Goldman Sachs (NYSE:GS) is hoisting the ‘for sale’ sign over its PFM business, previously United Capital Financial Partners, bought in 2019, as the Wall Street banking giant takes its latest strategic step backwards.
PFM, Personal Financial Management, manages some US$29 billion of asset value and was bought by the bank for US$750 million around four years ago. It was, at the time, as part of Goldman’s design to diversify its wealth management beyond the ‘super rich’ and also cater its advisory operations to the ‘mass market’ investment community.
The apparent row back on this strategy comes, similarly, after Goldman opted to sell online lending business, GreenSky, which was bought by Goldman even more recently, in 2021.
PFM spans only a minority of Goldman’s wealth business, with the main portion of the business catering to more than US$1 trillion of assets managed on behalf of ultra-high net worth clients.
Goldman’s manoeuvres come as the bank seeks to react to commercial challenges in its consumer-facing operations, which have seen over US$3 billion of losses over the past three years, as it sought to tap into mass-market finance.
David Solomon, chief executive since 2018, has been under increasing pressure to revitalize Goldman's performance, especially after a 60% drop in profits in the second quarter which saw writedowns on consumer businesses and real estate investments.
On Monday, Goldman Sachs (NYSE:GS) stock was down US$3.71, or 1.14% per share, trading at US$321.22 giving the bank a market valuation of just under US$106 billion.