Working with an Edelman Financial Engines Advisor?
There are some things you definitely should know.
6 things you should know if you are working with an Edelman Financial Engines Advisor:
At Edelman Financial Engines (EFE), your starting fee can be a jaw-dropping 1.75%/year (on the first $400,000). Plus the internal expense of the investments they use (example: .50%/year). Add it all up and your total fee could be 2.25%/year!!! Unfortunately, Wall Street greed has come to roost in Any Town, USA.
Small Fish - Big Pond
Your advisor may have over 500+ clients to keep tabs on. You can do the math – there are 2000 working hours a year – if your advisor has 500 clients, your entire financial welfare hinges on the hope that you are getting 4 hours of your advisor’s time. Unless you have 10s of millions of dollars, you are a small fish.
Your EFE Advisor is typically under supported. Each office has just a few assistants. Even the busiest senior advisors with more than $500 million in client assets may have to share an assistant. So instead of focusing on your really important financial issues – your advisor is likely overwhelmed with client servicing issues and quotas to hit.
They use an internal financial planning tool but the capabilities are limited. It might look like you are getting a Ferrari, but under the hood is a gerbil and a wheel.
First, it was the Mutual Fund Store, then Financial Engines, now Edelman. What’s next? Private equity has flipped this company over and over. Meanwhile, investors get pulled in different directions with a lack of consistency, stability, or knowing who will buy the company next.
Your EFE advisor might talk about tax strategies regarding investments, but that’s where it will likely end. At this point, they’ve yet to offer to all of their clients dedicated CPAs that will file your Federal and State taxes.
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