Ameriprise Financial executives think recruiting great advisors is now the best way to add assets.
Competitors are expanding by buying asset managers, but Jim Cracchiolo, the Ameriprise CEO, today told a securities analyst during a conference call that the current environment increases the appeal of organic growth.
"The market is a little bit pricey," Cracchiolo said. "Private equity has bid things up."
Instead of buying asset managers, Ameriprise would prefer to focus on bringing in "advisors that have a good sort of perspective on how they want to do business," he said. "And we also try to grow the productivity across our channel."
He said Ameriprise is trying to attract the right kind of advisor by emphasizing an advice-based approach, working to improve the clients' experience and providing updated advisor support systems.
The company added 91 experienced advisors in the fourth quarter of 2024, and the total number of advisors increased 1%, to 10,427.
"And we feel good about our pipeline," Cracchiolo said. "It's a very competitive marketplace."
What it means: Advisor recruiting is already hot, and it may be about to get hotter.
Earnings: Ameriprise held the conference call to go over earnings for the fourth quarter.
The Minneapolis-based financial services company is reporting $1.1 billion in net income for the quarter on $4.5 billion in revenue, up from $377 million in net income on $4 billion in revenue for the fourth quarter of 2023.
Assets under management, administration and advisement increased 10%, year-over-year, to $1.5 trillion.
Revenue at the advice and wealth management unit climbed 16%, to $2.8 billion. Revenue related to advice and asset management rose 25%, to $1.8 billion, and fees for distributing annuities, insurance products, mutual funds and other products rose 13%, to $633 million.
Revenue per advisor increased 13%, to a little more than $1 million.
Results for the latest quarter include severance costs. Ameriprise did not say how many people received severance payments or how much it paid out in connection with employee departures.
Recruiting: The number of franchisee advisors held steady at 8,171, but the number of employee advisors increased 1% from year-earlier levels, to 2,256.
Retention of the employee advisors fell to 92%, from 92.5%, but franchisee advisor retention increased to 92.8%, from 92.5%.
Ameriprise is starting to use artificial intelligence systems to help its advisors find marketing opportunities in their existing book of business.
Annuities: At the Ameriprise unit that sells life insurance and annuities, strong sales of registered index-linked annuities helped to increase variable annuity sales 15%, to $1.2 billion.
Protection products: Sales of variable universal life insurance, disability insurance and related products increased 26%, to $91 million.
In the life insurance market, "the team continues to enhance how we do business, including with accelerated underwriting," Cracchiolo said.
Asset management: The company is "completing two years of transformational work," Cracchiolo said.
Ameriprise is especially interested in improving how it meets client needs in Europe, the Middle East and Africa.
"And you will continue to see us tightly manage expenses," Cracchiolo said.
James Cracchiolo. Credit: Ameriprise
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