AMP Investor Presentation - December 2017 Goldman Sachs Conference FINAL · PDF file1...

Ameriprise Financial

December 5, 2017

Brokerage, investments and financial advisory services are made available through Ameriprise Financial Services, Inc.

Member FINRA and SIPC. Some products and services may not be available in all jurisdictions or to all clients.

© 2017 Ameriprise Financial, Inc. All rights reserved.

1

Forward-looking statements

The forward-looking statements in this presentation reflect management’s expectations about future events, plans and

performance. These forward-looking statements and the many assumptions upon which they are based involve risks and

uncertainties. A list of factors that could cause actual results to be materially different from those expressed or implied by

any of these forward-looking statements is detailed under the headings “Forward-Looking Statements” and “Risk

Factors”, and elsewhere, in our Annual Report on Form 10-K for the year ended December 31, 2016 and elsewhere in

our Quarterly Report on Form 10-Q for the quarter ended September 30, 2017. These forward-looking statements speak

only as of today's date and we undertake no obligation to update publicly or revise them for any reason. For information

about Ameriprise Financial, please refer to the Third Quarter 2017 Statistical Supplement available at ir.ameriprise.com.

Non-GAAP Financial Measures

This presentation contains certain non-GAAP financial measures that our management feels best reflect the underlying

performance of our operations. Reconciliations of such non-GAAP financial measures to the most directly comparable

GAAP financial measure have been provided along with the presentation.

Strategically positioned to seize large market opportunity

2

Ameriprise: a compelling investment opportunity

✓

✓

✓

✓

✓

Differentiated value proposition centered on providing comprehensive advice and strong performing solutions to clients and advisors✓

Fee-based business expansion delivering high ROE and EPS growth with multiple expansion✓

Excellent financial strength, substantial capital returns and value for shareholders through market cycles✓

✓

3

Diversified financial services leader

Leading wealth

and asset

management

businesses

Highly trusted

and respected

firm

Evolving

business mix and

navigating

industry change

Data as of 9-30-17

✓ $869 billion in AUM-A

✓ $145 billion balance sheet

✓ $13 billion to shareholders since 2010

✓ ~90% free cash flow generation

✓ More than doubled EPS since 2010

✓ $1.7 billion excess capital

4

Strong culture and engagement

Continuity of

executive

leadership

An industry

leader in

engagement

Meaningful

commitment to

our communities

Data as of 9-30-17

• 80% employee

engagement – above

industry benchmarks

• 90%+ advisor retention

• Rated a “Best Place to

Work” eight times

• Average of 30 years

in financial services

• Average of 20 years

at Ameriprise

• 100% Corporate

Equality index rating for

12 consecutive years

• Long-time supporter of

hunger/disaster relief

complemented by high

employee/advisor

volunteerism

5

Significant Wealth Management opportunity with U.S. investable assets expected to nearly double over the next 15 years

2030E

$66

2025E

$53

2020E

$41

$37

U.S. investable assets$ in trillions

2016

See source information in the appendix

Our market opportunity spans generations of clients

An important part of our client

base and growth opportunity

Millions want advice from an

investment professional

Generation X

Want to be served by a person

who will guide their financial

future in a relationship supported

by technology

Millennials

Fast growing wealth segment

Controls ~50% of investable

assets

Investors with

$500K to $5MM

6See source information in the appendix

Ameriprise Advice & Wealth Management is positioned to win

The leaderin financial planning

in the U.S.

Recognized

and Respectedbrand

9,890financial advisors

(Top 5 branded)

$235Bin wrap assets

$550ktrailing twelve month

operating net revenue

per advisor

~70%of AMP earnings

driven by AWM

90%+advisor retention

Data as of 9-30-17

See source information in the appendix 7

8

Large opportunity for Advice & Wealth Management –target market is fast growing & our services are valued

60%of target affluent and

mass affluent

households prefer a

comprehensive

financial plan

49%of households are

engaged with an

advisor

39%have a detailed

financial plan


Majority of our target affluent market prefers a comprehensive approach to advice

9

Ameriprise is highly respected in the marketplace

One of the most

Investment firms

trusted in customer ratings based on “unbiased

and puts myinterests first”

A Top Performer

in the investment industry in Net

Promoter Score

#1


10

Powerful full service financial planning value proposition

✓

• Personal client-advisor relationships

• Face-to-face complemented with compelling

digital experience

• Well positioned with focus on goal-based

solutions

• Unique Confident Retirement® approach

contributing to high client satisfaction and

growth in assets

• Attractive advisor value proposition drives

strong advisor retention and experienced

advisor recruiting

• High share of wallet with strong asset

persistency

90% 94% 91%

feel more

confident

about

retirement

feel the advice

addresses their

needs

are committed

to implement

recommendations

Clients engaging in our

Confident Retirement approach


11

Investing to deliver a compelling and consistent advisor and client experience

Training and leadership

Technology, security, privacy

Strong compliance program

Brand Advice value proposition

Digital experience

Advisor productivity

tools

71%

52%

AWM2011 to 9-30-17

CompetitorFirms

12

Advisor productivity growing at a higher rate than competitors

Ameriprise 2011 net revenue per advisor excludes banking operations.

