Goldman Sachs just revealed a new wealth brand at its first-ever investor day. It shows how the bank is trying to reshape its strategy - and image.
- Goldman Sachs on Wednesday highlighted "Goldman Sachs Personal Financial Management" as a new brand under the consumer and wealth management division in a presentation for its first-ever investor day.
- Its re-brand of United Capital highlights efforts around reshaping its image in the eyes of investors and more Main Street customers, a departure from the historically ultra-rich client base to which it's long catered.
- On an industry-wide level, it also underscores the wealth management business' push to re-brand historically opaque or insulated services and appeal to a wider swath of clients.
- Gregg Lemkau, the co-head of investment banking, said earlier on Wednesday that the firm counts "more than a half-dozen current and former Spotify executives as wealth management clients." Goldman Sachs was among the banks that took the music-streaming company public two years ago through a direct listing.
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Goldman Sachs on Wednesday highlighted "Goldman Sachs Personal Financial Management" as a new category under the consumer and wealth management arm in a presentation on its first-ever investor day.
The new branding for United Capital, the registered investment adviser it acquired last year for $750 million, highlights efforts around reshaping its image and its wealth operations in the eyes of investors and more Main Street customers. It marks a departure from the historically ultra-rich, insulated client base to which it's long catered.
The New York bank's presentation from Eric Lane, its global co-head of the consumer and investment management division, included the banner on a slide detailing its high-net-worth expansion throughout the US - "high growth, US-focused business in expansion mode."
That's a tier for customers with between $1 million and $10 million in investable assets. The consumer set is geared toward customers with less than $1 million in investable assets and $100,000 in average income, and ultra-high-net-worth is for those with at least $10 million in investable assets.
"We've come a long way in the last 25 years," Lane said Wednesday, addressing an audience of investors, analysts, and journalists. When he joined the firm in 1996, Lane noted, the firm did not have a consumer business.
It also highlighted plans around its digital bank, Marcus, which the firm hopes to morph into "the consumer bank of the future" as one of the three chief pillars of the division's growth strategy alongside growing ultra-high-net-worth globally and expanding its high-net-worth platform.
Consumer (the mass-affluent) and wealth management (ultra-high-net-worth and high-net-worth), is a segment the firm introduced earlier this month when it laid out a new structure around how it divvies up financial results.
It includes "management and other fees, incentive fees and results from deposit-taking activities related to the firm's wealth management business," results from providing loans through the private bank; unsecured loans and deposits through Marcus; and credit cards, all of which were previously reported within either Investment Management or in the Investing & Lending group.
Lane also walked through his unit's hiring plans around financial advisers. Over the next three years it's planning to grow its adviser pool in the Americas by 20%, and adding 50% in both its Europe, Middle East, and Africa (EMEA) and Asia-Pacific (APAC) segments.
An industry in search of a wider appealOn an industry-wide level, the re-branding underscores a wealth management push to revamp historically opaque or insulated services and appeal to a wider swath of younger clients with fast-changing tastes.
Hightower, a Chicago-based wealth management firm, said on Wednesday it was re-branding and adding a new tagline for the company: "well-th. rebalanced." The "t" in Hightower was previously uppercase.
Invoking a "holistic" approach to financial "wellness," the firm tapped into one of the industry's favorite pair of buzzwords outside of "democratization."
Business Insider also previously reported on how the California-based hybrid wealth management firm Personal Capital completely revamped its branding last October in an effort to appeal to a more modern set of clients.
Goldman Sachs' wealth business is also leaning into cross-selling.
Gregg Lemkau, the co-head of investment banking, said earlier on Wednesday that the firm counts "more than a half-dozen current and former Spotify executives as wealth management clients." Goldman Sachs was among the banks that took the music-streaming company public two years ago through a direct listing.
Investors on Wednesday seemed unimpressed with the firm's showing. The S&P 500 and a large financials-tracking exchange-traded fund both rose in midday trading, while Goldman Sachs shares fell by 1%.
The bank's details around the plan to drive a 3% improvement to its return on tangible equity measure over three years was roughly in-line with expectations, wrote Brennan Hawken, an analyst with UBS, in a note to clients.
While "clearly constructive," Hawken said, "this does not seem to be a dramatic change in the direction and approach of the business, nor do we expect it will result in a significant revision of forecasts in the near-term."
