• Total Revenue: $4.5 billion, up 13%.
• Earnings: $965 million, up 18%.
• Earnings Per Diluted Share: $9.54, up 23%.
• Return on Equity (ROE): 52.7%, up from 49.7% a year ago.
• Assets Under Management, Administration, and Advisement: $1.5 trillion, up 10%.
• Total Client Assets: $1 trillion, up 14%.
• Total Client Inflows: $11.3 billion.
• Wrap Assets Under Management: $574 billion, up 18%.
• Wrap Flows: $11 billion, up 59%.
• Transactional Activity: Up 17% from a year ago.
• Adviser Productivity: Up 13% to over $1 million per adviser.
• Bank Balances: Over $23 billion.
• Variable Annuity Sales: Up 15% for the quarter.
• Life and Health Sales: Up 26%.
• Net Inflows in Asset Management: $1.3 billion.
• Retail Net Inflows: $6.1 billion.
• Institutional Net Outflows: $3.9 billion.
• Free Cash Flow Generation: 90%.
• Capital Returned to Shareholders: $768 million for the quarter, $2.8 billion for the year.
• Share Count Reduction: 22% over the last five years.
• Adjusted Operating Margin: 27%.
• Adjusted Operating Net Revenues in Wealth Management: $2.8 billion, up 18%.
• Adjusted Operating Earnings in Wealth Management: $823 million, up 18%.
• Adjusted Operating Earnings in Asset Management: $251 million, up 29%.
• Adjusted Operating Earnings in Retirement & Protection Solutions: $213 million, up 5%.
• Protection Sales: Up 26% to $91 million.
• Variable Annuity Sales: $1.2 billion, up 15%.
• Excess Capital: $2 billion.

• Warning! GuruFocus has detected 5 Warning Sign with NTCT.

Release Date: January 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Ameriprise Financial Inc (NYSE:AMP) achieved a record high return on equity of 52.7%, up from 49.7% a year ago.
• Total revenues increased by 13% to $4.5 billion, driven by strong asset growth and transactional activity.
• Client assets grew to $1 trillion, marking a 14% increase, with wrap assets under management up 18% to $574 billion.
• The company attracted 91 experienced productive advisers in the fourth quarter, enhancing its recruiting efforts.
• Ameriprise Financial Inc (NYSE:AMP) returned $768 million to shareholders in the quarter and $2.8 billion for the year, demonstrating strong capital return strategy.

Negative Points

• Net interest income (NII) at the bank was down sequentially and year-over-year, raising concerns about future performance.
• Institutional net outflows of $3.9 billion were reported, reflecting challenges in the institutional segment.
• The market for acquisitions is currently considered pricey, limiting Ameriprise Financial Inc (NYSE:AMP)'s ability to pursue inorganic growth opportunities.
• The Asset Management business is under pressure, with a need to transform and become more efficient to improve flow rates.
• Corporate expenses, including severance and technology transformation costs, are expected to impact the first half of 2025.

Q & A Highlights

Q: Can you provide an update on the bank's net interest income (NII) expectations for 2025, given the recent decline? A: Walter Berman, CFO, explained that the bank has repositioned its portfolio to 87% fixed, which should stabilize NII. The bank also adjusted client crediting rates in January to align with interest rate changes. Overall, the bank is well-positioned to sustain and potentially grow NII in 2025, despite some variables.

Q: With client cash levels at 8% of assets, do you expect this to return to the historical 4-5% range? A: Jim Cracchiolo, CEO, noted that while cash levels are higher due to attractive short-term interest rates, there is a gradual redeployment into markets. Over time, as interest rates stabilize, cash positions are expected to decrease, but the process will be gradual.

Q: How are you approaching inorganic growth opportunities, particularly in Advice & Wealth Management (AWM)? A: Jim Cracchiolo stated that while the market for acquisitions is currently pricey, Ameriprise focuses on recruiting advisers who align with their client-centric approach. The company is also investing in expanding channels and exploring new opportunities, but remains cautious about large acquisitions given current market conditions.

Q: What are the prospects for achieving neutral organic growth in Asset Management? A: Jim Cracchiolo highlighted efforts to transform the business for efficiency and growth, including expanding into new formats like active ETFs and SMAs. While the industry faces pressure, Ameriprise is optimistic about improving sales and gaining traction in Europe, though it acknowledges this will take time.

Q: Can you discuss the impact of AI and automation on expense efficiency? A: Jim Cracchiolo explained that Ameriprise has been using intelligent automation and robotics to drive efficiencies and is exploring generative AI for further improvements. While significant efficiencies from AI are not yet realized, the company is testing various applications, particularly in enhancing adviser productivity and client experience.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.