AMP - Earnings call transcript Q4 2021 | Ameriprise Financial, Inc.

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Operator

Welcome to the Fourth Quarter 2021 Earnings Conference Call. My name is Sylvia, and I'll be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Alicia Charity. Alicia, you may begin.

Alicia Charity

good and Sylvia, you, morning. Thank Financial's Welcome earnings quarter to Ameriprise call. fourth

are call Chief Chairman with the Jim Financial me Berman, On Walter today Cracchiolo, and and Officer. CEO;

to their your Following be happy we'd questions. remarks, take

On earnings presentation a are our will Turning to Slide forward-looking materials you statements. our X, of available that on website. discussion see

respective we be of you into the insight in call, the to non-GAAP during and website. provide to hear references on can various operations. believe Reconciliation GAAP non-GAAP today's materials Specifically, will financial found numbers their measures, numbers which our company's

that Many trend to adjusted that, today performance with underlying the call operating these risks revise our it analysis. meaningful financial our the of XX-K the of On business which Some of in as be performance. only results, that can be events cause our at and the of XXXX to list Slide reflecting forward-looking could sample of forward-looking turn risks X, enhances publicly These understanding GAAP to to that, expectations of over make And annual more XXXX and fourth management release, statements actual and make found you our reflecting from different be earnings future number I'll speak XXXX our statements page of by that our the we uncertainties. see results. may top A operations report on factors on today's quarter. a comments report. core the on focus and this about and and will operating We the forward-looking adjusted forward-looking, statements. results for materially date no call overall Below or see statements Jim. and plans operating a obligation makes update you'll management management's our believes quarter fourth results shareholders facilitates involve

Jim Cracchiolo

well. Ameriprise I quarter completing quarter, delivered XXXX. thank an doing you're joining another in our exceptional hope and all for you fourth year strong morning, call. Good

We continue to execute well and produced results. record

navigate key reinforcing environment At driving in generate clients Importantly, Ameriprise advancing the we while initiatives organic and our returns. time, same shareholder growth, to profitable helped continued the the excellent our strong marketplace. position strategic

the the year terms In environment recovery, improved Europe, U.S. finished In continue the with continuing markets economy environment, equity U.S. its strong. but of to lag the the

to As we've raising short-term Fed seen, in causing the equity inflation greater rates, move higher markets. pressuring is the volatility on

the trillion. new up $XXX total last a quarter. Let's administration business BMO billion for In under asset $X.X new were management our client flows, over Total management acquisition move quarter, high XX% of we the to EMEA's a of in record. and reached $XX and the and from added highlights assets also year billion

strong and record ROE, XX%, per share XX%, by Turning sound quarter and billion, to ago. results. Revenues organic And a business adjusted to equity excluding growth our fourth was up XX.X% Earnings were unlocking up appreciation. XX% reflecting AOCI capital growth rose fueled I've market mentioned compared management. $X.X operating at and XX.X% a with year earnings robust

the with delivered full for year. consistent record are results results quarter fourth Our we the

up XX%. $XX.XX. XX%, to were share per revenues Earnings unlocking, earnings Excluding up XX% billion, with billion, $XX.X $X.X rose

from XX% investing earnings our continuing Solutions strongly of our We Protection businesses, higher & business. high-quality to the in now which while XXXX strategy, generate our execute year multiple continue to represent for operating returns Retirement adjusted our strong

investments closely and were to & robust active, our continue standout Management, client working quarter. and goals. strong Let's the achieve where acquisition. years. with was to Clients move is benefiting our to and Wealth solutions clients Advice asset from our This track generate a and advisers, number large their advice many high utilizing their over and It growth. flows comprehensive made to capabilities momentum are and a we've leading extensive we of Engagement is client digital activity, strategic

to driving management Client a of inflows up $XXX at activity total acquisition quarter, driven $XX.X were billion. over with volume assets to and to up net $XXX the $XX.X remained relationships. billion Client for billion. balances cash XX%, assets grew strong ramp Wrap record were last Transactional year inflows deepening under up solutions. product good a a range client client quarter, billion, X% by strong For client grew XX% another up billion. record XX% across $XX.X to nearly

over and regard last Ameriprise adviser. advisers their platform. the to Trusted being with of are XX deepen $XXX,XXX experienced This With top Our nearly prospects We joined in That one had they client-facing includes about serve grow. few value than able proposition X capabilities the The is satisfaction. productive us growth, technology, and financial number did up we we per advisers highly feel The recruiting, in practices rating Manager to another so and and highly clients strongly our prior who our Ameriprise reflected is proposition firms. with the to example we value of their recognition our their they X.X advisers why Helping it's in named XX% terrific, years. the strong acquire better Most and is consistently coaching training, of Wealth we're hundreds relationships, That's better of a XX% said an and them along clients of overall out and full ability receiving. also grow strength added at the engaged. advisers are tools client surveyed on to and grow advisers. driving adviser practices quarter. continuing and recruit suite advisers helping priority, build to run recently productive track provide integrated is fully productivity

latest family. showcasing and so they're national advertising we their called About. help that in clients week platform campaign conveys fact, our Worth we're with referring distinct feel their this we this a In It's that launched experience strength to confident Talking Advice how Ameriprise friends that

we $XX.X as positioned to in we nearly billion year billion to grew the feel quarter, assets ago. well $X.X from transition rate Total bank. environment. a the to up Turning rising And a

to from our especially strong our demand continue We lending pledge have products. solutions, loan

