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BlackRock Teams With GeoWealth to Offer Custom Models Featuring Simplified Access to Private Markets

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BlackRock (NYSE: BLK) has announced a strategic partnership with financial technology firm GeoWealth to offer custom models that integrate private markets, direct indexing, and fixed income SMAs alongside ETFs and mutual funds in a single account. This initiative aims to address the $37 trillion U.S. wealth market by simplifying access to various asset classes for advisors.

BlackRock's custom models business, which has generated $31 billion in new assets over the past four years, will be expanded through GeoWealth’s platform. This strategic move is expected to streamline and scale the integration of public and private markets, enhancing advisors' ability to create diversified, personalized, and tax-efficient portfolios.

GeoWealth's platform, with over $28 billion in assets and nearly 200 RIAs as of December 31, 2023, will enable the implementation of these custom models. The partnership aims to leverage BlackRock's portfolio design expertise and GeoWealth's technology to innovate and improve the advisor experience.

Positive
  • Strategic partnership with GeoWealth to offer custom models, enhancing BlackRock's capabilities in the $37 trillion U.S. wealth market.
  • Expansion of BlackRock's custom models business, which has generated $31 billion in new assets over four years.
  • Integration of private markets, direct indexing, and fixed income SMAs with ETFs and mutual funds in a single account, simplifying access for advisors.
  • GeoWealth's platform has over $28 billion in assets and nearly 200 RIAs, providing a robust foundation for the partnership.
  • The initiative supports advisors in creating diversified, personalized, and tax-efficient portfolios.
  • BlackRock's U.S. Wealth Advisory business is a key growth driver, generating about a quarter of the firm's revenues in 2023.
Negative
  • None.

The partnership between BlackRock and GeoWealth is a strategic move aimed at tapping into the $37 trillion U.S. wealth market. This collaboration can be a game-changer for advisors seeking a diversified and customizable asset management option. By offering private markets, direct indexing and fixed income SMAs along with traditional ETFs and mutual funds in a single account, BlackRock is enhancing its value proposition significantly. This could help advisors cater to the increasing demand for personalized and tax-efficient strategies among clients.

From a financial perspective, this move can be seen as a growth driver for BlackRock, which already generates a quarter of its revenues from the U.S. Wealth Advisory business. The integration is expected to simplify access to previously hard-to-access asset classes, thus attracting more advisors and clients to its platform. In the short term, this could result in increased assets under management (AUM) for BlackRock, while in the long term, it could solidify its position as a comprehensive solution provider in the wealth management space.

Another key financial implication is the potential for increased fee revenue from managing more complex portfolios that include private market strategies. However, the success of this initiative will heavily depend on the seamless integration of GeoWealth's technology and the effectiveness of BlackRock's portfolio design.

From a market research perspective, this partnership highlights a clear trend towards personalization and diversification in the wealth management industry. Advisors and clients are increasingly looking for solutions that offer a mix of public and private investments and this collaboration addresses that demand head-on. The $31 billion in new assets generated by BlackRock's custom models over the past four years is a testament to the growing appetite for such tailored solutions.

This initiative also aligns with the industry shift towards direct indexing, which allows for greater customization and tax benefits compared to traditional index funds. The addition of fixed income SMAs further enhances the appeal, especially for clients seeking stability and income generation in their portfolios. GeoWealth's existing platform, which already manages over $28 billion across 180,000 accounts, provides a strong foundation for this expansion.

In the long term, this partnership could set a new industry standard for how advisors manage client portfolios, making it more streamlined and efficient. The focus on innovation and enhancing the advisor experience will be important for maintaining competitive advantage. The scalability of GeoWealth's technology will play a significant role in the successful implementation and adoption of these custom models.

Automated Custom Models to Enable Access to Private Markets, Direct Indexing and Fixed Income SMAs in Addition to ETFs and Mutual Funds in a Single Account

NEW YORK--(BUSINESS WIRE)-- BlackRock (NYSE: BLK) today announced a strategic partnership with financial technology firm GeoWealth expanding BlackRock’s capabilities to meet client needs in the $37 trillion U.S. wealth market. Through the partnership, BlackRock will offer custom models via GeoWealth’s platform that enable advisors to meet client demand for private markets, direct indexing and fixed income SMAs – in addition to traditionally offered ETFs and mutual funds – in a single account.

“By combining BlackRock’s portfolio design expertise with GeoWealth’s implementation platform, we will make it easier for advisors to build a models-based practice and enable broader access to private markets – one of today’s most sought-after asset classes,” said Eve Cout, Head of Portfolio Design & Solutions within BlackRock’s U.S. Wealth Advisory business. “This initiative supports our goal of helping more and more advisors meet the evolving needs of their clients, who increasingly seek more diversified, personalized and tax-efficient strategies.”

The agreement with GeoWealth will expand BlackRock’s custom models business, which represents its fastest growing models segment, generating $31 billion in new assets over the past four years. BlackRock currently partners with several wealth platforms that offer implementation of custom models. Some of the first custom models to be available on GeoWealth’s platform are expected to include private market strategies alongside ETFs and mutual funds. That offering will provide advisors with a streamlined and scalable solution that combines public and private markets in one portfolio solution, simplifying access to an in-demand yet historically difficult-to-access asset class.

“We are excited to collaborate with BlackRock to unlock the next phase of our growth and deliver on key initiatives as we continue building on our proprietary technology,” said Colin Falls, CEO of GeoWealth. “This partnership underscores our dedication to innovation and streamlining the advisor experience.”

As of December 31, 2023, the GeoWealth platform has over $28 billion across more than 180,000 accounts and nearly 200 RIAs. In 2023, GeoWealth expanded its third-party model marketplace to include over 700 models from more than 70 asset managers. GeoWealth began offering BlackRock products in 2021, including BlackRock’s standard models, and launched Aperio and fixed income SMAs as standalone strategies earlier this year.

