Financial Engines

EMPLOYEES ENTRUST FINANCIAL ENGINES WITH $1 BILLION IN ASSETS UNDER MANAGEMENT

Milestone Achieved After First 14 Weeks Offering Personal Asset Manager Program

PALO ALTO, Calif. February 22, 2005 – Financial Engines, Inc. announced today that in the last 14 weeks of 2004 it reached $1 billion in assets under management in its managed account program. Two employers completed initial enrollment campaigns and two others began their campaigns during this 14-week period. By the end of 2004, nearly 15,000 employees chose to have their 401(k) accounts managed by professionals.^*

These employers saw plan participants signing up for professional account management at a much faster rate than is typical for a new plan option, proving strong demand for the "do-it-for-me" option. At one employer, the managed account option attracted more assets in 14 weeks than 18 new fund options had garnered two years after their introduction in 2002.

"Many employers are seeing strong demand for managed account offerings and are moving to offer participants the help they need," said David Wray, president of the 401(k) Profit Sharing Council of America. "The 401(k) is evolving and managed accounts are an important component to helping individuals reach their retirement goals."

The rapid inflow of assets into the managed account program underlines the need among participants for professional investment help. Results from the two enrollment campaigns that were completed in 2004 showed 90 percent of the participants who enrolled had a risk level that was inappropriate for them based on their peers and time horizon to retirement. Furthermore, participants closer to retirement were more likely to enroll in the program, with the 45 to 59 and 60+ age groups seeing the highest enrollment levels. Enrollment was also greater among participants with higher 401(k) balances, suggesting these individuals understand there is more at stake and want professional help.

"Work is being done to strengthen 401(k) plans and managed accounts are an important part of the process," said Jeff Maggioncalda, president and CEO of Financial Engines. "Managed accounts can impact participants' lives, immediately changing their chances of having a more successful retirement."

In 2004, 17 plan sponsors, representing more than 420,000 participants, contracted with Financial Engines to roll out managed accounts either directly or through their plan providers. These plan sponsors represent more than $23 billion in plan assets combined. In the first five weeks of 2005, another 7 plan sponsors have signed up for the Personal Asset Manager program, representing more than 146,000 participants with approximately $13 billion in plan assets combined.

About Financial Engines

Financial Engines is a new breed of investment advisor providing personalized investment advice and portfolio management to 401(k) participants. Founded by Nobel Prize-winning economist, William F. Sharpe, Financial Engines serves millions of employees at many of America's largest corporations. Patented advice technology and institutional-quality investment methodology allow Financial Engines to offer an array of advisory services to meet the needs of all investors. For more information, please visit www.financialengines.com.

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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 adviser.

 

* Two companies completed initial enrollment campaigns during the 14-week period from September 17, 2004 to December 24, 2004. Two other clients began rolling out the Personal Asset Manager but had not completed enrollment campaigns as of December 31, 2004.