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Charles Goldman speaks from the CEO Summit hotel about what he didn't see coming at AssetMark and how it changed his life

The Fidelity and Schwab veteran is criss-crossing the country as managing principal rather than part-time coach

Thursday, April 10, 2014 – 3:27 AM by Dina Hampton and Brooke Southall
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Charles Goldman: We bought the firm hoping the CEO would be there.

Brooke’s Note: When us non-client reporters were informed that our long-running invitation to the Tiburon CEO Summit was not being renewed, it produced a few mutterings nationally. But Summit organizers produced an olive branch in the form of interviews in soundproof rooms away from the action. Now it is true that no self-respecting publication would accept such a meager thrown bone. But when the bone in question was one Charles Goldman, it took on more of an Omaha-steak appeal. RIABiz leadership (such as he is) was willing to gamble that an hour of coffee with someone of Goldman’s energy, experience, wisdom and, of late, well-toned entrepreneurial musculature is a worthy substitute for two days of Power Bars on glass trays among the greater pantheon. We were not disappointed as Goldman, feisty at times, touched on issues that ranged from broad industry matters to his personal challenges and let us know the good and bad of being back in the CEO hot seat. Thank you, Charles, for taking the time and indulging Dina Hampton with an interview in her hometown under unusual circumstances.

Since leaving his position overseeing the clearing and custody arms of Fidelity investments in early 2010, Charles Goldman has led the life. See: Charles Goldman is seeking his game after tumult and a year of decompression.

Still in his late 40s at the time, he took his corporate winnings, moved to a home tucked into the Rocky Mountains and took on intellectually satisfying gigs that generally didn’t interfere with family life, cycling and a few days on the slopes. He served on boards, consulted for top firms, gave a go at starting Advizent and shopped for the Next Big Thing in his life — something he could sink his teeth into once his son was through with his schooling. See: Advizent will close its doors after a final flurry of negotiations.

Now — in spades — that big opportunity is upon him but it is not entirely what he bargained for.

“We bought the [AssetMark] hoping the CEO would be there,” Goldman says. “My goal was to spend time with the team and help them — a two-day-a-week cadence with clients, salespeople or in the office. Not to manage, but to coach the CEO.”

Executive shake-up

But in December, the PE partners decided to remove Gurinder Ahluwalia from the top spot of and install Goldman as president and chief executive. At the same time, coincidentally, Goldman says, Myra Rothfeld, the company’s chief marketing officer, announced her retirement. See: Gurinder Ahluwalia to step out, Charles Goldman steps in, as AssetMark CEO.

In other words, Goldman, who invested personal capital in the AssetMark deal found himself as the de facto owner-operator of the firm, which manages $20 billion of assets for the clients of 6,000 advisory firms. It was also a bit of a fixer-upper as its previous owner, Genworth, had declined to allocate sufficient resources to update and improve systems. See: 'AssetMark’ rides again as a $20-billion TAMP with a receding Genworth hangover.

Goldman says it’s not a change he contemplated when he and his private-equity partners, New York-based Aquiline Capital Partners LLC and Genstar Capital LLC of San Francisco, and Altegris Investments, put up the $412 million to buy the turnkey asset management program in August. See: VC firm installs one of its own, a Lehman Bros. legend, to get Altegris in gear.

The former head of the RIA custody units of Charles Schwab & Co. Inc. and Fidelity Investments has been going full bore since being named president and chief executive of AssetMark in January.

“There’s been an uptick in traveling since January,” said Goldman, with some understatement, in a chat with this reporter just before the closing session of the 26th rendering of the Tiburon CEO Summit XXVI at he Ritz Carlton Hotel in New York yesterday. “It’s more like when I was at Fidelity or Schwab. The last few years I’ve worked in private equity and you can control your schedule [more].”

Now, Goldman commutes between his new digs in the East Bay area of San Francisco to his home in Boulder, Colo. on the weekend and during the week, traverses the country.

“Monday through Friday, half the time I’m on the road.”

Full bundle

Goldman's friend and former partner Steve Lockshin made news at the Tiburon Summit this week.
Goldman’s friend and former partner Steve
Lockshin made news at the Tiburon
Summit this week.

But Goldman’s time on the road is making him a hands-on expert in what it takes to keep AssetMark clients happy.

“It was about building a broad platform — improving asset management and the way advisors access it — adding new managers, construct portfolios and UMA capability. If [an advisor] wanted J.P Morgan or F-Squared, for example, it took many different steps to figure it out and finally open up an account,” he says.

That is to say, AssetMark has always had decent products — if you could actually get past the niceties and vagaries of creating a full bundle — an area his company was struggling. See: Ron Cordes tells about his Next Big Thing after selling AssetMark.

“We know advisors need to build on a single platform, bundled fees, proposal generation, interactive reporting, so it’s easier for the advisor and the end-investor,” he says.

Working toward that end, Goldman says in the next couple of months the firm will roll out a new UMA platform as well as a mobile app to demonstrate to clients how that unified managed account platform works.

Millennial bait

On the first day of the Tiburon Summit, a juicy bit of news pierced the press blackout: Goldman’s colleague, friend and erstwhile partner in the ambitious but ill-fated Advizent venture, Steve Lockshin, has become a stakeholder and rights holder in the online advisor Betterment and will helm Betterment Institutional (under the URL, Betterment4RIAs), a TAMP-ish concept catering to RIAs with lower-balance clients. See: Tiburon CEO Summit extrudes news: Betterment Institutional is born.

Goldman says there’s absolutely no competition between AssetMark and Lockshin’s new venture. Indeed, as a board member of another online RIA, Personal Capital, Goldman sees online efforts as a uniquely good way to address two until-now intractable issues that threaten to hobble the fee-based, fiduciary model: the graying of the advisors and achieving advisor — and client — diversity. See: Why I find the term 'robo-advisor’ objectionable and unhelpful.

“It’s a new way to get to the millenials,” he says.

Room for all

Goldman says the future of wealth management is so wide open that “none of us have market share. Not only are we not in competition with Steve Lockshin — we’re not in competition with anyone.”

Of course, RIAs and the varying business models that service them — custodians, aggregators, research firms etc. — do compete, he amends, but with about $38 trillion of U.S. investable assets (a figure that Roame is reputed to have cited in his opening-day address) up for grabs, there’s room for all.

“Clients want fee-based advice. They may not understand investing or advisors vs. brokers vs. planners but there’s no doubt about the client-driven growth of the RIA industry. Clients like it. They’ve voted with their wallets.” See: What is the value proposition of a financial advisor — and how is a budding RIA culture upping the ante?.


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Mentioned in this article:

Tiburon Strategic Advisors
Consulting Firm
Top Executive: Charles Roame

Betterment, LLC
Financial Planning Software
Top Executive: Jon Stein




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