Edelman Financial Engines has been a significant player in the wealth management space, with $77 billion in assets and around 370 advisors. But the firm is also the top managed account provider for workplace retirement plans, with $247 billion in assets in that business.
The firm is the product of a merger between three separate, entrepreneurial organizations: The Mutual Fund Store and Edelman Financial Services on the mass affluent wealth side, and Financial Engines, which leveraged financial planning technology used by America’s leading employers and largest record keepers.
They were brought together with the hope of cross-selling retail advice to plan participants.
And that thesis appears to be working, according to CEO Ralph Haberli, who was promoted to the chief executive position late last year. Haberli, who has an extensive background in the retirement space at Capital Group and BlackRock, recently spoke with Wealth Management about the firm’s success in converting clients, how the process works, and his strategy for the firm moving forward.
The following has been edited for length and clarity.
WM: What’s the thesis behind having retirement and wealth under one roof?
Ralph Haberli: It really starts with the end investor’s investing experience. So the large majority of investors start that investing journey in a workplace context. You get your first investing experiences there, both good and bad, and start your journey there. Then, as the focus shifts from really saving money first and second order, your needs may get a bit more nuanced. Say you’ve built up a balance in your 401(k) plan, and you inherit some assets outside of the 401(k) plan.
That’s where, in just a plain-vanilla workplace investing context, we feel, what’s offered starts to run out of runway, and having the ability to access that personalized advice really starts to pay off. The thesis really starts with people start investing in that workplace, things get a bit more nuanced as they build wealth, and then you have a very logical crossover into a broader planning conversation. Some of that can happen in the workplace, and then, over time, and, if appropriate, that could continue with a full wealth planning relationship.
We get to build that relationship, start to earn some of their trust. That trust then pays off over time and over the investing journey of that client. There are certainly a lot of demographics that sit behind that as well, and a lot of movement every year from the ERISA world to the non-ERISA world, and from workplace into either taxable or non-taxable wealth. The numbers move up and down a bit every year, but it’s short of $1 trillion that moves from one to the other.
WM: Do you find that the thesis is working?
RH: We are. A lot of people talking about the thesis; I’d say we’re aligned against it, and we’re seeing the benefit of it. We are able to see a steady migration of clients that broaden their relationship from just a workplace relationship into a broader workplace and wealth relationship. We see that show up in just the number of clients we’re able to serve every year in our wealth context that we got to know initially in the workplace. That’s an important growth engine for us and a pretty differentiated one, given that we do have a unique foothold in the workplace, given our legacy and our history with Financial Engines specifically.
WM: Can you quantify the success you’re seeing in converting workplace clients to wealth?
RH: We have seen the number of clients in employee planning (those clients who are introduced to us in the workplace and are using our broader wealth planning services) more than double over the last five years. Our AUM has more than doubled every few years.
It’s a meaningful source of growth for us on the wealth side. And as we continue to mature and look forward, despite what we see as some good success already today, either in clients or inflow of assets that come with those clients, we still see a lot of potential to go deeper there as well.
WM: How big is the managed accounts business versus the wealth business?
RH: In total, we have $324 billion, and workplace represents about $247 billion of that.
WM: How does that conversion work? Is there a handoff to a wealth advisor? Is there a specific net worth threshold for a client to move to wealth?
RH: It’s more about a client looking to deepen his or her relationship. We have 1.2 million relationships in the workplace today where we have a participant in a managed account, and they have access to Financial Engines, to our investment algorithms, have access to our advisor teams that they can call. They get access to excellent insights and financial advice, but it is more of a scaled approach. As they start to say, ‘OK, my situation’s gotten a bit more nuanced, or there’s a need for me to have a deeper, more one-on-one planning relationship,’ that’s where we see those clients then make that path from that workplace relationship into a one-on-one relationship with a planner.
We have a team that sits in the middle that facilitates that, the employee planning team. The client would still remain a client in the workplace, so this isn’t about rolling assets out of the workplace. It’s just taking a comprehensive view of that relationship as it gets more nuanced, more complicated, and just has different dimensions to it.
WM: If a client comes through that channel, how do you go about deciding who they should be handed off to?
RH: There is a bit of matching that happens there. Much like any client in that mode, they’re probably having one or two or three different conversations with planners looking to see where’s that fit. And that would be our opportunity to say, ‘You know us from the workplace; this is what we do more broadly in wealth.’ And yeah, we compete for that client’s trust and that client’s business.
