Broader Push
The plans to expand the operations in Switzerland, the U.K. and Germany are part of a broader push by Goldman into more stable business areas. The bank plans to hire roughly 200 wealth advisers over the next three years globally. Goldman recently reopened its office in Geneva and is in the process of hiring and staffing the office there. Apart from the hiring, Goldman plans to boost its lending offering to wealth clients -- which can be often asset rich but cash poor -- and wants to expand its family office coverage.
Wealth advisers or relationship managers establish relationships with the wealth holders. It’s common practice for banks to poach teams for whole regions or specific segments such as entrepreneurs. Once hired, relationship managers need six to 12 months to increase their assets under management. However, clients don’t always follow their relationship managers as banks offer discounts to retain them.
Targeting Acquisitions
Goldman currently has just 1% of the market for ultra-high-net-worth individuals in Europe -- a $7 trillion business, Bollinger said. To grow from here he plans to hire teams from other banks. Bollinger said he would also screen acquisition opportunities in Europe, but any target would have to be exclusively holding wealth of ultra-high-net-worth clients.
Goldman earlier this year agreed to buy wealth manager United Capital for $750 million, one of the investment bank’s biggest purchases in recent years. The company manages $25 billion.
This article was provided by Bloomberg News.