Goldman's Neos deal puts a price on the race to own product factories

Goldman Sachs agreed this week to pay up to $2.25 billion for Neos Investments, an ETF provider. The cash-and-equity purchase would lift Goldman's ETF assets to about $130 billion. Neos is the kind of manufacturer wealth platforms increasingly prefer to own rather than pay to access. Among RIAs, distribution is no longer the tight constraint. Product ownership is.

Charles Schwab closed its purchase of Forge Global last month, adding a pre-IPO private securities marketplace to its brokerage and custody business. That puts direct control of the private share venue in Schwab's hands. Orion said on August 1 it is integrating Goldman Sachs Custody Solutions directly into its RIA platform. Advisers on Orion can open Goldman custody accounts without leaving Orion's software, and Goldman gets direct access to independent RIAs.

The older play was to sign a distribution agreement with a custodian or platform and pay to reach its customers. The newer play is to own the product manufacturer and the delivery system. Goldman is buying the ETF manager. Schwab bought the private share venue. Orion is integrating the custodian into its technology. Each move removes a round of negotiation and makes a former partner into an internal function.

Goldman is paying a headline price for Neos. The Orion-Goldman arrangement is a technology integration, not a purchase. Robinhood is moving faster on closed-end private market fund launches, bringing venture capital access to retail customers. Apex Fintech Solutions opened a prediction market built on Kalshi's API, with Tastytrade as the first user. Vista Equity invested $170 million in CAIS. The round valued the alternatives platform used by RIAs and family offices at $2 billion and put a sponsor with an infrastructure focus behind it. Mesirow bought flexPATH Strategies' 3(38) practice in August, its second outsourced-fiduciary purchase of the year.

RIAs should expect fewer independent entry points. Advisers who want private market access or custom ETF structures will increasingly deal with a handful of vertically integrated platforms. Those platforms should get better margins. The thing to watch is how quickly the remaining choices narrow.