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Company Details
Edelman Financial Engines (EFE) was formed by merging two organizations: Financial Engines, founded in the late 1990s by Nobel Prize-winning economist Dr. William F. Sharpe, and Edelman Financial Services, founded by Ric Edelman in 1986. The mission of EFE is to provide comprehensive financial advisory services to help clients meet their financial and retirement goals. The merger happened on November 1, 2018, combining their complementary strengths to create a premier national wealth management firm. The firm aims to provide outstanding and dynamic financial planning, world-class client service, and investment management solutions that deliver on the goals established in the financial plan.
Edelman Financial Engines emphasizes a client-first approach, focusing on education first, understanding clients' lives and objectives, and providing comprehensive financial plans supported by a best-in-class investment platform. They want to be a firm known for helping clients with anything that involves a dollar sign. EFE's Ideal Clients are "everyday millionaires", typically with investable assets in the $500,000 to $5 million range.
Edelman Financial Engines' investment philosophy is rooted in providing comprehensive financial advisory services to help clients achieve their long-term financial goals. The firm emphasizes a planning-first approach, focusing on education and client-first principles. Key tenets include: Planning First: Despite being known for excellent investment performance, the firm starts with financial planning and education. Market Efficiency: Belief that markets are generally efficient, meaning the best assessment of an asset's value is its current trading price. Modern Portfolio Theory (MPT): The firm follows MPT principles and does not engage in sector rotation, market timing, or tactical asset allocation. Emphasis is placed on tax-efficiency low-cost, and diversified. Investment Implementation The firm implements its investment philosophy through a combination of model portfolios and custom portfolios: Model Portfolios: Over 70 model portfolios are available, constructed with mutual funds and ETFs, ranging from 100% equity to 100% fixed income. Custom Portfolios: Significant and robust portfolio customization capabilities are available where appropriate for clients. In-House Management: Assets are managed centrally in-house, but the firm also holds active managers in their portfolios. Wrap Fee Program: Includes model portfolios and custom models featuring diversified asset allocation appropriate for each client. Investment Team Overview The investment team at Edelman Financial Engines is structured to provide comprehensive oversight and management: Investment Committee: Responsible for the oversight of advisory and investment management services, including the application of proprietary investment methodology. Key Members: Neil Gilfedder (Chief Investment Officer and Chairman) Wei-Yin Hu (Vice President, Investment Research and Strategy) Robert L. Young (Senior Director of Portfolio Management) Patricia Wang (Vice President, Portfolio Strategy and Development) Brian Lipps (Regional Director, Financial Planning) Ismail Ceylan (Director, Financial Research) Valerie B. Pimenta (Senior Vice President, Client Operations)
Locations
Company Videos
Acquisition Model
Full Acquisition
Direct Rollover Equity & Profit Interest
Yes
Max Cash: 80%
Max Equity: 20%
Edelman's standard terms are 20%-40% held in retention for 12 months.
Advisors participate in a 25-35% of top-line revenue share.
Mandatory Points of Alignment
In order to gain the lift of marketing, and centralized services with Edelman branding, they ask all partners to adopt their brand on day one.
At Edelman, everyone will receive the benefits of centralized compliance, HR, technology, billing, marketing, accounting, and more.
Advisors will have control of their own calendars.
In order to take as many operational functions off your plate, Edelman will centralize your P&L.
EFE has a branded client experience, One Face One Voice, that partners are asked to utilize. This allows all clients of EFE to have the same experience working with an advisor and brings efficiency to advisors’ ability to service clients.
For firms seeking assistance with defining roles and responsibilities and managing processes and procedures, EFE can help optimize the functionality of an office.
After joining Edelman, legacy portfolios will be managed on an ongoing basis by the centralized team in Santa Clara, CA and any new assets from existing clients or new clients will be managed using Edelman models. Migration of legacy positions into the Edelman models will also be facilitated over time with care if there are constraints to immediate migration.
Advisor Value Proposition
The EFE Small Business Solutions team delivers support for 401(k), 403(b), cash balance pension plans and more to advisors with clients who own businesses or who are business executives. The Small Business Solutions offering some of EFE’s biggest value-adds for a partners and their clients. Edelman’s suite of comprehensive services are compelling for advisors who believe a better client experience can result from having a CPA work with the advisor to deliver better advice. Additionally, for advisors who have qualified retirement plan clients, EFE helps plan sponsors with investment menu selection, plan management, and employee education. This competence gives advisors a competitive advantage when working with corporate clients. EFE sponsors a formal training program for young advisors who want to become a financial planner. This program has supported the development of talent within EFE. Partners consider this program an asset and leverage it to have graduates placed in the local office to work full time. Additionally, EFE distributes content for retail investors and prospective clients to learn from the experts at EFE about topics such as retirement planning, budgeting, discretionary spending, investments, and much more.
Edelman Financial Engines employs six CPAs on the tax planning team, two insurance experts, two estate attorneys, and four advance planning support members. The centralized planning, investment, and tax advisory teams are very supportive of advisors and partners tend to see a large lift in the business when using these teams.
EFE will centralize all operations and back-office functions allowing advisors to can gain significant capacity in their day to service and onboard new clients.
Beyond financial planning and portfolio management, EFE offers client service specialties in retirement planning, tax planning, insurance guidance/risk management, estate planning, qualified/non-qualified plans, and small-business solutions (retirement plan consulting).
Edelman Financial Engines (EFE) has one of the country's most robust and successful client lead generation programs. With 10+ million employees in the qualified plan division, EFE generates over 100,000 qualified leads each year for advisors. EFE has a 40-person business development team based in Phoenix, Arizona who qualifies inbound leads for advisors. Once the development team has talked on the phone with the prospect, they send the meeting notes to the advisor so they are prepared for a successful initial conversation with the prospect. Additionally, EFE has a broadly distributed podcast and newsletter that clients and prospective clients can access, which also drives inbound leads to the business development team.
Edelman has a practice management model they encourage their partners to adopt, but they will work with the local team to ensure the model fits everyone. They can assist with maximizing utility and capacity within an office for both client-facing advisors and administrative personnel. Leveraging the Learning and Development Team, all advisors become licensed in insurance and risk management. This enables advisors to be equipped and educated to address almost any situation within a client's life.
AUM Growth
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