Goldman Sachs is selling part of its wealth management business to independent wealth manager Creative Planning for an undisclosed price, the bank announced Monday.
The transaction, expected to close in the fourth quarter and result in a gain, confirms reports from earlier this month that the bank was exploring a sale of its Personal Financial Management arm, which it had purchased in 2019 for $750 million.
The development comes as Goldman hones its focus on the super wealthy, scaling back growth intentions for its consumer business, which has had a rough time of late — a Securities and Exchange Commission filing in January showed $3 billion in losses since 2020. The bank’s net income dropped 60% year-over-year, a recent earnings report showed, and it also took nearly $1 billion in impairments in connection to home-improvement lender GreenSky and some real estate investments.
PFM’s new home, Creative Planning, is one of the biggest Registered Investment Advisors in the country, with 2,100 employees and $245 billion in combined assets under management and advisory.
PFM, with $29 billion in assets, was a relatively small piece of Goldman’s overall business, which has $2.7 trillion in total assets under supervision. The bank’s private wealth arm oversees $1 trillion in assets for ultra-high net worth individuals, defined as those with at least $60 million in investable assets.
A strategic focus on these individuals leaves Goldman with “a lot of space for us to grow,” Goldman Sachs Global Head of Asset & Wealth Management Marc Nachmann told Reuters. “So we feel really good about it.”
Creative entered into a strategic custody relationship with Goldman Sachs Advisor Solutions in July, and Creative’s wealth management teams “will continue to have access to investment solutions and services from Goldman Sachs Asset Management as it builds a leading investment management platform,” Monday’s announcement said.
“This transaction ... allows us to focus on the execution of our premier ultra-high net worth wealth management and workplace growth strategy and to serve [high-net-worth] investors through RIA and other wealth management clients, such as Creative Planning,” Nachmann said in a prepared statement.
“We will continue to support PFM and other Creative advisors with access to our investment solutions through our expanded strategic agreement,” he said.