Banking giant Goldman Sachs has confirmed its plans to sell its high-net worth wealth management unit to Creative Planning LLC. The sale is part of a broader effort by the bank to refocus its strategy and enhance its services to “ultra-high net worth” customers. The sale is expected to be completed in the final quarter of 2023.
Creative Planning is an investment advisory firm based in Kansas with 2,100 employees. The company reportedly has more than $240 in assets under its advisement and management.
Focusing on the wealth management needs of the ultra-rich
Notably, observers say that Goldman’s wealth management model has experienced tremendous success with “ultra-rich” clients. Apparently, Goldman services roughly 8% of rich clients who have at least $30 million in investible wealth. The bank reports that its average ultra-rich client maintains somewhere around $60 million in the bank.
Meanwhile, Goldman’s efforts to make inroads into the market for so-called “high-net worth” clients has seen less success. Those clients have investible assets between one and ten million dollars. Unfortunately, despite recent efforts to expand its share of that clientele, the bank currently serves only about one percent of those customers.
Shifting focus
Reportedly, the sale is just part of CEO David Solomon’s efforts to move away from his prior retail banking plan. That strategy included the 2019 purchase of United Capital Financial Partners. That purchase was designed to help the bank broaden its access to that high-net worth group of customers. Goldman hopes that selling its personal financial management unit will help it redirect its focus to those ultra net worth accounts.
According to the bank, it will continue to provide support to those high-net-worth clients, as it partners with Creative Planning. Goldman declined requests to discuss the agreed sale price for the wealth management unit transaction.
