Goldman Sachs has agreed to acquire Honest Dollar, a mobile retirement savings platform that works with those who do not have access to an employer-sponsored plan.
The investment management division of Goldman is acquiring the Austin, Texas-based Honest Dollar, which launched last year, in an effort to serve about 45 million Americans without employer-sponsored plans. Honest Dollar automates the retirement savings process by choosing a portfolio for clients after they have scanned in their personal information using their driver's licenses and answering a questionnaire. The business will remain separate from Goldman Sachs, said William Hurley, chief executive of Honest Dollar.
Terms of the deal were not disclosed. The acquisition is expected to close next quarter, and Honest Dollar will remain in Austin after the deal closes.
"I wanted to do something that touched everyone's lives, and the reason we picked retirement is because there is a huge amount of people who don't have access," Mr. Hurley said.
He said his business is scalable, and focuses in on the 45 to 54 million people who are working at small or mid-sized businesses, as well as self-employed or contractors, all of whom may not have access to employer-sponsored retirement plans. The service is available for employers or the self-employed to get started with an Individual Retirement Account, and costs at least $8 a month per employee. Honest Dollar's clearing house is APEX Clearing Corporation, which may charge additional fees, according to Honest Dollar's website.
The client will be recommended one of six portfolios and invested in a percentage of four different Vanguard exchange traded funds based on the client's questionnaire, according to Honest Dollar's website.
"Together, we have the potential to help millions of people achieve their investing goals," Timothy J. O'Neill and Eric S. Lane, co-heads of IMD at Goldman Sachs, said in a statement.
