Review of Goldman Sachs Private Wealth Management

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Updated on Monday, March 9, 2020

The private wealth arm of financial services giant Goldman Sachs focuses on high net worth individuals, as well as certain endowments and foundations. Goldman Sachs Private Wealth Management is headquartered in New York, though it serves clients throughout the United States and around the world.

All information included in this profile is accurate as of March 9, 2020. For more information, please consult Goldman Sachs Private Wealth Management’s website.

Assets under management: $902,461,604,978
Minimum investment: $100,000
Fee structure: A percentage of assets under management
Headquarters location:200 West Street
New York, NY 10282
Website
212-902-1000

financial advisor

Overview of Goldman Sachs Private Wealth Management

Financial services stalwart Goldman Sachs was originally founded in 1869, and today has grown to become a publicly traded corporation (ticker symbol: GS). Its investment advising business, Goldman Sachs Private Wealth Management, has accumulated assets under management of $900 billion. Goldman Sachs Private Wealth Management has 1,366 employees, 896 of whom provide wealth advisory functions.

Goldman Sachs has won numerous awards, including for its private banking and wealth management services. The company has also won awards related to diversity, including for its policies for working mothers and LGBT+ inclusivity.

What types of clients does Goldman Sachs Private Wealth Management serve?

Most of the clients served by Goldman Sachs Private Wealth Management are high net worth individuals, though the firm also serves individuals, including trusts, estates and retirement plans. On top of that, the company also works with charitable organizations, banks and pooled investment vehicles, and even provides advice to government entities, sovereign wealth funds and international bodies.

While there is no true minimum threshold to open or maintain an account with Goldman Sachs Private Wealth Management, to obtain certain services you might need to have at least $100,000 in your account. For separately managed accounts and access to private investment accounts, you generally need to be an accredited investor. According to the Securities and Exchange Commission (SEC), this means you need to have an income of at least $200,000 a year if single ($300,000 combined if married) or a net worth of at least $1 million.

Services offered by Goldman Sachs Private Wealth Management

Goldman Sachs Private Wealth Management offers an extensive menu of services for its clients. Not only can you choose from a variety of preexisting investment vehicles, but the firm can also create customized portfolio options. A version of this process was actually dramatized in the movie The Big Short, when Dr. Michael Burry (played by Christian Bale) requested a highly tailored investment to short the U.S. housing market, just for him.

Basically, whatever assistance you need to manage your wealth, Goldman Sachs Private Wealth Management can make it happen. Services offered include:

  • Investment advising
  • Trading
  • Risk management
  • Income planning
  • Estate planning
  • Gift planning
  • Philanthropy planning
  • Tax planning
  • Trust administration
  • Estate administration
  • Cash management
  • Lines of credit

How Goldman Sachs Private Wealth Management invests your money

Goldman Sachs Private Wealth Management uses several distinct teams to develop strategies tailored to each client’s needs and goals. These teams and their strategies include:

  • Fundamental Equity: Utilizes basic fundamental analysis to evaluate and invest in more “traditional” assets like stocks, REITs, equity interests in trusts and business and even convertible debt obligations.
  • Energy and Infrastructure: This team focuses on investments in energy and infrastructure, including Master Limited Partnerships (MLPs). They look at sector exposure, cash flow stability and other criteria to choose investments.
  • Global Fixed Income and Liquidity Management: In an effort to optimize return and liquidity, this team can use various methods, including setting a long-term risk budget, using risk-based portfolio construction and making adjustments based on market conditions.
  • Insurance Asset Management: This team employs proprietary models to create liability management and tax-efficient strategies. In many cases, the focus is on fixed income.
  • Credit Alternatives: This team uses fundamental analysis to make decisions investments with a focus on capital preservation, including using corporate credit, real assets (especially renewable energy) and private investments.
  • Quantitative Investment Strategies: With this team, the idea is to try to beat the market. They look at mispricings, analyze market trends and sentiment and look at business models.

There are a range of other teams that focus on more specialized strategies, including hedging, private credit, relative value and event-driven analysis. Basically, analysts and advisors can use just about any type of strategy and analysis technique available to figure out how to help you meet your goals.

Fees Goldman Sachs Private Wealth Management charges for its services

Clients with separately managed accounts usually pay fees based on a percentage of assets under management, though there may be other fees that need to be paid. Fees are generally negotiable, and are usually billed monthly or quarterly.

Some of the fees that you might be charged as part of your participation include:

  • Pooled investment vehicle
  • Servicing
  • Services to portfolio companies
  • Asset-based compensation
  • Performance-based compensation
  • Underlying fund
  • Unaffiliated advisor
  • Transaction
  • Custody and administration

Goldman Sachs Private Wealth Management offers a wrap fee program, which means that these fees might all be bundled into a single fee to cover everything. Additionally, there might be expense ratios and other fees associated with fund investments which will also impact your overall returns.

