By the end of March, Ameriprise Financial Services and three private-equity firms are expected to submit final bids for AIG's three broker-dealers, according to TheDeal.com.
The AIG groups on the block, led by Larry Roth, are FSC Securities of Atlanta, Royal Alliance Associates of New York, and SagePoint Financial of Phoenix, formerly AIG Financial Advisors. They include an estimated 7,000-plus advisors.
Along with Minneapolis-based Ameriprise, other bidders include the private equity firms Clayton, Dubilier & Rice Inc., which has reportedly invested $11 billion from 1978-2008 and has its main offices in New York and London; GTCR Golder Rauner LLC of Chicago with about $8 billion in assets; and Warburg Pincus of New York, which has about $30 billion in assets.
For its part, Ameriprise Financial Services says its current cash and cash equivalents stand at $6 billion, which may give it the ability to fund such a deal. It bought H&R Block Financial Advisors, with 950 brokers and about $27 billion in assets under management, in November 2008.
In its latest quarterly statement, Ameriprise says it has 2,823 employee advisors; 7,746 franchise advisors; and 1,917 Securities America independent advisors. This gives it a total of nearly 12,500 advisors. They made an average of about $267,000 in revenues each in 2008, down from an average of $315,000 in 2007.
Total client assets for Ameriprise stood at $241 billion at year-end 2008 vs. $294 billion at year-end 2007. In the fourth quarter of 2008, the company says its retention of employee advisors was 68 percent, but was 92 percent for franchisee advisors.
An Ameriprise spokesperson was not available March 6 to comment on TheDeal.com's report.