Edelman Financial Engines Review (2024)

Navigating the vast landscape of financial advisory services can be challenging. In the midst of countless firms and options, Edelman Financial Engines stands out as a major contender. As one of the nation's most recognized financial planning institutions, they've carved a niche for themselves, marrying decades of industry experience with cutting-edge technology.

But are they a good choice for your financial planning?

In this comprehensive review, we'll delve deep into the services, fee structures, client experiences, and overall offerings of Edelman Financial Engines.

Whether you're a seasoned investor or just starting your financial journey, this review aims to provide a clear picture of what you can expect from partnering with this financial powerhouse.

Company History

The story of Edelman Financial Engines is one of innovation, expertise, and a profound understanding of the financial market's needs. The company's roots trace back to the individual journeys of two industry pioneers: Ric Edelman and Bill Sharpe.

Ric Edelman

An acclaimed financial planner, Ric Edelman's name has been synonymous with trust and expertise in the financial world. With a knack for demystifying complex financial concepts for the everyday person, Ric has authored multiple best-selling books and hosted nationally syndicated radio shows. His commitment to financial education and his hands-on approach to advising laid the foundation for what Edelman Financial would become.

In 1987, Ric and Jean Edelman co-founded Edelman Financial Services, which quickly rose to prominence due to its client-centric approach. Ric's ethos revolved around understanding each client's unique financial situation and goals, making financial planning accessible and personal.

In 2021, Ric Edelman stepped down from his position on the board at Edelman Financial Engines and currently hosts The Truth About Your Future podcast.

Bill Sharpe

A Nobel Prize laureate in Economic Sciences, Bill Sharpe's influence on the financial industry is monumental. He's best known for developing the Capital Asset Pricing Model (CAPM), a cornerstone of modern financial theory. 

Beyond academia, Bill co-founded Financial Engines in 1996. His vision was to harness the power of technology to offer personalized retirement planning services. Financial Engines, under Sharpe's guidance, became a pioneering force in offering online financial advice and tools.

In 2018, the merger of Edelman Financial Services and Financial Engines was announced, bringing together Ric Edelman's people-first advisory approach and Bill Sharpe's technological innovation. The merger birthed Edelman Financial Engines, aiming to offer a blend of human touch and technological precision in financial planning.

In sum, the union of these two stalwarts' legacies gives Edelman Financial Engines a robust foundation. The company's lineage is rooted in both in-depth personal financial advising and pioneering technological advancements in financial services, making it a unique player in today's financial advisory landscape.

Quick Facts

Awards and Recognition

Edelman Financial Engines, with its unique blend of traditional financial advising and innovative technological solutions, has garnered attention and accolades from the industry and beyond. Here’s an overview of some of the most notable awards and recognitions the firm has received over the years:

Barron’s Top 100 Independent Financial Advisors: Ric Edelman has frequently graced this list, which ranks the top independent financial advisors nationwide. Edelman Financial Engines has earned a spot on this list form 2018-2022, showcasing their dedication and expertise in the financial arena.

Investment News’ Icons & Innovators: Recognizing those who have made significant advancements in the financial planning industry, Edelman Financial Engines has been celebrated for its forward-thinking approaches and innovative tools.

Financial Times Top 300 Registered Investment Advisers: This list recognizes the elite RIA firms from across the U.S., and Edelman Financial Engines has been a consistent name, reflecting its stature and trust within the industry.

Nobel Prize in Economic Sciences: Though not a direct award to the firm, co-founder Bill Sharpe's Nobel recognition in 1990 for his development of the Capital Asset Pricing Model (CAPM) lends significant prestige to the company's roots and expertise.

PLANSPONSOR Retirement Plan Adviser of the Year: This award recognizes the nation's best financial advisors in the retirement planning space, and Edelman Financial Engines has been lauded for its comprehensive retirement solutions and client-centric approaches.

WealthManagement.com Industry Awards: Celebrating companies, individuals, and organizations that have demonstrated outstanding achievements in the wealth management industry, Edelman Financial Engines has been recognized for its tech-driven solutions and overall service excellence.

While awards and recognitions are a testament to the firm's achievements, they also highlight Edelman Financial Engines' commitment to providing top-tier financial advisory services and their continuous pursuit of excellence. Potential clients can view these accolades as an indication of the firm's industry respect and trustworthiness.

