Back to top

Image: Bigstock

Goldman (GS) Looks to Roll Out Digital Investment Service

Read MoreHide Full Article

In the current era of digitization, like many other big banks, Goldman Sachs (GS - Free Report) , the U.S. investment bank is targeting to expand rigorously into the mainstream consumer market through its digital wealth management service for the masses, per CNBC. The bank aims to roll out the automated investment service, Marcus Invest, earlier next year, which is under trials with staff. Through this service, Goldman targets to offer proprietary investment strategies to consumers.

Per a company memo, employees signing on Marcus Invest will be liable to pay an annual management fee of 0.15%. “As we prepare for the public launch in Q1 2021, we are pleased to invite consumer and wealth management colleagues to provide early feedback on Marcus Invest through our beta program,” the email stated. However, fees chargeable to general investors for the service’s launch were undisclosed.

Specifically, with a small amount of $1,000, the Marcus Invest account can be initiated. Moreover, users will be given a choice of three model portfolios comprising ETFs from Goldman and outside providers. Also, ActiveBeta and Access ETFs from Goldman Sachs Asset Management will be featured. Further, on the Marcus app and online portal, it will be combined with other offerings that includes personal finance tool called Marcus Insights.

“We’re on a mission to streamline and humanize the investing experience,” said the spokesman in an email, confirming the news about Marcus Invest, first reported by CNBC. “We’ve made it a focus to reduce jargon, speak in clear terms and be transparent throughout our customer service.”

Through this service, Goldman will be able to diversifyits business areas beyond its private wealth and investment banking foundation.Prior to the launch of Marcus in 2016, Goldman operated primarily as an investment bank and trading house. Post the launch of Marcus, the bank was able to diversify its revenues and funding sources by offering savings accounts and personal loans to retail customers. Over time, Marcus has grown into a multiproduct platform with four million customers in the United States and the U.K. without the traditional brick-and-mortar branch model. Also, the online bank has deposits worth $50 billion and $5 billion in consumer loan balances.

Expansion Moves

To expand operations, post Marcus launch, the bank acquired United Capital, a $25-billion California-based investment advisory firm last July. Further, in August, the company had partnered with Apple and introduced a credit card with simple application process, no fees. It encouraged customers to pay less interest, while guarantying security.

This September, the company completed its acquisition of Folio Financial, a boutique wealth management custodian and technology company. Further, in October, Goldman acquired General Motors Co's (GM - Free Report) credit card unit for about $2.5 billion from Capital One Financial (COF - Free Report) .

Conclusion

The key source of Goldman’s earnings stability lies in its diversified business. Traditional banking along with a diverse product portfolio is likely to help sustain growth. Thus, the company’s initiative to form a digital bank by developing Marcus is likely to boost the bank’s consumer business.

The company has gained 29.5% in the past six months compared with 39.7% growth recorded by the industry. Currently, Goldman carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.



Among other financial bigwigs, Bank of America (BAC - Free Report) , JPMorgan (JPM), Deutsche Bank (DB) are also moving ahead with the tools to survive in the current era of digitization.

Just Released: Zacks’ 7 Best Stocks for Today

Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.

These 7 were selected because of their superior potential for immediate breakout.

See these time-sensitive tickers now >>

Published in