Sale is part of a larger effort to simplify under pressure from Carl Icahn
A U.S. proposal for stricter rules on retirement-product sales helped spur American International Group Inc.’s decision to sell its broker-dealer operation, according to Chief Executive Officer Peter Hancock.
“It’s a business we are not the best owner of, particularly in the light of potential Department of Labor rules,” Hancock said Tuesday in a conference call updating investors on AIG’s strategy. “With the new DOL rules, that was a big factor in thinking whether this was better owned by somebody independent of us.”
The rule is “basically going to increase the risk and cost of distributing a number of retirement products, and so therefore it could have a chilling effect on sales and commissions,” Randy Binner, an analyst at FBR Capital Markets, said in a phone interview. “Relative to everything else that’s going on at AIG — which is a lot — this is just a distraction they don’t need.”
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