would an in addition deposits as wrap very XX.X%, that million, wealth we the up what our rates would Pretax and and interest benefit. at have bank, financials businesses margin sweep clearly the move which have to in points, $XXX compares We benefit XXX have well certificate rise. opportunity we through and industry. cash XX% metrics To our up at we basis where management, currently direct XXXX, was As a AWM, are was excellent. strong in income up there's

clients' Total while and completing business, new the drove in capabilities stay assets, acquired that complementary record. assets and added forward a XX% We strong Now a $XXX – where $XXX a significantly delivered I'll focused management business acquisition management asset to significant and turn year. to billion, asset we management under meeting our our increased our reach. on also billion expanding needs

able manager, we reinvestment had from XX% inflows foundational is net ratings elected tracked, earn periods. of Overall, broad time level peers of and on our of equity, top us to median of periods. a excellent. our We're That's a our of Lipper three, we multiple and of And from value funds relationship At focus were we well performance. is their clients in U.S. strategic over It's research, U.S. clients. above both This to the basis group consistently allocation time for asset to retail U.S. Global great performance billion. year-end, at that our we as dividends it generating when the them. strong can to a transfer As for BMO's on BMO $XX.X near compare realize significant start flows an over assets inflows billion, with fixed example clients. as five as an we and including institutional flows the which is business retail performed active well or net strategies. terrific the $XX.X XX-year to we This income strategies. with across we strong investment from asset-weighted were

terms with a fixed with the equities, significant after as our made and In increasing declined the outperforming line our average in flow were we've in recent rate income, share. quarters. bit results market and our industry progress industry In is consistent of good in

policy continent. flows As the you've had challenging. quarters. EMEA some inflows market remain experienced conditions we been volatility and about past pandemic. over improve there UK, has continued we given monetary to net outflows, concerns the on while the retail, In two And seen, In more the

over as global navigate across $X just equities, U.S. strategies period sales for our volatility, up a ahead strong asset we investment four retail, of heightened have two high-performing had this from of in last and that's billion Looking allocation. and XX we fixed ago. years of strategies lineup year, income

over to reinforce advisors have will successful that and We partner firms our driven execute with continue and results strategies multiple years. relationships strong our

institutional. global to Turning

by U.S. strongly $XX.X Excluding from mandate well partners, net were client legacy clients. inflows and billion wins as driven top-ups insurance transfers existing BMO as

of we have our feel Executing encouraged priority, EMEA teams good acquisition, in will about in BMO I'm top asset our We've the that how these made progress I through that wrap is our To years by drive place. growth. I we've Walter initial and the a tracking priorities integration recent numbers, our BMO over long-term management, together. months seen terms the the In to and and about take you in is and good now up further. feel business, progress we're

Retirement Moving Protection to Solutions. &

And and as XX% strong traditional environment. sales Protection, in doubled Variable an in structured the product were product XX% our by product in low up benefits. were were driven is results this strong driven with quarter. Our it our sales nearly living sales sales with product without appropriate VUL RAVA rate up annuity by

and in annuity the have been business, we know, you our we strategic As continued narrowed actions the quarter that offerings. within annuity as taking variable further

These by benefits, living XX% we on our sales part remaining past three represented of part living new a our products second will focus the represents all benefit end riders. very, small X, benefit sales our our stopped very of for our we business. of living which the discontinued year. rider, have the January of And three of effective riders of without XXXX, four As quarter of one

We balance continued We've moves discontinued product services, delivered & maintaining year excess one ended businesses Ameriprise terrific generate a over And higher results, ROEs other business, that’s a growth, lines. UL strong record Protection years sheet line, side, position. asset-light year, of and delivers And XXXX. we're strong capital in organic and while where returns insurance On the we're our Overall, positioned excellent products financial our Solution well similar businesses differentiated we're a flow, results. that steady superior with returning business in Retirement sheet the the free with two the many our significant capital position. our and XX%. Listen, highest excess balance in exceptionally a above financial consistent we and making for cash and lineup. driving to built across Ameriprise with

our executing our clients strategy, profitable on focused is growth. team our successful delivering close, to drive to So and continuing for

will then review detail, numbers questions. more your the Walter Now in and we’ll take

Walter Berman

We earnings Ameriprise growth you, Asset year and for with revenue, results now of levels record margin delivered delivered in Management adjusted the strong representing of on a quarter Wealth return Thank Jim. Asset to flows, and equity and our Ameriprise’s financial and in of earnings reached This and core strong We all Management businesses. favorably the the our businesses, compares year. XX% earnings pretax new earnings operating ago. quarter. expansion XX% Wealth total in across

Our we further profile. return perform continue risk as Retirement businesses and our Solutions well Protection to optimize

generate to our businesses. across flow We cash continue all robust free

year, the of ended quarter Our in billion excess sheet to year nearly $X a with returned and we our consistent XX% earnings target. And fundamentals We with the excellent. significant in adjusted position. capital balance shareholders the are for operating

Slide to Asset supplemented with AUMA. billion organic turn business, Asset the X. Wealth our and core businesses. which Let’s profitable $XXX on strategy added in BMO’s of acquisition strategy of our growth EMEA Management We In was delivered the quarter, our Management

and execution successful On quarter strategies client flows to Asset billion. a a that transfer institutional the nearly businesses. to year our billion we from to clients U.S. representing primarily additional flows in us. addition, $XX In BMO’s up $X.X Wealth were trillion and net assets reached Management up and basis, retail $XX add elected Overall, flows XX% of AUMA our to able in AUM of XXX%, full these growth each of were the was and

with XX%. points that see in turn profitable a year blended can up XX% operating $X.X of growth. of organic billion grew a and pretax Management basis to are up Asset Revenues ago. million, drove $XXX Let’s to earnings where delivering Slide XX.X%, XXX margin This X, you Wealth we from

