Great-West Lifeco Inc. (GWO) Earnings Call Transcript & Summary

Good morning. I'm Paul Mahon, President and CEO of Great-West Lifeco. I hope you and your families are well as we continue to navigate pandemic impacts across our communities. I know we all look forward to a more connected world. I'm hopeful that increasing vaccination rates will get us there soon and encourage vaccination for all who are eligible. Thank you for joining us for this Investor Day focused on Empower Retirement. Today, you will have an opportunity to hear from Empower President and CEO, Ed Murphy, and his executive leadership team as they do a deep dive on the Empower business. They will provide you with insights on the U.S. retirement and consumer wealth management markets and how Empower is positioned for success. They will discuss the MassMutual and Personal Capital transactions and how we're unlocking the value-creating potential in these businesses by integrating them with the Empower platform. We believe you will leave this session with a solid understanding of why we're so excited about Empower as a key part of the Lifeco growth story. Please note that today's formal presentations have been prerecorded and will be followed by a live Q&A session with today's presenters and other members of the Lifeco executive team. We hope that future investor days will find us meeting in person. Our intention is to host a series of investor sessions, each focused on a particular business and at the same time, update you on Great-West Lifeco's progress against our overall strategic growth objectives. Before we start, I'll draw your attention to our cautionary notes regarding forward-looking information and non-IFRS financial measures on Slide 2. These cautionary notes apply to today's discussions and presentation materials. Turning to our agenda. I'll spend about 15 minutes providing insights into Great-West Lifeco's overall strategy and how Empower's growth potential aligns with that strategy. More specifically, I'll provide you with insights into 4 important Lifeco value creation priorities and how they relate to Empower. You'll then have an opportunity to hear from Ed Murphy and the key leaders from Empower. Through their depth of understanding and experience, they will provide important insights into the growth opportunities in the markets where Empower operates. They will also illustrate the growth potential inherent in their business and highlight the transformational benefits of the MassMutual and Personal Capital transactions. Following the Empower team's presentation, I'll have some brief wrap up comments before we move to our live Q&A session. The live session will run for 45 minutes. Ed and his team, along with myself, Garry MacNicholas, Great-West Lifeco's Chief Financial Officer; and Andra Bolotin, CFO of Lifeco's U.S. operations will be available to take questions from institutional investors and analysts. You will find details on how to ask a question on the final slide of the presentation. It's going to be a great morning. So let's get started. Here, we illustrate the evolution and performance of our portfolio of businesses post the financial crisis. As you can see, we've been actively reshaping the Lifeco portfolio, executing over 15 transactions since 2012. We've highlighted some of the key actions taken on this chart. M&A has been an important lever for growth that has helped us achieve market-leading positions and accelerate our strategies. In 2012, after successfully navigating the financial crisis, we became active again in identifying opportunities to grow and strengthen the portfolio. This return to action surfaced the Irish Life acquisition opportunity, which ultimately closed in 2013. That acquisition aligned with our core strategy of establishing leadership positions in our chosen markets. It positioned us as the leading life assurance and pension provider in Ireland with significant transaction synergies. In 2014, we acquired the JPMorgan Retirement Plan Services' large market recordkeeping business and combined it with our existing U.S. record-keeping platforms. Through this combination, we built a scale leadership position in a market with strong underlying growth potential, and created the foundation for Empower Retirement strategy that you'll hear more about today. Through these and other M&A actions, we have positioned the portfolio for stronger growth while also funding a significant share buyback. Throughout, we've consistently delivered solid shareholder returns. As outlined here, our portfolio is well diversified across geographies and businesses. As of year-end 2020, the U.S. segment contributed 10% of base earnings. Today, you'll hear how Empower Retirement, bolstered by our 2 acquisitions in 2020, has the potential to unlock significant value, positioning our U.S. segment to be a major contributor to Lifeco's growth objectives in the coming years. These 4 priorities that are driving value creation across Great-West Lifeco are aligned with Empower's growth strategy. They represent areas of strength where we've been investing to create shareholder value. To start, we believe that effective delivery of advice is key to creating lifetime value through our millions of customer relationships. This aligns with the shift we observe across financial services, where profit pools are increasingly dependent on customer relationships that are strengthened through advice delivery. Profitability is driven by both proprietary product sales and advice fees associated with more open architecture, product and service solutions. Second is our ability to leverage technology to deliver digitally enabled advice across multiple channels. As you know, over the last 5 years, we've talked about our investments in technology to support organic growth. The acquisition of Personal Capital is enabling Empower with differentiated capabilities in the delivery of hybrid digital advice. A third area of strength is our access to millions of customer relationships through the workplace. This will be highlighted today when we talk about Empower, especially post-acquisition of MassMutual, which grew our participant base to over 12 million Americans. This same strength exists across our Canadian and European operations. We believe the workplace is a highly leverageable access point for providing advice and solutions to the mass affluent market. And the fourth priority ties importantly to the above 3. Employing our expertise in capital, risk and investment management to create competitive and profitable wealth management and insurance solutions for our customers. The scale of our existing customer relationships and our ability to access them through digitally enabled advice is a fundamental strength and growth opportunity across our businesses. Here, we highlight the workplace that will feature strongly when we dive into the Empower strategy. But I don't want to downplay the importance of our traditional adviser channels that serve affluent and high net worth customers across many of our businesses, including here in Canada. Our ability to strengthen these more traditional channels with digital capabilities is also fundamental to our growth and resilience. Here, we illustrate how we're leveraging the intersection of these priorities, advice, digital and workplace solutions to strengthen and extend our relationships with millions of customers. Our ongoing investments in digitizing the workplace have made for more efficient and effective delivery of retirement and benefits based advice and solutions to workplace participants. And we've also been investing to support independent adviser channels across our businesses, deploying technologies to help them to be more productive as they serve the needs of affluent and high net worth customers. An emerging area of focus across our businesses and highly related to the workplace is the introduction of the hybrid digital advice channel. This is where we're working to extend workplace relationships we have with millions of individuals into lifetime customer relationships. Related to this, you're going to hear about Personal Capital today, the engine they've built and how we're deploying those tools and capabilities at Empower. Similar strategies are being developed across workplace channels in our Canadian and European operations that also leverage technology and tools to create lifetime customer relationships. Here's a snapshot of how our 4 priorities play out across our geographies. In some businesses like Canada Life and Irish Life, all these priorities apply across their diversified businesses, supporting our leadership positions. This contrast with businesses that are more focused, like Personal Capital, which is centered on the delivery of hybrid digital advice and wealth management solutions. Another important consideration is the strength of our risk and investment expertise. While advice is at the core of our strategies, delivering competitive and profitable products and solutions to customers is critically important across all of our businesses. Related to this, Capital and Risk Solutions is a strong stand-alone growth business, but also an important capital management partner for many of our businesses. We've built a strong diversified portfolio with significant organic and extension growth potential. By focusing on the priorities I've outlined, we are confident in our ability to achieve the medium-term financial objectives we have set out here. They include base EPS growth of 8% to 10% per annum, 14% to 15% base return on equity and strong cash generation to support a progressive dividend policy and fund investments in future growth opportunities. Underpinning these objectives are the focused investments we've made to drive organic growth across our businesses as well as the significant benefits we expect from the capital deployed on the Personal Capital and MassMutual transactions. Beyond these objectives, we will continue to actively manage our portfolio, including deploying excess capital to drive incremental growth and increased resiliency. Our focus on resiliency and value creation extends to a broad range of stakeholders and our commitments to them. I want to speak to the priority we're putting on sustainability and the resilience of our business in the context of the changing environment in which we operate. This is about our environmental stewardship and the steps we're taking to be a positive contributor as the world deals with the challenges of climate change. Our focus internally and externally on diversity, equity and inclusion underscores 2 important beliefs. First, that our organizations must be reflective of the markets and communities where we operate. And second, that we must be a strong ally for traditionally underrepresented groups in support of building a stronger, more resilient and tolerant world. Finally, when we look to ESG, we see it as a significant commercial opportunity, given the capabilities we've built across our businesses. But we also see it as a responsibility in terms of our invested assets backing policyholder liabilities and the orderly transition of those assets in line with the changing world. With those comments, I'm excited to now have Ed Murphy and his team share insights into the Empower business and the important role it will play in driving Great-West Lifeco's continuing growth and success. Over to you, Ed.

