Financial Engines

FINANCIAL ENGINES FIFTH FASTEST GROWING ASSET MANAGER IN U.S. WITH OVER $6 BILLION IN ASSETS

Pension Protection Act of 2006 and New Department of Labor Regulations Expected to Fuel Even Faster Growth

PALO ALTO, Calif. October 4, 2006 – Financial Engines, Inc. today announced that it has crossed the $6 billion milestone in assets under management (AUM) in managed accounts within two years of first offering the service. According to research firm SNL Financial, Financial Engines ranked fifth in new asset inflows among U.S.-based asset managers in 2005. More than 100 employers have hired Financial Engines to offer managed accounts, which will make the service available to more than one million employees.

The Pension Protection Act of 2006, signed into law by President Bush on August 17, 2006, and new Department of Labor (DOL) proposed guidelines on default investments issued on September 27, 2006, are expected to create more demand for advice and managed accounts. The Pension Protection Act encourages employers to automatically enroll new employees into 401(k) plans, and the Department of Labor guidelines encourage employers to place employees into more appropriate default investments. The DOL guidelines designate managed accounts as a "Qualified Default" investment, which limits legal liability for employers who direct new employee contributions into managed accounts, in accordance with the guideline.

"Recent policy changes challenge the fundamental assumption of the 401(k)," explained Jeff Maggioncalda, president and CEO of Financial Engines. "Rather than assuming that employees want to do it themselves, the regulations recognize that participants want and need help in making the right decisions."

Financial Engines first rolled out managed accounts in 2004 to help employees who want an independent professional to manage their 401(k) for them. The company works with eight of the nine leading large plan 401(k) recordkeepers to make the managed account program widely available.

"As the health of Social Security and pension plans continue to decline, the 401(k) is emerging as the foundation of our nation's retirement system," said Maggioncalda. "Ironically, the new 401(k) will look more like a pension plan than the old 401(k) from which it emerged."

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 a wide range of investors. For more information, please visit www.financialengines.com.