Goldman to Sell Former United Capital Unit to Creative Planning

What You Need to Know

The business, formerly led by Joe Duran, oversees $29 billion in assets; it was purchased by Goldman for $750 million in 2019.
Creative Planning has $240 billion in assets and is run by Peter Mallouk, who has also written several investing books.
Last month, Creative Planning announced a custody deal with Goldman and is expected to expand on that partnership.

Goldman Sachs Group Inc. struck a deal to sell an investment-advisory business aimed at the mass-affluent market to Creative Planning LLC, a $240 billion wealth-management firm, according to people with knowledge of the matter.

The bank agreed to sell the business, with $29 billion in assets, that grew out of United Capital, a registered investment adviser it purchased for $750 million, according to a statement.

The offloading of the company just four years after Goldman acquired it signals the firm’s intention to refocus its attention on the ultra-rich segment where it has a dominant presence.

Goldman didn’t disclose the sale price but said it expects to recognize a gain when the deal closes.

That’s in sharp contrast to the other sale Goldman is pursuing: the divestment of installment lender GreenSky at a steep discount just over a year after it completed that takeover.

Creative Planning is run by Peter Mallouk, who has also written several investing self-help books. Those include a couple with motivational speaker Tony Robbins, who was once the “chief of investor psychology” at Mallouk’s firm.

Goldman expects a boost to its profit margin in the wealth unit after selling United Capital. That business has more than 16,000 clients and $1 trillion of assets under supervision.

At an investor day earlier this year, Goldman said it expects to continue growing its private wealth, workplace offering Ayco, and the related private-banking and lending business.

See: Creative Planning Adds Goldman as Custodian

Deal History

The United Capital acquisition was part of Chief Executive Officer David Solomon’s plan to broaden Goldman’s reach beyond a traditional focus on ultra-wealthy individuals.

It gained an instant connection with about 22,000 clients who had a little over $1 million each with the platform. That’s significantly less than Goldman’s typical uber-rich clients, who entrust tens of millions of dollars to the bank.

While the effort was separate from Goldman’s failed consumer-banking foray, it represented a similar pivot that sought to pitch the bank’s offerings to Main Street. It is now undoing much of that strategic turn.

Mallouk & Duran’s Roles

Mallouk, 53, took over Overland Park, Kansas-based Creative Planning in 2004.

It oversees about $110 billion for private clients, with the rest of its assets from services such as managing 401(k) plans and money for institutional clients.

Robbins held a formal role at the firm from 2016 to 2019.

“The financial services industry is broken. You may be surprised to hear this from someone who has made his living in the financial industry, but it’s true,” Mallouk wrote in a 2020 book co-authored with Robbins, citing consultants who rarely talk to one another, and products that benefit the companies that offer them more than they do investors. “Many advisors are excellent, but they work in conflicted environments.”

While Goldman is selling its United Capital unit to a firm run by a prolific financial-advice writer, it also purchased that business from another investor who’s dabbled as an author, Joe Duran.

Duran wrote a book called Start It, Sell It & Make a Mint in 2004, years before he sold his business to Goldman Sachs.