Empower Retirement achieves $1 trillion AUA, cites client and advisor success as keys to growth
A combination of acquisitions and organic growth build scale to support participant retirement needs
CEO highlights key industry trends as drivers of stakeholder success
GREENWOOD VILLAGE, Colo., March 9, 2021 — Empower Retirement, the nation’s second-largest provider of retirement services1 is crediting the success of its clients, plan advisors and retirement investors as key factors in the company’s growth.
On January 31, Empower’s assets under administration rose above $1 trillion2 for the first time in the company’s history. When Empower was formed in the autumn of 2014 — through a three-part merger of legacy retirement businesses — assets under administration were about $400 billion. Today, Empower serves the needs of 12 million retirement plan participants3, 67,000 employer-sponsored retirement plans and works with approximately 40,000 advisors.
Empower has created scale through a combination of multi-year organic sales growth and acquisitions, including the 2020 purchases of the MassMutual retirement plan business and Personal Capital.
Empower Retirement CEO Edmund F. Murphy III cited the new asset level as an important metric that is less about dollars and more about the creation of value for stakeholders.
“Seven years ago, when we first started talking about the creation of Empower Retirement, the focus was on our clients. How would we best serve them? How would we help more people achieve the retirement security they deserve? Where can we invest to help others invest? Every single day we strive to provide the best answers to those questions,” said Murphy.
“Scale is a critical factor in retirement plan services because of what it allows us to do for the individual retirement investors and the services, technology and advice we can provide,” he said.
Murphy, who has led Empower since its formation, noted that retirement investors across the country have been aided by a long-term bull market. However, key retirement industry developments have been the unheralded driver of client success. Murphy cited five key trends:
Consultant, Advisor & Third-party administrator engagement: The investment on the part of financial intermediaries to providing a range of services to employers and participants has accelerated beyond expectations over the last decade. Murphy noted that consolidation through mergers and acquisitions of recordkeepers has been a focus for industry observers, but a similar trend among advisors to invest in growing their practices has been equally important in the development of the retirement industry. “We have put advisors and TPAs at the center of our business model because they can provide the service and insights that are crucial to employers,” said Murphy. “Advisors are recognizing that scale can help them deliver for clients.”
Employer commitment: The importance of financial benefits is increasingly recognized by employers as essential to attracting and retaining talented employees, Murphy said. Because of this, the conversations that clients are having with advisors and retirement plan providers are increasingly sophisticated and now go beyond retirement planning and into overall employee financial wellness, including liability management and goal-setting. “There is no question that employers are focusing on the financial health of their workforce — and that is a terrific development,” he said.
Investment and advice solution development: Murphy pointed to the development of both low-cost investment options and the rising availability of professional advice as key components to participant success. “Every study we have done has shown that advice is the single greatest driver of success,” said Murphy. “The combination of low-cost investment options with advice has been a boon to millions of investors.”
Technology innovation: The delivery of retirement services through technology has created untold value for plan sponsors, advisors and participants. “The dividend of increasing investment in technology is the creation of information that we can deliver to stakeholders,” said Murphy. He said that Empower’s 2020 acquisition of Personal Capital was ultimately centered on the development of creating better information to help retirement investors, employers and advisors achieve better insights so they can work together to create an individual’s financial plan.
“The more information we can deliver to a plan or to an individual drives their ability to take action. The right action will ultimately drive better retirement outcomes,” he said.
Policy partnership: Ongoing engagement with policymakers and regulators has proven to be a key factor in creating conditions for a healthy retirement ecosystem, Murphy noted. New legislation such as the 2019 SECURE Act and proposals such as the Securing a Strong Retirement Act — both of which Empower has supported — are recent examples of fruitful partnership between the retirement industry and the government to support the needs of working Americans. “We’re hopeful this positive engagement can continue because clearly it works well,” said Murphy.
About Empower Retirement
Headquartered in metro Denver, Empower Retirement administers approximately $1 trillion in assets for more than 12 million retirement plan participants as of Jan. 31, 2021. It is the nation’s second-largest retirement plan recordkeeper by total participants. Empower serves all segments of the employer-sponsored retirement plan market: government 457 plans; small, mid-size and large corporate 401(k) clients; not-for-profit 403 (b) entities; private-label recordkeeping clients; and IRA customers. Personal Capital, a subsidiary of Empower Retirement, is an industry-leading hybrid wealth manager. For more information please visit empower-retirement.com and connect with us on Facebook, Twitter, LinkedIn and Instagram.
Stephen Gawlik, Stephen.Gawlik@empower-retirement.com, 617-417-4408
Monica Mendoza, Monica.Mendoza@empower-retirement.com, 719-373-2460
To learn more about how we’re empowering plan sponsors and their participants to be more engaged in their retirement plans than ever before, call us at 800-719-9914.
1 Pensions & Investments 2020 Defined Contribution Survey Ranking as of April 2020.
2 Estimated assets after both the acquisition of the MassMutual retirement business and recent 1Q21 plan conversions. As of December 31, 2020. Information refers to the business of Great-West Life & Annuity Insurance Company and its subsidiaries, including Great-West Life & Annuity Insurance Company of New York and GWFS Equities, Inc. GWLA’s consolidated total assets under administration (AUA) were $971.6B. AUA is a non-GAAP measure and does not reflect the financial stability or strength of a company. GWLA’s statutory assets total $75.1B and liabilities total $72.9B. GWLANY statutory assets total $3.6B and liabilities total $3.4B.
3 As of January 4, 2021
FORWARD-LOOKING STATEMENTS DISCLAIMER
Certain statements in this press release constitute forward-looking statements representing management’s current view of future events based on reasonable assumptions. These statements are not guarantees of future performance as actual results may differ depending on the development and completion of this business combination. Consider these and other factors, uncertainties and potential events carefully and do not place undue reliance on forward-looking information. Other than as specifically required by applicable law, forward-looking information as a result of new information, future events or otherwise will not be updated.
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