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Ameriprise Earnings Disappoint but Assets Under Management Grow

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Ameriprise Financial (AMP) reported a 2% drop in first-quarter earnings despite growth in its advice and wealth management operations. The company also increased its quarterly dividend to $0.67 a share from $0.58.

Net income fell to $393 million from $401 million in the first quarter of 2014, to $2.08 a share. Operating earnings per share rose 7% to $2.18. Analysts were expecting $2.33 a share.

Operating net revenues, however, rose 3% to $2.9 billion, but growth was partially offset by the negative impact of foreign exchange effects, a drop in net investment income and lower activity due to market volatility.

Total assets under management jumped 4% from a year ago to $815 billion, driven by net inflows from advisor clients, which grew 8% to $453 billion. Wrap account assets increased 13% to $180 billion.

“Retail client asset growth was strong from net inflows, new client acquisitions and experienced advisor recruiting,” CEO Jim Cracchiolo said in a statement. The company reported that 77 experienced advisors moved their practices to Ameriprise during the first quarter.

Among advisors, average yearly fees and commissions per capita rose 11% to $505,000 from $454,000 a year ago. Total advisor headcount as of the end of the first quarter, however, fell slightly to 9,691, down from 9,704 for the same period a year ago. That reflects a slight decline in retention of advisors in both the employee channel, which accounts for 22% of financial advisors, and in the franchisee channel, which comprises the rest, to 91% and 94.3%, respectively.

Ameriprise shares, which gained almost 1% in Wednesday’s trading ahead of the earnings report, gave back almost half those gains in after-hours trading following the earnings release. The stock rose by more than 1% by Thursday afternoon.

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