The first sentence of a Wall Street Journal piece by AnnaMaria Andriotis tells you all you need to know: “Goldman Sachs is turning to Main Street investors to boost its fee revenue.” Goldman Sachs is coming to Main Street, not to help investors, but to boost its fee revenue. You already know what Your Survival Guy thinks of revenue generation schemes by big money managers. This is no different. Andriotis continues:
Except for deposit accounts, Goldman has been pulling back from its foray into Main Street and is focusing on making money by providing services to companies that work with consumers. The bank is aiming to generate more fee revenue to offset swings in its larger dealmaking and trading businesses.
Last month, Goldman sold to Betterment the accounts of Marcus Invest, which it launched in 2021 to offer digital investing to mom-and-pop investors. Now, it will make money from the underlying fees that Betterment’s customers will pay for the Goldman ETFs, expanding a relationship with Betterment that began in 2016 when Goldman started offering investing portfolios on the platform.
Working with Betterment is Goldman’s third-party wealth team, which is part of the firm’s asset and wealth management division that has ramped up its hunt for fee revenue. The team poached Greg Weiss, who ran BlackRock’s managed accounts and portfolio consulting, late last year. It is tasked with building and selling more of its investment products to registered investment advisers, banks and other financial institutions that reach individual investors.
Action Line: Did you catch the tie-in to BlackRock in that last paragraph? Another BlackRock alum tasked with sucking more fees and revenue out of customers. Read more about that in my SPECIAL REPORT: The Trouble with BlackRo… er… ummm, Vanguard. And when you hear the words “robo advisor,” run. When you’re ready to talk to a human, I’m here.
