AIG Advisor B-Ds on block, source says

The broker-dealers in the AIG Advisor Group Inc. will be included as part of the massive asset sale that parent company American International Group Inc. could unveil as early as tomorrow, according to an investment banking source who asked not to be identified.
OCT 02, 2008
The broker-dealers in the AIG Advisor Group Inc. will be included as part of the massive asset sale that parent company American International Group Inc. could unveil as early as tomorrow, according to an investment banking source who asked not to be identified. At stake is the fate of almost 7,000 registered representatives and financial advisers who generated $1.3 billion in fees and commissions last year. AIG of New York is considering a sale of more than 15 different business lines in order to pay back an $85 billion emergency loan from the federal government, according to published reports. Edward Liddy, AIG’s chief executive, is scheduled to speak tomorrow morning during a conference call in which he may reveal the specific businesses that are up for sale. The AIG Advisor Group consists of three firms: AIG Financial Advisors Inc. of Phoenix, FSC Securities Corp. of Atlanta and Royal Alliance Associates Inc. of New York. “Watch for [Mr.] Liddy to hire a Wall Street firm to run a quiet auction [for the broker-dealers] involving aggressive bids from LPL, Raymond James and others,” the investment banking source said. Other sources said that a large insurance company that already owns one or more independent broker-dealers could have significant interest in AIG’s broker-dealers. When asked during a recent interview whether LPL Financial of Boston was interested in buying AIG’s broker-dealers, Bill Dwyer, president of independent advisor services, declined to comment. "We do not comment on market rumor and speculation," said AIG spokesman John Pluhowski. Meanwhile, one of the biggest teams of advisers affiliated with an AIG broker-dealer is in play and could wind up with LPL Financial or one of its subsidiary broker-dealer, sources and recruiters said today. The Financial Services Network of San Mateo, Calif., is by far the biggest group of advisers affiliated with FSC Securities Corp. James Herrington, chairman of Financial Services Network, did not return calls to comment about whether his group intended to leave FSC. Sources pegged the group as an organization with 250 reps that annually produce between $30 million and $40 million in fees and commissions. A spokeswoman for LPL said the company declined to comment.

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