Let’s beginning on segment turn Wealth Management with to performance, the X. Slide individual

in of the Our quarter, wrap organic markets strategy growth revenue billion up $XX.X to tools $XXX of client billion, technology per In to into led grow providing year. has assets exceptional to client a quarter, productivity $XXX,XXX adviser enable strong new billion, Organic up we best-in-class to deliver their Advisor record XX%. and including advisers reaching of prior continued the flows from high our results. the generated generated growth with force combined practices program. with growth, strong of $XX.X XX%

Turning to Slide X.

management revenue financial focus results more XX%. You doubling the transactional was continuation And and management, On differentiated growth the billion, while In to earnings, our over $XXX compensation past XX, our and can $X assets is driver from client in period. increase billion quarter well an has Page over of onto the see profitable activity as two higher in G&A over XX% excellent results by Adjusted up that than wealth can assets pretax grew levels net the total, billion robust of increased two Ameriprise of of adjusted cash wealth Flows fact same expenses by trends strong past discipline. performance-based additional in managed. up management the increased, earnings after on two sweep by expense levels. remain XX% activity-based productivity $XXX see years X% a sheet with showing offset Total to years. an largely Expenses wealth continue are operating XXXX. X% operating in $XX.X the bank the management. million. that over years, and a increased client is were for expenses supplemented see balance excellent moving flows, and billion you record client client grew past broad our a reached to engagement. revenues strong flows Bank transactional in markets XX% fueled we activities, advisor $X.X

into excellent interest quarter, result of revenue benefit will prior rates. move the the to our basis with short we margin proportional continue an was strong of increase pretax adjusted expense expenses In the a we in points from and manage we an expect As XXXX, without growth. environment, XXX light operating year from XX.X%,

Asset Let’s the quarter. excellent turn the supplemented we that acquisition Management by the was deliver to closing in BMO continue on growth XX, Slide where to of organic

$XX.X as of up $X transfer to EMEA, assets to BMO well institutional us demand billion from and clients breakage. in quarter U.S. retail $XX.X billion, were which BMO flows XX% Assets in assets up were the to from on strong Slide billion and BMO. margin a in a XX% was to the billion billion outflows results ago. XX%, strong quite are from of in as this deal-related net And about of $X.X the up billion you continuation last the year. a years. can XX, of was under couple acquired quarter, strong just over also On Closing included EMEA. $XXX at including inflows trends XX% see these of past from of year a at decision by U.S. $XXX $XX billion related quarter Net inflows AUM the This included

BMO leverage from is this management underlying The time margins under Management Asset with XX grew XX% trailing ago. in up the of flows the excluding XX% XX%, period. operating from billion, over and two $XX improved Assets months years significant

saw Additionally, press release our to our some we you enhancements made AUM that disclosure. in

of Specifically, across our the $XX demonstrate an part important assets various growing our we about to and billion BMO. business broadened additional from better point of for and our underlying alternative definition Alternatives with AUM are assets business strategies.

XX. to Turning Page

of for billion. $XX performance Adjusted Asset Management two that to asset our $X.X see business months. revenues The You XX% contributed operating EMEA trends about are management. growth million revenues excellent generating organic these increased financial BMO’s acquisition to and

benefit results. higher performance reflecting market and impact the of XX the was cumulative year, remains BMO growth from in our EMEA, appreciation fee over fees, rate EMEA very underlying BMO net the partially The which basis inflows the points, negative past higher strong fees. at Excluding of two XX%, by offset revenue in performance quarter benefit months

$XXX growth. expenses and with was expectations higher XX%, the performance EMEA demonstrates BMO, fees fees from elevated approximately Expenses and quarters prior at fee unwind in a well-managed from the performance well compensation. points. quarter. $XXX We and of This up XX.X% million expenses impact was remain million the adjusted managed were BMO fee year, BMO. with asset a for the by basis in delivered revenue the was pretax months million underlying BMO, up as including rate Excluding of earnings included two million, G&A last from excluding quarter, operating earnings our performance $XX which strength given XX in of $X our business. management line our contribution Pretax line margin

the in to margin a expect If the results decline full overall was quarter, adjusted percentage our had our BMO points. EMEA, to for in quarter X by approximately BMO Excluding X been XX.X%. we margin

the a BMO performance transaction and with our November are months synergies of With around expectations. Ameriprise and business in the closed under accretion includes integration fundamentals with couple BMO our financial the targets, umbrella, expectations This expenses. in line and

XX. a Page cash from up million, of generates Let’s business year Solutions with free performing risk earnings include The substantial Protection flow. & pretax turn a is well $XXX with that Retirement business to slightly adjusted blocks of operating ago. profile differentiated

to on risk lower profile our continue offerings. mix Jim our shifting business said, As optimizing to and risk we focus

life sales our December. with sales benefit in With to announcements product accelerating benefits secondary of quarter. full of shift caused annuity the variable our UL/LTC of without VA product. total XX% benefits, exit a recent with living the We’re uptick that guarantees announcements living at universal an for These leaving combo end and

XXXX, In less sales leading with VUL down mix a X% would we with in We both overall basis expected new account XX% values our XXX to another book sales. year. now, higher-margin past Now include for retirement This in in of represent of and sales had value than are driven continue. sales the benefits similar trend the living protection points products and riders. only by to protection expect benefit

move to balance the sheet let’s Now XX. on Slide

We Our following $X balance remain of holding billion fundamentals of of had capital end the at company quarter billion excellent. available the excess of sheet BMO. and $X.X liquidity the acquisition

diversified our differentiated capital Our effective well a us strong XXXX. shareholders. of portfolio and These to XX% high-quality remains in deliver consistent fundamentals was and return AA-rated allow level hedge program to positioned, investment

we nearly March consistent mentioned, shareholders. I target. This, to about continue to we an our good announced be questions. billion through XXXX, authorization $X with your used ability returned return As feel take to of we’ll shareholders XX, XXXX, and additional capital our to share XX% earnings repurchase to With that, in

