AIG Advisor Group to slash jobs, support for its three B-Ds

After a year of turmoil, the AIG Advisor Group is cutting a chunk of its staff and consolidating operations among the back offices of its three broker-dealers. The broker-dealer network is cutting 40 positions — roughly 20% — of its back office and operations personnel in New York, the home of one broker-dealer, Royal Alliance Associates Inc. The changes are widespread, AIG Advisor Group chief executive Larry Roth wrote in a letter sent to reps and employees this afternoon. The cuts and consolidations also affect the AIG Advisor Group's two other broker-dealers: FSC Securities Corp. of Atlanta and SagePoint Financial Inc. of Phoenix. Commissions processing in Atlanta and Phoenix will now be transferred to New York, where all compliance functions will also be housed. Brokerage processing services in New York will be moved to Atlanta and Phoenix, Mr. Roth wrote. He stressed in the letter that these changes affected the back offices only, and the brands of the broker-dealers will be maintained. “While it was a very difficult decision to eliminate positions, it has always been our desire to develop the strongest, most capable back-office support for our broker-dealer,” Mr. Roth wrote. Some jobs could be created in the three cities as a result of the realignment, he wrote. The 6,000 or so reps and advisers with the AIG Advisor Group broker-dealers have experienced significant changes in the last year. After parent company American International Group Inc. was bailed out by the federal government last September, the broker-dealer network, along with other AIG assets, was put on the block. A deal for the broker-dealers was believed to have been all but completed last month, but the new AIG CEO Robert Benmosche unexpectedly pulled the network off the table. Just last week, a plan to give bonuses to a limited number of the firm's reps and advisers caused more confusion in the ranks.