Great-West Lifeco subsidiary Empower Retirement is increasing its presence in the United States with an agreement to buy Personal Capital for up front consideration of US$825 million, and deferred consideration of up to US$175 million subject to achievement of target growth objectives.
Empower, the second largest defined contribution (DC) record keeper in the U.S. based on the number of participants, is an important growth platform for Great-West in both the retirement and retail wealth management markets. Personal Capital is a hybrid wealth manager that combines a leading-edge digital experience with personalized advice delivered by human advisors.
Combines retirement plan services and personal wealth
The combination will bring together Empower’s leading retirement plan services and integrated financial tools, and Personal Capital’s digitally oriented personal wealth management platform.
“This transaction supports Empower’s objective of accelerating growth in retail advice and wealth management for participants and is complementary to its objective of scaling its defined contribution retirement business both organically and through M&A,” said Paul Mahon, president and CEO of Great-West Lifeco.
Purchase strengths value proposition
“The combination of Empower and Personal Capital strengthens our value proposition for customers and supports our objective of increasing value for shareholders.”
Personal Capital will continue to operate as a high-growth direct-to-consumer business and is expected to reach standalone profitability as it achieves scale. It will leverage Empower’s and Lifeco’s scale and infrastructure to enhance the value proposition for its customers, which is expected to drive increased growth and adoption.
Taking the next step forward
Empower will integrate Personal Capital’s technology and capabilities to deliver a suite of state-of-the-art financial wellness tools along with leading digital and human advice to current and future Empower retail clients.
“Empower and Personal Capital are joining forces to take the next step forward in the evolution of an integrated platform to deliver personalized advice, financial wellness and comprehensive financial planning to millions of individual investors and retirement plan participants,” said Edmund F. Murphy III, president and CEO of Empower.
