When it comes to choosing a financial advisor, two big names often top the list: Edelman Financial Engines and Fisher Investments. Both companies have been around for decades and manage billions in assets, but they take very different approaches when working with clients.
This article will dive into the key differences between Edelman Financial Engines and Fisher Investments to help you determine which may be a better fit for your needs and goals.
A Brief Comparison Table
| Category | Edelman Financial Engines | Fisher Investments |
| Year Founded | 1986 | 1979 |
| Headquarters | Mountain View, CA | Camas, WA |
| AUM | $213 billion | $197 billion |
| Client Assets | $100k to $3 million | $200k minimum |
| Approach | Passive, index-based | Active management |
| Portfolios | Globally diversified ETFs and mutual funds | Individual securities, focus on equities |
| Fees | Lower due to passive approach | Higher due to active management |
| Service Model | Hybrid digital and human support | Dedicated advisor for personal service |
| Planning Services | Holistic financial planning | Investment-focused planning |
| Client Type | Mass affluent investors | High net worth investors |
| Philosophy | Low-cost indexing to match market | Seeks to outperform through security selection |
Overview Of Edelman Financial Engines
Edelman Financial Engines was founded in 1986 and is headquartered in Mountain View, California. The company focuses on providing personalized financial planning and investment management to individuals and families.
Some key facts about Edelman Financial Engines:
- Manages over $213 billion in assets (as of 12/31/2021)
- Serves 1.3 million clients
- Uses a goals-based planning approach that integrates tax planning and risk management
- Offers portfolios of ETFs and mutual funds as well as privately managed accounts
- Has won praise for fee transparency and use of technology/digital experience
Edelman Financial Engines targets mass affluent investors – those with $100k to $3 million in investable assets. They provide hybrid human and digital support, combining personalized financial planners with robo-advisors.
Their focus is on retirement planning and income strategies for retirees.
Overview Of Fisher Investments
Fisher Investments was founded in 1979 and is headquartered in Camas, Washington. Fisher takes more of an active management approach focused on equity investing for high-net-worth individuals and institutions.
Some key facts:
- Manages over $197 billion in assets (as of 12/31/2021)
- Serves high net worth clients with $200k minimum
- Employs in-house research team and takes a top-down approach to investing
- Focuses on global equities and fixed income
- Known for strong client service model with dedicated support advisor
Fisher Investments targets high net worth investors, though they work with some smaller clients as well. Their specialty is equity portfolios and they are an active manager, meaning they pick specific stocks and bonds versus using passive index funds.
Comparing Investment Approach
The most significant difference between Edelman Financial Engines and Fisher Investments is their underlying investment philosophy and portfolios.
Edelman Financial Engines uses a passive, index-based approach. Their portfolios contain globally diversified ETFs and mutual funds across stocks, bonds, and other asset classes. The goal is to maximize returns for a given level of risk. Portfolios are rebalanced regularly to maintain target allocations.
Fisher Investments is an active manager that seeks to beat the market through security analysis and stock selection. Their portfolios tend to be equity-heavy, containing individual stocks across global markets. Fisher frequently trades in and out of positions based on changing market conditions.
Over long periods, academic research shows most active managers underperform market benchmarks. However, Fisher argues their scale gives them an advantage in research. Their equity-focused approach could potentially outperform in bull markets but trail in bear markets.
In terms of costs, Edelman Financial Engines’ passive approach tends to have lower fees versus Fisher Investments’ active management. Fisher also often has higher account minimums given their focus on high-net-worth investors.
Also Read: Comparison Between Hippo Insurance And State Farm.
Client Experience
Both Edelman Financial Engines and Fisher Investments aim to provide a high level of personalized service and advice tailored to each client. However, their models differ.
Edelman Financial Engines uses a hybrid approach. Clients have access to online planning tools and portals as well as support from a dedicated financial planner.
Communication can occur online, by phone, or in person. The goal is to blend high-tech and high-touch services.
Fisher Investments assigns each client their own support advisor. Nearly all communication occurs over the phone or email, with annual in-person visits optional. Their team has a reputation for being very responsive and available to clients as needs arise.
Fisher Investments support advisors have fewer direct clients, allowing more time per account. However, some clients may prefer Edelman’s blended digital access and human touchpoints.
Also Read: Comparison Between Captrust And Fisher Investments.
Comparing Planning Services
Both Edelman Financial Engines and Fisher Investments provide financial planning services. However, Edelman places a stronger emphasis on holistic, goals-based planning.
Edelman Financial Engines starts by establishing short and long-term goals. Then they create a comprehensive financial plan to address retirement, education, insurance, estate planning, and other needs.
Portfolios are tailored to fund each goal with an optimal mix of risk and return. Ongoing monitoring helps adapt the plan to life changes.
Fisher Investments focuses mainly on investment management. They do provide basic planning services such as retirement projections. But their core value proposition is building and managing tailored portfolios based on risk tolerance. Planning is centered on aligning portfolios to investor goals.
Edelman Financial Engines caters more to those wanting a big picture plan plus investment management from the same provider. Fisher Investments appeals to investors who have their plan in place and want expertise in portfolio management. Also watch this video!
Frequently Asked Questions (FAQ)
Fisher Investments’ biggest competitors are Vanguard and Charles Schwab. These large discount brokers compete for investors by offering low-cost index funds and ETFs. Fisher tries to differentiate through active management.
Yes, Edelman Financial Engines is one of the largest and most reputable independent advisory firms. They have won praise for fee transparency, use of technology, and focus on goals-based planning. As a large RIA, they offer competitive pricing and strong customer service.
Fisher Investments has built a strong reputation over 40+ years for portfolio management, client service, and investment research capabilities. However, their active management approach does not guarantee outperformance versus benchmarks. Fees are also higher than passive competitors. Results vary by portfolio strategy.
No, Fidelity uses its own advisors and services – it does not outsource to Edelman Financial Engines. However, Edelman Financial Engines purchases services like trading tools and data from Fidelity and other large custodians to power their technology and operations. But the two companies operate independently.
Also Read: Comparison Between PayScale And Salary.Com.
The Verdict
There is no definitive “better” option between Edelman Financial Engines and Fisher Investments. The right choice comes down to your specific needs and preferences as an investor.
Key factors to consider include account size, service model, costs, investment approach, and desire for comprehensive planning. Edelman may be better for more passive investors focused on low costs and a blended service approach. Fisher appeals more to those wanting a heavy focus on active portfolio management and equity exposure.
Looking at long-term performance, there is no clear winner either. Returns vary across portfolios and time periods. Both firms have delivered solid results for clients over many market cycles. As large established players, they have similar reputations for quality and expertise. The best fit depends on your individual financial situation. Assess your needs, priorities, and temperament as an investor before deciding on Edelman Financial Engines, Fisher Investments, or another advisor.
