All right. We will get the next session started here. First thing I'd like to do is thank Jon Nielsen for being here, CFO Great-West. You all, you know, I know them better as Empower from my, you know, 401(k) plan. But, you know, fantastic to have you here. I can't wait to jump into the conversation. I wanted to start with a broad strategy update type of question here. I mean, you all hosted an Investor Day not too long ago. You provided a lot more disclosure on your business, which is very appreciated from the outside. You know, what are the things you're most focused on as we think through this, you know, more medium-term plan? What are the things you're most focused on over the next, you know, 12 to 24 months? What does the beginning part of that execution look like, for you?
Yep. Yep. Well, first, thanks, thanks for inviting us, Alex. We really appreciate the opportunity to meet with investors here at this great event and really appreciate the opportunity you've given us to join you here today on the stage. So, yeah, we did host an investor event. It was a across the waterfront view of all of our businesses. The composition of our portfolio over the last 10 years had changed quite materially. We went through a period of consolidation, so to speak, in terms of our focuses. We totally transformed our U.S. business by selling off our interest in Putnam, selling off our life insurance business, and reinvesting into becoming the second-largest retirement provider in the U.S.
And that was done both with a significant amount of organic investment into our U.S. business as well as some pretty strategic and large transactions that that's given us this incredible position. So what we wanted to do with Investor Day is re-articulate both the strengths and the market shares. What we like is developed markets we know well, significant brands, deep penetration, top-three market positions. So we wanted to bring forth the strength of those businesses. We thought a number of things were underappreciated, and part of that was on us telling our story better, but also part of it was giving enhanced disclosure. We wanted our investors to know better just the strength of our capital generation, the strength of the positions in the market. And that then led to changing and reaffirming and upgrading some of our targets.
So, out of that came moving from 8% earnings growth to a range of 8%-10%, raising our ROE target from 16% to 17% to 19% +, and reiterating our yield payout ratio of 45%-55%, and also introducing capital generation and really clear disclosures around how much capital we generate and the fungibility of that capital. So what we said is we're gonna generate over the medium term 80%-85%+ of capital as a percent of earnings. How did we get there? I mentioned the, you know, the strategic position and the way we like, but it's also a fundamental change over time in our business mix. So we're about 2/3 capital light businesses now. That's retirement, that's wealth, that's group benefits.
We have leading positions in our geographies in those businesses. They're the businesses that have the highest organic growth rates, and so we'd see those capital light businesses becoming 70%-75% without any inorganic deployment over the medium term, and that kinda leads to those higher targets that we've laid out. In terms of execution priorities over the next two to three years to get there, in most of our markets, you know, well, all of our markets, we're in the position that we like to be in. We've disposed of market positions that we don't have leading franchises in. You know, we have good, deep customer bases. So many of those are continuing to execute very strong, you know, growing with the market, taking market share organically. I guess in terms of where do you see the most change? It would be Empower.
And so over the next two to three years, I would say our biggest opportunity's expanding our wealth business in the U.S., organically, principally. Right now, we capture, we've increased our capture rate at rollover by 30% over the last three to five years. Our target's anticipating increasing that by another 30%. That would take us to 20% rollover capture. You know, that's a far distance from where we hope to get over time. You know, in comparison, we see best in class being 40%-50%. So a long road. It's a multi-year, multi-decade journey. But our principal focus, you know, in the U.S. is getting that rollover capture up over the next five years.
Great. Maybe I'll dig in there on Empower a little bit. You know, I thought one of the positives from the earnings call was that you all talked about potentially getting as much as $25 billion of flows into Empower. And, you know, this is an industry where, you know, it's not, you know, maybe overall industry positive flows. So quite a feat to be able to potentially do that in the back half. What, you know, what's the underlying driver there? You know, what are the things you're doing that are working?
So I think it goes back 10 years. And the team that set out our strategy recognized that structurally the U.S. retirement market was in outflow for a period of time with the baby boomers demographically exceeding new entrants into the retirement platforms, into the 401(k) market. And they anticipated that. And they saw that as a strength to build on because it said, you know, this market's gonna have to consolidate. There's gonna be less providers as you go through that demographic change. And what they identified were three, what I call almost three winning levers of the strategy. One is you have to have a top-notch tech platform that you own that delivers very cost-efficient processes, and you have to have a cost advantage. And through the transactions that we've done, I think we've proven that cost advantage.