Related: Find a Top-Rated Financial Advisor Today - Free Matching Service

Client Reviews Online Reputation

Online reviews for the financial planning and investment management provider are unfortunately a mixed bag.

Consumer Reports published a positive evaluation of the independent financial planning firm. Below is a screenshot of their overall assessment of 92/100.

At the time of this writing, Yelp is an eyesore in the firm's online reputation. Yelp reveals that my local Fairfax, Va office has a 1.5 star average rating based on 39 reviews.

33 out of the 39 total reviews gave the institution just one out of 5-stars. Many of these one-star reviews reveal complaints and dissatisfaction from working with Edelman’s team of fee-only financial advisors.

It's important to note that five of these reviews were glowing 5-star reviews. If you're considering this advisory firm, make sure to research your local office's Yelp reviews. Edelman has over 145 offices in the U.S. and perhaps other locations have earned higher ratings than the Fairfax, Va office.

The company does have an A+ with the Better Business Bureau. We're pleased to see the firm only has one complaint filed in the last three years. The BBB shows that the company has taken time to address this customer complaint.

One total complaint with the BBB is overall impressive considering Edelman Financial Engines serves 1.3 million clients and manages over $250 billion in client assets across the United States.
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FINRA’s BrokerCheck and the SEC’s website both confirm there are no regulatory issues or red flags that potential clients should be concerned with.

Of course, always perform due diligence. Check with both the SEC and BrokerCheck websites before handing any financial professional the keys to your investment portfolio.

Related: Cassaday & Company Review - Trusted Financial Advisors?

Pros & Cons of Edelman Financial Engines

Like every financial advisory firm, Edelman Financial Engines has its strengths and potential drawbacks. Let’s take a balanced look at the advantages and challenges clients might encounter when choosing to work with this institution.

Pros:

Holistic Approach: With the merger of Edelman's personal touch and Sharpe's technological expertise, clients get a comprehensive service that combines the best of both worlds.

Wide Range of Services: Beyond just retirement planning, Edelman Financial Engines offers services ranging from investment management to insurance planning, estate planning, and tax strategies.

Educational Resources: Ric Edelman's commitment to financial education continues with the company offering numerous resources like books, seminars, and webinars to educate their clients.

Tech-Driven Tools: Leveraging Bill Sharpe's vision, the firm boasts some of the most advanced online planning tools and algorithms that aid in investment decisions.

Transparency: Edelman Financial Engines takes pride in providing a transparent fee structure, ensuring clients are fully aware of the costs associated with their investments.

Reputation: Having roots with industry leaders like Ric Edelman and Bill Sharpe provides a trustworthiness and pedigree that few firms can match.

Cons:

Fee Structure: Some critics argue that their fees, especially when combined with underlying fund expenses, can be on the higher side compared to robo-advisors or passive investment strategies.

Size and Scale: Given the vast number of clients they serve, some individuals might feel that their service is less personalized or that they're just a number in a large database.

Overwhelming Options: While having a wide range of services is a boon, it can also be a bit overwhelming for clients who are new to financial planning. Some might find it challenging to navigate the myriad of offerings.

Technology Learning Curve: While their tech-driven tools are advanced and efficient, they might pose a learning curve for those less tech-savvy.

In conclusion, Edelman Financial Engines provides a unique blend of human expertise and technological efficiency. As with any significant decision, potential clients should weigh these pros and cons based on their personal needs, investment goals, and comfort levels.

Services Offered

Edelman Financial Engines has made its mark by offering an extensive range of financial services tailored to meet the varied needs of its clientele. Whether you're planning for retirement, trying to navigate complex tax landscapes, or simply aiming to grow your wealth, the firm has a solution. Here's a breakdown of the primary services offered:

Wealth Management: This encompasses a comprehensive approach to managing your finances, from investment strategy creation to periodic portfolio rebalancing, always keeping in line with your financial goals.

Retirement Planning: Given Bill Sharpe's foundational vision for Financial Engines, retirement solutions remain a core offering. Services range from 401(k) rollovers to detailed retirement income planning.

Investment Management: With a team of expert financial advisors and cutting-edge tech tools, the firm provides actionable insights and strategies for investment, ensuring optimal asset allocation and diversification.

Financial Planning: Whether you're buying a new home, saving for your child's education, or planning a business venture, Edelman Financial Engines helps clients chalk out a detailed roadmap for all significant financial milestones.

Estate Planning: Helping clients manage the complexities of wealth transfer, the firm offers solutions ranging from creating wills and trusts to more intricate estate tax strategies.

