Financial Engines

VANGUARD TO PROVIDE PERSONALIZED PORTFOLIO MANAGEMENT TO 401(K) PLAN PARTICIPANTS

Vanguard Managed Account Program Selects Investments, Provides Ongoing Portfolio Management, and Forecasts Future Retirement Savings

VALLY FORGE, PA, April 28, 2004 – The Vanguard Group today announced that it will provide an objective, personalized investment advice and portfolio management service for participants in employer-sponsored retirement plans. The new service, called the Vanguard^® Managed Account Program, utilizes an independent investment management process developed by Financial Engines, Inc. and will provide participants with access to professional portfolio management services on an individualized basis.

"Many employees participating in their workplace savings plan lack the time, motivation, or expertise needed to manage their portfolios effectively," said F. William McNabb, Managing Director, The Vanguard Group. "The Vanguard Managed Account Program meets the needs of these participants by providing them with an objective and low-cost portfolio management service that requires minimal involvement on their part."

The Vanguard Managed Account Program selects a portfolio of low-cost, broadly diversified funds for participants based on their personal risk preferences and other factors, such as desired retirement age, family information, non-plan assets, and investments in company stock. Participants' portfolios are reviewed quarterly and adjusted according to their risk preferences and will become more conservative as participants near their desired retirement age. Participants may speak with Vanguard^® Managed Account Specialists via telephone should they have questions about their program and will receive quarterly reports on their investments to keep them informed on their account's progress.

The Vanguard Managed Account Program will be offered to employer-sponsored retirement plan participants as either a separate plan option or as part of Vanguard's recently introduced One Step^TM program. One Step incorporates all aspects of retirement planning by automatically enrolling employees in their 401(k), increasing plan contributions by a set percentage annually, providing investment selection and automatic asset allocation over time, and advising participants on potential asset distribution approaches upon retirement.

Vanguard and Financial Engines have collaborated on delivering Financial Engines' advisory services to investors since June 2001. Today, nearly 200 Vanguard plan sponsor clients offer Financial Engines to some 700,000 participants. Vanguard is the first 401(k) plan provider to offer Financial Engines' investment process to employer retirement plan sponsors via managed accounts.

"Millions of participants need one more choice in their 401(k) -- the choice not to choose," said Jeff Maggioncalda, President and CEO of Financial Engines. "We're proud to stand with Vanguard as an independent expert and fiduciary dedicated to delivering personal advice and management solutions for all participants."

Vanguard said it plans to rollout the Vanguard Managed Account Program to participants during the summer 2004. The pricing for the service will be tiered, beginning at 0.40% of a participant's plan assets and subsequently declining to as low as 0.10% of assets.

"The fee for independent investment advice and ongoing portfolio management through the Vanguard Managed Account Program at its maximum annual rate of 0.40%, combined with Vanguard's average expense ratio of 0.25%, results in, on average, a total fee of 0.65% per year for participants," said Bert Dalby, Principal, The Vanguard Group. "The total fee is less than half the industry's average fund expense ratio of 1.38% (Lipper, Inc.), which does not include any advice or portfolio management for participants. The program also includes non-Vanguard funds and company stock, where applicable for the plan."

Financial Engines provides investors with objective, personalized advice and portfolio management online, on paper, by phone, and in person. Financial Engines' advice technology offers advice to all that is unique to each. Founded by Nobel Prize-winning economist William F. Sharpe, Financial Engines currently serves millions of individuals, more than 900 plan sponsors, and many leading financial institutions with a complete advice platform to meet the needs of all investors.

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 some 18 million shareholder accounts and manages more than $730 billion in U.S. mutual fund assets, including $225 billion in employer-sponsored retirement plans. Vanguard offers 126 funds to U.S. investors and more than 40 additional funds in foreign markets.