Thank you, Paul. My name is Ed Murphy, and I'm the President and CEO of Empower Retirement. I'd like to thank you for your interest in Empower, and I'm pleased and excited to be here today to tell you our story. I'm here today to discuss the state of Empower Retirement and how we are driving growth across our business. In addition, we'll discuss the significant market opportunity that Empower has before it and how we are uniquely positioned to seize that opportunity. We'll also look at where Empower has been, how our long-standing commitment to growth has helped us get to where we are. You will hear from 5 key Empower leaders today. Richard Linton, President of Workplace Solutions, our core business-to-business function focused on defined contribution retirement plans. Workplace Solutions is Empower's principal business unit and the key driver of our growth. Carol Waddell, Executive Vice President and Head of our Retirement Solutions Group, focused on individuals; Jay Shah, President of Personal Capital; Christine Moritz, CFO for the Empower business; and Andra Bolotin, who is Executive Vice President and Chief Financial Officer of Lifeco U.S. All of them will join us for the question-and-answer session later in the meeting. Today, my team will cover a broad overview of the Empower business. We will describe the current market dynamics in which we operate and how we are seizing the opportunities that the market is presenting today and in the future. The large and shifting U.S. market landscape creates a highly attractive growth opportunity. What you will see is that Empower is in a unique position to continue to grow earnings and cash flow in its current business of providing workplace retirement benefits. Meanwhile, we continue to grow and expand our abilities to address the parallel opportunities that are present in consumer wealth management. We know that underserved mass affluent individuals represent a significant opportunity that we can serve directly. In addition, Empower holds a strong financial position. In our short history, we have delivered earnings growth and strong cash flows, and we'll look to the future at what this means for investors. Now I'll take a few minutes to give you an overview of Empower Retirement. The Empower brand remains a relatively young player in the retirement services space, but our presence in the market has been nothing short of disruptive. Last year, we achieved revenues of $1.2 billion over the 4 years that ended in 2020. That represents a revenue CAGR of 10%. To put it another way, from 2016 to 2020, we have grown at more than twice the rate of the industry average as measured by retirement plan participants for whom we provide recordkeeping services. In January 2021, Empower passed a key milestone with $1 trillion in assets under administration. This is a remarkable feat for a company that was founded in 2014, through the combination of the retirement units of Great-West Financial and Putnam Retirement and the subsequent acquisition of JPMorgan Retirement Plan Services. Today, we are the second largest retirement plan services company in the U.S., with a growing gap between our market share and that of our closest competitors. A component of our success is the skill and talent of over 8,900 employees. The collective talent of our workforce spans the retirement services and consumer wealth management market, which is part of why we've been successful. As I know you are aware, our growth story continued in 2020 as we completed 2 major strategic acquisitions, Personal Capital and the retirement business of MassMutual. In seeking to understand our business, it's important for us to have a glimpse into what we are pursuing. As you can see, American households have $59 trillion of investable assets sitting in numerous places. Our primary focus is and continues to be serving these households through their defined contribution retirement plans. This is contained in the column labeled DC. We believe that through any person's lifetime, the importance of that retirement plan grows. However, as you can see through this snapshot, there are other opportunities to serve these households. We know that as we continue to win more customers through our retirement business and with the acquisition of Personal Capital, our opportunity to serve other needs grows in parallel. These markets are in the middle shaded boxes that include IRA, taxable and banking. Empower competes in both the B2B markets, defined contribution plans, and B2C markets, consumer wealth management. The synergies that are present in these parallel markets are at the heart of the investment we made in Personal Capital last year. Our strategy is to capture the opportunities present across households through one at-scale platform. The shared technology capabilities will offer a single comprehensive view of those we serve and how we can address their needs. The synergies that exist in the process of client acquisition have the potential to create material value. We began to address these opportunities through the establishment of our Retirement Solutions Group when Empower was founded. But with Personal Capital, our abilities to achieve scale in this space accelerate. You will hear from Carol Waddell, who runs that unit; and Jay Shah, President of Personal Capital a bit later. Our culture and values are straightforward and customer focused. We are obsessed with doing the right thing for our customers. We hold ourselves accountable. We created Empower because we felt that working Americans needed better solutions. We strive to make it easier for our clients to succeed. We cultivate an open environment where we share ideas. In addition, we are highly focused on diversity, belonging and equity. Our company should reflect those we serve. However, it's not a top-down strategy at Empower. We've democratized the discussion inside the walls of our company. We know that how we talk to each other greatly influences the way we engage others outside of our company. We have established the diversity, belonging and equity council, made up of leaders and influential employees this group drives and champions our strategy. Members serve as executive sponsors to business resource groups as well as on various DBE subcommittees. Our BRGs facilitate inclusion and collaboration across our business internally and throughout the communities where we live and work. This has been a remarkable thing and has seen great involvement levels from our associates. In addition, we empower our employees to uncover and overcome unconscious bias through education and awareness. Our people are our most valuable asset, and we purposefully engage all in our pursuit of inclusion. Empower continues to work hard at visibility and brand awareness. This is an increasingly important factor as we address the needs of individuals. Empower and Personal Capital brands have increasing awareness numbers with positive brand attributes. Personal Capital historically and currently has made significant investments in marketing. Empower has started to make more material investments in consumer brand awareness. A year ago, we took advantage of pricing in the advertising market and launched our first national ad campaign. This year, we further scaled up our advertising. Since our inception, we've invested in sports marketing because of the inherent value in those channels. A signature investment has been the naming rights of the National Football League stadium at Empower Field at Mile High in our hometown of Denver, Colorado. Empower has been growth-oriented since its creation. While acquisitions have grabbed headlines recently, by no means do they tell the whole story. Our organic growth has been consistent on a year-over-year basis. We've achieved pretax earnings growth of 34% CAGR since 2016. Through the 2020 acquisitions, that trajectory has the potential to accelerate. Over these next 2 slides, I will introduce the rationale for those acquisitions. In our strategy, the organizations we serve will receive a state-of-the-art financial wellness offering, bundled with their retirement plan benefit. What is financial wellness? That essentially means full holistic view of any individual's or household's financial picture. The financial wellness offering is represented through a new digital interface, that shows a view of one's financial picture. We believe this offering is unmatched in the marketplace. Empower recently announced this new interface to the market. It is driven by Personal Capital technology and focuses on current retirement savings, projected retirement income, spending, savings, debt and one's net worth. The interface is intended to help people make more complete financial decisions and offers the means to help execute on those decisions. This offers Empower an important opportunity to be at the heart of those decisions and distinguish itself from other providers in the defined contribution market. Just as the Personal Capital acquisition can help broaden Empower's scope. Last year's acquisition of MassMutual's retirement business increased our scale in a meaningful way. We know that scale ultimately gives us advantages and leverage. I'll spend more time on this point in a few minutes when we talk about the defined contribution market. This transaction strengthens Empower's #2 position in the growing retirement industry in the U.S. In addition, we are capitalizing on expertise, technology excellence and deep product capabilities. Also, the over 2.5 million retirement plan participants on our recordkeeping platform have the potential to increase the synergistic impact of Personal Capital on the Empower record-keeping and retail rollover business. The transaction closed at the end of 2020 and platform integration will occur in waves through 2021 and 2022. Rich Linton will give a more detailed update on the integration later in the discussion. I believe that our greatest asset is our team's involvement in helping others in the communities where we live and work. Our corporate giving approach is designed to put control in the hands of our employees through both company-sponsored volunteer hours and matching dollars. We believe this is our duty, and it leads Empower to be involved with over 1,100 nonprofits. We know we drive great service to others through the work we do, helping people with their financial lives. We also know that giving our own time and resources outside of this realm is still core to the company's mission. The world has great needs, and our associates lead the way. As I said, we know our employees are the primary reason for any success we've had. We have incredible expertise, talent and engagement. During the pandemic, we took every measure to keep our associates employed and working hard while maintaining the proper quarantine and social distancing standards. We achieved a work-from-home rate of nearly 100% with little to no disruption to operations and service. Our clients notice this. We believe these measures have been largely effective in maintaining and growing our business. We continue to see and hear from clients about the outstanding work of our teams. Our employees know that we are building something unique at Empower, and they want to be part of it. Some of the e-mails I get are incredible. One measure of our employees' attitude is reflected in our Glassdoor ratings. As you can see, we are in the tops in our industry, and we're proud of that. This is the team. As you can see, they have lots of experience and a range of backgrounds. We just picked a handful of logos to highlight the diverse prior work experience of the team. I believe this combination of talent is the best team in the industry. This video will give you a better sense of the Empower story. [Presentation]

