Key Takeaways
- • Goldman Sachs is launching a long-short SMA platform through its RIA custody division, with initial offerings from AQR Capital Management and Quantinno Capital Management expected to open in Q2 2026.
- • Long-short SMAs employ capital loss harvesting and capital gain deferral strategies across long and short stock positions to mitigate client tax liabilities, particularly for advisors managing concentrated stock positions.
- • The move positions Goldman Sachs directly against Schwab and Fidelity, the two largest custodians in independent wealth management, both of which already offer long-short SMA access; Fidelity has recently imposed an indefinite restriction on new client assets entering its platform.
- • Custodians face balance sheet risk by holding both underlying long and short positions, a structural constraint that has prompted Fidelity's cautious approach to new client onboarding.
Summary
Goldman Sachs is constructing a dedicated long-short SMA platform for clients of its RIA custody division, according to sources familiar with the initiative. The platform will provide access to separately managed accounts from asset managers AQR Capital Management and Quantinno Capital Management, with launch timing expected in the second quarter of 2026. Spokespeople for Goldman Sachs and AQR declined to comment, while Quantinno did not respond to requests for comment.
Long-short SMAs are tax-optimization investment vehicles designed to reduce client capital gains tax exposure through a combination of long and short positions in individual securities. The strategy operationalizes capital loss harvesting in certain holdings while deferring capital gains in others, creating a tax-efficient wrapper particularly attractive to advisors managing clients' concentrated stock positions. The strategies have gained significant traction across the wealth management industry, with both Charles Schwab and Fidelity Investments—the two dominant custodians in independent wealth management—having already built competing offerings.
Goldman Sachs' entry into this market reflects intensifying competition for RIA assets. Schwab recently agreed to refer clients with concentrated stock positions to Wealth Enhancement, a mega-RIA that will manage assets in long-short strategies on an investment management-only basis. However, the sector faces operational constraints: custodians must maintain both long and short positions on their balance sheets, creating concentration risk. Fidelity's recent imposition of an indefinite ongoing restriction on new client assets entering its long-short SMA platform underscores the balance sheet and operational challenges custodians face at scale in this product category.
Goldman Sachs' strategic timing suggests confidence in managing these operational risks while capitalizing on growing advisor demand for tax-efficient solutions in a persistently volatile market environment for concentrated wealth positions.
Long-short SMAs are tax-optimization investment vehicles designed to reduce client capital gains tax exposure through a combination of long and short positions in individual securities. The strategy operationalizes capital loss harvesting in certain holdings while deferring capital gains in others, creating a tax-efficient wrapper particularly attractive to advisors managing clients' concentrated stock positions. The strategies have gained significant traction across the wealth management industry, with both Charles Schwab and Fidelity Investments—the two dominant custodians in independent wealth management—having already built competing offerings.
Goldman Sachs' entry into this market reflects intensifying competition for RIA assets. Schwab recently agreed to refer clients with concentrated stock positions to Wealth Enhancement, a mega-RIA that will manage assets in long-short strategies on an investment management-only basis. However, the sector faces operational constraints: custodians must maintain both long and short positions on their balance sheets, creating concentration risk. Fidelity's recent imposition of an indefinite ongoing restriction on new client assets entering its long-short SMA platform underscores the balance sheet and operational challenges custodians face at scale in this product category.
Goldman Sachs' strategic timing suggests confidence in managing these operational risks while capitalizing on growing advisor demand for tax-efficient solutions in a persistently volatile market environment for concentrated wealth positions.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.