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Goldman Sachs Renames United Capital, Reveals Plan to Dominate Wealth Management

The bank shares a three-year strategy to expand its market share and grow revenue.

During Goldman Sachs’ first-ever investor day, a move to bring more transparency to the publicly-traded bank and encourage investors, the company laid out a three-year plan. Part of that included doing away with the name of United Capital, the RIA it bought for $750 million in 2019.

The RIA will be known as Goldman Sachs Personal Financial Management going forward, Eric Lane, the global co-head of the Consumer and Investment Management Division at Goldman Sachs, said during a presentation Wednesday.

"We feel quite confident that this was the right selection,” Joe Duran, founder and CEO United Capital, told RIA Intel.

It was “an easy decision” for management to agree to change the name and incorporate the bank’s in some way, according to Duran. Once that was decided, the RIA reached out to its advisors for name suggestions. It narrowed it down to three choices and then sent a questionnaire to its advisors and more than 1,000 clients asking how they defined the brand and which name best represented it.

The final name choice and design was revealed to United Capital advisors at a company meeting in New York last November. Duran said the crowd was “universally, super excited.”

“We’re not being folded into a brand. We created a brand with Goldman Sachs and that was a very unique opportunity for our clients.”

The name is one of the latest changes to the RIA but not the first. In November, Goldman said that Rachel Schnoll, a managing director and head of Retail Product Strategy for Goldman Sachs Asset Management, would run FinLife CX, United Capital’s collection of tools used by its advisors and other RIAs that she dubbed “the jewel” within the RIA.

In his opening remarks at the conference, Chairman and CEO David Solomon said the changes coming to the bank, including the creation of new business segments, revamped earnings calls and investor days, are “humanizing the organization,” improving the brand, and positioning the business for future success.

“My goal is to shift the firm and to institutionalize more long-term thinking,” Solomon said.

The new consumer and wealth management unit, with recurring revenue generated by assets under management and cash, will play an important part in that. 

Almost half of all wealthy clients (49%) say they would prefer a single financial institution to serve most of their needs, including investment management, financial planning and banking. However, only one third of clients interested in a one-stop shop say they are engaging a company that way, according to a report by Cerulli Associates.

There is “a lot of competition,” Lane said during the presentation of the new segment, but “even leaders in any of these spaces have single-digit market shares.” The fragmented wealth management industry is ripe for a large company to emerge as a leader in servicing all client segments, which Goldman is setting itself up to do. 

Over the last five years, Goldman has grown its total workforce of financial advisors from about 900 to 1,400, and increased client assets from roughly $590 billion to $840 billion over the same period. In 2016, Goldman launched its digital consumer bank, Marcus.

“We have a very clear vision for what we need to do to execute our strategy... and are making the investments in the business to make this a reality,” Lane said.

Goldman plans to continue hiring advisors in its Private Wealth Management group, which has about 800 advisors, 13,000 clients, and an average account size of approximately $55 million. It generates $3.5 billion in revenue per year. 

Ayco, an RIA Goldman acquired in 2003, services 435 corporate retirement programs and counts more than 55 of the Fortune 100 companies as clients. Goldman believes it can more than triple the number of corporations the group works with and go from serving more than one million employees to 40 million.

Goldman Sachs Personal Financial Management, which Duran described as the “planning-centric solution” within Goldman, has less than 1% of the U.S. market share and also an opportunity to grow, partly by leveraging the new name.

“We don’t think there's been a new, interesting brand in the market for a couple decades now. There's been very little done, certainly in wealth management, on a national scale, and so we think that is an opportunity for us at Goldman Sachs. We think that we can be a dominant name in the retail marketplace.”

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