Goldman is selling a wealth-advisory unit to Creative Planning

afr.com:

Goldman Sachs Group struck a deal to sell an investment-advisory business aimed at the mass-affluent market to Creative Planning LLC, a $US240 billion ($373 billion) wealth-management firm, according to people with knowledge of the matter.

The bank agreed to sell a business that oversees about $US29 billion in assets and grew out of United Capital, a registered investment adviser it purchased for $US750 million. The offloading of the company just four years after Goldman acquired it signals the firm’s intention to refocus its attention on the ultra-rich segment where it has a dominant presence.

The United Capital acquisition was part of chief executive officer David Solomon’s plan to broaden Goldman’s reach beyond a traditional focus on ultra-wealthy individuals. Bloomberg

It wasn’t immediately clear how much the platform will fetch, but it’s expected to result in an accounting gain for Goldman when the deal closes. That’s in sharp contrast to the other sale Goldman is pursuing: the divestment of instalment lender GreenSky at a steep discount just over a year after it completed that takeover.

Creative Planning is run by Peter Mallouk, who has also written several investing self-help books. Those include a couple with motivational speaker Tony Robbins, who was once the “chief of investor psychology” at Mallouk’s firm.

Goldman expects a boost to its profit margin in the wealth unit after selling United Capital. That business has more than 16,000 clients and $US1 trillion of assets under supervision. At an investor day earlier this year, Goldman said it expects to continue growing its private wealth, workplace offering Ayco, and the related private-banking and lending business.

The United Capital acquisition was part of