I hope that video gave you a feel for the energy and excitement over 8,900 Empower associates bring to helping our customers prepare for a better financial future. Now we will do a deeper dive into our retirement plan business. I'll spend a few minutes giving you an overview of the defined contribution plan market, then Rich Linton will speak to how we compete in this large and growing market. I've been involved in the defined contribution market for over 20 years. I believe we are seeing a fundamental transformation in the market and what it takes to be successful. 5 key themes have emerged. The DC market is large and complex with many different segments and industry participants. The market has increased interest in financial wellness and bundling benefits. Shifting DC market dynamics are changing industry economics in how to compete. As a result, the DC industry is consolidating. Clear winners are emerging, capturing market share and/or accelerating growth through M&A. Now let's look at the data that highlights these trends. This information from Cerulli highlights some interesting trends. First of all, the top half of the slide illustrates how assets in defined contribution plans have steadily grown with a CAGR of 8.7%. At the same time, the bottom half of the slide shows the dynamics of the flows into defined contribution plans. What we see is that as the workforce has aged, contributions in blue are largely offset by distributions in red. So net flows in green are slightly positive or negative given the year. Thus, overall defined contribution asset growth, as illustrated by the orange bar has been driven primarily by the market. But there is a story behind these numbers that could drive additional defined contribution market growth. The circle on the left shows the composition of the U.S. workforce. With 139 million workers, 120 million of these individuals work in the private workforce, with the remaining 19 million working in the public sector. The chart in the middle highlights the opportunity I foreshadowed on the previous slide. What we see is that 49% of private sector workers either do not have access to a defined contribution retirement plan or have access and choose not to participate. In the public sector, the numbers are different, with only 9% not having access to an employer-sponsored program. In summary, today, over 62 million individuals either do not have access to an employer-sponsored retirement plan or have access and choose not to participate. At Empower, we view this as a fundamental challenge. Solving what we call the access gap is simply the right thing to do for society to help more Americans have financially secure retirements. In addition, this can be a win-win as solving the access gap has the potential to add trillions of dollars to the defined contribution market in the future. Now let's look at a critical development regarding how employers think about benefits. Interestingly, employers are seeing a link between financial stress and productivity in the workplace. Over the years, half to a majority of employees find their financial situation stressful, and that stress can lead to distraction at work. The situation is particularly acute with millennials. Over 49% of millennials say they are distracted at work due to their personal finances. This realization of the impact of financial stress on the workplace is leading employers to act. A majority of employers believe financial wellness programs deliver tangible benefits and are implementing financial wellness benefit programs. At Empower, as the second largest provider of defined contribution plans, we see this trend to offer financial wellness benefits materially influencing how employers view the retirement plan benefit. Financial wellness and savings for retirement naturally go hand-in-hand. Now we will look at how the winning defined contribution business model is evolving. Let's now turn our focus to the changes in the defined contribution business model and how it's evolving. If we were having this conversation 15 or even 10 years ago, I would have been talking to you about the critical importance of revenue derived from the underlying investments in the plan, and we would have been focused purely on record-keeping with a customer experience that was largely paper-based and manual in nature. Finally, we would have seen many specialized players who successfully focused on niche market segments. But the world has changed and powerful market forces have reshaped the defined contribution industry. On the revenue side, we've seen consistent downward pressure on both investment and recordkeeping fees. Historically, many record-keeping business models were built around proprietary investment revenue. That business model is becoming much harder to execute. As we just covered, employers are thinking about benefits differently. They are increasingly focused on financial wellness and interested in the efficiency of integrating benefits. At the same time, consumers have experienced a digital service revolution in all aspects of their lives and expect a similar offering from their retirement plan provider. These trends plus a steady flow of regulatory and legislative developments has driven a need for record keepers to make significant investments in infrastructure. So what we see now and moving forward is that investment offerings are increasingly open architecture without a significant proprietary investment element. This means a significantly increased reliance on revenue from IRA rollovers, managed accounts and other consumer offerings. In addition, record keepers need to offer more integrated benefits and the customer experience needs to be of the quality that individuals see across their lives, which means a state of the art digital offering. This has led to an ever-increasing focus on scale. Think about a simplistic example. If a record keeper needs to invest $100 million in their infrastructure, that equates to $10 per participant if they have 10 million participants and $50 a participant if they have 2 million participants. Scale is increasingly the driving force in the defined contribution market. Now let's look at how these trends are influencing market share. This slide looks at the market share in the defined contribution market as measured by individual participants. With the acquisition of MassMutual's record-keeping business, Empower has solidified its position as the #2 player in the market. What is most important is how market share is evolving. This is highlighted in the columns. Clearly, the largest players are growing at a faster rate than the rest of the market. Looking at year-over-year change, Empower had the largest increase in participants from 2019 to 2020, driven by organic and inorganic growth. As I mentioned in the previous slide, much of the market share growth has been concentrated with the largest record keepers. This chart really brings that point home. We see that the top 5 record keepers have grown their share from 43% in 2012 to 58% in 2020. This growth has come at the expense of smaller record keepers outside the top 20. We've also seen an increase in volume of transactions with 13 deals occurring since 2019, and that number of transactions does not include organizations such as Vanguard or T. Rowe Price, who have elected to outsource their recordkeeping to a third party. In many ways, these trends show a classic maturing and consolidating industry where scale is a key driver. Comparing the defined contribution market to similar, more mature markets, it is very reasonable that the likely end state is a small group of record keepers with very significant scale. In summary, as with most markets, success in the defined contribution market has new imperatives moving forward. Industry dynamics will continually raise the bar needed for scale. Winning product offerings will be intuitive and easy customer experiences that include consumer advice and holistic financial wellness. Providers will need robust revenue streams beyond proprietary investment revenue. With scale mattering more and more, providers need successful distribution in all market segments. Finally, with the evolving revenue streams, owning the last mile gives providers the ability to reach participants and deliver engaging experience, which allows for greater capture of rollovers. To sum it up, what's needed is a formula of winning customer experience, scale, cost discipline and finding revenue from a variety of sources. Now let me turn the presentation over to Rich Linton, President of Workplace Solutions, who will talk about how Empower competes in the defined contribution marketplace.

Thank you, Ed. Empower goes to market with a unique value proposition that appeals to both employers and the individuals who work for those organizations. First of all, we offer and believe in the combination of powerful online tools accompanied by human delivered advice. Financial issues can be complex and emotional. People like to talk to people. Next, we recognize in the end, this is a service business. The one who delivers the best service will see customer loyalty. When we founded Empower, one of our opinions was that the defined contribution industry had gotten stale. So we positioned Empower as a high energy brand driving innovation. As Ed highlighted earlier, improving financial wellness of their employees is increasingly important to employers. This is one of the bigger evolutions I've seen in my 30-plus years in this industry. Finally, we leverage a segmented business model to align our service organization with our customers. Empower competes in all facets of the defined contribution market. This includes all sizes of companies, government entities, not-for-profit organizations and unions. You see on the slide some of the key highlights. We serve 2 of the 5 biggest corporate DC plans in the United States as well as 24 state government plans. At the same time, we are the largest provider to small and emerging organizations. The way we make this work is through the segmented business model that I mentioned earlier. We have a sales and service organization aligned with each market segment. This helps our organization align with the unique needs of each segment. These market-focused organizations then leverage common centers of excellence, such as HR, finance, technology, operations and marketing. I think it is easier to see our experience rather than describe it. So let's watch a quick video that shows what an employee of one of our clients will experience as we roll out our upgraded website later this year. As a side note, Ed commented earlier on the importance of the Personal Capital acquisition to our overall business strategy. If you're familiar with Personal Capital, you'll recognize key elements of their powerful online tools that are being integrated into the Empower defined contribution customer experience. [Presentation]

I hope that video helped you visualize our unique offering that brings together holistic financial wellness with a proven focus on driving retirement income. One of the concepts that has always differentiated Empower is that we focus on the end goal, monthly income in retirement, rather than on an accounting view of the retirement plan that many individuals find confusing. As I mentioned earlier, this is a service game. So let's look at how we're doing. We are believers in Net Promoter Score as the best measure of client satisfaction. As a reminder, NPS is the percentage of customers rating their likelihood to recommend a company, a product or a service to a friend or a colleague as a 9 or a 10, minus the percentage of those rating at a 6 or below on a scale from 0 to 10. The chart on the left looks at our Net Promoter Score over time for each of our major segments. 2 trends emerge as you look at the chart. Number one, our Net Promoter Score has improved materially over time in each segment. I believe this is due to our significant investments in our technology infrastructure as part of the JPMorgan Retirement Plan Services acquisition plus our multiyear operations transformation initiative to make Empower an easy to do business with destination. It's also important to note that client satisfaction is a key factor in our discretionary compensation package for client-facing associates. Number two, our Net Promoter Scores are consistently in the excellent and world class levels. I think this is critical as over my 30-year career in the business, I have seen that poor service is the biggest reason organizations look to for a new retirement plan record keeper. In addition, we take a close look at third party validation. This slide summarizes major industry awards Empower has won over the last year. As a fairly new brand, we think this recognition helps credentialize our approach. I'd like to call out that we were named the Retirement Leader of the Year in 2020. In addition, we have led the industry in #1 rankings from PLANADVISER, a publication focused on financial advisers who work in the retirement plan market. This is particularly important as financial advisers are critical in helping organizations select and evaluate their retirement plan providers. This chart shows our growth over 3 key metrics: assets under administration, participants or individuals on the record-keeping platform and sales. Note that sales in this industry tend to be lumpy as mega corporate and mega government plan sales can significantly impact a given year. The key message is that we're seeing steady organic growth that is complemented by inorganic growth. I believe this steady growth ties back to our value proposition, our service delivery and our product offering. Finally, Ed commented earlier on the importance of the MassMutual acquisition. So let me take a moment to update you on the status of our integration efforts. This is a complex integration as we are transferring business from 3 legacy MassMutual record-keeping platforms to the Empower record-keeping platform. However, we are leveraging our recent experience with the JPMorgan Retirement Plan Services integration and using a proven process. The integration will occur over a series of migration waves that will commence shortly and occur through September of 2022. The Empower offering will be a significant upgrade for these customers, and we're executing a robust communication plan around that change. In addition, our process is designed to minimize disruption for the plan sponsor and the participant. The project is currently on track. We've welcomed our new associates, worked through complex data mapping, and are finishing a series of systems builds to facilitate the migration process. The systems builds will help us with future integrations as well. Later, in the finance discussion, Christine Moritz will give an update on the projected synergies. That wraps up our overview of the defined contribution market and how Empower is competing in that growing space. Now let me turn it back over to Ed, and we will move our focus to consumer wealth management. [Break]