We're able to take out 30%-40% of the cost base of books that we bring in onto our platform. There are some variable costs. Obviously, you have more contact points with customers, but there's a, you know, there's a lot of fixed costs that need to be maintained, brand, you know, tech, and so on. So we think we have a winning hand on the cost side, driven that we own our own tech. We're very efficient. It took a long time to do this. If we look at publicly traded comparables, you can see that cost advantage in the numbers. So that was one part of the strategy.
The second was to be open architecture, to not rely on manufacturing asset management products, to be, if you wanna call it the Switzerland of asset management and partner with best-in-class providers. We thought that played into the Department of Labor's fiduciary responsibilities very well. It didn't leave us dependent upon asset management margins to meet our targets, and it allows us to partner with the best-in-class asset providers. I think the third thing was we saw that, you know, the team that built this saw the advantage that digital would bring to wealth over time, and knowing that mass affluent middle-class people need wealth advice as well can't be provided only with human touch. We knew human touch would be at both ends of our business for the long term.
But, you know, you can enable advice to be provided to many, many more Americans on a hybrid basis, you know, using a combination of human and digital. And that's our model. Our model is, right now, to attack those people with somewhere between $200,000 and $2 million in retirement assets and bring a wealth-based advice model, best-in-class asset managers, and focus on, you know, asset allocation, financial planning, and getting people to save more for the retirement and stay safe. So that's our model. And it's worked out well for us now. I would say we're in the early innings of that wealth build-out. And those were the tenets that led us to where we are today and what we think's a winning hand.
Next, could you discuss the earning sensitivity to equity markets in that business? And, you know, the reason I ask is, you know, markets are clearly up a lot from at least where the average level was in 2Q. I would think that'd be a reasonably good tailwind for the part of your fees that are.
Yeah.
AUM-based and the additional question I wanna ask is, well, you know, what do you do with that additional flexibility? Is that something that you leverage it to invest more in the business? Is there some of it that'll fall to the bottom line and benefit your capital base? Just trying to understand the way you'll approach it.
Yeah. So we do like, you know, this profile of earnings that we have. And let me just dive into that. About 50% of our revenues are kind of asset-based fee-linked revenues. Another 25% or so 30% are, call it spread or transactional-based fees, so they're not dependent on any type of markets. And then the residual is spread-based from our stable value products. So it is a very diversified set of revenues. Over time, what we really like is we found new sources within those categories of revenue, you know, to continue to diversify and build our revenue base. This provides, along with cost, a competitive position that allows us to really compete strong on organic growth in the retirement sector that you know, touched on.
So, you know, very diversified, very, you know, broad-based set of fees, you know, that we like that profile. You know, in terms of you're right, it should provide tailwind, you know, to continue to show great earnings growth. In terms of investment, I would say our principal investment is going into the wealth side of the business. You'll see that the margins of both businesses are quite similar, 30% type of EBITDA margins. You know, in the long run, we'd expect our wealth margin to increase, to be a higher margin than the retirement. Why is that the case? Well, we're about 100 billion of out-of-plan assets in the wealth.
You know, we're growing, you know, net flows in the wealth business are $12 billion plus this year. If we increase that capture rate, that business is gonna grow very nicely. That leads to the double-digit earnings guidance that we've given for the US business. So wealth is growing, you know, at a very healthy rate to get the double digit.
We would say our retirement earnings would grow at mid-single digits plus type of levels, you know, over time. So investment is gonna be principally on driving up that organic rate. What we need to do and what we think is the winning hand is to build a deeper relationship with the clients while they're in plan. So if you look at best in class, why do they win at higher levels of rates? Well, they have multi-product relationships with clients while they're in plan.
And we've announced that we're moving deeper into the health savings account business. You know, there are other biz things that we can do, whether it's retail brokerage, education savings accounts that we think will deepen our relationship with clients while they're in plan. And that will give us the right to win and move up, that capture rate over the medium to longer term. And that's where our investment's going.
Can you talk about the competitive environment in the Empower retirement business? You know, I guess I'm interested what are you seeing out there in terms of pricing competition? And also maybe if you could opine on, you know, is price usually what wins for you, or is it more on the capability side? Like, just how price elastic is that process?
