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This Massive FT 300 RIA Reveals the Secrets to its Success

By Garrett Keyes September 14, 2018

Financial Engines is not only the largest FT 300 Top-Ranked RIA in California based on AUM, but firm CEO and President Larry Raffone says it’s the largest in America. Outlining Financial Engines’ business, how it made its way onto the FT 300 Top-Ranked Advisor list, and where the RIA hopes to go in the future, Raffone sits down with FA-IQ.

Q: What have Financial Engines’ year-to-year growth rates been for the past few years?

A: Financial Engines is the nation’s largest independent investment advisor. Over the past 10 years, our assets under management have grown nearly 1,000% from $15.6 billion in 2008 to $169.4 billion in 2017. Year-over-year growth from 2016 to 2017 was 23%. Today we have over $200 billion in assets under management.

Q: How many clients do you serve?

A: In 2017, Financial Engines had over 1 million clients who entrusted us with more than $169 billion in assets under management. Over 760 leading employers, including 148 of the Fortune 500, have hired Financial Engines to offer managed accounts and advisory services to their plan participants. This equates to 10 million plan participants and more than $1.2 trillion in retirement assets.

Q: What is the fastest growing part of Financial Engines' business?

A: With our acquisition of The Mutual Fund Store in 2016 and integration with Edelman Financial Services earlier this year, we seek fast growth by providing comprehensive financial planning to American families through our national advisor network.

The firm continues to see healthy growth in its workplace business as well. In February, Financial Engines partnered with ADP to bring our online advice, professional management, personal advisor, income and retirement income, and financial guidance and wellness services to businesses of all sizes. It also expanded its partnership with T. Rowe Price to bring this full suite of services to all of their plan sponsor clients.

Q: What is your current marketing strategy?

A: We partner with plan sponsors to inform their employees about the independent financial planning services available to them as a workplace benefit. Additionally, we host complimentary live events across the country to help plan participants get started or fine-tune their retirement plans. The Financial Wellness and Education Center also provides valuable resources and education to these plan participants.

Financial Engines also produces the Investing Sense radio program to help individual investors better understand today’s financial markets and retirement landscape.

Q: What’s your biggest challenge and what are you doing to try and solve it?

A: Motivating people to take control of their financial futures is a challenge we are always working on. Procrastinating and doing nothing may feel easier, but they are not effective long-term retirement planning strategies. From our personal advisors to our radio shows, live events and online education center, we invest in multiple ways to help individuals get started and prepare for their long-term financial wellbeing and help them realize the goals that are most important to them.

Q: Where does Financial Engines aim to be in five years and how will you get there?

A: Our plan is to remain America’s largest independent investment advisor. Financial Engines was founded on the belief that all investors — not just the wealthy — deserve access to high-quality, independent financial help they can trust. We were founded on the belief that all advisors should act in the best interests of their clients, which is why we are staunch advocates for holding all investment advisors to a fiduciary standard.

We expect to see continued, rapid change in the industry in the years ahead. We want to lead that change and help more Americans, especially those people who have historically been underserved by the financial services industry.

The retirement savings crisis is real and the decumulation phase is complicated. The decisions can be overwhelming if you are not a retirement expert. We will continue to expand our high-tech plus high-touch offering, which combines our sophisticated investment methodology delivered by the best advisors in America.

Our acquisition of The Mutual Fund Store in 2016 and our integration with Edelman Financial Services earlier this year are the platform for our future growth. We will continue to provide individual investors with the high-quality, independent investment advice they need to prepare for a secure financial future as well as expand our financial planning capabilities. And we will continue to grow our network of plan sponsors, so they can provide independent financial wellness services to their employees as a workplace benefit.

Q: What technology is essential to your business and how is it used?

A: Founded in Silicon Valley in 1996 and often called “the original robo-advisor,” Financial Engines built a powerful proprietary technology platform to deliver high-quality investment advice at scale. This allows us to manage accounts of all sizes, not just accounts for high-net worth individuals. We continue to leverage technology in our operations to increase client engagement and get products and services to market faster.

This interview has been edited for brevity and clarity.