Empower’s Q3 Earnings Surge 35% Year-Over-Year to Record Highs

Empower reported a rise in its third-quarter earnings, achieving record financial results as of September 30, the country’s second-largest recordkeeper announced Thursday.

Driven by strong business growth, favorable market returns and continued sales momentum, the financial services firm—including its recently revamped wealth management division—saw after-tax base earnings increase to $264 million.

This latest result marked a 35% increase from the same period last year, a 12% increase from Q2 and brought Empower’s year-to-date base earnings to $711 million.

The Greenwood Village, Colorado-based company reported its assets under administration hit a new high of $1.8 trillion, representing a 26% year-over-year increase, while the number of retirement plan participants and clients climbed to 19 million, up 4% year-over-year.

Empower’s Workplace Solutions unit recorded a 32% year-over-year rise in base earnings, driven by increased fees from retirement plan sales, which reached $11.9 billion in the third quarter and $46 billion year-to-date, a 40% increase from the previous year.

Empower Personal Wealth, launched in January 2023 (though built off its earlier acquisition of Personal Capital), reported a 16% year-over-year earnings boost and 13% sequential growth from the second quarter, reflecting higher fee income and margins. EPW’s net new assets grew to $2.4 billion, up 26% year-over-year and 46% from the second quarter, while total assets under administration increased to $85 billion, a 32% rise year-over-year. EPW now serves about 711,000 clients, a 16% increase year-over-year.

Empower President and CEO Edmund F. Murphy III credited the company’s success to strategic investments in customer-focused initiatives, which have broadened Empower’s appeal.

“Empower is extending its appeal to a wider range of investors and employers who are making use of our expanded capabilities, insights, and offerings,” Murphy said in a statement. “We’ve made significant investments in new services, technology, and infrastructure, and it’s clear that our new and existing customers are noticing the value we bring to them.”

In September, Empower acquired Plan Management Corp., the creator of the OptionTrax platform for equity compensation. The acquisition allows Empower to integrate OptionTrax’s services with its own retirement and wealth management offerings. OptionTrax currently serves more than 300 employers with about $62 billion in plan value.

Empower’s parent company, Winnipeg, Manitoba-based Great-West Lifeco Inc., released the results as part of its broader Q3 earnings announcement.

Fidelity, the country’s largest recordkeeper, reported $15 trillion in AUA in an October 31 announcement; the firm is privately held.