As I discussed in the opening section, we go-to-market in the B2B and B2C financial services spaces. Our B2C focus is consumer wealth management, with primary lines of business targeting mass affluent investors and IRA rollovers. We will take the same approach we did with defined contribution. I will start with an overview of the market, then Jay Shah and Carol Waddell will join me to discuss how Empower and Personal Capital go to market. We looked at this slide in the opening. And I want to use the information to reorient as we shift to consumer wealth management. For this next section of the discussion, we will be focused on the individual retirement account known as IRA and the taxable and banking portion of the financial services market that are highlighted to the right of the red plus symbol. The key highlight is that by moving our focus beyond DC plans, Empower increases the size of our addressable market by 4 to 5x. Let me now do a deeper dive in our 2 primary areas of focus: the mass affluent customer and IRA rollovers. The mass affluent market or as it sometimes referred to as the middle market is very significant. While the 1% gets much of the media focus these days, the mass affluent market represents 34% of households controlling 50% of assets in the United States. Clearly, it is a large and important market. Taking the analysis to the next level on the right side of the slide, we see that tax advantage retirement savings both defined contribution plan and IRAs represent half of the mass affluent pie. Retail assets, defined as non-tax-advantaged savings and investments funded directly by individuals represents 37% of the total. Now that we've established the size of the mass affluent market, let's look at the needs and concerns of this market. Many have argued that the mass affluent market has been historically underserved. I think this point emerges when we look at key financial concerns of the market. Top issues center around concerns about retirement savings, estate planning, tax optimization and market volatility. Adding those issues together, we see a market that's looking for clarity, advice and guidance around a complex set of financial issues. So in summary, we see that the mass affluent market is vast and looking for help. Now let's turn our focus to the IRA market. IRAs have emerged as the most popular retirement savings vehicle for individuals. Cerulli projects that this market could represent $17 trillion in assets by 2025. The chart on the bottom left highlights the growth of the market since 2015. In 2020, the market was $11.8 trillion, with a 2015 to 2020 CAGR of 9.5%. Cerulli projects that this market will continue rapid growth. Their baseline case is a market of $17.4 trillion in 2025, with a modest CAGR assumption of 8.1%. Another key point of this slide is what drives IRA contributions. IRA contributions are overwhelmingly driven by rollovers from defined contribution plans. From 2013 to 2018, 96% of IRA contributions were defined contribution plan rollovers. So in conclusion, the very large IRA market is highly synergistic with the defined contribution plan market. So as we put things together, we get a feel for the size of the opportunity. Looking at rollovers, we see that about 6% of planned assets roll over every year in round numbers with Empower at $1 trillion in assets under administration. That's a rollover market opportunity of $60 billion. That $60 billion is tied to the existing relationships Empower has with defined contribution retirement plan participants. Held-away assets are another very large opportunity. Generally, for every dollar in a defined contribution retirement account, individuals have $4 to $5 in IRAs, taxable accounts and banking accounts. The opportunity here is for Empower to leverage the relationships it has to capture these extensive held-away assets at a favorable acquisition cost. Finally, looking at direct client acquisition, we see an opportunity of $35 trillion. This market would represent individuals with whom Empower does not have a relationship via a defined contribution plan. So a key success factor to capture share in this fragmented market is an efficient and profitable client acquisition model. So pulling all the points together, we clearly see the size and opportunity present in the mass affluent and IRA market. To win in the consumer wealth management space, we see 5 key factors. Consumers are looking for advice, and this needs to be a critical element of the value proposition. We do see a trend toward being able to capture revenue for advice. As competition increases, we see more emphasis on lower cost products and asset allocation. This is critical to capturing margin. Client acquisition costs are a huge barrier to growth. So existing relationships can be a big factor related to helping control client acquisition expense. Consumers are used to highly sophisticated and user-friendly digital experiences. This is becoming a norm in the industry. Finally, scale matters. Related to our comments on digital experience, this is a business with significant technology costs and a constantly shifting regulatory environment is a key cost driver as well. We see this market as advice and experience-driven with an imperative to acquire and service in a cost-effective fashion. Now let's turn our attention to how Empower and Personal Capital compete in the consumer wealth management market. I'll make a couple of opening remarks and then turn it over to Jay Shah and Carol Waddell. Empower's retirement plan customers need help and solutions addressing their broader financial goals. Empower wealth management services offers advice and products to address these needs. Personal Capital has a long history of successfully addressing the financial needs of the mass affluent market, a market that is widely underserved as traditional wealth management firms predominantly focus on high net worth and ultra-high net worth prospects. The models, missions and tool sets of our 2 wealth management businesses are quite similar. The ability to leverage technology to cost effectively acquire, service and grow relationships is paramount to our success. With nearly $2 trillion in assets in our collective pipeline, the Empower, Personal Capital wealth management businesses are well positioned for growth. Personal Capital occupies unique space in the market with its industry-leading digital experience and access to an adviser. This combination offers an efficient means to acquire and grow customers. Jay will provide a more detailed overview in a few minutes. Empower Wealth Management has the ability to establish early relationships with retirement plan customers, supporting savings, investing and advisory needs. This engagement transcends the customer's time in their plan and naturally leads to a longer-term individual financial relationship. These customers range and profile from entry-level investors to high net worth individuals and from self-directed to advised. Consequently, we offer a number of solutions to address each of their unique needs. As you can see, the Empower business has grown rapidly, and the acquisition of Personal Capital has doubled its wealth management assets under administration to more than $30 billion. Now let me turn it over to Jay Shah, President of Personal Capital.

Greetings. I'm Jay Shah, President of Personal Capital. I'm excited to share how Personal Capital is driving a transformational shift to redefine the wealth management landscape. Today, I will first start with our mission; second, how we set out to build a completely new approach to wealth management, starting with a blank sheet of paper in new technology; and third, how this translates into a powerful business model with huge growth potential. Regarding our mission, we are a purpose-driven enterprise on a mission to help people transform their financial lives. Personal Capital is a truly unique hybrid digital-first and human platform, which we designed to fundamentally change how financial planning and holistic advice are delivered today. With our highly engaging technology, Personal Capital customers have a full 360-degree view of their financial lives to turn chaos and confusion into clarity and confidence. We offer comprehensive financial planning based on personalized data insights, paired with fiduciary caliber advice for our clients, and we have achieved the highest level of adviser trust in the industry according to a recent poll. Personal Capital is the future of wealth management, and we have built a very powerful business while transforming the industry landscape. Our category challenging brand was built on a foundation of being innovative, personal and doing the right thing always. Our purpose oriented philosophy is aligned with Empower's core values. We have created a very simple customer funnel based on connecting, planning and advising and we have impressive scale through which our existing customers have linked over $1 trillion in account value. We have hundreds of thousands of prospects who qualify for our wealth management service. And now we manage over $18 billion in assets for tens of thousands of clients with portfolios averaging more than $600,000 with Personal Capital. We have an incredibly strong prospect base, a growing number of clients in wallet share and a very, very large untapped market. We provide truly holistic advice. Our success is driven by the fact that we are literally customer-centric by placing our customer in the middle and surrounding them with their personalized financial information. Metaphorically, we practice holistic medicine by advising the entire patient. And this puts us in a great position to best advice our clients. Today's mass affluent customer, Nancy is our illustrative example here, faces real and complex challenges. Like so many of the clients we serve, she is time starved and surrounded by the increasing complexity of her family's money and planning requirements to maximize her financial outcome. Like most of us, Nancy has over a dozen financial accounts, a 401(k), credit cards, brokerage accounts and a mortgage and more. Remembering all those user names and passwords is hard enough, let alone understanding how it all hangs together. Personal Capital simplifies it all with a single app that lives and breathes with Nancy as she lives her life. Our digital platform lets Nancy see and understand all of her personal accounts holistically and with great transparency into her financial life. Here you can see an image of our award-winning dashboard. With Personal Capital, Nancy can track all of her accounts securely with a single login. Via easy to use desktop and mobile apps, Nancy can see her entire financial life, using our engaging technology to view her personalized dashboard. By pulling Nancy's financial life into a single pane, we allow her to answer the most elusive financial questions. Am I saving enough? What are my household cash flows? What's my net worth? Unlike most financial advisers, we engaged Nancy with a complete view of our finances, also putting Personal Capital in a great position to provide holistic ongoing financial advice. With Personal Capital, Nancy's financial stress is replaced by financial confidence. She can realize what's possible and map out her financial life. She can create a comprehensive financial plan. She enters her key spending and savings goals, which create a window to her future that shapes her long-term retirement plan. Because she connects all of her accounts, we have a complete cash flow model for Nancy's household, allowing her to see the most likely outcome and also the downside case of outliving her money. With Personal Capital, Nancy and millions of others can really get a grip on the complexity of their evolving financial lives. Beyond our technology, Nancy can transform her financial life by working with a Personal Capital adviser she can trust. Using our digital-first approach, Nancy can connect with her adviser by video embedded in our dashboard, which allows Nancy and her adviser to have a shared, strategic and very personalized conversation. People want a human connection, not just technology. Nancy wants an adviser that will be there through the emotional journey of our personal financial life today and into the future. Personal Capital's digital-first technology paired with human advice is a winning combination. Personal Capital is Nancy's trusted money adviser. We create a show not tell adviser experience based on comprehensive wealth management, holistic planning and trusted personalized advice. With Personal Capital, Nancy has a custom portfolio based on our proprietary Smart Weighting approach. We personalize and tax optimize her investment strategy tailored to her goals and time frames. Ultimately, Nancy has moved away from complexity and confusion to clarity and confidence in her financial life. When we roll up all of the Nancys on our platform, we reveal a level of consumer engagement we feel is peerless. Personal Capital's best-in-class personal financial management system drives hyper engagement among all customers. Our customers segmented into users, prospects and clients are highly active and frequently engaged with our app. You can see that on average, our prospects log in 18 times a month and our clients log in 23 times a month. That's the power of the 360-degree view. Persistent engagement is a key to building trust and allows us to be at the right place at the right time to meet clients at key events in their lives. We are incredibly proud that Personal Capital has become the principal destination for so many people. In a word, our most critical business objective is trust. Based on a recent external tracking study conducted by the Harris Poll, we have achieved the highest level of adviser trust in the industry. Personal Capital is a new authority on advisers I can trust. Over the past year, our aided awareness with mass affluent investors has increased over 4.5x. Building our brand, being laser-focused on our customer and earning consumer trust shows we are on the right track in building the best consumer digital wealth management platform. In closing, you can see Personal Capital is a highly attractive business model. Our business results show Personal Capital is a proven hyper growth platform for generating revenue and assets. With over $1 trillion in connected investable assets on our platform, we have an uncapped prospect funnel, a 25x embedded opportunity as well as a $50 trillion wealth management market in front of us. Today, we are investing in growth and building our business. And when we carve out our investments in winning more customers, our business is highly profitable. We believe the Personal Capital model generates world-class customer lifetime value, client retention and exceptional profit margins that are allowing us to transform the consumer direct wealth marketplace. And we have an amazing opportunity to transform the workplace and take Empower's enterprise success to the next level. Thank you for listening to our Personal Capital story. Now I'll hand the conversation over to Carol Waddell.

