Goldman Sachs Investment Management Acquires Honest Dollar

Goldman Sachs’s investment management division says the acquisition of Honest Dollar will help deliver effective investment management and retirement planning services to “the approximately 45 million Americans who do not have access to employer-sponsored retirement plans.”

Readers of PLANADVISER will know Honest Dollar as one of a host of small-market specialist firms to emerge in recent years, alongside firms like ForUsAll, DreamForward Financial, Capital One Investing ShareBuilder 401k, Employee Fiduciary, and Ubiquity Retirement + Savings. The firms have blossomed in the small-plan space by rolling out automated platforms that streamline processes and eliminate back-office paperwork. Most crucially, these firms are driving down costs to the benefit of the participant and the small-business sponsor, who can now afford to access the flexibility (in terms of plan design and contribution levels) and tax benefits intrinsic to the 401(k). (Also see “Small Plans Face Big Opportunity.”)

Goldman Sachs’ clearly sees something it likes in the Honest Dollar approach to the small-plan market. It says purchase of the Austin, Texas-based Honest Dollar “enables employees of small- and medium-sized businesses, self-employed individuals and independent contractors to quickly begin saving and investing for retirement by establishing individual retirement account (IRA)-based savings programs.”

“Honest Dollar has created a simple solution to a complex retirement savings problem,” adds Timothy J. O’Neill and Eric S. Lane, co-heads of the investment management division at Goldman Sachs. “Together, we have the potential to help millions of people achieve their investing goals.”

Honest Dollar will remain based in Austin upon completion of the transaction, which is subject to certain conditions and expected to close in the second quarter of 2016. More information is at www.honestdollar.com.