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    AMP
    Earnings call· Jun 2025(Q2 FY25)

    AMERIPRISE FINANCIAL Q2 FY25 earnings call AMP

    Jul 24, 2025 Source

    Executive summary

    Ameriprise Financial Q2 FY25 — Record AUM/AUA and Strong Capital Returns

    Ameriprise Financial delivered solid Q2 FY25 results, marked by record assets under management and administration, strong adjusted EPS growth, and best-in-class return on equity. The company continues to invest in technology and adviser capabilities, driving productivity and client satisfaction. While Asset Management faced outflows and Wealth Management saw slower wrap inflows due to market volatility and seasonal factors, management remains committed to a high capital return strategy and strategic growth initiatives, including new bank products and active ETF launches.

    Highlights

    7

    • Assets under management, administration and advisement grew to a new high of $1.6 trillion.

    • Adjusted operating EPS increased 7% to $9.11.

    • Return on equity remains among the industry's best at a very strong 52%.

    • Wealth Management client assets grew 11% to a new record of $1.1 trillion.

    • Wealth Management productivity grew 11% to $1.1 million per adviser.

    • Asset Management margin was 39%, at the top end of their target range.

    • RPS pretax adjusted operating earnings increased 9% to $214 million.

    Concerns

    3

    • Asset Management experienced $8.7 billion of outflows, largely driven by higher institutional impacts and elevated retail redemptions.

    • Wealth Management wrap net inflows were $5.4 billion, slower than Q1, impacted by market uncertainty and seasonal tax payments.

    • Cash sweep balances declined to $27.4 billion from $28.6 billion QoQ due to seasonal tax payments.

    Guidance & targets

    3
    CategoryTargetConfidence
    Payout ratio
    85%
    high materiality
    High
    Wealth Management G&A expenses growth
    low to mid-single-digit growth
    medium materiality
    High
    Firm-wide G&A expenses
    maintain at current level
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Wealth Management
    Adjusted operating net revenues increased 6% to $2.8 billion. Revenue growth benefited from strong cumulative wrap net inflows and market appreciation over the past year, offsetting lower spread revenues and market impacts. Adjusted operating expenses increased 9%, with distribution expenses up 10% reflecting adviser productivity. Pretax adjusted operating earnings were $812 million. Margins remained best-in-class at 29%.
    Client assets: $1.1 trillion (up 11%)Total wrap assets: $615 billion (up 15%)Wrap net inflows: $5.4 billionClient net inflows (past year): $34 billionWrap flows (past year): $33 billionAnnualized wrap flow rate: 6%Revenue per adviser: $1.1 million (up 11%)Experienced advisers recruited: 73Cash sweep balances: $27.4 billion
    		$2.8 billion6%—29%
    Asset Management
    Financial results were solid in the quarter. Operating earnings increased 2% to $222 million, reflecting market appreciation and expense management, partially offset by net outflows. Adjusted operating expenses improved 3%, with G&A expenses improving 5%. Margins reached 39%, at the high end of the target range.
    Total assets under management and advisement: $690 billion (up 2% YoY, 5% sequentially)Fee rate: 46 basis points (stable)Outflows: $8.7 billionGross sales (Global Retail): up 10% YoYFunds above median (5-year): >70%Funds above median (10-year): >80%Funds rated 4 or 5 stars by Morningstar: 99
    		$830 million——39%
    Retirement & Protection Solutions
    Pretax adjusted operating earnings increased 9% to $214 million. The strong and consistent performance reflects benefits from favorable life claims, strong interest earnings, and higher equity markets. Sales were solid at $1.4 billion, with structured annuity sales remaining strong.
    Pretax adjusted operating earnings growth: 9%Sales: $1.4 billion
    		———$214 million