Thanks, Jay. Now I'd like to provide some insight into the Empower Retirement Solutions Group referred to as RSG. This team was established to support the advisory and financial needs of our DC plan participants. Our value proposition is simple and based on our experience in customer research. We help people work towards specific financial goals while considering their full financial picture, which includes both assets and debts. Our experience is designed to leverage a robust digital dashboard and toolset that is shared with an adviser who can work with our customers to address their financial goals and needs. This approach works hand-in-hand with services we provide to our defined contribution retirement plan participants. We do recognize the importance of the DC plan adviser and if a plan sponsor requests their adviser provide these services, we can provide referrals in these scenarios. Our value prop centers on simplicity, 1 dashboard, 1 point of contact, 1 clear path to success and a 1 stop shop for action. We formed the Retirement Solutions Group to address the significant money in motion each year. Our average retirement participants works for many companies over their career. A key component of our sales and service model is to help participants consolidate old employer plans with our current Empower plan. In 2020, we successfully acquired more than $4 billion in new assets through these consolidations. Each year, roughly 6% of our retirement plan participants retire or change jobs. This potential money in motion offers another opportunity to reach out to customers and review their options, which may include staying in their Empower retirement plan or opening up an IRA with Empower. In 2020, we retained substantial assets in retirement plans, enrolled more than $5 billion into Empower IRAs. In 2021, we expect that total number of new asset capture to materially increase with our expanded participant base and enhanced product offering. As I mentioned earlier, roughly 6% of our assets exit the platform each year. We can connect with half of these prospects. The contact rate, though, is greatly influenced by our plan sponsor's adoption of the program and the plan sponsor's ability to capture key data like the fact that an individual recently terminated their employment. Of those individuals that we have access to, we're able to convert 1/3 of the prospects into Empower IRA customers. This conversion rate depends on the competitive nature of our product, our speed of contact and the efficacy of our marketing and sales team members. We are making great investments in all 3 of these areas. Today the sales process involves a moderate marketing effort and a very cumbersome acquisition process. By leveraging a new technology platform, toolset, personalized messaging and an adviser application enabled by our acquisition of Personal Capital, we will be able to dramatically improve our customer and sales adviser experiences. For example, the shared dashboard illustrated on this slide is a key component of that strategy that's going to fuel potentially exponential growth. Finally, we have a strong track record for growth in assets, customers and sales since our formation in 2015. That momentum and the ability to deliver on our value prop, places us on solid footing as we look to continue to grow our wealth management business. Now I will turn it over to Empower's CFO, Christine Moritz, to review our financial results.

Thank you, Carol. Now we will take a deeper look at the financials. Here are a few high-level points with regard to the financials. This business has seen strong growth across both the workplace and individual wealth management businesses. Empower is an open architecture fund platform and sees a significant portion of earnings growth from low capital-intensive fee revenue and strong cash flow products. We have a well-diversified revenue mix as well as a strong market position across all various retirement segments split both by size and type of plan. Finally, Empower maintained strong capital ratios and highly diversified investment portfolios. We have seen consistent growth of Empower earnings as well as net revenues over the 2016 to 2020 time period. The numbers in the red circles represent net earnings after tax. The numbers in the colored bar are base earnings after tax for Empower, and in 2020, include both Empower and Personal Capital. You might remember that we were completing the JPMorgan acquisition in 2016, and then we have seen strong organic growth in these years following. The MassMutual acquisition occurred on December 31, 2020. So the impact of that business will be realized starting in 2021. This illustration lays out the revenue of Empower split by driver. Note that we are showing pro forma 2021 numbers so that we can illustrate the revenue mix with the recent acquisitions included. Overall, approximately 60% of revenue is asset based. This would include both asset-based fees as well as managed account or advisory fees. Approximately 22% is derived from the general account margins. This would be investment income net of interest credits. And then the remaining 18% is based on per participant or per planned fee types. Of the 60% of fees that are asset based, about 68% of those are in equities. That gives you a sense of how the movements in the market can impact our overall revenue. The bar graph splits the Empower business into segments to illustrate that 88% of the revenue is driven by the B2B DC retirement plan business of about 12 million participants. And the other 12% is coming from the B2C individual wealth management business. Again, these are pro forma 2021 numbers so that we can illustrate the revenue mix with the recent acquisitions included. On the right side of this slide, we have further broken down that 88% of B2B revenue into the various plan segments. As Rich mentioned earlier, we compete in all the segments of the DC market and take a segmented approach to our organizational structure. This slide is a reminder of what was presented in Q3 of last year related to the Personal Capital businesses. Personal Capital saw very strong growth from 2015 to 2020, and that continues post the acquisition. The middle chart is showing EBITDA pre customer acquisition cost growth and shows the positive position beginning in 2018. However, with the steep growth curve that Personal Capital has been on to invest heavily in its new clients, the total EBITDA impact is an overall loss. Personal Capital is expected to achieve profitability after acquisition costs during 2023, dependent on market conditions. In addition, integrating the Personal Capital platform with the Empower Retirement business, opens up revenue synergy opportunities in the consumer wealth management business. From the perspective of MassMutual, we closed this deal on December 31, 2020. And so far, we are on track with the integration time line, the retention targets and the expected financial impacts. MassMutual added approximately 2.5 million participants and $190 billion in assets. Empower expects to realize $160 million in run rate expense synergies once the business is fully integrated in the second half of 2022. In addition, there are opportunities to add both managed account services and increase the IRA rollover capture of this business, adding approximately $30 million in revenue synergies in 2022. The 2022 estimated incremental earnings forecast is $220 million. This would be after the acquisition is fully integrated, excluding integration costs and including financing. Now let me turn it back over to Ed Murphy to summarize what we see looking forward.

I hope this was a helpful overview of Empower Retirement, and you enjoyed hearing from Rich, Jay, Carol and Christine. Let me make a couple of concluding remarks. With all the success we've experienced at Empower, we are embarking on a new period of rapid change that we believe will further solidify our leadership position. I'm very excited about our future. We are in the process of delivering a powerful new story to the marketplace centered on financial wellness. As Rich mentioned, shortly, we will begin to move waves of retirement plans from the legacy MassMutual system to the Empower record-keeping system. Later this year, we will integrate Personal Capital's personal financial management tools into our digital offering and leverage a new personalized messaging engine. Finally, our scale, stability and investments will help Personal Capital maintain their growth while continuing to broaden their product offering. To summarize, I think about 7 key ways Empower Retirement can create enterprise value. We compete in a vast market in both the B2B and B2C areas. Our offering has tangible differentiation and strong service ratings. Arguably, we are one of the few providers at scale today and we are constantly investing in our infrastructure. Empower's technology platform is scalable, uses a cloud infrastructure and benefits from meaningful annual investment. Our team is proven and hungry. I hope you've got a taste of that today. Finally, we have a history of both organic growth and successfully integrating acquisitions. Thank you very much for your time. Let me turn the presentation back to Paul for any closing remarks and to start the question-and-answer period.

Thanks, Ed. That was a great session. In closing, I want to reiterate our objectives to achieve an 8% to 10% base EPS growth and 14% to 15% return on equity, along with strong cash generation. These objectives are underpinned by our diversified value-creating portfolio. All these factors taken together with our commitment to sustainability and disciplined capital deployment indicate a bright future for the company, our shareholders and other stakeholders. Thank you again for your time and attention today. We'll now pause for a moment as we move to our live Q&A session. I'd like to remind you that you can follow the instructions displayed on the screen to ask a question.

[Operator Instructions] Our first question comes from Tom MacKinnon of BMO Capital.

I have 2 questions for Ed. Ed on Slide 31, you talked about growth in the DC market in terms of assets and how the growth from 2012 through 2019 was really just driven by growth in the market. And then you had talked about the way that -- for this market to have [indiscernible] better than the market is to close the access gap. And I guess the question is, how come we haven't seen that yet in the market at all? The presentation [indiscernible] on how you're going to close that access gap, but we haven't seen that in the market yet. And -- or maybe you've seen touches of it, but how come the assets haven't grown faster than the market? Is the industry not doing a very good job of closing the access gap? What has been the barriers to that? And then I have a follow-up.

Okay. Thank you, Tom. I think it was hard to hear you, but I think I got the gist of your question. I think your observation is fairly accurate there in terms of new plan adoption. I would say the 2 primary inhibitors in the past have been cost, complexity. And I might add a third, which is a lot of small companies have concerns about the fiduciary responsibility associated with offering a plan. So if you look at what we're doing at Empower, we've invested quite a bit in what we call our micro plan offering and capability, where we can really scale that offering and make it available to the tens of millions of small businesses today that don't offer workplace savings. So we think this is a new opportunity that we can unlock. We are the largest player today in what we would characterize that small market under $50 million. But that micro market or that new plan formation market is a significant opportunity. As we commented in the video, there's over 50 million Americans that work for small employers that aren't covered by workplace savings plan. So that's a significant lever. I'd say the other 2 levers are with the engagement capabilities that we have, particularly with the Personal Capital platform and the fact that, that's going to be embedded into our defined contribution experience, we think we can drive savings rates higher. We think we can engage participants to save more. We also think we can drive higher participant adoption. We commented in the video about the fact that there's still a number of individuals that have access to a plan but just haven't joined the plan. And so I look at the defined contribution market, and I see growth. I see our business today at roughly 12% share. When you look at it as defined by participants, you see a consolidating market. And we have a pipeline that's at the highest in our history. So I think significant opportunities in general and then a real opportunity to expand and open up this market, and we're making the investments necessary to do that in the very small end of the market.

Okay. And then the follow-up is, I think you had mentioned there's downward pressure on record-keeping fees. Can you give us an idea as to the magnitude of that? Is it -- maybe express those in terms of, I don't know, fees per participant or anything like that. Just to put some more color around what that downward pressure has been on record CCCs and how you see that continuing?

