Ameriprise Financial(AMP) - 2023 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Ameriprise reported strong third quarter earnings with adjusted operating net revenue growing 10% to $3.9 billion and earnings up 18%, with EPS increasing by 24% [6][19] - Assets under management and administration reached $1.2 trillion, up 12% year-over-year [6][19] - Return on equity was 49.9%, compared to 48% a year ago, indicating strong financial performance [7] Business Line Data and Key Metrics Changes - Wealth Management client assets increased 15% to $816 billion, driven by strong client net flows of $8.9 billion and market appreciation [7][22] - Retirement and Protection solutions saw life and health sales increase by 22%, with variable annuity sales growing 18% [12][28] - Asset Management total assets under management increased 7% to $587 billion, despite facing net outflows [14][26] Market Data and Key Metrics Changes - Economic growth in the U.S. remains stable, but consumer sentiment is declining, leading to potential soft economic growth in the future [6] - Equity markets were up year-over-year but down slightly in the quarter, with many investors holding higher levels of cash [6][19] Company Strategy and Development Direction - The company is focused on leveraging its complementary businesses to drive growth and maintain strong financial results [17] - Ameriprise is examining its entire expense base to prepare for potential economic slowdowns in 2024 [17] - The re-entry into the banking business is seen as beneficial, with plans to launch new products to attract client cash from other institutions [8][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining client flow rates despite a slight moderation in growth [34] - The company is optimistic about the potential for cash redeployment into investment products as market conditions stabilize [53] - Management acknowledged the challenges in the asset management space but highlighted strong investment performance and margin resilience [14][27] Other Important Information - The company returned $663 million to shareholders, representing 81% of operating earnings, showcasing strong capital return capabilities [20] - Ameriprise's adviser productivity increased by 10% to a new high of $901,000 per adviser [10][22] Q&A Session Summary Question: Update on organic growth within wealth management - Management remains confident in sustaining mid-single-digit flow rates and sees opportunities for growth with the onboarding of Comerica [34][35] Question: Asset Management margins outlook - Management noted stable fee levels and is beginning expense tightening to maintain margins in the face of flow headwinds [36][37] Question: Update on recruiting and financial advisor headcount - Recruiting was slower in Q3 but showed signs of recovery in September, with a strong pipeline expected to support future growth [46] Question: Client cash balances and growth potential - Management indicated that cash balances have stabilized and there is room for growth in the bank products as market conditions improve [40][41] Question: Long-term care business risk management - Management expressed confidence in managing long-term care risks effectively and indicated a preference to retain the business unless a compelling offer arises [67][68]