Goldman, BNY Pershing Break into the Client Referral Game

Goldman Sachs and BNY Pershing just swiped right on client referrals.

BNY, the world’s largest custodian, is preparing to launch a matchmaking program that would pair RIAs that use its services with retail customers, according to a December filing. Its Advisor Match service will compete with well-established services from competitors like Fidelity and Charles Schwab. Not to be outdone, Goldman Sachs also entered the referral fray, offering its retail clients to major RIA customers; Creative Planning, Mercer Advisors and Wealth Enhancement are reportedly among the first to join. It’s welcome news to independent advisors, who benefit from having multiple options to buy fresh leads, and could turn the RIA landscape into a high-stakes episode of The Bachelor. 

“BNY has a unique opportunity to match advisors and investors across our ecosystem,” Ben Harrison, BNY Pershing’s global head of client coverage, said in an email.

Matchmaker, Matchmaker, Send Me a Lead 

The developments, which were first reported by FAIQ, Citywire and InvestmentNews, come as competition in the mid-tier wealth management segment heats up. Schwab significantly raised the barriers to entry for its own referral network late last month, doubling minimum AUM requirements to $500 million. While Schwab pivoted toward larger firms and wealthier clients (asset minimums now begin at $2 million instead of $500,000), BNY is keeping a more open-door policy:

• Advisors using the Advisor Match service will face no AUM minimums.
• There will be an annual fee of $50,000 and an annual asset-based fee of as much as 0.3% based on the value of the assets of the referred client, a potential barrier for advisors with less affluent customers. 
• There are also requirements like federal registration, a fee-based compensation model, and liability insurance and fidelity bond coverage, according to the Dec. 26 filing.

Love at First Asset. The moves give two of the world’s largest financial services providers a way to capture a segment of the wealth management market that industry leaders like Charles Schwab and Fidelity have dominated for years. Schwab’s program, which launched in 2002, has 100 to 150 participating firms, while Fidelity’s Wealth Advisor Solutions reportedly lists a roster of about 70. BNY expects to begin the digital matching service later this year, potentially reshaping how mid-tier advisors compete for new assets. 

The initiative is “a digital-first referral program that will help BNY Pershing clients scale organic growth through a new channel of qualified leads as more investors seek financial advice,” Harrison told Advisor Upside.