Empower Retirement announced that it has entered into a definitive agreement to acquire digital wealth management firm Personal Capital in a $1 billion deal.
The combination will bring together Empower’s retirement plan services and integrated financial tools with Personal Capital’s digitally oriented personal wealth management platform. According to the announcement, the $1 billion acquisition will be composed of $825 million on closing and up to $175 million for planned growth.
“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,” Empower President and CEO Edmund F. Murphy III said in a statement.
The combination will give Empower and Personal Capital the ability to offer retirement plan sponsors’ employees a singular view of their entire financial picture. This, in turn, will help create new opportunities for plan sponsors to offer improved financial wellness benefits based on the needs of individual employees, the announcement explains. Moreover, it notes that this will position Personal Capital to serve consumers who seek a combination of digital and human advice, while helping to pick up rollovers and other out-of-plan assets.
Empower administers $656 billion in assets on behalf of 9.7 million American workers through approximately 40,000 workplace DC plans. Empower also serves 135,000 IRA and brokerage account customers with approximately $13 billion in assets, while Personal Capital has over 2.5 million users on its platform and currently manages over $12 billion in assets.
Upon closing of the transaction, Personal Capital will be branded as “Personal Capital, an Empower Company.” Personal Capital CEO Jay Shah will serve as President of Personal Capital, reporting to Murphy, and will be a member of its executive team.
The transaction is expected to close in the second half of 2020 subject to regulatory approvals and other closing conditions.