While fees are largely negotiable and there isn’t a standard fee schedule for some of the portfolios, Goldman Sachs does have fee schedules for certain asset classes. The fees, however, represent the maximum charged based on assets under management, and they might actually be lower.

Index Oriented – Tax Advantaged Core
Up to $10 million1.650%
$10 to $25 million1.050%
$25 to $50 million0.950%
$50 to $100 million0.850%
$100 to $250 million0.800%
$250 to $500 million0.750%
More than $500 million0.700%

 

Active Core Equity, MLP
Up to $10 million1.750%
$10 to $25 million1.150%
$25 to $50 million1.050%
$50 to $100 million0.950%
$100 to $250 million0.900%
$250 to $500 million0.850%
More than $500 million0.800%
Active Satellite, Real Estate
Up to $10 million1.900%
$10 to $25 million1.300%
$25 to $50 million1.200%
$50 to $100 million1.100%
$100 to $250 million1.050%
$250 to $500 million1.000%
More than $500 million0.950%
AII/Smid
Up to $10 million2.175%
$10 to $25 million1.600%
$25 to $50 million1.500%
$50 to $100 million1.400%
$100 to $250 million1.350%
$250 to $500 million1.300%
More than $500 million1.250%
Energy and Infrastructure
Up to $10 million2.050%
$10 to $25 million1.500%
$25 to $50 million1.400%
$50 to $100 million1.300%
$100 to $250 million1.250%
$250 to $500 million1.200%
More than $500 million1.150%
Dynamic Equity
Up to $10 million2.400%
$10 to $25 million1.650%
$25 to $50 million1.550%
$50 to $100 million1.450%
$100 to $250 million1.400%
$250 to $500 million1.350%
More than $500 million1.300%
Fixed Income
Up to $10 million0.750%
$10 to $25 million0.550%
$25 to $50 million0.500%
$50 to $100 million0.450%
$100 to $250 million0.400%
$250 to $500 million0.350%
More than $500 million0.300%
Short Duration Fixed Income
Up to $10 million0.500%
$10 to $25 million0.450%
$25 to $50 million0.450%
$50 to $100 million0.400%
$100 to $250 million0.350%
$250 to $500 million0.300%
More than $500 million0.300%
Corporate High Yield Fixed Income
Up to $10 million0.950%
$10 to $25 million0.950%
$25 to $50 million0.950%
$50 to $100 million0.950%
$100 to $250 million0.950%
$250 to $500 million0.950%
More than $500 million0.950%

Goldman Sachs Private Wealth Management’s highlights

  • Personalized service: It’s possible to get a truly tailored approach to wealth management, including updates and changes as needed.
  • Private banking: In addition to personalized investment help, there are also private banking services that offer help with cash management.
  • Variety of services: Goldman Sachs Private Wealth Management offers a wide selection of services, making it a potential one-stop shop for wealth management and investment management.

Goldman Sachs Private Wealth Management’s downsides

  • Account minimum might be out of reach: For certain advisory accounts, the minimum is $100,000. However, you will be faced with higher minimums for other types of accounts. In order to access the full range of services, you would need to be a high net worth individual.
  • Performance-based fees: With some accounts, you’ll end up paying performance-based fees. As a result, there’s the possibility that an advisor will take extra risks in order to hit a benchmark for an additional fee.
  • Fees are a little above average: Goldman Sachs charges fees on some of its accounts that are a little above average. For example, the average fee charged by financial planners for asset management is 0.69% on accounts of $10,000,000. However, Goldman Sachs charges more than that for many of its accounts.

Goldman Sachs Private Wealth Management disciplinary disclosures

There are no disciplinary disclosures from Goldman Sachs. This is fairly impressive, considering the long history of the company.

Goldman Sachs Private Wealth Management onboarding process

A Goldman Sachs representative will talk with you to get a feel for your goals and your situation in an attempt to help you develop a plan. It’s a high-touch process that involves personal attention in the analysis of your finances and ongoing counsel. You also receive access to your accounts and information online and through a mobile app, once you’re a client.

Is Goldman Sachs Private Wealth Management right for you?

For the most part, Goldman Sachs Private Wealth Management is aimed at high net worth individuals who want help managing various aspects of their finances. If you have a complex financial situation and a lot of assets, and you want access to premier services like private banking and a truly tailored management plan, this might be the right move for you. Additionally, if you want help with trust administration and know you’ll need other similar services, Goldman Sachs Private Wealth Management can be a good choice.

However, if you are looking for a little help with managing your investments and you aren’t quite to the point where you’re an accredited investor or a high net worth individual, you might be better off looking elsewhere.

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