September 29, 2020
Is it retirement Groundhog Day? Less than a month after publicly disclosing its purchase of Mass Mutual’s retirement services, Empower Retirement announced its intent to purchase Fifth Third Bank’s retirement recordkeeping business. The deal has been agreed to in principal and is expected to close in December 2020, pending regulatory approval.
Fifth Third’s decision to exit the recordkeeping business comes as no surprise. Over the past several years, the industry has witnessed a number of banks exiting the business altogether including Huntington, Wells Fargo, and PNC.
This is effectively Fifth Third’s second but more permanent exit from the business. In the mid-2000’s, Fifth Third outsourced its retirement recordkeeping business primarily to Fascorp, a division of Empower, but maintained service through a 5/3-branded product. In this most recent move, Fifth Third is exiting altogether. Others who have followed Fifth Third’s initial move include American Funds and JP Morgan middle-market and, most recently, Nationwide and Vanguard. All of these have soft-exited the retirement recordkeeping business in favor of a strategy of recordkeeping consolidation while maintaining a branded product.
If you have any questions, please reach out to Paul Carl, CPFA, at 513.794.8189