Goldman Looks to Shed RIA Arm, Will Continue Third-Party Custody Push

The Goldman Sachs Group Inc. is considering parting with a registered investment adviser it acquired in 2019, but the asset manager still expects to push ahead with third-party solutions for advisory firms, including asset management and custody solutions.

Earlier this week, reports broke of Goldman Sachs seeking to sell the United Capital Financial Partners Inc. division, now called Personal Financial Management, it acquired in 2019 for $750 million in cash. The New York-based asset manager made the deal, CEO David Solomon said at the time, to enhance its private wealth offerings through its Ayco personal finance and workplace division, bringing more scale to wealth management solutions with “access to the intellectual capital and investment capabilities of Goldman Sachs.”

The firm has since confirmed it is looking to pivot, moving away from direct investment and management of smaller personal financial management to focus on ultra-high-net-worth clients, as well as providing third-party services to the consolidating RIA space.

“Goldman Sachs has a premier ultra-high net worth wealth management business (PWM) with over 16,000 clients and $1 trillion in AUS [assets under supervision] that has consistently grown its client base, AUS and fees,” a spokesperson wrote in an email. “We also continue to invest in and grow our services to the third-party RIA market through our asset management, custody, structured notes, stock lending and deposit taking products and services.”

At its investor day earlier in the year, the firm reiterated plans to grow its private wealth and workplace practice, Ayco; its related private banking and lending business; and Marcus Savings, its high-yield consumer-focused savings platform.

Now it is looking for other options for the more individual financial advisory business, according to the statement.

“Personal Financial Management (PFM), our proprietary RIA business, is a very small component of our overall wealth franchise,” the spokesperson wrote. “We see continued opportunities to invest in this segment but with less strategic impact to GS. As such, we are currently evaluating alternatives for that business as we determine where to invest our resources and where we see the greatest opportunity. We expect to find an outcome that benefits both our clients and our advisors.”

Goldman’s PFM division has about $29 billion in assets under supervision, according to an SEC ADV filing. The firm would be selling into an RIA deal market that, while depressed through the first half of this year, is still robust, according to a recent report by DeVoe & Co.

Meanwhile, the firm will continue with third-party advisory services, such as a July deal it signed with Creative Planning LLC in which the retirement plan advisory and wealth manager will have access to Goldman Sachs Adviser Solutions “institutional grade.” Those services will include GSAS’ middle and back office for alternative investments, electronic lending platform, advanced analytics and other product offerings.