Ameriprise Financial, Inc. · NYSE:AMP
Ameriprise Financial — Q2 2023 Earnings Presentation
39 slides from Ameriprise Financial's earnings presentation, Jul 27, 2023
Slide 1: Ameriprise Financial
Ameriprise Financial May 2023
Slide 2: Forward-looking statements
Forward-looking statements The forward-looking statements in this presentation reflect management’s expectations about future events, plans and performance. These forward-looking statements and the many assumptions upon which they are based involve risks and uncertainties. A list of factors that cou
Slide 3: A diversified and differentiated financial services leader
A diversified and differentiated financial services leader with a record of outperformance – well-positioned to capture future growth 3
Slide 4: Ameriprise – diversified and fully integrated
Ameriprise – diversified and fully integrated Advice & Wealth Management Industry-leading wealth manager with Strong investment differentiated advice Important solutions performance; value proposition meeting clients’ client-focused approach evolving needs $1.2T Quadrupled ~90% ongoing ~$22B returne
Slide 5: One dynamic firm delivering significant value
One dynamic firm delivering significant value Wealth Global Asset Benefits Management Management Wealth management1 drives ~85% of the firm’s revenue Columbia Deep, long-term client relationships Threadneedle Investments Captures assets and fees across Advice market cycles & Wealth Management Strong
Slide 6: Continued progress in shifting our business mix
Continued progress in shifting our business mix given growth in Wealth Management Pretax Adjusted Operating Earnings1 19% 44% 2012 2023 $1.7B 25% $3.9B 19% 62% 31% Advice & Wealth Management Asset Management Retirement & Protection Solutions 2023 represents trailing 12-months through 3-31-23. 6 1. E
Slide 7: Advice & Wealth Management is delivering sustained profitable growth
Advice & Wealth Management is delivering sustained profitable growth A longstanding leader in 10,259 financial planning and advice financial advisors (Top 5 branded) Excellent client $847K trailing 12-month satisfaction adjusted operating net revenue per advisor Continue to grow ~85% fee-based Ameri
Slide 8: Recognized for our premium client experience and for managing our business responsibly
Recognized for our premium client experience and for managing our business responsibly One of Investor’s Business Daily Ameriprise has been recognized Most Trusted by J.D. Power for providing Wealth “An Outstanding Customer Management Service Experience” for phone Companies of support for advisors f
Slide 9: Attractive and fast-growing market
Attractive and fast-growing market Households Financial assets Financial assets (in millions) ($ in trillions) CAGR 2016 – 2022 $20M+ 0.2 $9 +7.0% U.S. household $10-$19.9M 0.4 $6 +5.0% financial assets $5M-$9.9M 1.1 $9 +6.0% projected to grow +5.0% $500k – $4.9M 14.2 $23 3 - 5% +4.0% annually going
Slide 10: Within the opportunity, we are focused on the Responsible Mindset
Within the opportunity, we are focused on the Responsible Mindset Who they are What they want Our primary target market: Advice and anytime access $500K–$5M $20.2 trillion in financial assets 63% prefer Want advice Strong digital comprehensive beyond expectations and advice investments engagement At
Slide 11: Through our Client Experience, we will deliver advice to our full client base
Through our Client Experience, we will deliver advice to our full client base and generate significant value and client satisfaction 4 elements of the Client Experience What clients 1:1 financial advice based A personalized plan and Anytime access to your Regular meetings to review can expect on you
Slide 12: Multiple affiliation options to serve more clients and advisors
Multiple affiliation options to serve more clients and advisors Ameriprise Ameriprise Ameriprise Ameriprise Financial Franchise Group Advisor Group Advisor Center Institutions Group AFFILIATION AFFILIATION AFFILIATION AFFILIATION Independent Employee Employee Employee DESCRIPTION DESCRIPTION DESCRIP
Slide 13: Our bank capabilities complement our advice value proposition
Our bank capabilities complement our advice value proposition and allow us to help clients with both sides of their balance sheet Many wealth Ameriprise Bank, FSB managers generate OPPORTUNITY • Over $20 billion in assets with additional opportunity to a substantial grow the balance sheet via off ba
Slide 14: Strong financial performance compared to peers
Strong financial performance compared to peers Ameriprise margin expansion aligns us with wirehouses and notably above regionals and independents Adjusted Pretax Operating Margin 2023 AWM 28% Regionals / 17% Independents Wirehouses 27% Data represents trailing 12-months through 3-31-23. 14 Source: C