Sure. I'll make a couple of comments, Tom, and then I'll turn it to Christine to add some color. I think like most industries, we're seeing pressure, not just on investment fees, but we're seeing pressure on admin fees as well, which I think underscores the point that we made, I made, Rich made about scale and the importance of scale. And we're seeing really strong operating leverage in the business today. And we -- when we build our models, we take into consideration fee compression in all aspects of the business. That's built into our plans. And that's why this relentless focus on driving our cost structure down as well as tapping new sources of revenue to offset what we might see on the fee compression side. But yes, we are seeing it. Our expectation is that it will continue. I think it's what's led to some of the strategic changes you're seeing in the market, the consolidation you're seeing and the fact that a disproportionate amount of the business is being essentially aggregated by the small-, large-scale players. Christine, anything you want to add on the fee compression side?

Yes. Thanks, Ed. I think you covered it well. The only other thing I would add is I think we do look for other sources of revenues. So it's not a straight just fee compression that you're going to see. We look for different mixes of revenue coming through, so that we've got some other opportunities.

Yes. I almost -- I would also add, when we think about the way we run the business, the key is the difference between our revenue per part and our cost per participant and the core focus is to drive that point of leverage, notwithstanding a bit of downward pressure on fees. We're seeing the benefit of significant automation, significant extensions like the Personal Capital. So the key is really just widening that differential between your revenue and your cost per part.

Our next question comes from Doug Young of Desjardins Capital Markets.

On Personal Capital, I just wanted to dig into -- or hoping you can dig into. You expect that business to be profitable by 2023 after client acquisition costs. And I just would like to hear a little bit more about the assumptions that you're using in terms of IRA rollover, the share -- the capture of share of wallet, any additional details you can provide would be helpful.

I'll start and happy to turn it to Jay and perhaps Christine for some comments as well. Yes, your assumption is correct on a fully allocated basis, taking into consideration all of our marketing and acquisition costs, we expect profitability in 2023. One of the things that we've already started to undertake as part of this newly formed relationship is the ability for us to introduce Empower customers, Empower participants to Personal Capital. We think we can serve them very effectively with those capabilities. And so that's another growth opportunity that we have that's incremental in effect to the plan that Personal Capital has. And that program has begun in earnest, and we're seeing really positive results, very high conversion rates, nearly 50% conversion rates on those NOLs. And then I'll just turn it to Jay, maybe just to offer a little bit of color on at a high level on some of the underlying assumptions in terms of how we achieve that objective in 2023.

Sure. Thanks, Ed. Doug, great question. In addition to this mix shift of sourcing these clients directly as we've done in our 10-year heritage of going direct to the consumer, this blend or opportunity of combining the businesses and defraying some of our acquisition thoughts, as Ed mentioned, that's -- that I think is a very powerful lever. The other thing I would just mention is the operating leverage we've received in our business. On balance, we have a very low fixed cost for our business. But our variable costs are quite low. I'd mentioned in the video, we have a very strong gross margin profile, excuse me. And I think over the course of time, as we continue to scale up the growth trajectory that we've seen historically as well as what we continue today, that will continue to drive profitability into our business.

It's Paul, I may add just one other comment. Doug, I would just note that when we talk about 2023 profitability for Personal Capital, we're talking about that as a stand-alone entity. And what Jay is talking about is the significant leverage in that business on its own. We also look at Personal Capital as the engine that's going to drive things like IRA rollover capture, roll in of other client assets and broader and deeper relationships with the Empower participant. So that's an additional benefit that will be driven through the Empower retail channel that Carol Waddell talked about. So that 2023 profitability is really just a stand-alone part of Personal Capital and doesn't include the leverage that we'll get across the Empower process.

Yes, Paul that's what I wanted to understand so.

Yes. Let me just underscore that point because I think it's a critical one. When we looked at Personal Capital as an asset, and as Jay mentioned, this is a company that's been around for nearly 11 years. We looked at it really across 3 dimensions, and this is what we're executing on right now as a company. First and foremost is we're embedding a lot of the capabilities into our defined contribution experience. That's going to begin in earnest. So the user interface, the way we engage the customer, the ability to drive the engagement levels that Jay talked about where customers are engaging 23 times a month that's unprecedented. That will be embedded into our defined contribution experience and effectively 12 million Americans will have access to that. So that's data point 1. The second is what Paul touched on, which is we're effectively replatforming our IRA business. Our IRA captive business that Carol was leading, both the front end and the back end. We've had really strong success with that business. We've grown to $19 billion in assets. But frankly, we've been handicapped a bit from a technology standpoint. And so this work has begun. Obviously, it's part of the integration effort that we're working through. And we'll be unveiling some new capabilities this August on a phased rollout approach. So that's the second component. And then the third is what Jay talked about is this direct-to-consumer external marketing effort that, frankly, Empower never really engaged in that activity. We were just focused on the captive opportunity. And so if you -- taken together you've got a significant opportunity here with the leverage that the intellectual capital, intellectual property that we have as a result of the Personal Capital acquisition.

Very helpful. And then, Garry, if I can slip one in on the medium term EPS and ROE guidance. Obviously, medium term, 3 to 5 years, I mean, that takes you into the IFRS 17 adoption. So you seem to be confident in your outlook and how the numbers are going to look post-IFRS 17. But I'm just curious as to what are some of your assumptions related to that IFRS 17 adoption? Because things like book value, which impacts ROE, just -- it's not clear a lot of different things and moving pieces. And that if this is too in depth, we can take this off-line. But I just -- I don't know if there's some high-level things you can kind of throw out there around that?

Sure. I'll think about that. I think you're right. I think we can follow up on the more detailed aspects of that separately. But just a couple of high-level comments on the IFRS 17. I think I'd start by saying that a lot of our businesses, including all of the businesses we've talked about Empower, Personal Capital today aren't actually impacted other at all or in any material way with IFRS 17. So IFRS 17 is very big focus on insurance contract. So certainly, it doesn't impact a lot of today's focus. Yes, you're absolutely right. There are a number of still policies and still to be made to be impacts on transition and then a trajectory going forward. Overall, we're not seeing a significant impact at this point. I mean, there's going to be a lots and lots of noise. So I see not a significant impact, but a lot of gives and takes through the transition. We can take further ones that are off-line, but overall, certainly, confident in our outlook here, just about the growth of the business.

Garry, I would also clarify that when we're talking about these objectives, these medium term objectives, we are focused on medium term base earnings growth and base ROE growth. And from our perspective, as we think about a transition from the current accounting standard to IFRS 17, there's going to be -- obviously, there's going to be noise, but there's also noise in net earnings. And what we're really doing is we're talking about the base earnings, the underlying driver of growth in the business. And we think that's going to be pretty solid and constant as we transition. And to Garry's point, more and more of our business is really flowing through the non-IFRS affected lines. We're seeing strong growth in Wealth Management. So as we think about the transition, certainly, there'll be noise, but we're confident in the underlying business.

Our next question comes from Meny Grauman of Scotiabank.

You noted 88% of revenue coming from B2B, 12% from B2C. I'm wondering what's your expectation in terms of seeing a meaningful change in that mix over what time period? And maybe to put a finer point on it, 5 years from now, where do you expect that revenue composition to be?

Yes. Ed, I'll start off and say, Meny, I think there's a natural underlying assumption that if you looked at the organic growth rate of the underlying retirement business and the opportunity that we have on the retail side, we're going to see stronger growth on retail relative to retirements in terms of underlying growth, if you sort of said just organically, but there's also significant opportunities to continue to consolidate in the Empower in the DC record-keeping space. So actually putting a number on that would be very difficult. But I think Ed can provide a bit of color and context around the underlying growth where, although I don't think we're going to provide you with percentage growth rates out into the 5-year area. Ed?

Well, I would just add, I think in the video, we referenced $30 billion in total Wealth Management assets, it's actually closer to $40 billion now, where I think we're $39 billion and change. So we're continuing to see really strong growth there. And if we look at it over several years, we anticipate very, very strong growth there. I suspect it will affect the mix to some degree. What we're seeing from our clients is that -- and we touched on this in the video, is they want to see a more holistic approach. They expect a comprehensive approach that transcends their retirement savings. And one of the interesting data points is that roughly 70% of the people that roll to us, actually north of 70% don't have an existing adviser. So there's tremendous need and demand in this mass affluent space. And frankly, we think we're just scratching the surface here in terms of the opportunity. So I suspect there'll be some change in mix for sure. And we're obviously increasingly focused on the consumer side. But as Paul mentioned and I commented on earlier, there's tremendous growth in the defined contribution space. I recognize that it's largely a -- historically, what we're seeing, last several years, it's been more market related because of distributions offsetting net flow -- gross flows. But it's a takeaway game. And we have a very compelling value proposition, and that's why we're growing at 2x the rate of the market. So we're going to continue to grow that business, and we're going to grow it profitably. And as always, we'll be opportunistic on the M&A side as well. So I think you'll see growth in both market segments over time.

And maybe just as a follow-up, just in terms of getting a better sense of profitability between the B2B and the B2C, how much more profitable is B2C? Can you sketch it out a little bit more?

Well, it really depends because a lot of it is dependent on the types of products and services that are being offered. I think Christine commented in her section that our fees can be asset-based fees. Our fees can be per participant fees. There's transaction fee revenue. So I would say in the U.S., the marketplace tends to value retail wealth management assets typically higher than they would value record-keeping and servicing. So that might give you some indication. I don't know if Christine or Andra, Andra, do you want to comment on profitability though?

No. I think, Ed, you had it right. As we continue to grow the retail business, then other scale, that does tend to have a higher, a very favorable profitability for customers. But at this point, I'd say that defined contribution business in 2020 results is the majority of our...

