Goldman mining new wealth
Increasing advisers by 30%
Goldman Sachs is tormenting its banking rivals as it embarks on a global mission to make a new fortune off the globe’s fast-growing ranks of millionaires.
The firm with the Midas touch will increase its number of financial advisers by 30 percent within three years as it lays out plans to massively expand wealth management for affluent customers.
Analysts estimate the program may generate as much as $1 billion in annual revenues by 2020.
Goldman says the clock is ticking, since it must move swiftly to catch up with the growth of new business titans and the superrich.
“The world seems to be growing rich people faster than we can grow advisers to cover them,” Goldman Chief Executive Lloyd Blankfein told a recent industry conference, unveiling the bold plan to ramp up the firm’s private wealth management unit.
Goldman’s gambit has exposed ripples of anxiety in its rivals’ corner offices, people familiar with the matter say.
“If Goldman does it right and is totally driven, of course rivals would be nervous,” said industry recruiter Danny Sarch. “The devil is really in the details.”
Although Goldman is not ranked among Wall Street’s biggest kahunas in managing money for business titans and millionaire households — it currently employs about 700 financial advisers, compared with nearly 16,000 at Morgan Stanley — Goldman is no shrinking violet.
The firm’s elite troops are among the most productive anywhere. Each produces an average of $4.5 million in annual revenues, Blankfein said, for a combined total of $3.1 billion.
And Goldman can often nimbly leverage its current network of affluent investment banking customers to bolster its wealth management revenues.
By comparison, Morgan Stanley reported that its brokers produce just over $1 million each in revenues, for a combined $16.8 billion in wealth management revenue last year.
It’s not surprising that Goldman wants to ratchet up its wealth management success by hiring at least 200 more advisers — a total that may turn out to be the tip of the golden iceberg.
Devin Ryan, senior banking analyst at JMP Securi- ties who covers Goldman, says if it has the wind at its back, the firm could bump up hiring beyond the initial 200. “If it’s successful, they will keep going,” he told The Post.
Blankfein has touted massive long-term net inflows of $17 billion in private wealth management last year, a jump from $12 billion in 2016,
“Given the strength of our offering and brand, we haven’t seen the limit to where this segment of the market can grow,” Blankfein told the recent Credit Suisse Financial Services Forum in Miami last month.
Goldman has at least one thing right — the globe is awash is new personal wealth. Today’s 36 million millionaires across the planet are forecast to grow to 44 million by 2022, according to Credit Suisse’s 2017 Global Wealth Report.
On the billionaire side, there were a record 2,043 on the Forbes list last year, the first time the number exceeded 2,000 since records began in 1987.
Goldman advisers, many of them MBAs groomed at Ivy League colleges, know this landscape of yachts, private jets and country clubs. The typical Goldman private wealth management client has $50 million in his account, and account minimums are $10 million.