Financial Engines
FINANCIAL ENGINES' INVESTMENT ADVICE GAINS GROUND IN 2002
Financial Engines Increases Plan Sponsor Client Base by 30% and Number of Participants Served by 60%
PALO ALTO, Calif., January 15, 2003 – Financial Engines, Inc. announced today the company added more than 200 new plan sponsor clients in 2002, increasing the total number of employer clients to over 850 and the total number of participants with access to advice to more than 3 million. New customers in 2002 include Aetna, American Century, Baker & McKenzie, BearingPoint (formerly KPMG Consulting, Inc.), Kraft Foods Inc., McDonald's Corporation, Occidental Petroleum, Altria Companies Inc., JCPenney, Towers Perrin, and United Technologies Corp.*
Early in 2002, the company launched the Financial Engines Professional Advisor service to extend its advice technology platform to financial services firms serving retail investors and continues to work with such clients as E*TRADE Financial, TD Waterhouse Institutional Services, and The Vanguard Group. Later in the year, Financial Engines introduced its next generation of advice services, including:
- QuickSolve solutions, designed to help both plan sponsors and financial services firms deliver quick and efficient answers to investors' most pressing financial needs; and
- Personal Statements, which give each employee a realistic view of how much their 401(k) investments might be worth at retirement and a personalized call to action to improve their forecast.
Growing Demand for Investment Advice
The volatile stock market of 2002 has prompted employers to do more to help employees with investment decisions. A recent survey by Hewitt Associates found that 82 percent of employers identify offering advice as a top priority for 2003, and 52 percent agree that using a third-party online advice provider is the best solution. Financial Engines' expanded multi-channel offering including online, printed statements and call center, allows employers to deliver different services to meet the growing needs of different employees.
"The increase in demand for Financial Engines' advice technology reflects the growing necessity to provide employees with high quality and objective advisory services," said Bill Sharpe, chairman and co-founder of Financial Engines and participant in President Bush's 2002 Economic Forum. "Our goal is to help them make crucial investment decisions about diversification, savings and risk in these uncertain times."
Technology and Service Innovation
Financial Engines redesigned and enhanced its service in 2002, launching a series of QuickSolve solutions for employers and financial institutions. For employers, the Single Account QuickSolve and Retirement QuickSolve solutions provide their employees with fast and easy access to targeted investment advice. The company's new QuickSolve solutions for financial institutions include the IRA Rollover QuickSolve to help clients with their IRA rollover decisions, the New Money QuickSolve to help clients invest a lump sum of new money and the Rebalance QuickSolve to help advisors rebalance their clients' portfolios tax-efficiently.
To broaden the value of its services to employees, Financial Engines launched Personal Statements, which can be sent to all participants via email or U.S. Mail. Personal Statements give employees a realistic view of how much their 401(k) investments might be worth at retirement and show how saving more or adjusting the risk level of their portfolio may increase the amount of money they have in retirement.
"The more than 60 million investors between the ages of 45 and 64 want help investing trillions of dollars," said Jeff Maggioncalda, president and CEO of Financial Engines. "Employers and financial institutions are increasingly turning to Financial Engines to give these investors the advice they need to make well-informed decisions."
Financial Engines' Multi-Channel Advice Works
In 2002 Financial Engines announced relationships with clients and partners, including the state of Florida, CitiStreet Advisors and TD Waterhouse Institutional Services, that make personalized investment advice available through multiple channels. These multi-channel offerings, which include access by telephone, through paper statements, face-to-face or online, demonstrate how the growing understanding of investor behavior has led to the development of different solutions for different types of investors.
Whether receiving advice via the Internet or through a call center, Financial Engines' users make better-informed financial decisions, save more and adjust the risk of their investments to fit their goals. The most recent Financial Engines data on employee behavior shows:**
- 92% of employees have seen a realistic forecast of how much their investments could be worth in retirement
- 80% of employees receive a recommendation to save more
—45% of these employees add this recommendation to their plan
–37% were saving below the company match
–8% were saving above the company match
—The average increase is more than 125%, from $3,200 to $7,300 annually - 75% of employees who are advised to consider changing the investments they hold add this recommendation to their plan
- 35% of employees who see their current risk level together with a peer comparison choose to make adjustments to their level of risk
—57% of these decrease the risk of their retirement portfolio
—43% of these increase the risk of their retirement portfolio - 60% of employees complete the advice process and receive investment recommendations
- 50% of employees take action to implement changes to their retirement investment strategy
In addition, individuals using the CitiStreet Advisor Service, powered by Financial Engines' technology and delivered through CitiStreet Call Centers, increased their savings rates by over 150%.***
About Financial Engines
Financial Engines provides multi-channel advice technology and services to help financial institutions and employers address real-world investor needs. Financial Engines' services provide specific, actionable investment recommendations based on the outcomes an investor wants to achieve and can be delivered through the Internet, U.S. Mail, telephone, or face-to-face. More than 15 financial institutions and 850 plan sponsors have hired Financial Engines to make advice available to over 3 million individuals. Nobel Prize-winning economist William F. Sharpe founded the company with a revolutionary vision: to help financial institutions and employers make institutional-quality advice available to individual investors.# # #
Financial Engines® is a registered trademark of Financial Engines. All other trademarks and service marks are the property of their respective owners. All advisory services are provided by Financial Engines Advisors LLC, a federally registered investment advisor.
*This is a partial listing of Financial Engines' customers who were added in 2002. These companies have consented to a public announcement of their relationships with Financial Engines as of 12/02. This does not constitute an endorsement or approval of the advisory services provided.
**Data from the Financial Engines Marketing Database as of December 2002
***Data from CitiStreet Advisors LLC.