Slide 15: Wealth Management continues to deliver strong profitable organic growth
Wealth Management continues to deliver strong profitable organic growth in the face of market dislocation Total Client Assets Total Client Flows TTM Revenue Per Advisor $ in billions $ in billions $ in thousands 6% 7% $827 $847 (7%) $796 $858 $44.4 $41.4 $42.5 $799 $758 2021 2022 2023 2021 2022 2023
Slide 16: AWM planning model results in a stable client cash base
AWM planning model results in a stable client cash base • Breadth of our cash product offerings enable us to meet client Stable Client Cash Balances needs across market and rate cycles $ in billions • Client cash balances remained relatively stable at approximately 5.5% of client assets and reflect
Slide 17: Wealth Management has strong underlying momentum and interest rate tailwinds
Wealth Management has strong underlying momentum and interest rate tailwinds to offset market dislocation Grow our client base and move further up market Advice and Wealth Management PTI ($ in millions) Increase advisor productivity $2,445 Deepen client relationships 18% CAGR Ameriprise Bank will dr
Slide 18: Retirement & Protection Solutions: maintain differentiated risk-return profile
Retirement & Protection Solutions: maintain differentiated risk-return profile while supporting clients’ long-term needs Important solutions for our Confident Retirement® approach ~$91B $ Strategically managing our client AUM1 books of business Strong returns Top 10 VUL insurance with a lower provid
Slide 19: RPS business is highly valuable with sustainable financial results
RPS business is highly valuable with sustainable financial results, strong free cash flow and a low risk profile • Unique distribution model • Diversified inforce business with client behavior that has been consistent focused on delivering client with expectations solutions through financial plannin
Slide 20: We are a leading asset manager with strong business performance
We are a leading asset manager with strong business performance amidst challenging market environment Global presence Net flow rate in line and capabilities with peers1 Top 15 $608B in AUM $ long-term mutual funds in the U.S.2 Strong institutional Top 10 retail ranking presence in the UK2 118 four-
Slide 21: Our investment engine is a foundation for client success
Our investment engine is a foundation for client success and sets us apart Our investment approach is underpinned by a culture that is dynamic, collaborative and interactive and by processes that are team-based, performance driven and risk aware. Our investment teams share a common set of values and
Slide 22: The integration of our asset management business is on track
The integration of our asset management business is on track Additive capabilities from the acquisition A recognized leader with a broad range of specialist ESG Responsible Investment (RI) products Liability-Driven Investing A top-four LDI business in Europe (LDI) Fiduciary/outsourced A key solution
Slide 23: Our investment approach has delivered consistently competitive long-term investment performance
Our investment approach has delivered consistently competitive long-term investment performance over many years Asset-weighted performance Columbia Threadneedle funds 52% 52% 76% 88% 1 year 3 years 5 years 10 year 118 funds out of 257* earned an Overall Rating of 4 or 5 stars: - 23 funds received 5-
Slide 24: Our core investment capabilities span a broad spectrum of strategies
Our core investment capabilities span a broad spectrum of strategies with Responsible Investment at the heart of our corporate and client agenda Equities Fixed Income Global quality growth: large Regional & single country Investment grade credit US bank loans & small cap, EAFE, emerging Equity incom
Slide 25: Broad global distribution capability
Broad global distribution capability U.S. EMEA APAC 11 locations 15 locations 5 Locations • $252B U.S. Retail Product AUM • $69B EMEA Retail Product AUM • Retail and private bank / GSR (global strategic relationship) distribution • 5 focused intermediary sales channels: • Key countries / regions inc
Slide 26: Stable institutional flow trends while industry dynamics pressure retail flows
Stable institutional flow trends while industry dynamics pressure retail flows Retail Net Flows1 $ in billions Improved segmentation and targeting ($5.8) ($5.3) ($3.7) ($1.9) ($4.6) Growing model business Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Growing Institutional distribution momentum Insti
Slide 27: Industry margins to be pressured moving forward
Industry margins to be pressured moving forward as the market remains challenged 41.9% 36.9% 33.6% 32.4% 32.1% 31.3% 31.1% 27 Represents trailing 12-months through 3-31-23. Adjusted operating margin for AMP, BLK, JHG, APAM, IVZ, BEN.
