Financial Engines’ Managed Accounts Surpass $1 Trillion

Questions over the value of managed accounts were raised in a Government Accountability Office report last year, which examined the costs of the eight largest providers of managed accounts, though it never identified them.

The GAO said it found a wide variance in the fees the providers charge, ranging between $8 and $100 on every $10,000 of participant assets. Also, some providers were found to have inadequate fee disclosures and benchmarking for participants, factors that ultimately could create fiduciary liability for sponsors. 

In an interview with BenefitsPro after the GAO released its report last year, David Weiskopf, a senior director of communications with Financial Engines, said the company was “absolutely confident in the value we provide sponsors and their enrollees, and we know we’re delivering it at a fair price.” 

On average, Financial Engines account holders pay about 40 basis points in fees, Weiskopf said. 

According to research conducted by Financial Engines and Aon Hewitt in 2014, participants that used managed accounts saw a 3.32 percent median increase in annual returns, net of fees, compared to participants working without guidance.