Goldman weighs sale of Personal Financial Management unit
Goldman Sachs (NYSE: GS) is weighing a sale of its investment advisory unit — which it acquired just four years ago — as part of a broader retreat from mass-market and consumer businesses.
Why it matters: The firm's attempts to move downmarket have been an expensive disaster, forcing CEO David Solomon to unwind multiple deals that Goldman had envisioned driving future growth.
What's happening: Goldman said in a statement that it is evaluating alternatives for its Personal Financial Management (PFM) unit, which manages about $29 billion in assets.
Flashback: The business added about $4 billion in AUM following Goldman's acquisition of United Capital Financial Partners for $750 million in 2019.
- The acquisition was meant to broaden the set of customers Goldman could serve, from the ultra-rich to the merely extremely well-off.
Yes, but: The PFM division remains a small portion of Goldman's wealth management practice, which oversees more than $1 trillion in assets for ultra-high net worth clients.
The big picture: CEO David Solomon has been under pressure to turn the firm around after profits have sunk in recent quarters, leading to a retreat from some mass-market and consumer businesses.
- Goldman wrote down $504 million related to its 2021 acquisition of consumer lender GreenSky and is looking to sell off that business.
- The Wall Street Journal reported in June that the firm is considering ending its partnership with Apple for its consumer credit card product.
What they're saying: "We are currently evaluating alternatives for that business as we determine where to invest our resources and where we see the greatest opportunity," a company spokesperson said in an emailed statement.
- "We expect to find an outcome that benefits both our clients and our advisors," they added.