Peers include Edward Jones, LPL, Merrill Lynch, Morgan Stanley, Raymond James (Private Client Group), and UBS Wealth Management

See source information in the appendix.

Growth in client assetsper advisor

Growth in net revenue per advisor

48%

27%

AWM2011 to TTM 9-30-17

CompetitorFirms

See non-GAAP financial measure reconciliations in appendix.

$207

$304$103

$235

$310

$539

2011 9-30-2017

Other client assets Client wrap assets

$1.0 $1.1

$2.6

$4.2

$3.7

$5.3

10.9%

20.4%

0%

5%

10%

15%

20%

25%

30%

0

1

2

3

4

5

6

2011 TTM 9-30-2017

Non-recurring revenue Recurring revenue

Pretax operating margin

13

Strong Wealth Management results with room to grow

Operating net revenues & margin$ billions (except margin)

~80% Segment revenue

is recurring

Total client assets$ billions

Pretax operating earnings$ millions

$406

$1,091

2011 TTM 9-30-2017

Our Insurance and Annuities business has strong performance and provides important client solutions

100%affiliated distribution for life,

health and variable annuities

Top 15 life insurance provider

Top 15 variable annuity carrier

Affinity based Auto & Home carrier with

a leading client experience

Strong

Capital base

Core solutionsessential to our Confident

Retirement approach

ExcellentRatings

$100 billionclient AUM

14

$

%

Data as of 9-30-17


Solutions focus results in high client retention and a differentiated risk profile

5Xhigher retention

of clients who

own RiverSource

Insurance and

Annuity products

38%of variable annuity

account value does

not have a living

benefit rider

• Focused on product design and risk

management to meet Ameriprise client needs

• Consistent sales volume and market share

• Very low net amount at risk as a percent of

account value: 0.3% with living benefits and

0.1% with death benefits

• High-quality books are supported by

disciplined hedging strategy

15Data as of 9-30-17

Global AUM

16

Growth opportunity globally for Asset Management

Significant AUM growth in the U.S. and Europe

Accelerated growth rates in Asia,Latin America, Middle East

and Australia

Asia Pacific Latin America Middle East & Africa North America Europe

$75T2016 AUM

$85-90T2020E AUM


Ameriprise is a leading asset manager

$484 billion in AUM with annual gross sales

of $80-100 billion

Top 15 long-term mutual funds in the U.S.

Top 5 retail ranking in the UK

115four- and five-star

Morningstar-rated funds

Institutionalpresence is strong

Globalpresence

Innovativeglobal product solutions

Benefiting from

strategicrelationships

17

$

1. Data as of 9-30--2017


Competitive margins and earnings growth

$

1

1

$411$73

18

We are increasing third-party assets under management

$310 $147 Q3 20172010

Assets Under Management ($ in billions)

Former Parent Related Third-party & Affiliated

90%+ of net

management

fees are from

third-party and

affiliated AUM

19

Adjusting to industry headwinds with more work to do

Distribution: Deepen retail and institutional relationships globally

Operating efficiency: Supporting business growth by transitioning

to a single back-, middle- and front-office platform in 2018

Proven product expertise

Credit

High-conviction equity

Asset allocation

Solutions

Strategic Beta

Adding offerings in

higher-demand categories

Multi-asset solutions

Adaptive risk

Global

Strategic Beta / ETF

Responsible Investment / ESG

Third-party flow

rate within range

of active peers

Product: Helping clients and advisors address investor goals

$436

$484

2011 9-30-2017

$2.9 $3.0

33%

37%

2011 TTM 9-30-17

Revenue Adjusted net pretax operating margin

20

Delivering competitive earnings & margins

Operating net revenues & margin$ in billions (except margin)

Assets Under Management$ in billions

Pretax operating earnings$ in millions

$528

$695

2011 TTM 9-30-2017

35-39%

Margin1

maintained

through

expense

discipline

1. Adjusted net pretax operating margin


21

Solution focused business - targeting 75% of earnings from lower capital, fee-based businesses

Pre-tax Operating Earnings(excluding Corporate & Other)

>75%

Q3

2017

68%

32%

2011

49%

51%

Near-term

Objective

<25%

Advice & Wealth Management and Asset Management Insurance and Annuities

Q3 2017 excludes unlocking impacts


$5.21

$11.35

2011 TTM 9-30-2017

$10.1$11.8

2011 TTM 9-30-2017

16.1%

29.8%

2011 9-30-2017

1. Excludes impact of unlocking

2. Accumulated other comprehensive income

We consistently deliver both strong financial and shareholder results

Operating EPS1 $

Operating Total Net Revenue1 $ in billions

Operating ROE (ex. AOCI1,2) %

22See non-GAAP financial measure reconciliations in appendix.

Ameriprise delivers growth with lower volatility than peers

23

1. Calculated on a quarterly basis.

Peers include Edward Jones (pretax earnings only), LPLA, RJF, AB, AMG, EV, IVZ, LM, TROW, LNC, PFG and PRU; peer data excluded when not meaningful.


