Investment Industry Regulatory Organization of Canada (IIROC) and the Nasdaq securities marketplace have launched a market surveillance system that employs Nasdaq’s SMARTS technology.
The surveillance system is meant to oversee Canada’s capital markets and protect investors from market abuses.
“IIROC is positioned at the forefront of market surveillance in Canada, thanks to Nasdaq’s real-time, multi-asset, state-of-the-art SMARTS technology,” Victoria Pinnington, IIROC’s senior vice president, market regulation, says in a statement.
“We are setting the stage for our future with a system designed to improve how we oversee securities trading on debt and equity markets, by opening the door to use artificial intelligence that is more analytical and predictive,” Pinnington says.
IIROC directly manages and maintains the SMARTS system, which monitors up to one billion transactions daily in real-time and supports cross-asset surveillance and investigations, according to the statement.
IIROC’s market surveillance team will be able to “more quickly detect trading anomalies across multiple products and firms, and identify and respond to emerging trends in an efficient manner. For example, new visualization tools take multiple sources of data and [distill] them into a single snapshot, giving IIROC an immediate and clear picture of the activity so that they can quickly assess next steps,” per the statement.
The statement also notes that, “Nasdaq provides surveillance technology to more than 50 marketplaces, 18 regulators and 170+ market participants, including several buy-side institutions, across 65 countries.”
IHS Markit Targets Account Onboarding
IHS Markit, an information and analytics specialist, reports the launch of Onboarding Accelerator, a new process intended to “help banks and other service providers open accounts with institutional clients more quickly.
“Onboarding,” or bringing in, new clients can be complex and time-consuming in financial services and, on average, the process takes 40 days, IHS Markit says in a statement.
The new IHS Markit technology “enables firms to reduce onboarding time to as little as one day and is suitable for any servicer relationship an investment fund or corporation might have with banks, custodians, fund administrators, trade repositories, technology platforms as well as providers outside financial services,” the firm says.
“Same-day onboarding is within reach for the industry,” Brittany Garland, director at IHS Markit, says in the vendor’s statement. “Onboarding Accelerator helps firms create a positive experience for clients from the very beginning by enabling an orderly process for setting up new accounts. In addition, the analytics we offer show account status to both clients and service providers, bringing much needed transparency to the information black hole that plagues onboarding.”
IHS Markit, headquartered in London, spotlights its “more than 50,000 business and government customers, including 80 percent of the Fortune Global 500 and the world’s leading financial institutions.”
House Financial Services Committee’s FinTech Focus
The U.S. House Financial Services Committee recently approved two resolutions to set up two task forces “to promote responsible innovation through financial technology,” officials say.
Committee members voted on Resolution #1, which “establishes the Task Force on Financial Technology, which will examine the current legal framework for fintech, how fintech is used in lending and how consumers engage with fintech,” according to the committee. “The chair of the task force will be Rep. Stephen Lynch (D-MA).” That resolution was adopted by unanimous consent.
A second resolution was also unanimously approved and that set up a task force on artificial intelligence (AI), “which will examine the impact of automation and machine learning and how companies and consumers can use AI to improve their lives.
The chair of the second task force will be Rep. Bill Foster (D-IL), officials add.