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Goldman's (GS) Divestiture of PFM Unit to Result in a Gain
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To progress toward achieving targets outlined at the Investors Day, TheGoldman Sachs Group, Inc. (GS - Free Report) entered into an agreement to divest its Personal Financial Management (PFM) unit to the leading Registered Investment Advisor (RIA), Creative Planning. Though the financial terms were not disclosed, the sale will result in a gain and is expected to be completed in the fourth quarter of 2023.
Goldman Sachs Asset Management will continue to provide investment solutions and services to Creative Planning’s wealth management teams as it continues to build a premier investment management platform. These customized solutions are being catered to high-net-worth (HNW) investors.
This July, Creative Planning entered into a strategic custody agreement with Goldman Sachs Advisor Solutions (GSAS). GSAS provides independent advisors with access to institutional solutions, custody, banking and lending services to meet the individual needs of their clients.
Goldman acquired the PFM unit, which was formerly known as United Capital Financial Partners, Inc., in an all-cash deal valued at $750 million in 2019. At the time of acquisition, it had $25 billion of assets under management.
Goldman’s global head of the Asset & Wealth Management segment, Marc Nachmann, stated, “It is margin accretive to Asset & Wealth Management and allows us to focus on the execution of our premier ultra-high net worth wealth management and workplace growth strategy and to serve HNW investors through RIA and other wealth management clients, such as Creative Planning.”
Peter Mallouk, president & CEO of Creative Planning, commented, “Building on our existing custody relationship with Goldman Sachs Advisor Solutions, an expanded partnership with Goldman Sachs is a natural, strategic fit. Together, we will offer HNW investors comprehensive planning and a broad set of solutions related to wealth and investment management.”
Besides this restructuring move, Goldman has been looking for bidders for the sale of its consumer lending platform, GreenSky. GS has been refocusing its business on its core strengths of investment banking and trading while reducing its retail footprint. These major business restructuring initiatives are in sync with the strategic overhaul.
Over the past three months, shares of the company have lost 1.5% against the industry’s upside of 5.8%.
The PNC Financial Services Group, Inc. (PNC - Free Report) entered into a definite agreement with a leading global wealth management firm, Insigneo, to sell the Latin American consumer brokerage and investment accounts of PNC Investments, PNC Managed Account Solutions, and PNC Bank.
PNC will continue to support the U.S. banking needs of its international clients moving to Insigneo. Also, it will be retaining the deposit and loan accounts of its customers with brokerage assets and assets under management which are being sold to the wealth management firm.
Citigroup Inc. (C - Free Report) completed the sale and migration of its Taiwan consumer business to DBS, which was announced in January 2022. The sale included the transfer of retail banking, credit card, mortgage and unsecured lending businesses. The transaction involved the transfer of approximately 3,000 employees. However, Citigroup retained its institutional client businesses in Taiwan.
As a result of this sale, C is expected to attain a regulatory capital benefit of approximately $1.2 billion.
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Goldman's (GS) Divestiture of PFM Unit to Result in a Gain
To progress toward achieving targets outlined at the Investors Day, The Goldman Sachs Group, Inc. (GS - Free Report) entered into an agreement to divest its Personal Financial Management (PFM) unit to the leading Registered Investment Advisor (RIA), Creative Planning. Though the financial terms were not disclosed, the sale will result in a gain and is expected to be completed in the fourth quarter of 2023.
Goldman Sachs Asset Management will continue to provide investment solutions and services to Creative Planning’s wealth management teams as it continues to build a premier investment management platform. These customized solutions are being catered to high-net-worth (HNW) investors.
This July, Creative Planning entered into a strategic custody agreement with Goldman Sachs Advisor Solutions (GSAS). GSAS provides independent advisors with access to institutional solutions, custody, banking and lending services to meet the individual needs of their clients.
Goldman acquired the PFM unit, which was formerly known as United Capital Financial Partners, Inc., in an all-cash deal valued at $750 million in 2019. At the time of acquisition, it had $25 billion of assets under management.
Goldman’s global head of the Asset & Wealth Management segment, Marc Nachmann, stated, “It is margin accretive to Asset & Wealth Management and allows us to focus on the execution of our premier ultra-high net worth wealth management and workplace growth strategy and to serve HNW investors through RIA and other wealth management clients, such as Creative Planning.”
Peter Mallouk, president & CEO of Creative Planning, commented, “Building on our existing custody relationship with Goldman Sachs Advisor Solutions, an expanded partnership with Goldman Sachs is a natural, strategic fit. Together, we will offer HNW investors comprehensive planning and a broad set of solutions related to wealth and investment management.”
Besides this restructuring move, Goldman has been looking for bidders for the sale of its consumer lending platform, GreenSky. GS has been refocusing its business on its core strengths of investment banking and trading while reducing its retail footprint. These major business restructuring initiatives are in sync with the strategic overhaul.
Over the past three months, shares of the company have lost 1.5% against the industry’s upside of 5.8%.
Image Source: Zacks Investment Research
Currently, GS carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Inorganic Expansion Efforts by Other Banks
The PNC Financial Services Group, Inc. (PNC - Free Report) entered into a definite agreement with a leading global wealth management firm, Insigneo, to sell the Latin American consumer brokerage and investment accounts of PNC Investments, PNC Managed Account Solutions, and PNC Bank.
PNC will continue to support the U.S. banking needs of its international clients moving to Insigneo. Also, it will be retaining the deposit and loan accounts of its customers with brokerage assets and assets under management which are being sold to the wealth management firm.
Citigroup Inc. (C - Free Report) completed the sale and migration of its Taiwan consumer business to DBS, which was announced in January 2022. The sale included the transfer of retail banking, credit card, mortgage and unsecured lending businesses. The transaction involved the transfer of approximately 3,000 employees. However, Citigroup retained its institutional client businesses in Taiwan.
As a result of this sale, C is expected to attain a regulatory capital benefit of approximately $1.2 billion.