Is Edelman Financial Engines’ New Offering a Threat to Rollovers?
July 16, 2019 by Nick Thornton
When it was announced last spring that Hellman & Friedman, the private equity firm that already owned a majority stake in Edelman Financial Services, was throwing down $3 billion in cash to take 401(k) provider Financial Engines private, one prominent industry voice predicted the deal would present an existential threat to trillions of dollars in potential IRA rollovers.
“It may mean the beginning of the end of the giant 401(k) rollover bonanza that powers so much growth in the advice business today,” wrote Michael Kitces, a partner with Pinnacle Advisory Group and publisher of the Nerd’s Eye View blog.
Pairing Financial Engines, the largest 401(k) automated fiduciary investment platform provider that added more than 900 new plan sponsors in 2018, with Edelman Financial, one of the largest retail RIAs with 320 fiduciary advisors across the country, is a first-of-its kind arrangement.
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