Empower Retirement Acquires Personal Capital

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Another big deal was announced Monday, one that reiterates an established trend in both industry consolidation and firms attempting to provide overall wealth management—from workplace retirement accounts to comprehensive household financial guidance.

Empower Retirement, the No. 2 player in the retirement plan record-keeper space behind Fidelity, has announced its acquisition of online registered investment advisor Personal Capital in a deal totaling $1 billion.

Far from being a merger of equals, Empower, which has more than 6,000 employees and administers $656 billion in assets for more than 9.7 million retirement plan participants, is a behemoth compared with Personal Capital, which currently manages $12 billion in client assets for just under 23,000 clients, according to its latest form ADV.

Principals, past and present, as well as pundits, welcomed the deal, many on social networks referring to it as an example of common sense

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Empower’s Personal Capital acquisition highlights convergence of wealth and retirement

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If we weren’t sure about the convergence of wealth and retirement, or the focus on serving and monetizing 401(k) and 403(b) plan participants, then Empower Retirement’s pending acquisition of Personal Capital gave us 1 billion reasons to believe.

Though some question the $1 billion price tag for a company with an estimated $50 million in earnings before interest, taxes, depreciation and amortization, Empower really had no choice. It needed to keep up with its main defined-contribution rivals, Fidelity and Vanguard, as well as with Charles Schwab, a giant in retail finance with a foothold in the DC space.

For Personal Capital, Empower provides easy access to 10 million potential clients.

“Growth in the wealth management business will not come from traditional marketing,” said Mark Bruno, managing director at Echelon Partners. “Wealth managers that add new clients, especially younger mass affluent investors, will be those that make it easy to do

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Empower Retirement acquires Personal Capital in billion-dollar deal

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Empower Retirement, the Greenwood Village financial firm with its name on Mile High Stadium, has made a major acquisition to fill out its roster.

Courtesy of Empower Retirement

Ed Murphy

The company announced Monday that it would acquire Personal Capital, a digital wealth management firm, for up to $1 billion. The price includes $825 million on closing later this year and up to $175 million if Personal Capital can hit undisclosed growth targets.

The purchase will allow Empower plan participants and individual investors to obtain a more complete picture of their financial holdings, access digital personal finance tools, and receive customized advice, the company said.

Longer-term, the combination should allow Empower to retain more plan participants as customers after they retire.

“The acquisition of Personal Capital and the integration of their tools and capabilities into the Empower offering is designed to create a best-of-breed platform — powered by digital and

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Personal Capital vs. Mint – Which is Best to Manage Your Money?

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Mint and Personal Capital are two web-based, money management platforms that are frequently compared to one another. While there are some similarities, the differences between the two render them very different services. Which you will prefer to work with will depend entirely on what you are looking for the platform to do.

Mint vs. Personal Capital–The Basic Comparison

Mint is an online personal budgeting platform. It pulls your entire financial life into one application. That includes your checking, savings, credit cards, investments, retirement accounts, and even your PayPal account. Mint enables you to look at your entire financial situation holistically, rather than in the bits and pieces.

Mint is one of the most popular budgeting applications available and is part of the TurboTax and Quicken families. The application enables you to manage virtually all aspects of your finances. And perhaps best of all, the application is completely free to use.

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Empower Retirement to acquire Personal Capital – Business Insider

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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

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Personal Capital vs. Quicken – Which is Best for Wealth Management?

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Personal Capital and Quicken are two of the most popular financial platforms available. Both have extensive budgeting and personal financial management capabilities. And while Quicken offers limited investment features, Personal Capital is virtually built around your investing activities.

Which of the two platforms is the best? It really depends on what you’re looking for. Quicken is certainly the more comprehensive budgeting platform. But Personal Capital also adds that all-important investment component. And given that investing should be the ultimate goal of successful financial management, that’s no small advantage in Personal Capital’s favor.

Below is a chart to compare key features of Personal Capital and Quicken:

  Personal Capital Quicken
Review Rating 9.5/10 9.2/10
Investment Tracking
Budgeting
Retirement Planner
Net Worth Tracker
Bill Tracking
Bill Pay
Reconcile Transactions
Track the Market Value of Your Home
Free
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Personal Capital sells to Empower Retirement in $1B deal

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Empower Retirement will buy digital advice company Personal Capital in a deal that could provide a pipeline of clients to Personal Capital from the retirement plans serviced by Empower.

Under the agreement, Empower will acquire Personal Capital for $825 million on closing and up to $175 million for planned growth, according to the companies. The transaction is expected to close in the second half of 2020.

The deal illustrates increasing consolidation among digital advice firms. In May, Charles Schwab acquired the technology behind thematic investing startup Motif, while Folio Financial bought Motif’s accounts. Folio was then quickly purchased by Goldman Sachs.

Empower plans to use Personal Capital’s technology and wealth management capabilities as a benefit that plan sponsors and advisors can offer to retirement plan participants. Personal Capital will leverage Empower’s size and resources to grow its presence among individual investors seeking a hybrid of digital and human advice,

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Fintech Personal Capital Sells To Canadian Insurer For $825 Million Plus Contingency Bonus

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Personal Capital, the San Francisco fintech that lets people invest in automated portfolios of stocks and bonds, is being bought by Empower Retirement for $825 million upfront, plus $175 million if growth goals are reached over two years. Personal Capital was last valued at $950 million in a February 2019 fundraise, according to PitchBook.

Former Intuit
INTU
CEO Bill Harris founded Personal Capital in 2009. Jay Shah joined the same year and became CEO in 2017.

Denver-based Empower is the second-largest administrator of retirement investment plans in the U.S. after Fidelity. It has $656 billion in assets and is a subsidiary of Canadian insurance giant Great-West Lifeco. 

Forbes identified Personal Capital as a likely acquisition target in May as the coronavirus was wreaking havoc on financial markets. Brian Ascher, a partner

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Empower Retirement to Buy Personal Capital

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Lovelyday12/Dreamstime

Empower Retirement, the nation’s second-biggest retirement plan record keeper (Fidelity is No. 1), is buying Personal Capital, a digital RIA that offers varying levels of access to human financial advisors.

Empower said it would acquire Personal Capital for “up to $1 billion in enterprise value, composed of $825 million on closing and up to $175 million for planned growth.” The companies said they expect the deal to close in the second half of this year.

“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,” said Edmund F. Murphy III, president and CEO of Empower.

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Personal Capital | TechRadar

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Personal Capital is a Fintech business that advises consumers on how best to invest their money and offers a portfolio of products that help to automate the process. Using their supporting app it’s possible to quickly consolidate many different accounts covering everything from investments through to retirement savings. 

Having been around since 2009 the personal finance software is both free and easy to use. It’s essentially a combination of a finance-tracking tool that can help you keep tabs of spending via your bank accounts and credit cards while also incorporating tools for monitoring investments. 

Personal Capital gets a further boost from the paid-for financial advisory services that it offers. It’s also possible to use various Personal Capital tools, including a Retirement Readiness Score, Recession Simulator and a Fee Analyzer to complete your financial housekeeping.

Personal Capital

Personal Capital offers a full suite of finance management tools (Image credit: Personal Capital)

Pricing

There’s

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