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January 25, 2018updated 29 Jan 2018 6:40am

Ameriprise Financial wealth unit pre-tax operating earnings soar 28% in Q4

The advice & wealth management arm of Ameriprise Financial has posted pre-tax operating earnings of $326m for the fourth quarter of 2017, a surge of 28% compared to $254m a year ago.

The company attributed the rise in earnings to asset growth and higher earnings on cash balances.

The unit’s pretax operating margin rose to 22% in the fourth quarter from 19.3% in the year ago same period.

For the quarter ended 31 December 2017, operating net revenues were $1.48bn, up 12% from $1.31bn reported a year ago. Operating expenses dropped 9% year-on-year to $1.15bn.

Total retail client assets increased 17% to $560bn from $479bn in the fourth quarter of 2016. The company said that the rise was due to client net inflows, client acquisition and market appreciation.

Wrap net inflows were $5bn during the quarter, a surge of 51% compared with $3.3bn a year earlier.

Asset Management

The pre-tax operating earnings in the asset management unit were $214m for the fourth quarter of 2017, an increase of 27% from $169m reported in the corresponding quarter of 2016.

The unit’s fourth quarter operating net revenue was $825m, up 8% from $761m reported a year ago.

The division’s operating expenses dropped 3% year-on-year to $611m, due to lower distribution expenses. The unit’s AUM totalled $495bn at the end of December 2017, a rise of 9% over $454m reported a year earlier.

Ameriprise chairman and CEO Jim Cracchiolo said: “Ameriprise had an excellent fourth quarter and a strong 2017 as we served more clients and experienced good asset growth across the firm. We’re well positioned to build on our momentum and further differentiate Ameriprise as a financial services leader.

“Our strong growth, driven by our wealth management business, reflects the value of the advice and solutions we provide, and we are increasingly being recognized for high client satisfaction, loyalty, trust and forgiveness.”

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