Surprise suitor emerging in sale of Woodbury

Sources say AIG's Advisor Group one of four potential buyers for The Hartford's indie B-D; past connections cited

Jul 19, 2012 @ 3:31 pm

By Bruce Kelly

AIG
+ Zoom
Dark horse ((Photo: Bloomberg News))

The Hartford Financial Services Group Inc. is close to announcing a buyer for its independent broker-dealer, Woodbury Financial Services Inc., according to several sources outside the firm but close to its brokers.

Indeed, announcement of a deal for the 1,600 registered representatives and financial advisers is expected before the B-D's national sales conference in mid-August, industry recruiters said.

The Hartford said in March it intends to sell Woodbury, along with a number of other noncore businesses, as part of a broad restructuring.

According to industry sources, four firms are in the running for Woodbury, which generated $253.7 million in gross revenue last year. Three of the potential acquirers — Ladenburg Thalmann Financial Services Inc., LPL Financial LLC and Cetera Financial Group — have been prominent players in the marketplace, making large deals to buy firms or acquire large groups of reps.

The fourth, The Advisor Group, has not been as active but could make a strong run at Woodbury, sources said.

American International Group Inc., which owns the Advisor Group, “would love the high proprietary sales that the reps bring to the table,” said Jonathan Henschen, an industry recruiter.

A spokeswoman for AIG, Linda Malamut, did not return a message seeking comment by 4 p.m. ET on Thursday. Hartford spokesman Tom Hambric said: “It's our policy not to comment on market speculation.”

But others noted that Advisor Group chief executive Larry Roth and Woodbury CEO Pat McEvoy once worked together at Vestax Securities Corp. Woodbury's head of recruiting, Gary Bender, also has a history with Royal Alliance Associates Inc., which is part of the Advisor Group. He left that firm last year to join Woodbury.

Ladenburg Thalmann spokesman Jonathan Doorley declined to comment. LPL spokesman Michael Herley said the firm does not comment about rumors or speculation regarding its acquisition strategy.

Cetera spokesman Jason Hron said that its broker-dealer network “seeks to grow through recruiting and continues to look at bringing additional broker-dealers into our family of firms. However, at this time we cannot comment on any particular growth opportunities or recruiting agreements.”

Insurance-company-owned broker-dealers have struggled in recent years as the record low interest rates have made many of the insurance products they offer, such as variable annuities, difficult to sell at a healthy profit. However, there probably will be no shortage of potential buyers for Woodbury, given the recent mergers-and-acquisitions binge in the brokerage business.

In February, insurer Western & Southern Financial Group said that it was selling the assets of its independent broker-dealer, Capital Analysts Inc., to Lincoln Investment Planning Inc. And in January, insurer Genworth Financial Inc. sold its independent-broker-dealer subsidiary to Cetera Financial Group for $78.5 million, plus an earn-out provision.

0
Comments

What do you think?

View comments

Recommended for you

Latest news & opinion

Advisers go on the offensive, getting clients ready for the next market correction

Some proactive planners are spelling out for clients the impact of a 10% or 20% correction.

Phyllis Borzi says opponents of DOL fiduciary rule face uphill climb to further delay or dilute it

Former assistant Labor secretary who crafted the rule says President Trump won't be able to get rid of it simply because he doesn't like it.

Shrinking talent pool puts strain on advisory firms

Attrition, cuts in training programs and new competition make it difficult to fill job openings

Trump miscues, more cash becoming available will drive summer muni bond rally

As Trump agenda derails, municipal bonds are benefitting from flight to safety as well as a mismatch between bonds maturing and new issues.

Indexed, variable annuity sales slump as DOL fiduciary rule looms

Uncertainty around the rule may be contributing to tentativeness from advisers and distributors.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print