Its journey began in 1894 as Investors Syndicate, which provided face-amount certificates to consumers. The company's significant growth milestones include its formation as a Delaware corporation in 1983, coinciding with American Express' acquisition of IDS Financial Services. In 2005, Ameriprise spun off from American Express to become an independent entity. Today, Ameriprise has over 10,000 financial advisors who offer a range of services, including financial planning, advice, cash management, banking products, and full-service brokerage services, primarily serving retail clients.
The company offers a diversified range of products and services through several key brands. The Ameriprise Financial brand serves as the enterprise brand and is also the name of the advisor network and various retail products and services. The Columbia Threadneedle and Columbia Threadneedle Investments brands represent the combined capabilities of Columbia Management Investment Advisers, its US-based entities, and Threadneedle, covering the company's global operations primarily through subsidiaries in the UK and Singapore. The RiverSource brand is used for annuity and protection products issued by RiverSource Life Insurance Company and RiverSource Life Insurance Co. of New York.
The Advice & Wealth Management segment serves as the primary growth engine for Ameriprise (85% of the firm’s revenue). It capitalizes on significant demographic and market trends, particularly in the US. With the ongoing retirement of baby boomers and the wealth-building efforts of younger generations, there is an increasing demand for financial advice and solutions. Ameriprise targets households with $500,000 to $5,000,000 in investable assets (88% of the US market), but also caters to clients outside this range. From 2016 to 2022, investable assets grew at an 8% CAGR, highlighting the expanding market opportunity.
The Global Asset Management segment operates under the Columbia Threadneedle Investments brand, offering a diverse range of investment capabilities to individual, institutional, and high-net-worth investors. In 2021, Ameriprise expanded this segment by acquiring BMO Global Asset Management's EMEA business, rebranding it under Columbia Threadneedle. The products are distributed through third parties, the advisor network, direct retail channels, and an institutional sales force. The asset management offerings address mature markets in the US and Europe while expanding into global and emerging markets.
Key acquisitions have played a crucial role in Ameriprise's growth strategy. Notable acquisitions include Threadneedle Asset Management Holdings, H&R Block Financial Advisors, J&W Seligman, Columbia Management, Emerging Global Advisors, Investment Professionals, Lionstone Partners, and BMO Financial Group’s European asset management business in 2021 for $2.6B.
The company employs multiple affiliation options to attract and retain advisors, aiming to serve a broader client base. The Ameriprise Franchise Group comprises full-service advisors operating as franchises. It includes full-service advisors employed directly by the firm and delivers client experiences remotely. Additionally, it consists of full-service advisors based in banks and credit unions, managing nearly $23 billion in assets and supporting organic growth through lending products. The company also boasts over 67,000 clients with Ameriprise Visa credit cards.
Wealth Management continues to deliver strong, profitable organic growth. Total Client Assets increased by 26% from $758 billion in 2022 to $954 billion in 2024. During the same period, Total Client Flows, which include new investments, withdrawals, and transfers, rose from $42.5 billion to $49.5 billion. Additionally, TTM Revenue Per Advisor, reflecting the total revenue generated by a financial advisor over the trailing twelve months, grew by 14%, from $827 billion in 2022 to $942 billion in 2024.
In 2023, Ameriprise Financial experienced significant growth across several key metrics. Assets under management and administration increased by 15% to $1.4 trillion, driven by record Total Wealth Management client flows of $53.3 billion, a 25% rise from higher-yielding cash products and wrap account growth. Ameriprise Bank and certificate assets grew by 28% to $36.8 billion. Excluding the non-cash impact of unlocking, adjusted operating financial results showed revenues up 8% to $15.4 billion, earnings rising 15% to $3.2 billion, and earnings per diluted share increasing by 21% to $29.58, with a return on equity of nearly 50%, one of the highest in the industry.
Net sales increased from $14.2 billion in 2022 to $15.3 billion in 2023, with EBTDA rising from $3.4 billion to $4.4 billion. Operating margin improved from 20.37% in 2017 to 25.58% in 2023, with a target of 27.23% by 2026, and net margin improved from 12.45% to 16.61%, aiming for 20% by 2026. The branch aims to maintain a margin target of 31% - 35%, currently below BlackRock (42.1%) and T. Rowe Price (36%) but above other such as Artisan Partners Asset Management (31.8%), Janus Henderson (31.5%), Franklin Templeton Investments (28.8%) and Invesco (27.6%).
Nearly $2 billion was allocated to share repurchases and $569 million to dividends in 2023, with an 8% increase in dividends marking the 19th increase since the spin-off in 2005. Over the past five years, the Ameriprise share count has been reduced by 25%, while the dividend increased by 50%, supported by generating 90% of free cash flow. In 2024, FCF was accounting for $4.5B where Advice and Wealth Management represented 65%, Asset Management 17% and Retirement & Protection Solutions 18%.
Ameriprise faces several risks, including downturns and volatility in various markets such as equity, fixed income, real estate, and alternatives like infrastructure and private equity. These fluctuations can adversely affect revenues and returns from asset management services, retail advisory accounts, variable annuity contracts, and banking products. A decline in investment performance compared to competitors could negatively impact revenues and profitability, as strong investment performance is crucial for retaining clients and attracting new sales. Additionally, research indicates that over 90% of advisors and fund managers struggle to outperform the market and ETFs (BlackRock, Vanguard, State Street, Invesco...), which have generally lower management fees and no performance fees, posing a significant threat to the company's financial performance.
The company has shown strong growth through strategic expansions and key acquisitions, focusing on wealth and asset management services. It capitalized on market opportunities within the affluent US household segment, boasting significant asset growth and a solid advisor network. However, potential risks include market volatility, competitive pressures from low-fee investment alternatives, and challenges in maintaining high investment performance. Despite these risks, Ameriprise's solid financial performance, strategic focus on high margins, and capital returns to shareholders position it well for future growth.