Insurance company Lincoln National has announced a deal to sell its wealth management business, Lincoln Wealth, to Osaic. This move comes as part of a trend of consolidation in the broker-dealer sector, driven by increasing technology and compliance costs.
Key Details
The wealth management unit, Lincoln Wealth, currently employs around 1,450 advisors who oversee $71 billion in assets under advisement and $38 billion in assets under management. As part of the deal, Osaic will acquire both Lincoln Financial Advisors and Lincoln Financial Securities, which are dually registered broker-dealers and investment advisor firms.
The transaction is expected to be completed in the first half of 2024. Lincoln National anticipates a "capital benefit" of $700 million from the sale.
Industry Consolidation
Osaic's acquisition of Lincoln Wealth reflects a broader trend in the industry. Rising technology and compliance costs have prompted several insurance companies to exit the broker-dealer sector in recent years. For example, earlier this year, Securian Financial sold its wealth management business to Cetera Financial Group.
Osaic's Growth
The acquisition of Lincoln Wealth represents a significant expansion for Osaic. Owned by private-equity firm Reverence Capital Partners, Osaic already boasts more than 10,500 financial professionals. This strategic move aligns with their goal of becoming a dominant force in wealth management.
Rebranding and Streamlining
Phoenix-based Osaic recently underwent a rebranding process, changing its name from Advisor Group. Additionally, the company is working towards consolidating its network of eight broker-dealers into a single entity.
This deal between Lincoln National and Osaic marks a significant development in the wealth management space. The transition is set to enhance Osaic's market position while enabling Lincoln National to unlock capital benefits.
Lincoln Wealth to Join Osaic as Stand-Alone Entity
Lincoln Wealth, a prominent financial services company, is set to join Osaic as a stand-alone entity following their recent transaction. Osaic, a leading wealth management firm, plans to seamlessly integrate Lincoln Wealth into its operations over time.
Seamless Transition Experience for Financial Advisors
Osaic CEO Jamie Price has expressed the company's commitment to ensuring a smooth transition for Lincoln Wealth's financial advisors. With a focus on driving continued business growth, Osaic aims to provide its extensive resources and expertise to benefit Lincoln's advisors.
Expanded Distribution Relationship
As part of the deal, Lincoln Financial will expand its distribution relationship with Osaic. The Radnor, Pa.-based insurer remains dedicated to maintaining its wholesale distribution franchise, Lincoln Financial Distributors, as well as its channel of independent agents.
Building Future Value
Looking towards the future, Ellen Cooper, Chairman and CEO of Lincoln Financial Group, emphasized the company's dedication to growth. With a focus on expanding their individual insurance solutions and workplace solutions businesses, Lincoln Financial aims to leverage their distribution leadership and strong brand to deliver ongoing value to stakeholders.
A Legacy of Wealth Management
Founded in 1969, Lincoln has established itself as a trusted name in the wealth management industry.
