Goldman Sachs, as soon as reserved for the wealthy, is on the verge of providing wealth administration to the plenty
A woman is looking at Marcus, a new savings and loan app Goldman Sachs recently launched in New York on January 10, 2020.
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Goldman Sachs has targeted the global wealth management elite for decades. Now it opens up to everyone else.
According to an email received exclusively from CNBC, the bank has started internal testing of a new automated securities service ahead of a broader rollout early next year. Employees who register with the digital service Marcus Invest pay an annual administration fee of 0.15%, according to the company.
“As we prepare for the public launch in the first quarter of 2021, we are pleased to invite colleagues from consumer and asset management to provide early feedback on Marcus Invest via our beta program,” the email reads. The memo was signed by Tucker York and Stephanie Cohen, co-heads of Consumer and Wealth Management.
Goldman’s move is the latest example of a move to Main Street that began in 2016 with the Marcus brand of personal loans and savings accounts. The bank, which has long cared for the wealthy, senior executives and institutional investors, is looking for new sources of income outside of trading and investment banking.
As part of this push, the company hopes to expand its wealth management reach to include so-called mass wealth. For years, the bank has primarily targeted clients with $ 25 million or more to invest in the White Glove service of their private wealth management group. Then, last year, Goldman acquired boutique wealth management company United Capital to serve single-digit millionaires.
However, according to the memo, the Marcus Invest account can be opened with as little as $ 1,000. Users can choose from three model portfolios consisting of Goldman and third party ETFs. It will be integrated with other offerings including a personal finance tool called Marcus Insights in the Marcus app and online portal. A Goldman spokesperson confirmed the authenticity of the December 14 email and declined to comment.
Goldman’s product for the masses comes years after releases from rivals like Morgan Stanley and Bank of America and the startups that pioneered the technology. What sets Goldman’s apart is that some of the intellectual firepower that was once reserved for the company’s richest customers is channeled into digital service.
“Marcus Invest helps make it easier to invest in managed ETF portfolios that are based on models developed by our colleagues in the Investment Strategy Group that include ActiveBeta and Access ETFs from GSAM in select portfolios,” says it in the memo. The company’s Investment Strategy Group manages asset allocation for private clients. The GSAM unit, which stands for Goldman Sachs Asset Management, is known for a popular line of smart beta ETFs.
According to the bank, the administration fee of 0.15% is a “special employee offer”. While the company wouldn’t say how much it plans to charge non-employees, according to a person with knowledge of the plans, it is likely to be in line with competitors’ prices for automated investing. Morgan Stanley charges 0.35% and Bank of America’s Merrill Division charges 0.45% for select service levels.
Goldman executives had originally targeted a 2020 release for the digital wealth management service but have been delayed by the coronavirus pandemic. The company’s next move is likely to be a Marcus checking account, which will be available through the app. This is part of the bank’s vision for the retail bank of the future.
Since getting into consumer finance, the bank has been testing new products with its staff to fix bugs, including the Apple Card, which was released last year. In the internal message, the bank warned employees not to share details of their latest project, calling it confidential and voluntary.
“Portfolios are pre-approved by corporate compliance and do not require pre-approval for trading,” said Goldman. “After your account is set up, your account will be monitored daily and regularly rebalanced to help you meet your goals.”