Goldman taps former Fidelity exec to grow lending service for RIAs

Goldman Sachs is tapping a former Fidelity executive to head up Goldman Sachs Private Bank Select, its business offering registered investment advisers and independent broker-dealers access to securities-backed loans.

Anthony Rochte, who most recently oversaw Fidelity’s digital wealth management platform as head of Fidelity Institutional investments and technology solutions, will take over as managing director and head of GS Select. Mr. Rochte succeeds Whitney Magruder, who helped launch GS Select in 2017 and will remain with Goldman Sachs Private Bank.

GS Select was an expansion of Goldman’s existing private bank business in Private Wealth Management, which extended lending services to non-PWM clients via a digital platform. With GS Select, advisers can offer clients up to $25 million in loans backed by securities held in non-retirement investment accounts at partner firms.

The loans are also called non-purpose loans, and the borrowed money can be used for virtually anything except buying more investment securities. The loans appeal to investors who want to keep their portfolios fully invested.

The program launched with a relationship with Fidelity Clearing & Custody and in 2018 expanded to advisers with LPL Financial. Goldman says more than 150 RIAs and IBDs are now eligible to use GS Select, and about 50,000 advisers tap into the platform.

Now that the bank has proven there is an appetite among independent advisers for these kinds of loans, it's hoping to tap into Mr. Rochte’s deep experience with the intermediary world to supercharge GS Select’s growth.

Mr. Rochte has more than 25 years of experience in the industry, with most of it in the RIA, IBD, bank brokerage and family office market. Before joining Fidelity’s FITS team, Mr. Rochte was president of Fidelity Selectco, Fidelity’s ETF business, and a senior managing director at State Street Global Advisors’ SPDR ETF business.

He hopes his industry relationships and experience developing products will help not only the technology side of GS Select, but the commercial success of the program as advisers look to expand the range of services they provide clients.

“The financial adviser was primarily focused on the asset management solution maybe 10, 15 years ago. That quickly evolved to wealth management alongside financial planning,” Mr. Rochte said. “What GS Select will bring is helping the adviser think about the asset accumulation period and also the liability management of that relationship. It ties the adviser even closer to the end client.”

The independent adviser market seems to be an increasing part of Goldman’s growth strategy. After acquiring United Capital, Goldman decided to continue licensing out the FinLife Partners technology to independent firms and installed a company veteran, Rachel Schnoll, to grow the business.

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Wirehouse advisers have long offered clients access to securities-backed loans, Mr. Rochte said. GS Select offers additional firepower to independent advisers who want to maintain the services they offered at wirehouses.

“The fee-based and fee-only side of the adviser market is growing at a faster clip than traditional commission-based broker-dealers. This is just one more digital tool in the toolkit,” he said.

Goldman isn’t the only firm trying to support advisers in new lines of business beyond portfolio management. Envestnet can also offer advisers access to loans on its credit exchange, annuities on its Insurance Exchange, and now business management tools on its Advisor Services Exchange.