Proactive Investors - Run By Investors For Investors

Prudential sells US independent broker-dealer for US$325mln to LPL Financial LLC

Prudential has shed assets from its US business to focus on retirement products
Prudential is streamlining its US business

Prudential PLC (LON:PRU) has sold its US independent broker-dealer network to LPL Financial LLC amid speculation of a break-up of the insurer.

LPL Financial, the largest independent broker-dealer in the US, will pay an initial purchase price of US$325mln for the network, which includes Invest Financial Corporation, Investment Centers of America, Inc., National Planning Corporation and SII Investments, Inc.  

The purchase price may increase to up to US$448mln, subject to certain “transition criteria”.

The deal has been approved by regulators and is expected to be completed by the end of the first quarter of 2018.

Barry Stowe, chairman and chief executive of Prudential’s North America business, said: "While we still very much believe in the independent broker-dealer model, our primary strategy in North America is to focus on being the leading manufacturer of retirement products. The transaction with LPL Financial provides us with a compelling opportunity to divest our ownership in the NPH network to a leading independent broker-dealer well suited to support financial advisors and their retail clients going forward."

The news comes just days after Prudential announced it was merging its UK asset management business, M&G, with its UK and Europe life insurance unit to form M&G Prudential.

READ: Prudential merges UK operations as Asia continues to drive profit growth in first half

The move fuelled rumours that Prudential may be preparing to carve off its UK business to focus on its more profitable Asian unit.

On Monday reports emerged that Legal & General Group PLC (LON:LGEN) is planning to bid for a £10bn tranche of Prudential's UK annuity portfolio.

READ: Legal & General plans to bid for Prudential's UK annuity business

Prudential last year said it was exiting the annuities market as regulatory changes and low interest rates have deterred customers and insurance firms.  

View full PRU profile View Profile

Prudential Timeline

Related Articles

December 05 2018
“I think we’re a different generation of bank that is a lot quicker on our feet, a lot quicker at reacting to what customers want and are a lot more attractive to the savings market,” PCF boss Scott Maybury said
March 12 2019
"Over the past 25 years, S&U has consistently demonstrated its ability to adapt to the kinds of economic and political uncertainty we all currently face," said chief executive Anthony Coombs.
CSE head office in Toronto
January 01 2019
Capital raised on the CSE set to increase over 500% by the end of 2018

© Proactive Investors 2019

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use