Goldman Sachs' Ayco adds 'marketplace' for workplace clients

Goldman Sachs' Ayco adds 'marketplace' for workplace clients
The firm is now providing access to investment management, insurance brokerage and other services
JUL 07, 2020

Call volume at Ayco has been 40% higher during the COVID-19 crisis, with workers seeking advice on emergency savings, budgeting and insurance, said Greg Wilson, the head of the firm’s institutional client business.

Previously, the Goldman Sachs-owned corporate financial counseling business would give guidance, though it did not directly connect clients with products and services. That changed earlier this year, when Ayco added a marketplace for investment management, term life insurance, loans and charitable giving.

The company is planning to expand its marketplace to include annuities, investment accounting and tax services, it announced Tuesday.

With access to specific products and services, “people are far more likely to implement on the advice” that Ayco gives them, Wilson said.

The marketplace includes Betterment, student-loan provider CommonBond, Goldman Sachs Invest, Goldman Sachs affiliate Marcus, Ayco’s Protect insurance brokerage and charitable giving company Pinkaloo.

Currently, about 450 U.S. companies are clients of Ayco and about 1 million corporate employees have access to its services, Wilson said. Since Ayco launched the marketplace about three months ago, about 50 of its clients have added access to it, he said. The firm has about 75 to 80 employer clients that use Ayco’s broad financial wellness service, he said.

“Employees are increasingly looking to their employers for solutions and for ways to improve their financial lives,” Wilson said.

“Corporate partners were asking for this [marketplace],” he said. “One of the key tenets for this was that it was an open-architecture structure.”

The service is customizable and fees vary accordingly, according to the firm.

Financial wellness is a big business opportunity, and many players are looking for ways to access the mass market, said Laura Varas, CEO of Hearts & Wallets.

“Scalable technology solutions for empowering financial wellness in the mass market [are] the golden egg that many firms are going after,” Varas said. “The size of the market opportunity to provide advice to the workplace … is enormous. A lot of investors have their first [financial advice] experience through the workplace.”

There are potential consequences in this trend for retirement plan advisers who are seeking to establish wider financial relationships with plan participants. A 2019 report by Aite Group found that advisers are often at a competitive disadvantage to 401(k) providers and other financial services firms when it came to providing financial wellness.

Comprehensive financial wellness has been the overall direction in employer-sponsored plans for years, Aite senior analyst Dennis Gallant said.

“You’re just servicing the client’s balance sheet, looking at asset and liabilities,” Gallant said.

Ayco’s development of a marketplace addresses “a missing piece,” he said. “Execution is important … You can give them the right recommendation, but they don’t necessarily take action. This closes the loop.”

While the industry has long been looking for ways to capitalize on financial wellness, there are still opportunities, Varas said. “I don’t think anyone has cracked the code on technology to engage employees. There is a lot of room for innovation.”

Bigger firms with plentiful cash to push toward technology stand to benefit, she said.

“The sole practitioner adviser who focuses on small businesses is going to be limited to the pizza stores that the big companies don’t want,” Varas said.

In 2010, only 8% of people said they usually turned to their employer-sponsored plans for financial advice, according to data from Hearts & Wallets. As of 2019, that figure had more than doubled, at 19%, according to Hearts & Wallets.

Latest News

FINRA cuts exam retake waiting periods for aspiring brokers
FINRA cuts exam retake waiting periods for aspiring brokers

Shorter waits for failed SIE and Series 7 candidates take effect Jan. 19, speeding the path to registration

Advisor moves: Ameriprise lands three RBC teams with $1.2B; Wells hails $900M recruiting haul
Advisor moves: Ameriprise lands three RBC teams with $1.2B; Wells hails $900M recruiting haul

Raymond James and Cetera also welcomed advisors from UBS and LPL as competition for experienced teams stays fierce

Atlanta B-D Arkadios Capital pays $500K to settle investor lawsuit involving former broker.
Atlanta B-D Arkadios Capital pays $500K to settle investor lawsuit involving former broker.

Jim Walesa worked in the securities industry for 39 years before leaving in 2021.

A tale of two consumers: The growing divide between Wall Street and Main Street
A tale of two consumers: The growing divide between Wall Street and Main Street

As the market turned from pricing in cuts to betting on hikes this year, the developing reality of a K-shaped economy has had real implications for households and investors alike.

Primerica alleges Osaic Wealth raided branch office and poached six advisors
Primerica alleges Osaic Wealth raided branch office and poached six advisors

Alleged cash payments, stolen client data, and a court that jumped the gun

SPONSORED Built on insurance experience to deliver on long-term promises

Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor