Empower, the country’s second-largest retirement plan provider, is eying potential RIA acquisitions as it continues to grow its personal wealth division.
Empower Personal Wealth, which has about 1,000 financial advisors, has grown through organic client acquisition through offshoots of its retirement plan business, which includes roughly 19 million participants and nearly $1.8 trillion in assets under advisement.
The Greenwood, Colo.-based firm’s wealth focus was seeded five years ago when Empower purchased RIA Personal Capital for about $1 billion. Overall, its personal wealth division has reached $100 billion in client assets, marking a 25% compound annual growth rate since its personal wealth division was established in January 2023.
However, even as the firm hits its latest wealth milestone, CEO and President Ed Murphy said it is interested in eventually acquiring a national RIA to further bolster the division.
“Near-term, it’s continuing on this organic investment and growth that we’ve been driving in the personal wealth business,” Murphy said. “But before too long, I think there are opportunities through an acquisition to give us better distribution coverage and to augment the existing advisor force that we have with advisors that allow us to compete more effectively in the high-net-worth space.”
Empower is no stranger to M&A, having built its retirement base over the years through acquisitions of large recordkeeping businesses from the likes of J.P. Morgan, Prudential and MassMutual. Beyond its deal for Personal Capital, which was a tech-focused advisory founded by Bill Harris, Empower entering the RIA acquisition space as a strategic acquirer would be new terrain.
“That’s a muscle and a discipline that we have,” Murphy said. “We’re also fortunate that we have a pretty good-sized balance sheet and a lot of support in our holding company and support to invest.”
The firm is owned by Canada’s Great-West Lifeco., a financial services holding company across insurance, asset management, investment and retirement.
Murphy said Empower would be looking for more than advisor talent and a national footprint in such a deal; it would also need a management team skilled in the higher-net-worth market.
“For us, it wouldn’t be just about adding the distribution capability—in some cases, it would be adding management to augment what we already have,” he said. “That’s a little different if you contrast that with the types of transitions we’ve done on the workplace side.”
Murphy said Empower will still actively acquire retirement record keepers, with those opportunities remaining “priority number one” and wealth shops coming next. At the moment, the firm will continue hiring and training financial advisors who are often focused on planning more than prospecting.
“Unlike the traditional RIA, where a lot of the efforts are focused on the hunting and the prospecting, we do have this installed base of prospects,” he said.
Murphy said the firm’s organic growth on the wealth side is well into the double-digits. He attributed this to three channels: terminated or job-switching employees looking to move retirement assets; active and inactive employees looking for help beyond retirement investments; and direct-to-consumer or unaffiliated clients—including about 750,000 active users of Empower’s free online financial tools.
“We’ve really spent a lot of time and investment over the last several years building out that product set and product menu over on the workplace side and the wealth side,” Murphy said. “It really becomes a core part of our value proposition not just to the end-user, but to the sponsors themselves.”
Murphy also noted Empower’s increased investments in branding and advertising, which included about $50 million in traditional advertising spend over the past three years.
“Our goal is to build a powerful, consumer brand—we know that takes time,” he said.
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