Ameriprise Wealth Unit Boost Profits 39%: Q1 Earnings

Average fees and commissions per advisor top $450,000, up 15% from a year ago

CEO Jim Cracchiolo of Ameriprise. CEO Jim Cracchiolo of Ameriprise.

Ameriprise Financial (AMP) beat earnings estimates and reported first-quarter net income of $401 million, or $2.01 per share, up 19% from $336 million, or $1.58, a year ago.

Operating net revenues increased 8% year over year to $2.8 billion, “driven by strong fee-based business growth from client net inflows and increased client activity, as well as market appreciation, which more than offset pressure from continued low interest rates,” according to the company.

“Our advisory and asset management businesses continue to drive our growth,” said Chairman and CEO Jim Cracchiolo, in a press release. “Clients committed record flows to fee-based wrap programs, and we’re steadily driving improvement in advisor productivity.”

The number of advisors in the group totals 9,704 — down 12 from the prior quarter and 73 from a year ago: 2,155 reps are employee advisors, while the remaining 7,549 are independent.

Strong Wealth Results

Pretax operating earnings from the Advice & Wealth Management and Asset Management units grew 36% to $364 million. Wealth management results expanded 39% to $181 million on sales of $1.15 billion, up 13% from a year ago.

Average annualized fees and commissions per advisor stood at $454,000, a jump of 15% from last year’s $395,000. Mutual fund wrap flows for the wealth group were $4.2 billion vs. $4.1 billion a year ago.

The unit’s pretax margin rose to 15.8% from 12.8% in the first quarter of 2013.

Asset-based activity jumped 18%, and transactional-based activity ticked up 6% in the period, CFO Walter Berman said on a call with equity analysts on Tuesday.

“Importantly our advisor force remains strong and retention and satisfaction rates remain high,” Berman said. “We continue to recruit, good productivity people and brought in another 76 experienced advisors in the first quarter.

The Asset Management group’s net outflows totaled $3.9 billion in Q1’14, down from outflows of $5.7 billion last year.  

In the quarter, the company returned $457 million to shareholders through share repurchases and dividends. 

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