Co-founder and former CEO, Financial Engines Inc.
Jeff Maggioncalda is co-founder and former CEO of Financial Engines Inc., which provides workplace-based personalized guidance for retirement accounts. It is the largest RIA in the world, managing more than a million portfolios.
Mr. Maggioncalda recalled several innovations that contributed to the company’s success, including:
• Employing economist William Sharpe’s framework for risk and return.
• Providing institutional-quality advice to every account holder.
• Picking up customers in big chunks — achieved by offering online 401(k) advice to employees of Fortune 500 companies.
The innovation that triggered the company’s skyrocketing growth, however, was its transition in 2004 to managed accounts, which meant offering both advice and implementation.
“The customers were saying ‘We don’t want self-service; we want someone to do this for me,’” said Mr. Maggioncalda, 48.
The service took off like wildfire, attracting $1 billion dollars of new assets in just three months. A year later, Financial Engines was managing $3.5 billion; in 2007, $16 billion. It’s now at $134 billion in assets.
A Stanford graduate, Mr. Maggioncalda became a responsible adult quickly. At 22, he graduated from college, married and became a father. At 27, he became CEO of a company. At 46, he retired.
Now taking time off, Mr. Maggioncalda has been mentoring SafeSpace, a teen suicide prevention start-up.
“I took a page from Financial Engines,” he said. “The whole idea is a very low-cost way for kids to get professional counseling 24/7 in an affordable and convenient way through the schools.”
Mr. Maggioncalda is relishing his freedom.
“I’m not the boss of anything now,” he said. “I’m enjoying life tremendously.”
– Deborah Nason