The operator welcomes participants to the Q1 2024 Earnings Call and introduces the speakers, Alicia Charity, Jim Cracchiolo, and Walter Berman. The presentation materials and website contain non-GAAP financial measures and forward-looking statements, which are subject to risks and uncertainties. The GAAP financial results for the first quarter are shown on Slide 3.

The company's adjusted operating results were reported, which management believes reflects the underlying performance of their core operations and facilitates trend analysis. The CEO discussed the company's good first quarter results, with revenue and earnings increasing. The company's assets under management also saw growth, driven by client net flows and equity market appreciation. The Wealth Management sector is focused on providing goal-based advice to more clients and ensuring a highly satisfied and referable experience. The CEO has spoken to advisors at the first quarter field conferences.

In the third paragraph, the author discusses the positive reception and growth of their client value proposition and support, resulting in a 19% increase in client assets. They also mention an increase in transactional activity and client inflows, particularly in structured products, brokerage, and fixed income. The bank is also performing well, with $22 billion in assets and good spread revenue. The Ameriprise advisor force is one of the largest in the industry, with high productivity and consistent growth rates. The company has also been successful in recruiting experienced advisors and is well-positioned to serve the growing demand for advice among mass affluent and affluent consumers, as well as younger investors.

The company has earned recognition for its top-performing advisors who prioritize client interests and utilize advanced technology. Their wealth management margins remain strong and they have seen an increase in sales in the Retirement and Protection sector, particularly in structured annuities and variable universal life products. These enhancements have contributed to consistent strong earnings and profitability in this area.

In the quarter, the company saw positive earnings in long-term care and asset management, with a 7% increase in total assets under management. The company also had strong investment performance, ranking in the top 10 in Barron's Best Fund Families and sixth in active engagement with issuers. While there were net outflows, there was improvement in gross sales in North America and EMEA, and the company is making efforts to drive more flows. Synergies and efficiency gains in asset management have also resulted in a 3% decrease in normalized G&A expenses.

The North America region is performing well in terms of asset management profitability, while EMEA has faced some challenges due to market conditions. The company is focused on leveraging global capabilities and managing expenses in order to achieve consistent results and invest for growth. Ameriprise has a strong track record of delivering excellent returns and earnings growth, as well as a differentiated level of shareholder return. The company has received external recognition for its talented team and will soon celebrate its 130th anniversary. The company remains dedicated to prioritizing its clients and investing in opportunities for growth.

Berman reports that EPS grew 16% to $8.39 and assets under management and administration increased by 15%, resulting in 11% revenue growth across all businesses. Expenses were tightly managed, with only a 2% increase in G&A expenses due to operational efficiency improvements. The company plans to maintain this discipline in 2024 and return 80% of operating earnings to shareholders. Wealth Management saw strong results with a 19% increase in client assets and a 20% increase in wrap assets due to net flows and market appreciation. Client flows in the quarter were down from the previous year due to higher net flows into third-party money market funds.

In the quarter, the company saw a 13% increase in adjusted operating net revenues due to growth in client assets and increased transactional activity. This led to a new high in revenue per advisor. Cash balances also reached a new high, but are expected to decrease as clients invest in other products in the future. Adjusted operating expenses increased 14%, but the company is maintaining expense discipline. The asset management sector saw a 7% increase in assets under management primarily from market appreciation, but also experienced net outflows.

The company's operating earnings increased by 25% in the quarter due to market appreciation and expense management. Adjusted operating expenses only increased by 2%, with a decrease in general and administrative expenses. The Retirement and Protection Solutions segment also saw growth in earnings and free cash flow, driven by strong market performance and higher interest rates. Ameriprise as a whole has a strong track record of growth and profitability, with revenue and earnings per share increasing over the past 12 months and 5 years.

The paragraph discusses the performance of a financial services company and its focus on profitable growth. It also mentions the company's strong balance sheet and ability to consistently return capital to shareholders. The company has a consistent capital return strategy and has returned $12 billion to shareholders in the past five years. The paragraph also mentions the company's experienced advisor recruiting and the competitive environment for FA recruiting. The company is focused on attracting high-quality recruits and believes the market is currently very competitive.

