Menu Close

Goldman Sachs bullish on custodian-brokerage Focus amid record consumer and wealth revenue

view original post

Many Wall Street banks have shunned the independent wealth management space, spinning off their registered investment advisory platforms or shying away from maintaining client assets for such firms. Not Goldman Sachs.

In contrast to many rivals, bank CEO David Solomon views the space as “an interesting opportunity.”

Solomon made the remark during a July 18 quarterly earnings call after an analyst asked about the “evolution” of brokerage and custodian Folio Financial, which the megabank bought in 2020. That unit, along with other parts of Goldman’s Consumer and Wealth Management division, drove record results for the bank in the second quarter. It beat Wall Street’s expectations handily, despite falling stock values and rising inflation. 

Analyst Devin Ryan of JMP Securities asked Solomon if Wall Street “should expect a more aggressive acceleration in the marketing” of the custodian in coming months and years, according to a transcript from AlphaStreet.

“It’s something that we are focused on as an opportunity for the firm,” Solomon replied. “At this point, the resources and the size and the scope of that are relatively small. But I think as we look forward over the course of the next three years to five years, it will be an area that we see opportunity in and we will turn more focus to expanding.” 

Scroll down the slideshow to see the key wealth management takeaways from Goldman’s earnings for the second quarter. For a look at results across the entire megabank, click here. To see the most important wealth management takeaways from the prior quarter, follow this link.

Note: The firm doesn’t disclose metrics specific to Goldman Sachs Personal Financial Management, the home of the rebranded United Capital, an RIA the megabank acquired in 2019. It includes the firm’s private bank and workplace planning channel, Ayco. Each of the metrics below refer to the Consumer and Wealth Management segment, which includes those divisions as well as Folio Financial and high-yield savings and loans from online bank Marcus.