Yes. I might jump in on that, Andra, and point to the type of data point that Jay Shah provided, when you look at the outlook for Personal Capital and the leverage in that and a lot of that is about this concept of lifetime value of the customer. And as we think about the DC record-keeping business, there's certainly huge value in that, there's huge value because of the underlying earnings because of the fact that we've got leverage from scale. But there's also a huge value because we've got such a significant population of customer relationships with an opportunity to transition into that lifetime value capture. And when you look at the leverage that Personal Capital has, we have that same leverage. So if you're talking about in the next 2 to 3 to 5 years, I think we could see a shift from that 88%, 12%. But if you look over the long game and as we build out a fundamental retail wealth management platform, I think you could see a fundamental shift even in the other direction over time if you're going to play the long game. And that's the beauty of this because this is not just about consolidating and record-keeping and driving down costs. This is about actually unlocking value in 12 million Americans, their customer relationships and then all the other relationships we can either get through organic growth or we can get through further M&A. So as we think about it near term, we'll see some shift. As we think about long term, I think there is such value to unlock here. And I think today's presentation really highlights that point.

Our next question comes from Darko Mihelic of RBC Capital Markets.

I just have a couple of questions. First question relates to a combination of Slide 5 and 6. So when I look at the historical growth rate of net earnings per share from 6.6%. And we think about moving it to the 8% to 10%. And then you go to the next slide, you see that really the U.S., which is mostly Empower, is only 13%. I was just wondering if you could give us a bit of a guide as to which other businesses are expected to really shoulder the increase in the growth of the earnings per share to the earnings per share objective, let's use the midpoint 9%. Maybe you can just talk a little bit about whether this is evenly broadly based across all businesses. And I realize this excellent presentation on Empower gives me some insight into what you're expecting here. But just if you can just touch around the edges around which other business segment will help shoulder the lows moving up the earnings per share to the new target?

Thanks, Darko. Very good question, and it's not one where I'm going to get into specific growth rates by business segment or business. But I will give you some color around our perspectives on growth. I think as a starting point, we've got leadership positions in a number of markets. So if you sort of took Canada and Ireland, where it's sort of large diversified positions relative to those markets. We've got other -- in other markets, we would have more focused niche positions like our position in Germany. And then you got other businesses actually where we have differentiated capabilities like capital and risk solutions. So if I go to -- they're more traditional, like Canada and Irish Life, our strategy there is to outpace what I would say is a mature consolidated market growth for extension of those businesses and we tend to think of that market growth in the mid-single digits. We think we can outstrip that through extending the business. And a good example of that would be if you hear the strategy for Empower by unlocking value through leveraging Personal Capital capabilities, we're looking at those same strategies in Canada here with our benefits and retirement business, our group businesses, where we believe we can unlock value through what we call plan members customer strategies. And at some point, we'll do another session like this on Canada and other businesses, and we'll give you insight into that. But we think we can grow faster than market in some of those, we'll call them a few markets where we've got leadership positions. If you go to other markets like Germany, where we're participating in a high growth segment of the market, it's brokerage. It's moving to unit-linked and unitized with profit products. And those are the products that are shining right now in terms of growth in a post Solvency II environment where competitors are having to move to more capital-light solutions, and that's where we play. And we've seen double-digit growth, and we like that, and we believe that will continue. If you look to a business like our capital and risk solution, where the opportunity for growth, one might argue is unlimited. You can always be reaching into new markets and new differentiated offerings. At the same time, we want to sort of manage that growth in the context of life overall, but also look for highly profitable and relatively low-risk segment growth. So you add that all together, and we sort of see that mid-single digits, but also getting some extension growth in mature markets and we see some other double-digit growth opportunities in other markets where we have other more niche positions. And I think if you add that all up, that gives us confidence in that 8% to 10% growth outlook.

Okay. Thank you for the color on that. And my second question is I just wanted to revisit the discussion on fee pressure. I think Tom asked a question and I'm looking specifically in your deck at Slide 22. And I'm just looking for some sort of historical basis of understanding fee pressure. And you guys had mentioned this, there's fee pressure on investment revenues and on admin fees. And when I look here, I see your assets under administration are up 14%. Your relationships are up 4%, but revenue is 10%. So is it safe to say that historically, what we've seen is more pressure on the investment income versus the fee side or am I trying to read into this too finer point? And I guess the question again revolves around, is it just a continuation of the trend? Or do you see fee pressure a little more weighted towards admin fees or investment pressure? Any help or guidance on that would be appreciated.

Over to you on that one, Ed.

Sure. Well, again, I would say it's a little bit of both. That being said, let me just make a comment on admin fees. I think with the market consolidating the way it is, and you can see the fact that the larger players are capturing a disproportionate amount of the share. I think for firms like us that have a very compelling value proposition, we're typically commanding a premium in the market vis-à-vis our competitors. And so I think as there's less choice, there's perhaps a shift in the balance somewhat as it relates to admin fees. I think on investment fees, the expectation is that, that will likely continue to come under pressure, we're seeing that across the board, both on the active side and on the passive side. So we obviously need to plan appropriately for that and plan for that accordingly. I don't know if Christine, you want to add anything on...

Can I just add in one other bit of color before Christine? We see this investment fee compression happening across a lot of businesses, and it's sort of a broad feature of wealth management markets. But having said that, one of the tenants behind our strategy here is to have an open architecture strategy, where, frankly, we can transcend some of this fee compression because a lot of the products and services that we're delivering our advice space. So when we talk about things like managed accounts, when we talk about things like IRA and the type of relationship we would have, for sure, there can be some fee compression in the underlying assets that we might manage. But what we're trying to do is manage a customer relationship, not just sort of a specific asset, and to the extent that we're providing this more holistic advice, there's an opportunity for fee capture in a very different play than just the asset management. And that is part of the strategy going forward. Christine, back over to you on that.

Thanks, Paul. I think the only other thing I would add from a historical perspective is you have to think about the mix as well. So what was in the deck is we were about 50% asset based from a revenue perspective. So as those mixes are moving over time, whether it's per part fees or asset-based fees or general account margins, all of those things play a part into how you then you see the revenue move forward over time.

[Operator Instructions] Our next question comes from Paul Holden of CIBC.

First question, you've highlighted quite a number of growth opportunities. One that maybe you haven't highlighted, and I'm wondering if it's an opportunity with your differentiated service offering, is there also something on the table to grab market share from some of the large competitors in the DC plan market?

Well, I mean, obviously, we've -- you mean from an acquisition standpoint? Or you mean just -- you mean just organically?

Organically. So taking customers away from some of the larger competitors?

Yes. I mean that's really the way we've grown the business primarily, Paul, is through those organic efforts. One of the key metrics that we focus on is net participant growth. And that's where we're growing at over 2x the rate of the market. So clearly, there are winners and losers. We've certainly been one of the winners in terms of market share as defined by participants. And obviously, we've layered on some acquisitions as well. Rich Linton, who runs that segment for us, might want to comment specifically on what we're seeing in the landscape.

Yes. Thanks, Ed. Good morning, Paul. Thanks for the question. I would say we are winning against our largest peers and competitors. We've built a nice reputation for record-keeping quality as well as customer service quality. So we're well-regarded for that across the industry. We've got a really nice track record of increasing participant savings rights and moving the needle on income replacement. So we're really being seen as a differentiated provider to actually getting participants, individuals to where they need to be in retirement. And then you couple that with our simple focus on retirement compared to many of our competitors that are in multiple industries. Those 3 things are really working together to allow us to win to edge point at a differentiated level more than to actual market.

Yes, I might ask, Ed, when you think about Empower prior to the acquisition of MassMutual, you grew the participant base from -- remind me where we started to where we got to 8.4 million. It was below the growth from -- in the 6 million to 8.4 million and that was primarily organic growth during that period, correct?

Correct.

Post the acquisition of Personal Capital.

Yes.

So I think, Paul, the key was we actually made the necessary investments to get the business situated to grow organically. And that was sort of around the -- post the acquisition of the JPMorgan Retirement Plan Services business. We've really harvested a lot of that. We will continue to. So now as you look to MassMutual and any other opportunity that might come along in future, we look at that as augmenting something that is already high-growth organic growth business for us. The market is not high organic growth. It is high organic growth for us from the standpoint of this takeaway game.

Yes. And I think we saw during the pandemic, the market was on pause somewhat. You just didn't see a lot of companies looking to change providers. And now we're seeing the market clearly open up, and that's playing out in our numbers and our results. I mentioned the pipeline at the highest in our history, over $1 trillion in terms of our pipeline. But also just that the RFP activity we're seeing and our win rates, our win rates are higher across every market segment. And then we coupled that with very, very strong client retention. So we're very encouraged by what we're seeing from an organic standpoint on the defined contribution side.

Yes. My impression is just maybe most of the organic growth had come from, let's say, the subscale players where you had a clear scale advantage, but I think your answer is making sure that you're gaining from all competitors.

No. We're in that game as every competitor.

Yes, understood that. And then just to make it crystal clear on the growing at 2x the market. Then that kind of puts you in line with that overall organic growth objectives that Paul highlighted, that 8% to 10%, is that the way I should view it as Empower is right kind of in that range acquisitions?

Are you referring to our ROE or our growth rate?

How about both?

Well, maybe I'll jump in on that one because it's really -- we're not going to provide a specific call on Empower's growth rate. But I will say that if you want to or to bifurcate our business into those that are going to be high growth into double digits. And when you think about it, Empower is growing not only because of organic growth, it also has to leverage that is coming on board because of the MassMutual and ultimately, the Personal Capital acquisitions. So when you layer on the benefit of synergies coming in and you layer on the benefit of the revenue synergies as well, starting to flow through as we adopt Personal Capital capabilities. Empower is actually a high solid, solid double-digit growth potential. And then we've got Germany, which is growing, where it's growing, when I talked about other businesses kind of in a mid-single digit. And when you add all those up, that's where we have this confidence in the 8% to 10% growth that we've articulated. And beyond that, we will continue to generate excess capital, right? So we're talking about organic growth, and that would contemplate the fact that we will continue to invest in our business. So we'll be taking some of the firepower we've gotten continue to invest in the businesses as we have in terms of technology and the like. And there's likely some small tuck-in acquisitions that are not material to Lifeco that might be included in that 8% to 10%. And that's constantly when we're repositioning businesses and maybe picking up a small tuck-in wealth manager in Ireland and things like that. But when we think about deploying excess firepower, incremental capital to drive incremental growth, that would be over and above the 8% to 10% that we're quoting.

