Ameriprise Q2 Profits Soar on Financial Advisor Productivity

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Market appreciation, higher sales, and massive inflows to close advisory accounts helped boost profits for one of the top wealth managers by more than 50% in the second quarter.

Ameriprise’s Minneapolis-based Advice & Wealth Management unit raked in nearly half a billion dollars in adjusted operating profit before tax with a 380 basis point increase over its profit margin for the year. same period a year earlier, the company said disclosed July 26. Not all metrics were so optimistic, however: On a call the next morning, CEO Jim Cracchiolo told analysts that Ameriprise’s incoming group of 42 senior advisers was “a little below what we expected. have been “in recruiting for the past few quarters. .

  • The company’s headcount increased 2% year-on-year, or 153 net advisers, to 10,047 at the end of the quarter. This included 7,943 independent franchise advisers and 2,104 employee representatives. Despite the smaller harvest of recruits, however, the net gain exceeded those of the previous two quarters. “We hear that the advisers have focused on everything that comes with the reopening,” Cracchiolo said in his prepared remarks, according to to a transcript of The Motley Fool. “People are returning to a more normal rhythm. We are now hosting in person meetings that complement our virtual recruiting, and we feel good about our pipeline for the third quarter. “
  • Total client assets of the wealth manager soared 28% from last year to $ 807 billion, with an inflow of $ 10 billion to wrap advisory accounts and an overall infusion of 9.5 billion dollars of flow. Advisor-adjusted annual net operating income jumped 9% to $ 731,000, or 14% excluding the impact of lower interest rates. The difference between the turmoil marking the second quarter of 2020 in the midst of the pandemic and greater economic strength in the just completed one was striking, with overall flows increasing by more than 75% and counseling flows increasing by more than 50 %.
  • Ameriprise’s wealth management unit generated adjusted operating income before tax of $ 423 million on net sales of $ 1.98 billion, a margin of 21.4%. Revenue increased 29% from the same period a year ago, while distribution expenses related to the compensation of business growth advisors increased by almost a third. The company also plans to close its $ 845 million acquisition BMO Financial Group’s EMEA asset management business in the fourth quarter, which Cracchiolo said will “add significant capabilities and strengthen our reach” in international markets.
  • He credits Ameriprise’s advisors for sales and asset flows. Part of the company’s growth has come from favorable economic conditions like rising stock values ​​as more businesses and in-person businesses reopen in 2021, according to Cracchiolo. Ameriprise’s technology also plays a role, he says. “We are integrating everything into an ecosystem that works together, not just putting tools on a platform and saying, ‘Hey, we have this service,’” said Cracchiolo. “It’s not something like we just thought, just introduced or just added. It’s something that we’ve really tested, we’ve proven, we’ve actually deployed it. And it works really well. And so I would just say that it has a lot to do with the fact that our advisors have that type of engagement with clients and also how they are able to deal with the firm and the information that we provide. So I think it’s a combination of all of that.


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