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January 31, 2019

Ameriprise Financial wealth unit reports rise in Q4 earnings

The advice and wealth management unit of Ameriprise Financial has posted pre-tax adjusted operating earnings of $368m for the fourth quarter of 2018, an increase of 13% compared to $325m in the previous year.

The company attributed the growth to continued strength in client net inflows alongside increased earnings on cash balances.

The division’s pretax adjusted operating margin increased 180 basis points to 23.3% in the quarter from 21.5% last year.

The unit’s adjusted operating net revenues increased 5% to $1.58bn from $1.51bn a year ago.

The rise is said to be due to “strong client activity, increased adviser productivity and higher earnings on cash balances”.

Adjusted operating expenses at the division rose 2% year-on-year to $1.21bn.

Total retail client assets dipped 4% to $539bn from $560m last year. Wrap net inflows were $4.5bn, down 10% from the previous year.

Asset Management

Pre-tax adjusted operating earnings in the asset management arm were $153m in the fourth quarter of 2018.

The figure marked a 27% slump compared to $210m in the same quarter of 2017.

The unit’s adjusted operating net revenues were $706m, a 13% decrease from $816m a year earlier.

The fall was said to be due to lower performance fees, markets and the cumulative impact of outflows.

Adjusted operating expenses at the asset management arm increased 9% to $553m on a year-on-year basis.

The unit’s assets under management totalled $431bn at the end of December 2018, a fall of 13% from $495bn last year.

Ameriprise chairman and CEO Jim Cracchiolo said: “Ameriprise delivered solid results in a volatile quarter with our Advice and Wealth Management business driving our growth.

“Ameriprise client flows into fee-based investment advisory remained strong and cash balances increased. As we serve more clients in advice relationships, we’re steadily growing adviser productivity.”

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