Goldman unloads another business

I’m a bit annoyed this Monday as I woke up with a small scratchy throat. How one gets sick in the middle of a 80 degree heatwave in San Francisco is beyond me. I don’t feel awful and I’m going to try to run this one off later this afternoon.

I’ve been following Goldman Sach’s moves around retail banking and financial management for awhile. Many years ago, it seemed like the firm was making a big push to retail by launching Marcus. They also acquired United Capital in 2019 which signaled their foray into a tier or two below ultra-wealthy individuals and families.

This has changed recently as Goldman is now looking to get out of the retail side of the business. To my knowledge, Goldman hasn’t said too much about the decision. However, I can imagine they quickly found out that retail and mass market is much harder than just sticking to their ultra wealthy clientele. Retail clients in this world provide a fraction of the revenue and often times just the same amount of work as the ultra net worth clientele.

In other words, it’s not an easy high profit margin business unlike their ultra high net worth business. I suppose at some point Goldman came back and just said, look our strength is in the ultra high net worth area. We’re Goldman and we should probably just stick to doing what we do best which is serving the top 0.5%.

Will they come back and try to make another run at retail clients many years down the road? I wouldn’t be too surprised. These retail clients will one day hopefully be in that ultra high net worth bracket and I’d imagine the hope for growth will one day come back.