Goldman strikes deal to exit robo business
Goldman Sachs Group Inc. is closing down its automated-investing business for the masses after clinching a deal with Betterment.
The bank has struck an agreement to transfer clients and their assets from the unit known as Marcus Invest to Betterment, a $45 billion digital investment-advisory firm. The transfer is expected to be completed by the end of this quarter.
“This acquisition further cements our leadership in the digital investing space,” Betterment Chief Executive Officer Sarah Levy said in an emailed statement. The firm’s assets have roughly doubled since Levy took over as CEO at the end of 2020. “We are excited to welcome these customers to Betterment.”
While the deal price is expected to be immaterial, it’s another piece of the consumer empire Goldman once dreamed of that the bank is now scaling back. The New York-based firm had rolled out the robo-advisory product, which is separate from the more popular Marcus savings-account offering, as part of a suite of products that was billed as a “more comprehensive consumer-banking offering.”
The banking heavyweight, known for its prowess in catering to the ultra-wealthy, eyed Marcus Invest as a way to lure new customers with balances as low as $1,000. But an about-face involved Goldman ditching most of those retail-banking ambitions and retraining its focus to what it knows best: its Wall Street operations.
The bank is still building out its deposits business that has helped reduce its reliance on costlier unsecured borrowings as a source of funding, and has increased its balances to more than $110 billion.
It was a sensible plan “to build a proper deposits franchise which really has been a big success for the firm,” Goldman President John Waldron said at a Semafor
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