Operator

you. Thank

We Jefferies. will from now first begin from question-and-answer comes [Operator the Instructions] question session. our Kamath Suneet And

Suneet Kamath

Hi, wanted on flow Jim, Good to thanks. U.S. start retail morning. I the picture.

past about of Or in little that’s fourth good bit inflows. where years, trends of you had do sort bucking here As to is that you view industry road a in anything the of a substantial? Do bump you’ve on there we need think you happening more the of run get couple in back terms what’s a the as quarter pretty track?

Jim Cracchiolo

assuming talking about flows. U.S. management asset I’m you’re that the

Suneet Kamath

correct. That’s

Jim Cracchiolo

Okay. Yes.

saw that income we flows the had we our was fourth quarter in the what industry. So fixed actually in some with consistent good

we the of is we right performance we average, there actually opportunity the funds stronger So the things forward the which as based able there that And gain and are know in share, which funds we’ve in been industry one some categories demand. like we’re of to do. the move on and we to want see the of with

volatility, et little little So slowed. that value a there’s occurred growth, the equities, fourth sales a quarter, that will rotation been I be more in positive. some think cetera, In

you the I saw in that industry. think

been of the number we line-up, average strong above at did good we we’ll But that of a the as a income as activity selling which temporarily two quarters. were as we’re driver sales we the sales lot has to performance versus funds good our for us. past. sales industry we We the got move very that dividend and previous We forward, to some it. line-up, total pretty wanted into actually Our that the we We in that the of reduction digest little is and be were fund. it a look about closed reviewing about had soft fund now in feel when what

there about continuation in we believe So the forward. and I that good move I feel what with the as that do line-up equities demand. will and we will be actually

Suneet Kamath

Walter you Okay. we’ve these guess when on That I up the sort past cost And market in makes sense. then guess, volatility, I periods expenses. savings. of for your had of one stepped

point. Just G&A you hearing on Can wondering give about as And if pressure your the us we’re inflation those overall? back well from people other thoughts that’s this in as to your relatedly, expense companies for coming office. from at play impacts and outlook then

Walter Berman

Sure.

markets So dropping it reduction expense a third-party did as obviously, correlated in compensation. to the with relates

So that’s happen. going to

to have relates it As developing, we strategies.

We’ve certainly not XXXX had to implementing. this been event We take in XXXX. have place

make to stay to and business. want still You we profitable track on in get invest sure growth the

engaging – we’re as a feel there some into that. but on looked comfortable situation. inflation We business, to it’s and our totally this at on plan. our been but strategy. So we we relates inflation, wages, the expenses as leveraged certainly, manageable have It’s it. it’s it address our And incorporated of good We’ll we is navigate, about

Suneet Kamath

G&A do for of like overall And have outlook an growth? you sort

Walter Berman

targeted excluding add-on because that’s range, was G&A be, of in our going again, from course, growth, BMO, to we felt standpoint. that

normally We’re mid-low digits. in

little at get But and would a feel that which is stage, some out, benefit could Fed we’re just the we again, from rates, on we from pointed going. year that. interest so this of anticipate this we comfortable standpoint, evaluating where market the And coming a as mitigate and

Suneet Kamath

Yes.

sure. For

thanks Okay, guys.

Walter Berman

welcome. You’re

Operator

Our next Sachs. Alex question from from Goldman comes Blostein

Brian Bailey

flows BMO behalf is we the This Bailey second Alex. on of wondering on Good maybe spend actually Brian I was quarter. for can a if the morning.

to more And a you assets you question. any assets think Are transfer? about I and So could said think perhaps electing was that then billion. clients second that $XX the U.S. transfer there

the there business. there? part that I Is said breakage that you’re you expecting EMEA there else think some of was deal-related the anything on

Jim Cracchiolo

billion quarter, more, I the think, come those expect in few a along in, lines. on something we first So BMO, do will

breakage the can the the from XX% to out see of a and around or we of as we probably billion said, breakage so. On quarter, is bit XX% started probably estimate $X.X fourth to in BMO we

Now that et LDI, was cetera. some of

So always plan level we we be will of there for have actually think mean – a that to breakage. I

we well. the that really putting did we’re as They However, and that our like pretty part did last assumption saw the we doing year, stayed to of of in it regard clients business makeup. what in

that really we’re disrupting But that. cetera, in that more So not important et cetera be areas, would way helpful. the are any investment to of et capabilities bear, for et some we’re cetera, trying to bring technology, also greater

will it’s mean we institutional so an And I experience, business.

So be to through up there processes. go they their review may for things that various have

but So the be breakage, the we we it we the we as Walter of assumed that’s mentioned on assumptions that in will at all that go as have look business through. will and But what reporting level generate.

Brian Bailey

Got it. Completely fair.

wealth maybe Okay. income. pretax particularly one And the impact just higher rates, for on management of the

you sheet give basis in peers also are XXX your the sort about on thinking to sensitivity. about to Is be any additional pretax then we how balance can points income sort of of have thinking moving incremental could cash you XXXX? about? And color of of some us there talked So that how much

Jim Cracchiolo

handle you can Walter, it.

Walter Berman

Sure.

