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There are plenty of robo-advisors out there that allow you to invest on autopilot. But only one comes from Goldman Sachs, one of the most respected names in investment banking and wealth management.
Marcus Invest is that robo-advisor. It is a competitive and low-cost solution that also offers ESG investment. And it also offers the Goldman Sachs-owned Smart Beta portfolios that many competing robo-advisors rely on.
However, this is not the right robo-advisor depending on the level of customization you want. That’s why our Marcus Invest review covers all its features, pros and cons and pricing to help you make your decision.
Commissions and fees – 9
Ease of use – 8
Wallets – 8
Tools and resources – 7
Customer service – 6
Account type – 8
7.5
total
Marcus Invest is a robo-advisor using portfolios powered by Goldman Sachs technology. It is a low-cost solution for automated investing and also has ESG and Smart Beta portfolios that you can use.
Pros Cons
pros
- $5 minimum investment low
- It offers a variety of portfolios created by Goldman Sachs
- Competitive annual management fee of 0.25%.
- It offers impact investment portfolios and Smart Beta
- Includes automatic rebalancing
against
- It does not use tax loss harvesting
- No access to human advisors
What is Marcus Invest?
Marcus Invest is a robo-advisor that allows you to automatically invest in portfolios designed by financial professionals at Goldman Sachs. Like other leading robo-advisors, Marcus Invest uses a portfolio of multiple ETFs to match your goals and risk tolerance.
With a minimum investment of $5, Marcus Invest is also very suitable for beginners. Plus, you still get features you want in a robo-advisor, like automatic rebalancing so your portfolio composition stays the same over time.
What makes Marcus Invest great?
Because Marcus is part of the Goldman Sachs brand, their robo-advisor is powered by some of the leading investment research and technology out there. This makes the underlying theories behind the Marcus Invest portfolios attractive and there are several advantages to using this robo-advisor.
Various Goldman Sachs portfolio issues
Marcus Invest’s main selling point is that it works with Goldman Sachs, a leading investment management firm, to build its portfolios. Specifically, you can choose three different portfolio themes to invest in:
- Goldman Sachs Core: This portfolio invests in a range of US stocks, international stocks and bonds for a well-rounded investment approach.
- Goldman Sachs Smart Beta: While potentially more volatile than the Core Portfolio, the Smart Beta Portfolio aims to achieve long-term gains through a variety of Goldman Sachs ETFs. According to Marcus, these ETFs use Goldman Sachs’ proprietary technology to invest in companies with high growth potential to outperform the market over the long term.
- Impact of Goldman Sachs: This portfolio focuses on ESG investments avoiding sectors such as coal, firearms and tobacco.
You can still choose different levels of portfolio risk that influence the proportion of stock and bond ETFs in your portfolio. For example, the conservative option is a mix of 10% stock ETFs and 90% bond ETFs. Instead, you can be more aggressive with 80% stock ETFs and 20% bond ETFs, or even 100% stock-based ETFs.
Other robo-advisors like improve and Wealthfront use similar approaches. Marcus Invest is holding up well against the competition, and the fact that it offers an ESG portfolio theme is also a selling point.
Low minimum investment requirement
As mentioned, there is a $5 minimum investment requirement for Marcus Invest. This is on the lower end of the robo-advisor spectrum, and it’s great news if you’re investing small amounts of money.
Asset selection
Although Marcus Invest only has three portfolio themes, it actually considers a wide range of sectors and assets for its portfolio. Some asset classes considered by Marcus Invest include:
- Short-term municipal bonds
- US High Yield Bonds
- US Large Cap Stocks
- US Small Cap Stocks
- Emerging market stocks
- US real estate
- International real estate
- International developed market stocks
The international exposure and inclusion of more small-cap stocks is interesting, as many micro-investing apps or robo-advisors focus on US large-cap companies. You still don’t get as much customization as you do with competitors M1 Finance or Front of wealth. However, Marcus Invest still has very robust portfolios.
Automatic rebalancing
You get automatic rebalancing for every Marcus Invest portfolio and your portfolio is monitored daily for changes. Marcus Invest can then buy and sell assets if the asset allocation changes enough that the portfolio mix is out of the “tolerance range”.
This feature is a must for robo-advisors as it ensures that your asset allocation stays in line with your goals and risk tolerance.
