Empower Retirement to acquire Personal Capital – Business Insider

dhita yudha

The US-based retirement services provider has entered into a definitive agreement to acquire wealthtech Personal Capital for an initial $825 million, with a further $175 million in planned growth incentives. Business Insider Intelligence Personal Capital describes itself as a hybrid advisor: It offers automated portfolios in stocks and bonds for retail […]

The US-based retirement services provider has entered into a definitive agreement to acquire wealthtech Personal Capital for an initial $825 million, with a further $175 million in planned growth incentives.

Global fintech M&A volume



Business Insider Intelligence


Personal Capital describes itself as a hybrid advisor: It offers automated portfolios in stocks and bonds for retail investors and registered investment advisors, much like fully automated robo-advisors, but it also offers human advice and financial planning services and tools, including on tax optimization and insurance coverage. Empower Retirement is a subsidiary of Canadian insurer Great-West Lifeco and is the second-largest administrator of retirement investment plans in the US.

Personal Capital has been seeking a buyer on and off for at least a few years and has been in negotiations with other financial institutions (FIs). Personal Capital has likely been exploring a takeover in order to access a steady stream of funding and infrastructure to help scale its business. It was in negotiations with JPMorgan about a potential acquisition, but talks broke down over Personal Capital’s price: The $1 billion price tag for a wealth manager yet to turn a profit was deemed inflated by JP Morgan, according to RIABiz.

Empower Retirement likely agreed to acquire Personal Capital because of its strong growth path and the potential to integrate with its offering to boost the customer experience.

  • Personal Capital has enjoyed growth in its assets under management (AUM) in the last year. Personal Capital now has over $12.3 billion AUM, signifying about a $2 billion increase in the last year. This likely enticed Empower Retirement to target the hybrid advisor, as the wealthtech has the potential to turn a profit with the scalability that the partnership between the two firms will offer.
  • Empower Retirement can integrate Personal Capital’s services with its own to build a complete financial wellness picture for clients and boost the customer experience. Going forward, Empower Retirement can bring together its own retirement plan services and Personal Capital’s wealth management platform to better serve financial planning and retirement needs by providing a complete picture of a user’s financial health. Moreover, Empower Retirement will be able to boost its own service offerings by leveraging Personal Capital’s digitally enhanced platform and financial planning tools to boost the customer experience.

Want to read more stories like this one? Here’s how you can gain access:

  1. Join other Insider Intelligence clients who receive this Briefing, along with other Fintech forecasts, briefings, charts, and research reports to their inboxes each day. >> Become a Client
  2. Explore related topics more in depth. >> Browse Our Coverage

Are you a current Insider Intelligence client? Log in here.

Source Article

Next Post

SAMA to Saudize Insurance Jobs

The Saudi Arabian Monetary Authority (SAMA), the Kingdom’s central bank and insurance regulator, said it will not extend the grace period for Saudizing administrative and customer service jobs at insurance companies and that defaulters will be punished. Company officials said they have completed procedures to Saudize jobs as demanded by […]