Okay.

now the publish about in basically it. to search, most that’s affected XXX And then that. that’s range, right it. of look will sheet is keep we should has the increase, be have it benefits it, been – been the relates doing that again, will but think late. a competitor on mid-XX% off get But have in comparisons, balance the So we normal point you trend which we’ll we line that to at our basis as as from we subject majority range. And also That we as

So sort get. that’s we that would the math it of of

Brian Bailey

it. Got

you. Thank Okay.

Operator

Our next question comes KBW. from Ryan Krueger from

Ryan Krueger

still about And forward? Good targeted of million Can related the morning. you BMO timing synergies? is also, Hi. a good expected that expense going had $XX the assumption you talk originally

Walter Berman

should Okay. the assumption It’s of balance about you range still assumption should is occur and the The good in about XXXX yes. answer that and The beyond XX% is in in a good mostly assume Walter. XXXX.

Ryan Krueger

the the I we’ve been it’s then on affected of you year, in in can the and by from extent activity retail this? seen what the weeks but volatility increased you've perspective what year, it know seen client given to any And early Thanks. few still first may give have

Jim Cracchiolo

So, expectations the pretty cetera. Again, it's retail our to for et so weeks, clients in seemed as activity hold the has add well. far their forward allocate still on always disruption for we what where there appropriately funds But necessary, think go what be. portfolios opportunity the to may is first depends and few to up I

shifts But we so so for be would versus again, they people. feel may haven't So, into the with. may depends opportunity far, might this money an be some It be one that good. dramatic market I whether a people volatility seen on projection disruptive But that comfortable more out a there. will more a say, depends of probably it pullback on adjusted putting what have bit.

Ryan Krueger

you. Thank

Operator

Our next Autonomous Research. question comes from Erik from Bass

Erik Bass

business? And similar potential a think change does precursor it to you're and the guaranteed we Hi, also, this capital you does the a selling did amount on stop VA thank your to the Can talk announcement of should And block? to new annuities? to of retaining writing SGUL the signal the view with And in you. decision in-force about allocating fixed any materially policies? change what reinsurance of deal you

Jim Cracchiolo

Okay.

So that, part Walter side and of I'll have capital of the handle it. handle I'll

the clients this rewards both environment, products but the So and book economics for where will appropriate are far company fine-tune also overall. in as to we as the our risk think to we that of continue we return appropriate said, as the

the in has product we we certain continued for were for favor. RAVA so And the product the they're a came business shift our business. the the from more segment that of environment part back state – to guarantees very have people to to a actually of us before they And clientele the variable particularly in Those the was guarantees little is structured that into steady this are core structures living our in product. of base living of appropriate no side and give guarantees that way looking for feel a RAVA

and So, very that about we feel good away. the shift

the total year we to need rather In And providers side feel went business. that in shift. down our you same thing on started of guarantees. shelf those for our saw fact, the And as the to than there those other up an we provide guarantees. sales actually in last issue we are And don't insurance

of up products younger as life little the some or variable of and again, in the that the a emphasis years Dow our disability more were environment. core universal that, part business products have focused the of off get the turned a as on We we're products for rate These ago interest turn of more life-type are population. universal we actually we number on dial this putting the on

So, help about we are for very returns think risk good appropriate It's ones de-risk the the clients. it the They're company, good us feel for good the for products that. good as we tail future. does and And environment. well for any

how I'll the with So of handle with thinking I'll forward. And the about the idea let books capital. we're come back that, Walter going

Walter Berman

Jim. Thanks,

in will capital, come reduce. yes. it the will certainly in reduction obviously, stress But less this as And environment, you're selling real environment, of benefits on So a base situation.

did from modulate certainly we does a But sales. and stop lot a that that more. – it stress the situation So

Jim Cracchiolo

as in books we the some overall, of tried we for details of business. we quarter last good what have again, very So and provided the some of we to past, released as you actually the convey the well books, information to

various you've compared risk in very in at example. as industry what for low the is seen category to an VA books Our the

we that And manage to differentiation, this to as per books. just so to continues add these maintain se,

namely activity. Now there's start, in mainly we the capital for They've did been been moving requirements annuity account of our been type books the assets discounted in fixed people that They've greater as reinsurance, have looking, just like in want sold the unique been environment levels that or recently. we're deeply of general VAs.

managed; low very cash Our generators. books efficient, very flow very are strong risk, well capital very

cash that flow for sales the having more book evolves. are conversations. We're for provider have an in generate will and quality strategically a from earnings the it we there's of market interest a even So, the for perspective. or future And reviewing we in what as of

And would to continue the value both market, for there's and appropriate. strong shareholder appropriate economic will open discussions strategic we're or buyer creation be, we to if and monitor and as have have clients, very well that. a the us a But continue from flow. that might differentiated a opportunity, where to books, it very our say very as I we entertain for So, cash

Our the be the possibly Difficulty] might risk even which there or wouldn't significant. position on call that at be capital capital, that [Technical

feel we about So, good really it.

Erik Bass

I factoring the four-point entering three- the way could all on Appreciate BMO initially the kind to and Asset you. Is margins. of there. the one follow-up of if And think come time that right kind margin then ask smaller XXXX for this the low is from drag a to then baseline it, BMO and expense ex synergies just that to business on get over a Management of Thank details a mid-XX% through? kind about as would the

Jim Cracchiolo

way good pretty a that's of think looking at I it.

Erik Bass

Thank you.

