Goldman Sachs Group is shifting a heavily touted business line into its wealth management unit as the bank eyes expansion through products that can be pitched to the division’s customers.
The firm is handing oversight of the Marcus business — its retail-banking effort, which offers personal loans online — to its $1.5 trillion investment management division, according to a memo seen by Bloomberg. The move is aimed at starting new business offerings under the Marcus brand that can be sold to the unit’s expanding roster of clients.
A spokesman for Goldman Sachs confirmed the contents of the memo.
New Chief Executive David Solomon earlier this year showcased how some of the wealth group’s initiatives could be used to draw more clients to new consumer products. While Marcus currently offers only personal loans and deposit accounts, it has ambitions to expand into mortgages, credit cards and retirement-planning products.
The shift highlights Goldman’s evolving strategy with the customers it targets through its wealth management business. The firm is increasingly moving beyond ultrahigh-net-worth individuals and widening the net to attract new clients.
With the move, the firm is disbanding the consumer and commercial banking division that was set up under Stephen Scherr. A vacuum at the top of the unit was created after Scherr was promoted to chief financial officer.
The Marcus leadership will now report to Eric Lane and Tim O’Neill, the two heads of the investment-management division, which now brings in almost 20% of Goldman’s revenue. The group is split across asset-management and handling the finances of the wealthy.
Goldman Sachs’s private-banking arm has long been dwarfed by units at firms including Morgan Stanley, Bank of America and JPMorgan Chase, which Goldman has chalked up to its focus on the super rich. But a new push is afoot to take the Marcus brand to the mass market, and new offerings could help reel in a broader swath of consumers.
The primary business for the two-year-old Marcus so far has been online personal loans with that lending book at about $4 billion at the end of last quarter. The firm has shown signs of slowing down its pace of growth of that segment in response to concerns about the credit cycle.
