Ameriprise's wealth management pretax profits rose 7% year-over-year even as asset growth stalled.

The Minneapolis-based firm said pretax profits rose to $219 million for the third quarter from $205 million for the same period a year ago.

Total clients assets, meanwhile, were flat compared to a year ago, and actually declined 4.4%, or $20 billion, from the previous quarter to drop to $433 billion. Net flows to wrap accounts were also down quarter-over-quarter, dropping from $3.278 billion to $2.98 billion.

The drop in client assets mirrors similar declines at Morgan Stanley and Merrill Lynch, which recently reported earnings. For example, Morgan reported that client assets slid to $1.925 trillion from $2.034 trillion for the previous quarter and $2.003 trillion for the same period a year ago.

Despite stalled asset growth, Ameriprise said that revenue for the wealth management unit increased 3% year-over-year to $1.245 billion, which outpaced a modest 2% increase in expenses. However, revenues were down compared to the second quarter when the firm reported revenues of $1.274 billion.

"Given the operating environment, revenue growth was good and we continued our disciplined expense controls," Ameriprise said in a statement.


Advisor headcount rose across both channels at Ameriprise. The firm now has 2,099 employee advisors, up from 2,082 for the prior period, while the independent ranks increased to 7,715 advisors from 7,639.

Advisor productivity also rose, reaching $514,000 per advisor, up from $483,000 for the year-ago period.

Companywide, net income plummeted 38% year-over-year, falling to $352 million. Ameriprise said earnings were hurt by market volatility and unfavorable exchange rates.

Earnings per share slid one penny to $2.20.

"Ameriprise had a solid third quarter given the backdrop of declining and volatile equity markets, unfavorable foreign exchange and persistently low interest rates," CEO Jim Cracchiolo said in a statement.

Referring to the firm's wealth management unit, Cracchiolo said "we're serving more clients and delivered another strong quarter for experienced advisor recruiting, both of which contributed to good client flows and helped balance market-related impacts in our other businesses."

Read more:

Register or login for access to this item and much more

All On Wall Street content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access