Goldman Sachs sells financial planning unit as part of consumer retreat

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Goldman Sachs has agreed to sell one of its personal financial management divisions as chief executive David Solomon continues to unwind a botched foray into consumer banking.

The unit, which has about 200 employees, is being sold to Creative Planning, an investment and retirement adviser. The division offers financial planning to well-off customers who are not super-rich, servicing individuals with accounts that tend to range from hundreds of thousands to millions of dollars.

Goldman did not disclose the terms of the transaction, which it expects to complete in the fourth quarter of the year, but said it would book a gain on the sale. The Financial Times had previously reported that Goldman was “evaluating alternatives” for the unit, which encompasses its registered investment adviser operations and supervises about $29bn in assets. The deal represents about 1 per cent of Goldman’s $2.7tn in assets under management overall.

Goldman’s shares were up more than 1 per cent on Monday.

Goldman plans to continue to offer financial planning services to its wealthiest clients, with accounts that average $60mn. For less wealthy individuals, Goldman said it would continue to offer funds and other investment products, which would be sold through outside financial advisers, including Creative Planning.

“The point of the transaction is that it allows us to stay focused on the ultra high-net worth business where we have a long-term proven track record,” said Marc Nachmann, Goldman Sachs’ wealth management head. “We see a lot of opportunity for continued growth there, both domestically and internationally.”

Creative Planning, a wealth management firm with $245bn in assets, is run by chief executive Peter Mallouk, the author of several popular personal finance books including The Path: Accelerating Your Journey to Financial Freedom.

Mallouk also uses social media platform X, formerly Twitter, to dispense advice to more than 37,000 followers. He has co-authored books with lifestyle coach Tony Robbins, who previously served as chief of investor psychology at Creative Planning before leaving in 2019.

The business Goldman is selling grew out of United Capital, a California-based investment adviser that it acquired for $750mn in 2019. The unit grew 20 per cent under Goldman’s ownership, but was never integrated into the rest of the firm’s wealth management unit.

It is the second deal executed under Solomon to be undone. The bank this year put up for sale GreenSky, the online lending business that it acquired in 2021, though a deal has yet to be announced.

Losses from the push into mass-market banking have contributed to the pressure on Solomon, who is contending with the most challenging period of his nearly five-year tenure as chief. He has so far retained the backing of the Wall Street bank’s directors and some of its top shareholders but is facing an internal backlash over his blunt leadership style as well as critical news stories.

Additional reporting provided by Josh Franklin