employees standing for a photo (Photo: Shutterstock)

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Fifteen years ago, when Financial Engines began deliveringpersonalized retirement strategies to 401(k) investors, the ideawas considered visionary, said Kelly O'Donnell, who was recentlypromoted to head Edelman Financial Engines' workplace unit.

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But now that the 401(k) has become the primary retirementsavings vehicle for most Americans, more sponsors are realizing theneed for more holistic advice beyond the retirement plan.

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That bodes well for the Edelman Financial Engines model, and italso means that sponsors' reluctance to tap managed accounts as thedefault investment will change, thinks O'Donnell.

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"The future is personalization," O'Donnell said.

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"We may still be in the early innings of managed accounts, but Ithink we are in an evolution," she said. "I don't think people willbe talking about low managed account adoption levels for muchlonger, if they still are."

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O'Donnell, who began her career at Financial Engines in itsworkplace unit before advancing to chief risk officer, will beresponsible for running and growing the division that alreadyserves 150 of the largest Fortune 500 firms. About 1.1 millionretirement savers access Edelman Financial Engines managed accountplatform through the workplace.

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The announcement that she would head Edelman Financial Engines'workplace unit comes 15 months after the merger of EdelmanFinancial Services, one of the country's largest retail RIAs, andFinancial Engines, the largest provider of managed accounts todefined contribution plans.

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Already, the merger is delivering value for the firm's 401(k)clients, says O'Donnell.

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"This was really a marriage made in heaven," she said."Edelman's focus was on high touch financial planning for theaverage American. We're now able to leverage a library of Edelmaneducation tools in the workplace. Ric [Edelman] was a big proponentof financial education. We're able to take his content, add it towhat we already have—that's where you are seeing the immediateenhanced capabilities of the merger."

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What the merger is not about, insists O'Donnell, is capturingrollover money.

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In fact, she says the merger will lead to more participantskeeping savings in defined contribution plans, and says there isdata to back that.

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"A lot of plans have really low fees, and in those cases it canbe a great choice to stay in plan. We found that when a participanttalks to an Edelman Financial Engines adviser, they were twice aslikely to keep money in plan as those that did not. There willalways be times when someone wants a rollover and it's in theirbest interest. What we want to do is show the options," saidO'Donnell.

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Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.