    Operational metrics

    32
    Adjusted operating EPS
    $9.11up 7%
    Q2 FY25

    with a strong margin of 27%

    Adjusted operating net revenues
    $4.3 billionincreased 4%
    Q2 FY25

    from asset growth and strong transactional activity

    Return on equity
    52%
    Q2 FY25

    among the industry's best

    G&A expenses
    improved 3%
    YTD FY25

    Year-to-date, from our ongoing firm-wide transformation initiatives

    Operating earnings returned to shareholders
    81%
    Q2 FY25

    of operating earnings

    Excess capital position
    $2.3 billion
    Q2 FY25

    above regulatory requirements

    Available liquidity
    $2.1 billion
    Q2 FY25

    available liquidity

    Total capital returned to shareholders
    $3 billion
    LTM

    over the last 12 months

    Total capital returned to shareholders
    $12 billion
    5 years

    over the past 5 years

    Revenue growth
    8%
    LTM

    over the last 12 months

    Adjusted EPS growth
    13%
    LTM

    over the last 12 months

    Return on equity improvement
    240 basis points
    LTM

    over the last 12 months

    Revenue growth
    8%
    5 years

    compounded annual growth over the past 5 years

    EPS growth
    17%
    5 years

    compounded annual growth over the past 5 years

    Return on equity improvement
    16 percentage points
    5 years

    over the past 5 years

    Pretax adjusted operating earnings
    $812 million
    Q2 FY25

    included the impact on wrap assets from the dip in equity markets in April

    Operating earnings
    $222 millionincreased 2%
    Q2 FY25

    reflected equity market appreciation and the positive impact from expense management actions, partially offset by the impact of net outflows

    Adviser recruiting offer
    125%
    Q2 FY25

    reported by a new source; company does not comment on specific reports but states it offers appropriate competitive packages

    Distribution expense ratio
    67%up 120 basis points year-on-year
    Q2 FY25

    getting to like high 60s, impacted by mark-to-market on advisory deferred comp

    Distribution expense ratio
    66%
    Q2 FY25

    staying fairly consistent within that point, subject to deferred comp movement

    Client satisfaction score
    4.9 out of 5
    Q2 FY25

    consistently earn

    Bank total assets growth
    6%
    Q2 FY25

    total assets were up 6%

    Structured annuity sales growth
    25%from Q1
    Q2 FY25

    nice pickup from the first quarter

    Funds above median (1-year, equity)
    slipped a bit
    1-year

    equity performance slipped a bit

    Funds above median (1-year, short-term fixed income)
    >80%
    1-year

    short-term fixed income performance is very strong

    Adviser gross production growth
    9%
    Q2 FY25

    what they get compensated on

    Core earnings growth
    low to mid-single-digit range
    Q2 FY25

    after absorbing the market impact in the quarter

    Cash earnings decline
    high single-digit decline
    Q2 FY25

    from the impact of the Fed funds effective rate reduction since the latter part of 2024

    Net investment income
    modest increase
    Q2 FY25

    continue to see a modest increase in net investment income in the bank this quarter

    Advisory wrap assets
    6% highervs Q2 average
    June 30, 2025

    positions us well as we enter the third quarter

    Net adviser count
    up
    Q2 FY25

    our net adviser count is actually up

    Suneet Kamath's assessment of growth drivers
    100% correct
    Q2 FY25

    The core growth of our business comes from the organic part of adding new business from our advisers, new clients, flows from current clients, et cetera.

    Product announcements

    7
    ProductTypeDetails
    Signature Wealthlaunch
    New CDlaunch
    HELOCs and checking accountsroadmap
    Active research enhanced index ETF lineupexpansion
    Series of active ETFslaunch
    CLOsexpansion
    Interval fundlaunch

    Risks & headwinds

    5
    Equity market volatility and uncertaintyQ2 FY25

    equity markets moved around quite a bit in the quarter; investors paused and kept more cash on the sidelines; slower flows in the second quarter

    Mitigation: strong balance sheet fundamentals; diversified business model; advisers staying closely connected with clients; investments in capabilities

    Seasonal tax paymentsQ2 FY25 (April)

    seasonal impact of client tax payments; slower flows in the second quarter; cash sweep balances were in line with expectations at $27.4 billion compared to $28.6 billion in the prior quarter, reflecting normal seasonal tax payments

