Goldman Sachs is up to something, and we want to know why. The famous (some say infamous) investment bank has been rolling out a slew of consumer products (or acquiring them) lately and now they're looking into building a robo-advisor, too. The latter fact wasn't issued in a press release, though. Rather, an astute onlooker noticed a job listing on their site for a "GSAM Technology - DAS Digital Experience Developer - Associate" in NYC. Translation - they need an IT guy to help build out a robo-advisor. You're welcome.
Now we NEVER underestimate Goldman, but we must say, they're a little late into the game on this particular round. We won't say we're skeptical because they're - well - Goldman, BUT... That said, sometimes it's not smart to be the first one into a brand new market. Let the others come in, muck around and blow through capital while they break open the new category, and then come in and sweep up the carnage. So perhaps that's Goldman's strategy here with their seemingly late entrance into the robo-advisor category. We'll have to wait and see how this one goes.
(Cindy Taylor/Publisher)
"Incumbent financial services institutions (FSIs) have responded to the proliferation of startup robo advisors by increasingly rolling out automated investment solutions built in-house.
Now, leading US investment bank Goldman Sachs seems to be jumping on this trend with plans to build a robo advisor of its own, according to a Monday job posting on the bank's website. The new product is likely to target "mass affluent investors," individuals with less than $1 million to invest, as explained by Reuters. Goldman Sachs' current private wealth management service caters to clients with $50 million or more to invest, so the new product would hypothetically target a significantly broader market.
Launching a robo advisor is probably the latest step in Goldman Sachs' broader diversification strategy. In October 2016, the bank launched Marcus, an online personal loan platform, marking one of the bank's first ventures into consumer lending. In addition, Goldman Sachs' Investment Management division acquired Honest Dollar, an online benefits platform for small- and medium-sized businesses (SMBs) and startups, in March of last year. That Goldman Sachs has begun moving into consumer banking with these projects, and the possibility that it will now roll out a more affordable investment service, suggests the bank has a strategy to target consumers outside of its usual demographic, possibly in a search for more diverse revenue streams.
The new product's success will come with conditions attached. The behemoth's brand could be a powerful lure for potential investors who wouldn't normally be eligible for its services, but it is worth bearing in mind that equally powerful peers like Vanguard and Charles Schwab also operate robo advisor solutions. These offerings have been around longer, so brand image alone might not be enough to ensure Goldman's new product attracts enough users to succeed..."
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