Financial Engines
FINANCIAL ENGINES SIGNS 200th MANAGED ACCOUNT SPONSOR
Strong Demand, Investments in Infrastructure and Provider Relationships Keys to Growth
PALO ALTO, Calif., October 9, 2007 – Financial Engines, a leading provider of independent investment advice and managed accounts to 401(k) plans, today announced that it has signed its 200th managed account plan sponsor. The 200 employers that are working with Financial Engines to provide managed accounts to participants have an average plan balance of more than $1 billion and an average of 14,000 plan participants.
After introducing managed accounts in September 2004, Financial Engines has been rapidly rolling out its professional investment management services at companies that want to help their employees achieve a more secure retirement. Financial Engines makes its services readily available through relationships with leading 401(k) providers. Fidelity Investments is the most recent provider to complete integration of the Financial Engines’ suite of advisory services, including managed accounts. Other leading industry providers where Financial Engines’ services are offered include ACS, CitiStreet, Hewitt, JPMorgan, Mercer, T. Rowe Price and Vanguard.
"Financial Engines was founded with the vision of providing high-quality, independent investment advice and management to all 401(k) participants, regardless of account balance,"explained Larry Raffone, executive vice president. "Our alliances with the industry’s leading 401(k) plan providers, combined with significant investment in our infrastructure, have been crucial to successfully serving large numbers of employees at a diverse group of companies across America."
About Managed Accounts
A managed account is a professionally managed investment portfolio within a defined contribution plan (typically a 401(k) plan), in which an independent investment manager manages the plan participant's account for the participant. Using the existing investment choices within the plan, managed accounts create diversified, personalized portfolios consistent with the participant's risk preferences and retirement horizon. Managed accounts have been designated as a Qualified Default Investment Alternative in proposed regulations by the Department of Labor, and are being selected by plan sponsors as the default investment option for both new and existing employees.
Once participants are enrolled in managed accounts, Financial Engines transitions their portfolios to the appropriate risk and diversification levels. Based on experience to date, participants who join the program tend to be those who need help the most. For example, as of June 2007, 89% of participants joining the managed accounts program had 401(k) portfolios with inappropriate risk or diversification levels. In addition, 57% of participants where company stock is an investment alternative in the plan had 20% or more of their portfolios concentrated in company stock.
In addition to personalized portfolio management, participants in a managed account program receive regular personalized communications showing how their portfolios are doing. Managed account members also have ongoing access to an investment adviser. Financial Engines is able to personalize managed accounts by automatically taking into account plan features, such as cash balance plans and company stock. Once a participant provides additional information about outside assets, Financial Engines is able to further tailor the management of the account.masponsorprs.fe
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* Signed clients as of September 15, 2007
Financial Engines and Fidelity are not affiliated.