Markus of Goldman Sachs made a splash in the world of robotics

 Markus of Goldman Sachs made a splash in the world of robotics

According to Reuters, the digital-only app Marcus, the American financial services giant, has launched an automated investment vehicle with a minimum invoice amount of $ 1,000 and an advisory fee of 0.35%.

Like other advisory robots, Marcus Invest will offer portfolios of low-cost ETFs for stocks and bonds, including Goldman Sachs ETFs, based on risk tolerance and user goals. As of last September, the Marcus app had over 5 million customers and already offers a savings account, consumer loans, and a personal finance management tool.

The latest launch expands Goldman's fintech offerings into a new area of ​​growth, creating cross-selling opportunities among a wider consumer base. With the help of Marcus Invest, the bank will be able to capitalize on the rapidly growing sector in the coming years to attract customers: Insider Intelligence expects $ 830 billion in robot consultants in North America by 2024, up from $ 330 billion in 2019.

The new feature could also unlock more user income by pushing those who already have savings with Markus to move their deposits to

Robo Advisor

 where Goldman can be rewarded. This is especially valuable considering that in the first three years after launch, Goldman has lost more than $ 1.3 billion on Marcus, largely due to bad loans. Markus Invest also states that investors who choose the Goldman ETF for their portfolios will receive a loan for their advisory services, encouraging the use of the firm's own funds.

Despite entering a crowded marketplace, Marcus' Robo-Consulting offerings are more affordable than other legacy operators and threaten to crowd out digital wealth managers who are also rebranding finance.

  • The minimum threshold for a Marcus Invest account places it in the middle ground between traditional gamblers and fintechs. Existing robotic consulting services for incumbent asset managers include five to 50 times higher minimum account balances than Goldman, such as Schwab Intelligent Portfolios for $ 5,000 or Vanguard Personal Advisor services for $ 50,000. Meanwhile, standalone robot consulting platforms have sought to offer much lower thresholds like the $ 500 Wealthfront or the $ 0 Betterment. At $ 1,000, Goldman is better positioned than its current peers to attract consumers who would rather invest in a trusted, established financial brand than in a fintech startup: 64% of consumers in select markets, including the US, say they trust traditional Asset managers, up from 49% say the same for digital wealth managers. 
  • And the new service is moving Marcus closer to becoming the one-stop shop for everyday consumer finance, an area that digital wealth managers have so far been isolated. Fintech robo consultants around the world are diversifying their product portfolio to meet all consumer needs under one roof and replace existing services. Both Wealthfront and Betterment, for example, also offer savings accounts at 0.35% and 0.40% per annum, respectively, down from Marcus' 0.5%. The latest launch highlights that Marcus repackages funding from a different starting point than robo-consultants, but ends at the same point. Markus also plans to open a checking account later this year. Backed by the trusted and respected brand of Goldman Sachs, Markus is set to pose a major threat to digital wealth managers' own growth trajectories.