Guidance

The Diversified Approach: The Philosophies of Edelman Financial Services

When Ric and Jean Edelman launched Edelman Financial Services 25 years ago, their aim was to upend the traditional practices of the financial industry by subscribing to one simple but ultimately radical principle: Refuse to be salespeople.

Critical of financial planners who approached their jobs as if they were salesmen — pushing whatever investment idea was hot at the moment — EFS would differentiate itself.

Instead, Ric would do his own research, develop an effective investment strategy and implement it by choosing investments that he was going to buy for himself and Jean. He’d then share this information with consumers via radio, television and seminars. If others so desired, they could become clients of his firm and invest as he was investing — essentially putting everyone on the same side of the table, helping to avoid conflicts of interest.

And to this day, that foundational principle has never changed: EFS advisors and their clients own the same investments.

The approach is as unusual as it is successful. The goal, as Ric saw it, wasn’t simply to pick investments that might “beat the market” but to help families achieve specific goals like paying off debts, saving for college and planning for a comfortable retirement. In Ric’s view, investment management should be wrapped inside the financial planning process. It is on that basis that Ric and his team evaluate and select investments for themselves and their clients.

The approach has resonated with consumers nationwide. EFS now serves more than 26,000 clients and has more than $13 billion in assets under management,1 making the firm the fourth largest independent advisory firm in the nation, according to WealthManagement.com.2

 

1As of September 30, 2014

2Based on a Wealth Management.com list that was composed using data from Meridian-IQ where advisory firms are ranked by total assets under management. To be included on the list, firms had to have at least 10 percent individual clients and at least 10 percent high-net-worth clients for whom they do financial planning, and no more than 50 percent institutional clients. Edelman Financial Services LLC ranked 4th on the list.