Goldman Sachs Advisor Solutions, the custodian and service provider to RIAs that the investment bank began building after it acquired Folio Financial last year, announced on Monday an exclusive licensing deal with a popular fixed-income trading software for wealth managers.
Only Goldman Sachs Advisor Solutions will have a white-labeled version of the InspereX trading platform called BondNav. (InspereX will still work with other custodians. The white-label exclusive only applies to partnerships with custodians, not other enterprise clients.) Goldman was a shareholder of fixed-income underwriter Incapital, which merged with the trading platform 280 CapMarkets to create InspereX in February.
In addition to the licensing deal, Goldman also said Monday it increased its equity position in InspereX. The technology company declined to share how much capital it recently raised.
InspereX is also adding a one board member, Mariana Lopert-Schaye, director of firmwide strategy at Goldman Sachs.
The integration between Goldman and InspereX went live on November 8, InspereX CEO John DesPrez III told RIA Intel.
Financial advisors who custody client assets with Goldman will be able to use BondNav without cost. However, to use BondNav, advisors must have trading authorization and they pay any custody fees charged by their custodians.
“[The] Goldman RIA custody platform is new and so this is, I think, the first time that an RIA has been able to sign on with a custodian that has the products and capabilities of Goldman Sachs sitting behind it,” Dave Rudd, president of InspereX, said. “In 2021, the bond market is averaging $960 billion a day in trade volumes and so getting your arms around pricing, and making sure you're getting access, it's challenging. And that's what our platform seeks to solve for advisors.”
Once Incapital and 280 CapMarkets completed their merger in July, the existing relationship with Goldman helped InspereX attract the attention of the investment bank’s RIA custody business, DesPrez said.
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“This whole deal that we're talking about today validates the coming together of the company,” he added.
BondNav, which was developed by 280 CapMarkets, is a cloud platform that aggregates real-time retail, middle-market, and institutional bond markets and helps portfolio managers make more informed decisions. The company says it can make buying securities faster, easier, and potentially cheaper across almost all the fixed-income asset classes: municipal bonds, corporate bonds, U.S. government-sponsored assets, treasury and agency debts, and mortgage-backed securities.
BondNav’s primary feature show traders searching for securities similar ones that fulfill similar requirements but might be more advantageous. The bonds recommended are often substantially cheaper, Rudd said.
“When an order comes into our desk…we don't just buy the bonds that are on the screen. We will actually look at the bond, leverage all of our data and we may recognize that we had a seller a week ago on that bond at a much cheaper price,” Rudd said.
InspereX currently offers BondNav to about 450 RIA firms, which manage over $1.2 trillion in assets, according to the company.
InspereX has a “robust product roadmap,” for the Goldman Sachs Advisor Solutions Platform customer and the company plans on working to provide more capabilities and integrations with the platform, said Rudd, but he did not disclose what those capabilities would entail.
“Goldman Sachs is just a premier market maker, underwriter, and they're a world-class fixed-income operation, and they've really dedicated themselves to being on the cutting edge of technology. So, the collaboration of our engineers with the Goldman Sachs engineers is a huge value add to us, and we're really looking forward to developing out the products and capabilities of the system,” Rudd said.
Holly Deaton (@HollyLDeaton) is a staff writer at RIA Intel and based in New York City.