KEY POINTS
- The bank has begun internal screening of a new automatic financial investment service ahead of a broader rollout early next year, according to an e-mail obtained exclusively.
- Employees who sign on to the digital service, called Marcus Invest, will pay a yearly management charge of 0.15%, according to the company memo.
- A few of the intellectual firepower as soon as scheduled for Goldman’s wealthiest customers will be funneled into the digital service, which includes the firm’s smart-beta ETFs and asset allocation models developed by its private wealth management investment group.
Goldman Sachs has for decades set its sights on the international elite when it concerns wealth management. Now, it’s opening as much as everybody else.
The bank has started internal testing of a brand-new automatic investment service ahead of a wider rollout early next year, according to an e-mail acquired solely by CNBC. Workers who sign on to the digital service, called Marcus Invest, will pay a yearly management charge of 0.15%, according to the business memo.
“As we prepare for the public launch in Q1 2021, we are pleased to welcome consumer and wealth management coworkers to provide early feedback on Marcus Invest through our beta program,” the email said. The memo was signed by Tucker York and Stephanie Cohen, co-head of the consumer and wealth management division.
Goldman’s relocation is the current example of a shift towards Main Street that began in 2016 with its Marcus brand of individual loans and savings accounts. The bank, which has long accommodated the ultra-wealthy, business officers and institutional investors, is seeking new sources of revenue away from trading and investment banking.
As part of that push, the firm wants to broaden its reach in wealth management to the so-called mass affluent. For several years, the bank has primarily targeted customers with a minimum of $25 million to invest in white-glove service from its wealth management group. Then last year, Goldman got shop wealth management company United Capital to assist it to serve single-digit millionaires.
The Marcus Invest account, nevertheless, can be begun with just $1,000, according to the memo. Users can choose amongst 3 design portfolios composed of ETFs from Goldman and outside suppliers. It will be integrated with other offerings, consisting of an individual financing tool called Marcus Insights, on the Marcus app and online portal. A Goldman representative verified the authenticity of the Dec. 14 e-mail and decreased to comment even more.
Goldman’s product for the masses comes years after versions from competitors including Morgan Stanley and Bank of America and the start-ups that pioneered the technology. What separates Goldman’s is that a few of the intellectual firepower as soon as reserved for the company’s richest customers will be funneled into the digital service.
“Marcus Invest assists take the heavy lifting out of investing with handled portfolios of ETFs based on models designed by our colleagues in the Financial investment Technique Group, and including GSAM’s ActiveBeta and Gain access to ETFs in choose portfolios,” according to the memo. The firm’s Financial investment Method Group guides asset allotment for personal wealth customers. It’s GSAM system, which stands for Goldman Sachs Property Management, is understood for a popular series of smart-beta ETFs.
The 0.15% management charge is a “special staff member deal,” according to the bank. While the company wouldn’t state how much it plans on charging nonemployees, it’s likely to be in line with rivals’ pricing for automated investing, according to an individual with knowledge of the plans. Morgan Stanley charges 0.35% and Bank of America’s Merrill department charges 0.45% on select tiers of service.
Goldman executives had originally targeted a 2020 release for the digital wealth management service but were postponed by the coronavirus pandemic. The company’s next move is likely to be a Marcus inspecting account that will be offered through the app, part of the bank’s vision for the retail bank of the future.
Given that pushing into consumer financing, the bank has checked brand-new items with its workers to work out bugs, including with the Apple Card, which was released in 2015. In the internal message, the bank cautioned employees versus sharing details of its latest job, calling it personal and voluntary.
“Portfolios are pre-approved by firmwide Compliance and do not require trading pre-clearance,” Goldman stated. “After your account is set up, your account will be kept an eye on daily and rebalanced occasionally to help you meet your objectives.”