Tax Strategies: Understanding that taxes can significantly impact wealth accumulation and preservation, the firm provides tax-efficient investment strategies and advice on managing and reducing tax liabilities.

Insurance Planning: Analyzing risk and ensuring that clients and their assets are adequately protected is another hallmark service. This includes life insurance, long-term care insurance, and disability insurance consultations.

Education Funding: Recognizing the rising costs of education, Edelman Financial Engines offers strategies for efficient college savings, navigating financial aid, and leveraging tax-advantaged education savings accounts.

Employee Financial Wellness: With Financial Engines' background, the firm also offers services aimed at businesses, ensuring that their employees have access to sound financial advice and tools to manage their financial lives.

Online Tools and Resources: Reflecting the firm's belief in client empowerment, Edelman Financial Engines provides a suite of online tools, calculators, and educational resources. These tools assist clients in gaining a clearer understanding of their finances and making informed decisions.

In essence, Edelman Financial Engines acts as a one-stop-shop for an array of financial needs. Their holistic approach, combined with a broad spectrum of services, ensures that clients have both the guidance and resources they require to navigate their financial journey confidently.

Related: How to Choose a Financial Advisor

Advisory Fees

A crucial aspect to consider when evaluating any financial advisory firm is its fee structure. Transparent, fair, and competitive fees are paramount for clients seeking value for their money. Let's delve into the fee landscape of Edelman Financial Engines:

Assets Under Management (AUM) Fees: Edelman Financial Engines primarily operates under a fee-based model, which means the majority of their revenue is derived from a percentage of the assets they manage for clients. This fee typically decreases as the amount of assets under management increases, providing economies of scale for larger investors. As of the last update, their fee starts at 0.5% and can range up to 1.75%, but it's always wise to confirm the current rates directly with the firm.

See their wrap fee brochure for more details.

Fund Expenses: Apart from the management fees, clients should be aware that the investments themselves might have underlying fees, known as expense ratios. While these aren't fees charged by Edelman directly, they impact the overall returns. Edelman Financial Engines does strive to choose cost-effective investment vehicles when constructing client portfolios.

Retirement Plan Services: Fees associated with employer-sponsored retirement plan services, like 401(k) advisory, might differ based on the scale, complexity, and nature of the services offered.

No Commission: One of the advantages of working with a fee-only advisor like Edelman Financial Engines is that they typically don't earn commissions on the products they recommend. This can reduce conflicts of interest and aligns the firm's objectives with the client's best interests.

Transparency: Edelman Financial Engines is committed to transparency in its fee structure. Clients receive clear communication about all costs associated with their investments and any other services they avail. It's always recommended for clients to discuss fees directly with their advisor for a comprehensive understanding.

When evaluating fees, it's essential to look at the entire value proposition. While cost is a factor, the quality of advice, range of services, and overall return on investment are equally crucial. Clients should weigh Edelman Financial Engines' expertise, resources, and personalized approach against the fees to determine if it's the right fit for their financial journey.

Related: Top 10 Financial Advisors in Washington, DC (Ranked and Rated)

Becoming a Client

Taking the leap to entrust someone with your financial well-being is a significant decision. If you're considering joining the extensive clientele of Edelman Financial Engines, here’s a step-by-step guide to streamline the process:

Research and Understand: Before initiating any process, take the time to understand the services offered. This review provides a comprehensive overview, but Edelman Financial Engines' official website also offers detailed insights, client testimonials, and more.

Office Locator Tool: If you prefer face-to-face interactions, use the office locator tool on their website to find the nearest branch. Schedule an appointment at your convenience.

You can also set up an appointment over the phone: 833-PLAN-EFE

Initial Consultation: Most financial advisory firms, including Edelman Financial Engines, offer an initial consultation. This is an opportunity to discuss your financial goals, understand their approach, and gauge if it aligns with your objectives.

Onboarding Process: Once you decide to become a client, there will be an onboarding process. This typically involves filling out a series of forms and questionnaires that help the advisor understand your financial situation, risk tolerance, goals, and other relevant details.

Creating a Financial Plan: Armed with your information, your advisor will craft a financial plan tailored to your needs. This plan will outline strategies, investment recommendations, and other pertinent advice.

Review and Feedback: Go through the proposed plan thoroughly. Ask questions, seek clarifications, and provide feedback. A good financial plan should be a collaborative effort between the client and the advisor.

