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Charles Goldman is seeking his game after tumult and a year of decompression

The former head of Schwab's and Fidelity's RIA units may land in an entrepreneurial venture

Monday, December 20, 2010 – 2:23 PM by Brooke Southall
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Charles Goldman: I’m still hungry to do more stuff.

Charles Goldman wants in to the RIA business again after a year that he spent clearing his mind — and getting through legal entanglements with the two largest custodians.

The former head of both Schwab Advisors Services and Fidelity’s three financial advisory platforms is working on a new venture that he is discussing with private equity people and veterans in the industry. Goldman said he is also considering the possibility of buying a company or running one.

“Now I’m starting to think about what I’m going to do next,” he said in an interview from New York on Tuesday. “...I’m trying to figure out how I can have the most influence…and have it be the most interesting, challenging and fun.”

Goldman left Schwab in November of 2008, a sudden departure that resulted in him (later) filing suit against Schwab with a claim that he was owed $736,000 in severance pay. After he left Schwab he went almost immediately to Fidelity to fill a newly created position that had him overseeing its clearing, custody and family office platforms for financial advisors. The unexpected news that he was leaving the Fidelity job came late in January of 2010 and he officially vacated the position in March. See: Charles Goldman to leave Fidelity

Though neither Goldman nor the custodians ever offered an explanation for the departures, people close to each situation say he left because he was outspoken in his views — even if it caused friction with his corporate superiors.

In response to a question about what Goldman was like in the trenches, Dave Welling, who reported to him at Schwab and is now is the chief solutions officer of Black Diamond Performance reporting of Jacksonville, Fla., described a tough love dynamic that other people related off the record.

No punches pulled

“He didn’t pull punches. He was direct and would tell you straight up if he thought something was crap, if it was a great idea and what you needed to overcome to be successful.”

Now, Goldman says he’s putting both episodes behind him.

He says he settled the Schwab lawsuit (first reported in May). His noncompete agreement with Fidelity Investments following his departure from the company in March also expired during that time, he says. Both the San Francisco-based and Boston-based RIA custodians declined to comment on these matters.

Still, the legal issues were not the biggest factor keeping Goldman on the sidelines, he says. He was decompressing after nearly three intense decades in the grind. “It’s been 25 years of killing myself. It’s healthy for me stepping back.” He took a trip to Europe and drove up the Maine coast and over to Montreal, among other excursions.

While he was still living in Boston, he joined a group that did a weekly 50-mile ride. He worked to get his daughter into a better preparatory school after she decided she wanted to become a doctor. See: Postscript to the story of Charles Goldman parting ways with Fidelity Investments

Though Goldman, 49, is charting his next big career move, he’s also content with the patchwork of duties he has right now.

Goldman is serving on both the CFP Board of Standards and on the board of the Foundation for Financial Planning – a charity that raises money from people in the RIA industry including planners and custodians then uses its planners helping people in real need or crisis. This includes people in inner cities, military personnel and 911 victims.

Goldman Sachs

Goldman has also picked up consulting gigs with both Goldman Sachs and Bain & Co., the big management consulting firm. Goldman also says he hears from a number of financial advisors, and he offers them counsel if they ask for it. If Goldman doesn’t land on his next big thing soon, he says he could imagine serving on more boards of directors as he continues to survey his possibilities.

As Goldman sets his sights on 2011, both he and some of the people who know him best personally and professionally say that the career possibilities may be richer for him in the entrepreneurial world than a corporate position. Goldman points to his legacy as a management consultant for Boston Consulting Group, his job heading up a $200-million fruit-and-nut company and his job helping Schwab to invest venture capital.

He likes the energy and intellectual intensity associated and he also believes the time may be ripe to apply experience skill with start-ups and his knowledge of the RIA industry.

Bob Oros, national sales director and member of the executive management team with Denver, Colo.-based Trust Company of America also worked under Goldman at Schwab and quips that he’s excited to see Goldman lacing up his cleats but hopes that he doesn’t join a competing custodian.

“I regard Charles as a visionary leader with a deep knowledge of RIAs and what makes them tick,” he says Bob Oros, national sales director and member of the executive management team with Denver, Colo.-based Trust Company of America. “I would consider him a person of high integrity but he has a real down-to-earth quality and a sense of humor. It makes it fun to work for him.”

Oros was one of Schwab’s top sales executives under Goldman in 2007.How Bob Oros landed at Trust Company of America

No ill will

Goldman says he bears no ill will against his former employers. “I have nothing but respect for both those firms and anyting I could do to be helpful, I would do.” He says he has particularly high regard for Bernie Clark at Schwab, Sanjiv Mirchandani, president of National Financial, Mike Durbin at Fidelity and Ed Orazem, who heads up the family office unit at Fidelity. “I consider them lifelong friends and colleagues.”

Goldman didn’t specify what his prospective business ventures encompass but said he’s in frequent contact with some of the executives atop the various roll-up efforts and that he has had particularly in-depth conversations with David S. Pottruck, the former CEO of Schwab who is now a board member and major investor in the well-financed HighTower Advisors of Chicago. Weissbluth lands war chest for HighTower Advisors [Updated]

The custodians are becoming more commoditized and “cheaper, better and more integrated”, which is great news for RIAs, Goldman says. There’s “a big need for more” because the firms have become so sophisticated. “When it was mom and pop, it didn’t matter,” he says.

Going the route of launching a venture is very timely for Goldman, according to Timothy Welsh, president of Nexus Strategy, who also worked with Goldman at Schwab.

$2 billion in two minutes

Private equity funds are anxious to find ways to invest in the emerging fee-based advisory model and there are few people with the knowledge and skills to execute a strategy, he says. It only takes about 10 RIAs with $1 billion or more to have a very successful venture, he adds.

“He could get a couple billion in a couple minutes,” Welsh says.

Welsh allows that there’s another reason why Goldman is likely to go that route – custodians all have solid leaders right now. “There’s no room in the Fidelity chair, the TD chair, the Pershing chair and the Schwab chair – so where are you going to?”

Whatever Goldman decides to do next, his home base will be in Boulder, Colo. He recently sold his house in Brookline, Mass. and purchased one in the university town in the Rockies. The idea was to find better weather than Boston’s and live in a place where his 13-year-old son could attend a good school.

Goldman says he’s slowly fallen in love with Boulder as a result of having to visit there four time a year for several years starting in 2002 when Schwab bought a piece of a company called Wall Street on Demand through its venture investing unit. Goldman oversaw the investment and stayed on the company’s board after it was sold to Goldman Sachs. It’s since been resold to The Market.

He doesn’t believe that his choice of Boulder will be limiting for the types of opportunities that he is eyeing – pointing out that Schwab CEO Walt Bettinger and Jim McCool, Schwab’s executive vice president for institutional services, lived in Cleveland, Ohio for a significant part of their Schwab tenure. Both have since moved to the Bay area.


What Goldman is certain about is that he’s ready to work again – and in the RIA industry.

“I’m still hungry to do more stuff.”

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Paul Harris

Paul Harris

December 20, 2010 — 6:41 PM

Charles being the leader he is, should look at what Dynamic Wealth Advisors is doing. They are doing it right for the right reasons, and better than any other solution other there.

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