Great-West Lifeco Subsidiary to Buy Personal Capital

dhita yudha

By Dave Sebastian


Great-West Lifeco Inc.’s subsidiary Empower Retirement said it is buying the personal-wealth management company Personal Capital Corp. for an upfront consideration of $825 million.

The price entails a deferred consideration of up to $175 million over two years, subject to achieving certain milestones, Empower, a retirement-plan recordkeeping company, said Monday.

Empower said it could grow in retail advice and wealth management through the transaction. The company said it will integrate Personal Capital’s technology in financial-wellness tools. Empower expects the acquisition to help it increase defined-contribution sales, managed accounts usage rates, participant engagement and the adoption of more services.

Empower said it expects to fund its upfront consideration with cash on hand and $500 million in debt financing. It sees one-time integration expenses of $57 million over 17 months, as well as transaction expenses of $28 million. The company expects the deal to close in the second half

Read More

Great-West subsidiary buying Personal Capital in deal worth at least US$825M

dhita yudha

Great-West Lifeco Inc. will shell out more than US$800 million to buy U.S. investment manager Personal Capital — and its chief executive hinted the company is prepared to dip into its coffers again if other promising deals come along.

Great-West subsidiary Empower Retirement said Monday that it will pay US$825 million for the hybrid wealth manager that combines a digital experience with personalized advice delivered by people. It could spend up to US$175 million more, if specific target growth objectives are met.

President and chief executive Paul Mahon said the deal with the Colorado-based business is helpful for customers who have a range of assets spread out across banks and brokerages, but want to make decisions around budgeting, buying a house or saving for retirement.

Great-West advisers would meet those clients face-to-face to share advice, he said.

“But mass affluent Americans or mass affluent Canadians that are on retirement savings

Read More

Empower Retirement Acquires Personal Capital

dhita yudha

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

Read More

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

dhita yudha

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

Read More

Empower Retirement acquires Personal Capital in billion-dollar deal

dhita yudha

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

Read More

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

dhita yudha

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.

Read More

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.

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

Read More

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

dhita yudha

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
Retirement Planner
Net Worth Tracker
Bill Tracking
Bill Pay
Reconcile Transactions
Track the Market Value of Your Home
Read More

Personal Capital sells to Empower Retirement in $1B deal

dhita yudha

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,

Read More

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

dhita yudha

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
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

Read More