Got it. Okay. And then just in terms of acquisitions as it relates to Empower, I mean you've highlighted that the MassMutual is a complex and large integration, will take a couple of years. So should we think about potential for next significant acquisitions to then take place maybe sort of 2023, 2024, that's kind of when you'll be reloaded again, let's say?

Can I? I'll start and just maybe talk about more in principle based on our experience at a Lifeco level, and then I'll let Ed speak to the relative readiness of Empower. One of the realities is, it has to be about discipline, but it also has to be about opportunity. And unfortunately, you can't set the timing for when high-quality strategic properties come to market. So think about -- we were in the midst of interacting with Personal Capital on that opportunity when the MassMutual deal came along. And we actually had to reflect at that point in time, we had to say, are we situated well with funding capacity? Do we have an ability to execute with confidence? And then fundamentally, is there strategic benefits? And we looked at those and we said, we can actually do both these transactions because, to a large extent, it's kind of Rich's team driving the MassMutual deal and Carol's team working with Jay creating all this value, we can have at Personal Capital, and we're able to do that. Having said that, if we had a deal that came along at some point, these things tend to take many, many months to actually get yourself to a position of readiness. And so I don't think -- we can't kind of take ourselves out of the market and miss opportunities. We actually have to constantly be on watch in all of our businesses, looking for opportunities. And then once we see the opportunity, use that discipline of how do we build up funding it, how do we feel about our execution capability and how strategic is it. So Ed, you can speak to the relative readiness of Empower, whether that's 12 months from now, 18 months from now, I'll let you speak to that.

Yes. I think you captured a lot of it, Paul. I mean, I would just say that we've got a very, very experienced team here. In fact, the team that's working on the MassMutual integration effort was directly involved in the JPMorgan acquisition and other acquisitions for that matter. So the team is deep, it's talented, and we have real expertise in doing this. That being said, I will say that we want to be opportunistic as a company, but I always say to my team that our first priority is to our existing customers. And we're not going to do anything that would compromise our ability to serve them and serve them well. And so when we look at acquisitions, we oftentimes look at them, not just from the standpoint of scale, but are there product capabilities, are there human capital elements to this acquisition that can strengthen our overall offering, add to what we're doing as a company and that's clearly what we saw with Personal Capital, and it's definitely what we saw with MassMutual. So when I think about M&A, I think about it as an opportunity because we've got a market that's consolidating. But I also see the prospect of M&A in the consumer wealth space as well as a way to garner scale and garner capabilities and build on what we're doing. So I think we try to take a fairly broad lens at the opportunity and at the landscape.

Yes. Ed, I wonder if Rich might comment on the nature of how automated we can be in some of these integration activities? Because if this was a hand-to-hand combat, day-to-day thing, case by case, the time line even just to getting MassMutual online would take a long time as opposed to the rigor, discipline and digital capabilities we've built around that. So maybe Rich can speak to that because I think it's the one thing that gives me confidence in the MassMutual deal, but confidence in our ability to continue to grow this business. Over to you, Rich.

Yes, it's a great point, Paul, thank you. Yes. What we learned from the JPMorgan RPS deal was the client engagement playbook, how you make sure you engage early and quickly with clients so that you deliver high retention. And then from there, as you look at MassMutual, the difference between JPMorgan RPS and MassMutual is the number of clients with 25,000, 26,000 planned sponsors to migrate over, you had to have a different mapping strategy than you had when you had 300 or 400 clients. So to Paul's point, a very automated lift and shift of the data out of the 3 platforms at MassMutual and then mapping that into our single platform, we call it easy, here at Empower. That has been really the focus of these early builds just to make sure that first wave migration that happens in September is an automated transfer of data, client data participant data from one platform to the other. So I'm pleased to say we're on track with our builds and our scheduled first migration wave in September is on track.

[Operator Instructions] Our next question comes from Mario Mendonca of TD Securities.

Can I ask you to have a quick look at Slide 78. And I want to look at Slide 78 in the context of future consolidation in the industry, which sounds like it's certainly right for it. I see $160 million in tangible expense synergies, another $30 million in revenue and then a total of USD 220 million 2022. So when I look at that, the first thing that occurs to me is that the business itself, MassMutual on a stand-alone business, a stand-alone basis, was generating, let's say, I don't know, maybe $40 million in profitability. Firstly, is that an appropriate way to look at this that it was roughly $40 million or so?

I'll let Ed then perhaps Christine speak to that one.

Yes. Christine, why don't you take that one?

So first, just want to clarify, the $220 million in base earnings after tax. And the $160 million and the $30 million are both pretax numbers. And so then the other -- only other thing I would say is we just have to look at the business after retention assumptions and that sort of thing. So I have to do a full reconciliation for you, so we could take that off-line. But just wanted to point out the pretax and after tax numbers.

That's helpful. So obviously, it's more profitable than I was giving it some credit. But maybe the question still stands. Where I'm going with this is, it sounds like most of the profitability from consolidating the industry, particularly if we're talking about businesses, say, with less than 2 million participants. Most of it will come from expense savings and revenue synergies. If that's the case then, with so much of the value really being created by the integration itself, why do you figure we haven't seen a more aggressive consolidation of the industry? I asked the question that way because when it's so skewed, when value creation is so skewed in the favor of scale, you'd expect the industry to have consolidated more abruptly by now. Is there something that maybe has limited that and that might change over time?

Yes. Yes. I think the -- I think one of the key factors is some of the remaining providers in the space built their business around proprietary investments. And they have, in some cases, meaningful proprietary asset positions. So by remaining in the business, it becomes, in some respects, a defensive position for them in order to maintain those assets that they have on the platform. The concern is if you sell all together, you run the risk of seeing those assets to threat and move to other platforms or other investments. That's why you've seen a couple of fairly large players choose to outsource to a third party. So they remain in the business, marketing a product and marketing their proprietary solutions but they outsource the back office to a third party, and they effectively transfer the employees that were working on that part of the business to a third party as opposed to an outright sale. So again, I think that that's, I think, been a big impediment around not seeing more consolidation at this point. But again, we've seen, as we noted in the presentation, a number of transactions over the last 5 to 6 years.

Ed, I think that integration isn't always easy. I think it's complicated. I think we've got a very good playbook for that. We've been able to execute. If you look at some of the historical transaction taking place, they haven't consolidated all of the participants on to a single platform, which is really where you get the scale and efficiency. So I think that's one of the strengths of our past experience is the ability to get to that single platform is really operate at scale.

Just going to add one more thing, Mario, which is if you think about our Empower strategy, which is kind of more of an open architecture strategy, where we essentially are, we're actually quite aligned with sort of fiduciary standards and all of those considerations. I think we're actually an attractive partner to a lot of organizations from the standpoint of them viewing us as a platform where they can integrate like MassMutual and sustain a relationship -- an investment management relationship because we're not there trying to displace with a house brand investment solution offering. We're a very open architecture in our view. And ours is all about the lifetime customer relationship and to a large extent, it's the advice part of the business that we're really focused on.

So as a follow-up, just along the same lines of reasoning, if Great-West Life were to or rather Empower were to be successful in being, say, an outsourcer of choice. A company that those other providers really could look to outsource the recordkeeping. If that, in fact, played out, could Great-West Life realize the same level of synergies playing the role of outsourcer or in this case, being providing the service with the same level of synergies be doable for Great-West Life as they were, let's say, as they are, it would appear for MassMutual or there's some other economics at play that would limit that?

We -- well, first of all, let me just say, we do this today. So we do work with a few companies. We have over 1 million participants as part of our Empower institutional business, where we are effectively the back office, and those companies are selling a branded product marketplace. They tend to be smaller players, with the exception of one that's fairly large. But we're effectively the intel inside for them. So we have that capability today. And it's been a business for us that, in some instances, has led to outright acquisitions in the sense that some of the providers over time just opt to get out altogether. And essentially hand the business over to us. So we have that capability. We've spoken to other firms in the marketplace. So if they're not interested in outright sale, we could be a good destination for them as their back office while they continue to market their own solution.

And do those opportunities offer the same synergies?

It depends on how the deals are structured, quite honestly. There can be some limitations on whether the revenue synergies, for instance, accrue to us or to them. So it really just depends.

This concludes the question-and-answer session. I would like to turn the conference back over to Paul Mahon for closing remarks.

Thank you very much, operator. I want to thank everyone for attending. As you can sense, we're truly excited about the Empower opportunity and actually, how it can fundamentally broaden an offering for millions of Americans. And actually what it means to Great-West Lifeco. So as we look to the future, reducing this as a significant part of our future growth story. As we leave today's meeting, I really want to wish everyone a safe and healthy summer, hopefully helped by vaccination rates. But -- and as we slowly return to normal, I'm also conscious of a lot of upside on easing our world today and in particular, in Canada, where we've seen some really challenging things that have played out more recently with the residential school and more recently in London, Ontario, where there was a killing of a Muslim family. And what I really want to encourage all of my colleagues at Empower and Lifeco to do is really to lean in and to think about how we're going to support our bi-part colleagues and communities. And I want to encourage all of us to support one another with compassion in both our words and our actions as we move forward. So thank you very much. And thank you again. I wish you all a health and safe and peaceful summer.

This concludes today's conference call and webcast. You may disconnect your lines. Thank you for participating, and have a pleasant day.