Firm has doubled customer base and assets under
administration since 2020
Empower today announced that it has entered its tenth year of
operations with record earnings achieved through sustained business
growth and sales momentum. The firm’s full-year after-tax base
earnings1,2 in 2023 were $749 million (US) or $1 billion (CAD). The
company now administers more than $1.5 trillion in assets for 18.5
million individuals.
Empower, a leading provider of retirement and wealth
management services, released results as part of a broader
quarterly announcement by its parent company, Winnipeg-based
Great-West Lifeco (TSX: GWO-CA). For more information on Great-West
Lifeco’s fourth-quarter 2023 results, please see the release on the
firm’s website:
- Great-West Lifeco reports record base earnings in the fourth
quarter of 2023; announces 7% dividend increase
(greatwestlifeco.com)
Highlights from Empower’s reported results at the close of 2023
include:
Empower Workplace Solutions (EWS):
- Defined contribution plan assets under administration (AUA)1
increased 17% year over year to $1.5 trillion.
- Participants served: a record 17.9 million.
- Funded sales1 of $54 billion; pipeline1 across all segments at
almost $2 trillion.
Empower Personal Wealth™ (EPW):
- AUA1 was $72 billion, up 31% over the prior year as a result of
both strong net inflows and positive markets.
- Wealth clients are up 268%, or a Compound Annual Growth Rate
(CAGR)1 of 54%, over the three-year period.
With this combination of increased scale and growth, Empower’s
base earnings1 have grown by 400% in three years, and its base
return on equity1 in the U.S. has doubled in that same period.
“We delivered a strong quarter at Empower, with positive cash
flows and strong organic growth across both Workplace Solutions and
Personal Wealth,” said Empower President and CEO Edmund F. Murphy
III. “This continues an extended period of expansion that has been
our hallmark since Empower was created in 2014.”
Acquisitions + organic growth
Since its inception in 2014, Empower has grown through a
combination of strategic acquisitions and organic growth. Today,
Empower Workplace Solutions is the second-largest retirement
services provider in the U.S.3 In 2023, the firm expanded its
business to create a focused wealth management unit called Empower
Personal Wealth, which is composed of its legacy retail unit and
the Personal Capital business it acquired in 2020.
This combination has led to a doubling of assets and
participants since 2020, resulting in higher market share and
material gains in scale. Organic net flows1 in Empower’s defined
contribution business have averaged 4% annually as a percentage of
beginning AUA.1
“Through our investment, Empower has made a significant
commitment to the retirement services market, and our intent is to
build on that through continual service to employers, plan
participants and the advisors who serve them,” said Murphy.
Empower Personal Wealth’s offering, which combines a powerful
and unique digital experience with human advice, has driven annual
net inflows1 of 21% over the last three years (2021-2023). Today,
EPW employs over 1,000 advisors serving individual investors from
across the wealth spectrum, from the mass affluent to
high-net-worth individuals.
“Empower is extending its legacy of being a valued provider of
financial services to more people who want financial advice,
education and investment expertise,” said Murphy. “The last year
proved that we are positioned to grow this business and help our
clients seize opportunities to build the financial security they
want.”
Prudential integration
In 2022, Empower closed on its acquisition of the full-service
retirement business it acquired from Prudential. The integration of
that business is currently underway and slated for completion later
this year. “Retention levels of the clients, participants and
assets from the Prudential business remain high and exceed original
expectations,” said Murphy.
The Prudential integration program achieved pretax run-rate cost
synergies of $80 million at the end of 2023, with the remainder to
be assumed during the first half of 2024.
ABOUT EMPOWER
Recognized as the second-largest retirement services provider in
the U.S.3 by total participants, Empower administers approximately
$1.5 trillion in assets for more than 18.5 million individuals4
through the provision of retirement plans, advice, wealth
management and investments. Connect with us on empower.com,
Facebook, X, LinkedIn, TikTok and Instagram.
1 This is an unaudited non-GAAP financial measure. Refer to the
“Non-GAAP Financial Measures and Ratios” section in the Great-West
Lifeco 2023 Annual Management Discussion and Analysis (MD&A)
for additional details. Please visit Financial reports - Great-West
Lifeco Inc. (greatwestlifeco.com).
2 On January 1, 2024, Great-West Lifeco completed the sale of
substantially all of Putnam Investments to Franklin Resources,
Inc., operating as “Franklin Templeton.” Great-West Lifeco retained
a controlling interest in PanAgora Asset Management, a leading
quantitative asset manager, as well as certain other aspects of the
Putnam business. The 2023 results presented herein include these
results as Empower will assume these retained operations in
2024.
3 Pensions & Investments 2022 Defined Contribution Survey.
Ranking measured by total number of participants as of September
2022.
4 As of December 31, 2023. Information refers to all retirement
business of Empower Annuity Insurance Company of America (EAICA)
and its subsidiaries, including Empower Retirement, LLC; Empower
Life & Annuity Insurance Company of New York (ELAINY); and
Empower Annuity Insurance Company (EAIC), marketed under the
Empower brand. EAICA’s consolidated total assets under
administration (AUA) were $1,544.5B. AUA is a non-GAAP measure and
does not reflect the financial stability or strength of a company.
EAICA’s statutory assets total $72.1B and liabilities total $68.3B.
ELAINY’s statutory assets total $7.2B and liabilities total $6.9B.
EAIC’s statutory assets total $92.0B and liabilities total
$91.0B.
On August 1, 2022, Empower announced that it is changing the
names of various companies within its corporate group to align the
names with the Empower brand. For more information regarding the
name changes, please visit empower.com/name-change.
________________________________________ Empower refers to the
products and services offered by Empower Annuity Insurance Company
of America and its subsidiaries. “EMPOWER” and all associated logos
and product names are trademarks of Empower Annuity Insurance
Company of America.
Advisory services are provided for a fee by Empower Advisory
Group, LLC (EAG). EAG is a registered investment adviser with the
Securities and Exchange Commission (SEC) and subsidiary of Empower
Annuity Insurance Company of America. Registration does not imply a
certain level of skill or training. Investing involves risk. Past
performance is not indicative of future returns. You may lose
money. All visuals are illustrative only. Actors are not EAG
clients.
On April 1, 2022, Empower Annuity Insurance Company of America,
an affiliate of Empower Retirement, LLC (Empower) acquired the
retirement services business of Prudential Financial, Inc.
(Prudential). EAICA acquired Prudential’s retirement services
businesses with both a share purchase and a reinsurance
transaction. EAICA acquired the shares of Empower Annuity Insurance
Company (formerly Prudential Retirement Insurance and Annuity
Company), and business written by The Prudential Insurance Company
of America was reinsured by EAICA and Empower Life & Annuity
Insurance Company of America of New York (for New York business).
Following an initial transition period, EAICA will become the sole
administrator of this business. Empower refers to the products and
services offered by EAICA and its subsidiaries, including Empower
Retirement, LLC. Empower is not affiliated with Prudential or its
affiliates.
©2024 Empower Annuity Insurance Company of America. All rights
reserved. RO-3394746-0224
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version on businesswire.com: https://www.businesswire.com/news/home/20240216445702/en/
Stephen Gawlik - Stephen.Gawlik@empower.com Alex Goss -
agoss@stantonprm.com
Great West Lifeco (TSX:GWO)
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