Goldman Sachs Private Wealth Management is part of the Wall Street bank's investment management division. The investment management division as a whole boasts a team of 700 financial advisors and oversees about $1.77 trillion for clients. Goldman Sachs Private Wealth Management, which has offices across the U.S., currently has $184.4 billion in assets under management.
The group generally requires its clients to have at least $10 million invested with Goldman Sachs. Thus, it primarily provides investment advisory and wealth management services to high-net-worth individuals and families, as well as foundations, endowments and institutions.
Goldman Sachs Private Wealth Management Background
Goldman Sachs Private Wealth Management has been an SEC-registered investment advisor since 1981. It's principally owned by The Goldman Sachs Group, Inc., the publicly traded bank and financial holding company and full-service financial services organization that's been in existence since 1869.
At this point, private wealth management remains a relatively small, but steadily growing part of Goldman Sachs' business. The private wealth management division added $17 billion in long-term net inflows in 2017, a $5 billion increase from the previous year. In its year-end report, Goldman Sachs say that it has "not seen the limit to the growth of this segment of the market" and plans to increase its numbers of advisors by 30% by 2020.
What Types of Clients Does Goldman Sachs Private Wealth Management Accept?
Due to its notably high account minimums, Goldman Sachs Private Wealth Management primarily works with high-net-worth individuals and families. Its individual clients either invest directly with Goldman Sachs or through private investment vehicles, including partnerships, limited liability companies, privately held corporations and trusts and estates.
Goldman Sachs Private Wealth Management also serves select institutional clients, including charitable organizations, pension plans, corporations and other business entities.
Goldman Sachs Private Wealth Management Minimum Account Sizes
Goldman Sachs Private Wealth Management typically requires clients to invest at least $10 million to open a private wealth management account. In order to open an advisory or managed account, clients must have at least $1 million under Goldman Sachs' management or a net worth that exceeds $2.10 million. A client’s total net worth can include assets that he or she holds jointly with a spouse.
Services Offered by Goldman Sachs Private Wealth Management
Goldman Sachs Private Wealth Management offers the following services to its clients:
- Investment advisory services
- Trading, hedging and structuring solutions
- Wealth advisory services:
- Income planning
- Estate planning
- Gift planning
- Generation-skipping tax planning
- Trust and estate administrative services
- Private banking and lending
- Advisory services for select institutions
For certain clients, Goldman Sachs also offers a suite of family office services that includes:
- Tax support
- Reporting and analytics
- Administrative services
- Cyber security
- Physical security
- Health advisory services
Goldman Sachs Private Wealth Management Investment Philosophy
Goldman Sachs Private Wealth Management offers a wide range of asset classes and investments. Clients can choose from a variety of investment vehicles, including cash, fixed income, equities and alternative investments like private equity and hedge funds. Goldman Sachs will also create custom investment vehicles for clients.
Goldman Sachs' Investment Strategy Group, a separate team of global investment professionals, provides guidance on asset allocation and portfolio diversification. Advisors’ investment decisions for individual accounts are typically based on a client's investment objectives, risk tolerance, time horizon and financial situation.
Fees Under Goldman Sachs Private Wealth Management
Goldman Sachs charges clients for advisory services provided by private wealth advisors according to one of two fee models: a single advisory fee structure or a strategy-based advisory fee model. The former is recommended to clients who invest across a number of asset classes rather than a small number of managed strategies. It will depend on a variety of factors whether a client will pay more or less with one model or the other.
The following fee schedules apply to advisory accounts that are managed by private wealth advisors. Clients can choose between a single advisory fee for all asset classes or separate fees for each strategy used in the account.
|Single Advisory Fee Structure|
|Asset Level||Total Fee|
|$0 - $10 million||1.75%|
|$10 million - $25 million||1.15%|
|$25 million - $50 million||1.05%|
|$50 million - $100 million||0.95%|
|$100 million - $250 million||0.90%|
|$250 million - $500 million||0.85%|
|More than $500 million||0.80%|
|Separate Advisory Fee Structure|
|Asset Level||Equity||Index Oriented||Other (Including Fixed Income)|
|$0 - $10 million||1.75%||1.40%||0.75%|
|$10 million - $25 million||1.15%||0.80%||0.55%|
|$25 million - $50 million||1.05%||0.70%||0.50%|
|$50 million - $100 million||0.95%||0.60%||0.45%|
|$100 million - $250 million||0.90%||0.55%||0.40%|
|$250 million - $500 million||0.85%||0.50%||0.35%|
|More than $500 million||0.80%||0.45%||0.30%|
Clients may also pay commissions, commission equivalents, mark-ups, mark-downs and spreads. Fees for custody, family office services and consolidated reporting may also apply. Clients will also be responsibly paying any expenses or fees related to mutual funds and private investment funds.
What to Watch out For
Prospective and current clients should be aware that Goldman Sachs and its advisors are compensated for the sale of securities, banking products and other investments and services. Furthermore, they receive higher fees and compensation for investing clients' assets in affiliated products, which means they're more likely to recommend those products as opposed to outside products.
Additionally Goldman Sachs does have disclosures -- see more below.
Goldman Sachs has been subject to disciplinary events over the last decade. It highlights two particular relevant events in its Form ADV (SEC-filed paperwork). In 2010, Goldman Sachs paid $550 million to the SEC, one of the largest penalties ever paid, to settle charges brought against the company and one of its employees regarding a single collateralized debt obligation transaction. The SEC alleged that Goldman Sachs and the employee had defrauded investors "by misstating and omitting key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter." The company did not admit wrongdoing, but it did change several of its business practices.
Prior to that, in 2008, Goldman Sachs entered into a settlement with state securities regulators following allegations that it had "misled clients by falsely assuring them that ARS (auction rate) securities were as safe and liquid as cash," the North American Securities Administrators Association said. When the ARS markets subsequently froze, investors were unable to withdraw money from their accounts. Goldman Sachs paid a $22.5 million fine and neither admitted nor denied the allegations.
Opening an Account With Goldman Sachs Private Wealth Management
To open an account with Goldman Sachs Private Wealth Management, you'll need to sign an investment advisory agreement. Clients must also select an investment objective and portfolio objectives that align with their larger investment goals and level of risk tolerance. Additionally, clients must meet Goldman Sachs' specified minimums (listed above) to open an account.
Where Is Goldman Sachs Private Wealth Management Located?
Goldman Sachs Private Wealth Management is headquartered in New York City. It has additional offices in large cities across the U.S., including in Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, Philadelphia, San Francisco, Seattle, Washington, D.C. and West Palm Beach. The company also provides private wealth management services in Europe, the Middle East, Africa, Asia and Latin America.
Tips for Choosing a Financial Advisor
- Do your research. A great resource is Form ADV, paperwork that registered firms are required to file with the SEC. Form ADV provides information on everything from a firm's offered services to its fees.
- If you're overwhelmed by the options, a financial advisor matching tool like SmartAsset's SmartAdvisor can help you narrow it down. Simply answer a short series of questions about your financial situation and preferences and the program will pair you with up to three nearby advisors who suit your needs. You can then read the advisors' profiles and ask them questions to determine if they're a fit.