Gallagher to Continue Push Into Retirement Advisement in 2023

Insurance powerhouse Gallagher’s pending acquisition of Buck will further its strategy of providing the full scope of financial planning to group plans and participants, its retirement head tells PLANADVISER.

Arthur J. Gallagher & Co., one of the world’s largest insurance brokerages, will push further into the retirement plan advisement space in 2023 on its march toward providing more holistic financial services, according to one of its practice leads.

The Rolling Meadows, Illinois-based insurance brokerage, risk management and consulting firm is working to complete a $660 million acquisition of the partnership interests of Buck, a New York-based retirement, HR and employee benefits provider, by the first half of 2023.

The acquisition will add to Gallagher’s recent focus on providing the full scope of group plan offerings, including defined benefit and contribution retirement plans; institutional investment consulting; and executive benefit solutions, says Jeff Leonard, Gallagher’s financial and retirement services practice lead.

“From a plan sponsor’s perspective, [the acquisition] pulls everything together in the group retirement space,” Leonard says.

The addition of Buck comes alongside numerous insurance tuck-in acquisitions by Gallagher this year, as well as deals for human resource and executive search firms. Gallagher also sealed a deal for f3 Companies in October, a “turnkey” asset management and retirement planning platform for use by registered investment advisers and individuals.

The trend toward offering full service insurance, HR, retirement, and wealth management mimics other insurance brokers in the space, such as Hub International and Marsh McLennan. The strategy has gained even more credence since the pandemic has made providing robust benefits including retirement plans crucial to draw and retain talent, according to surveys and industry sources.

Although Gallagher did not disclose the terms of the Buck deal, it confirmed it will bring f3’s more than $1 billion in assets under advisement (AUA) into Gallagher’s more than $100 billion in retirement and financial assets.

Adding Buck’s services, Leonard says, will provide a strong defined benefits focus to build on Gallagher’s own DB services, as well as bring in more clients with which the company can discuss defined contribution plans.

Leonard says that, after the transaction, Gallagher’s overall DC business will move from constituting about 80% of the firm’s business to a 50-50 split with its DB offerings. Furthermore, Buck will bring a pension client base in the U.K., where Gallagher does not currently have a presence.

The Full Suite

Overall, the Buck acquisition is another step in meeting a need Gallagher is hearing from clients (including human resource leaders) to help employees maximize their benefits across finance and health, Leonard says. That need will come in part from incorporating Buck’s bSuite—a platform for benefits administration and employee engagement—with Gallagher’s own personalized wealth solutions program, Gallagher Money Coaching.

“That’s a really nice opportunity for us to respond to the employers’ request to help their employees from a financial education perspective,” Leonard says.

Gallagher’s strategy is following a relatively recent trend of positioning services not just for the plan sponsor, but for their participants also, according to Leonard.

“Where we are today is much different than where we were 10 years ago,” he says. “I think in the past, financial planning and one-on-one coaching … was really expensive per employee. Now, with the technology, it’s becoming more price-accessible for employees, and that’s why it’s becoming more available.”

Leonard’s relationship with Buck goes beyond this recent deal. He worked at the firm from 2005 to 2013, including focusing on client retention and attraction in its retirement business. Now, Leonard says a key to keeping a client long-term is by offering them the full range of financial services.

“It is just a good opportunity for the longevity of the client,” Leonard says. “The more you know about the employer and what the employer is providing, the better adviser you can be. … We’re more efficient if we’re under the tent for everything, so to speak, because our people have access to the information.”

The Buck transaction will bring 2,300 new employees to Gallagher, which as of December 31, 2021, had 39,000 employees. The deal is expected to close during the first half of 2023, subject to customary regulatory approvals.

Going forward, Leonard sees the firm considering the acquisitions of small, local retirement and wealth advisories around the U.S. He says having the wealth platform of f3 Companies and the broader footprint of Buck will make those types of acquisitions more possible.

“I see us now being able to go around and build across the country on the retirement and wealth side,” Leonard says.