Goldman Sachs opens up an investment strategy once reserved for the wealthy

livemint.com:

Goldman Sachs is turning to Main Street investors to boost its fee revenue. The bank plans to offer some of the sophisticated investment strategies that it has long reserved for its deep-pocketed clients to customers of robo-adviser Betterment. Goldman is structuring portfolios for everyday investors that are meant to help them save money on their taxes, in part by moving their cash from ultrasafe bank accounts to fixed-income exchange-traded funds that involve more risk.

The funds will hold short-term Treasurys, municipal and investment-grade corporate bonds. The portfolios were designed by Goldman’s teams that manage north of $1 trillion of investments for clients like corporate pensions and sovereign-wealth funds. They have different allocations depending on the investor’s federal and state tax brackets, among other factors.

The Wall Street giant has long customized investing portfolios with a tax edge for its institutional clients and its private-wealth clients, individuals and families who on average have about $70 million with the bank. Betterment’s platform, in contrast, requires just $10 to start investing, and the new portfolios are geared toward people with at least around $190,000 of annual income. Many of those clients were surprised by the tax hits they incurred leaving their money stashed in high-yield savings accounts, Betterment says.

Except for deposit accounts, Goldman has been pulling back from its foray into Main Street and is focusing on making money by providing services to companies that work with consumers. The bank is aiming to generate more fee revenue to offset swings in its larger dealmaking and trading businesses. Last month, Goldman sold to Betterment the accounts of Marcus Invest, which it