Ideas and Insights for Wealth Managers
October 2014
www.onwallstreet.com
Wealth Management Profits Up 35% at Ameriprise
By Andrew Welsch
A
shift toward fee-based business is boosting
Ameriprise’s profits.
Earnings for Ameriprise Financial’s wealth
management unit surged 35% year over year in the third quarter.
Ameriprise CEO Jim Cracchiolo credited growth in the
firm’s fee-based businesses and wealth management unit for
the company’s robust overall performance.
“I feel good about our current position,” Cracchiolo said
during a conference call with analysts on Wednesday.
The company said pretax earnings for its Advice & Wealth
Management unit grew to $205 million for the third quarter
from $152 million for the year-ago period.
The unit’s net revenue increased to $1.21 billion from
$1.074 billion, a 13% increase from the prior year. That
growth outpaced costs, which climbed 9%, growing to $1
billion from $922 million.
Total assets under management grew 11% year over year,
the company said, rising to $433 billion from $389 billion. The
amount of money in wrap accounts surged 23%, increasing
$167 billion from $135 billion.
Net flows into those accounts remained strong, rising to $3.8
billion from $3.01 billion for the previous quarter and $3.02
billion from the previous year. (This stood in contrast to some
of Ameriprise’s competitors; Morgan Stanley, for example,
reported that third-quarter fee-based asset inflows slipped.)
MARKETING PUSH
Cracchiolo said that the firm was focused on deepening
existing client relationships and establishing new ones.
To that end, the firm in September launched a retirementfocused advertising campaign, which Cracchiolo said tests
well with mass affluent and high-net-worth clients.
The firm is also trying to bring in new assets through
social networks. “Our social media capabilities can help
advisors build a robust presence with prospective clients,”
said Cracchiolo.
The firm is also attempting to grow its bottom line
by bringing in new advisors. Ameriprise has raised its
signing bonuses to match offerings from other brokerage
firms and lure away advisors from rivals, an Ameriprise
source said.
ADVISOR GROWTH
The firm has seen stronger growth in its independent
advisor channel, where headcount edged up to 7,596 advisors
from 7,577 in the previous quarter. The number of employee
advisors, meanwhile, fell to 2,100 advisors from 2,115.
Year-over-year, Ameriprise’s employee channel shrank by
135 advisors.
Cracchiolo said that advisor retention remained high, and
the firm expected strong recruiting in the fourth quarter.
“We feel good about our pipeline, from the independents
and the wirehouse channel,” he said.
Companywide, Ameriprise reported third quarter profits
of $565 million, up 26%.
Total revenue at the Minneapolis-based firm increased
11%, rising to $3.111 billion from $2.813 billion. This beat
analyst estimates of $3.097 billion according to Bloomberg,
which surveyed four analysts. Costs rose at a slower pace,
reaching $2.391 billion from $2.211 billion, an 8% increase.
Earnings-per-diluted-share increased to $2.17 from $1.86.
Shares were up 2.5% in late morning trading on Wednesday;
the stock is up about 8% for the year to date.
Discover the Ameriprise difference. As America’s leader in financial planning1, our success is built on an unwavering
dedication to clients and unparalleled Culture & Commitment, Dedication & Support, and Opportunity & Rewards
for advisors. To learn more about what the Ameriprise difference can mean for you and your practice,
visit joinameriprise.com/why or call 800.770.5092.
Ameriprise helped pioneer the financial planning process more than 30 years ago. We have more financial planning clients and more
CERTIFIED FINANCIAL PLANNER™ professionals than any other company in the U.S. based on data filed at adviserinfo.sec.gov and
documented by the Certified Financial Planner Board of Standards, Inc., as of Dec. 31, 2013.
Ameriprise Financial Services, Inc., is an Equal Opportunity Employer. Ameriprise Financial Services, Inc. Member FINRA and SIPC.
1
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