Ameriprise Financial, Inc. Q4 FY2024 earnings call

• Ameriprise delivered a strong fourth quarter with assets under management, administration and advisement growing to $1.5 trillion, up 10%. Adjusted operating EPS increased 23% to $9.54 in the quarter.
• In Wealth Management, total client assets grew 14% to $1 trillion with strong client flows, wrap assets were up 18%, and revenue per adviser reached a new high.
• Asset Management generated strong financial results with assets under management and advisement at $681 billion, and nearly 70% of funds above the medium over one and three years.
• Retirement & Protection Solutions continued to drive strong sales growth with protection sales up 26% and variable annuity sales up 15%.
• Ameriprise returned $768 million to shareholders in the quarter and $2.8 billion in 2024, with ROE at best-in-class levels.

Wealth Management

• Total client assets grew 14% to an all-time high of $1 trillion with strong client flows of $11.3 billion. Wrap assets were up 18% to $574 billion. Wrap flows were $11.1 billion in the quarter with an 8% annualized flow rate. Revenue per adviser reached a new high of $1 million, up 13% from a year ago. Total cash balances, including third-party money market funds and brokered CDs, were $85.4 billion, which was over 8% of client assets.

Asset Management

• Assets under management and advisement was $681 billion. Nearly 70% of funds globally were above the medium across one-year and three-year time frames, and 80% or more of funds outperformed for the five-year and ten-year periods. Net inflows were $1.3 billion, with $6.1 billion in retail net inflows and $3.9 billion in institutional net outflows (excluding legacy insurance partner flows).

Retirement & Protection Solutions

• Pretax adjusted operating earnings in the quarter increased by 5% to $213 million, reaching $816 million for the full year. Protection sales were up 26% to $91 million primarily in higher-margin VUL products and variable annuity sales up 15% to $1.2 billion.

Corporate

• Long Term Care pre-tax adjusted operating earnings were $21 million in the quarter or $62 million for the full year (excluding unlocking). Results reflected higher closed claims and new premium rate increases.

• Expect more cash to be put to work and greater transactional activity as markets and rates normalize.
• Bank to continue to expand its product set with CDs, HELOCs and checking accounts.
• Asset Management to continue to broaden investment capabilities, including building out active ETF lineup and growing SMA and model delivery businesses.

• Forward-looking statements involve risks and uncertainties, including factors that could cause actual results to differ from forward-looking statements, as detailed in the fourth quarter 2024 earnings release, 2023 annual report to shareholders and 2023 10-K report.

Q: Suneet Kamath asked about the bank's NII being down sequentially and year-over-year and if 2025 NII would be above 2024.

A: Walter Berman responded that the bank repositioned its portfolio, grew its base, and adjusted the client crediting rate, positioning well for 2025 NII.

Q: Suneet Kamath asked about client cash being 8% of assets and if it would return to historical levels.

A: Jim Cracchiolo said money is starting to be redeployed, but rates are still higher than the last 10 years, and over time the cash position will come down.

Q: Brennan Hawken asked about NII stability at the bank and crediting rate adjustment.

A: Walter Berman said the bank adjusted the rate, is in a good position with 87% fixed in the bank, and will navigate 2025.

Q: Brennan Hawken asked about loan growth in the bank.

A: Jim Cracchiolo said they will launch fixed pledge later in Q1, HELOCs later in Q2, and add other products, with residential mortgage likely still leading.

Q: Unidentified Analyst asked about the firm's capital strategy and inorganic opportunities in AWM.

A: Jim Cracchiolo said they have consistent capital deployment through buybacks and dividends, are targeted in acquisitions focusing on appropriate advisers, and see opportunities in new channels.

Q: Michael Anagnostakis asked about organic flows and recruiting backlog.

A: Jim Cracchiolo said there's a pickup in flow, wrap business will continue, pipeline for recruits is good, and they're gaining traction with technology and client experience.

Q: Michael Anagnostakis asked about sweep cash January to date.

A: Walter Berman said it's been fairly stable from December endpoint.

Q: John Barnidge asked about Long Term Care earnings and Advice & Wealth Management's private asset product portfolio.

A: Walter Berman said Long Term Care has good fundamentals and trajectory, and Ameriprise has added a digital alternatives platform with private credit starting to grow.

Q: Wilma Burdis asked about Corporate costs and G&A in 2025.

A: Walter Berman said corporate expense is on a similar trajectory to 4Q, and G&A is managed well with investments in growth and efficiency.

Q: Ryan Krueger asked about wrap flow trends in January and AWM margin.

A: Jim Cracchiolo said January is hard to gauge, but things look consistent, and Walter Berman said AWM margin expectation is reasonable.

Q: Kenneth Lee asked about bank portfolio allocation and RPS run rate earnings.

A: Walter Berman said bank portfolio mix is stable, and RPS has solid fundamentals with good sales and liability base.

Q: Michael Cyprys asked about expense efficiency from AI and Generative AI.

A: Jim Cracchiolo said they've deployed intelligent automation and are using Generative AI in various use cases like helping advisers, client experience, and research capabilities.