Goldman Sachs Launches Robo-Advising Through Marcus Invest

Need to Know

• Users of Marcus, the bank’s consumer-banking app, can now invest as little as $1,000 in Marcus Invest.
• Invest will use a robo-advisor to allocate and rebalance customers’ investments, based on models developed by Goldman Sachs’ investment strategy group.
• Consumers can use Marcus Invest to put money into automated portfolios, rather than stocks and bonds.
• The bank is also gearing up to launch a checking account with Marcus, which already offers a savings account.

Analysis

Goldman Sachs took a substantial leap into the world of consumer banking this week, launching its long-awaited consumer investment tool, Marcus Invest, on Tuesday, February 16.

Marcus Invest will live within Marcus, the consumer-banking app that Goldman Sachs launched in 2016. Customers will be able to open an investment account with as little as $1,000, which will be allocated and rebalanced by Goldman’s robo-advisor, which was developed by the bank’s investment strategy group. Stephanie Cohen, global co-head of Goldman’s consumer and wealth-management division, said the launch of Invest gets Goldman closer “to the point where we can be someone’s primary banking relationship, meaning we can be the digital bank on your phone.”

Marcus customers who use Invest will be charged an annual fee of 0.35%. The bank has been teasing the launch of Invest for some time, with Goldman Sachs CEO David Solomon saying on an earnings call in January that he was “particularly excited about the launch of Marcus invest platform in the U.S. this quarter, which for the first time brings the investing expertise of Goldman Sachs directly to mass affluent customers.”

Marcus currently offers individual and joint investment accounts, plus three types of individual retirement accounts. In addition to Invest, Marcus users have access to a savings account, unsecured personal loans and budgeting tools. The bank also offers a credit card with Apple, which is available through Apple Wallet and Apple Pay. The launch of Invest comes ahead of the rollout of a personal checking account within Marcus, which Goldman plans to launch later this year. The bank recently partnered with Marqueta for its checking account and debit card offerings.

Goldman has made a number of upgrades to Marcus in recent months, including the rollout of personal finance tools such as Marcus Insights, which the bank launched in September 2020. That tool allows consumers to view multiple accounts at different institutions all in one place, and provides insights, such as spending history and budget forecasting, in the same spot.

And while Goldman doesn’t anticipate Marcus will break even until 2022, the app has been picking up steam: Goldman’s increased investments in consumer banking infrastructure resulted in $1.2 billion in consumer-banking revenue in 2020, representing a 40% increase from 2019. Consumer-loan balances with Goldman by the end of 2020 amounted to $8 billion, and deposits amounted to $97 billion. The bank is targeting at least $125 billion in deposits to Marcus by 2024.