RADNOR, Pa. - Lincoln Financial Group (NYSE: LNC) has finalized the divestiture of its wealth management business to Osaic, Inc., a prominent wealth management solutions provider in the United States. This strategic move has unlocked approximately $650 million in capital for Lincoln, which intends to bolster its risk-based capital ratio and decrease its leverage ratio using the proceeds.
The transaction, initially disclosed in December 2023, involved the transfer of Lincoln's subsidiary entities, including Lincoln Financial Advisors Corporation (LFA) and Lincoln Financial Securities Corporation (LFS). These entities represent a national network of nearly 1,450 financial professionals and the corresponding support staff from Lincoln's home office.
Ellen Cooper, Chairman, President, and CEO of Lincoln Financial Group, expressed the company's commitment to its strategic pillars, focusing on growth in individual insurance solutions and workplace solutions. She also highlighted the anticipation of a long-term strategic partnership with Osaic, aiming to equip financial professionals with effective products and solutions for client service.
Despite the sale, Lincoln retains its Lincoln Financial Distributors (LFD) and its network of independent agents, now integrated into LFD. The company's wholesale distribution franchise, known for driving organic growth through a broad distribution network, will continue to operate and expand its distribution relationship with Osaic.
Lincoln Financial Group, known for aiding customers in planning, protecting, and retiring with confidence, reported approximately 17 million customers relying on its guidance and solutions as of December 31, 2023. The company, headquartered in Radnor, Pa., had $310 billion in end-of-period account balances, net of reinsurance, as of March 31, 2024.
This development is based on a press release statement from Lincoln Financial Group, and it marks a significant reshaping of its business structure, focusing on core strengths and strategic growth areas.
InvestingPro Insights
Following the divestiture of its wealth management business, Lincoln Financial Group (NYSE: LNC) is poised to strengthen its financial standing and focus on its core insurance and retirement services. According to InvestingPro, the company is expected to see net income growth this year, a positive outlook that may reassure investors regarding the company's profitability post-transaction. Additionally, Lincoln Financial is trading at a low earnings multiple with a P/E ratio of just 3.87, which could indicate the stock is undervalued relative to its earnings potential.
InvestingPro data also reveals that Lincoln Financial has a robust dividend yield of 6.41%, a compelling figure for income-seeking shareholders. This is further supported by the company's impressive track record of maintaining dividend payments for 54 consecutive years, underscoring its commitment to returning value to shareholders. Moreover, the company's liquid assets exceed its short-term obligations, reflecting a solid liquidity position which is crucial for operational flexibility and financial stability.
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