Yeah. It's a great question. And, and it goes back to the original strategy, you know, with the strategy being a cost leader where you can invest in the retirement business while still maintaining strong margins. And what we would say is we viewed the smaller players. What would force their hands on consolidation is the inability to invest into the retirement platform and make it best in class. You know, if you have earnings guidance, you're a public company, and you're in an outflow, it's a bit of a, what do you wanna say, a treadmill that you're on. Ultimately, they would need to curtail investment. Most of those providers rent their tech from third-party software providers that are also unwilling to invest substantially in, in service. And in integrating wealth into the retirement platform, we own ours. It's, you know, we own our tech. We can do that.
We can invest and still grow. So we believed in order to make our inorganic strategy successful, we needed to win organically. And if you look at the last three to four years, we've taken $135 billion of plan flows from other providers. We would say us and the number one company in the industry are the two that are taking market share at the expense of the remaining parts of the industry. So winning market share organically is a testament to the product that we offer, the service and standards that we hold and that we're providing financial wellness to companies, at a time when, you know, financial issues are typically what keeps the workforce from being highly productive. So we continue to win market share. Is there some price compression? Of course.
I guess our view would be we'll outrun that with continued enhancements on the back office and the ability to invest into better solutions for our clients. So, you know, do we feel price competition? Yeah. Do we always win on price? No. I'd say more times than not, it's on the service, the broader offering that we bring to our clients than price.
That's helpful. One of the key topics of the investor day that you already touched on a little bit was just the cash generation, how much capital you're generating. You know, you're returning some of it. There's also, you know, some build-up that's occurring. Good problem to have. But, you know, just listening to you talk about, you know, how fragmented it still is out there and some of these providers can't invest in their businesses, it seems rational that many of them would make the decision to sell.
Yeah.
Is that accurate? Like, how impactful could that be for you? I know it has been a big part of the strategy, but will it be as big a part of the strategy for the next few years?
We certainly wanna be opportunistic and be prepared for those opportunities when they come. We will maintain quite strict price discipline, and, you know, make sure that the transactions meet our financial strategy and our incremental where we allocate capital. And we wanna be prepared for that. You mentioned, you know, that period of time. We obviously took advantage of our strong balance sheet, strong credit rating, to lever up the balance sheet, make those transactions. And now we're back in really good shape. So, you would typically see us around 30% leverage. You know, we're down to 27%. We have really strong capital, regulatory capital levels despite the capital generation, so very strong there. And we have more than $ 2 billion of cash sitting at the holding company.
What we also have done actively, while we wait for the right opportunity, is we started to return cash through buybacks. We've announced two buybacks this year. We have that capacity. We will balance that return of capital with those financial opportunities, you know, strategic opportunities that come up. We think the market needs to consolidate more. We think with our cost advantage and the ability to provide wealth services, which many of these retirement providers are nowhere near our capabilities, it makes industrial logic, you know, to consolidate the market more. We think it will happen. It's a matter of when. We're waiting, and we'll be ready to go when the right opportunity comes. We think it will consolidate down quite substantially from where it is over time. We'll be there when the right transaction comes.
Maybe just to pry a touch further. I mean, do you envision more of this industry consolidation at, like, the micro level where it's like smaller, you know, businesses that really can't invest? Or, you know, are there still pretty large opportunities out there where, you know, there's still a very big scale play for you as well?
Yeah. Well, the good thing is, I think the good thing is we're very successful in our integration. So if you look at the larger ones that we've done, Prudential, MassMutual, J.P. Morgan, those were the largest transactions that we did, some of which had very large clients, you know, Fortune 500 that are very picky about these transactions. It's never easy. So nobody actually wants to change 401(k) if you're in the Fortune HR because you gotta send out passwords to thousands of people, disrupt your employees. So it's a very sticky nature of business, only about 3% of plans. We have 97% retention rate. But when you do a transaction, you're at your weakest point, right, because you actually have to force all your clients to move platforms, send out new passwords, change what they do.
We had priced those, you know, you know, transactions, you know, at a level we're comfortable with, and we way overperformed the retention, and we think that's, again, a sign. You can see it. We disclose revenue and participants, so you can see what revenue shrinkage we had to do to retain those. And it was both in excess of our targets. It was high- to high-80s %, despite being disrupted, so we were very successful in that, much better than everybody else, so we have experience in the large integrations, but we've done smaller ones as well over time, so whether it's large or small, there's a lot of the things you do that are the same, meaning we see it as being easier to integrate one versus three, but we can do it either way. And we've done it both ways, so what's our preference?