    Mitigation: expected trend

    Tariffs and trade dynamicsongoing

    questions remain around the next steps and impact of tariffs

    Mitigation: ability to continue to manage and adjust for the environment

    Asset Management outflowsQ2 FY25

    $8.7 billion of outflows; largely driven by higher institutional impacts; higher underlying redemptions

    Mitigation: adding to active research enhanced index ETF lineup; extending capability in EMEA with active ETFs; adding more CLOs; earning key equity fixed income and hedge fund mandates; product development

    Competitive recruitment environmentQ2 FY25

    some irrationality in recruitment packages; some big checks that were a little irrational given

    Mitigation: increased the competitive packages; focused on selling our total value proposition; not just looking to associate anyone by giving them a big check

    What to watch in Q3 FY25

    5

    Wealth Management wrap net inflows

    Q3 FY25
    Current$5.4 billion in Q2 FY25
    Targetrecovery from Q2 slowdown

    Why it matters

    Indicates client engagement and market confidence, impacting AUM growth.

    Wrap net inflows were $5.4 billion and reflected the higher market uncertainty🌐 and seasonal impact of client tax payments and transactional activity was also good.

    Q&A highlights

    5

    Inquired about drivers of slower Q2 flows and if M&A activity is picking up.

    Jim Cracchiolo attributed slower Q2 flows to seasonal tax payments and "Liberation Day" (market pause), with recovery starting later in the quarter. He noted some lumpiness from large checks impacting outflows but expressed confidence in the core client base.

    “Yes. So really at the beginning part of the quarter between the combination of the tax payments, but also Liberation Day, the flows you had the tax payments out, but then the flows did not bounce back because of the Liberation and people a bit more on the sidelines.”

    asked by Steven Chubak · answered by Jim Cracchiolo

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Investments & Digital Transformation

    Ameriprise is implementing a significant investment agenda across client experience, technology, digital capabilities, advanced analytics, and AI. These investments are supported by consistent expense discipline and ongoing firm-wide transformation efforts, aiming to drive efficiency and enhance personalization for clients. The company's ability to manage and adjust for the environment is underpinned by these strategic priorities and continuous generation of good returns.

    02

    Wealth Management Client Engagement

    The company emphasizes its goal-based advice experience, reflected in high client satisfaction (4.9 out of 5). Intelligence dashboards and automation analytics are used to help advisers enhance client engagement, identify growth opportunities, and manage practices more efficiently. The launch of Signature Wealth in June further supports advisers in managing client assets holistically and focusing on practice growth.

    03

    Ameriprise Bank Expansion

    The bank is performing well with 6% asset growth and good loan growth driven by pledges. New products like CDs were launched in Q2, with HELOCs and checking accounts planned for release in coming months, expanding the product offering and minimizing the impact of Fed funds rate reductions on the AWM business. This strategy leverages Ameriprise Bank to support overall business objectives.

    04

    Asset Management Performance & Flows

    Asset Management delivered solid earnings and operational efficiencies, with AUM/AUA increasing to $690 billion. Investment performance remains strong long-term (70%+ funds above median over 5 years, 80%+ over 10 years). However, the quarter saw $8.7 billion in outflows, primarily from institutional impacts (including Lionstone) and higher retail redemptions, though gross sales increased 10% YoY. The company is expanding its active ETF lineup in the U.S. and EMEA to address flow dynamics.

    05

    Capital Return Strategy

    Ameriprise maintains a strong balance sheet with $2.3 billion in excess capital and $2.1 billion in available liquidity. The company generated 90% free cash flow and returned 81% of operating earnings to shareholders in Q2. Management plans to increase the payout ratio to 85% for the second half of the year, demonstrating a commitment to consistent capital returns and long-term shareholder value.

    06

    Adviser Productivity & Recruiting

    Adviser productivity grew 11% to $1.1 million per adviser. The company continues to attract experienced advisers, with 73 joining in the quarter, citing Ameriprise's brand, practice support, and financial strength. The recruiting pipeline is strong, and the firm focuses on selling its comprehensive value proposition rather than solely relying on aggressive recruitment packages, aiming for long-term growth and successful adviser integration.

    AI-generated summary of the company’s earnings call. Not investment advice.