One day after the American International Group-owned Advisor Group said it was acquiring Woodbury Financial Services from The Hartford, top executives at the two independent-advisor firms say they are confident that the firms’ retention efforts and mix of business skills will lead to increased sales.
“We were very transparent with advisors and upfront with them” since Hartford went public with plans to exit the variable annuity and life insurance fields in late March, said Patrick McEvoy, president and CEO of Woodbury Financial Services, in an interview with AdvisorOne on Wednesday. “We all agree to overcome three challenges for advisors with this transition: Keep the Woodbury culture, minimize paperwork and distractions for them and their clients and maintain an independent environment.”
The alignment with the 4,400-rep Advisor Group should help Woodbury deliver on these promises with its 1,400 advisors, McEvoy adds. “We are very excited and are getting good support and plenty of congratulations in our calls with advisors,” he said.
Neither McEvoy nor Advisor Group head Larry Roth, who is in charge of the umbrella organization for broker-dealers FSC Securities, Royal Alliance and SagePoint Financial, would disclose the details of any retention arrangements or the number of bidders involved in its acquisition. (The deal should close by the end of 2012, subject to regulatory approval and associated conditions.)
McEvoy said it was a “long, arduous process.”
“The Hartford made a commitment to consider all stakeholders, and it delivered on that by putting us in the hands of the Advisor Group,” he said.
According to McEvoy, the average level of production, or yearly fees and commissions, for its advisors was about $170,000 in 2011—“a significant rise over the year before,” when production averaged $147,000. And Woodbury advisors have a fairly diverse book of business already, according to the Woodbury executive, who is based in Oakdale, Minn.
“We work with plenty of mid-America clients on their retirement,” he explained. “Yes, this includes lots of insurance, but also wealth-protection products and guaranteed-income products. Life insurance and variable annuities are growing substantially on advisor platforms.”
For Roth, this is an area that can translate into sales growth for the broader Advisor Group reps, who have average production of about $170,000 to $180,000 a year. “This is one reason we are excited to have a new member of the family,” he said.