Specialist
Former C-Suite at Ameriprise Financial Inc
Agenda
- Ameriprise Financial’s (NYSE: AMP) operating environment, including inflow vs outflow trends and drivers
- Competitive landscape for Ameriprise Financial’s wealth management division vs other large banks
- Opportunities for organic and inorganic opportunities in current macro environment
- Growth outlook for H2 2023 and beyond, noting trends in advisor acquisition and churn
Questions
1.
What are your thoughts on Ameriprise’s operating environment, pulling out 2-3 key trends or drivers to pay attention to?
2.
Cash balances have obviously been a huge tailwind for broker dealers over the past 24 months with the rising interest rate environment – Ameriprise’s management highlighted that 5.5% of total client assets out were cash balances. Where would you compare that to the long-term average? What’s your outlook for this?
3.
Looking at the advice and wealth management side of things, Ameriprise saw an 18% increase in net inflows in Q1 2023, which was close to an all-time high. What do you think the company is doing to drive this continued growth of net inflows?
4.
Is that 18% increase a sustainable growth rate in terms of net inflows? What’s your outlook for that?
5.
On the recruiting side, if there is an advisor that Ameriprise is interested in recruiting, what’s the company’s differentiating factor compared to competitors? What makes that advisor want to join Ameriprise?
6.
Looking at the tools and support as something that advisors would be interested in joining Ameriprise for, how much of a moat does the company have? You mentioned bringing on Salesforce, but any firm could hire Salesforce.
7.
What sort of advisor joins Ameriprise? How should we look at the growth rate that is usually achieved in terms of Ameriprise’s assistance? How quickly can the advisor grow?
8.
You mentioned that the average client age was 60s and close to retirement. Is that a slight headwind in terms of Ameriprise? Does the company skew older than competitors? How much of a headwind would you consider that?
9.
From the acquisition side, there is the franchise vs employee model. What are your thoughts on growth in each of those models?
10.
Revenue per advisor was highlighted at USD 847,000, which was a 5% YoY increase. What type of growth do you expect to see from this KPI?
11.
Ameriprise’s wealth management segment represented 66% of Q1 2023 earnings, which was up from 49% – that’s a big jump and a new record. Is that a strategic decision or a symptom of the environment?
12.
Management highlighted the Comerica Bank deal for the Ameriprise Financial Institutions Group. What are your thoughts on the growth opportunities for the Financial Institutions Group?
13.
You mentioned the retirement and protection side is being de-emphasised and indicated a bit of a tough environment for sales, but Ameriprise still saw 11% YoY earnings growth in Q1 2023. Do you think this is sustainable?
14.
Could any cost areas be improved for the protection side, or are they set in stone and there’s nothing to be done?
15.
What’s your assessment of the Comerica Bank deal with the Financial Institutions Group? How should we look at the TAM for the Financial Intuitions Group? How do you gauge the opportunity for growth? Is it akin to every potential bank in America? Would you do AUM [assets under management] in the wirehouse?
16.
How many of the small, regional-sized banks have already partnered with a player such as Ameriprise or LPL Financial? Is there a lot of room to go into this space, or do most already have a partner?
17.
How would players such as Ameriprise win a client away from someone else? Is it just a case of fees? How should we assess the competitive dynamic?
18.
For the asset management side, we discussed how there have been outflows for about eight out of the most recent 10 years. What can be done to stop those outflows or reverse this trend?
19.
One of the main storylines on the asset management side is Ameriprise’s acquisition of BMO Financial Group’s EMEA asset management business. Can you give me your thoughts on that? How’s the integration going? What synergies do you think can be achieved?
20.
Inorganic growth is obviously a trend in the asset management industry overall, and we’ve seen a lot of acquisitions. Do you think Ameriprise will continue to expand through acquisitions or is the company a bit tied up with the BMO integration?
21.
At Ameriprise overall, expenses were down in general and management highlighted slower performance fee compensation. Is that a symptom of the environment or is it a sustained lower-cost expense? How should we look at that?
22.
What is your growth outlook for Ameriprise over the next 3-5 years? What type of growth do you expect to see?
23.
What specific factors do you think Ameriprise needs to focus on to achieve or maintain the long-term growth you expect?
24.
What headwinds might Ameriprise face over the longer-term time horizon?
25.
Is there anything we didn’t discuss today that you feel is worth noting?
26.
You mentioned how the protection side is referenced every time you speak with analysts or during analyst calls. What do you think the investment community typically gets wrong about Ameriprise? What contrarian view do you have compared to the market consensus?
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