Financial Engines

FINANCIAL ENGINES INTRODUCES NEW QUALIFIED DEFAULT PRICING FOR MANAGED ACCOUNTS

Nearly One Quarter of Participants in Financial Engines Managed Accounts Automatically Invested as More Large Companies Default Into Managed Accounts

PALO ALTO, Calif., November 14, 2007 – Financial Engines, a leading provider of independent investment advice and managed accounts to defined contribution plans, today announced a new Qualified Default Pricing Schedule for the growing number of companies and organizations choosing to default existing or new participants into managed accounts. Under the new pricing schedule, Financial Engines waives the managed account fee for the first $5,000 in each participant's account when plan sponsors select managed accounts as their defined contribution plan's primary Qualified Default Investment Alternative (QDIA) with auto-enrollment into the plan.*

For example, participants with less than $5,000 in their defined contribution accounts pay no fee for managed accounts. Furthermore, a participant with $12,000 in their account would only pay fees for $7,000 of their account balance. The first $5,000 of a participant's plan balance will not be subject to a management fee for as long as the participant remains in the managed accounts service when a sponsor selects managed accounts as their plan's primary Qualified Default.

As of September 30, 2007, 22 percent of Financial Engines participants in managed accounts were automatically invested either as new or existing participants. Under the Qualified Default Pricing Schedule, many auto-enrolled participants will get to experience the value of professional investment management free of charge for approximately 18 - 24 months.

New Department of Labor QDIA Regulations

On October 24, 2007, the Department of Labor finalized its QDIA regulations, naming managed accounts, lifecycle funds and balanced funds as qualified defaults. Under the new regulations, companies that enroll participants in qualified defaults receive additional fiduciary protection. Leading employers have been steadily adopting managed accounts as the plan default based on existing fiduciary protections, as well as the encouragement provided by the Pension Protection Act of 2006 and the issuance of proposed qualified default regulations by the DOL in September 2006. In addition, the regulations state that if a plan sponsor matches 401(k) contributions in company stock, they must select managed accounts as their default if they want to gain QDIA fiduciary protection for the money invested in company stock.

"More companies are recognizing that managed accounts are a cost effective solution for helping those that need it most," explained Ken Fine, executive vice president of marketing at Financial Engines. "Financial Engines default pricing schedule gets participants with lower balances started on the right foot when it comes to saving and investing. Looking ahead, we will continue to develop our managed accounts offering to address more participant advice and management needs from the retirement preparedness phase into retirement."

One of the key reasons sponsors default participants into managed accounts is the ability to leverage the existing plan line-up to construct personalized portfolios. Sponsors with company stock in the plan require a default like managed accounts that manages company stock holdings when developing the portfolio. Plan sponsors that provide cash balance plans value the fact that managed accounts take other benefit plans into consideration when managing defined contribution portfolios. Cash balance and defined benefit plans should be considered when selecting a qualified default, since they impact how a participant's account should be allocated. A portfolio that ignores these holdings is likely to not be appropriately diversified and could result in an over-concentration in a particular asset class for the participant, impacting the overall expected growth of the account.

In addition to receiving professional portfolio management, participants in a managed account program receive regular personalized communications detailing how their portfolios are doing, and have ongoing access to an investment adviser. Once a participant provides additional information about outside assets, Financial Engines is able to further tailor the management of the account to the individual's unique needs. The end result for participants is greater personalization than a one-size-fits-all product solution.

About Financial Engines

Financial Engines is a leading provider of independent investment advice and managed accounts to 401(k) plans. 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.

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*The new pricing schedule is available to ERISA plans including 401(k), 403(b), and 457 plans.