Goldman Launches Marcus Invest To Target Retail Investor

Goldman Sachs is launching Marcus Invest to facilitate automated stock buys, the Wall Street Journal (WSJ) reported on Tuesday (Feb. 16).

A digital platform, Marcus Invest will automatically make investments in stocks and bonds based on predetermined criteria. The tool will be integrated into Goldman’s existing Marcus app and website.

Stephanie Cohen, global co-head of Goldman’s consumer and wealth-management division, told the WSJ that Marcus Invest and Marcus Checking offer a digital app-based banking experience and give Goldman Sachs the ability to “be someone’s primary banking relationship.”

Chief Executive Officer David Solomon was a beta tester for the Marcus Invest app. Under Solomon, Goldman has passed on risky investments in favor of predictability and stability.

Consumer banking revenue at Goldman Sachs was up 40 percent in 2020, reaching $1.2 billion. By the end of 2020, consumer loans totaled $8 billion and deposits $97 billion.

Goldman’s new tools are meant to compete with digital investing startups like Betterment and Wealthfront. Digital investments are expected to hit an estimated $449 billion in assets under management across the field in 2021, Cerulli Associates told WSJ.

Goldman Sachs typically targets investors with over $10 million in assets. Marcus Invest, however, has a minimum account balance of $1,000 and fees of .35 percent.

Goldman’s previous inroads into retail investing included the 2016 $20 million acquisition of digital retirement startup Honest Dollar. The tool was never integrated into Goldman’s other services.

Marcus Invest is being launched amid growing interest in stock market investments. Digital investing apps like Robinhood and Webull Financial have attracted new users. Marcus Invest doesn’t allow users to buy and sell individual stocks.

Cohen told the Journal that Goldman believes in generating wealth over time via diversified portfolios. Marcus Invest is not intended to drive user engagement the way Robinhood is.

Robinhood is moving forward with plans to file an initial public offering (IPO) either through a direct listing or by way of a special purpose acquisition company (SPAC). Going public will give the platform an infusion of capital and ease the way to future financing. Robinhood just raised $2.4 billion in a funding round led by Ribbit Capital, after raising $1 billion from current investors.