After almost a year of looking for the right buyer, AIG’s broker/dealer reps were told on Monday that they would not be sold.
In a letter from the individual b/d presidents and Larry Roth, president and CEO of the advisor group, reps were told that the b/ds would remain part of AIG Retirement Services as they have always been. Royal Alliance, FSC Securities and SagePoint Financial (formerly AIG Financial Advisors), will remain as three separate brands under the existing senior management teams.
The decision came after Ben Benmosche was named CEO of the AIG earlier this month. Soon after his appointment, Benmosche, former chairman and chief executive officer at Met Life, said he’d like to keep the Advisor Group as part of the company. That’s a major shift from October 2008 when then CEO, Edward Liddy, announced the company would sell the b/ds to help pay back the company’s debt.
“It would be disingenuous not to acknowledge that this has been a difficult year for our business. We have weathered an extraordinary time in our country’s economy and an unprecedented series of events. Notwithstanding those events, we remain an autonomous network of profitable broker/dealers backed by a strong capital base, which we will continue to augment,” Art Tambaro, president and CEO of Royal Alliance, said in the letter.
The fate of AIG has been up in the air for 10 months now. Just last week, there was talk about two private equity firms, Lightyear Capital and Lovell Minnick Partners, being the final bidders on the three independent broker/dealers that make up the group.
Advisors over the last 10 months have felt left in the dark over their firm’s situation. As an industry consultant and a former senior level executive at Wachovia and FINET put it, “I recently talked to a decent AIG producer outside of Buffalo, and they’ve been fed mushrooms. They’ve been kept in the dark and fed a lot of shit. They keep hearing different things. They hear private equity, and they hear this and that. What most advisors at AIG are scared of is they have been on the market long enough and nobody has put a full offer down on them. What they’re scared the most of is the private equity.”