American International Group’s SunAmerica unit is seen within the securities distribution industry as the strongest amongst four suitors for Hartford Financial Groups’s broker-dealer arm, Woodbury Financial Services, Inc.
Hartford has placed Woodbury, which has 1,600 registered representatives and financial advisers, up for sale as part of its decision to divest itself of life insurance operations in order to concentrate on property and casualty-related businesses.
Woodbury is based in Woodbury, Minn., and dates to 1910. It has 1,600 affiliated representatives and had more than $230 million in revenue in 2010, according to several sources.
It sells annuities, life insurance, mutual funds, college savings plans unit investment trusts and alternative investments as part of financial planning by the middle-class and wealthy, as well as seniors.
Larry Mark, a spokesman for AIG’s SunAmerica unit, based in Los Angeles, declined to comment.
Others expressing interest in Woodbury include Ladenburg Thalmann Financial Services Inc., LPL Financial LLC, and Centera Financial Group.
A decision as to the purchaser of Woodbury is expected by mid-August.
Acquisition of broker-dealers by life insurers and investment advisors by stronger players seeking to increase their distribution capacity in a down market is a new trend.
Acquisition by insurers is also seen as a means of increasing their life insurance sales, according to several sources.
AIG Sunamerica plans to rename itself AIG Life and Retirement in October as the multinational company reemerges as a major player in the insurance industry with a strong balance sheet after being forced to sell almost 80 percent of itself to the U.S. government in return for aid in September 2008. At the moment, the company is approximately 60 percent owned by the government, but that is expected to decline as the government moves aggressively to divest itself of companies it has helped weather the 2007-2009 economic crisis.
SunAmerica, headed by Jay Wintrob, currently has three units in its advisor group, Royal Alliance, based in New York; FSC, based in Atlanta; and SagePoint, based in Phoenix.
Two other distributors of securities products and life insurance have already been sold this year. Western & Southern Financial Group sold the assets of its independent broker-deal, Capital Analysts, Inc., in February to Lincoln Investment Planning, Inc.
And, in January, Genworth sold its sold its independent-broker-dealer subsidiary to Cetera Financial Group for a minimum of $78.5 million. Moreover, last year, Ameriprise Financial Inc., based in Minneapolis and a spin-off of American Express, sold its independent broker-dealer, Securities America Inc., to Ladenburg Thalmann.