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Technology > Investment Platforms > Robo-Advisors

Goldman Unleashes Digital Investment Platform for the Masses

By Bernice Napach

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Goldman Sachs, the 150-year-old investment bank best known for serving big corporations and wealthy investors, has expanded into investing for the mass market.

It introduced Marcus Invest, a low-cost digital investing platform, which offers individual investors three different investment strategies populated by a varying mix of ETFs — core, impact and smart beta — adjusted for their risk profile along with regular rebalancing.

“It truly is a seminal moment when they actually turned on the power and unleashed their robo-advisor into the wild,” said Tim Welsh, founder, president and CEO of Nexus Strategy LLC. “Given Goldman’s brand and reach, the game has been fundamentally altered. No more sleep for retail wealth management executives this week!”

The minimum investment for Marcus Invest is $1,000 and the annual advisory fee is 0.35%, far less than most financial advisors charge for more personalized services. ETF fees for Marcus Invest are embedded in the performance of the funds chosen, and additional fees may be levied for specific requests such as printed statements and check copies.

Marcus Invest is available for individual, joint and IRA accounts and is integrated into the Goldman by Marcus consumer banking app, which offers relatively high-yielding savings accounts, unsecured personal loans and budgeting software, as well as an Apple credit card.

With its latest launch, Goldman Sachs will compete directly with digital platforms of retail-focused giants including Vanguard, Schwab, Fidelity and Merrill Edge and with the independent robo-advisors Betterment and Wealthfront.

Marcus Invest’s 0.35% fee is the same as the fees charged by Morgan Stanley and Wells Fargo but slightly higher than the 0.25% fee for the digital-only services of Wealthfront and Betterment and 0.20% all-in cost charged by Vanguard Digital Advisor, according to David Goldstone, manager of research and Analytics at Backend Benchmarking, which publishes The Robo Report. Fidelity Go and JPMorgan Chase You Invest charge 0.35% for everything, including expense ratios for ETFs.

When Goldman Sachs announced its plans for Marcus in December, a spokesman told ThinkAdvisor that the new service would help the firm “attract new customers and deepen relationships within its consumer and Ayco ecosystems,” the latter referring to its employer-based financial counseling investment management service.

Marcus Invest could be conceivably the first stop for investors who ultimately move on to Goldman Sachs Personal Financial Management — the renamed United Capital that Goldman acquired in May 2019 headed by Joe Duran, United Capital’s former CEO — or to Goldman Sachs Private Wealth Management.

Bernice Napach

@Think_Napach

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