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.”
The Blue Vault Summit could not have been more perfectly timed. This gathering of the Broker Dealer and Sponsor communities provided insightful and open discussion from several vantage points. These conversations are paramount, especially in a time of significant regulatory change.