Where Marcus Invest could improve
Goldman Sachs’ technology behind Marcus Invest’s portfolios is its main selling point. However, there are some drawbacks that you should be aware of before opening an account.
No tax loss collection
Many leading robo-advisors use tax loss harvesting to help boost returns. This strategy involves selling assets to realize a loss, which you can claim on your tax return. After selling the assets, you can buy back identical or similar assets to keep the composition of your portfolio the same, even though you may incur some losses.
Unfortunately, Marcus Invest does not use tax loss harvesting. Instead, it uses a tax relief methodology and essentially sells the assets with the lowest possible taxable gains when rebalancing. This is still good for investors, but not as good as tax loss harvesting to maximize returns.
No human advisors
Goldman Sachs offers personalized and professional wealth management services. But Marcus Invest has no human advisor option or plan that you can subscribe to. Instead, competitors like Betterment and SoFi allows you to work with financial advisors.
This is not a drawback if you just want automated investing. But some competitors have a hybrid model which is a significant difference with Marcus Invest.
Limited financial tools
With some robo-advisors, you get a wealth of financial tools and even various savings products to help you get the most out of your money. For example, personal capital it has a number of useful features, including budgeting tools, a net worth tracker, and even an investment fee analyzer. Similarly, competitors like Betterment and Wealthfront have excellent no-fee cash management accounts.
With Marcus, you don’t really get much out of the robo-advisor, other than some quality blog posts and various financial calculators. Of course, the company has an excellent high-yield savings account and a variety of CDs. However, their robo-advisor product line is pretty straightforward.
Account Type
You can open the following account types with Marcus Invest:
- Individual investment account
- Joint investment account
- Traditional IRAs, Roth and SEPs
Please note that the Goldman Sachs Smart Beta Portfolio is not eligible for any IRAs.
Marcus Invest prices and fees
Marcus Invest charges 0.25% in annual management fees, which cover ongoing management, automatic rebalancing and trading fees. You still pay various ETF expense ratios depending on the ETFs you invest in, but this is the same case for any other robo-advisor..
In the past, Marcus Invest actually charged 0.35% in annual fees. The drop to 0.25% puts its management fee on par with competitors like Betterment and Wealthfront.
Is Marcus Invest safe?
Yes, Marcus Invest is a safe and secure robo-advisor offering its investment advisory service through Goldman Sachs Bank USA and Goldman Sachs & Co LLC. It also works with Apex Clearing Corporation, a registered dealer and FINRA/SIPC member, and offers SIPC insurance for members.
Like any other robo-advisor, returns are not guaranteed, so you may lose value from your investments. But the platform itself is safe and Marcus Invest uses similar long-term investment philosophies as other robots do.
How can I contact Marcus Invest?
You can contact Marcus Invest by calling 1-833-720-6468, Monday through Friday, 9:00 AM to 6:30 PM ET. Existing customers can also use the chat feature to get help from the online customer service. Other Marcus Invest products have 24/7 support, but Marcus Invest does not offer 24/7 support even on weekends.
Better alternatives
If you are already a Marcus customer through its various savings, loan or credit card products, Marcus Invest is a natural choice to keep your accounts under one roof. And even new clients might find Goldman Sachs portfolios a selling point.
However, the robo-advisor and wealth management space is competitive. And some alternatives might be superior depending on your investment styles and capital.
Betterment and Wealthfront are two popular alternatives for the same annual management fee of 0.25%. Betterment offers more portfolios than Marcus Invest and has some great ESG options. As for Wealthfront, we prefer it if you want more customization capabilities at the ETF level.
Personal capital is also worth considering, although their investment management service requires you to invest at least $100,000. However, it does have a number of useful financial tools and calculators, and its investment fee analyzer is also free.
bottom line
If you want a simple yet effective robo-advisor, Marcus Invest could be for you. It’s an ideal choice if you’re already in the company’s ecosystem. And those who believe in Goldman Sachs’ technology and investment track record will find solace in staying with Marcus.
Personally, I think the lack of tax loss harvesting and other financial services makes it a bit too “bare bones” for me. After all, competitors like it improve i Front of wealth they have the same management fees, but also offer cash management accounts and more tools. And you can get even more personalization with hybrid robo-advisors like this one M1.
That said, it only takes $5 to start investing, so you can try Marcus Invest and explore their portfolios very easily. And for long-term automated investing, it still holds its own against many of the top contenders.
