Financial Engines, Inc (FNGN) (NASDAQ:FNGN) provides independent, technology-enabled portfolio management services, retirement help and investment advice to those who are in employer-sponsored defined contribution retirement plans, such as 401(k) plans. The company targets clients from three constituencies: plan participants (employees of companies that offer 401(k) plans), plan sponsors (employers who offer 401(K) plans) and plan providers (companies that provide administrative services to plan sponsors). Financial Engines charges management fees based on the value of the client's assets managed by them. It uses its own propriety advice technology platform to achieve cost efficiency, in order to reach out to more clients regardless of their personal wealth or investment account size.
Financial Engines' revenue mainly comes from asset management fees, which is directly proportional to the total assets in the retirement accounts that they manage. As such, the company is susceptible to macroeconomic factors such as the performance of the financial markets, currency movements, interest rate fluctuations, because the value of the assets invested is affected by these factors.
Financial Engines recorded total revenue of $84.98 million in 2009, an increase of 19.2% versus 2008. It also turned profitable in 2009 with a net income of $5.69 million in 2009 after recording a net loss of $3.6 million a year ago. 61.9% of Financial Engines' revenue in 2009 came from Professional Management fees, while 35.4% was generated from recurring, subscription-based platform fees.