Raffone is still figuring that out, too. Financial Engines’ managed-account product charges workers as much as 0.6 percent of assets annually, though the average is closer to 0.4 percent. Financial planning will probably cost more. The company expects pricing to run from a third to half of the 1.5 percent to 2 percent or more that “middle-class Americans could expect to pay.” (The affluent typically pay 1 percent to hire a financial advisor—less, if they’re very wealthy.)
Whatever the fee comes to, Raffone said it will charge clients in a transparent way—without, for example, receiving commissions to steer them into particular products.
Financial Engines was a strong supporter of a new U.S. Department of Labor “conflict of interest rule,” scheduled to go into effect next year, that requires adviseors put clients’ interests first when handling retirement accounts. That’s a legal duty that Financial Engines already has, but it's one that many firms are still fighting in court, a fact that Raffone bemoans.
“It’s actually embarrassing for the industry to say they can’t put their clients first,” Raffone said.