Implementation: Once you're comfortable with the plan, your advisor will begin the process of implementing the strategies, which might include setting up accounts, initiating transfers, or making specific investments.

Regular Check-ins: Financial planning isn’t a one-time task. As a client, you’ll have regular reviews with your advisor to gauge the progress, make necessary adjustments, and address any changes in your financial circumstances or goals.

Online Access: Edelman Financial Engines provides clients with an online portal where they can view their portfolio, track performance, and access a wealth of resources.

Open Communication: As a client, always remember that open communication is key. Whether it's a significant life event, a change in financial goals, or any other concerns, keep your advisor informed.

In essence, becoming a client with Edelman Financial Engines is a structured yet personalized journey. Their team ensures that from the initial steps to the ongoing relationship, clients feel understood, valued, and confident in the direction of their financial futures.

Related: Get Matched with Up to 3 Local Financial Advisors Today

Find a Financial Advisor Near You

When seeking financial advice, locality and accessibility can play pivotal roles. Personal face-to-face interactions can sometimes provide a level of comfort and understanding that digital communication may not offer. Edelman Financial Engines understands this and has, therefore, established offices nationwide, ensuring that clients have the opportunity to meet their advisors in person, fostering a deeper connection.

However, like any significant decision in life, it's always prudent to explore multiple options. Just as one would shop around for the perfect house or car, finding the right financial advisor requires some shopping and comparison.

Even within a renowned firm like Edelman, the rapport, specialization, and approach can vary from one advisor to another. It's wise to interview a few advisors, compare their strategies, philosophies, and fee structures before committing to a long-term financial relationship.

For those seeking a streamlined way to find the right advisor, WiserAdvisor's free matchmaking service is an excellent resource. By filling out a concise questionnaire detailing your financial objectives and preferences, WiserAdvisor can match you with up to three local advisors that align with your requirements. It's a hassle-free and efficient method to get a head start on your quest for the ideal financial partner.

Remember, the right advisor is not just about expertise and reputation; it's about finding someone who understands your financial journey and can guide you every step of the way. Whether you decide on Edelman Financial Engines or another firm, the key is to ensure the advisor aligns with your goals, values, and vision for the future.

FAQs

Is Edelman Financial Engines a Fiduciary?

Yes, Edelman Financial Engines is a fiduciary, and it operates as a fee-only advisor. Being a fiduciary means that the firm is legally bound to act in the best interests of its clients. This commitment ensures that the advice or recommendations provided are tailored to the client's specific needs and objectives, without being swayed by external commissions or incentives.

Furthermore, as fee-only financial advisors, Edelman Financial Engines earns its revenue solely from client fees rather than commissions from product sales. This model further underscores their commitment to unbiased advice, as there's no financial incentive to recommend specific products or investments other than the best interest of the client. In essence, clients can have peace of mind knowing that their financial well-being and interests are at the forefront of every decision made by Edelman Financial Engines.

Related: Compare Local Financial Advisors Now

What is the Minimum Investment to Work with Edelman?

The independent financial advisory firm has a low $5,000 minimum investment to get started. The company manages billions in client assets and has customers ranging from college students with a little bit of savings to retirees with millions in investments. A consultation is free to see if the registered investment advisors are right for you and your goals.

Bottom Line

Edelman Financial Engines stands as a testament to what the union of time-tested financial wisdom and innovative technology can achieve. With its roots anchored in the expertise of industry giants like Ric Edelman and Bill Sharpe, the firm offers a blend of personal touch and data-driven strategies that cater to a broad spectrum of financial needs.

Their expansive services range from intricate estate planning to accessible online tools, ensuring clients from all walks of life find value in their offerings. While their fee structure may warrant evaluation, their transparency and commitment to aligning their interests with those of their clients speak volumes about their ethical approach.

The nationwide office presence not only brings convenience but also reinforces the firm's dedication to forging strong client relationships. As with any financial endeavor, potential clients should weigh the pros and cons, but Edelman Financial Engines undoubtedly emerges as a strong contender in the realm of financial advisory services.

For those on the fence, taking the time to explore, compare, and perhaps even meet with an advisor from Edelman can provide clearer insights. After all, financial journeys are deeply personal, and finding the right partner to navigate through it is paramount.

In the landscape of financial advising, Edelman Financial Engines shines brightly, offering a beacon of guidance for many seeking financial clarity and growth.