Financial Engines Reaches $7 Billion in Assets Under Management
PALO ALTO, CA, November 06, 2006 -- Financial Engines today announced that 401k participants have entrusted the company with $7 billion in assets under management (AUM) in managed accounts, attracting more than $1 billion in new assets in the last month.
The Pension Protection Act of 2006 and its support of automatic 401k plans, and the recent Department of Labor (DOL) proposed regulation that designated managed accounts as a "Qualified Default" investment continue to drive strong employer demand for managed accounts. As a result, many companies are redesigning their 401k plans in an attempt to make participant success more automatic.
"As more large companies wind down their defined benefit plans, many seek to deliver greater value through their 401k plans, and managed accounts fit well within that strategy," explained Larry Raffone, executive vice president for Financial Engines. "One reason large plan sponsor demand for managed accounts has risen of late is that managed accounts are uniquely suited to work in conjunction with other company benefit programs, such as cash balance plans and company stock programs."
Financial Engines first rolled out managed accounts in 2004 to help employees who want an independent professional to manage their 401k for them. The company works with the leading large plan 401k recordkeepers to make the managed account program widely available.
The assets coming into the program today are attributable to plans that have moved to an automatic 401k in advance of the Pension Protection Act, and participants who want additional help in preparing for retirement.
"This is a big decision for participants, and many are grateful to have the option of delegating the management of their 401k to a professional," explained Raffone. "Our research shows that at initial enrollment in managed accounts, 90 percent of participants have poorly diversified portfolios, so it’s clear that we’re providing help to the people who need it most."
About Financial Engines
Financial Engines is a new breed of investment advisor providing personalized investment advice and portfolio management to 401k 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.
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