Empower Hires Former Fidelity Private Wealth Head

Roger Hobby is joining Empower in a senior role in its recently rebranded consumer wealth division.

Empower Monday announced that that Roger Hobby will be joining the firm April 1 in a senior position at its recently rebranded wealth advisory division.

Roger Hobby

Hobby will take the role of executive vice president and head of advisory and distribution for Empower Personal Wealth. He will lead the firm’s in-retirement plan and direct-to-consumer customer services, including financial planning and advice, and report to Carrol Waddell, president of the new division announced in March 2023, after the completed integration of Empower’s Personal Capital acquisition.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

Hobby joins the firm after a stint at competitor Fidelity Investments, where he was head of distribution for private wealth management, executive services, workplace planning and advice, and stock plan services—roles in which he led the firm’s service to high-net-worth clients and workplace participants, according to the announcement.

The announcement marks the second former Fidelity executive to join Empower this year, after Dave Gray took the role of executive vice president for enterprise solutions in January. Gray had been head of workplace products and platforms at Boston-based Fidelity.

Hobby will join Greenwood Village, Colorado-based Empower with experience in wealth management, executive benefits, workplace solutions and general management skills, Empower noted in a release.

“Roger has a very deep understanding of our customers’ needs and choices, and I am confident he will help Empower Personal Wealth create valuable experiences for them,” Waddell said in a statement. “His passion for customer success is evident to anyone who meets Roger. He is a mission-driven innovator who puts the customer at the center of his thinking.”

In February, Empower reported growth in its workplace solutions and asset management divisions from 2023. The consumer wealth division saw year-over-year growth of 31% to $72 billion, while still being in the “first or second inning” of development, according to an interview at the time with CEO Ed Murphy—also a former Fidelity executive.

“While Empower Personal Wealth is a more recent entrant in the wealth management market, we have a great opportunity to deliver world-class experiences to help customers achieve results,” Hobby said in a statement with the announcement of his hiring.

Hobby also formerly served as president of Fidelity’s family office services group, managing strategy, sales, business development, technical product development and relationship management for high-net-worth clients. Prior to that role, he was president of Wilmington Trust NA, where he led wealth advisory services for the Northeast, including private banking, equity compensation planning, investment services, fiduciary services and family office services.

DOL Answers Appeal in ESG Rule Litigation

The ESG rule was upheld in a Texas district court, but was appealed to the 5th Circuit in October 2023.

The Department of Labor filed to the U.S. 5th Circuit Court of Appeals a defense of its rule governing “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights,” sometimes called the environmental, social and governance rule, as complying with the Employee Retirement Income Security Act.

The final rule permits fiduciaries under ERISA to consider ESG factors in their risk-return analysis when selecting retirement plan investments. It also permits fiduciaries to use collateral factors as a tiebreaker between two or more investments when both investments equally serve the interests of the plan and for fiduciaries to use qualified default investment alternatives that use consider nonfinancial factors, if it is a prudent investment. The department finalized the rule in September 2022.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

In January 2023, the final rule was challenged in a Texas federal district court, which upheld the rule in September 2023. The plaintiffs in the initial litigation—26 Republican-led states, two corporations and a trade association in the fossil fuels industry, and two individuals—appealed in October in the case now known as Utah et al. v. Julie Su et al. The 5th Circuit hears appeals from federal cases in Louisiana, Mississippi and Texas.

The DOL argued its response to the appeal in much the same way that it did in district court: Fiduciaries are not permitted to subordinate the interest of the plan when considering ESG factors, and they may only consider nonfinancial factors to the extent that they are part of a prudent risk return analysis.

The DOL rejected the plaintiffs’ argument that the “rule improperly licenses fiduciaries to defy their statutory obligations by taking actions that are not in the financial interests of plan beneficiaries.” The DOL answered that “the rule does no such thing. To the contrary, a fiduciary engaging in such conduct would defy the clear text of the rule.”

Further, the DOL argued that the tiebreaker rule was the “best construction of ERISA.” Previously, fiduciaries could only use collateral benefits as a tiebreaker if the two choices were otherwise “indistinguishable,” a standard relaxed to “equally serve the interests of the plan.” The DOL’s filing notes investments need not be identical in order to equally serve the plan, and it is not always possible to choose both. Picking one or the other randomly, such as by a coin flip, is itself a collateral benefit, because it is nonfinancial and produces no marginal benefit to considering other nonfinancial factors.

The DOL added that, “if plaintiffs are correct that such ties are infrequent, that does not mean the tiebreaker standard is invalid; it just means the standard applies infrequently.”

The plaintiffs have not yet filed an answer, and oral arguments have yet to be scheduled.

«