1,600 Woodbury reps await fate after Hartford purge

1,600 Woodbury reps await fate after Hartford purge
The dramatic reorganization at The Hartford leaves 1,600 reps at Woodbury Financial with a very uncertain future | <a href=http://www.investmentnews.com/article/20120321/FREE/120329977>Exit from the annuity business a shocker to advisers &amp;raquo;</a>
APR 17, 2012
The Hartford Financial Services Group Inc.'s announcement Wednesday that it intends to sell independent broker-dealer Woodbury Financial Services Inc. marks the third time this year that an insurance company has moved to exit the indie B-D space. And given the recent M&A binge in the brokerage business, there probably will be no shortage of potential buyers for Woodbury Financial. In February, carrier Western & Southern Financial Group said it was selling the assets of its independent broker-dealer, Capital Analysts Inc., to Lincoln Investment Planning Inc. 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. And last year, Ameriprise Financial Inc. sold its independent broker-dealer, Securities America Inc., to Ladenburg Thalmann & Co. Inc. Insurance companies were big buyers of independent broker-dealers in the 1990s, hoping to use the firms to increase sales of insurance products. Record low interest rates, however, have severely cut the profitability of firms, as well as certain products, such as variable annuities, that reps with such broker-dealers routinely sell. The Hartford said today that it is going through a substantial restructuring. Selling Woodbury Financial is part of an effort to focus on core businesses such as property-and-casualty insurance. The company also announced that it is exiting the annuity business and intends to sell parts of its life insurance operation. RELATED ITEM Hartford annuity exit a shocker for advisers » The reorganization comes amid pressure from the company's largest shareholder, hedge fund giant John Paulson, to do “something dramatic” to boost the insurer's stock price. A call to a Hartford spokeswoman, Shannon Lapierre, was not immediately returned this afternoon. Woodbury Financial should fetch a fair sum for The Hartford. The Woodbury, Minn.-based firm, which traces its roots back to the founding of Montana Life in 1910, has 1,600 affiliated reps, according to data compiled by InvestmentNews. The brokerage produced $238.7 million in revenue in 2010.

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