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Goldman Sachs is exploring a sale of the investment advisory business it acquired four years ago, marking a further retreat from efforts to be a major bank to mass-market customers.
The Wall Street firm said on Monday it was “currently evaluating alternatives” for its personal financial management business, which encompasses Goldman’s registered investment adviser operations and supervises about $29bn in assets.
The business grew out of United Capital, a California-based investment adviser that Goldman acquired for $750mn in 2019. The deal came as Goldman was pushing to serve a broader array of customers.
It is now the second deal executed under chief executive David Solomon that Goldman is looking to undo. The bank this year put up for sale the online lending business GreenSky, acquired in 2021.
“We expect to find an outcome that benefits both our clients and our advisers,” the bank said of the personal financial management business.
Goldman’s wealth management operation has historically been weighted more to the super-rich — so-called ultra-high net worth clients — whose wealth is at least in the tens of millions of dollars.
United Capital’s customers typically had more modest fortunes. The deal four years ago was a sign of Goldman’s efforts to serve a broader array of customers.
Losses from the push into mass-market banking have contributed to pressures on Solomon, who is contending with the most challenging period of his nearly five-year tenure as chief. Aside from plans to sell GreenSky, Goldman last year decided to pare back its Marcus online retail banking business.
Goldman is still prioritising growth in asset and wealth management, businesses which are more predictable and stable than its core investment banking and trading activities.
In wealth management, Goldman has more than $1tn in assets under supervision including from its private wealth business and its Ayco workplace money management platform. United Capital had about $25bn in assets under management when Goldman bought it.
Registered investment advisers are licensed to provide advice and sometimes directly manage money. The bank said it would continue to invest in its services to cover advisers as customers.
Goldman is exploring a sale at a time of heightened job-hopping by registered investment advisers this year in response to mergers and turmoil in the banking sector. Many are leaving advisory groups owned by banks for boutique operations or starting their own firms, and taking their books of clients with them.
Goldman last year merged its wealth management and asset management businesses, with the combined unit now run by Marc Nachmann, a close confidant of Solomon.