Goldman Sachs Loses $10 Billion Wealth Teams to Rival Banks
UBS hired private-wealth advisers who oversaw $6 billion in assets for Goldman.
(Bloomberg) -- Goldman Sachs Group Inc. planned a hiring spree to ramp up the fees it gets from advising the wealthy. It got a reminder this week that it’s not alone.
Teams of advisers overseeing $10 billion in assets are leaving for rivals. A group headed by Denis Cleary and Gregory Devine with $6 billion in assets under management will move to UBS Group AG. Brian Zakrocki and Joe Wladyka, who helped manage about $4 billion, are leaving Goldman for First Republic, according to people with knowledge of the matter, who asked not to be identified discussing personnel matters.
Goldman has about $560 billion in wealth-management assets under supervision, most of it catering to the ultra-high net worth crowd. Under Chief Executive Officer David Solomon, the firm known for trading and dealmaking is heaping new focus on managing money for the wealthy.
It’s trying to do this as the world’s largest banks also vie for a greater share of the wealth created during the decade-long bull market. Wealth-management units of nine of the biggest firms surpassed $100 billion in combined revenue for a third straight year in 2019. That’s driving intense competition among banks and boutiques for advisers who can bring billions of dollars in client assets.
Intense Competition
“We have built an amazing private-wealth management business that today is the crown jewel in our wealth management franchise,” Eric Lane, Goldman’s investment-management head, said at the firm’s investor day last month. “So how are we going to grow? First, we need to add more advisers.”
Lane said he thought the firm can add 250 advisers over the next three years -- a 30% increase from its current figure.
Wealth managers moving shop is far from rare, but departures from units that Goldman is leaning on for growth have been under the spotlight in recent weeks after high-profile exits in technology and merchant-banking groups.
Read more about exits from Goldman’s merchant bank and tech units
Cleary and Devine’s team will maintain offices in Boston and Los Angeles, Zurich-based UBS said Tuesday in a statement. The group has clients in more than 25 U.S. states.
“Known for being one of the largest teams in the country under the age of 50, we’re proud to have them on board here at UBS to bring a differentiated view for our clients,” said John Mathews, UBS’s head of ultra-high net worth Americas and private wealth management.
Spokespeople for Goldman and First Republic declined to comment on Zakrocki and Wladyka’s move.
UBS said last month that Wickham Cash Partners, which oversaw about $10.8 billion, joined its Charlotte, North Carolina wealth-management office. The group was previously part of Merrill Lynch.
To contact the reporters on this story: Suzanne Woolley in New York at swoolley2@bloomberg.net;Sridhar Natarajan in New York at snatarajan15@bloomberg.net
To contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Michael J. Moore, Steven Crabill
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