Since 2003, The Ayco Company, L.P. is a part of The Goldman Sachs Group, a publicly traded bank holding company and financial holding company. Ayco is headquartered in Saratoga Springs, New York, and has offices in Albany, New York; Atlanta, Georgia; Canonsburg, Pennsylvania; Cincinnati, Ohio; Dallas, Texas; Deerfield, Illinois; Irvine, California; Latham, New York; Minneapolis, Minnesota; Parsippany, New Jersey and Troy, Michigan. Its advisory services are also available through offices of affiliate Goldman Sachs & Co. LLC.
Ayco has nearly $34.95 billion in assets under management (AUM). Most of its AUM (approximately $29 billion) is on a discretionary basis. The company’s primary business is corporate employer-sponsored financial counseling. It also offers investment management and family office services. Most of its advisors are also broker-dealer representatives and many are insurance agents, too.
The Ayco Company Background
Ayco’s unusual name comes from combining the first two letters of the surnames of its founders - Bill Aydelotte and Jim Conway. Formed in 1971, the company originally offered corporate-sponsored financial counseling to executives and expanded to all employees a decade later. As mentioned earlier, Goldman Sachs became the primary owner in 2003.
As of its most recent SEC filings, the firm employs 1,366 people, of whom 858 are investment advisors, 891 are brokers and 480 are insurance agents.
The Ayco Company Client Types and Minimum Account Sizes
The company works with both individuals and institutional clients. Of the former category, about 71% do not have a high net worth while 29% do. For discretionary portfolio management services, Ayco requires $50,000 to $750,000, depending on the investment strategy. Financial counseling clients are not required to open an investment account.
The firm’s institutional clients include endowments, public charities, private foundations and other nonprofit organizations through Ayco Institutional Client Solutions. All clients must be subject to U.S. tax laws.
Services Offered by The Ayco Company
As noted earlier, the company started as a provider of financial counseling - and that remains its primary business today. Its counseling includes coaching (typically provided as an employee benefit), planning (primarily delivered over the phone or on the web), counseling (typically provided to executives and high-net-worth individuals either directly or through a corporate partner), family office, and Ayco Personal Advisor Service (requires $250,000 in investable assets) services and programs.
Ayco also offers discretionary investment advisory and management services. These services are provided by one or more of investment professionals, portfolio management teams or the Ayco Trust Advisory Service (ATAS) investment committee. Accounts can be held either on the Fidelity platform or Ayco’s affiliate Goldman Sachs platform. Ayco may also recommend unaffiliated third-party money managers.
Additionally, Ayco sponsors - but does not manage - a wrap fee program on the Fidelity platform, called Ayco Private Access Account Strategies.
The Ayco Company Investing Philosophy
Investing strategies depend on the investing professional. Generally, they - and the ATAS investment committee - may use strategic and tactical asset allocation models or securities recommendations from the Goldman Sachs Private Wealth Management Investment Strategy Group. Or they may not.
Portfolio Management Teams utilize various strategies that invest in specific asset classes, including, but not limited to, taxable fixed income, municipal fixed income, equities, mutual funds and exchange-traded funds.
Fees Under The Ayco Company
For financial counseling, the individual fee (as opposed to corporate fee) ranges between $2,500 and $100,000, depending on the type of services provided (coaching, planning, etc.) There may be a 15% surcharge for services provided by Ayco’s West Coast office. For family office services, there may be a minimum annual fee of $50,000 for new clients and a one-time integration fee that’s 15% of the annual family office fee. For financial counseling on an hourly basis, the rate ranges from $180 to $570 per hour.
For investment management services, the fee depends on the platform and strategy or manager. But generally, the fee is a percentage of client assets under management (AUM) and ranges from 0.25% to 1.10% on the Fidelity or Goldman Sachs platform. In addition to strategy-based investment advisory fees, clients pay execution charges, custody and administrative costs and underlying fund fees (if invested in mutual funds or ETFs).
What to Watch Out For
As Ayco points out in its materials, advisors providing financial counseling are not acting as fiduciaries who must put client interests first. They must only provide suitable recommendations. Advisors who are providing investment guidance, though, are legally bound by their fiduciary duty.
In its most recent SEC filings, Ayco reported 14 disclosures. Four involved individuals affiliates and 10 involved affiliate The Goldman Sachs Group. Of the 10 actions, the allegation that carried the largest fine was brought by the Commodity Futures Trading Commission and involved traders trying to manipulate the U.S. Dollar International Swaps and Derivatives Association Fix, a benchmark for interest rates, from 2007 to 2012. Goldman Sachs agreed to pay a civil monetary penalty of $120 million.
All information was accurate as of the writing of this article.
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