Edelman Financial Engines
Edelman Financial Engines is a financial advisor firm that is headquartered in Sunnyvale, California. It offers an assortment of services focused on financial planning, investment management, retirement planning and money management.
Edelman Financial Engines Background
Edelman Financial Engines was officially formed on November 1, 2018 via the merger of Edelman Financial Services, LLC and Financial Engines Advisors, L.L.C. Both of these two firms were in the advisory business for some time before merging. Edelman was established in 1986 by Ric and Jean Edelman, and Financial Engines was created in 1997. Edelman Financial Engines is under the principal ownership of Edelman Financial Engines, L.P.
Prior to the merger, Edelman Financial Services and Financial Engines Advisors each received a number of accolades from various financial publications. In fact, Financial Times previously ranked both firms on its list of the top U.S. registered investment advisors (RIAs). Edelman Financial Services was named the top independent financial advisory firm in the U.S., according to Barron’s.* This was awarded in September 2021 based on data within a 12-month period, and compensation was paid for use and distribution of the rating.
Edelman Financial Engines Client Types and Minimum Account Sizes
Edelman Financial Engines serves a wide range of individual and institutional investors. More specifically, the firm works with non-high-net-worth individuals, high-net-worth individuals, pension and profit-sharing plans, charitable organizations, other investment advisors and corporations.
The firm's required account minimums vary by service type:
- Edelman Managed Asset Program® (EMAP) wrap fee program
- Individuals: $5,000
- Institutions: $500,000
- EFS Edelman Retirement Program (ERP): No minimum
- IRA management through the workplace: $10,000
Services Offered by Edelman Financial Engines
Edelman Financial Engines provides a multitude of services that span different areas of financial planning, investment management and retirement account management. Here is the firm’s full list of offerings:
- Financial planning
- General goal-based financial planning
- Retirement savings planning
- Retirement income planning
- Insurance analysis
- Tax considerations
- Credit and debt advice and planning
- Home ownership and mortgage analysis
- Investment management
- Fiduciary services
- Investment recommendations and advice for:
- Mutual funds
- Separate accounts
- Commingled funds
- Exchange-listed equities
- CDs
- Bonds
- Variable annuities
- Portfolio forecasting analyses for:
- Foreign exchange stocks
- Options
- Warrants
- Account monitoring
- Retirement income solutions
- Employer-sponsored defined contribution accounts
- 401(k)
- 457
- 403(b)
- IRAs
- Taxable accounts
- Employer-sponsored defined contribution accounts
Edelman Financial Engines Investment Philosophy
Though Edelman Financial Engines has a company-wide investment ideology, it says that it focuses primarily on the personal needs of each client. More specifically, the firm looks at each client’s financial goals, risk tolerance, liquidity needs, time horizon and any preferred investment types or styles. Based on these individual factors, the firm will recommend specific planning and investment strategies that match each client's financial situation.
On the whole, Edelman Financial Engines is focused on long-term growth. The firm says that it achieves long-term investing success through strict diversification, cost-effective investment choices and periodic and purpose-driven rebalances and reallocations. Edelman Financial Engines also typically avoids short-term strategies, as the fees and other costs associated with frequent trading can lower a portfolio’s return potential.
Fees Under Edelman Financial Engines
The merger between Edelman and Financial Engines resulted in a new fee schedule with lower rates for both new and legacy accounts. Edelman Financial Engines’ fees vary depending on which service you use. Generally, the firm bases it s fees on a percentage of assets under management. Occasionally, you may encounter other fee types, such as hourly fees and fixed fees.
For the most part, Edelman Financial Engines charges clients on a quarterly basis. Fees are charged in arrears and are calculated based on the average daily balance of your account during the prior quarter. The firm will automatically deduct most charges from your account, though you first may have to give authorization.
| New Client Fees | |
| Assets | Annual Fee |
| First $400k | 1.75% |
| Next $350k | 1.25% |
| Next $250k | 1.00% |
| Next $2MM | 0.75% |
| Next $7MM | 0.6% |
| Next $15MM | 0.5% |
| Over $25MM | Negotiable |
| EMAP Institutional Fees | |
| Assets | Fee |
| Up to $999,999 | 1.4% |
| $1,000,000 - $1,999,999 | 1% |
| $2,000,000 - $4,999,999 | 0.75% |
| $5,000,000 - $9,999,999 | 0.6% |
| $10,000,000 - $24,999,999 | 0.5% |
| Over $25,000,000 | Negotiable |
Check out the table below to see how Edelman Financial Engines’ fees for its asset management services compare to those at other financial advisor firms. Note that these fees are only estimates and actual costs may vary.
| *Estimated investment management fees do not include brokerage, custodial, third-party manager or other fees, which can vary in amount. | |
| Estimated New Client Fees at Edelman Financial Engines* | |
| Your Assets | Fee Amounts |
| $500K | $8,250 |
| $1MM | $13,875 |
| $5MM | $40,875 |
| $10MM | $70,875 |
What to Watch Out For
Edelman Financial Engines currently has no disclosures listed on its SEC-filed Form ADV.
Advisors are fee-only at Edelman, meaning that they do not receive commissions on trades or sales from affiliates or other entities. Fee-based firms, by comparison, have advisors who are licensed to sell insurance and investment products, and can earn a commission. To avoid any conflicts, make sure the firm you work with has a fiduciary duty that puts client interests first.
Opening an Account With Edelman Financial Engines
The best way to get in touch with Edelman Financial Engines is to either visit its website or call the firm at (888) 752-6742. Whichever route you choose, the firm will then help you to locate advisors in your area so you can get started as soon as possible.
Edelman Financial Engines has a massive presence throughout the country. The firm’s headquarters is in Sunnyvale, California, at 1050 Enterprise Way. Additional offices are located nationwide.
All information is accurate as of the writing of this article.
How to Build an Investment Portfolio
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*The 2021 Top 100 Independent Advisory Firm Ranking issued by Barron’s is qualitative and quantitative, including assets managed, revenue generated, regulatory record, staffing levels and diversity, technology spending, and succession planning. Firms elect to participate but do not pay to be included in the ranking. Compensation is paid for use and distribution of rating. Investor experience and returns are not considered.
