Marcus Invest review 2021

Bankrate senior reporter James F. Royal, Ph.D., covers investing and wealth management. His work has been cited by CNBC, the Washington Post, The New York Times and more.

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Marcus Invest Logo

Best For

  • Current Marcus customers 
  • Beginning investors
  • Smart Beta and impact portfolios

Known for its high-yield online banking accounts, Marcus is now taking its game to the robo-advisor space with Marcus Invest. It brings the core functionality – portfolio management, rebalancing – and adds some less common options such as socially responsible investing into the mix. But higher fees and the lack of tax-loss harvesting and other tools leave Marcus Invest fighting to distinguish itself in a crowded field where the pace is set by more robust rivals. 

With the range of other services offered by Marcus, the robo-advisor makes a good pick for those who already have an account there or who would like to consolidate their accounts with one provider. But others may find Marcus Invest not sophisticated enough for their needs, and may opt for more fully featured rivals such as Wealthfront and Schwab Intelligent Portfolios.

Marcus Invest at a glance

Star Rating

3.5
  • Cost: 3.5 of 5
  • Investments and Portfolios: 4.5 of 5
  • Account Types: 3.5 of 5
  • Features and Tools: 3 of 5
  • Customer Experience: 4 of 5
  • Account Minimum:
    $1,000
  • Management Fee:
    0.35 percent of assets annually
  • Account fees:
    $75 transfer-out fee
  • Portfolio Mix:
    3 fundamental strategies: Core, Impact (ESG investing) and Smart Beta
  • Fund Expense Ratio:
    Core: 0.05-0.16 percent; Impact: 0.11-0.19 percent; Smart Beta: 0.15-0.17 percent
  • Account Types:
    Individual and joint taxable accounts; Roth and traditional IRA; SEP IRA
  • Cash Management Account:
    Yes, but must open a separate account at Marcus
  • Customer service:
    Monday through Friday, 9 a.m. to 6:30 p.m. ET by phone, email
  • Tax Strategy:
    Tax minimization but no tax-loss harvesting
  • Rebalancing:
    Yes, automatic
  • Tools:
    Goal tracker, basic charting
  • Promotion:
    Management fee waived for 90 days when you deposit $5,000 and open by Oct 31, 2021

Pros: Where Marcus Invest stands out

Portfolio types

Marcus Invest provides three broad types of portfolios, each of which can be adjusted based on your risk tolerance and investing time horizon: 

  • Core: Uses index funds to invest in a mix of asset classes in major markets, including internationally
  • Impact: Similar to the Core portfolio but with some extra flavor of ESG (environment, social and governance) investing, though not all funds here will be ESG-focused
  • Smart Beta: Uses certain investment factors (such as valuation or quality) to try to modestly outperform the market, perhaps with lower volatility or risk

The Smart Beta option is a notable standout as a portfolio choice, since few robo-advisors offer it. But it’s worth pointing out that the Smart Beta portfolio uses funds from Goldman Sachs, owner of Marcus. So there’s an inherent conflict of interest here, one that some other robo-advisors also have when they recommend their own funds. That said, Marcus does provide economic incentive if you select this option (more below).

When you open your account, you’ll run through a few quick questions about how long you want to be invested and how you would respond if the market falls. These are used to judge your time horizon and risk tolerance, and thus your allocations to stock funds (riskier and better for long-term investors) and bond funds (safer and better over shorter periods of time.) 

If you don’t like the fund allocations that have been selected for the portfolio, you can adjust your answers to these questions later and receive a different allocation.

Expense ratios

Each ETF you buy will charge an expense ratio, a fee that’s seamlessly deducted from your account. This fee structure is the same at any robo-advisor, but it’s an additional cost. Marcus helpfully lays out the average range of the costs you could pay for each of its strategies:

  • Core: 0.05 - 0.16 percent
  • Impact: 0.11 - 0.19 percent
  • Smart Beta: 0.15 - 0.17 percent 

Why the variation of costs within each strategy? It depends on the mix of funds, which depends on your investing time horizon and risk tolerance. 

The average expense ratios fall a bit above the range of ETFs offered at other robo-advisors. The difference may amount to a few dollars for every $10,000 invested, so it’s not much. And you could well end up paying less at Marcus, depending on which exact mix of funds you’re in.

It’s worth noting that if you opt for the Smart Beta strategy, any fees from Goldman Sachs funds will be refunded up to your management fee, so in effect you won’t pay anything extra to own those funds.

Clean layout, easy to navigate

The Marcus Invest dashboard is cleanly laid out, and you’ll be able to navigate from it to the relatively few other sections on the site (or app). There you’ll see your balance, and can link to your target portfolio, including all the funds that you’re buying. Each ETF also links out cleanly to the prospectus, so you can see the costs for each investment and other relevant information. 

The dashboard also gives you projected performance data over time and across three scenarios, so you can gauge how large your portfolio might grow in any given year in the future. A “deposit impact” tool shows you what effect adding money will have on your total wealth over time, a useful visual to show the power of compounding and a handy reminder to add money. 

