Lincoln Financial Group Completes Sale of Wealth Management Business to Osaic, Inc.

Rhea-AI Summary

Lincoln Financial Group (NYSE: LNC) has completed the sale of its wealth management business to Osaic, Inc., providing approximately $650 million of capital benefit. The company plans to use the funds to increase its risk-based capital ratio and reduce leverage. This strategic move aligns with Lincoln's focus on growing its insurance and workplace solutions businesses to deliver long-term value for stakeholders.

Positive

• Approximately $650 million in capital benefit from the sale

• Focus on executing enterprise strategic pillars for long-term value

Negative

• None.

Insights

Financial Analyst

Lincoln Financial Group's divestment of their wealth management business to Osaic, Inc. represents a strategic reallocation of resources that appears to be aimed at strengthening their financial position. The estimated $650 million capital benefit boosts Lincoln's risk-based capital ratio, which is an important measure of an insurance company's financial strength and stability. The company's intention to use a portion of this benefit to reduce its leverage ratio will likely be viewed favorably by debt holders, as it implies a reduction in financial risk. This transaction allows Lincoln to focus more on its core insurance and workplace solutions, which could streamline operations and improve efficiency. Investors should note that divestitures can have multiple implications, including a temporary decrease in revenue due to the loss of the sold business segment. However, if the capital is redeployed effectively, the long-term benefits include the potential for improved returns on equity.

Market Research Analyst

The completion of the sale marks a notable change in Lincoln's business strategy, shifting away from wealth management services towards a focus on their individual insurance and workplace solutions. This move mirrors trends in the financial services industry where companies are seeking to specialize and optimize their core offerings. For investors, this may signal a commitment to enhancing Lincoln's competitive edge in its areas of strength. The strategic partnership mentioned with Osaic could facilitate cross-selling opportunities and potentially preserve some client relationships and revenue streams. Moreover, retaining the Lincoln Financial Distributors and expanding distribution relationships with Osaic may mitigate the impact of losing the wealth management business, as it keeps open channels for product distribution. The net effect on market share and revenue will depend on the successful execution of these strategic partnerships and Lincoln's ability to capitalize on them to drive organic growth.

RADNOR, Pa.--(BUSINESS WIRE)-- Lincoln Financial Group (NYSE: LNC) today announced that it has completed the sale of its wealth management business, including all ownership interests in the Lincoln subsidiary entities comprising that business, to Osaic, Inc. (Osaic), one of the nation’s largest providers of wealth management solutions. The sale provides Lincoln with approximately $650 million of capital benefit, which the company will primarily use to increase its risk-based capital ratio. Lincoln also plans to use a portion of the capital benefit to reduce its leverage ratio.

“Lincoln is focused on continuing to execute on our enterprise strategic pillars, leverage our core strengths to grow our individual insurance solutions and workplace solutions businesses, and deliver long-term value for all of our stakeholders,” said Ellen Cooper, Chairman, President and CEO of Lincoln Financial Group. “We look forward to our long-term strategic partnership with Osaic as we continue to provide financial professionals with products and solutions that will help them best serve their clients.”

Lincoln first announced its definitive agreement to sell its independent broker-dealer and registered investment advisory firms – Lincoln Financial Advisors Corporation (LFA) and Lincoln Financial Securities Corporation (LFS) – to Osaic in December 2023. As a result of the close of today’s transaction, the entities, which comprise a national network of approximately 1,450 financial professionals, together with Lincoln’s home-office employees who support the wealth management business, will transition to Osaic.

Lincoln retains all aspects of Lincoln Financial Distributors (LFD), its industry-leading wholesale distribution franchise, which drives organic growth across Lincoln’s distinct retail product value propositions through a broad distribution network. Lincoln also retains its channel of independent agents, which is now part of LFD. Additionally, as part of the transaction, LFD is further expanding its strong distribution relationship with Osaic, including the network of financial professionals that will transition as part of this transaction, and Osaic’s broader financial professional network.

About Lincoln Financial Group

Lincoln Financial Group helps people to plan, protect and retire with confidence. As of December 31, 2023, approximately 17 million customers trust our guidance and solutions across four core businesses – annuities, life insurance, group protection, and retirement plan services. As of March 31, 2024, the company had $310 billion in end-of-period account balances, net of reinsurance. Headquartered in Radnor, Pa., Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE: LNC) and its affiliates. Learn more at LincolnFinancial.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240506463502/en/

Tina Madon

445-280-0488

Investor Relations

Tina.Madon@LFG.com



Sarah Boxler

215-495-8439

Media Relations

Sarah.Boxler@LFG.com

Source: Lincoln Financial Group

FAQ

What did Lincoln Financial Group sell to Osaic, Inc.?

Lincoln Financial Group sold its wealth management business, including all ownership interests in the Lincoln subsidiary entities comprising that business.

How much capital benefit did Lincoln Financial Group receive from the sale?

Lincoln Financial Group received approximately $650 million of capital benefit from the sale.

What does Lincoln Financial Group plan to do with the capital benefit from the sale?

Lincoln Financial Group plans to primarily use the funds to increase its risk-based capital ratio and reduce its leverage ratio.

When did Lincoln Financial Group announce the sale of its independent broker-dealer and registered investment advisory firms to Osaic, Inc.?

Lincoln Financial Group announced the sale in December 2023.

How many financial professionals are part of the national network that transitioned to Osaic, Inc.?

Approximately 1,450 financial professionals are part of the national network that transitioned to Osaic, Inc.

What aspect of Lincoln Financial Group's business does Lincoln Financial Distributors (LFD) retain?

Lincoln Financial Distributors (LFD) retains its wholesale distribution franchise, driving organic growth across Lincoln's retail product value propositions.