Displaying items by tag: mass affluent

(New York)

One of the first big changes under new Goldman CEO David Solomon is becoming clear. That first major move is in wealth management, where Goldman is attempting to push much more broadly into the market. The bank plans to launch a robo advisor to get people with as little as $5,000 to invest to join its offering. Goldman has traditionally gone after very wealthy clients ($10m+), so this is a major change of pace for the the bank and is more in line with its recent increased focus on mass market savings products. A senior figure at Goldman explained “It’s a pipeline for future clients” to allow them to “experience the Goldman Sachs’ way”.

FINSUM: Goldman seems to believe it has stretched the high end of its market (big corps and UHNWIs) as far as it could go, and this is just the next logical area for growth. The challenge here is that we don’t think the Goldman name has the same cache with the mass market that it does with the HNW market.

(New York)

JP Morgan looks like it is about to push further into wealth management. JP Morgan has always had a solid wealth management practice, but one much smaller than wirehouses or other large broker-dealers. However, the firm has now announced that it is planning to grow headcount in the area by nearly 20%, adding over 1,000 new advisors. According to CEO Jamie Dimon, “We are expanding our footprint to capture more of the opportunity across the U.S. wealth management spectrum — from mass affluent ($500,000 to $3 million) to high-net-worth ($3 million to $10 million) to ultra-high-net-worth ($10 million or greater)”.

FINSUM: Wealth management is a very good business if you can get assets, and it seems like JP Morgan is waking up to the fact that it has a better opportunity in the area than it formerly realized.