Ameriprise Financial reported greater earnings stability in the second quarter with higher revenues coming from its advice and wealth division as well as in asset management for the Minneapolis-based firm.
Adjusted operating net revenues within Ameriprise's advice and wealth management segment grew 13% to $2.6 billion in the second quarter compared to a year ago largely due to growth in client assets, like wrap and brokerage accounts. Total assets under management also jumped 4% to $642 billion during the same periods.
"We continue to focus on transforming our global asset management business to gain greater operational efficiencies, leveraging resources and technology globally … and we have a number of additional actions underway to further derive benefits throughout the year," Jim Cracchiolo, chairman and CEO of Ameriprise, said during an earnings call with investors on July 25. "Looking forward, we have the right strategic focus, growth investments, a talented team and a meaningful opportunity to drive greater growth."
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Ameriprise saw a 17% increase in total client assets to $972 billion largely from a boost in wrap accounts. While Cracchiolo said their "second quarter results were excellent," he also cautioned about larger economic uncertainty down the road, including investor impact from the presidential election in November.
"Looking at the external landscape in the quarter, markets continue to be good with the expectation that there will be a soft landing. While inflation remains sticky, people assume that it's going to come down," he said. "However, that could take longer than expected. And there is also the ongoing geopolitical instability and the upcoming U.S. election. So all of this is top of mind for our clients."
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Overall, GAAP net income was down 7% to $829 million in the second quarter compared to a year ago. The drop was largely due to "unfavorable market impacts on the valuation of derivatives and market risk benefits" this past quarter, the company said. Ameriprise also had an additional $20 million expense from severance packages as it's been lowering operating expenses this year.
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Still, the firm added 52 advisors during the quarter, increasing its total headcount to 10,392.
"We're also using automation and analytics to drive efficiency, helping advisors enhance personalization based on their needs and identifying new growth opportunities," Cracchiolo said. "We added another 52 experienced advisors, and we feel good about our pipeline as well as our differentiated value acquisition."
