Goldman Ditches Robo-Investing in Sale to Betterment

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 event last week while discussing the arc of the bank’s consumer business.

The challenges arose as the bank sought to build out other consumer-focused products, hoping it could use its big-bank standing and tech while still acting as a nimble disruptor, according to Waldron.

“We thought we could be competitive,” he said. “I think we learned it’s a lot harder than we thought it was.”

Marcus Invest took flight in 2021, and the bank highlighted the clinching of more than 10,000 accounts in just the first few months, with a majority opened by existing clients.

It was touted as an example of the progress Goldman was making in building its cross-product digital-banking capabilities.

When the bank first started scaling back its consumer-banking goals, it still hoped that the investing tool would find a home, expecting to steer well-to-do clients and employees at corporate partners to the more-affordable advisory product.

It never really gained much traction, and the agreement with Betterment will free up resources as it looks to expand its business with high-net-worth clients.

Goldman’s customers can opt out of moving their assets to Betterment as part of the deal, which doesn’t involve acquiring any Goldman technology or employees.

(Credit: Bloomberg)