Prudential sells US broker dealer business

Prudential has offloaded its US independent broker-dealer network for a fee that could rise to $448m as the life insurer looks to trim the fat.

After the deal was signed off overnight and announced on Wednesday, the transition is expected to be completed by the end of the first quarter of 2018.

Prudential, which last week revealed it is merging its UK operations into a single business, will receive an initial $325m cash, which may increase to roughly $448m subject to "certain transition criteria".

Barry Stowe, chairman and chief executive officer of Prudential's North American business, said: "While we still very much believe in the independent broker-dealer model, our primary strategy in North America is to focus on being the leading manufacturer of retirement products.

"The transaction with LPL Financial provides us with a compelling opportunity to divest our ownership in the NPH network to a leading independent broker-dealer well suited to support financial advisors and their retail clients going forward."

After the FTSE 100 group's results earlier last week, analysts at Deutsche Bank said one of the key messages was that underlying US margins "are modestly worse than assumed", though there were "signs of improvement even in the US despite the regulatory headwinds".