LPL snags major AIG broker network

The AIG Advisor Group has seen a massive defection from one of its broker-dealers, involving a network of reps that produced more than $41 million in gross revenue last year.
OCT 20, 2008
By  Bloomberg
The AIG Advisor Group has seen a massive defection from one of its broker-dealers, involving a network of reps that produced more than $41 million in gross revenue last year. Hauling in the group of advisers is LPL Financial of Boston, by far the biggest independent-contractor broker-dealer in the industry. The group that left AIG, The Financial Services Network of San Mateo, Calif., has more than 230 independent reps and advisers, and is led by James Herrington, widely acknowledged for building on e of the biggest networks of advisers in the industry. One question, however, remains about the deal, industry observers said. It is not clear exactly how many or what percentage of the 230 reps and advisers in Mr. Herrington’s network have joined him in the move to LPL. The “vast majority” of the advisers in the network have joined LPL, said an LPL spokeswoman, Jennifer Gill. She added, however, that she does not have a specific number for advisers who have left FSC. But an AIG spokesman said that Mr. Herrington’s ability to move a "vast majority" of advisers was far from certain. “We are confident that a large group of Jim’s advisers may elect to stay with FSC in recognition of the value we offer and our commitment to meeting their needs,” said the spokesman, John Pluhowski. Advisers may be better off sticking with AIG for now, he said. “Jim has built a large, successful practice over the years and we recognize that a move at this time may serve his best interest,” Mr. Pluhowski said. “Such a move may not, however, be in the best interests of his advisers, particularly during a time of unprecedented market volatility.” Mr. Herrington and his group were formally affiliated with FSC Securities Corp. of Atlanta, one of three broker-dealers in the AIG network. He and the other advisers are now affiliated with Associated Securities Corp., which is an El Segundo, Calif.-based subsidiary of LPL. Mr. Herrington’s impending departure from AIG was first reported in InvestmentNews this month InvestmentNews, Oct. 5. The AIG Advisor Group’s 7,000 reps and advisers are in a massive state of flux. The three AIG broker-dealers, FSC, Royal Alliance Associates Inc. of New York and AIG Financial Advisors of Phoenix, are all on the block. The parent company, American International Group Inc .of New York, has begun a massive sell-off of assets to repay an $85 federal government bailout that kept that company afloat as the credit crisis threatened the firm last month. AIG is seeking a buyer for its retirement services group, which includes the broker-dealers, but may also consider a buyer interested solely in the broker-dealers. Meanwhile, the turmoil surrounding the company has pushed recruiters at rival broker-dealers to pursue the AIG’s advisers with ardor.

Latest News

Maryland bars advisor over charging excessive fees to clients
Maryland bars advisor over charging excessive fees to clients

Blue Anchor Capital Management and Pickett also purchased “highly aggressive and volatile” securities, according to the order.

Wave of SEC appointments signals regulatory shift with implications for financial advisors
Wave of SEC appointments signals regulatory shift with implications for financial advisors

Reshuffle provides strong indication of where the regulator's priorities now lie.

US insurers want to take a larger slice of the retirement market through the RIA channel
US insurers want to take a larger slice of the retirement market through the RIA channel

Goldman Sachs Asset Management report reveals sharpened focus on annuities.

Why DA Davidson's wealth vice chairman still follows his dad's investment advice
Why DA Davidson's wealth vice chairman still follows his dad's investment advice

Ahead of Father's Day, InvestmentNews speaks with Andrew Crowell.

401(k) participants seek advice, but few turn to financial advisors
401(k) participants seek advice, but few turn to financial advisors

Cerulli research finds nearly two-thirds of active retirement plan participants are unadvised, opening a potential engagement opportunity.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today’s choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave