Financial Engines, Inc. provides investment advisory services to the common person. It sells its services to retirement plan sponsors. The company was incorporated in California in May 1996, then reincorporated in Delaware in February 2010.
The company filed a S-1 for IPO earlier this year to offer over 10 million common stock by the company and its selling stockholders. As of November 2008, the company incurred approximately $3.0 million attributable to the IPO, which was once deferred because of the disruption in the equity capital markets in 2008.
The management uses adjusted EBITDA and adjusted net income or loss as measures of operating performance, for planning annual budgets, to allocate resources, to evaluate business strategies, and to communicate to the board of directors on financial performance. Adjusted EBITDA means net income or loss before interest income or expense, net, income tax expense, depreciation, withdrawn offering expense, amortization of internal use software, direct response advertising and deferred sales commissions and stock-based compensation.
The company derives most of its revenue from asset management fees based on the assets in retirement accounts it manages. The company appears to have a stellar cast of characters on its leadership, with most executives on the team for more than several years. For instance, the President and CEO, Jeffrey Maggioncalda's bio reads he has been with the company since 1996. Kenneth Fine, Executive Vice President of Marketing, has been with the company since 1997.
Financial Engines' revenue depends on retirement plan participants signing up for its Professional Management service. Financial Engines does not sell investment products or earn commissions on its advice to participants. Many people think that they already get investment advice from their employers, but employers are only responsible for choosing the mix of funds, not making the choices on what to invest in.
The company advises to diversify to manage risk, and considers expenses and taxes. The company gives people a personalized plan to fit their retirement age, asset turnovers, transaction costs. People are recommended to review their plans regularly.
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