Goldman retreat from RIA market shows pitfalls of chasing varied clients

investmentnews.com:

Goldman Sachs Group Inc.’s foray into the retail-focused wealth management business was short, lasting only four years, On Monday, the bank said it was dumping its registered investment advisor business to refocus on the super-rich.

The shift in strategy shows how tough change can be for an institution like Goldman, industry sources said.

In 2019, Goldman acquired United Capital Financial Partners for $750 million and then renamed it Personal Financial Management. The RIA unit targets high-net-worth clients, but not the ultra-wealthy, who have accounts with $20 million to $50 million and are the typical target client for the giant investment bank.

Last week, Goldman Sachs said it was considering selling Personal Financial Management in a bid to shift its focus back to the ultra-rich and away from the merely rich, or the millionaire next door type.

On Monday, the bank ended a week of speculation by announcing it was selling the RIA business to Creative Planning, a leading RIA with $245 billion in client assets. Terms of the deal, which is expected to close by the end of the year, were not disclosed.

Goldman’s decision was not a surprise to some in the broad financial advice marketplace.

“The brand didn’t translate as powerfully as [Goldman Sachs management] thought to Main Street from the ivory tower,” said Ron Carson, founder and CEO of Carson Group, during an interview for an episode of the InvestmentNews Podcast.

Instead of focusing on the day-to-day business of financial advisors, Goldman will continue to work with them through its asset management and fund platform, as well as its nascent RIA custody business. Indeed, the bank is looking to invest in RIA custody to gain scale with a broader group of financial