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Portfolio > Portfolio Construction > Investment Strategies

Goldman Sachs Readies Digital Investment Offering

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 (Photo: AP)

Goldman Sachs is launching a digital investment offering for “ordinary” people, the first time in the firm’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.

“We’re on a mission to streamline and humanize the investing experience,” said the spokesman in an email, confirming the news about Marcus Invest, which was first reported by CNBC. “We’ve made it a focus to reduce jargon, speak in clear terms and be transparent throughout our customer service.”

According to an internal email from Stephanie Cohen inviting them to participate in pilot program, the firm’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 service’s broad launch were not disclosed.

Marcus Invest should help the firm “attract new customers and deepen relationships within both the Consumer and Ayco ecosystems” (the latter referring to the firm’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, told ThinkAdvisor the Marcus Invest offering is a “logical step into making the Marcus brand more prevalent among savers and investors, particularly those who are younger and early in the saving investing journey.”

The offering will not only “lift the Marcus brand” but also will “give customers peace of mind” that its tools and apps “won’t be acquired or shut down in the future,” Winterberg said.

Expanding the Brand

The offering will help round out Goldman’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 in  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 “executing 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,” said Tim Welsh, president, CEO and founder of Nexus Strategy. 

Independent RIAs and digital are the fastest growing segments … ,” said Welsh. “No 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.”

The Marcus Invest also will increase competition in the digital investment space, where its “main competitors will be the most successful platforms, specifically Vanguard, Schwab, Betterment, Merrill Edge, and Wealthfront,” said David Goldstone, manager of research and analytics for Backend Benchmarking, which publishes The Robo Report.

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