December 9, 2023

Net income at Goldman Sachs’ wealth management unit slipped slightly in a tough quarter for the storied Wall Street dealmaker.

In the weeks leading up to Wednesday’s earnings report, Goldman Sachs Takes Unusual Step Investors and analysts were warned to brace for dismal results. Net income at its wealth management division fell 4% year-over-year to nearly $3.05 billion in a quarter when the company’s overall earnings fell 58%.

The decline was mainly due to “increased net losses on equity investments, a sharp drop in incentive expenses, and a sharp drop in net income from debt investments.” Goldman Sachs said in a statement.

Goldman added that both equity and debt losses were driven by a decline in its real estate holdings. The write-down of these investments resulted in a $1.15 billion loss in pre-tax earnings.

Goldman has been advancing a plan to reduce its reliance on investment banking and other business units that are highly vulnerable to market volatility, and to reduce reliance on more stable revenue streams such as wealth management.

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A bright spot for Goldman during this difficult quarter has been the firm’s “scaled asset and wealth management platform, which continues to demonstrate very strong underlying trends consistent with our Investor Day objectives of growing recurring revenue from management and other fees, private banking and lending,” Chief Executive David Solomon said on the company’s earnings call Wednesday.

Scroll down for more highlights from Goldman Sachs’ wealth management unit’s second-quarter earnings. For a look at its first-quarter results, Click here. Q4 2022, Click here.

Note: The firm does not release the most specific metrics for its wealth management business, including the number of financial advisor and client assets United Capital and the level of assets under custody Unit Once Known as Folio Financial. Unless otherwise noted, the metrics below relate to Goldman Sachs’ asset and wealth management division.