American International Group Inc's plans to sell its broker-dealer business, AIG Advisor Group, are facing hurdles, the New York Post said.

Division CEO Arthur Tambaro in April said that AIG was in final discussions with a potential buyer, the paper said. But two months later, no deal has been struck.

Two sources told the paper that mutual-fund company Fidelity Investments considered providing financing for an unnamed bidder, but backed out. Fidelity declined to comment to the paper.

According to the paper, the lack of a deal for AIG Advisor Group has already led to some departures among its staff, and some say if a deal is not struck by year-end more than half of the company's employees may head for the exit.

AIG Advisors, which includes Royal Alliance Associates of New York, generated $1.3 billion in 2007 revenue, the paper said.

AIG could not be immediately reached for comment by Reuters.

(Reporting by Chakradhar Adusumilli in Bangalore)

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