The dashboard also provides you with performance details, so you can understand just how well your portfolio is doing. And that’s about where the tools at Marcus Invest end (more later).

Automatic rebalancing

Marcus Invest offers automatic rebalancing on its portfolio, which is something of a standard feature in robo-advisors these days. With rebalancing, a robo-advisor moves your portfolio back to its target allocations when it runs too far away from them, due perhaps to one asset growing faster than others. Basically it brings your portfolio back to its originally intended alignment. 

At Marcus, investment professionals set the maximum “drift” the account can experience before it needs a realignment. While the robo algorithm alerts the team about a rebalance and what trades could be made, it’s the human advisors that review those trades and approve them. In certain situations – say, during volatile markets – these pros can delay or override rebalancing.

Marcus also thinks about taxes in this rebalancing process, selling the funds with the least tax impact first, in order to minimize taxes. However, it’s not clear if and how the robo-advisor factors in new money coming into the account as a means to rebalancing – and therefore, avoiding all tax implications – as an alternative to actually selling funds.

Quick comparison of Robo-Advisor options:
Robo-Advisor Overall Rating Cost Rating Investments and Portfolios
Marcus Invest logo
3.5 4.5 of 5
Personal Capital review 2021 logo Read Our Review
3.5 3 of 5
Schwab Intelligent Portfolios review 2021 logo Read Our Review
5 4.5 of 5
Wealthfront review 2021 logo Read Our Review
5 5 of 5

Cons: Where Marcus Invest could improve

Management fee

Marcus Invest charges an annual management fee of 0.35 percent of invested assets, a bit higher than what might be called the standard rate of 0.25 percent offered by robos such as Wealthfront and Betterment. In dollar terms, Marcus would charge $35 annually for each $10,000 you have invested in the fund, compared to $25 at some other places.

But remember that investors at other advisors have to pay the ETF’s expense ratios on top of the management fee. So once you factor in those costs, all-in fees might come closer to 0.35 percent. 

Those fees are generally lumped on top of the management fee at Marcus, too, making Marcus a clearly higher-cost option – except if you choose its Smart Beta portfolio option. As noted above, if you choose this option Marcus will refund fees on Goldman Sachs funds up to the 0.35 percent management fee. So Marcus does give you some extra incentive to go with its Smart Beta portfolio.

Tools

Marcus really lacks an offering of tools to help you understand your financial decisions and give you a holistic picture of your finances. Yes, it does provide some basic visuals to help you see how your portfolio might perform over time and the effect of adding money to your portfolio. But that’s about it. 

In contrast, some of the top robos offer tons of tools and educational elements to help you plan your financial journey and see the impacts of your decisions. Ellevest, Personal Capital and Wealthfront are standouts here. 

No human advisor option

If you need a human advisor, Marcus Invest is probably not for you. There’s not even an option to add one for an extra fee. If human advice is necessary, you can hire an outside advisor to help you or go with another robo-advisor who does offer that service. 

Betterment offers this access for an additional fee, while Schwab Intelligent Portfolios rolls unlimited access to advisors into its all-in monthly fee. 

Account types and minimums

At $1,000, the account minimum at Marcus isn’t exactly high, but it’s more than the competition’s minimum, most of whom require no cash to get started. Still, if you want to open an account at Marcus and have a look around before you plunk down your money, you can easily skip through the deposit step during the sign-up process. However, you’ll have a limited time to add the minimum balance to the account before it’s closed. 

The account types are somewhat limited but you may still find what you need: 

  • Individual taxable accounts
  • Joint taxable accounts
  • Traditional and Roth IRAs
  • SEP IRAs

This range will cover a lot of needs but certainly not all of them, so if you need something besides what’s on the list, you will have to turn elsewhere. 

Tax strategies

It’s a bit disappointing to see that Marcus Invest doesn’t offer tax-loss harvesting, though that still remains something of a premium feature in the robo space. With tax-loss harvesting, a robo-advisor constantly monitors your portfolio for losing investments and then sells them to gain a tax break. Then it buys a similar fund so that you remain appropriately invested. 

Instead, Marcus offers a really basic tax approach here: When it’s time to sell a fund, for example, during rebalancing, it sells the funds with the least negative tax impact. That means it would sell a fund with a low capital gain before one with a higher gain. It’s a simple, straightforward approach and really the minimum that a robo-advisor should offer. 

Bottom line

Marcus Invest offers a robo-advisor that’s likely to perform well for many investors, and it’s a natural fit for those who already have a Marcus bank account, allowing them to consolidate their financial accounts with one institution. The robo-advisor’s management fee comes in toward the higher end of the industry, however, without offering the same level of features as rivals (fewer tools and no tax-loss harvesting, for example).

For those who need access to human advisors, Betterment’s premium tier at only a slightly higher price point could be an attractive alternative. Or those who demand the lowest cost could look at Ellevest, SoFi Automatic Investing or even Schwab Intelligent Portfolios. 

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