AMEX TO SPIN OFF FINANCIAL ADVISORS BUSINESS: American Express Co. said that it will spin off its American Express Financial Advisors unit to shareholders to focus on its credit card, charge card and travel services businesses.Shareholders would receive 100 percent of the common shares of the company, which would be renamed American Express Financial Corp. AmEx said that it expects to complete the transaction in the third quarter.
"This spin-off will create two distinct businesses and allow them to capitalize on their respective growth opportunities," said Kenneth I. Chenault, chairman and chief executive officer of American Express. "As an independent company, AEFA would not have to compete for capital or management resources with other American Express businesses, and therefore would be able to react more quickly to market opportunities for new products, partnerships and expansion."
AEFA, which provides financial planning and advice services, asset management, insurance, and annuities, generated revenues of approximately $7 billion and net income of approximately $700 million in 2004. AEFA has a network of more than 12,000 advisors that serve more than 2.5 million clients, according to the company.
After the spin-off, American Express will consist of its charge and credit card business, a network that processes more than $400 billion in transaction volume, its global travel and travelers' check businesses, and an international bank serving affluent consumers and financial institutions - businesses that it says delivered approximately $22 billion in revenues and net income of $2.7 billion in 2004.
The two companies will enter into exclusive marketing affiliations that will allow AEFA to continue to use the American Express name for a transition period following completion of the spin-off.
Both companies will also continue an exclusive marketing affiliation "for a transitional period" for certain co-branded programs, including working arrangements with partners such as Delta Air Lines and Costco, and AEFA's Gold and Platinum financial services offerings.
FISERV SAYS TPA AND FR SERVICES UNITS GREW IN '04: Fiserv Investment Support Services said that an increase in product and service offerings and a stronger economy helped fuel growth in its advisor, third-party administrator and financial representative services business areas in 2004.
The Fiserv ISS Advisor Services Group, which includes DataLynx, grew assets by 35 percent in 2004. The unit currently supports 425 financial advisors who custody $10.9 billion in client assets with Fiserv ISS. Fiserv ISS now serves more than 68,000 client accounts, a 27 percent rise from the previous year. Assets under custody in the TPA services area grew by $1.9 billion to $5.7 billion, a 50 percent increase over 2003.
The financial representative services area specializes in the administration of non-standard assets in retirement accounts - particularly in retirement plan investors' interest in real estate. That area helped bolster the representative services area by 201 percent in 2004. The service area administers more than 207,000 accounts with a reported value of $16.3 billion.
Headquartered in Denver, Fiserv Investment Support Services is among the largest independent trust service providers, administering 322,000 self-directed retirement and custodial accounts valued at $34.7 billion through Fiserv Trust Co.
"Last year was one of the strongest for growth in our 40-plus-year history. The company's increasing breadth and depth of products and services for financial intermediaries, combined with the strength of our personnel and stronger financial markets, helped fuel this growth," said Skip Schweiss, executive vice president of Fiserv ISS.
WRIGHT WINS AMERICAN COLLEGE'S HIGHEST HONOR: The American College, a leading educator of financial service professionals, awarded its highest honor - the Huebner Gold Medal - to Charles R. Wright, CLU, ChFC.
Awarded annually since 1975, the Huebner Medal honors recipients whose dedication to education and professionalism have been emblematic of the mission and progress of the American College. Wright serves as senior executive vice president and chief agency and marketing officer at State Farm Insurance.
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