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AMERIPRISE FINANCIAL INC (AMP)·Q4 2024 Earnings Summary

Executive Summary

  • Adjusted operating EPS was $9.54 excluding severance and share-based comp mark-to-market, up 23% YoY; GAAP diluted EPS was $10.58 vs $3.57 a year ago . Total net revenues were $4.501B, up 13% YoY and 2% QoQ, with pretax adjusted operating margin at 26.8% .
  • Advice & Wealth Management delivered pretax adjusted operating earnings of $823M with a 29.0% margin; wrap net inflows hit an all-time quarterly high of $11.1B (8% annualized) and total client assets reached ~$1.0T .
  • Asset Management grew adjusted operating net revenues 10% to $930M and expanded net pretax adjusted operating margin to 39.0%, aided by performance fees and transformation-driven expense discipline; total AUM/AUA net flows improved to +$1.3B .
  • Corporate returned $768M in Q4 via buybacks and dividends; dividend declared at $1.48 per share payable Feb 28, 2025 . Adjusted operating ROE ex-AOCI was 52.7% on a trailing basis .
  • Near-term catalysts: redeployment of elevated client cash ($85.4B) into advisory products, bank NII stabilization post positioning to ~87% fixed mix, and product launches (fixed pledge loans, HELOCs, checking) in 2025 .

What Went Well and What Went Wrong

What Went Well

  • Record advisory momentum: “Client inflows into fee-based investment advisory accounts grew to an all-time high” and wrap flows were $11.1B in Q4 (8% annualized flow rate) .
  • Margin expansion in Asset Management: pretax adjusted operating margin rose to 39.0% with continued performance fees and lower underlying G&A (ex performance comp) .
  • Capital returns and ROE: returned $768M in Q4 and $2.8B for FY’24; adjusted operating ROE ex-AOCI reached 52.7% .

What Went Wrong

  • Institutional flow headwinds: Asset Management saw $3.9B net outflows in institutional channels and $0.9B outflows from legacy insurance partners, partially offsetting retail/model delivery inflows .
  • Lower interest revenue headwind in AWM: revenue growth more than offset a >60 bps reduction in average Fed funds rate YoY, but net investment income in AWM declined 5% YoY in Q4 .
  • Elevated market risk benefits/claims in Protection: RPS booked $156M change in fair value of market risk benefits and $224M benefits/claims; LTC results reflected higher closed claims despite improved rate increases .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Total Net Revenues ($USD Millions)$4,220 $4,397 $4,501
GAAP Diluted EPS ($)$8.02 $5.00 $10.58
Adjusted Operating EPS ($)$8.53 $8.10 $9.36
Adjusted Operating EPS excl. items ($)$8.72 (ex severance) $9.02 (ex unlocking & severance) $9.54 (ex reg accrual, severance & MTM SBC)
Pretax Adjusted Operating Margin (%)26.8% 24.1% 26.8%
Adjusted Operating ROE ex-AOCI (%)48.9% 49.6% 51.6% (52.7% ex unlocking)

Segment performance

SegmentMetricQ4 2023Q3 2024Q4 2024
Advice & Wealth MgmtAdjusted Operating Net Revenues ($MM)$2,403 $2,742 $2,834
Advice & Wealth MgmtPretax Adjusted Operating Earnings ($MM)$698 $826 $823
Advice & Wealth MgmtPretax Adjusted Operating Margin (%)29.0% 30.1% 29.0%
Asset MgmtAdjusted Operating Net Revenues ($MM)$845 $882 $930
Asset MgmtPretax Adjusted Operating Earnings ($MM)$194 $245 $251
Asset MgmtNet Pretax Adjusted Operating Margin (%)32.4% 40.9% 39.0%
Retirement & Protection SolutionsAdjusted Operating Net Revenues ($MM)$918 $973 $960
Retirement & Protection SolutionsPretax Adjusted Operating Earnings ($MM)$202 $118 $213

KPIs and AUM/AUA

KPIQ2 2024Q3 2024Q4 2024
AWM Total Client Assets ($B)$972 $1,024 $1,029
Total Client Net Flows ($B)$6.6 $8.6 $11.3
Wrap Net Flows ($B)$7.5 $8.0 $11.1
AWM Cash Balances ($B)$40.6 $40.1 $41.6
Total Client Cash ($B)$81.9 $83.0 $85.4
Cash Sweep Balances ($B)~28.0 ~28.0 $29.8
Bank Assets ($B)$23.2 $23.2 $23.6
Asset Mgmt AUM/AUA ($B)$642 AUM $672 AUM $681 AUM/AUA
Asset Mgmt Total Net AUM & AUA Flows ($B)$(12.0) (incl legacy transfer) $(2.4) +$1.3
RPS Total Sales ($B)$1.5 $1.4 $1.4

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
AWM Pretax Adjusted Operating Margin2025 baselineNot explicitly guided; recent trend ~29–31%29% viewed as reasonable going forwardMaintained at ~29% post rate cuts
Corporate & Other Pretax Adjusted Operating Loss (ex Closed Blocks)H1 2025$85–$95MM per quarter range discussed previouslyExpect similar to Q4 2024 levels; less severance as tech cloud transformation costs dissipateLower than prior range; similar to Q4 ($106MM)
Bank Net Interest Income2025Analyst referenced prior CFO commentary expecting 2025 > 2024CFO reframed to “well positioned to sustain and continue NII,” after mix shift to ~87% fixed and crediting rate adjustmentsFrom “above” to “stable-to-improving” posture
Product roadmap (Bank)2025N/ALaunch fixed pledge loans (Q1), HELOCs (Q2), checking (later 2025)New products to support deposit/loan growth
DividendQ1 2025Prior $1.48$1.48 declared payable Feb 28, 2025Maintained
Operating Tax RateFY 2024 actualExpected 20–21% (Q3)20.8% Q4; 20.3% full year actualIn-line with prior expectation

