Press Release
Financial Engines® Introduces Personal Asset Manager for 401k Investors
PALO ALTO, CA, October 13, 2003 -- Financial Engines, Inc. today introduced its Personal Asset Manager program, a personal portfolio management program designed for employees who would rather have an independent expert manage their 401k savings for them. The program will be made available to plan sponsors and plan providers, including over 900 employers who have hired Financial Engines to provide advice to more than 3 million employees.
Personal Asset Manager powered by Financial Engines gives investors who lack time or expertise a convenient way to get professional investment management and access by phone to a personal advisor. The program is accessible to all plan participants and has no minimum account balance requirement. Without professional help many employees fail to invest wisely for retirement, creating fiduciary risk for employers.
"Typical 401k plans are tailored to do-it-yourself investors, with a staggering array of information and choices but almost no expert help," said Dallas Salisbury, president of the Employee Benefit Research Institute. "Employers increasingly want to shift their focus from adding more choice to adding more help."
Personal Asset Manager lets employees delegate the responsibility for investment and savings decisions to an expert and receive a level of personalized investment management for their 401k accounts never before available to them. What makes this level of quality and personalization possible is the same underlying advice technology that powers Financial Engines’ online advice and printed statements. Together with online and print, Personal Asset Manager gives employers a comprehensive, consistent suite of advisory services designed to meet the needs of every employee, regardless of the time and interest they have in investing.
"Online advice is only one way to deliver the power of our engines," said Jeff Maggioncalda, president and CEO of Financial Engines. "With Personal Asset Manager, we can deliver the same personalized, expert advice to employees who want to delegate to an advisor they can talk to by phone. Now, even employees who do nothing with their 401k accounts can succeed."
How it Works
Personal Asset Manager, like the company’s other advice offerings, is completely personalized. Rather than slotting employees into model portfolios, Financial Engines creates a portfolio unique to each investor based on their specific 401k investments, non-401k investments, spouse’s investments, savings rate, time horizon, risk level, and goals. Additionally, employees have the added assurance of being able to access a live advisor who can explain how their recommended portfolios will help them reach their goals.
After enrolling in the program, members receive a Personal Plan Preview that details the exact portfolio plan that will be implemented and offers the option of supplying additional information through the mail, online, or to an advisor over the phone. The account will then be continuously monitored and periodically rebalanced taking into consideration all of the personalized data that is available.
Personal Asset Manager offers investors:
- Ongoing professional portfolio management
- Access to savings management to maximize pre-tax savings over time
- Access to a live advisor
- Personalization based on outside holdings and company stock
- Convenient enrollment via print, online, or over the phone
- Utilization of the existing investment options in their retirement plan
- No minimum account balance requirement
In developing Personal Asset Manager, Financial Engines spent a year with over 50 sponsors and 2,000 participants listening to what they want from this kind of a program. A sponsor forum in May 2003 revealed that the most important elements in a managed account solution include:
- Simple enrollment via paper, phone, online (80%)
- Personalized to include outside assets and company stock (73%)
- Phone access to an advisor (68%)
- Uses sponsor’s existing investment options (89%)
- Independent fiduciary (84%)
"Sponsors require a solution that reaches the unreachable employee, is easy to add to their plan and can be trusted to provide high-quality, personalized portfolio management," said Ken Fine, vice president of product marketing for Financial Engines, who led the development of the program.
Over the past ten years employers have focused on adding additional investment options to their 401k plans as a means of fiduciary management. These employers are now concerned about providing employees with the help they need to avoid making investing mistakes that could cost them their retirement. Adding a managed account advice option is comparable to hiring an investment manager to a plan under the Employee Retirement Income Security Act of 1974 (ERISA). Therefore, employers can offer managed accounts as a means of fiduciary risk management to help ensure that employees are properly saving and diversifying their accounts.
About Financial Engines
Financial Engines provides investors with honest, personalized advice and portfolio management online, on paper, by phone, and in person. Financial Engines advice technology makes expert advice accessible to all investors and unique to each investor. The company was founded by Nobel Prize-winning economist William F. Sharpe and currently serves millions of individuals, over 900 plan sponsors and many leading financial institutions. Financial Engines has incorporated proven financial methodology into proprietary advice technology to offer a complete advice platform to meet the needs of all investors. For more information visit www.financialengines.com.
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