Slide 28: Unique shareholder value creation opportunity with diversified free cash flow
Ameriprise is a unique shareholder value creation opportunity with diversified free cash flow generation Excess Capital $ in billions Sizeable growth in earnings and free cash $2.0 flow from Wealth Management Significant operating leverage in Asset Growing contribution Management fromnormalize as ma
Slide 29: We have returned nearly $22 billion of capital to shareholders since 2012
We have returned nearly $22 billion of capital to shareholders since 2012 Capital Returned to Shareholders $ in billions $2.4 $2.4 $2.4 $2.4 $2.1 $2.2 $2.1 $1.9 $1.8 $1.8 $1.8 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Dividends Share Repurchase 29 2023 represents trailing 12-months thro
Slide 30: Increasing and diversified sources of free cash flow
Increasing and diversified sources of free cash flow as business mix shift accelerates Pretax Adjusted Operating Earnings1 19% 25% 2023 Continued 44% 2012 $3.9 Growth & $1.7 19% billion Mix Shift billion 62% 31% Advice and Wealth Management Asset Management Retirement & Protection Solutions 2023 rep
Slide 31: Continue to meet and exceed client needs across our businesses
Continue to meet and exceed client needs across our businesses as we return to office Significant opportunity to further grow as a wealth management and advice leader focused on deep client relationships Leading global asset manager with competitive long-term investment performance that meets the gr
Slide 32: Appendix
Appendix 32
Slide 33: Appendix: Sources
Appendix: Sources Wants & Pricing Report (April 2021, the most recent report) from the Hearts & Wallets Investor QuantitativeTM Database. In this annual syndicated survey respondents are asked to rate their financial services providers in a variety of areas on a scale of 0 (not at all satisfied) to
Slide 34: Disclosures
Disclosures Investors Business Daily - The Most Trusted Financial Companies Survey is conducted by Investor's Business Daily and TechnoMetrica Market Intelligence, ranking financial companies based on consumer trust. The study was conducted in two phases, with 691 individuals responding to Phase 1 i
Slide 35: Reconciliation Tables
Reconciliation Tables Adjusted operating earnings per diluted share Per Diluted Share Full Year TTM (1) 2012 2023 Reported EPS $ 4.61 $ 24.45 Less: Impact of operating adjustments (0.96) (2.37) Adjusted operating EPS $ 5.57 $ 26.82 Less: Impact of annual unlocking/loss recognition (0.22) (0.95) Adju
Slide 36: Reconciliation Tables
Reconciliation Tables Mix Shift ($ in millions) Full Year TTM 2012(1) Q1 2023 Advice & Wealth Management pretax adjusted operating earnings $ 434 $ 2,445 Less: Unlocking - - Pretax adjusted operating earnings excluding unlocking $ 434 $ 2,445 Asset Management pretax adjusted operating earnings $ 535
Slide 37: Reconciliation Tables
Reconciliation Tables Advice & Wealth Management net pretax adjusted operating margin ($ in millions) TTM Q1 2023 Adjusted operating total net revenues $ 8,684 Pretax adjusted operating earnings $ 2,445 Pretax adjusted operating margin 28.2% 37
Slide 38: Reconciliation Tables
Reconciliation Tables Asset Management net pretax adjusted operating margin ($ in millions) TTM Q1 2023 Adjusted operating total net revenues $3,288 Less: Distribution pass through revenues 748 Less: Subadvisory and other pass through revenues 365 Net adjusted operating revenues $2,175 Pretax adjust
Slide 39: Reconciliation Tables
Reconciliation Tables Adjusted operating return on equity ($ in millions) Twelve Months Ended March 31, 2023 Net income $ 2,741 (1) Less: Adjustments (266) Adjusted operating earnings $ 3,007 Less: Unlocking 107 Adjusted operating earnings excluding Unlocking $ 2,900 Total Ameriprise Financial, Inc.