Goldman Sachs said it agreed to sell its personal financial management unit to a competitor named Creative Planning. The unit has only been in the hands of the bank since 2019 when Goldman Sachs was looking to expand its brand and services beyond the nation’s most wealthy clientele by buying United Capital Financial Partners and bringing with it more than 200 financial advisors.
However, in recent months the bank has done an about face on its earlier retail banking ambitions and going down market.
Marc Nachmann of Goldman stated, “This transaction is progress toward executing the goals and targets we outlined at our investor day in February.” The company will still focus on high net worth individuals for its wealth management practice, but with individuals and families with more than $20 million to invest rather than the $1 million and above category.
Analysts mostly praised the move, as the bank gets back to its core competencies. Earlier this year, Goldman Sachs also unloaded its business Marcus, a loan division that had limited success.
Small to midsize banks in the United States have been under intense scrutiny in 2023 due to a handful of banks facing default. Some industry experts have speculated that larger banks would benefit as customers would seek stability at larger financial institutions.
However, Goldman Sachs is not one of the companies that would benefit from such a scenario as the company is not known for retail banking expertise.