Edelman Financial Engines, a registered investment advisor and managed accounts provider with more than $308 billion in assets under management, announced Tuesday that it has promoted its new president to acting CEO as it considers the firm’s long-term needs.

Former CEO Jay Shah announced on Tuesday that he would step down into an advisory role with the Boston-based firm until the end of the year. Meanwhile, Ralph Haberli took what the company called an “acting CEO” role.

Haberli joined Edelman Financial in July from Capital Group, where he was president of the institutional and retirement client group. He will now, at least temporarily, oversee the firm’s push to expand its wealth management footprint to align with its leading position as a managed accounts provider in defined contribution retirement plans.

“Ralph has full authority to lead EFE while the board considers the company’s long-term CEO needs,” according to a spokesperson.

Haberli said Edelman Financial Engines is “operating from a position of strength and differentiation. We alone are positioned to serve clients in every stage of their financial journey—from their first paycheck through our leading 401(k) managed account offer, through the accumulation years, to and through retirement with our full-scale wealth management expertise.” 

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He said the firm would continue to grow through acquisition, but also referred to its organic growth potential via its managed advice products.

“We will remain deliberate and strategic with inorganic growth opportunities,” he said. “But I believe our scale, marketing engine and proprietary tech and solutions also make us an attractive partner to planners who can see the benefit of our national footprint and integrated service model—and, most importantly, share our client-first values.” 

Edelman Financial Engines was created when private equity investor Hellman & Friedman merged Ric Edelman’s RIA with Financial Engines, a tech-focused retirement plan advisor, in 2018. In 2021, that combination was rewarded when Warburg Pincus took a minority stake in the firm.

Jay Shah was hired as CEO in May 2023, having just commandeered the sale of tech-focused RIA Personal Capital to one of the country’s largest retirement plan providers, Empower.  

Under Shah’s tenure, the firm expanded its wealth business via acquisition, including two deals this year for firms with assets of $426 million and $300 million, respectively.

According to reporting by Citywire, Hellman & Friedman and Warburg Pincus were seeking a buyer for the firm, and having failed to find the right price, recently took it off the market.  

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Phil Waxelbaum of Masada Consulting said the change in leadership is likely a sign that the private equity investors were agitating for a new direction to find the desired exit, either through a recapitalization or, at some point, a public listing.

“They’re not desperate sellers,” Waxelbaum said. “They clearly weren’t getting the valuations back that were consistent with what they had valued the entity at.”

A spokesperson for H&F declined to comment on the leadership change, and Warburg Pincus did not respond to a request for comment.

Shah posted on LinkedIn that he had decided to leave Edelman at the end of the year.

“What a privilege it has been to lead this great company, a genuine pioneer in bringing institutional-grade investing and financial planning to the masses,” he wrote. “I’m very proud of what we accomplished during my time as chief executive of EFE—key executive leadership changes to complement a tenured and devoted team, a cultural reset of our purpose, vision and values and execution of transformative strategies to modernize how we attract, acquire and service our clients—creating a stronger foundation for greater growth.”

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Shah wrote that he would be “taking a breather” before returning to the space.

“There’s too much work to be done, plenty of fuel for the fire, and many ways to contribute to our industry,” he wrote.

Tim Welsh, president and founder of consultancy Nexus Strategy, said via email that Shah “did a great job, and I’m sure they’ll find someone similar.”

Welsh said with the strong demand for wealth management and Edelman Financial’s position to cross-sell via its retirement business, it “will do fine” no matter the leadership changes.

“Bottom line here is that just like the wirehouses and big IBDs, no matter who they put in charge, they won’t materially change the direction of the business as the underlying market demand is just too large to be impacted,” he said.

Consultant Waxelbaum said that private equity’s entrance into the RIA and broker/dealer space has made leadership reshuffling the norm, not the exception. He noted that private equity firms are beholden to their investors and therefore focused on the best outcomes for them, along with the private equity firm’s reputation in drawing future partners.

“If you are paying attention to the PE world, you are seeing a lot of this,” he said. “They are structuring leadership teams to be capable of running a public company. … You can either sell it to a large buyer, or you can sell it to a large number of buyers, which is the public.”