Goldman Sachs has announced that it will be selling its Personal Financial Management (PFM) business to Creative Planning, a registered investment advisor based in Overland Park. This decision comes just one week after Goldman revealed that it was exploring alternatives for this particular business segment. The PFM business was originally established as part of Goldman's efforts to cater to the mass affluent market, with the acquisition of United Capital for $750 million in 2019.
Financial details of the deal between Goldman Sachs and Creative Planning have not been disclosed. However, Goldman has stated that the transaction is expected to be finalized in the fourth quarter of 2023 and will result in a gain for the company.
Goldman's decision to sell its PFM business comes amidst a larger transformation for the firm. In recent years, Goldman had made efforts to offer savings and lending products to retail customers and serve the mass affluent market. However, these initiatives did not gain the traction desired, leading Goldman to scale back its efforts in this area.
As of the end of 2022, the PFM business at Goldman Sachs had approximately $29 billion in assets under supervision, according to regulatory filings. Although sizable, this unit represents only a small component of Goldman's overall wealth franchise. By comparison, Goldman's wealth management business, which caters to ultrahigh net-worth clients, boasts $1 trillion in assets under supervision across 16,000 clients.
Under the terms of the deal, Creative Planning will gain access to investment products and services from Goldman Sachs. This will prove beneficial for the United Capital advisors who are familiar with Goldman's offerings. Notably, Creative Planning recently entered into a strategic custody relationship with Goldman.
Goldman Sachs' decision to divest its PFM business marks an important strategic move for the firm. This transaction will allow the company to refocus its resources and efforts on serving its core clientele in the wealth management space.
Goldman Sachs Expands Partnership with Creative Planning
Goldman Sachs, a global leader in asset and wealth management, has announced an expanded partnership with Creative Planning, one of the nation's largest registered investment advisory firms. This strategic move aims to better serve the mass affluent population by distributing products through RIAs via Goldman's asset management business.
Marc Nachmann, Goldman Sachs Global Head of Asset & Wealth Management, emphasized the importance of this transaction, stating, "This deal allows us to focus on our premier ultrahigh net worth wealth management and workplace growth strategy, while still serving high net worth investors through RIA and other wealth management clients."
Creative Planning, with $245 billion in combined assets under management and advisement, has experienced consistent growth through a mixture of organic growth and acquisitions. The company's CEO, Peter Mallouk, expressed his confidence in the partnership, highlighting the trust and confidence in the Goldman name and United Capital's business model.
Mallouk also emphasized that this expansion will benefit every client of Creative Planning. The acquisition aligns well with their existing custody relationship with Goldman Sachs Advisor Solutions, making it a natural fit and paving the way for future success.
As consolidation continues in the RIA space, this partnership between Goldman Sachs and Creative Planning marks an important strategic move that will allow both companies to better serve their clients and enhance their offerings in the market.