Goldman Sachs primed to launch new robo-adviser Marcus Invest

Goldman Sachs Inc. is testing its digital advice platform with employees ahead of a public rollout slated for the first quarter of 2021, according to a company memo reviewed by InvestmentNews. 

The robo-adviser, called Marcus Invest, is designed to manage portfolios of exchange-traded funds based on models designed by Goldman Sachs Investment Strategy Group, and featuring Goldman Sachs Asset Management’s ActiveBeta and Access ETFs in select portfolios, according to the memo.

The beta program opens the floor for Goldman Sachs consumer and wealth management employees to provide early feedback on Marcus Invest, according to the email first reported by CNBC. The email was signed by Tucker York and Stephanie Cohen, co-heads of the Goldman Sachs Consumer and Wealth Management division.

“You can get started with as little as $1,000, and — as a special employee offer — an annual advisory fee of 0.15%,” the email noted. “Select an individual or joint investment account, or one of our three individual retirement account (IRA) options — plus, pick one of our three Goldman Sachs investment strategies to customize your approach.”

While the fee is a special offer to employees, the price point could increase fee pressure in the robo-advice landscape. The average price for robo-advice platforms is roughly 0.25%.

Fresh details about the new robo-adviser comes after Goldman Sachs announced in May it had scrapped plans to launch a digital wealth offering this year, delaying its ambitious push into the mass-affluent marketplace.

Traditionally, Goldman has offered advice only to the ultra-wealthy, defined as investors with more than $10 million of investible assets. At its first-ever investor day in January, Eric Lane, co-head of the bank’s consumer and investment management division, said its combined share of the high-net-worth and mass-affluent marketplace was well under 1%.

In 2018, Goldman restructured its four-year-old online bank Marcus to streamline operations. The firm hoped the addition of a robo-adviser would help it transform from an elite bank for the ultra-wealthy to more of a digital platform with an eye toward Main Street investors.

Goldman still has plans to launch Marcus checking accounts in 2021.

Goldman bought United Capital last year for $750 million in cash as part of its transition. United had approximately $25 billion in AUM, $230 million in revenue and close to 100 offices around the country at the time. The firm’s FinLife CX digital platform and financial planning software came along in the deal.

While robo-advice may not be core to the Goldman Sachs strategy, it would provide an outlet for the distribution of Goldman funds. A handful of other asset managers have purchased digital platforms in recent years in part to offer proprietary funds to a larger swath of retail investors.