The Wall Street bank, which did not disclose the sale price, said the sale to Creative Planning LLC is expected to close in the fourth quarter and result in a gain.
The latest sale is part of a shift in strategy after chief executive officer David Solomon reorganised the firm into three units last year and scaled back ambitions for its consumer business, which has lost US$3bil (RM14bil) in the last three years.
Goldman bought the registered investment adviser (RIA), formerly known as United Capital Financial Partners, for US$750mil in 2019, when it managed about US$25bil in funds.
Creative Planning has more than 2,100 employees across its affiliates and US$245bil in combined assets under management and advisory.
The RIA business was relatively small in size compared with Goldman’s core business, which focuses on the super-rich.
Goldman Sachs’s private wealth arm oversees US$1 trillion in assets for ultra-high-net-worth clients, who have US$60mil or more in investable assets.
High-net-worth individuals, who would fall within the business Goldman is considering selling, typically have about US$1mil to US$10mil to invest.
Marc Nachmann, Goldman Sachs global head of asset and wealth management, told Reuters the current strategy is to invest more in its core businesses, such as ultra-high net worth and workplace growth strategies, including the proceeds from the sale.
“We think there’s a lot of space for us to grow. So we feel really good about it,” Nachmann said.
He added that these plans are without a potential acquisition.
Goldman said the bank can serve high-net-worth investors through RIA and other wealth management clients, such as Creative Planning, Goldman said.
In July, Creative Planning announced it had entered into a strategic custody relationship with Goldman Sachs advisor solutions platform, which serves independent advisors.
“This transaction is consistent with Goldman’s ongoing efforts to streamline core segments and de-emphasise legacy consumer-centric businesses,” said Daniel Fannon, banking analyst at Jefferies.
“Within wealth, Goldman can now focus exclusively on the growth of the workplace and premier ultra-high-net-worth advice channels, while also supporting private banking and lending revenues.”
Goldman Sachs and Co LLC is serving as a financial adviser, and Weil, Gotshal and Manages LLP is serving as legal counsel to Goldman Sachs.
Goldman is also pushing for the sale of its financial technology business, GreenSky, and has also offloaded the bulk of its unsecured consumer loans after it halted this kind of lending last year. — Reuters