If Prudential Insurance completes its plan to go public, Prudential Securities brokers expect to see their firm spun off and ultimately bought by someone else. And reps at the firm like the idea.
It puts us on the market, says a six-year Prudential Securities broker in the Northeast. Prudential Securities is the real value, the profit maker. We could be spun off, even before we go public.
The plan makes eminent sense, says a Prudential Securities rep in New Jersey. Its a way to get out from under for the insurance side.
The capital infusion the deal would provide Prudential Securities is necessary to compete with other wirehouses, reps say.
Its very hard to acquire financial services firms with cash, says a Midwestern broker. With stock capital, Prudential Securities could be looking to acquire money management firms and even regional brokerage firms, he says, in geographic areas where the firm is underrepresented.
No details of new deferred compensation or stock option plans have yet been given, brokers report. But the six-year broker in the Northeast says the deal would end broker concerns that their current deferred comp plan, Wealth Builder, is vulnerable.
Its hard for the firm to keep funding it with cash, he says. The broker recently qualified for the plan. Id hope if Prudential Insurance goes public that the firm would fund my bonus in stock, perhaps restricted stock.
Reps stress that Prudential Securities management is making it clear the deal is far from likely. Were getting interoffice memos on a weekly basis, all saying there are a lot of regulatory and compliance studies to be done that will take at least a year or two to complete, says a 20-year veteran Prudential broker in the Northeast.
The six-year Prudential broker notes that since the Feb. 12 announcement, Prudential Securities senior management has been going on in-house video every couple of weeks to talk about the deal. They tell us theres a very good possibility it wont happen, he says.
The firm also has been sending mailings to brokers key clients, says the Midwest broker, so far just to explain the hurdles the deal will encounter.