Ameriprise Reports Healthy 3Q Profits as Advisor Force Shrinks

Ameriprise Financial now has less than 12,000 financial advisors nationwide

Ameriprise Financial reported net income on Wednesday of $344 million, or $1.32 per share, for the third quarter compared to $260 million, or $1.00 per share, for the third quarter of 2009. Analysts estimated that the firm would earn $1.08 per share in the quarter.

Operating net revenues were $2.4 billion in the third quarter of 2010, up 26% as a result of growth in asset-based fees driven by market appreciation, the acquisition of Columbia Management and retail net inflows.

"We generated record third-quarter earnings, driven largely by strong results in Advice & Wealth Management and Asset Management,” said Chairman and CEO Jim Cracchiolo in a statement. "We're growing our core client base, and our advisor force is strong and increasingly productive. The integration of Columbia Management is proceeding well, and we are beginning to realize the benefits of the acquisition.”

Revenues for the advice and wealth-management group were $946 million, up $832 million from last year.

Advisor Group

The company’s number of employee and independent advisors was 11,608 as of September 30 – a drop of 6% or 706 advisors – since last September, when it had 12,314. In the second quarter of 2010, Ameriprise had 11,684 advisors.

With the current headcount, Ameriprise Financial is slightly smaller than LPL Financial, which has some 12,020 advisors.

Ameriprise attributed the drop in advisors primarily "to the continued departure of low-producing advisors,” it said in a press release, adding that “advisor retention rates remained strong” at 77.8% for employee advisors and 93% for franchise advisors.

The company has some 2,200 employee advisors and 7,500 franchise advisors operating under the Ameriprise Financial banner. Its affiliate, Securities America, has close to 1,900 advisors.

The average revenue per advisor in the third quarter was $81,000 vs. $67,000 last year

Assets under management were $313 billion in the most-recent quarter vs. $287 billion a year ago.

Net inflows to the advisor wrap program were $1.8 billion.

Asset Management

The company’s asset-management segment reported that its managed assets increased 89% to $445 billion thanks to the acquisition of Columbia Management and the year-over-year appreciation in the S&P 500.

But in the most-recent quarter of 2010, this unit had $3.2 billion in net outflows, primarily in equity and sub-advisory portfolios.

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