Goldman Sachs has its own 1 percent.
The gold-plated investment bank, run by CEO Lloyd Blankfein, has found a new way to separate the ultrawealthy from the merely well-to-do within its own ranks.
Employees with less than $1 million in assets will no longer have access to Goldman’s premier money-management services geared toward high-net-worth individuals.
Instead, Goldman’s rank-and-file workers with less than $1 million in their accounts will be redirected to Fidelity Investment’s retail brokerage platform, where Goldman has a relationship.
Access to Goldman’s top-shelf private-wealth platform had been a major perk for toiling away at one of Wall Street’s most elite firms.
Now only some managing directors and partners will have access to the firm’s high-touch money-management services.
Goldman started moving current and former employees who fall below the millionaire mark into Fidelity accounts over the past year.
The transfer, which is expected to take anywhere from six months to a year to complete, affects only US employees, people familiar with the matter said.
In contrast to the rest of Wall Street, Goldman is one of the few investment banks that doesn’t have a business catering directly to mom-and-pop investors.
Regulators require Wall Street firms to monitor investments of their employees in order to guard against insider trading and other malfeasance.
Goldman is able to track employee holdings under its arrangement with Fidelity, a person familiar with the matter said.
“This [change] is entirely consistent with current employees who have similar investment criteria, and ensures these current and former employees receive the right tools and services,” said a Goldman spokesman.
Few of Goldman’s nearly 32,000 employees boast more than a million in assets. The vast majority of Goldman’s workers, roughly 90 percent, aren’t in the upper echelon of partners and some managing directors who take the lion’s share of the firm’s compensation.
The firm’s highest-paid employees are its partners, who can pull in millions of dollars annually because they can co-invest with Goldman, among other perks.
A source familiar with Goldman’s thinking said that redirecting employees with smaller accounts away from its private-wealth platform is not part of a broader strategy shift.
However, some former employees aren’t too keen on the moves, according to New York magazine’s Daily Intelligencer blog, which first reported Goldman’s internal divide.
“They probably have 20,000 ex-employees. I think it’s a pain for them to manage all those accounts for very little revenue,” a former employee told the Intelligencer.
Last year, CEO Blankfein and his top lieutenants raked in more than $60 million in compensation, including bonuses and salaries.