MINNEAPOLIS–(BUSINESS WIRE)–Ameriprise Financial, Inc. (NYSE: AMP):

Advice & Wealth Management pretax adjusted operating earnings increased 5 percent to $387 million with strength in client activity and improved equity markets that more than offset the significant decline in short term interest rates. Pretax adjusted operating margin of 22.6 percent remained strong.

Adjusted operating net revenues increased 8 percent to $1.7 billion, reflecting strong organic growth and equity market appreciation that more than offset headwinds from a decline in short term interest rates.

Expenses increased 9 percent reflecting strong business performance and higher activity levels that led to a 9 percent increase in distribution expenses. General and administrative expenses, excluding bank-related expenses, increased 6 percent and were in line with expectations as planned investments for future growth were partially offset by expense reengineering.

Total client assets increased 19 percent to $643 billion. Organic growth remains strong with $4.4 billion of wrap net inflows. Total wrap assets increased 26 percent to $318 billion. Client brokerage cash balances declined 8 percent to $25.4 billion as cash balances a year ago were at record highs due to market dislocation. On a sequential basis, client brokerage cash balances increased following a normal seasonal pattern.

Adjusted operating net revenue per advisor on a trailing 12-month basis increased 6 percent to $664,000. Total advisors were 9,871, demonstrating solid advisor retention and experienced advisor recruiting with 63 advisors moving their practices to Ameriprise in the quarter.

Asset Management pretax adjusted operating earnings were $178 million, up $25 million from the prior year period, reflecting equity market appreciation and strong performance fees, which more than offset the cumulative impact of net outflows. Fourth quarter net pretax adjusted operating margin was 36.2 percent.

Adjusted operating revenues improved 9 percent driven by market appreciation and performance fees, partially offset by the cumulative impact of net outflows.

Adjusted operating expenses increased 7 percent, which included higher distribution expenses. General and administrative expenses remain well managed and included higher performance fees and year-end compensation-related expense adjustments, which were partially offset by expense reengineering initiatives.

Net inflows in the quarter were $3.3 billion, an $8.0 billion improvement from the year ago quarter. This marks the third consecutive quarter of improved flows. Excluding former parent flows, net inflows were $4.2 billion. Global retail inflows were $5.1 billion, reflecting substantial improvement in North America and EMEA, as well as $5.7 billion of reinvested dividends. Global institutional outflows were $0.9 billion, down from $3.1 billion a year ago.

Annuities pretax adjusted operating earnings were $120 million, up 1 percent from the prior year.

Variable annuity pretax adjusted operating earnings decreased $2 million to $113 million reflecting lower interest rates and outflows that more than offset equity market appreciation. Variable annuity sales improved 9 percent year-over-year to $1.1 billion in the quarter.

Fixed annuity pretax adjusted operating earnings were $7 million, reflecting continued spread compression and lower account balances. Account balances declined 5 percent from limited new product sales and continued lapses.

Protection pretax adjusted operating earnings were $65 million compared to $67 million a year ago. Overall claims were within expected ranges. VUL/UL cash sales were $69 million, down 8 percent, primarily due to lower indexed universal life sales.

Corporate & Other pretax adjusted operating loss⁽¹⁾ was $103 million, up $56 million from the prior year, primarily due to low income housing impairments, severance expenses and the impact of share price appreciation on compensation expense.

Long Term Care pretax adjusted operating loss was $2 million.

Taxes

The adjusted operating effective tax rate in the quarter was 14.6 percent. For the full year, the adjusted operating effective tax rate was 16.0 percent.

(1) Excluding Long Term Care and Auto & Home

About Ameriprise Financial

At Ameriprise Financial, we have been helping people feel confident about their financial future for more than 125 years. With extensive advisory, asset management and insurance capabilities and a nationwide network of approximately 10,000 financial advisors, we have the strength and expertise to serve the full range of individual and institutional investors’ financial needs. For more information, or to find an Ameriprise financial advisor, visit ameriprise.com.

Ameriprise Financial Services, Inc. offers financial planning services, investments, insurance and annuity products. Columbia Funds are distributed by Columbia Management Investment Distributors, Inc., member FINRA and managed by Columbia Management Investment Advisers, LLC. Threadneedle International Limited is an SEC- and FCA-registered investment adviser affiliate of Columbia Management Investment Advisers, LLC based in the U.K. Auto and home insurance is underwritten by IDS Property Casualty Insurance Company, or in certain states, Ameriprise Insurance Company, both in De Pere, WI. RiverSource insurance and annuity products are issued by RiverSource Life Insurance Company, and in New York only by RiverSource Life Insurance Co. of New York, Albany, New York. Only RiverSource Life Insurance Co. of New York is authorized to sell insurance and annuity products in the state of New York. These companies are all part of Ameriprise Financial, Inc. CA License #0684538. RiverSource Distributors, Inc. (Distributor), Member FINRA.

Forward-Looking Statements

This news release contains forward-looking statements that reflect management’s plans, estimates and beliefs. Actual results could differ materially from those described in these forward-looking statements. Examples of such forward-looking statements include:

• statements of the company’s plans, intentions, positioning, expectations, objectives or goals, including those relating to asset flows, mass affluent and affluent client acquisition strategy, client retention and growth of our client base, financial advisor productivity, retention, recruiting and enrollments, the introduction, cessation, terms or pricing of new or existing products and services, acquisition integration, general and administrative costs, consolidated tax rate, return of capital to shareholders, and excess capital position and financial flexibility to capture additional growth opportunities;
• other statements about future economic performance, the performance of equity markets and interest rate variations and the economic performance of the United States and of global markets; and
• statements of assumptions underlying such statements.

The words “believe,” “expect,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely,” “forecast,” “on track,” “project” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from such statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. Management cautions readers to carefully consider the risks described in the “Risk Factors” discussion under Part 1, Item 1A of and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2018, and subsequent Quarterly Reports on Form 10-Q, available at ir.ameriprise.com. Management undertakes no obligation to update publicly or revise any forward-looking statements.

The financial results discussed in this news release represent past performance only, which may not be used to predict or project future results. The financial results and values presented in this news release and the below-referenced Statistical Supplement are based upon asset valuations that represent estimates as of the date of this news release and may be revised in the company’s Form 10-K for the year ended December 31, 2019. For information about Ameriprise Financial entities, please refer to the Fourth quarter 2019 Statistical Supplement available at ir.ameriprise.com and the tables that follow in this news release.

Ameriprise Financial announces financial and other information to investors through the company’s investor relations website at ir.ameriprise.com, as well as SEC filings, press releases, public conference calls and webcasts. Investors and others interested in the company are encouraged to visit the investor relations website from time to time, as information is updated and new information is posted. The website also allows users to sign up for automatic notifications in the event new materials are posted. The information found on the website is not incorporated by reference into this release or in any other report or document the company furnishes or files with the SEC.