Goldman Sachs has announced its contemplation of selling a portion of its wealth business that caters to high net worth individuals. The shift in focus aims to realign the bank’s efforts towards serving the ultra-rich clientele.
In an official statement released on Monday, the Wall Street institution revealed that it is currently exploring various options for its registered investment adviser division known as Personal Financial Management (PFM).
Managing approximately $29 billion in assets, PFM was acquired by Goldman in 2019, formerly operating as United Capital Financial Partners.
The purchase, valued at $750 million, was intended to diversify Goldman’s client base beyond the ultra-wealthy category. However, PFM has remained a relatively modest segment within the bank’s broader wealth management operations.
Goldman Sachs’ private wealth division, which exclusively serves ultra-high net worth clients, oversees an impressive $1 trillion in assets.
The bank’s strategic focus entails bolstering its core wealth business catering to ultra-high net worth clients, reiterating its intentions set forth during the investor day in February earlier this year. Apart from the division under evaluation, Goldman’s core wealth services also encompass workplace financial planning through Ayco and the Marcus savings platform.
In the competitive landscape of U.S. banks, the quest to serve ultra-wealthy clients involves providing an array of services, including brokerage, mortgage facilities, estate planning, and tax advisory. These activities contribute to more stable revenue streams compared to the volatility often associated with Wall Street’s investment banking and trading operations, which are inherently linked to economic fluctuations.