Empower Workplace Assets Rise 13% Through Q2, Personal Wealth Jumps 28%

Empower saw its assets under administration rise about 13% from one year ago to $1.4 trillion, while its personal wealth division rose 28% to $65 billion through the year’s second quarter, according to an earnings report Wednesday from parent company Great-West Lifeco Inc.

During the quarter ending June 30, Empower’s earnings increased 57% year-over-year, up 21% from the first quarter, according to the Greenwood Village, Colorado-based division of Great-West. Empower also announced an increase in participants of 5% from the year prior, to 18.3 million people.

The report on the personal wealth side comes about six months after Empower announced the completed integration of its acquisition of Personal Capital, with a rebranding to Empower Personal Wealth and an effort to further sync its retirement plan business with consumer wealth management.

“We are starting to see some of the benefits associated with the transactions beginning to play out,” says CEO Ed Murphy. “It’s one of those quarters where we were hitting on all cylinders.”

Murphy cited sales growth of 5% quarter-over-quarter in the consumer wealth business, overseen by Carol Waddell, who was named to the post in January.

“I would stay we are still in the early stages, but we are really pleased with the progress with the qualified leads that we are seeing and converting those leads directly or referring some of them to our adviser partners,” Murphy says. “There is no shortage of lead generation activity, and I think that’s evident in the direct-to-consumer space, but also the rollovers that we are seeing come off of our workplace solutions platform.”

Empower’s rollover capture has grown quarter-over-quarter, according to Murphy, in part because the firm is able to service account averages of about $100,000, which are often passed up by third-party wealth managers.

“They tend to set higher thresholds in terms of complexity and dollar amounts,” Murphy says. “But in the case of Empower, we can support those customers, and we don’t discriminate on account balances.”

In terms of workplace solutions, Murphy reports a sales pipeline of $2 trillion in requests for proposal or information opportunities. He notes strong client retention for most plans but says if there is any trend among plan sponsor clients, it is a slowdown in churn among small businesses of 1,000 employees or fewer.

“If the averages are flat or down, sometimes you see more RFP activity [among sub-1,000 employers],” he says. “But when markets are up, the rising tide lifts all boats, and there’s not necessarily the need for sponsors to look outside for other providers.”

Murphy says he is “cautiously optimistic” about the overall economy through the rest of the year and expects to see general M&A activity return to stronger levels in 2024.

“M&A opportunities to make additional investment, either in partnerships or outright acquisitions, will emerge, and you’ll see a lot more in 2024 than we’re seeing in 2023,” he says.

For Empower specifically, the CEO says: “I think if there’s an opportunity for us to strengthen and enhance our product offering, add talent to the organization, add scale, add capabilities that we think are going to be important to our customers—we’ll be very engaged in those kinds of situations.”