Ameriprise Financial, Inc. · NYSE:AMP
Ameriprise Financial — Q3 2023 Earnings Presentation
39 slides from Ameriprise Financial's earnings presentation, Oct 26, 2023
Slide 1: Ameriprise Financial
Ameriprise Financial August 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 $1.3T Quintupled EPS ~90% ongoing ~$22B ret
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% 16% $4.1B 65% 31% Advice & Wealth Management Asset Management Retirement & Protection Solutions 2023 represents trailing 12-months through 6-30-23. 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 10,274 financial planning and advice financial advisors (Top 5 branded) Excellent client $874K trailing 12-month satisfaction adjusted operating net revenue per advisor Continue to grow Over 80% fee- Amerip
Slide 8: Recognized for our premium client experience
Recognized for our premium client experience and for managing our business responsibly Ameriprise recognized as Ameriprise has been recognized Ameriprise earned a 2023 #1 among wealth by J.D. Power for providing Hearts & Wallets Top managers in Kiplinger “An Outstanding Customer PerformerTM recognit
Slide 9: Attractive and fast-growing market
Attractive and fast-growing market Households Financial assets Financial assets (in millions) ($ 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: 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: Our Client Experience
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 • Almost $22 billion in assets with additional opportunity to grow organically by gathering deposits throug
Slide 14: Strong financial performance compared to peers
Strong financial performance compared to peers Ameriprise margin exceeds wirehouses, and remains notably above regionals and independents Adjusted Pretax Operating Margin 2023 AWM 30% Regionals / 18% Independents Wirehouses 27% Data represents trailing 12-months through 6-30-23. 14 Source: Company f
Slide 15: Wealth Management continues to deliver strong profitable organic growth
Wealth Management continues to deliver strong profitable organic growth Total Client Assets Total Client Flows TTM Revenue Per Advisor $ in billions $ in billions $ in thousands 9% 10% (3%) $45.2 $858 $874 $833 $41.4 $42.5 $827 $796 $758 2021 2022 2023 2021 2022 2023 2021 2022 2023 15 2023 represent
Slide 16: AWM client cash has returned to historic levels
AWM client cash has returned to historic levels • Earnings on client cash balances have increased substantially Client Cash Balances – Fee yields increased 347 bps from a year ago to 4.77% $ in billions – Client cash balances returned to normalized levels at approximately 5.0% of client assets $47.2
Slide 17: Wealth Management has delivered excellent growth across market cycles
Wealth Management has delivered excellent growth and financial performance across market cycles Grow our client base and move further up market Advice and Wealth Management PTI ($ in millions) Stable advisor force with increase advisor productivity $2,684 Deepen client relationships 19% CAGR Ameripr
Slide 18: Retirement & Protection Solutions: 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 ~$93B $ 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 global asset manager
We are a leading global asset manager with strong business performance amidst challenging market environment Global presence Net flow rate in line and capabilities with peers1 Top 15 $617B in AUM $ long-term mutual funds in the U.S.2 Strong institutional Top 10 retail ranking presence in the UK2 115
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: 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 63% 66% 76% 87% 1 year 3 years 5 years 10 year 115 funds out of 251* earned an Overall Rating of 4 or 5 stars: - 15 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 • $259B U.S. Retail Product AUM • $69B EMEA Retail Product AUM • Retail and private bank / GSR (global strategic relationship) distribution • 5 focused intermediary sales • Key countries / regions include: oper
Slide 26: Stable institutional flow trends while retail flows pressured
Stable institutional flow trends while industry dynamics pressure retail flows Retail Net Flows $ in billions Improved segmentation and targeting ($5.3) ($4.6) ($5.8) ($3.7) ($4.8) Growing model business Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Growing Institutional distribution momentum Instit
Slide 27: Industry margins to be pressured moving forward
Industry margins to be pressured moving forward as the market remains challenged 41.5% 35.1% 31.5% 31.3% 30.5% 30.0% 29.8% 27 Represents trailing 12-months through 6-30-23. 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 Sizeable growth in earnings and free cash $ in billions flow from Wealth Management $2.0 Significant operating leverage in Asset Growing contribution Management fromnormalize as ma
Slide 29: We have returned over $22 billion of capital to shareholders since 2012
We have returned over $22 billion of capital to shareholders since 2012 Capital Returned to Shareholders $ in billions $2.4 $2.4 $2.5 $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 throug
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 2012 Growth & 44% $1.7B 16% $4.1B Mix Shift 65% 31% Advice and Wealth Management Asset Management Retirement & Protection Solutions 2023 represents traili
Slide 31: Continue to meet and exceed client needs across our businesses
Continue to meet and exceed client needs across our businesses 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 growing client need for a
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 Kiplinger -- Kiplinger readers were invited to take the 2023 Readers' Choice Awards survey on Kiplinger.com from Feb. 28-March 31, 2023. Kiplinger received more than 2,600 total completed surveys — 725 of which answered the questions pertaining to the Wealth Management category. Responde
Slide 35: Reconciliation Tables
Reconciliation Tables Adjusted operating earnings per diluted share Per Diluted Share Full Year TTM 2012(1) 2023 Reported EPS $ 4.61 $ 27.27 Less: Impact of operating adjustments (0.96) (1.29) Adjusted operating EPS $ 5.57 $ 28.56 Less: Impact of annual unlocking/loss recognition (0.22) (0.97) Adjus
Slide 36: Reconciliation Tables
Reconciliation Tables Mix Shift ($ in millions) Full Year TTM 2012(1) Q2 2023 Advice & Wealth Management pretax adjusted operating earnings $ 434 $ 2,684 Less: Unlocking - - Pretax adjusted operating earnings excluding unlocking $ 434 $ 2,684 Asset Management pretax adjusted operating earnings $ 535
Slide 37: Reconciliation Tables
Reconciliation Tables Advice & Wealth Management net pretax adjusted operating margin ($ in millions) TTM Q2 2023 Adjusted operating total net revenues $ 8,971 Pretax adjusted operating earnings $ 2,684 Pretax adjusted operating margin 29.9% 37
Slide 38: Reconciliation Tables
Reconciliation Tables Asset Management net pretax adjusted operating margin ($ in millions) TTM Q2 2023 Adjusted operating total net revenues $3,215 Less: Distribution pass through revenues 731 Less: Subadvisory and other pass through revenues 369 Net adjusted operating revenues $2,115 Pretax adjust
Slide 39: Reconciliation Tables
Reconciliation Tables Adjusted operating return on equity ($ in millions) Twelve Months Ended June 30, 2023 Net income $ 3,017 (1) Less: Adjustments (143) Adjusted operating earnings $ 3,160 Less: Unlocking 107 Adjusted operating earnings excluding Unlocking $ 3,053 Total Ameriprise Financial, Inc.