Edelman Financial Engines is a financial advisor firm that has $181.3 billion in assets under management (AUM). The firm, which is headquartered in Sunnyvale, California, has 592 advisors across its around 180 branches throughout the country. Edelman Financial Engines 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, Barron’s ranked Edelman Financial Advisors as the top independent financial advisor in the U.S. in 2018*. Financial Times ranked both firms on its list of the top U.S. registered investment advisors (RIAs)**.
What Types of Clients Does Edelman Financial Engines Accept?
As a firm with around 1.2 million clients, Edelman Financial Engines serves a wide range of individual and institutional investors. More specifically, Edelman Financial Engines works with non-high-net-worth individuals, high-net-worth individuals, estates, trusts, investment advisors, small to mid-size businesses, employer-sponsored defined contribution plan participants, pension plans, profit-sharing plans, retirement plans, associations, foundations and charitable organizations.
Edelman Financial Engines Minimum Account Size
Edelman Financial Engines’ required account minimums vary by service type. The firm’s requirements are as follows:
- 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
- Independent IRA management: $50,000
- Defined contribution plan participant services: maintain an account balance of $5
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
- Variable annuities
- Portfolio forecasting analyses for:
- Foreign exchange stocks
- Account monitoring
- Retirement income solutions
- Employer-sponsored defined contribution accounts
- 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|
|EMAP Institutional Fees|
|Up to $999,999||1.40%|
|$1,000,000 - $1,999,999||1.00%|
|$2,000,000 - $4,999,999||0.75%|
|$5,000,000 - $9,999,999||0.60%|
|$10,000,000 - $24,999,999||0.50%|
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.
|*Fee estimates only consider the maximum base fees for the services each firm provides. You may also pay manager fees and other fees, which can vary in amount. **All figures are based on median fee levels according to Bob Veres' 2017 Planning Profession Fee Survey. The above estimates solely take into account AUM-only fees. Total costs will likely be higher due to additional expenses.|
|Estimated Fee Comparison*|
|Your Assets||Edelman Financial Engines New Client Fees||National Median Advisory Fees**|
|$1MM||$13,875||$8,500 - $10,000|
|$5MM||$40,875||$25,000 - $32,500|
Edelman Financial Engines has one disclosure listed on its SEC-filed Form ADV***. However, this disclosure refers to a relatively minor event from 2006 that occurred with one of the firm's predecessors, Edelman Financial Services, LLC.
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.
Where Is Edelman Financial Engines Located?
Edelman Financial Engines has a massive presence throughout the country. It currently has more than 180 branches. The firm’s headquarters is in Sunnyvale, California, at 1050 Enterprise Way. Additional offices are located in Alabama, Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Virginia, Washington and Wisconsin.
How to Build an Investment Portfolio
- Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started here, or call 1-888-217-3971.
- Investors can sometimes neglect to consider taxes when evaluating their investments. Capital gains taxes will impact your return on investment, though, so it’s important to know how much you can expect to pay when Uncle Sam comes knocking. SmartAsset’s capital gains tax calculator can help you calculate the total capital gains tax you’ll pay.