Home Alts News Ameriprise Grows Retail Client Assets to Record $566 Billion in 2Q18

Ameriprise Grows Retail Client Assets to Record $566 Billion in 2Q18

Ameriprise Financial Inc. (NYSE: AMP), one of the nation’s largest independent broker-dealers, reported strong growth during the second quarter of 2018 across a number of metrics.

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Ameriprise Financial Inc. (NYSE: AMP), one of the nation’s largest independent broker-dealers, reported strong growth during the second quarter of 2018 across a number of metrics.

Ameriprise reported second quarter 2018 net income of $462 million, up 18 percent compared to a year ago, or $3.10 per diluted share, up 24 percent. Adjusted operating earnings were $536 million, up 22 percent compared to a year ago, with adjusted operating earnings per diluted share of $3.60, up 29 percent.

“Like others, Ameriprise is also benefiting from a better operating environment. Equity markets globally are positive. We’ve seen a meaningful pickup in short-term interest rates though long-term rates are still relatively low. The U.S. economy and employment levels are also improving nicely,” said chairman and CEO Jim Cracchiolo on yesterday’s earnings call.

“However, global trade and geopolitical issues remain and we’re seeing that reflected in the higher equity market volatility. And in the U.K., we’re closely navigating Brexit and executing our strategy to adapt accordingly,” he added.

Second Quarter 2018 Highlights

Net revenues of $3.2 billion increased 6 percent, or $184 million, from a year ago primarily due to net revenue growth in advice and wealth management from growth in client assets.

Expenses of $2.6 billion increased 6 percent compared to a year ago reflecting increased distribution expense from higher advisor productivity, the company noted.

First quarter profitability was strong, with a 22 percent increase in adjusted operating earnings, a 29 percent increase in adjusted operating EPS, and a 590 basis point increase in adjusted operating return on equity.

Ameriprise returned nearly 100 percent of adjusted operating earnings to shareholders. The company repurchased 2.9 million shares of common stock for $400 million and paid $132 million in quarterly dividends.

Excess capital was $1.4 billion, with an risk-based capital ratio of 532 percent, and a total of $470 million in dividends were paid from subsidiaries to the holding company during the quarter.

Ameriprise assets under management and administration increased 7 percent to $891 billion.

Ameriprise retail client assets grew 10 percent to $566 billion, an all-time high.

Fee-based investment advisory (wrap) products posted net inflows of $5.3 billion in the quarter – the fifth consecutive quarter of wrap net inflows over $4 billion. Wrap assets grew to $259 billion, one of the largest platforms in the industry.

Advisor productivity increased 12 percent to $599,000 per advisor on a trailing 12-month basis after normalizing for the net impact from eliminating 12b-1 fees in advisory accounts.

Total advisors increased to 9,906, with 76 experienced advisors moving their practices to Ameriprise during the quarter.

Advice and Wealth Management

Advice and wealth management pretax adjusted operating earnings increased 20 percent to $350 million driven by asset growth and higher earnings on cash balances.

Advice and wealth management represented 50 percent of the company’s pretax adjusted operating earnings. Pretax adjusted operating margin reached a new high of 22.7 percent, up 160 basis points from a year ago.

Adjusted operating net revenues increased 12 percent to $1.5 billion.

Adjusted operating expenses increased 10 percent to $1.2 billion primarily from higher distribution expenses related to growth in client assets.

General and administrative expenses were up 8 percent compared to a year ago, approximately half of which were related to investments for business growth.

Client brokerage cash balances were $24.5 billion, down slightly from a year ago as clients allocated cash to other investments.

Ameriprise Financial oversees a nationwide network of approximately 10,000 financial advisors and has $891 billion in assets under management.

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