One of the nation's biggest independent broker dealers, with 12,000 reps and $7 billion in revenues last year, is getting even more independent. American Express Company has announced plans to spin off American Express Financial Advisors to shareholders in the third quarter of 2005.
The move will include Amex's Securities America unit, the Omaha-based unit's chief compliance officer, David Spinar, said during the Financial Services Institute annual conference in Orlando. He applauded the spinoff, saying true independence could allow the Amex advisor network to build more visibility in the market.
Amex Advisors will be led by James Cracchiolo, its current CEO. The spun-off firm will continue to use the Amex name during a transition period. Amex Advisors accounted for 24% of American Express's revenues and 21% of its net income last year. Indicating that the B/D may have been holding Amex back. However, the company noted that its long-term targeted return on equity would rise to 28% to 30% following the spinoff, from its current 18% to 20% target.