Ameriprise’s First Quarter Earnings Boosted by $25M Comerica Breakup Fee
Ameriprise recently reported that its pretax operating earnings for the first quarter received a $25 million boost from the termination of its relationship with Comerica Bank. This boost helped increase operating earnings for the firm’s Advice & Wealth Management segment by 20% year over year to $951 million.
Ameriprise’s Loss of Comerica Contributes to Asset Outflows
Ameriprise had been the investment services provider and broker-dealer for Comerica since 2023. The departure of Comerica advisors led to a decrease in net inflows of new assets by nearly 60% year over year to $4.2 billion. Chief Financial Officer Walter Berman mentioned that the Comerica loss was a significant factor in the outflows experienced by the firm.
Ameriprise Adds 61 Advisors as Recruiting Competition Heats Up
Despite facing aggressive recruiting competition and advisor departures, Ameriprise managed to attract 61 advisors in the first quarter, with more expected to join in the following quarter. CEO Jim Cracchiolo emphasized the importance of building an advisor workforce organically rather than through recruitment deals that may not provide long-term benefits.
Ameriprise Reports Higher Client Assets, Revenue per Advisor
Ameriprise’s total client assets saw a 12% year-over-year increase to nearly $1.15 trillion, driven by organic growth and advisor productivity. The firm also welcomed Huntington Bank as a new client, bringing in 260 advisors and $28 billion in client assets. Despite the increase in net revenue, operating expenses also rose by 12%, mainly due to distribution expenses like advisor compensation.
The firm’s pretax operating margin improved to 30% in the first quarter, with advisors generating an average of $1.16 million each over the past year. Ameriprise’s operating net revenues for all businesses rose by 11% year over year to $4.8 billion, with net income increasing by 57% to $915 million.
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