Goldman Sachs sells personal financial management business to Creative Planning
Goldman Sachs has agreed to sell its personal financial management (PFM) business to the registered investment advisor (RIA) Creative Planning for an undisclosed sum.
Goldman Sachs sells PFM unit to Creative Planning
Founded in 1983 and headquartered in Overland Park, Kansas, Creative is a wealth management firm specialising in financial planning, investment management and retirement funds and has around $245 billion in combined assets under management and advisement.
The firm has adopted the investment solutions of Goldman Sachs Asset Management and entered into a strategic custody relationship with Goldman Sachs Advisor Solutions (GSAS), which merged with its existing custodians TD Ameritrade and Charles Schwab in July of this year.
“Building on our existing custody relationship with Goldman Sachs Advisor Solutions, an expanded partnership with Goldman Sachs is a natural, strategic fit,” says Peter Mallouk, president and CEO of Creative Planning. “We will offer high-net-worth investors comprehensive planning and a broad set of solutions related to wealth and investment management.”
Goldman Sachs’ sale of its PFM unit, which is due to close in the fourth quarter of this year, signals the bank’s continued move towards serving more ultra-high-net-worth individuals (UHNWIs) and aligns with the strategic priorities outlined by CEO David Solomon at its investor day in February.
It acquired the unit, which was formerly known as United Capital Financial Partners, in a $750 million deal back in May 2019.
At the time, Soloman described the bank’s wealth management franchise as the “cornerstone of our business” and that the acquisition would “help accelerate” its “long-term strategy to offer clients solutions across the wealth spectrum”.
However, in January, it was reported Goldman’s platform solutions unit, which includes its transaction banking, credit card, and fintech businesses, has lost $3 billion over nearly three years.
The news of losses from a division within the bank designed to diversify its business has seen the Wall Street titan decide to shift its focus back to its core propositions of trading and investment banking, wealth management, and transaction banking.
The sale of the PFM is anticipated to strengthen its profit margins and “result in a gain” for the bank.
For Marc Nachmann, Goldman Sachs’ global head of asset and wealth management, the move “allows us to focus on the execution of our premier ultra-high-net-worth wealth management and workplace growth strategy”.
