Empower to Acquire Digital Adviser Personal Capital

Personal Capital will be positioned to serve plan participants who seek a combination of digital and human advice while helping to accelerate the capture of rollovers and other out-of-plan assets, the firms say.

Empower Retirement and Personal Capital, a digital-first registered investment adviser (RIA) and wealth manager, announced they have entered into a definitive agreement for Empower to acquire Personal Capital.

Edmund F. Murphy III, president and chief executive officer of Empower, tells PLANADVISER, “We will integrate Personal Capital’s innovative, digital personal financial management platform with Empower’s retirement plan services platform to create a best-of-breed offering, expanding our capabilities to best serve participants and achieve their financial goals.”

Murphy says benefits to investors and retirement plan participants include:

  • A comprehensive financial wellness solution for retirement plan participants that takes into account their full financial picture; and
  • The ability to offer individuals a single stop for personalized financial advice, financial planning and goal setting, capable of addressing financial complexities and solutions.

“Customers can expect a seamless experience, as the focus remains on delivering the highest quality client engagement and service to the marketplace,” he adds.

The firms say the capability to offer retirement plan sponsors’ employees a singular view of their entire financial picture will create new opportunities for plan sponsors to have improved financial wellness benefits that are highly tuned to the needs of individual employees. The combined company’s solution “will help Empower clients differentiate their benefit offering in a highly competitive labor market,” the announcement says.

“Leveraging Empower’s scale and infrastructure, Personal Capital will be positioned to serve the growing segment of consumers who seek a combination of digital and human advice while helping to accelerate the capture of rollovers and other out-of-plan assets,” the firms say.

Personal Capital’s President and Chief Executive Officer Jay Shah adds, “By pairing consumer technology and human advice, we provide data-driven personalized financial solutions and help our clients find financial confidence at scale. With Empower, we are joining forces with a philosophically aligned partner to accelerate our original vision and mission.”

After the close of the transaction, Personal Capital will be branded as “Personal Capital, an Empower Company” and will continue to provide its financial tools and investment solutions to its clients. 

Shah will serve as president of Personal Capital, reporting to Murphy, and will be a member of its executive team. A joint team from both enterprises will work together to integrate the Personal Capital and Empower offerings.

The transaction is expected to close in the second half of 2020, subject to required regulatory approvals and other customary closing conditions.

Empower, formed in 2014, administers $656 billion in assets on behalf of 9.7 million American workers through approximately 40,000 workplace savings plans. Empower serves all segments of the defined contribution (DC) plan market and provides services to plans of all sizes, including private-label recordkeeping clients. Empower also serves 135,000 individual retirement account (IRA) and brokerage account customers with approximately $13 billion in assets.

Since its founding in 2009, Personal Capital has added more than 2.5 million users on its platform, tracking more than $771 billion of household assets.