Earnings Call Themes & Trends

TopicQ2 2024 (Older)Q3 2024 (Previous)Q4 2024 (Current)Trend
Advisory wrap flows$7.5B; 6% annualized; early signs of return to advisory $8.0B; 6% annualized $11.1B; 8% annualized; all-time high Improving
Client cash redeploymentTotal cash $81.9B; sweep stable Total cash $83.0B; sweep ~$28B Total cash $85.4B; sweep $29.8B; expectation for more redeployment over 2025 Gradual redeployment
Asset Mgmt transformationExpense discipline; margin 37.6% Margin 40.9%; improved outflows Margin 39.0%; net inflows +$1.3B; continued transformation benefits Structural improvement
Institutional flowsMixed; legacy partner transfer impacted Outflows improved to $(2.4)B $(3.9)B outflows; slower fundings; expected Lionstone outflows Lumpy headwind
Bank NII & mixNII up; 11% bank NII growth in AWM Positioning into rate cuts; sweep stable Repositioned to ~87% fixed; crediting rate adjusted; confident on sustaining NII Stabilizing
Long Term CareEarnings $12M; improved yields/claims $13M ex unlocking; improved trajectory $21M; higher closed claims; rate increases; $62M FY ex unlocking Improving but variable
AI/technologyOngoing investments; operating efficiencies Efficiency focus across segments Building out data and AI; early generative AI use cases; governance emphasized Expanding capabilities
Recruiting/advisersAdded 52 in Q2; revenue/advisor $968K TTM Added 71; revenue/advisor $997K TTM Added 91; revenue/advisor ~$1.037M TTM; high retention Strengthening

Management Commentary

  • CEO: “Ameriprise delivered a record year in 2024… Client inflows into fee-based investment advisory accounts grew to an all-time high… total client assets reached record levels… we invest in the business and return to shareholders at a differentiated rate.”
  • CEO on Asset Mgmt: “We’re completing 2 years of transformational work… improved efficiency… tightly manage expenses while investing in active ETFs, SMA and model delivery; assets under advisement now over $35B” .
  • CFO: “Adjusted operating EPS increased 23% to $9.54… consolidated margin of 27%… returned $768M (81% of operating earnings) in Q4; $2.8B (78%) for 2024; ROE best-in-class at 52.7%.”
  • CFO on AWM: “Pretax adjusted operating earnings increased 18% to $823M… more than offset the ~$20M impact from Fed funds rate cuts and portfolio repositioning; G&A $438M; margins remained strong at 29%.”
  • CEO on banking products: fixed pledge loans (later Q1), HELOCs (Q2), checking account later in 2025 to deepen engagement and support loan growth .

Q&A Highlights

  • Bank NII: CFO highlighted repositioning to ~87% fixed securities, crediting rate adjustments, deposit growth; expects to sustain and continue NII in 2025 despite rate reductions .
  • Client cash normalization: CEO expects gradual redeployment from elevated cash (8% of assets) back into advisory and fixed income products as rates normalize; not a dramatic shift .
  • Loan growth mix: CEO sees residential mortgages leading near-term, with expansion into pledge loans and HELOCs; deposit products (CDs, checking) to support bank growth .
  • Capital allocation/M&A: CEO favors organic growth and targeted, disciplined opportunities; sees PE driving wealth acquisition valuations up, thus less inclined to large inorganic deals currently .
  • Corporate/G&A trajectory: Corporate costs expected similar to Q4 early in 2025 with less severance as cloud migration costs fade; continued prudent G&A management across segments .

Estimates Context

  • S&P Global Wall Street consensus estimates were unavailable due to access limits during this session, so an EPS/revenue vs-consensus comparison cannot be provided. As a result, no beat/miss determination versus Street is included here. The company reported adjusted operating EPS of $9.54 (ex items) and total net revenues of $4.501B for Q4 .

Key Takeaways for Investors

  • Advisory flywheel accelerating: wrap net inflows at $11.1B and record revenue/advisor suggest continued momentum; elevated client cash ($85.4B) offers incremental deployment tailwind as rates normalize .
  • Asset Management inflection: transformation and performance fees are expanding margins; flows turned positive (+$1.3B), though institutional remains lumpy—position sizing should reflect flow volatility .
  • Bank earnings resilience: repositioning to ~87% fixed and crediting adjustments position NII to sustain through a lower-rate environment; upcoming products should deepen client engagement and support balances .
  • Protection steady: RPS earnings are consistent with higher sales in SVAs and VUL; monitor market risk benefits and claims volatility against strong free cash flow generation .
  • Capital returns remain robust: $768M in Q4, $2.8B in FY’24, and dividend maintained at $1.48; sustained high ROE ex-AOCI (52.7%) underpins buyback capacity .
  • Near-term trading: positive narrative on flows and margins with potential incremental upside from cash redeployment; watch institutional flows and rate path impacts on AWM margin (~29%) .
  • Medium-term thesis: diversified engines (AWM advisory scale, Asset Mgmt margin uplift, bank NII stabilization, RPS cash generation) support compounders’ profile with disciplined capital allocation through cycles .