Joe Duran's Goldman two-step: Exiting as partner, staying to consult

Goldman Sachs Group Inc. is redeploying perhaps its most valuable asset in its endeavor to become a leading custodian to the fast-growing market for registered investment advisors. On Monday the giant investment bank said Joe Duran, head of Goldman Sachs Personal Financial Management, would be stepping down as a partner but would stay at the bank as a consultant to work with the head of Goldman's burgeoning RIA offering, Padi Raphael, global head of third-party distribution and a partner at the bank.

"I'm still a partner here but in the next few weeks I will be stepping down and remain as a consultant," Duran said in an interview Monday morning. "Padi is leading the RIA charge and I’ll be her right hand."

Resigning as a partner at the bank but working as a consultant gives him just enough distance for his point of view to be regarded in the RIA marketplace, he said.

"There's a value to objectivity," Duran said. "Independent financial advisors are independent. If I'm a partner here, they know I have a point of view. Plus, it's been an amazing 3½ years," he added, referring to the 2019 sale of his firm, United Capital, to Goldman for $750 million.

Duran said he expects to be active on the conference circuit for financial advisors and to work in an independent manner he simply could not if he remained a partner at the bank.

It's a role he knows well. Before the sale of United Capital, Duran was one of the most public-facing executives in the financial advice industry. He was one of the pioneers of the registered investment advisor aggregator or roll-up business model, which has been widely imitated.

According to Business Insider, roughly just 1% of Goldman Sachs' employees reach partnership status, making it one of the most exclusive — and coveted — executive positions on Wall Street.

Goldman Sachs, like many of Wall Street’s most elite banks and money managers, historically has focused on institutional investors rather than RIAs. But that's changing as RIAs have become the fastest-growing segment of the wealth management market.

"What we intend to do is show the marketplace that we bring decades of experience of serving our own institutional clients and deliver that capability to the high-net-worth financial advisor community," Raphael said in the same interview. "I've been spearheading the effort over the past year, with senior leaders across the firm, to coordinate and collaborate. We want to show our commitment to the [RIA] industry and present our firm in a client-centric way rather than a product-centric way."

Traditionally Goldman Sachs has worked with clients in silos but it's now trying to work with financial advisors in a much more holistic, coordinated manner, she added.

Raphael is not running the operations of the RIA custody business at Goldman but is in charge of third-party distribution within Goldman Sachs Asset Management and is spearheading the internal effort to coordinate the Goldman Sachs RIA franchise, internally dubbed One Goldman Sachs. Adam Siegler is the head of Goldman Sachs Advisor Solutions, the custody group.

Meanwhile, Goldman Sachs also announced that Dave Dase will join Larry Restieri as co-head of the workplace and personal wealth business, and David Fox will become head of personal financial management, the position Duran is leaving.

[More: Goldman Sach’s push into RIA custody gets going — finally]