Goldman Sachs wealth management fees jump 17% as AWM revenue misses estimates

Goldman Sachs’ wealth franchise is starting to look like two businesses running at different speeds. Fee revenue climbed 17% in the first quarter, but the broader Asset & Wealth Management line still missed expectations because private banking and lending remained under pressure.

Goldman said Asset & Wealth Management revenue was $4.078 billion, up 10% from a year earlier and down 14% from the prior quarter. The segment posted a 23% pre-tax margin, a reminder that the unit is still highly profitable even when parts of the mix soften. Total firm net revenues reached $17.23 billion, with net earnings of $5.63 billion, diluted EPS of $17.55 and annualized return on common equity of 19.8%.

The clearest strength came from the fee side of the franchise. Goldman said total asset and wealth management fees were $3.077 billion, up 14% year over year, while incentive fees in asset management rose 42%, mainly because of performance. That shift matters for teams across wealth, product and alternatives because it favors recurring, higher-margin revenue tied to mandates, not balance sheet usage.

The drag came from the more capital-intensive side of the business. Private banking and lending revenue fell 12% because of lower deposit spreads tied to Marcus deposits, partly offset by higher deposit balances. Marcus by Goldman Sachs, launched on October 13, 2016, was meant to build a consumer funding base; nearly a decade later, it is still shaping the economics of the wealth franchise. Goldman also said provision for credit losses was $315 million, mainly tied to growth and impairments related to wholesale loans, underscoring that lending remains risk-heavy even inside a growing wealth platform.

For employees, the split points to where Goldman is likely to keep leaning in. The firm said assets under supervision reached a record $3.65 trillion and marked its 33rd consecutive quarter of long-term fee-based net inflows, while also completing acquisitions of Industry Ventures in the first quarter and Innovator Capital Management in the second. That combination suggests continued investment in fee-rich wealth and alternatives businesses, and more scrutiny on lending operations that are not producing the same return profile.

David Solomon said the firm delivered a “very strong performance despite more volatile market conditions,” and Goldman’s materials said disciplined risk management must remain core. For bankers, advisors and support teams, the message is clear: the company still wants the wealth platform to grow, but the jobs tied to fee gathering and scalable products are likely to carry more strategic weight than the teams exposed to deposit spreads and lending margin pressure.