Investor Day, Keynote
Consumer & Wealth Management - Goldman Sachs 2020 Investor Day
- Goldman Sachs aims to significantly expand growth opportunities through its "Realign to Focus on Individuals" strategy, leveraging eco-corporate relationships, the acquisition of United Capital, and digital consumer business integration to grow its wealth franchise from a position of strength.
- The firm plans to capture revenue by securing small market share increases in multi-trillion dollar markets, specifically by adding more advisors and increasing penetration with ultra-high net worth existing clients while scaling the high net worth segment through the integration of United Capital into Goldman Sachs Personal Financial Management.
- Advisor headcount is projected to increase by 30% over the next three years with the addition of 250 advisors, including the hiring of experienced international talent to close penetration gaps relative to the US.
- Growth in the high net worth segment will be driven organically, inorganically through team additions, and via internal referrals from private wealth management and the ACO platform, utilizing financial counseling tools combined with United Capital technology.
- Corporate reach will expand to cover entire employee bases of client corporations, with an aspiration to add 30 new corporate relationships and 300,000 employees to the ACO platform annually, while lending penetration in international markets is expected to converge toward the 27% level currently seen in the US.
- A leading digital consumer bank for the mass affluent segment is being built by embedding products into client work and shopping environments, launching a modern checking suite in 2021, adding Marcus-branded wealth capabilities later this year, and enhancing mobile apps with budgeting tools and insights.
- Long-term projections anticipate the consumer business reaching $125 billion in deposits, $20 billion in loan and card balances, and $700 million in pre-tax income within five years, supported by an expectation of asset allocation shifts away from cash and fixed income.
- Margin targets include a medium-term increase to approximately 15% and a potential to exceed 20% once scaled.