Goldman Sachs underscores focus on RIAs with sale of Folio retail unit

The sale of 70,000 retail accounts to Interactive Brokers validates the strength of the independent adviser channel, analysts say

Less than three months after its acquisition of Folio Financial, Goldman Sachs is selling the self-directed retail brokerage segment of the business to Interactive Brokers.

The deal, which is expected to close in January, underscores Goldman’s specific commitment to the wealth management channel by keeping Folio’s custody and clearing business, according to Mark Bruno, managing director at Echelon Partners.

“From a wealth management perspective, this is pretty consistent with everything Goldman has been doing to build out a bigger presence in the RIA space,” he said. “They are definitely prioritizing the RIA space and looking at ways to expand their reach.”

Bruno cited the 2019 acquisition of United Capital for $750 million as a sign of Goldman’s increased focus on wealth management.

Terms of the latest deal were not disclosed. Goldman representatives could not be reached for comment.

For Interactive Brokers, the deal brings approximately 70,000 current Folio self-directed customers, and about $3 billion in client equity, according to a company spokesperson. At the end of November, Interactive Brokers had 1.037 million client accounts, which is 52% higher than the prior year, and client equity climbed to $268.7 billion, a 61% increase year-over-year.

“While most of our growth has historically been organic, Interactive Brokers saw this opportunity as a way to expand the number of retail investors we serve and increase our assets,” said Kalen Holliday, a director at Interactive Brokers.