Financial Engines

We've got numbers to prove it

Hundreds of America's biggest organizations have hired Financial Engines to provide investment advice and portfolio management to over 7 million plan participants. Each month, Financial Engines typically analyzes and evaluates more than 30,000 mutual funds, stocks, and other investment vehicles. Our team of financial analysts, portfolio managers, and economists uses advanced portfolio modeling technology to research investments and forecast returns so that participants can retire with more confidence.

Helping more participants succeed

Plan sponsors face many challenges, foremost among them, how to get the greatest number of participants to take full advantage of the retirement help you offer. Every eligible participant in the plan receives a Retirement Evaluation to help them know where they stand.  Those who want more help can get it through Professional Management or Online Advice.  Depending on enrollment method and employee demographics, our results show that up to 75%* of participants get the expert help they need through one of our services.

*Results will vary based on factors including enrollment method, communication practices and employee demographics. Provided for evaluative and informational purposes only, and is not necessarily indicative of future results.

Is it worth getting help?

Good question. A recent joint study published by Hewitt Associates and Financial Engines in January 2010shows that employees using professional investment help provided by their employer experienced better returns on their 401(k) retirement investments than those who did not use help. This study focused on the use of managed accounts, online advice, and target date funds. The study's findings revealed that on average, median annual returns for employees who got help were nearly 2% (186 basis points, net of fees) higher than people who did not get help across the three-year period covered by the study. ¹

The Financial Engines National 401(k) Evaluation provides evidence that employees who are automatically enrolled in a qualified default alternative investment (QDIA)², such as managed accounts and target date funds do better. Based on this research, one of the most effective ways to get results for the greatest number of participants is re-enrolling all employees - new and existing-into a managed account.  Plans that have re-enrolled all participants into a managed account have nearly twice as many participants with appropriate risk and asset allocation of their portfolios compared to plans that have not.³

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¹ Help in Defined Contribution Plans: Is it Working and for Whom?, published January 2010.

The report is based on a dataset of seven plan sponsors representing more than 400,000 individual participants and more than $20 billion in plan assets. Within the Help group, online advice and professional management were provided by Financial Engines. This report looked at participant portfolio risks and returns during the volatile period between January 1, 2006 and December 31, 2008. These joint research findings are provided for informational purposes only, do not reflect performance of accounts managed only by Financial Engines and do not constitute investment advice or the recommendation of any particular security, strategy or investment product. Not a guarantee of future results. Results may vary. 

²  A "qualified default investment alternative," as defined in the Department of Labor's final rule, Default Investment Alternatives Under Participant Directed Individual Account Plans, 72 Fed. Reg. 60452 (Oct. 24, 2007).

³ See "Financial Engines National 401(k) Evaluation" report published October 2010.