Operator

from Hawken Brennan question comes from next UBS. Our

Brennan Hawken

taking color on where just you Good thanks you selling lot great that on to for of a question. I morning, with gave are in a wanted of process the start follow-up that my RiverSource.

you spoke October financial strategics well I as from the becoming the differentiated market. and in you far, both buyers receiving call. on experience, So appreciated the as profile risk so that guess bids received – that the to to your is spoke bids you

distribution and So do they in private equity interest be an that attractive be could cohort? consider component those your a that with your is the line that view wealth there And your the you or products to of have into channel? Are expectation? to there their buyers, distribution And align financial lower be for bids allow sold risk for with with in arrangement dialogue profile? could when idea

Jim Cracchiolo

Let start, me Walter really but have I respond.

type those someone players more we be if both something of whether looking of term, to and products. I exploring there annuity type perspective. books really from the like upon or So that one you all they of doing for for we've summertime. the was of if in want the you'll one I What there at them we bid for are best the for that. would a from books the didn't a are did want can see feel be to as do We to exploring generate to sell books that would them interest have some we of know is something they importantly, aspects, things. economic mentioned to the of is on we fixed business continue to don't best we strategically, client you really receive and build the to mentioned out look returns type having high current in October. the for economically quality, What and find the out transaction what put that, and is probably finalized for the did conversations in clients good be bids there, type longer probably But This opportunity. of out various the

and some this I at So And we look if good it there will see that market crystallizes, two strategically will think be two as to opportunities. equals five.

to the do want on proceeding. so anything that? way And Walter, say we're that's you

Walter Berman

has would that book that deals of of at I standpoint. the say, from look Yes. quality do from the given. certainly, as Jim been And distribution had – people the them recognize and standpoint, some to from yes, standpoint indicated, people

that variables of potpourri have discussions. gone whole a it's So into

Brennan Hawken

the cash we've for the Thanks quarter. what it. saw that in forward seen then and increase this is clearly, nice the we Then from an hawkishness the a in and bit that. when pace and Got think outlook the bank, market prior the about a so acceleration an And rate increase of curve. in

billion within accelerate annum to indicated? reinvestment $X the $X environment, the ability to to improving was in rates due the pace the of do have you ahead bank stand billion of deposits And at an per So previously you've pace that point? where the to the over this transfers acceleration bank

Walter Berman

Sure.

have as you looking with have with can certainly a increase especially it of this investments investment the at current and go certainly we XXX%. balance from the we way environment to the and balance on and – So amount into high-quality sheet plan and and – the the sheet transfer increase, get do ability, to we anticipated Fed

you'll you we be measure an though coming on lift because getting the the it also the So in have even have that's opportunity. But we'll balance situation capacity; sheet. now

of yes, we but get earnings the the is Fed you capacity, picking higher sheet the variable having up yield curve. coming answer of – side. So also But from have on now fund good balance the off

So all interesting it's be in evaluation an us going is point. for But certainly, to aspects. a positive it

Brennan Hawken

the color. for thanks Great,

Operator

Barnidge Our Sandler. from Piper John comes next question from

John Barnidge

strong they're financial about on much. your adviser X% very revenue versus trailing comment have really Could year-over-year. attractive, what being existing? back about versus can better advisers technology you a had about where you, question at talk new I And recruitment, talk up Thank you maybe average one, you for to coming? then

Jim Cracchiolo

a production averages you. of recruits our level, that we've consistent with quality given are from pretty the So the now

them of and list There's marketing, all that the also, we onboard Teams wirehouses So et And a $X all good. have of would from stuff. well it tools, to to in XX% of detailed say the we now, over. which the would support average did probably technology, of and are coming spectrum, of able come survey but so technology acquisition, use capabilities, the also average, it plus, or very asked XX% itself, mix client we areas, producers. technology XX% a combination in is thought, million-plus grow, branding, advisers, I the part have brought right cetera. production was that the we levels how of those of very put long we I questions was some recruits recruitment on our entire that strong. it a the of deepening, about large them, independents, capabilities were mix, very as But across give clearly, the

really from firms as from us wide joining firms. very people of range was good. So And good independent feel it a as well we

John Barnidge

you just Thank about it returning expenses question. you from you talk little same increase? discipline. how you increase at for out may out, expense deck, In prior says follow-up do the but time activity-based Thank going likely also be My the certain that people have you. a not to maybe Can expense that. bit more call activity-based

Jim Cracchiolo

Yes.

But rate. actual last So the And et invest even in to and we with continued cetera, the get to and – business. expense continued let with strongly et AI. better capabilities, analytics, with with year cetera, we Walter the technology, the I'll year with robotics the before,

of things across been firm. the doing a set. product We we've So number expanded our

that a we feel good what moving Yes, really so we And will to about been continue we've we doing. forward. have of do investments level

the there's fashion. base the we now not. the to expense We're very like and some able of we manage know travel wages. be, what meetings not, will workforce enhance if way, what's compression come through example, reduces what's an to and a will we'll around think But of of managing modulate sessions You working doing come will inflation the as activities capable of to that that down level less look we against things does activities. T&E be the support versus have in in the evolve we lot expense we than year, we involve, digital a and that continue some bit, like some to we that investment offset we to that. it. expense that cybersecurity, with necessary the well hybrid, do little that If back or the that and feel this feel will from that we But be markets digitally a what of But have. We in a And feel similar travel. always needs is growth have to keep we video do last see up and also sort help did of of might capabilities group that. what Maybe various face-to-face manage very revenue level the year

okay but a it yes, will we expense in, have to think picture. reasonable be able modulate So some and back come that, of we'll

John Barnidge

Thank you very much.

