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Goldman Sachs is sending a clear message to potential customers: You must have at least three houses and a yacht to ride this ride.
The banking giant plans to sell one of its investment advisory divisions to wealth management firm Creative Planning. In ditching a division whose clientele consisted mostly of the “mass-affluent market,” the move is yet another sign that Goldman’s exclusive preference is the “ultra-rich.”
Silver and Gold
Goldman’s recent foray into retail banking with the unwashed masses has been like asking a French chef to start slinging hot dogs — nobody on either side of the equation is very happy. It’s why the bank has for years been unwinding its consumer banking operations to focus on its wealth management caviar-topped bread and butter.
This latest move is no different — even if Goldman’s definition of wealth seems to keep moving further and further away from anyone else’s:
- The soon-to-be-sold unit first came to Goldman as part of its $750 million acquisition of United Capital in 2019. According to Bloomberg, it caters to around 22,000 clients with just over $1 million each on the platform.
- But that’s chump change compared to Goldman’s typical ultra-high net worth clients, who station around $60 million with the bank, according to CNBC, and thus the unit has been deemed too small to keep.
Solomon, Rushed: This marks the second time Goldman has sought to effectively undo a retail banking-minded acquisition completed by CEO David Solomon. The bank is also in talks to sell fintech unit Greensky, which it acquired in 2022 at a valuation of around $1.7 billion. But the latest bids have come in far lower, according to Fortune. While the final sale price of this latest division to Creative Planning has yet to be disclosed, Goldman says it will “result in a gain.” More importantly for moonlighting DJ Solomon, it means that time spent with regular people will be relegated strictly to the dance floor.