In paragraph 11, the speaker discusses the type of people they are focusing on, who want to build good practices and become more productive. In the follow-up question, the speaker asks about cash balances and the impact of taxes on the business. The speaker responds that there has been a small amount of money going out before taxes from sweep and some shifting from third-party money markets. The overall trend for the month is stable sweep. In a separate question, the speaker asks about the growth of net investment income in Wealth Management. The speaker responds that it will not be as high as the 30% seen in the current quarter, but they expect growth over the next year.

The speaker predicts that rates will stay the same and make a contribution to the company's assets under management. They expect the revenue to slow down in the future but remain profitable. The speaker also mentions their focus on cost savings and efficiency in the asset management and other business segments, not due to external pressure but as part of their ongoing efforts to reengineer and invest.

The company is investing in AI, data, analytics, and technology platforms in cybersecurity while also trying to improve efficiency in expenses. They cannot control market conditions, but this gives them flexibility. The number of experienced advisor recruits and their assets should be reported in the future. There is no pressure from clients to pass through short-term interest rate benefits. Acquisitions in the AWM space are being considered for scale.

The speaker is responding to a question about their company's approach to acquiring new firms. They prioritize finding firms that align with their values and can add value to their business. The next question is about the company's margins and the speaker explains that they saw an increase in core business activities in the first quarter and expect higher margins as more people invest in the markets.

The company has seen an increase in cash flow over the past year, which has resulted in more money being invested in money markets and brokered CDs. This has not provided as much margin as other investments, but the company expects this to change. They are evaluating the potential for long-term care risk transfer, and are also looking at increasing bank assets in 2024 through cash sweeps and organic growth.

The company is considering increasing the amount in their sweep account and earning interest on repositioned funds. They are also exploring potential opportunities for risk transfer and other strategic moves with RiverSource. However, they are confident in their current business performance and have a large range of solutions available. They will continue to evaluate opportunities for potential growth.

The analyst asks about expense management and G&A growth in the organization, and James Cracchiolo explains that there will be a reasonable amount of savings in 2024, but there will also be carryover and continued initiatives. The analyst also asks about recruiting and advisor loans, to which Walter Berman responds that loans have increased and will continue to do so, as the company remains competitive.

The speaker asks about the high distribution expenses and G&A growth in the Wealth Management segment. The CEO explains that the expenses were due to payroll taxes and higher transactional elements, and that they are staying within their target range of mid-single-digit growth. Another question is asked about the large amount of customer cash on the sidelines, and the CEO discusses steps they are taking to facilitate its movement into wrap accounts. Success in capturing this cash will depend on market conditions.

The speaker discusses the current market conditions, noting the recent strength in the equity market and the rise in interest rates. They believe there is an opportunity for investors to rotate back into fixed income and for money to flow back into the market. They also mention their lending solutions and plans to drive greater uptake among advisors and clients in the future.

In this paragraph, Walter S. Berman and James M. Cracchiolo discuss their plans for expanding their bank CD offerings and launching new mortgage capabilities and HELOCs. They also mention their existing pledge program and their goal of deepening relationships with clients. They mention a recent partnership with Comerica and their pipeline of potential partnerships, including some smaller deals and the potential for larger ones in the future.

During the first quarter, Comerica had about $2.5 billion in client cash sitting with them, which is expected to transition to Ameriprise sweep options in the second half. The company is uncertain about the impact this will have, but expects to have a better understanding by the end of the second quarter. There has been a slowdown in institutional asset management mandates, but the company believes this will pick up as the year progresses. Some severance costs in the first quarter may have affected flows, but there are no expectations for further impact.

During a conference call, Steven Chubak from Wolfe Research asked about the company's plans for excess capital deployment and potential M&A opportunities. James M. Cracchiolo, the operator, responded that they are currently focused on buying back stock and raising dividends, but are open to acquisitions if they provide value. They are also investing in organic growth, particularly in asset management and international property areas. They are not actively seeking acquisitions, but are open to opportunities that may arise.

The speaker is discussing the possibility of increasing the bank's payout ratio, but they currently feel that 80% is an appropriate level. They have the capacity to increase it, but they will evaluate it opportunistically and have gone up in the past. There are no further questions and the conference is now ending.

This summary was generated with AI and may contain some inaccuracies.