Financial advisers jump ship Vice president leads revolt at American Express in Detroit

October 25, 1997|By BLOOMBERG NEWS

MINNEAPOLIS -- American Express Co.'s money-management subsidiary suffered mass defections of financial advisers from its Detroit regional offices, the firm's top sales area in the U.S.

More than 80 of the region's 400 advisers, including the vice president of the metropolitan Detroit group, John Hantz, resigned from American Express Financial Advisors to open a new firm after a year-long dispute with management.

Hantz, 35, wanted more independence and was proposing to open his own firm while maintaining his affiliation with American Express. In a statement, Hantz said the disagreements centered on his view that American Express wasn't offering customers a broad enough range of investment choices.

"The unmistakable trend in the financial advisory business is toward offering more choice," said Andrew Guillette, an industry consultant at Cerulli Associates Inc. in Boston.

By breaking away, "we will be able to better serve our clients' needs," Hantz said, adding the new company won't solicit current American Express clients.

American Express said its financial advisers can offer customers a wide range of investment offerings, including proprietary and non-proprietary mutual funds, variable annuities, IRAs and life insurance.

"We offer a very broad range of products and services that we manufacture and we also offer 400 mutual funds from other companies, as well as a range of insurance and health care products," said Lynn Closway, a spokeswoman for American Express Financial Advisors in Minneapolis, said yesterday.

The subsidiary, which employs about 8,500 financial advisers and oversees more than $160 billion of assets for about 2 million clients, accounted for more than a third of the parent company's earnings in the second quarter.

Michael Durante, an analyst at Salomon Brothers, doesn't expect the loss of advisers to hurt the company. He rates American Express stock a "hold" and estimates the company will earn $4.15 a share this year.

Pub Date: 10/25/97

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