Goldman Sachs is launching a digital investment offering for â€œordinaryâ€ people,Â the first time in the firmâ€™s 150-year history that it will offer proprietary investment strategies to this group of consumers.
Starting sometime in the first quarter, Goldman plans to introduce Marcus Invest, which will offer portfolios of ETFs from Goldman Sachs and other financial institutions. These will be integrated with existing, free financial tools and trackers available from Marcus by Goldman, its digital service for high-yielding savings accounts and consumer loans.
â€œWeâ€™re on a mission to streamline and humanize the investing experience,â€ said the spokesman in an email, confirming the news about Marcus Invest, which was first reported by CNBC. â€œWeâ€™ve made it a focus to reduce jargon, speak in clear terms and be transparent throughout our customer service.â€
According to an internal email from Stephanie Cohen inviting them to participate in pilot program, the firmâ€™s chief strategy officer, sent to employees of its Consumer and Wealth Management division, Marcus Invest includes three different investment strategies and three IRA options.
It also features ActiveBeta and Access ETFs from Goldman Sachs Asset Management, requires a minimum $1,000 investment and carries a 0.15% annual advisory fee for Goldman employees.
Fees to be charged to general investors for the serviceâ€™s broad launch were not disclosed.
Marcus Invest should help the firm â€œattract new customers and deepen relationships within both the Consumer and Ayco ecosystemsâ€ (the latter referring to the firmâ€™s work-based financial counseling, investment management and family office service), added the spokesperson.
Bill Winterberg, founder of FPPad, a technology consultant for financial professionals,Â told ThinkAdvisor the Marcus Invest offering is a â€œlogical step into making the Marcus brand more prevalent among savers and investors, particularly those who are younger and early in the saving investing journey.â€
The offering will not only â€œlift the Marcus brandâ€ but also will â€œgive customers peace of mindâ€ that its tools and apps â€œwonâ€™t be acquired or shut down in the future,â€ Winterberg said.
Expanding the Brand
The offering will help round out Goldmanâ€™s push into multiple business areas that ultimately serve the investing public, moving the firm well beyond its private wealth and investment banking foundation.
After launching Marcus by Goldman in March 2016 offering consumers loans and savings accounts, Goldman acquired United Capital, a $25 billion RIA in July 2019, which it subsequently renamed Goldman Sachs Personal Financial Management.
In August 2019, it launched a credit card inÂ partnership with April and in September of this year it completed its acquisition of Folio Financial, subsequently selling off its do-it-yourself brokerage arm but keeping its RIA clearing and custody business.
Goldman is â€œexecuting very well and quickly on a classic market segmentation strategy to be able to expand into growth markets adjacent to their high net worth business,â€ said Tim Welsh, president, CEO and founder of Nexus Strategy.Â
â€œIndependent RIAs and digital are the fastest growing segments â€¦ ,â€ said Welsh. â€œNo one else has high net worth covered, independence (RIAs), and now digital. Other market share leaders are all missing one of those big 3 segments.â€
The Marcus Invest also will increase competition in the digital investment space, where its â€œmain competitors will be the most successful platforms, specifically Vanguard, Schwab, Betterment, Merrill Edge, and Wealthfront,â€ said David Goldstone, manager of research and analytics for Backend Benchmarking, which publishes The Robo Report.
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