NEW YORK (Bloomberg) - American International Group Inc. (AIG), the insurer bailed out by the US, pulled the auction of an investment-advisory unit after CEO Robert Benmosche decided it complemented retirement operations.

"The broker-dealer group is core to the retirement services business," David Monfried, an AIG spokesman, said yesterday in an interview. "We intend to keep it and continue to build a world-class financial advisory business."

The AIG Advisor Group includes SagePoint Financial Inc., FSC Securities Corp. and Royal Alliance Associates Inc. and has about 5,500 independent financial advisers, Mr. Monfried said. Former CEO Edward Liddy said in October that AIG would divest most businesses excluding property-casualty coverage.

Benmosche, the former MetLife Inc. CEO who replaced Mr. Liddy last week, has to sell businesses to repay loans within AIG's $182.5 billion bailout. The company has disclosed agreements to divest assets for about $9.3 billion since the September rescue.

AIG sells retirement products, including annuities, through units including Western National Life. The company's life and retirement units posted a $1.52 billion operating profit before investment gains in the second quarter, a 42 percent decline from a year earlier. Sales of investment products had been hurt by publicity about the company's bailout, AIG said.

The adviser group "has very strong long-term prospects and will support AIG in its drive for growth and sustained profitability," Mr. Monfried said.

Mr. Benmosche ran MetLife, the largest US life insurer, for eight years through 2006 and oversaw the company's transition to a publicly traded business from a policyholder-owned firm. He was also on the board of Credit Suisse AG for seven years and decided to step down from that post, the Zurich-based bank said this month.

Mr. Benmosche sent a letter about his decision to the adviser group's managers, according to Bank Investment Consultant, which previously reported that the auction was halted.

Mr. Liddy oversaw the beginning of efforts to repay the government by selling assets. When he failed to find buyers as quickly as expected, he persuaded the US to expand the bailout three times.

The package includes a $60 billion credit line, an investment of as much as $70 billion, and $52.5 billion to buy mortgage-linked assets owned or backed by AIG.