American International Group Inc.'s reorganization of a subsidiary broker-dealer, American General Securities Inc., is intended to let it take advantage of the technology and sales support shared by AIG Advisor Group, the company says.
The move will put the subsidiary, which is part of the giant insurer's domestic life insurance unit AIG American General, in the AIG Advisor Group network of independent broker-dealers, said Andy Kalbaugh, the president and CEO of American General Securities in Houston.
"This move will give us access to products, technology, and services that other broker-dealers already have, instead of constantly trying to do it on our own," Mr. Kalbaugh said. "It allows us to operate more cost-effectively and gives us advantages in scale and leverage."
American General's product offerings will complement what is already offered by the AIG Advisor Group broker-dealers, Mr. Kalbaugh said last Wednesday. His unit's addition to the adviser network will give its clients more product options, particularly on the insurance side, he said.
The move underscores AIG American General's commitment to the independent distribution model, Rodney O. Martin, Jr., its president and CEO, said in a press release. AIG American General, which is also based in Houston, is the securities unit's parent.
In addition to life insurance, the American General brokers offer annuity, investment, and accident and health insurance products.
American General Securities is to join the adviser group this quarter. At Dec. 31, the group's broker-dealers had $989 million of revenue and more than $100 billion of client assets. The network's constituents are Advantage Capital Corp., AIG Financial Advisors Inc., FSC Securities Corp., and Royal Alliance Associates Inc.
American General Securities' 1,400 registered representatives will bring the AIG Advisor Group's network to about 7,000 representatives, a 25% increase.
The adviser group's registered representatives work together on certain initiatives and share support services, but each company has its own management team and market focus.
The AIG Advisor Group is to begin offering network-wide support services this year to American General Securities' independent broker-dealers. These services include Vision2020 Core, an Internet-based financial adviser workstation, and Vision2020 Advisor, a fee-based advisory service platform that has more than $7 billion of assets under management.
The Vision2020 products are sold by Albridge Solutions Inc., a Trenton, N.J., financial technology provider. The products give brokers access to financial data such as consolidated account statements and let the brokers automate processes like opening new accounts, Mr. Kalbaugh said.
American General Securities will also have access to the AIG Advisor Group investment products and research division, which gives financial advisers independent research, product selection and positioning strategies, pre- and post-sales assistance, and consultation services. In addition, it will be able to take advantage of the group's legal and compliance department, which includes an advertising review team.
"The advertising review team will improve turnaround times," Mr. Kalbaugh said. "We can provide better services and quicker service than we are currently able to do as a stand-alone company."
Once American General Securities has joined the adviser network, its brokers will also have access to business development support, including personal coaching, networking tools, recruiting support, and practice-management assistance. The brokers will also be able to speak with customer service representatives.
