washington D.C.

Empower expands fiduciary role as SEC Regulation Best Interest nears

Jun 9, 2020
Press Release

Firm seizes opportunity to help individuals with retirement and financial planning

GREENWOOD VILLAGE, Colo., June 9, 2020 — Empower Retirement will continue to assume the role of a fiduciary to help address the financial needs of retirement plan participants and other customers when the Securities and Exchange Commission’s (SEC) Regulation Best Interest goes into effect on June 30.

In addition, Empower will continue to expand the scope of its field representative service model so that individual retirement plan participants can discuss investment strategies with their Empower representative.  Empower serves approximately 9.6 million individuals through defined contribution retirement plans, Individual Retirement Accounts and retail brokerage accounts.

“Empower is seizing the opportunity to provide best-interest recommendations to better help individuals plan for a successful retirement and achieve other financial goals. Many customers are unsure of what financial decisions to make on their own, and we are here to help,” said Edmund F. Murphy III, Empower Retirement President and CEO. “Our goal is to ensure participants and other retail customers have quality support to help improve their financial well-being.”

Known by the short-hand, “Reg. BI,” the new rules establish a standard of conduct that requires broker-dealers and their registered representatives to act in the best interest of their retail customers, including both plan participants and IRA owners, when recommending securities and investment strategies, including rollovers and account-type recommendations. The regulation is designed to ensure that broker-dealers and their registered representatives act under a higher standard of care when making such recommendations to everyday investors.

The new regulation is the result of a multi-year effort by the SEC to provide comprehensive and uniform rules around securities advice.  Many stakeholders, including Empower, submitted comment letters during the rulemaking process to help the SEC finalize these important consumer protections.

“Reg. BI offers a number of common sense measures that are compatible with Empower’s view of the importance of providing investment advice and investment recommendations to both plan participants and IRA investors,” said Murphy.

Investment advice provided to participants in retirement plans that are subject to the Employee Retirement Income Security Act (ERISA) must satisfy ERISA’s fiduciary conduct standards. Empower representatives offer fiduciary investment advice designed to meet ERISA’s standards, to participants in both ERISA and non-ERISA plans.

“Empower is taking the additional responsibility of being a fiduciary even though Reg BI does not require it. We believe in doing the right thing when providing investment and distribution advice to plan participants,” said Carol Waddell, Senior Vice President, Retirement Solutions Group for Empower. “Frankly, we have always operated in this way, but Reg. BI is formalizing the process and giving us additional guardrails in which we will operate.”

Reg. BI applies to investment recommendations made to retirement plan participants in 401(k), 403(b) and 457 plans, among others, as well as IRA owners and retail brokerage customers. It does not apply to Empower’s interactions with plan sponsors or plan advisors and representatives.  Additionally, Empower will continue to provide investment education to those plans that have not authorized Empower’s advice service, and those participants and retail customers who are interested in making their own investment choices without a recommendation or advice from Empower.

Acting under its registered investment adviser, Empower field representatives provide fiduciary advice to plan participants seeking robust investment advice, when allowed by the plan sponsor.  As such, Empower will update disclosure and procedures around client interactions, and its supervisory structure in place through Empower Advisory Services.

Under Reg. BI, broker-dealers will now need to engage in a thorough and in-depth process to collect information and determine if an investment is in the individual’s best interest. Customers will be provided disclosures that include transparency on any conflicts of interest that the broker dealer or their registered representatives may have with respect to the recommendations they provide their client.

“These changes will advance the relationship between Empower and individual investors,” said Waddell. “Under Reg. BI, individuals can establish a trusted and ongoing relationship with a firm to provide the personal information and updates they need and want.  Empower will be ready, willing and proud to serve these investors.”

About Empower Retirement

Headquartered in metro Denver, Empower Retirement administers $583 billion in assets1 for more than 9.6 million retirement plan participants, as of March 31, 2020. It is the nation’s second-largest retirement plan record keeper by total participants (Pensions & Investments, April 2020). Empower serves all segments of the employer-sponsored retirement plan market: government 457 plans; small, midsize and large corporate 401 (k) clients; non-profit 403 (b) entities; private-label recordkeeping clients; and Individual Retirement Account customers. For more information please visit www.Empower-retirement.com.

Media Contacts:

Stephen Gawlik – 303.737.0899 (office), 617.417.4408 (cell)

Monica Mendoza – 303.737.2626 (office), 719.373.2460 (cell)

Learn More:

To learn more about how we’re empowering plan sponsors and their participants to be more engaged in their retirement plans than ever before, call us at 800-719-9914.

 

Securities offered and/or distributed by GWFS Equities, Inc., Member FINRA/SIPC. GWFS is an affiliate of Empower Retirement, LLC; Great-West Funds, Inc.; and registered investment adviser, Advised Assets Group, LLC. This material is for informational purposes only and is not intended to provide investment, legal or tax recommendations or advice.

RO1208212-0620

1As of March 31, 2020. Information refers to the business of Great-West Life & Annuity Insurance Company and its subsidiaries, including Great-West Life & Annuity Insurance Company of New York and GWFS Equities, Inc. GWLA’s consolidated total assets under administration (AUA) were $595.2B. AUA do not reflect the financial stability or strength of a company. GWL&A’s statutory assets total $47.7B and liabilities total $46.1B. GWL&A of NY statutory assets total $1.59B and liabilities total $1.48B.

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Carefully consider the investment option’s objectives, risks, fees and expenses. Contact Empower Retirement for a prospectus, summary prospectus for SEC registered products or disclosure document for unregistered products, if available, containing this information. Read each carefully before investing.

Securities offered and/or distributed by GWFS Equities, Inc., Member FINRA/SIPC. GWFS is an affiliate of Empower Retirement, LLC; Great-West Funds, Inc.; and registered investment adviser, Advised Assets Group, LLC. Investing involves risk, including possible loss of principal. This material is for informational purposes only and is not intended to provide investment, legal or tax recommendations or advice.

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