Ameriprise Financial, Inc. · NYSE:AMP
Ameriprise Financial — Q4 2023 Earnings Presentation
39 slides from Ameriprise Financial's earnings presentation, Jan 25, 2024
Slide 1: Ameriprise Financial
Ameriprise Financial November 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 Quintupled EPS ~90% ongoing ~$23B 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 given growth in Wealth Management
Continued progress in shifting our business mix given growth in Wealth Management Pretax Adjusted Operating Earnings1 18% 44% 2012 2023 $1.7B 25% $4.3B 16% 66% 31% Advice & Wealth Management Asset Management Retirement & Protection Solutions 2023 represents trailing 12-months through 9-30-23. 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 10,258 financial planning and advice financial advisors (Top 5 branded) Excellent client $901K trailing 12-month satisfaction adjusted operating net revenue per advisor Significant and Over 80% fee- sustain
Slide 8: Recognized for our premium client experience
Recognized for our premium client experience and for managing our business responsibly Ameriprise recognized as Ameriprise earned a 2023 #1 among wealth Hearts & Wallets Top managers in Kiplinger PerformerTM recognition Readers’ Choice Awards in “Understands me and 2023 shares my values” 96% of clie
Slide 9: Attractive and fast-growing market
Attractive and fast-growing market Households Financial assets Financial assets (in millions) ($ 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 deliver advice to our full client base
Through our Client Experience, we 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 your goa
Slide 12: Multiple affiliation options to attract and retain advisors
Multiple affiliation options to attract and retain advisors and serve more clients Ameriprise Ameriprise Ameriprise Ameriprise Financial Franchise Group Advisor Group Advisor Center Institutions Group AFFILIATION AFFILIATION AFFILIATION AFFILIATION Independent Employee Employee Employee DESCRIPTION
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 sheets Many wealth Ameriprise Bank, FSB managers generate OPPORTUNITY • Almost $22 billion in assets with additional opportunity to grow organically by gathering deposits throu
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 26% Data represents trailing 12-months through 9-30-23. 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 4% 13% (5%) $901 $858 $42.5 $43.0 $827 $41.4 $796 $816 $758 2021 2022 2023 2021 2022 2023 2021 2022 2023 15 2023 represent
Slide 16: AWM clients continue to allocate heavily to cash
AWM clients continue to allocate heavily to cash • Total cash balances, including money market funds and brokered Client Cash Balances CDs, reached $72.5 billion $ in billions • Up 17% from 2022 and 57% from 2021 $72.5 • A sizeable opportunity for future deployment $32.0 $62.1 • Cash sweep (includin
Slide 17: Wealth Management has delivered excellent growth across market cycles
Wealth Management has delivered excellent growth and financial performance across market cycles Grow our client base and move further up market Advice and Wealth Management PTI ($ in millions) Stable advisor force with increase advisor productivity $2,818 Deepen client relationships 19% CAGR Ameripr
Slide 18: Retirement & Protection Solutions: maintaining differentiated risk-return profile
Retirement & Protection Solutions: maintaining differentiated risk-return profile while supporting clients’ long-term needs Important solutions for our Confident Retirement® approach ~$89B $ Strategically managing our client AUM1 books of business Strong returns Top 10 VUL insurance with a lower pro
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 in-force business with client behavior that has been consistent focused on delivering client with expectations solutions through financial planni
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 $587B in AUM $ long-term mutual funds in the U.S.2 Strong institutional Top 10 retail ranking presence in the UK2 112
Slide 21: Our investment engine is a foundation for client success
Our investment engine is a foundation for client success 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 a commitment to d
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 performance
Our investment approach has delivered consistently competitive long-term investment performance over many years Asset-weighted performance Columbia Threadneedle funds 66% 67% 76% 87% 1 year 3 years 5 years 10 year 112 funds out of 249* earned an Overall Rating of 4 or 5 stars: - 26 funds received 5-
Slide 24: We have a broad set of investment capabilities and solutions
We have a broad set of investment capabilities and solutions to meet client needs Equities Fixed Income Global quality growth: large Regional & single country Investment grade credit US bank loans & small cap, EAFE, emerging Equity income High yield credit Social bonds markets ESG & sustainable equi
Slide 25: Broad global distribution capability
Broad global distribution capability U.S. EMEA APAC 11 locations 15 locations 5 Locations • $246B U.S. Retail Product AUM • $64B 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 industry dynamics pressure retail flows
Stable institutional flow trends while industry dynamics pressure retail flows Retail Net Flows $ in billions Improved segmentation and targeting ($3.7) ($3.8) ($5.3) ($4.6) ($4.8) Growing model business Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 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 41.6% 35.2% 31.4% 31.3% 29.9% 29.8% 29.2% 27 Represents trailing 12-months through 9-30-23. Adjusted operating margin for BLK, TROW, APAM, AMP, IVZ, JHG, 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 ~$23 billion of capital to shareholders since 2012
We have returned ~$23 billion of capital to shareholders since 2012 Capital Returned to Shareholders $ in billions $2.6 $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 through 9-
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 18% 25% 2023 Continued 2012 Growth & 44% $1.7B 16% $4.3B Mix Shift 66% 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 % Change Reported EPS $ 4.61 $ 25.89 Less: Impact of operating adjustments (0.96) (2.33) Adjusted operating EPS $ 5.57 $ 28.22 Less: Impact of annual unlocking (0.22) (0.71) Adjusted oper
Slide 36: Reconciliation Tables
Reconciliation Tables Mix Shift ($ in millions) Full Year TTM 2012(1) Q3 2023 Advice & Wealth Management pretax adjusted operating earnings $ 434 $ 2,818 Less: Unlocking - - Pretax adjusted operating earnings excluding unlocking $ 434 $ 2,818 Asset Management pretax adjusted operating earnings $ 535
Slide 37: Reconciliation Tables
Reconciliation Tables Advice & Wealth Management net pretax adjusted operating margin ($ in millions) TTM Q3 2023 Adjusted operating total net revenues $ 9,241 Pretax adjusted operating earnings $ 2,818 Pretax adjusted operating margin 30.5% 37
Slide 38: Reconciliation Tables
Reconciliation Tables Asset Management net pretax adjusted operating margin ($ in millions) TTM Q3 2023 Adjusted operating total net revenues $3,218 Less: Distribution pass through revenues 730 Less: Subadvisory and other pass through revenues 374 Net adjusted operating revenues $2,114 Pretax adjust
Slide 39: Reconciliation Tables
Reconciliation Tables Adjusted operating return on equity ($ in millions) Twelve Months Ended September 30, 2023 Net income $ 2,828 (1) Less: Adjustments (254) Adjusted operating earnings $ 3,082 Less: Unlocking (78) Adjusted operating earnings excluding Unlocking $ 3,160 Total Ameriprise Financial,