Turns out that cross selling investments to American Express cardholders wasn't so “synergistic” after all.

Saying there are “few critical strategic links between the two businesses that create a compelling case” for keeping them together, American Express CEO Ken Chenault announced Amex's plans to spin off American Express Financial Advisors (AEFA).

The move comes as little suprise to readers of Registered Rep. In Sept. 2004, this magazine published a story called “The Great Experiment”, which detailed AEFA's effort to attract more seasoned planners by offering a franchise affiliation option. “The strategy hasn't quite panned out,” the article stated.

Though some remain skeptical of AEFA's ability to succeed, even as an independent firm, others think the newly-freed firm has potential. With a network of 12,000 advisors serving more than 2.5 million clients, AEFA could become, in the words of one expert, a “giant LPL.”

“Once this company is on its own, it will be fully open architecture and selling third-party funds,” he noted. “It could quickly reposition itself and take the same path to success as LPL.”