What next after summer sale?
Get ready, advisors! Goldman Sachs is stepping back into the RIA space.
Not that it ever really left.
Following months of gossip about the future of its investment advisor business, Goldman Sachs finally ended all the speculation in august by announcing the sale of its Personal Financial Management unit to Creative Planning, a leading RIA with $245 billion in client assets. Terms of the deal were not disclosed, but those Wall Streeters’ long schadenfreude concerning Goldman CEO David Solomon’s unsuccessful attempt to crack the consumer business saw their accounts rise.
Or at least they grinned as if it did.
Goldman acquired United Capital for $750 million in 2019 and then renamed it Personal Financial Management. The RIA unit targeted high-net-worth clients, but not the ultra-wealthy, who have accounts of $20 million to $50 million and are the typical target clients for the esteemed investment bank.
The unit’s summer sale, along with Solomon’s other recent maneuvers to scale down Goldman’s consumer-oriented operations, shifted the bank’s focus back to the super-rich.
According to a February Investor Day presentation, Goldman services around 16,000 ultra-high-net-worth clients with an average account size of around $60 million, totaling nearly 8% of that market. The average ultra-high-net-worth client’s tenure at the bank is over 10 years.
Goldman insiders say the reorganization is less a retreat from the RIA marketplace than a realignment. The unit’s new focus is not to compete with RIAs (a leading cause of industry resentment toward PFM that Solomon failed to foresee) but to serve them in a way very few banks can.
“Goldman Sachs is targeting RIAs who provide investment advisory solutions and guidance to
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