WM: You have an extensive background in the retirement space, coming from Capital Group and BlackRock. Do you have a specific vision or strategy for syncing the retirement with wealth, given that background?
RH: Something that we’re working to really elevate is this lens of personalized advice. Many asset managers and other investment capability providers in that marketplace tend to fall into the box of being just a product provider. That’s not our legacy. Our legacy is around personalized advice, and that’s an area where, as we look at where we’re putting our energy, the dialogue we’re having with our largest plan sponsor partners and clients, and where we’re investing, it really is around that personalized advice area.
Also, there are a ton of insights that we have from the wealth part of what we do. So the ability to work with clients on anything from budgeting, planning, savings, through various giving strategies or ultimately spending and paying down taxes. The fact that we have a lot of experience around helping clients navigate taxes is a conversation that’s resonating with plan sponsors and participants. They’re in a tax-free environment, but all of them have some of those tax-planning needs. So being able to take some of those insights from the wealth context and bring them as part of a proposition around personalized advice to a plan sponsor client is the area where we see opportunity, and you can expect us to lean into that to a larger extent.
WM: How many advisors do you have on the workplace side?
RH: It’s about 100 or so. On the wealth planning side, we have around 370 advisors.
WM: One of the critiques of managed accounts is that they charge a higher fee than a target-date fund. How do you respond to that critique?
RH: It comes down to value. What we’re able to offer around personalized advice delivered through a managed account, the value of that to participants is significant. Will it be more basis points expensive than targeted options? It may be. Those options don’t have the ability to pick up the phone and call someone with a question.
If the only buying criteria is cost, which for some that may be the primary or only criteria, then the right place is probably a target date fund or something similar. But there’s a meaningful part of the marketplace that gets outsized benefit from personal advice, anything from the person you can call through the tailoring of the investment.
Also, we’re seeing some better behaviors out of managed account users. Managed account clients contribute an average 9.1% of their income to their retirement account, compared to 7.8% for non-clients and 7.4% of individuals primarily invested in a single target date fund. So much of the challenge in a 401(k) plan is engagement. A lot of the broader delivery, the broader value that we’re able to bring to a sponsor and a participant, it’s correlated with better engagement, which is correlated with better savings behavior.
WM: Do you envision wealth overtaking retirement at some point?
RH: We’ve got real opportunities for growth in wealth, and our proposition is one that I think is great for planners looking to grow. I think you can expect us to raise our voice on bringing more planners to our platform.
And I think we’ve got a lot of opportunity to grow in the workplace. Today we’re very large market-focused, and I see great opportunity for us to extend our value proposition into the mid and small market. There’s a lot of opportunity that we’re already starting to see with our proposition in the smaller market, both around managed accounts, as well as offering that engagement capability from the employee planning center and potentially even acting as a plan fiduciary advisor to those plans. It’s a bit of a different market segment for us; it certainly would require a bit of a different gearing. But there’s a lot of commonality there, and we think could be a really good extension of both parts of our business, an extension of the wealth advisory work we do in our traditional wealth business, as well as an extension of our workplace managed account business into a smaller market.
Will one overtake the other at some point? Perhaps, but I would expect those lines to cross if they ever would at a larger size for both.
WM: What are your organic growth rates?
RH: I can’t share specific figures for organic growth. But over the last five years, we’ve added $6 billion in assets under management from inorganic growth, and the rest of our growth has been organic and markets.
WM: What’s your M&A strategy for 2026, and will you ramp that up this year on the wealth side?
RH: You should expect us to be quite a bit more front-foot on just bringing planners to our platform—not through a classic M&A lens, but more of a planner recruiting lens.
WM: When you first came on, you said you had plans to boost Edelman’s advisor capabilities. How will you do so? What capabilities are you looking to add?
RH: As we head into 2026, we are already investing behind that. One area we’ve invested in is bringing together groups of advisors around regional meetings, national meetings and building that sense of community and connection.
Another area is our investment in support for planners. That’s anything from technology, just making sure that they have what they need around them to focus on what they do best, which is planning. At our size and scale, we have the benefit of working with partners, not just Orion and Schwab. But also to tap into the best of AI and those other capabilities. That’s an area where we expect to continue to invest with a view toward making planners more efficient, more effective.
WM: Have you considered expanding internationally?
RH: We have not looked at that recently as a near-term option. I would certainly never say never. There are capabilities and insights we have on the financial planning side that I do think cross borders very well, but our focus for the near term is on the U.S. market and deepening and broadening our footprint in the United States.
