Goldman Sachs is considering selling part of its wealth management division, Reuters reported Monday.
The Wall Street giant is exploring alternatives for its registered investment advisory business, Personal Financial Management — a unit that supervises $29 billion in assets, the wire service noted.
“We expect to find an outcome that benefits both our clients and our advisers,” Goldman said, according to the Financial Times.
The advisory business grew from United Capital Financial Partners, which Goldman bought in 2019 for $750 million. The California-based private wealth adviser had around $25 billion in assets when Goldman bought it, the Financial Times reported.
The deal was aimed to expand Goldman’s wealth-management client base beyond the ultra-rich. The private wealth arm of the New York City-based bank manages more than $1 trillion in assets, according to the publication.
U.S. banks serve the ultra-rich by providing brokerage, mortgage, estate and tax planning, and other services which help to generate more stable revenues than the sometimes-volatile investment banking and trading activities.
The potential sale marks the latest move in an ongoing transformation that has seen Goldman scale back its consumer-lending ambitions amid mounting losses.
Marc Nachmann has run Goldman’s asset and wealth management division since that reorganization last October.
The United Capital Financial Partners deal was one of Goldman’s first under CEO David Solomon — and at least the second from his tenure that the lender has sought to undo. Goldman plans to sell GreenSky, the installment-lending fintech it said it would buy in 2021 for $2.24 billion.
Goldman’s profit declined 60% in the second quarter as write-downs on its consumer businesses and real estate investments weighed on earnings. The bank January detailed more than $3 billion in losses it credited to its Platform Solutions segment — home to GreenSky, Apple Card and some of its Marcus business.
The potential sale also comes amid an uptick in the departure of registered investment advisers from firms owned by banks. Many are joining boutique operations or starting their own firms while taking their client bases along with them.
