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Financial Planning > Charitable Giving

Ameriprise Dream Book A Surprise Marketing Hit

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Taking a cue from its former parent company — American Express — Ameriprise Financial is devoting a large chunk of its resources to marketing. In fact, it’s spending some $330 million on a national branding and ad campaign over a two-and-a-half year period — with ad firm Saatchi & Saatchi’s contract alone worth a reported $55 million.

“This is not rebranding,” says Mark Bradley, head of J. R. Scott, a unit of Esquire Staffing in Chicago. “They are creating a new brand driven by their focus on financial planning, not brokerage services.”

Front, right and center in this branding campaign is the Dream Book, a slick 30-page financial-planning tool designed to be “front and center” as advisors help clients achieve financial freedom, says Chief Marketing Officer Kim Sharan. “It has an overarching position in our financial-planning process.”

It’s also resonating well in the marketplace. This, say Amerprise executives and advisors, has come as a surprise and also drawn praise from industry observers. “The response to our [Dream Book] direct-mail and direct-response TV offer is the greatest response ever, compared with past American Express Financial Advisor campaigns,” Sharan says. “The volume is 10 times greater and has been much larger than anticipated.

Some 35 percent of Ameriprise clients queried by direct mail requested a copy of the Dream Book, according to a senior Ameriprise advisor.

This marketing success comes as Amerprise’s recruiting efforts are also gaining traction, says Brian Heath, president of the U.S. Advisor Group, which now includes some 10,500 FAs (12,000 if those with Securities America are included). These efforts came to a bit of a standstill when the spin off from American Express was announced last year, Heath says.

“But now the pipeline has accelerated. The first quarter of 2006 was one of our best recruiting quarters. We are identifying segments that find our value proposition compelling.”

The Dream Book, he adds, is making a big contribution. “We are all surprised at the incredible response rates. It’s exceeding all we’ve seen before.”

The concept has impressed some industry experts, such as Chip Roame of Tiburon Strategic Advisors in Tiburon, Calif. “It’s a great idea,” Roame says. “It plays better in Middle America than with the ultra high-net-worth crowd,” he notes. “If a client has $5 million in assets, they’ve already got their dreams.”

And while firms with a HNW focus, like Merrill Lynch, may not move to copy the Dream Book, other industry players might, according to Roame. He mentions H&R Block, Allstate, State Farm, Fidelity and Charles Schwab as among the firms that could use a Dream Book-like tool as they push to grow their Middle America business.

“Amerprise is targeting Middle America, the largest investor class in the county and the least appreciated — to the point of disdain at the top-tier brokerage firms,” explains Bradley. Plus, the Dream Book isn’t expensive to produce, giving it another advantage in the marketplace, he shares.

The Dream Book builds on recent research supported by Ameriprise and conducted by Age Wave of San Francisco and Harris Interactive of Rochester, N.Y. The study was based on interviews with 2,000 people age 40 to 75 and identifies five “emotional stages of retirement:” imagination, anticipation, liberation, reorientation and reconciliation.

The Dream Book, Sharan says, “encapsulates how to engage with clients.” And it gets into the specifics of not just saving a set amount per year, but saving an exact amount to pursue a highly defined goal. “This is a different conversation from those of the past.”

This emotional engagement is a big plus, according to Heath, who’s been with the company for 22 years. The industry, he points out, has tended to over-emphasize analytics in the financial-planning process. The Dream Book puts some balance back into the equation by focusing on the client’s goals and balance sheet.

Advisor Renee A. Hanson, CFP, of Hanson, Ayala, Schuler & Associates in Phoenix, agrees. “Financial planning is more than a science of numbers,” explains Hanson, who’s been with Ameriprise since 1997. “It involves completing a plan that is emotionally and financially balanced.”

Despite the ripple effect the Dream Book is having within the Ameriprise advisor and client community, the company has a number of performance issues left to tackle, some analysts say.

Bank of America equity analyst Tamara Kravec, for instance, recently upgraded her opinion of the company’s stock (to Neutral from Sell). But, she says, concerns remain about Ameriprise’s ability to execute its strategy and business model.

There’s much left to do at the company, Kravec explains in an equity research report: increase its market share in financial planning, target the mass affluent (“where the market is overcrowded and intensely competitive,” she says), build out its brand (“which is likely a multi-year undertaking”) and improve advisor productivity (“the advisors became fully vested in their compensation at year-end 2005″).

Ameriprise maintains that it has “always served mass-affluent clients and has sharpened its focus on this market over the past few years.” It defines this group, which includes those with $100,000 to $1 million in assets, as “underserved.”

As for its Ameriprise brand, the company is pleased with the 40 percent awareness it has achieved and expects “the momentum to continue in the brand’s second year.”

In March, Ameriprise shared the following achievements with investors: an 11 percent increase in the number of its mass-affluent clients; a 1 percent rise in the number of clients with a financial plan; and a 15 percent rise in total gross dealer concessions.

In Heath’s view, the Dream Book “is just the tip of the iceberg. It shows where the firm is going and that we’re on the right path… ,” he explains. “Our focus is executing well on the vision that’s been laid out.” Results in the last two quarters of ’06 should reflect the Dream Book’s impact, Heath adds, pointing out that nearly 75 percent of new assets come from clients who’ve paid to have a financial plan done for them.

For advisors like Hanson, the Dream Book’s potential is helping her to further solidify relations with existing clients and is having “a big impact with prospective clients,” she says.

And the key reason for the Dream Book’s success appears to be its ability to take a popular E.F. Hutton concept of the ’80s — “when E.F. Hutton talks, people listen” — and give it an entirely new spin.

“The Dream Book lets the client know that I am really listening to their goals,” Hanson concludes. What a difference two decades make.


A New Compensation Grid

Ameriprise has moved to simplify the payout grid for its 7,500 independent-contractor branded advisors or franchisees. The grid focuses on assets under management, insurance and gross dealer concessions.

“We are implementing a new advisor compensation structure that aligns with client and advisor needs,” says Brian Heath, president of the U.S. Advisor Group. We worked directly with advisors in its design, and we are confident it rewards results that are in the best interest of our clients, while benefiting advisors and the company.

“Importantly, the new compensation structure, which will take effect in 2007, aligns with our focus on serving the mass affluent through a financial-planning relationship,” Heath explains. “Additionally, the simplified measurement grid is reasonably aligned with the industry yet still rewarding our advisors for financial planning.”


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