Wells Fargo Reportedly Nearing $1 Billion Sale of Retirement Plan Business
Wells Fargo is in advanced talks with life insurance and financial services group Principal Financial Group over the sale of Wells Fargo’s retirement plan services business, which includes its 401(k) savings accounts business, people familiar with the matter tell Reuters. The companies could announce the deal, which may top $1 billion, as soon as later this month if the negotiations proceed smoothly, the people, who asked to remain anonymous, tell the newswire. Both companies declined comment to Reuters.
Wells Fargo has been divesting from various businesses following the February 2018 asset cap placed on the company by the Federal Reserve in light of a series of consumer abuse scandals at the firm dating back to the 2016 revelations of its bank employees opening millions of bogus accounts, the newswire writes. Last year, Wells Fargo said it was offloading 52 branches in Indiana, Michigan, Ohio and Wisconsin to Flagstar Bancorp Inc. and selling its Puerto Rico auto financing unit to Popular Inc., according to Reuters.
Morgan Stanley, meanwhile, has agreed to sell a unit that administers the company’s 115 alternative-investment feeder funds to fintech firm iCapital Network, according to Bloomberg, which cites a statement from iCapital. The funds invest in hedge funds, real estate and private equity for Morgan Stanley’s wealth management unit, the news service writes. The companies didn’t disclose the terms of the deal, according to Bloomberg.
Morgan Stanley will continue managing investments under the deal but hand off some operational tasks to iCapital, allowing the wirehouse to streamline customer relationship management for its advisors, iCapital CEO Lawrence Calcano tells the news service. iCapital will offer several jobs, primarily in operations, to Morgan Stanley employees, according to Bloomberg.