Meet your chief investment officer

A Q&A with Neil Gilfedder.

Article published: May 15, 2023

Neil Gilfedder joined Edelman Financial Engines in 2014, most recently leading the team responsible for portfolio management, representing more than 1.3 million clients and more than $242 billion in assets as of Dec. 31, 2022. With over 20 years of experience in portfolio management and research, Neil is actively engaged with both the wealth planning and employer sides of our enterprise, making him uniquely qualified to carry our investment methodology forward. We asked Neil for background on his new role, what he’s learned on his journey and his advice for investors.

What first sparked your interest in the markets?

I come from a family where no one invested in or really knew about the markets. When you had money to save, you went to the bank. Also, teachers matter. The best teacher I had was my secondary school economics teacher. I found understanding how the economy worked utterly fascinating. I’m sure my family got tired of me talking about unemployment and inflation at the dinner table. As I studied economics more, I then started to see the importance of financial markets – which ultimately are how companies raise capital and are able to invest.

After studying economics at university, going into investing seemed like a fairly logical career move. I took the Chartered Financial Analyst® exams over my first three years and developed a deep understanding of various aspects of investment management. It was something that I was intellectually fascinated with, and I wanted to turn that into doing something useful with that passion. And here I am 25 years later.

What have you learned along the way?

Soon after I began, I witnessed the frenzy of the dot-com boom, followed by the dot-com bust. I then worked through the global financial crisis of 2007-2009, the pandemic and most recently, the 2022 downturn. So those are several major disruptions in the markets.

Two lessons I learned are to 1) maintain your focus on your goals and 2) not get drawn into thinking that this time is different – in good times as well as bad.

 

I benefited from having colleagues with more experience than I had at the time, who had been through previous difficult markets. I like to think I am a realistic optimist. The drive to innovate and sell means that there will always be companies that will do well and make profits, and that is what drives markets.

What does a chief investment officer do?

The chief investment officer is responsible for all the investment functions of the company. That spans from overseeing the development and operations of investment programs, to heading the Edelman Financial Engines Investment Committee, to communicating with our clients and planners about markets and our investment philosophy. I am responsible for monitoring the investments of our clients and using our expertise to manage their investments to help them achieve their goals. I take this responsibility very seriously, as does everyone on the Investment Management Team.

What does a typical day look like for you?

I start the day by reviewing the financial news on the train on the way to the office. I look at what happened in international markets overnight and what data on things like unemployment and inflation is being released. When I am at work, I love to talk to planners and hear what is on their clients’ minds. This helps to ensure I am connected to the people who have put their trust in us.

I am fortunate to have a great group of colleagues on the Investment Management Team. It is an interactive group and I like to hear their ideas and concerns. We work as a team to figure out solutions to problems and to develop new products. Teamwork is key. I find it satisfying to see the power of collaboration.

What does your team look like?

We have a very collaborative approach at Edelman Financial Engines. I am lucky to have an extremely strong and experienced team of 35 spanning from people with doctorate degrees and academic backgrounds – who help design our algorithms and fine-tune them based on how markets have been behaving – through to people who have frontline investment and operational experience. They manage our investments day to day to help ensure that everyone’s portfolio is aligned with their goals and kept up to date.

What is unique about your process?

Edelman Financial Engines does have a unique approach to investing. The “engines” in our name refers to the algorithms that allow us to do two things that really make us stand out. First is our forecasting approach. The future is of course uncertain, but we take an extremely detailed and methodical approach to forecasting possible outcomes at the individual level. We implement thousands of simulations of the future so you can see how investments perform in different markets. This means we can give every one of our clients access to the information they need to make informed choices about the important decisions in their lives, how much to save and invest to help achieve their goals, and how much risk to take on the way.

The second part is the algorithms that help us build the portfolios that our clients are invested in. We look at the drivers of risk and return in the markets, and make sure that the portfolios are built in a way that can get the most out of the risk clients take in the long run.

What advice do you have for investors?

The most important thing when investing money is to get a really clear understanding of what it is you are investing for – whether it’s saving for retirement or targeting another goal. This is why it is so important that you work with your planner. The hardest thing is to stick with a plan. It takes a strong stomach when markets go down. Markets are unpredictable – what is predictable is that there will be periods of volatility. Of course past performance doesn’t guarantee future results, but over the long term, markets tend to go up. Reacting emotionally and selling when you are scared can mean you miss out on the market recoveries and lock in your losses.

In your new role, you succeed Christopher Jones, the founding chief investment officer of Edelman Financial Engines. Is there anything you will do differently?

I joined the company nine years ago, and I joined because of three things.

First, I passionately believe in the mission of the company: offering the best advice and investment management available to people regardless of how wealthy they are. Second, I believe in the way we invest in markets – cost-efficient, diversified and tailored to an individual’s goals. And third, and the factor that really swung the decision for me to join, was the people I’d work with – in particular, Chris Jones. He built an amazing department, created an innovative investment methodology, and has been a big part of building this successful company. So, I come into this role knowing that I am building on Chris’ legacy. It’s important to note that this is part of a thoughtful succession plan that builds upon his accomplishments, and Chris is now transitioning into a new role as a special advisor to the firm.

And what is exciting is, there’s still lots to do – new ways we can help clients achieve their goals.

I am also excited to develop how we communicate with clients. That is really important to me and something I have a particular interest in. The world has been an unsettling place for investors over the last year, and one thing I have focused on is making sure that we provide information about what is happening and why it’s happening, and most importantly, putting it in a context for how clients should be thinking about their investment plans. Things can be less scary when you understand why they are happening.



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