Our preference would naturally be to do one versus three, 'cause there is some synergies from larger customer bases, but we could do either way. We think the pressure will be across the sector. I mean, if you think of, let me probably lay out the market. If you think of the number one provider, which I think everybody knows who it is, it's they're about 30 million lives. We're about 20 million participants. We're adding 600,000-700,000 new participants a year. They're adding, you know, proportionally a lot of participants every year.
The next largest players are, call it, 5-7 million lives. So we're already three times as large. You know, there's two or three of those, and then there's a whole host of people with a million or two lives. We think that pressure is across, you know, everybody, you know, everybody but the two largest. The acute pressure will obviously be the smaller you are, the more, you know, cost pressure you're gonna have. We suspect there's a lot of fixed costs.
Makes sense. Okay. Can we have a similar conversation about the wealth side of the business? And I guess maybe just to add into the fold, like, are you, you know, is there still a focus on doing some M&A within wealth? You know, how does that compare to maybe just doing team hires? You know, when I think about some of the publicly traded ones in the U.S. that have built out wealth management businesses, I think team hires has been a really big part of it. And how does that all fit into your strategy?
I think our wealth strategy's probably a little different than the IRA roll-up strategy. Obviously, we're very familiar with that strategy in Canada, our home market, and in Europe, we're also building independent, you know, well, independent financial advisor roll-ups. We're not pursuing the same thing in the U.S. today. Our advisors, there's 1,200 of them. We're growing that organically. They're principally salaried-based advisors. The remote partial, you know, as I mentioned, is a hybrid, human, you know, digital hybrid, advice channel, so we're not competing with other RIAs for team liftouts or consolidation. It's really an organic strategy, and I would say to build the business, there is a distribution component. We need to continue to, you know, attract salaried advisors. We're on track to do that.
There hasn't been any, let's say, we've been able to do that commensurate with the ability to deliver that rollover percentage upwards. I'd say the big investments are brand. You know, everybody's now seen Empower all over CNBC, but we're only about a 50% aided awareness of the brand right now. Big providers are 80%-90%. So that's gonna take time, right? It needs to become a household brand name. Number two, it's product. You know, I mentioned entering HSA market. We need to bring other products to our in-plan customers. We already, you know, capture more customers off our platform than anybody else. So we're already number one off our platform. But if where we typically lose isn't to the RIAs of the world 'cause those they're looking for two million-plus accounts.
We're losing to, you know, the big financial services providers, the Vanguard, the Schwab, the Fidelity. So building that product suite and that deeper relationship, we think moves the dial on the rollover rate. And then the third thing is just customer experience. You know, we are very good at this, but we need to become better. We need to make it easier to roll over to us. We need, you know, to be a one-stop shop in terms of the customer experience for other products. So I, I'd say, in the medium term, you know, are we gonna buy distribution in the wealth side? Could be, but probably it's more likely we invest organically on the wealth side. Are there skills or products or complementary spaces that could accelerate that build? Probably. But pricing right now is quite aggressive.
And we're not necessarily competing against RIAs for teams, you know, we're right now. So, I'd say that's probably more likely organic. And if we were to deploy material, inorganic capital into the U.S., it'd be further consolidation in the retirement sector.
Makes sense. We pivoted a little bit over to Canada. I wanted to see if you could talk about the group benefits, specifically, you know, what you're seeing in terms of top-line growth production, maybe if there's any initiatives that are going on right now that we should be thinking about, and, you know, how you're viewing the performance of the margins in the business as well.
Yeah. So, well, while we're a retirement wealth player in the U.S. and a leading one, our international presence, we're strong in retirement wealth in Canada and Europe as well. But we are a leading group benefits provider, number one in Canada. Our historical focus has been on the small, medium sector where we see the great margins. We've also started to move into larger, you know, the larger scale market. We have the heft and the scale to compete there stronger than we have in the past. The margins have been very strong. They've always been pretty strong in Canada. Competition's quite rational in Canada. At the edges, you know, you see some heightened competition.
Nothing that really gives us pause. Disability margins are very strong right now. That's driven by, you know, a good experience as well as higher rates. You know, the higher rate environment at the medium-term term structure of the interest rate cycle's helpful to us. Obviously, you're discounting present value back lower. Nothing that gives us real pause. You know, the world. Well, unemployment's up in Canada. The economy's slow. We actually are hopeful that the future's more positive for the Canadian economy than we might've hoped, you know, 12 months before. The government's gonna invest substantially in infrastructure, military spending. You know, there is a lot of investment that will happen in Canada. And we're hopeful that that will lead to better economic growth as we look out two to three years than where we are, where we're sitting today.
So, there's nothing in that sector that says that, you know, it's really a battle of the three big companies there, but pretty rational competition. So nothing that gives us real pause right now.
If we move over to the U.K., could you talk a bit about bulk annuities? I think that was something you highlighted as a good opportunity to the last investor days. I just wanted to see if you could update us there on some of the things you're doing.
So when you think of Great-West, we talked a lot about Empower, number two, and retirement. Canada Life in Canada, we're one, two, or three in every sector of the insurance business. Number one in group benefits, obviously very strong in the other. Our European franchise is really principally made up of a very strong position in Ireland, which is the strongest growing economy in the E.U. It's benefited from Brexit, obviously. It's benefited from being very close to the U.S. and Canadian economies. So lots of employers make their European base in Ireland. So in Ireland, you can think of us as a 40% market share in almost all of the non-retail banking financial sector, but it's a small but growing, you know, population.
The U.K. is really the place where we're not top three in the country across all segments. It's more of a targeted position, where we're one of the last foreign insurers in the U.K. But we have targeted positions. So we're number two in group benefits. Again, we're very good at group benefits, life, disability, and so forth and we've always been very strong in the retail annuity market. So, in English, I think I heard on the last stage, the you know, Department of Labor wants more retirement income products in the U.S., and I think that will happen at some point. The U.K. has been the opposite. Very defined benefit, very fixed income, retirement streams. So we've always competed very well and with good, reasonable margins, the retail sector.
The U.K. is going through. Corporates are going through a de-risking of their balance sheets. Higher interest rates right now is helpful, but they are gonna de-risk $100 billion or $1 trillion of on-balance sheet defined benefit obligations to the private sector over the next 10 years. We know this sector both through our retail annuity. We've also been a big player through our reinsurance division and longevity transactions in Europe, more on an institutional basis by supporting other providers in this pension risk transfer business. So we know it well. We're only a couple percent market share in bulk annuities or pension risk transfer.
I wouldn't think that we're gonna be a major player, but we think we can do better than we've done before. We think we can grow that market share, you know, to a degree and provide some growth given all the skills that we have in underwriting longevity. Why do we think it's attractive right now? A couple of things have happened. First, Solvency II limits the asset allocation, you know, through the capital structure, the options that you have. So it's not like pension risk transfer in the U.S. where you can kinda move it to Bermuda and invest any way you like, you know, you know, or, or let's say in a, in a really broad perspective. They limit the asset choice. It's, it's pretty limited because of the high capital strain into more conservative investments, but, illiquids, you know, provide some yield.
And the second thing that's happened is they've said you can't move these assets offshore. And, and so you can't just do what the U.S. market's done, you know, underwrite these pension risk transfers and move them to, Bermuda. They allow maybe 20% offshore, but they're requiring a substantial amount of your risk to stay onshore. There's only, you know, half a dozen-plus people in the market. So by limiting reinsurance and us being onshore, we think it makes the margins a little, you know, a little better than if they would allow offshore, and we typically compete in the small-case market, so think of pension risk transfer of $50-100 million, maybe $200 million. We're not competing in the billion-dollar transactions at this stage, and we like the margins in that,
and then I'll say that secondarily, our reinsurance division, you know, benefits 'cause it can be, you know, where you do take advantage of 20% offshore in this market. What the U.K. regulator said is you can't just place it all with one provider. You need to split your reinsurance. You need to have a diversification. Naturally, they have to come to us as a AA provider. I'd say it's an opportunity. I wouldn't overstate it in terms of the you know the equity story of our company. If we can underwrite that business at you know mid- to high-digit IRRs, we'll do it in you know in a limited capacity. If we don't see that good margin, we're not dependent upon it. We will pull back our capital. We'll reallocate it to other sectors, so it's a nice opportunity to have, but not something we're dependent on.
Got it. Next, if we could go to the productivity initiatives that you've got going on, could you remind us of some of the things you're doing, the efficiency ratio improvements that you're anticipating, and maybe even just sort of geographically now that you've got this more thorough disclosure that you've laid out, where should we expect to see the benefits of it come through?
Yeah. So we did indicate that we saw some efficiencies coming through the business, and we were making some investments into that. So we announced about CAD 250 million-CAD 300 million charge. Let me lay out where we see that coming geographically and how it will benefit us over the long run. Most of it is targeted at Canada. So if you think back, Great-West really consolidated or started the consolidation of Canadian industry into these three great companies that exist now. Obviously, there's you know the I'd say three major companies that control 80% of the market share. There's other great companies in the market that have found their niches and grown really nicely too. They're quite a consolidated industry. When we did that, we maintained three brands up until about three or four or five years ago.
We had Canada Life, we had London Life, and we had Great-West. You know, that was the right strategy for a period of time. You know, we always had the best. We felt the best distribution. It gave affiliated people, you know, who were affiliated with one of the brands higher opportunity to work with them. But we decided the best thing to do in the long run is leverage one of the best brands in Canada, Canada Life. So if you look at brand awareness in Canada, you know, Tim Hortons, you know, Air Canada, and you know Canada Life, right? This was just the right decision at the right time. When we made that switch, we were quite focused on the U.S. integration and so forth.
We've now turned our attention to leveraging that brand, building a better customer experience in Canada, trying to throw around our heft better behind the Canada Life brand, having a better customer experience and becoming more efficient in Canada. So most of that investment goes into Canada. It prepares us. It puts in place a better platform to enable AI over time. So a lot of it is moving to the cloud so that we can enable AI over the longer term, better. And it's really to modernize our tech platform and kind of integrate it into a tech-enabled environment. The U.S., that's already been done. Ireland, that's already been done. They are really, you know, prepared for the advent of AI. They're on the cloud largely. So most of it goes there.
There are some, you know, I'd say smaller investments into the U.S. and U.K. as part of that. If you look at our how we get from, call it 56%-57% efficiency ratio down to 50%, sub-50, you know, I call it 75% just comes from revenue growth. The other 25% comes from efficiency initiatives that we announced. We think, you know, over the medium term or towards the end of the medium term, AI will be a real enabler that we need to be prepared for that will potentially drive even more efficiency over the long run. And that's what we're getting prepared for with those charges.
Got it. That's helpful. So it looks like we have time for maybe one more here. So, why don't we hit on the ROE target that you've laid out? And I wanted to ask you about this because you've got a more capital-efficient business. We could almost debate whether ROE's even the right way to think about it a little bit. And so the nice thing about that is you're generating all this capital. As you put that to work, does it just naturally continue to be upside to those ROEs that you've laid out? Could we end up seeing more actual earnings growth as a result of just the redeployment, whether it's in you've been doing more buybacks, but also, you know, some of the M&A?
I mean, I'm just trying to think through whether, I mean, the ROE sounds great where it is, but, you know, is it also just sort of missing the point of like this, this thing's gonna keep, you know, chugging itself into more redeployment and more earnings growth too?
Yeah. So I think the, I mean, I think it's natural to continue to have an ROE target. And it really goes, you know, to why it's increasing. It really goes to the fundamental nature of the redeployment of capital into inorganic growth, right? Or organic growth, excuse me. You know, 66% of our business is effectively capital light, meaning next dollar deployment of growth doesn't require additional investment that's not already, you know, built into their earnings. You know, we're investing in tech and so forth and marketing, but that's in the earnings. It's not, call it, distribution costs to get that next dollar of growth, you know, commissions and reserves that you need to set aside. You know, these are capital light businesses.
So, if you look at the return on next dollar deployed of capital to grow, it's very high, because of the nature of the mix of our earnings and the growth rates of those earnings. So, we moved the target up to 19%+ . We wanted to leave room for inorganic growth. We didn't want to not have the ability to consolidate the market or invest into things that were strategically important over the long run and financially attractive that might, you know, let's say, temporarily set us back on ROE. And we think we got the right, we think we got the right place, you know, at 19%+ . If you look at our prior guidance, we said 16%-17%, and we've finally changed it. It was, you know, where we are today about going on 18%.
If you look at in the long run, we think our wealth business in the U.S. can be as big as our retirement business. And the wealth business is, you know, a high ROE business, much higher than, you know, the 19% guidance.
Sure.
And I wouldn't think that we would deploy capital into more capital-intensive insurance businesses as we look forward. Organically, we left aside 20% of our earnings to invest in those. But I don't think you'd see a change in strategy where we'd inorganically re-enter higher capital businesses. So just gravity and growth over time should get us to that 19%+ . And we'll continue to evaluate all our targets regularly. And if need be, and we're able to overachieve the 19%+ or we need to re-guide, we'll do that in due time.
Great. Well, thank you for being here. This has been fantastic. Thanks, everybody, in the audience. And we'll see you back here tomorrow.
Thank you. Thanks for the time, Alex.