Is empower retirement a good company 4-star brokerage rating

Empower Retirement Review: Is It Good?

2022 Empower Retirement IRA review: 401K plans, Roth, rollover and traditional IRAs. Is Empower Retirement a good company? Account rating, plan funds management fees, cons and pros, and cost.

Empower Retirement – Who Are They?

Empower Retirement is the second largest retirement financial services provider in the U.S., trailing behind international behemoth Fidelity Investments. Empower is a relatively recent name in the Retirement Services industry. It is a subsidy of the Canadian-based financial holding company Great-West Lifeco. In 2014, Great-West orchestrated a series of acquisitions and partnerships with other big names such as Putnam Investments and JP Morgan Retirement, catapulting their collective controlled assets above every other company save Fidelity. The resulting conglomerate was branded “Empower Retirement”.

Since then Empower Retirement has continued to expand its business by taking on new corporate clients and increasing their access to additional investment funds.

Is Empower Safe and Legitimate Company or a Scam?

With all the information in this article and from the internet, it is obvious that Empower Retirement is not a scam. Empower Retirement is a safe and legitimate retirement plan provider.

The Details of Their Service

Empower Retirement's main mission is helping customers grow their investments to a level that can support them in retirement years. Empower offers their services both to the public and private sector. They provide retirement plans for companies of every size as well as various government agencies from the municipality level all the way up. The employees of their direct customers are ultimately the users of Empower’s service. They also offer the opportunity to set up individual IRA accounts apart from their corporate plans.

The company offers a very large package of resources to their customers. Individuals are able to create their own Empower user accounts to view and modify their investments at any time they wish. Some of their best features include:

- Detailed account statements with history of past performance by individual asset

- High degree of customer autonomy for controlling and managing their investments

- Retirement planning tools for forecasting future fund income

- Extensive customer support network with financial professionals available to help individuals plan for their particular retirement circumstances and goals

Empower Retirement review

Account Information & Management

Empower offers a very organized view of the customer’s investment account. They have a great “At-A-Glance” table which shows essential information such as present account value, rate of return, and current contribution amount. Users can delve into more detailed information as they wish. There are many funds to choose from with different specializations, such as US Markets, European Markets, Corporate Bonds, Emerging Markets, and much more.

This allows customers to diversify their holdings and change the weighting of their various investments as needed. For example, it is a typical practice to invest a greater percentage of their portfolio in bonds as one ages; which are less volatile but have lower overall returns. This protects the retiree from their portfolio depreciating as much as a pure stock portfolio during a market downturn when they actively need the income to live off of. Contribution percentages, investment percentages, automatic rebalancing and more are available for the customer to modify. The interface is easy to navigate and understand.

Customer Support & Retirement Planning

Empower also has a very good customer service branch. Whether a user wants to know more about how to navigate the account portal, get information on fund specifics, or wants to speak with a financial planner about their retirement goals, support from Empower is easily accessible. They can be reached through messages and they have dedicated phone numbers for customer service and financial planning available for calls every day. We have always received prompt and helpful support when contacting Empower for any needs.

There are some built-in calculators to forecast future account values and income potential right on the site that can be used as well.

Empower Investments

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Getting Specific – An Analysis of Empower

So, should customers sign on with Empower Retirement for their long-term investing needs, or look elsewhere? Here are several critical facts and figures to consider. Since Empower offers their services primarily to corporations, the standard plan administration fees aren’t absorbed by the individual users. Instead, they are negotiated and paid by the client corporation. There are a few fixed account fees that come with the creation of an individual IRA account, but these are so small they can almost be considered negligible.

Empower charges $0 for account setup; and an annual administration fee of $35 until the account balance exceeds $30,000. Competitor Vanguard charges an annual fee of $20 per fund. So a Vanguard user with a diversified account of three funds will be paying about the same as an Empower user. Larger Empower accounts will have a slight advantage when they exceed $30,000. But a difference of $100 per year pales in comparison to the potential difference in fund management fees.

The main source of costs to consider for any retirement services vendor is by far the annual fund management fees. This is a cost to the consumer based off a percentage value of their total holdings in a particular fund. And since the goal of most retirement accounts is to appreciate well into the six-figure range at least, even a 0.5% difference in fees can end up costing thousands of dollars extra per year. The expense percentages vary by individual fund, so even within Empower it is possible to shop around for lower fee funds. A direct comparison between competitors is difficult for this reason.

Besides the costs, account management interface, customer service, and fund performances are other key areas to consider. Here is a breakdown of the pros and cons at Empower Retirement:

Empower Retirement Pros

- Very detailed account information.

- The user interface is easy to navigate and the customer has a lot of control with how they want to manage their investments.

- Large selection of mutual funds.

- Valuable retirement planning tools.

- Access to professional financial advisors to help with retirement planning and account structure for the less educated.

Empower Retirement Cons

- Empower’s funds change a slight premium for no large edge in performance over other options. Whether the quality of their other services is worth this cost is debatable.

Empower Retirement reviews

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Empower Fund Management Fees

Empower Retirement offers over 100 mutual funds with good historic performances and expense ratios. As an example, here are the two highest performing Large Cap Equity funds with a track record of at least 10 years:

JP Morgan Growth Advantage A - 17.41% last 10-years Historic Returns; 1.14% Expense Ratio

Alger Capital Appreciation Instl I - 16.67% last 10-years Historic Returns; 1.14% Expense Ratio

Competitor Vanguard is widely considered to be the pioneer of extremely low cost index funds created to rival the active management philosophy. Here are the top two funds from Vanguard picked with the same criteria:

PRIMECAP Admiral Shares - 16.79% last 10-years Historic Returns; 0.31% Expense Ratio

Growth Index Admiral Shares - 16.05% last 10-years Historic Returns; 0.40% Expense Ratio

As can be seen, there is no noticeable increase in historic performance for the higher costs of Empower’s funds. And these small margins of difference become increasingly significant as one’s account balance rises. A $1,000,000 account compounded for five years at 9.94% vs. 8.45% ends up netting an extra $105,927!

Now, there is a common mantra in the investing world, “Past results does not indicate future performance.” Advocates of actively managed funds insist that index funds only outperform active funds in friendly market conditions, and the US market has been in one of the longest bull markets in history since the aftermath of the real estate crash in 2008. So it is possible that active funds may gain back this performance deficit by losing less if and when markets become more turbulent again in future times.

However, the hard data points toward index funds being a superior investment vehicle for the past decade or two. Empower’s increased fees may very well create an exponential drag on customer portfolios if past trends continue. Whether a customer deems the extra costs worthwhile for the other services offered by Empower or their account balance is too small at this point to trifle over it is a decision each person will need to make for themselves.


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Empower Retirement Review Summary

In conclusion, Empower is a high quality vendor of retirement services. They have an extensive network of funds, a rock-solid business model, comprehensive and user-friendly account management, along with a great customer support.

However, the main cause for concern is that many of its funds have much higher management fees than competitor funds which investors can buy on their own at many discount brokers, such as Ally Invest or TD Ameritrade.

About the Author
Arthur Chachuna is professional personal finance blogger, and the owner of He has been an avid investor for 23 years, and has background in both applied math and programming.