Operator

from Our comes from Steven Wolfe next Research. Chubak question

Steven Chubak

morning. good Hi,

RiverSource. related to you of just book. follow-up about question or asset? in of you the And from wanted I of questioning improved line the quality the attractiveness informing could start a speak rate of how inform or perceived or a impact just that's improving conversations? there given I with the the is some the interest So to community I off or the know around the was with talked hoping to could guys had the any how demand backdrop that sponsor rate backdrop, change

Walter Berman

Yes.

the of Walter. the Yes, would basically lot long-term own I'm that standpoint – the of the base. looking care. book. from you it's – and And So yes, a answer potential certainly, people's people standpoint attractiveness the our it's at certainly, go into then increase at is are of base people the certainly That as thinking.

Steven Chubak

Got it.

Okay. a into equity little deeper And my market dig bit for follow-up, sensitivity. your just wanted to I

the could mitigate that look of you I reflecting earlier, some allocation engagement business the of increased as importantly, of static cash market XX% more it's You their hoping a know I to the correction. a great analysis. a the you retail was terms pressures, in speak increased and some alluded disclosure, portfolio. to to investors bit impact in to could those of natural relatively both provide that derisk that hedges

Walter Berman

Fed businesses the increase accounts box certainly look asset window us on have will curve. of equity causing rates back rep in certainly interest and leverage increased are yield these I the that listen, potential at year, what's on surge Obviously, certainly and on will you give because it, management, and Yes. if think, impact. This an

course, that's But said But So shifting expenses, the see or rates adjust it. sweep the within And yes, cash aspect ability it. then, our as certainly. previously in that that beneficial and will as increases Jim our Fed as is done. of – into that the has would that offsetting other we would to area the be far people

Steven Chubak

for taking much very thanks questions. Walter my

Walter Berman

welcome. are You Thank you.

Operator

comes question Gallagher from from Evercore. next Tom Our

Tom Gallagher

morning. Good

understand the $XX that what's clients? on I little works in have the that hands more Meaning assets. behind first And what the their you ownership the points explanation how here. the scenes on billion had at point? on of economics alternative are I there? want BMO? BMO they guess with the believe question the just asset get sure for of Just U.S. come these Ameriprise basis billion How is Thanks. why XQ. money transferred. that to going U.S. you much sharing of a change or of bit almost the you this assets, that are I to you like a fee moving think for And an business to you Did of a might XX couple close economics make I management

Jim Cracchiolo

well. In So what areas, funds over made really institutional clients some the it there is the move And accounts. retail are these retail boards made fund that as mutual to were and is, decision CTI. themselves have that both choice The to adopted. mutual

had clients very I'll type had good to ones that. great so handle for not and the did of revenue over. move investment the some feel be as that let capabilities as the we arrangement, far theirs as of as you a And appropriate or very assuming for that didn't And that and But good well would choice. were we lineup, clients There over Walter, that good other we assets move activities feel for us.

Walter Berman

Yes.

on us. So that. with us. approximate capabilities there and They've signed feel of profitable I intent. taking care the XX we obviously, said, it's And certainly you're that good right be And think, we economically in range on to revenue. comfortable certainly for But standpoint is Jim as points basis really on But that that it's we're provide.

Jim Cracchiolo

what do Yes. driven mainly an to wind And in [indiscernible] to, that down, current cetera. offset they their was had by that for et so to activities business

both for appropriate very was it feel we So parties.

Tom Gallagher

Okay.

the revenue the XX-XX? Okay. Or Thanks. of And share you are majority fee? keeping of the is

Jim Cracchiolo

don't to certainly, reasonable. I I get good I'm think, transaction. But I want – asking, the It's think into certainly it a terms. it's is

Tom Gallagher

out. that, thing timing the whole follow-up guess, a full comprehensive Based process. And going with Is you the heard on assuming process I XXXX you're on from just Life pretty by a for describe, this what and a it's of business. process probably Retirement fair just to play is I've this I'm like what the year then take to standpoint? sounds doing And for, and whole Okay. it that

Jim Cracchiolo

over doing regard our business you the explain first of cetera. investors, as would What evaluating analysts retirement, as tried good is take very my Board. I to we that, you is thorough a activities and decades, solid their actually books spoke this the there for business. business I solutions analysts, who cetera. to to What we planning books all investors all that what We're listened many built et business, clients, and of their to consistent against business. my about very these to love et the to very we've say a of Mostly analysis in

a to generate the don't returns. to with returns comfortable I generate free comfortable capital; excess a and with can the books. risk business XX% asset-light balance are so that. flow that see the how impact back are when you helps the the mean this ROE the We're And buy flow comfortable strong us very profile. you sheet with you and economic very And we just and which have very business. that, quite from we businesses free with cash like use those other good negatively with cash go the along stock, We're

where to a So get other it's get out risk their capital. needed they not they tail our in of a had They had issue. – needed to this rid that some invest others business, not to That's businesses. of long

certain dimension those in that. opportunities to it, structure, doing at a in this things very better manage and a someone for we we to something even, we like the their that haven't invested can make. lot that's So could someone with book. to care with investment what in that If sense have. that If do with types would appropriate. other they they're and capital if capabilities growing There's of the like is their have long-term they investments interested say, add this coming it do is If what or that open In or to they other quality there, want explore invest looking opportunities structure, we're values in a out to can wanted they're of we what short. can add business – we're

some will be So there to market a players strategic that money that's But There's is what we're lot think while. out interested. probably continuing it take exploring. Yes, a might I of the and there's evolve.

open something we'll very and we the will dialogue, feel If it's we explore is that not, We're very conversations. proceed. comfortable having we're it. So books. to there, maintaining If

Tom Gallagher

That's very helpful, Jim.

