Goldman Sachs Selling Marcus to Focus on Core Business

Goldman Sachs is selling Marcus to focus on its core business. Marcus is Goldman Sachs' consumer banking platform, which offers high-yield savings accounts and personal loans.

The decision to sell Marcus is part of a broader effort by Goldman Sachs to simplify its operations and focus on its most profitable lines of business. Goldman Sachs has been shifting its focus towards wealth management and investment banking.

This move is expected to free up resources for Goldman Sachs to invest in its core businesses, such as investment banking and asset management. By selling Marcus, Goldman Sachs can redirect its attention and resources towards these more profitable areas.

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Goldman Sachs is selling its Marcus Invest digital investing accounts to Betterment.

The accounts are expected to transition to Betterment around June 29, but customers can opt out by June 20.

Betterment will acquire the accounts and assets under management of Marcus Invest, but not any other accounts, technology, employees, or operations.

Marcus Invest was launched in February 2021, with a minimum account balance of $1,000, targeting retail investors.

Betterment will offer transitioned account holders access to automated investing, tax, and planning tools alongside a range of different account types.

Betterment currently serves an 850,000-person customer base and manages more than $45 billion in assets.

The deal value was not made public, but it is not expected to be material.

Goldman Sachs will focus on growing its Marcus Deposits platform, which boasts over three million customers and more than $100 billion in consumer deposits.

Goldman Sachs has reaffirmed its commitment to the Marcus brand, particularly its Marcus Deposits platform.

Betterment CEO Sarah Levy expressed enthusiasm for welcoming Marcus Invest clients into their fold, promising a seamless continuation of their investment journeys on Betterment's scalable platform.

The acquisition further cements Betterment's leadership in the digital investing space.

Here are some key details about the acquisition:

Goldman Sachs' decision to sell Marcus Invest to Betterment marks a significant shift in the bank's consumer banking strategy.

The bank had launched Marcus Invest within its Marcus platform in 2021, offering automated investment advice tailored to customer risk profiles.

Despite this innovation, Goldman is now narrowing its focus, divesting from Marcus Invest and previously from its credit card partnership with Apple and the BNPL firm Greensky.

Goldman Sachs reaffirms its commitment to the Marcus brand, particularly its Marcus Deposits platform, which boasts over three million customers and more than $100 billion in consumer deposits.

The bank's decision to transition away from digital investment advisor offerings suggests a more targeted approach to consumer banking, prioritizing stability and scale over the breadth of services.

Betterment, the largest independent digital investment advisor in the US, will absorb Marcus Invest customers who do not opt out by late June.

With over 850,000 customers and managing more than $45 billion in assets, Betterment is well-positioned to benefit from this acquisition.

Betterment will offer transitioned account holders access to automated investing, tax, and planning tools alongside a range of different account types with a variety of portfolio diversification opportunities.

A different take: Goldman Sachs International Bank

Goldman Sachs' pivot away from consumer banking is a clear indication that the bank is re-evaluating its priorities and focusing on more profitable areas of its business.

The bank's decision to divest from Marcus Invest and other consumer banking initiatives is a significant shift in its strategy, one that is likely to have far-reaching implications for the industry as a whole.

In a statement, Goldman Sachs' global head of Marcus, Marcos Rosenberg, emphasized the company's intent to concentrate on its growing Marcus Deposits platform.

As part of its growth strategy, Goldman Sachs had identified four areas of interest for the firm to grow: Asset Management, Wealth Management, Transaction Banking, and Consumer Banking.

However, the bank's foray into consumer banking has not been without its challenges, with the Robo-advisory product, Marcus Invest, being a significant area of loss for the bank.

According to analyst Farhad Huseynli, Goldman's approach to Robo-advisory was "backward" and resembled a wealth management service, involving experts and shying away from full automation.

The bank's decision to sell Marcus Invest to Betterment is a clear indication that Goldman Sachs is learning from its mistakes and adapting to changing market conditions.

Here are some key statistics on the acquisition: