January 25, 2016
by Christine Idzelis, Investment News
Call set for 8 a.m. for parent company to discuss plan to sell off some non-core businesses
Brokers at AIG’s Advisor Group may find out as early as Tuesday morning who the new owner of the adviser network will be.
American International Group Inc. has scheduled a call for 8 a.m. Tuesday to discuss its plan to sell off some of its non-core businesses. The firm has been under pressure from billionaire investor Carl Icahn to break itself up to unlock shareholder value.
Citing anonymous sources, the Wall Street Journal reported Sunday that AIG is nearing a deal to sell its broker-dealer business and named Lightyear Capital as a buyer.
AIG Advisor Group is a small piece of AIG’s business that produces tens of millions of dollars in earnings annually, according to Meyer Shields, a Baltimore-based analyst with Keefe, Bruyette & Woods.
“It’s a reasonable unit to put on the block,” as the firm evaluates ways to “liberate capital” and reduce expenses, he said.
Jennifer Hendricks Sullivan a spokeswoman for AIG, declined to comment. Donald Marron, chairman and founder of Lightyear, didn’t return phone calls seeking comment.
The AIG Advisor Group network consists of four broker-dealers, including FSC Securities Corp.,Royal Alliance Associates Inc., SagePoint Financial Inc. and Woodbury Financial Services Inc.
Many broker-dealers have had to increase their budgets due to concerns surround regulatory compliance, according Jon Henschen, president and found of Henschen & Associates, a financial-adviser recruitment firm in St Croix, Minn.
“It’s an increasingly hostile regulatory environment for broker-dealers,” he said. “They have to track their business with a fine-toothed comb knowing that if they mess up there are some very big fines.”