Ameriprise Financial, Inc. · NYSE:AMP
Ameriprise Financial — Q1 2023 Earnings Presentation
37 slides from Ameriprise Financial's earnings presentation, Apr 25, 2023
Slide 1: Ameriprise Financial
Ameriprise Financial February 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 ~$21B 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 given growth in Wealth Management
Continued progress in shifting our business mix given growth in Wealth Management Pretax Adjusted Operating Earnings1 22% 44% 2012 2022 $1.7B 25% 57% $3.8B 21% 31% Advice & Wealth Management Asset Management Retirement & Protection Solutions 2022 as of 12-31-22. 6 1. Excludes Corporate & Other segme
Slide 7: Advice & Wealth Management is delivering sustained profitable growth
Advice & Wealth Management is delivering sustained profitable growth A longstanding leader in 10,269 financial planning and advice financial advisors (Top 5 branded) Excellent client $827K trailing 12-month satisfaction adjusted operating net revenue per advisor Continue to grow 90%+ fee-based Ameri
Slide 8: Recognized for our premium client experience and for managing our business responsibly
Recognized for our premium client experience and for managing our business responsibly One of Investor’s Business Daily Ameriprise has been recognized Most Trusted by J.D. Power for providing Wealth “An Outstanding Customer Management Service Experience” for phone Companies of support for advisors f
Slide 9: Attractive and fast-growing market
Attractive and fast-growing market Households Financial assets Financial assets (in millions) ($ in trillions) CAGR 2016 – 2022 $5M+ 2.0M $26.4 5.0% U.S. household financial assets $500k – $4.999M 14.8M $23.5 2.6% projected to grow 3 - 5% $100k – $499K 24.9M $6.6 0.3% annually going forward <$100K 8
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 • Over $18B sweep deposits shifted to date OPPORTUNITY a substantial • Strong growth in Pledge Lending with $587M in lo
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 2022 AWM 26% Regionals / 14% Independents Wirehouses 28% Data as of 12-31-22. 14 Source: Company filings. Regionals / Ind
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 43% 23% 4% $42.5 $827 $41.4 $796 $858 $674 $758 $732 $29.7 2020 2021 2022 2020 2021 2022
Slide 16: Wealth Management has strong underlying momentum and interest rate tailwinds
Wealth Management has strong underlying momentum and interest rate tailwinds to offset market dislocation Grow our client base and move further up market Advice and Wealth Management PTI ($ in millions) Increase advisor productivity $2,192 Deepen client relationships 18% CAGR Ameriprise Bank will dr
Slide 17: 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 ~$88B $ Strategically managing our client AUM1 books of business Strong returns Top 10 VUL insurance with a lower provid
Slide 18: 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 19: 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 $584B in AUM $ long-term mutual funds in the U.S.2 Strong institutional Top 10 retail ranking presence in the UK2 131 four-
Slide 20: 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 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 t
Slide 21: 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 22: 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 49% 68% 70% 89% 1 year 3 years 5 years 10 year 131 funds out of 261* earned an Overall Rating of 4 or 5 stars: - 42 funds received 5-
Slide 23: 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 24: Broad global distribution capability
Broad global distribution capability U.S. EMEA APAC 11 locations 15 locations 5 Locations • $245B U.S. Retail Product AUM • $64B EMEA Retail Product AUM • Retail and private bank / GSR (global strategic relationship) distribution • 5 focused intermediary sales channels: • Key countries / regions inc
Slide 25: 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 $13.8 Growing model business ($1.9) ($5.8) ($5.3) ($3.7) Growing Institutional distribution Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 momentum Oppo
Slide 26: Industry margins to be pressured moving forward
Industry margins to be pressured moving forward as the market remains challenged 42.8% 38.5% 36.5% 34.8% 34.3% 33.8% 32.8% Data as of 12-31-22. 26 Source: Company filings reported adjusted margin.
Slide 27: A 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 28: We have returned nearly $21 billion of capital to shareholders since 2012
We have returned nearly $21 billion of capital to shareholders since 2012 Capital Returned to Shareholders $ in billions $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 Dividends Share Repurchase 28 Data as of 12-31-22.
Slide 29: 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 21% 25% 2022 Continued 44% 2012 $3.8 Growth & $1.7 billion 57% Mix Shift billion 22% 31% Advice and Wealth Management Asset Management Retirement & Protection Solutions Data as
Slide 30: 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 31: Appendix
Appendix 31
Slide 32: 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 33: Reconciliation Tables
Reconciliation Tables Adjusted operating earnings per diluted share Per Diluted Share Full Year Full Year 2012 2022 Reported EPS $ 4.61 $ 22.51 Less: Impact of operating adjustments (0.96) (1.45) Adjusted operating EPS $ 5.57 $ 23.96 Less: Impact of annual unlocking/loss recognition (0.22) (1.18) Ad
Slide 34: Reconciliation Tables
Reconciliation Tables Mix Shift ($ in millions) Full Year Full Year 2012 2022 Advice & Wealth Management pretax adjusted operating earnings $ 434 $ 2,192 Less: Unlocking - - Pretax adjusted operating earnings excluding unlocking $ 434 $ 2,192 Asset Management pretax adjusted operating earnings $ 535
Slide 35: Reconciliation Tables
Reconciliation Tables Advice & Wealth Management net pretax adjusted operating margin ($ in millions) Full Year 2022 Adjusted operating total net revenues $ 8,461 Pretax adjusted operating earnings $ 2,192 Pretax adjusted operating margin 25.9% 35
Slide 36: Reconciliation Tables
Reconciliation Tables Asset Management net pretax adjusted operating margin ($ in millions) Full Year 2022 Adjusted operating total net revenues $ 3,506 Less: Distribution pass through revenues 787 Less: Subadvisory and other pass through revenues 374 Net adjusted operating revenues $ 2,345 Pretax a
Slide 37: Reconciliation Tables
Reconciliation Tables Adjusted operating return on equity ($ in millions) Twelve Months Ended December 31, 2022 Net income $ 2,559 Less: Adjustments (1) (165) Adjusted operating earnings $ 2,724 Less: Unlocking (134) Adjusted operating earnings excluding Unlocking $ 2,858 (2) Total Ameriprise Financ