BlackRock sees significant growth opportunity in the U.S. wealth market and is actively positioning the firm to become an integral, whole portfolio partner to advisors in an increasingly complex environment. Overall, BlackRock’s U.S. Wealth Advisory business is a key growth-driver for the firm, generating approximately a quarter of BlackRock’s revenues in 2023.

About BlackRock

BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable. For additional information on BlackRock, please visit www.blackrock.com/corporate.

About GeoWealth

GeoWealth is a turnkey asset management platform (TAMP) and financial technology solution built specifically for the needs of modern RIAs. GeoWealth’s user-friendly, cost-efficient, integrated technology enables advisors to access a diversified lineup of model portfolios and fully offload mid-and back-office responsibilities, including performance reporting, billing, portfolio accounting and more. Via its customizable open-architecture platform, GeoWealth enables advisors and firms to grow faster and serve clients more efficiently. Founded in 2010, GeoWealth is headquartered in Chicago, IL. For more, please visit www.geowealth.com.

Special Note Regarding Forward-Looking Statements

This press release, and other statements that BlackRock may make, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to BlackRock’s future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” and similar expressions.

BlackRock cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and BlackRock assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.

BlackRock has previously disclosed risk factors in its SEC reports. These risk factors and those identified elsewhere in this press release, among others, could cause actual results to differ materially from forward-looking statements or historical performance and include: (1) the introduction, withdrawal, success and timing of business initiatives and strategies; (2) changes and volatility in political, economic or industry conditions, the interest rate environment, foreign exchange rates or financial and capital markets, which could result in changes in demand for products or services or in the value of assets under management; (3) the relative and absolute investment performance of BlackRock’s investment products; (4) BlackRock’s ability to develop new products and services that address client preferences; (5) the impact of increased competition; (6) the impact of future acquisitions or divestitures, including the acquisition of Global Infrastructure Management, LLC (referred to herein as Global Infrastructure Partners ("GIP") or the "GIP Transaction")” (7) BlackRock’s ability to integrate acquired businesses successfully, including GIP; (8) risks related to the GIP Transaction, including the possibility that the GIP Transaction does not close, the failure to satisfy the closing conditions, the possibility that expected synergies and value creation from the GIP Transaction will not be realized, or will not be realized within the expected time period, and impacts to business and operational relationships related to disruptions from the GIP Transaction; (9) the unfavorable resolution of legal proceedings; (10) the extent and timing of any share repurchases; (11) the impact, extent and timing of technological changes and the adequacy of intellectual property, data, information and cybersecurity protection; (12) the failure to effectively manage the development and use of artificial intelligence; (13) attempts to circumvent BlackRock’s operational control environment or the potential for human error in connection with BlackRock’s operational systems; (14) the impact of legislative and regulatory actions and reforms, regulatory, supervisory or enforcement actions of government agencies and governmental scrutiny relating to BlackRock; (15) changes in law and policy and uncertainty pending any such changes; (16) any failure to effectively manage conflicts of interest; (17) damage to BlackRock’s reputation; (18) increasing focus from stakeholders regarding ESG matters; (19) geopolitical unrest, terrorist activities, civil or international hostilities, and other events outside BlackRock’s control, including wars, natural disasters and health crises, which may adversely affect the general economy, domestic and local financial and capital markets, specific industries or BlackRock; (20) climate-related risks to BlackRock’s business, products, operations and clients; (21) the ability to attract, train and retain highly qualified and diverse professionals; (22) fluctuations in the carrying value of BlackRock’s economic investments; (23) the impact of changes to tax legislation, including income, payroll and transaction taxes, and taxation on products, which could affect the value proposition to clients and, generally, the tax position of the Company; (24) BlackRock’s success in negotiating distribution arrangements and maintaining distribution channels for its products; (25) the failure by key third-party providers of BlackRock to fulfill their obligations to the Company; (26) operational, technological and regulatory risks associated with BlackRock’s major technology partnerships; (27) any disruption to the operations of third parties whose functions are integral to BlackRock’s exchange-traded funds platform; (28) the impact of BlackRock electing to provide support to its products from time to time and any potential liabilities related to securities lending or other indemnification obligations; and (29) the impact of problems, instability or failure of other financial institutions or the failure or negative performance of products offered by other financial institutions.

Media

BlackRock

Christa Zipf

Phone: 646-231-0013

Email: christa.zipf@blackrock.com

GeoWealth

Will Ruben, StreetCred PR

Phone: 847-208-8289

Email: william@streetcredpr.com

Source: BlackRock

FAQ

What is the new partnership between BlackRock and GeoWealth about?

BlackRock and GeoWealth have partnered to offer custom models that integrate private markets, direct indexing, and fixed income SMAs alongside ETFs and mutual funds in a single account, enhancing capabilities in the $37 trillion U.S. wealth market.

How will BlackRock's partnership with GeoWealth impact advisors?

The partnership will enable advisors to meet client demand for diversified, personalized, and tax-efficient strategies by integrating various asset classes into a single account through GeoWealth's platform.

What growth has BlackRock's custom models business seen?

BlackRock's custom models business has generated $31 billion in new assets over the past four years.

How much in assets does GeoWealth's platform manage?

As of December 31, 2023, GeoWealth's platform manages over $28 billion across more than 180,000 accounts and nearly 200 RIAs.

What role does BlackRock's U.S. Wealth Advisory business play in the company?

BlackRock's U.S. Wealth Advisory business is a key growth driver, generating approximately a quarter of the firm's revenues in 2023.

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