Financial Engines
VANGUARD TO BE FIRST TO OFFER FINANCIAL ENGINES' ADVICE PLATFORM TO BOTH EMPLOYER RETIREMENT PLANS AND RETAIL INVESTORS
VALLEY FORGE, PA and PALO ALTO, CA, March 1, 2001 – The Vanguard Group and Financial Engines, Inc. announced today that they have entered into a strategic relationship to provide investment advice powered by Financial Engines to Vanguard clients.
Vanguard will be the first investment management firm to offer participants in employer retirement plans the Financial Engines' Investment Advisor® service at no charge. Vanguard and Financial Engines expect a second quarter 2001 rollout of the Advisor service for participants in employer-sponsored retirement plans, such as 401(k) plans.
Vanguard will also be the first investment management firm to offer the Advisor service on taxable investments for individual retail investors. The service will feature personalized, tax-efficient investment advice on an investor's total household portfolio. Vanguard and Financial Engines expect this service to be available to Vanguard's individual investors later this year.
"Through the introduction of Financial Engines, Vanguard will provide the latest innovations in online advice to our clients from an independent, third-party source," said John J. Brennan, Chairman and Chief Executive Officer of The Vanguard Group. "Financial Engines utilizes an investment advisory methodology that emphasizes the value of long-term investing and the importance of consistency, taxes and costs -- key components of Vanguard's philosophy. This relationship clearly reinforces our commitment to using the power of the Internet to provide best-in-class, high-value service offerings to our clients."
Founded by Nobel Prize-winning economist Bill Sharpe, Financial Engines is a leading provider of investment advisory services. Financial Engines enables both novice and sophisticated investors to receive professional investment advice quickly across the entire portfolio. It forecasts the likelihood of reaching targeted financial goals, taking into account realistic variables such as fluctuations in inflation, interest rates and market returns. The Financial Engines service provides customized advice and specific investment recommendations across multiple tax-deferred and taxable investment accounts.
"Collaborating with Vanguard to help them build stronger relationships with their clients reinforces our commitment to helping financial institutions and employers better serve individual investors," said Bill Sharpe, Chairman and Co-Founder of Financial Engines. "With the Financial Engines platform, Vanguard will be able to quickly roll out a comprehensive advisory service which is easily integrated into the look and feel of the Vanguard website."
A specially developed new feature of the Financial Engines platform will offer total portfolio, tax-efficient investment advice to Vanguard's individual investors. This service is designed to better manage personal taxes by helping Vanguard clients:
- Avoid transactions that trigger capital gains taxes
- Rebalance intelligently using tax-deferred accounts and new savings
- Identify whether an investment should be placed in a tax-deferred or taxable account
- Evaluate investment performance on an after-tax basis
"A top priority at Vanguard is to utilize the Internet to provide personalized and individualized advice and education, and to become the primary financial management and education source for our clients," said Mr. Brennan. "This offering, complemented by several other Vanguard online initiatives underway, such as collaborative browsing, puts that priority into perspective for our clients."
Vanguard and Financial Engines have long been leaders in delivering educational and advisory services via the Internet. Both firms' websites (www.vanguard.com, www.financialengines.com) were named to Forbes Magazine's "Best of the Web" ranking in February 2001 --the second consecutive year each firm was recognized by the publication. Additionally, Vanguard placed second overall in the "Top 100 Innovators" list by Information Week Magazine(December 2000), which identified innovative companies in all industries that combine technology with business savvy to learn more about and better serve their customers. For two years in a row,Financial Engines was also named to U.S. News & World Report's"Best of the Web" (1999 and 2000).
About The Vanguard Group
The Vanguard Group, headquartered in Valley Forge, Pennsylvania, is the nation's second largest mutual fund firm and a leading provider of company sponsored retirement plan services. Vanguard serves 15 million shareholder accounts and manages some $560 billion in U.S. mutual fund assets, including more than $170 billion in participant-directed defined contribution retirement plans. Vanguard offers 109 funds to U.S. investors and 29 additional funds in foreign markets.
About Financial Engines
Financial Engines is a leading provider of investment advice services to the workplace and to financial institutions. Financial Engines enables employers, financial professionals and financial organizations such as fund companies, brokerages and banks to offer consistent, high-quality, personalized investment advice on a cross-enterprise basis. Founded by Economics Nobel Laureate William F. Sharpe, Financial Engines works with its customers to help their clients make better investment decisions to meet their financial goals. Financial Engines was founded in 1996 and is located in Palo Alto, Calif. For more information, visit Financial Engines' web site at www.financialengines.com.
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Financial Engines® is a registered trademark and Financial Engines Investment Advisor® service is a registered service mark of Financial Engines, Inc. All other trademarks and service marks are the property of their respective owners. Financial Engines Advisors LLC, a federally registered investment advisor and wholly owned subsidiary of Financial Engines, Inc., provides all advisory services.