Empower, a leading provider of retirement and wealth management services, has achieved a record-breaking milestone in its financial performance for 2024. The company announced an impressive $973 million in base earnings, marking a 30% increase compared to the previous year. This substantial growth has been driven by strong business expansion and robust sales momentum across both its workplace and wealth management segments. Additionally, Empower’s base return-on-equity (ROE) has seen a notable rise from approximately 12% to 16% over the past 12 months, reflecting its strategic and operational success.
A Year of Unprecedented Growth
The company reported a net earnings growth of 42% for 2024, a testament to its increasing influence in the financial services industry. These results were shared as part of a broader financial announcement by Empower’s parent company, Great-West Lifeco, headquartered in Winnipeg. Great-West Lifeco (TSX: GWO-CA) has provided a detailed breakdown of its fourth-quarter financial performance on its official website.
Empower’s growth strategy has been centered on delivering financial advice to a broader audience through innovative channels. This customer-focused approach has played a crucial role in strengthening its market position and expanding its client base.
Expanding Asset Under Administration (AUA)
Empower now administers a staggering $1.8 trillion in assets under administration (AUA), serving over 19 million individuals. This significant expansion underscores the company’s commitment to providing comprehensive financial solutions to a diverse clientele.
The company’s Workplace Solutions division has demonstrated remarkable resilience and growth. Managing approximately 88,000 employer-sponsored retirement plans, Empower welcomed around 600,000 net new plan participants in 2024, reflecting a 3.4% year-over-year increase. This growth highlights the trust and confidence that both employers and employees place in Empower’s retirement planning services.
Synergies and Operational Efficiencies
A significant factor contributing to Empower’s impressive earnings growth is the successful integration of Prudential’s retirement business. This strategic acquisition, coupled with the company’s focus on cost-efficiency initiatives, has led to enhanced operational synergies. As a result, Empower’s Workplace Solutions unit reported an average AUA growth of 22% in 2024, further solidifying its dominance in the retirement services sector.
Empower Personal Wealth™, which is celebrating its second anniversary this quarter, also witnessed substantial progress. The division reported a 29% increase in average AUA, driven by strong client engagement and the successful acquisition of rollover assets from defined contribution plans. The positive net flows into Empower Personal Wealth™ underscore the company’s effectiveness in helping individuals transition their savings into tailored wealth management solutions.
Leadership Insights and Strategic Vision
Empower President and CEO, Edmund F. Murphy III, emphasized the company’s commitment to financial guidance and accessibility. “At the center of Empower’s growth strategy is the delivery of financial advice to more people in new ways,” Murphy stated. “We achieved four strong quarters of growth in 2024 because our customers, their advisors, and the partners with whom we work are bringing much-needed advice to the millions of people we serve.”
Murphy also highlighted the long-term vision of the company, emphasizing its readiness for future expansion. “The year 2024 proved we are positioned to further expand this business and help our clients seize opportunities to build the financial security they want and need,” he added. His statement reinforces Empower’s mission to continuously innovate and provide financial solutions that cater to the evolving needs of its clients.
The Competitive Edge: Innovation and Client-Centric Solutions
Empower’s success in 2024 can be attributed to its unwavering focus on innovation and customer satisfaction. The company has leveraged advanced financial technology to offer personalized solutions that align with individual and corporate financial goals. With an emphasis on digital transformation, Empower has enhanced its online platforms and advisory services, ensuring seamless access to financial planning tools and resources.
Moreover, the company’s ability to integrate new acquisitions effectively has provided a competitive advantage, enabling it to scale operations while maintaining high service quality. Empower’s strategic initiatives, such as optimizing expense efficiencies and streamlining retirement plan management, have played a crucial role in driving sustainable growth.
Industry Trends and Future Outlook
The broader financial services landscape continues to evolve, with increasing demand for retirement and wealth management solutions. Factors such as longer life expectancy, rising healthcare costs, and economic uncertainties have heightened the need for comprehensive financial planning. Empower has positioned itself as a trusted partner for individuals and businesses seeking financial security.
Looking ahead, Empower plans to further strengthen its market leadership by:
- Expanding its advisory services to reach a wider audience and provide tailored financial guidance.
- Investing in digital capabilities to enhance user experience and improve engagement with clients.
- Fostering strategic partnerships to drive innovation and broaden its service offerings.
- Enhancing operational efficiencies to maximize profitability and sustain long-term growth.
With these strategic priorities, aims to maintain its upward trajectory and continue delivering value to its stakeholders.
