Ameriprise’s Advice and Wealth Management Business saw its pretax operating earnings fall 14% to $83 million in the fourth quarter compared to the same period one year ago as a result of volatility that gripped the markets and increased investment in the unit, the firm said in its earnings release Wednesday.
That unit’s performance came amid an overall decline for Ameriprise Financial in net income from continuing operations in the fourth quarter to $240 million versus $306 million for the fourth quarter of 2010.
“Despite the impact of volatile markets and low interest rates on our revenues, we continued to make significant progress,” Ameriprise Chairman and Chief Executive Jim Cracchiolo said in a statement. “Our advisory business generated excellent results for the year, highlighted by record advisory productivity and accelerating success in our experienced advisor recruiting program.”
The Advice and Wealth Management unit saw its revenue growth slow to 1% as market volatility curbed asset growth.
Total retail client assets rose by 2% to $310 billion for the quarter. That includes $1.4 billion in wrap net inflows.
Clients increased cash balances, while transactional volumes declined during the quarter. Earnings from cash accounts also stayed low, the firm said.
Operating net revenue per advisor for the fourth quarter stayed the same compared to the fourth quarter of 2010 at $93,000, which the firm attributed to market volatility.
For the year, operating net revenue per advisor rose to $384,000, or by 12%, which Ameriprise credited to recruiting experienced advisors, retail net inflows and market appreciation.
Operating expenses rose 3% as Ameriprise increased its investment in advertising and technology for the unit. The company is currently installing a new brokerage technology platform. So far, 500 franchise advisors have converted to that platform. Ameriprise said it expects to have all of its advisors using that platform by the end of the year.
Lorie Konish writes for On Wall Street.