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.
The potential $1 billion price represents a “stunning” premium for Personal Capital “relative to its (strong but not THAT strong) $12B AUM base as an RIA,” prominent industry blogger Michael Kitces tweeted.
The “real story,” added Kitces, is that Empower wants to do with Personal Capital what Financial Engines is doing with merger partner Edelman: “human advisors in 401k channel…”