Rosalind Evans
Goldman Sachs announced its intention to divest its personal financial management division to a rival entity, Creative Planning.
The deal is slated to be finalized in the last quarter of the current year, promising a profitable outcome for Goldman Sachs, based in New York. The exact financial specifics of the PFM business sale remain undisclosed.
In May 2019, Goldman Sachs onboarded a group of roughly 220 financial consultants managing assets valued at $25 billion. This followed their noteworthy $750 million procurement of United Capital Financial Partners. CEO David Solomon had then expressed the acquisition as a strategic move, enabling Goldman to expand its services not only to the ultra-affluent but also to individuals with considerable wealth, potentially a few million dollars for investment.
However, in alignment with Solomon’s strategy to divest or close various divisions related to his retail banking vision that didn’t pan out, the PFM division was perceived as a marginal part of Goldman’s broader wealth and asset management ambition. As of February, Goldman reported catering to merely 1% of the high-net-worth market, which encompasses individuals with investments ranging from $1 million to $10 million.
Marc Nachmann, Goldman’s global head of asset and wealth management, commented on Monday, “This sale marks a milestone in achieving the objectives we shared at our investor presentation earlier this year.”
He further noted that this decision permits them to “prioritize our top-tier ultra-high net worth management and professional growth strategy”, while still catering to affluent clients, thanks to a collaborative alliance with Creative Planning.
Creative Planning, headquartered in Kansas, is a well-established investment advisory firm with over 2,100 staff members and an impressive $245 billion in managed and advised assets.
As the financial landscape continues to shift, major institutions like Goldman Sachs are consistently re-evaluating and refining their strategies to better serve their clientele and stakeholders. This recent divestiture underscores the importance of agility in the banking and finance sectors. While Goldman Sachs refines its focus on ultra-high net worth individuals, partnerships like the one with Creative Planning ensure a continuity of service and cater to a broad spectrum of affluent investors.
