Ameriprise Financial(AMP) - 2024 Q4 - Annual Report

Assets Under Management - As of December 31, 2024, the company had $1.5 trillion in assets under management, administration, and advisement, up from$1.4 trillion as of December 31, 2023[17]. - The Asset Management segment reported $681 billion in managed and advised assets as of December 31, 2024[26]. - The company’s investment management business has$645 billion in assets under management diversified across various geographies and strategies[29]. - Assets Under Management (AUM) increased by $89.7 billion, or 8$1.17 trillion as of December 31, 2024, compared to 1.08 trillion in 2023[256]. - Advice & Wealth Management AUM grew by 85.3 billion, or 18%, driven by market appreciation and wrap account net inflows[256]. - Total Assets Under Administration increased by $37.7 billion, or 13$317.2 billion as of December 31, 2024[256]. - Total Assets Under Advisement increased by $8.6 billion, or 34$34.0 billion as of December 31, 2024, due to market appreciation and net inflows[256]. Financial Performance - Net income for 2024 is projected to be $3,401 million, an increase from$2,556 million in 2023, representing a growth of approximately 33%[218]. - Adjusted operating earnings for 2024 are expected to reach $3,535 million, up from$3,111 million in 2023, indicating a growth of about 14%[219]. - Total revenues increased by $1.83 billion, or 11$17.93 billion for the year ended December 31, 2024, compared to $16.10 billion in 2023[257]. - Net income rose by$845 million, or 33%, to $3.40 billion for 2024, up from$2.56 billion in the previous year[257]. - The effective tax rate was 20.3% for 2024, a decrease from 21.0% in the prior year[268]. Revenue Sources - Revenues in the Asset Management segment are primarily driven by managed asset balances, which are influenced by market movements and net asset flows[26]. - Management and financial advice fees increased by $1.2 billion, or 14$207 million, or 7%, driven by market appreciation[294]. - Management and financial advice fees rose by $1.0 billion, or 18$6.492 billion in 2024, driven by a 21% increase in average advisory wrap account assets[281]. Employee Engagement and Culture - The company has a strong employee engagement score of 84%, exceeding external benchmarks, with 93% of employees participating in the engagement survey[57]. - The company has invested in a comprehensive modern learning platform for all employees to support their growth and career development[57]. - The company has established a strong values-driven culture, with 40% of its global workforce being women and 22% of U.S. employees being ethnically diverse[56]. Regulatory Environment - The company continues to face enhanced regulatory scrutiny, particularly regarding transparency and disclosure in advisor compensation and managing conflicts of interest[67]. - Ameriprise's asset management subsidiaries are registered with the SEC and must adhere to fiduciary duties, disclosure obligations, and operational restrictions[70]. - The company is subject to extensive financial regulation, including pre-approval for financial transactions by domiciliary regulators[79]. - The SEC's Regulation Best Interest standard became effective on June 30, 2020, impacting how financial advisors operate and comply with fiduciary duties[68]. - The company is subject to U.K. regulations, including the Financial Conduct Authority's new Consumer Duty, which sets higher standards for care provided to retail consumers[78]. Investment and Risk Management - The company utilizes reinsurance agreements to manage risks associated with its life and disability income products[38]. - The company ceded 50% of the risk on existing LTC policies to Genworth Financial, retaining the remaining risk[44]. - The company has pursued nationwide premium rate increases for long-term care (LTC) policies and expects to continue this strategy over the next several years[43]. Cash and Liquidity - As of December 31, 2024, Ameriprise Financial had $8.1 billion in cash and cash equivalents, up from$7.5 billion in 2023, indicating a year-over-year increase of approximately 8%[318]. - The company reported $856 million in cash, cash equivalents, and unencumbered liquid securities as of December 31, 2024, compared to$544 million in 2023, representing a significant increase of 57%[319]. - Ameriprise Financial's estimated liquidity available in a volatile economic environment was $2.1 billion as of December 31, 2024, which includes various sources of liquidity[319]. - The company believes that cash flows from operating activities and available cash balances will be sufficient to meet both short-term and long-term liquidity needs[323]. Market Conditions - The company operates in a historically low interest rate environment but has recently seen a substantial increase in rates, which may impact long-duration contract reserves and adjusted operating earnings after tax[210]. - The average Weighted Equity Index (WEI) increased by 23$3.233 billion in 2024 from 2.851 billion in 2023[270]. - Total revenues for the Retirement & Protection Solutions segment decreased by 5 million in 2024 compared to 2023[272]. - Net investment income in the Retirement & Protection Solutions segment increased by $222 million, or 26$1,080 million in 2024 compared to 2023[300]. - Corporate & Other segment pretax adjusted operating loss increased by $123 million, or 38%, for 2024 compared to the prior year, primarily due to lower net investment income[307].