good like one if is most right pretty Just I I guess that prices investors books the in gotten have final that market follow-up, lower-quality I hear could. better than annuity bids, now were expecting. generally variable perception the

yet tested books. with quality not have the We market higher

fit Yours I much certainly would that the most lot measures of quality, ones bill. other out a than better there. on think, It's

level sense that. of concern you'll the the so same least at there would very on bids too is And even may the higher-quality the be for give that? we'll attractiveness books. Do is just have Or discussions whether you it not I of that you've any of be case appreciate and your you, to proper test the price tell? had book quality But guess say, early for value initial of

Jim Cracchiolo

any end quality So been the And or idea right of in what's we far. you're XXX% of look of at your the so out definitely the sort sold on there what's done would spectrum. be been

Now It's as the I money, think just as some strategic good to be might not at that, actually forming. want how people that what evolve yes, why et think think say conversations money be to said of their or a have there evolves having as But quality players it's more that differentiate. deep years little about over are account, start win-win. I variable a – accounts, an there is opportunities and do appetite we're having better But flows would as that people different. a get is But of having it's discount an put and or those That's not to believe and long-term marketplace appropriate in thinking the things cetera. there's as I general they people many the I I where could again, interest to work understanding believe well.

That's the for comes a would So good positive. that's see. I as that flow, of it. we'll what right If – I a will I day, negative. with that's think decision et tomorrow And next at along But returns, shareholders. feel said, more about looking that's not our we make our cetera, the say, you I but cash

Tom Gallagher

Great. lot. a Thanks

Operator

Credit next Our from Kligerman Andrew from Suisse. comes question

Andrew Kligerman

four pandemic, most What before in you. Hey, it above another happy billion record $X Question yet, wealth billion, investors flows and been the in where a would in. billion $X net wrap made have think somewhere ago, quarters I $XX.X the seeing around range. $X billion. just two advice for I thank And management, row years to

the So here? normal? the changed is, what's of question new this kind is And

Jim Cracchiolo

like So adviser. more say flows we we probably been feel our generate base to our would we are through do Andrew, have as able and client and

adviser up. Our has productivity picked

opportunities, focused capabilities them. actually we on are feel and at of appropriately. tools very of that adding and forward Our to management even technology advisers market can further use we've and AI I've strong good up We're in capabilities more with clients as relationship with that been get capabilities they the the the really then the even to in. very been that we well actually appropriately, giving we segments looking go as the deepen able move even to those We've book quite mentioned, relationships recruit and more

seeing. that of have has And that that the good feel flows we activity. up pick that to translated them you're a been helping we So level

Our as remote to the it some multiple and how bring looking focused higher for our retirement segment how long-term grow, – worth. We're even we've up income. starting category. longevity wrap through market work also we're been to a of do $X investing and the capabilities that. solution client the clients and acquisition in to as we the them – optimize And our million was further the our which in their in. integrated types net they returns we're to that product portfolios that up new is across and million moving move can for of clients generation and solutions, programs we We're strongly really the We're the develop the also for wanted for we developing money at on this year, on younger including digital $XXX

is that really to what grow So we've picture help flow in. that, good able result been advisors I do feel about will and the

bit year, Of markets environment. when yes, there's always little a said positive course, as helped last I a

of the that's base. So part

is So and of three I volatility But it ago the we've doing. whether much you I was ago two a down slow tell think been will can't than little things, of because activity other bit. that years base years stronger regarding and what

Andrew Kligerman

It tough? to XX% were the advisor Why happy? I the model in was helps is checking answer question is count that XXXX in the X%. And prior And they happy XXXX, not general kind in I the And it. look do is XXXX, somewhat XX%? X% could Got continue And low we're appear think was your business, you great. was digits? other mentioned think X% I my a going down very to be of with just my to count. Jim, in decline, it's question. X% grow I single you and that up in then in it secular Or – that X%. that then about at this advisors adviser with and technology. second to In flat be at grow down that XXXX in up XXXX. But up least very What looked the you year,

Jim Cracchiolo

that Well, happy. they had them weren't it all these across that What we dimensions. asked wasn't is

better, businesses. why them, capabilities grow that's them So all we grow brand, better them gave and satisfaction, a help clients client And the there XX%. better, whether those cetera, were get support things things, work help said et are all of asked above to I their things number that the above we them the with the

like And so that's an unbelievable.

nine times of out So that's XX.

provided. solutions in or good technology that they might the been but capability certain that things have activities or might good certain firms, those be might there certain been for Now have of

whole we to everything. that of you'll about of dimensions, tell lines. we continue like business, in other nine the – get be at not with find it's a do feel look when is I'd along would were as find And would so out I firms So if know to ability interested. going What our recruiting those best good very I I we're people don't – XX be you'll that say you think you across we I But bunch that pleased. in

to satisfaction doesn't really branded value as want an to I advisors. valued just productivity advisors. and are level adding – really well Now it more networks give matter value process X%, of mean have a a far or that and been And there is people, client what I'll out independent can growing at or up of good and to what the a And clients, doesn't X. a that their as strong advisors number replenish network productivity X.X client I grow cetera. quality don't people do good than in help it giving they branded that there adding I'll buying productivity me, we is, to matter to play continue business, them they My proposition. think can feel grow I is value how X%, it to in X%, XX,XXX really productivity We to game. across and is et support. someone that a and if company makes could want We very out do proposition on and that, got technology them I can bring I if we people, grow if their

So that's what we're focused really on.

Andrew Kligerman

Thanks. helpful. Very

Operator

time the gentlemen. Thank conference. you questions. and participating. concludes for today's ladies This all is have for Thank you, we This

Ameriprise Financial (AMP) 27 Jan 222021 Q4 Earnings call transcript