Goldman Sachs is exploring sale of investment advisory unit - reports

Investing.com -- Goldman Sachs Group (NYSE:GS) is looking into a possible sale of its investment advisory operations it acquired almost half a decade ago, according to media reports on Monday, as the banking giant steps back from efforts to tap into a broader customer base.

Citing the company, news outlets said that Goldman was "currently evaluating alternatives" for the segment of its wealth business that caters to so-called high-net-worth individuals.

The unit, which has developed out of Goldman's $750 million purchase of California-based investment adviser United Capital in 2019, oversees around $29 billion in assets.

The United Capital acquisition was originally designed to help expand Goldman's focus beyond its typical client base of ultra-rich clients, or those with fortunes in at least the tens of millions of dollars.

But losses incurred during the strategy shift into a more mass-market model have ratcheted up the pressure on Chief Executive David Solomon, the reports said. Most recently, profit slumped by 60% in the second quarter, driven in part by writedowns at Goldman's consumer businesses.

The firm reiterated its ambitions stated earlier this year to increase its core wealth business that provides a range of services to ultra-rich clients, the reports said. These activities tend to generate more stable revenues because they are not subject to economic cycles, unlike other divisions like investment banking and trading.

Goldman is also seeking to unwind some aspects of its drive into a wider market. In particular, the bank's GreenSky fintech division, which it bought in 2021, has been put up for sale. Its Marcus online retail banking service was scaled back last year as well.