Goldman Sachs explains that advisory fees do not convert into a fixed percentage of downstream revenue. Instead, they describe a 'virtuous flywheel' where trusted advisory relationships spur broader engagement in financing, risk management, and capital markets, supported by One GS connectivity. The dynamic is qualitative, with advisory backlog and cross-franchise momentum signaling enhanced wallet share across divisions in Q2 2026.
Generated by Dafinchi AI. Source-grounded AI analysis, not investment advice.
What is the multiplier effect of advisory fees on other activities such as financing, risk management, and execution?
Goldman Sachs’ management does not provide a specific numeric “multiplier” (e.g., “10%, 20%, 50%”) that converts $1 of advisory fees into predictable additional revenue in other activities. In the Q&A, management explicitly says it will not “give you a specific percentage” and “doesn’t know if [it] could give you an exact percentage.” 1 Instead, they describe a mechanism (a “framework”) and call it a “virtuous flywheel” that is “significant,” spanning multiple divisions and activities. 123
Management explains that the advisory franchise is rooted in “an extraordinary number of senior people” with “deep… trusted relationships with CEOs and boards.” 1 When those relationships are leveraged in an environment with strategic activity, it “spills through” because advisory trust leads clients to consider Goldman for:
Implication for the multiplier: advisory fees are treated as a gateway into broader client engagement that increases wallet share across other revenue streams—especially where clients need both capital and risk solutions. 13
Management says the firm is “finding ourselves in these discussions earlier and alone and without other banks,” which allows Goldman to “command more of the wallet structurally.” 1
Implication for the multiplier: the advisory mandate tends to generate additional, earlier opportunities where Goldman can win more of the downstream economics in financing/execution/risk. 1
Management repeatedly frames the impact as firm-wide: “The multiplier effect is across the firm” and is “a very, very virtuous flywheel.” 1 They also say advisory relationships are “often the genesis of client activity across the franchise,” and that the activity can extend into Capital Solutions (financing, risk management, capital markets execution, distribution) plus opportunities for Asset Wealth Management clients. 3
Implication for the multiplier: advisory is not an isolated fee line; it is portrayed as the starting point for multi-product mandates. 3
While management doesn’t quantify “how much more” revenue is generated per $1 of advisory fees, the excerpts show co-movement between advisory strength and broad-based activity in other business lines that Goldman links to this “flywheel.”
Management highlights that even with strong investment banking revenues in the quarter, advisory backlog increased to:
They then describe momentum that “accelerated across equities and FICC,” including record equities revenues and record financing revenues in that same cycle. 3
Connection to the multiplier concept: this supports the narrative that advisory strength is associated with increased activity in financing/risk/execution segments. 3
In the excerpt, FICC and equities activity is described as benefiting from clients turning to Goldman for “principal liquidity and risk management amid ongoing volatility.” 4 In financing, management states they “generated record revenues reflecting… strong demand for asset secured financing solutions.” 5
Additionally, management provides specific growth/rate data (not directly attributed to advisory fees, but showing a strong environment in financing/execution/risk):
Important intellectual honesty note: these figures demonstrate broad strength in financing/risk/execution during the same period, but the transcript does not provide a calculated conversion factor from advisory fees to other activities. 76
Management says the advisory franchise drives referrals into wealth management: “Since the start of 2025, we’ve seen nearly 900 referrals to wealth management from investment banking.” 5 This is another form of “multiplier” beyond financing and risk management, but it corroborates the general thesis that advisory engagement expands across the platform. 5
Management states it will not disclose a percentage multiplier because it:
They also emphasize the multiplier is contextual, depending on:
So, the multiplier is best understood as a structural cross-sell / wallet-capture effect rather than a stable, linear ratio. 12
In short: the “multiplier” exists as a cross-franchise linkage anchored in trusted advisory relationships and One GS connectivity, but the company does not disclose a precise percentage multiplier from advisory fees to other activities in these materials. 123
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