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Deals & People December 15, 2023
Lincoln to Shed Wealth Division With Sale to Osaic
Lincoln has agreed to sell its $108 billion wealth management business to focus on workplace and insurance services and products.
Reported by Alex Ortolani
Lincoln Financial Corp. has agreed to sell its independent broker/dealer and registered investment advisory divisions to Osaic Inc. to focus on the distribution of its workplace—including retirement services—and insurance offerings, the firms announced Thursday.
Lincoln Financial Advisors Corp. and Lincoln Financial Securities Corp., the wealth management firms that make up “Lincoln Wealth,” will move to Osaic with “minimal to no repapering and no change to account numbers” for clients, the firms announced. The deal is expected to close in the first half of 2024 and bring Lincoln $700 million in capital, according to Radnor, Pennsylvania-based Lincoln in an announcement.
Lincoln Wealth’s units include about 1,450 financial advisers overseeing about $108 billion in assets, made up of $71 billion in assets under administration and $38 billion in assets under management. The divisions’ leadership teams and employees will join Phoenix-based Osaic as a “stand-alone” entity after the transaction, which is subject to regulatory approval.
Lincoln’s business lines include services ranging from employer-sponsored plan recordkeeping to individual retirement accounts, annuity products and group life insurance. The firm ranks among the 10 largest by assets for 403(b), 457 and nonqualified deferred compensation plans, according to PLANSPONSOR’s 2023 Recordkeeping Survey.
Lincoln will retain its own financial distribution network and its channel of independent agents, it noted in the announcement. It will also, as part of the transaction, expand its distribution relationship with Osaic, extending a decades-long partnership, according to the firms.
“As we look ahead, we will continue to focus on growing our individual insurance solutions and workplace solutions businesses and leveraging our core strengths, including our distribution leadership and strong brand, to deliver future value for all of our stakeholders,” Ellen Cooper, chairman, president and CEO of Lincoln Financial Group, said in a statement. “We are pleased to have found a strong long-term home for Lincoln’s wealth management business, and we believe this transaction will greatly benefit this national network of financial professionals who deliver invaluable services for their clients each and every day.”
According to Lincoln, earnings from the sale of the wealth business, which was started in 1969, will be used “primarily” to increase the company’s risk-based capital ratio, but also to reduce its leverage ratio. The firm does not expect any “material impacts” to free cash flow or earnings.
“This acquisition was driven by the strong partnership between Osaic and Lincoln Financial Group, which will continue into the future,” Jamie Price, CEO of Osaic, said in a statement. “The cultural alignment between Lincoln Wealth and Osaic makes this a natural fit, and we look forward to continuing to serve Lincoln Wealth advisers with the strong culture of community and development they have built.”
Osaic is backed by private equity firm Reverence Capital Partners and supports more than 10,500 financial professionals.
