Ameriprise Financial's wealth management profits grew 33% year-over-year, even as the firm's advisor ranks thinned somewhat.

The firm's wealth management pretax profits rose to $212 million for the fourth quarter, from $160 million for the same period a year ago. For the year, the firm reported $792 million in profits, up 34% year-over-year.

"Ameriprise delivered another good quarter to complete a strong year, led by our Advice and Wealth Management business," said Jim Cracchiolo, chairman and chief executive officer, in a statement. "We're bringing in significant client net inflows, growing our assets under management and increasing advisor productivity."

'HEADCOUNT ADJUSTS'

While profits were up, advisor headcount was down. The number of employee advisors fell to 2,083 from 2,100 for the prior quarter, and from 2,205 for the year-ago period. The ranks of independent advisors grew year-over year, rising to 7,589 from 7,511. However, that figure was down by seven advisors compared to the prior quarter.

Retention rates were slightly down. For employee advisors, the figure fell to 91.2% for the quarter from 92% for the same period a year ago. For independent advisors, the rate dropped 94.5% from 94.7%.

In a conference call, Cracchiolo said that there was some consolidation in the independent advisor channel, as some advisors prepared for retirement by selling or transitioning their practices to other advisors.

"Part of our attrition is part of that activity going on. The assets don't leave, the clients don't leave, but the headcount adjusts," he said.

He added, "We also have assistants that advisors bring into their practice. Sometimes there is a higher rotation of those people just like we do in the employee channel."

Cracchiolo said that productivity remained strong across both channels, but especially among new hires.

"With the employee channel, we have much more productivity and we are bringing in people who have much higher productivity than the people who have left."

In a press release, the firm said recruiting remained strong as Ameriprise picked up 73 experienced advisors across both channels during the quarter. Productivity grew 13% year-over-year, rising to $496,000 in operating net revenue per advisor.

Total client assets for the firm's wealth management unit rose to $444 billion for the quarter from $409 billion for the year-ago period, a 9% increase.

Total revenues for wealth management grew 11% year-over-year, rising to $1.2 billion from $1.1 billion. Expenses grew at a slower rate, 7%, increasing to $1.03 billion from $967 million.

GROWING THE BOTTOM LINE

Wealth management has been contributing more to Ameriprise's bottom line. The Minneapolis-based company said its wealth and asset management division delivered a combined 68% of pretax earnings for the company, up from 59% a year ago.  

Overall, Ameriprise reported that profits surged 44% year-over-year, rising to $425 million from $296 million. This beat analysts' projections of $420.75 million.

Revenues grew 5%, increasing to $3.089 billion from $2.946 billion. This also beat analystsÂ’ estimates of $3.065 billion.

Expenses grew at a slower rate, 3%, climbing to $2.531 billion from $2.467 billion.

Earnings per diluted share rose to $2.22 per share from $1.46 per share.

 

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