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Goldman Sachs Private Wealth Management Review

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Goldman Sachs Private Wealth Management

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 
    • Philanthropy
  • 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
  • Philanthropy
  • 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. 

Disclosures

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

  • Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.  
  • 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

How Many Years $1 Million Lasts in Retirement

SmartAsset's interactive map highlights places where $1 million will last the longest in retirement. Zoom between states and the national map to see the top spots in each region. Also, scroll over any city to learn about the cost of living in retirement for that location.

Least
Most
Rank City Housing Expenses Food Expenses Healthcare Expenses Utilities Expenses Transportation Expenses

Methodology To determine how long a $1 million nest egg would cover retirement costs in cities across America, we analyzed data on average expenditures for seniors, cost of living and investment returns.

First, we looked at data from the Bureau of Labor Statistics (BLS) on the average annual expenditures of seniors. We then applied cost of living data from the Council for Community and Economic Research to adjust those national average spending levels based on the costs of each expense category (housing, food, healthcare, utilities, transportation and other) in each city. Using this data, SmartAsset calculated the average cost of living for retirees in the largest U.S. cities.

We assumed the $1 million would grow at a real return (interest minus inflation) of 2%. This reflects the typical return on a conservative investment portfolio. Then, we divided $1 million by the sum of each of those annual numbers to determine how long $1 million would cover retirement expenses in each of the cities in our study. Cities where $1 million lasted the longest ranked the highest in the study.

Sources: Bureau of Labor Statistics (BLS), Council for Community and Economic Research