PensionBee Group plc, a prominent online pension provider, has announced the launch of its operations in the United States, the world’s largest Defined Contribution pension market.
The move will see them enter the market which accounts for approximately 80% of the global total and boasts $22.5tn in assets.
The company’s wholly-owned US subsidiary, PensionBee Inc., is now registered with the US Securities and Exchange Commission as an investment adviser.
In May this year, PensionBee entered into a strategic agreement with State Street Global Advisors (SSGA), a large, US-based global financial institution. This partnership builds on their previous collaboration in the UK, where SSGA acts as an investment manager for certain underlying portfolios offered by PensionBee.
Under the terms of the strategic agreement, PensionBee will introduce its award-winning online retirement services and proprietary technology to the US market. This will enable American consumers to easily consolidate and roll over their 401(k) plans and Individual Retirement Accounts (IRAs) into a new PensionBee IRA.
The investment portfolios offered to US customers will be based on SSGA’s model portfolios, exclusively comprising SSGA-managed Exchange Traded Funds (ETFs). Additionally, SSGA will provide significant marketing support as PensionBee leverages its data-driven, multi-channel customer acquisition strategy to attract new clients.
PensionBee anticipates rapid growth for its US business, aiming to manage $20-25bn in US Defined Contribution assets over the next decade, potentially matching the importance of its expanding UK operations.
In the UK, PensionBee currently manages over £5bn in Assets Under Administration (AUA) for more than 250,000 customers.
The company plans to continue increasing its market share, targeting a 2% share of the £1.2tn UK pensions market within the next 5-10 years, with a goal of onboarding one million customers and administering £20-25bn in AUA.
Having achieved sustained Adjusted EBITDA profitability by the end of 2023, PensionBee expects to maintain profitability on an Adjusted EBITDA basis for the entire 2024 financial year in the UK.
Romi Savova, CEO of PensionBee, remarked, “In the year of our 10th anniversary since founding PensionBee, we are delighted to expand the reach of our award-winning customer proposition, innovative technology platform and unique marketing approach to the US market.
“Our vision is a world where everyone can enjoy a happy retirement. By entering the world’s largest Defined Contribution pension market, where many consumers still struggle to prepare adequately for retirement amidst an array of confusing and opaque investment options, our unique and simple approach to online retirement savings will resonate.
“We are excited to work with our long-standing partner, State Street Global Advisors, to transform the retirement savings market for millions of American consumers.”
Yie-Hsin Hung, CEO of State Street Global Advisors, commented, “We are excited to extend our relationship with PensionBee and serve as their exclusive ETF model provider in the United States. Our collaboration with PensionBee will enable millions of Americans to have access to model portfolios built with our ETFs in individual retirement accounts managed by PensionBee.
“At State Street Global Advisors, we are committed to collaborating, partnering and delivering high quality solutions for investors. We are excited to provide the models and access to some of the world’s largest and most liquid SPDR ETFs to enable PensionBee’s clients to save for retirement.”
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