The public will reap a profit as the U.S. government sells off the remainder of its holdings in American International Group Inc., chief executive Robert H. Benmosche said last week
The public will reap a profit as the U.S. government sells off the remainder of its holdings in American International Group Inc., chief executive Robert H. Benmosche said last week.
“I've said publicly, "We could earn $6 billion to $8 billion,'” he said during the keynote speech at the Insured Retirement Institute's 2011 marketing conference in Washington. “If the government sold all those shares at the low end of the range, they get a profit of about $2 billion.”
If the share price is more than $30 apiece, the government will only add to its profit and could make as much as $16 billion from its sale of the shares, Mr. Benmosche said.
“From the taxpayers' point of view, it's a fair exchange — maybe it's a little too good — but the company would not be here if not for the government stepping in,” he said.
As far as the thwarted sale of Advisor Group, which is made up of FSC Securities Corp., Royal Alliance Associates Inc. and SagePoint Financial Inc., Mr. Benmosche recalled a conversation he had over dinner with Larry Roth, chief executive of Advisor Group.
“With Larry, there were two things: We're going to sell things for the right price, and he was a distributor for SunAmerica [Financial Group],” Mr. Benmosche said. “We wanted to send a message to the organization that we're going to prepare for the future.”
Advisor Group sold SunAmerica's products at a time when many other broker-dealers had suspended sales. To motivate the best producers, Mr. Benmosche advocated the infamous California spa trip.
“We told everybody, We're going to the spa,' and that set a tone in the whole company,” he said.
Mr. Benmosche said that AIG expects to invest more money in Advisor Group in order to improve technology at the three broker-dealers.
As far as retaining producers at Advisor Group, he recalled a story from his time at PaineWebber Inc. in 1982, when he attempted to lure a producer from another firm.
That adviser told him that PaineWebber's research desk had put him on hold during a phone call. The anecdote was a lesson in keeping advisers happy.
“He is telling me this story, "Bob, when I call anyone at Bache [& Co.], they s—t whenever I call; when I call PaineWebber, nobody's going to know who I am,'” Mr. Benmosche said.
“You have to make people feel good about where they are. If they feel at home, they'll stay at home,” Mr. Benmosche said.
The best advisers head for the door “when you don't give them the support, when you spend too much time on the low producer and not enough on the high producer,” he said. “Larry's challenge is to make sure that every broker feels at home.”
E-mail Darla Mercado at dmercado@investmentnews.com.