Operating Earnings 2011 – TTM 9-30-2017

Ameriprise

Asset Manager

Peers

Pretax earnings volatility1 EPS CAGR

9%

10%

10%

15%

24%

26%

30%

17%

Advice & Wealth

Management Peers

Insurance &

Annuities Peers


24

With a differentiated and sustainable level of capital return

1. Peer dividends and share buybacks as a percentage of net income.

2017 Totals YTD through 9/30/2017

Peers include: LPLA, RJF, SCHW, AB, BLK, IVZ, BEN, LM, LNC, MET, PFG, PRU, TMK, UNM, PRI


See appendix for source information

2011 – 2017

Dividend Payout1

2011 - 2017

Share Buyback

Payout1

2011 - 2017

Total

Payout1

Ameriprise Financial 27% 98% 125%

Broker Dealer Peer Average 27% 13% 40%

Asset Manager Peer Average 40% 52% 92%

Insurance & Annuity Peer Average 30% 40% 70%

Returned ~$13 billion to shareholders over the past 7 years

25

Ameriprise: a compelling investment opportunity

Strategically positioned to seize large market opportunity ✓

✓

✓

✓

✓

Differentiated value proposition centered on providing comprehensive advice and strong performing solutions to clients and advisors✓

Fee-based business expansion delivering high ROE and EPS growth with multiple expansion✓

Excellent financial strength, substantial capital returns and value for shareholders through market cycles✓

✓

26

Source information

Significant wealth management opportunity with U.S. investable assets expected to nearly double over the next 15 years

Federal Reserve Survey of Consumer Finances – multiple years; Federal Reserve, Financial Accounts of the United States, Z.1

Our market opportunity spans generations of clients

Ameriprise Financial research. Federal Reserve Survey of Consumer Finances – multiple years; Federal Reserve, Financial Accounts of

the United States, Z.1.

Ameriprise Advice & Wealth Management is positioned to win

Leader in Financial Planning – Ameriprise helped pioneer the financial planning process more than 30 years ago. We have more

CERTIFIED FINANCIAL PLANNER™ professionals than any other company in the U.S. as documented by the Certified Financial

Planner Board of Standards, Inc., as of Dec. 31, 2016.

Top 5 branded advisor force – Based on company filings as of Q3 2017

Large opportunity for Advice & Wealth Management – target market is fast growing & our services are valued

Ameriprise Financial Market Segmentation survey, February 2017

Ameriprise is highly respected in the marketplace

One of the most trust investment firms – Temkin Group 2017 Trust Ratings, www.temkinratings.com

Top performer in customer ratings based on “unbiased and puts my interests first” – Hearts & Wallets 2016 Wants and Pricing Report

from the Hearts & Wallets IQ DatabaseTM Hearts and Wallets conducted a survey in 2016 of 5,216 investors.

#1 in the investment industry Net Promoter Score – Rating based on responses to a consumer survey as part of the Temkin Group 2016

Net promoter Score® Benchmark Study. See www.temkingroup.com for more.

Powerful full service financial planning value proposition

Ameriprise Financial Confident Retirement Client survey, Jan. 2015 - Dec. 2016. The Confident Retirement approach is not a guarantee

of future financial results.

Advisor productivity growing at a higher rate than competitors

Capital IQ and company filings

27

Source information

Our Insurance and Annuities business has strong performance and provides important client solutions

Top 15 variable annuity carrier – LIMRA International, Q2 2017

Top 15 life insurance provider (VUL total assets) – LIMRA International, Q2 2017

Growth opportunity globally for Asset Management

2020 estimate from PWC based on PWC’s CAGR of ~5.2% to 2016 global AUM from sources below. McKinsey “Thriving in the New

Abnormal, NA Asset Management”, November 2016; Boston Consulting Group, “Global Asset Management 2016: Doubling Down on Data”,

July 2016; Casey Quirk press release August 2016; “The World Turned Upside Down”, Morgan Stanley Research, Oliver Wyman, 2017.

Ameriprise is a leading asset manager

Top 15 long-term mutual funds in the U.S. – ICI Complex Assets report, data through September 2017.

Top 5 retail ranking in the UK – Investment Management Association, data as of May 2017.

Ameriprise delivers growth with lower volatility than peers

S&P Capital IQ and company filings

With a differentiated and sustainable level of capital return

SNL Financial and Bloomberg

28

Reconciliation tables

For Advice & Wealth Management operating net revenue per advisor

($ in millions)

TTM

2011 9/30/2017

Advice & Wealth Management operating total net revenues 3,713$ 5,342$

Less: Operating total net revenues attributable to former banking operations 116 -

Advice & Wealth Management operating total net revenues excluding former

banking operations 3,597$ 5,342$

29


Asset Management adjusted net pretax operating margin

($ in millions) TTM

2011 9-30-2017

Operating total net revenues 2,897$ 3,013$

Less: Distribution pass through revenues 833 802

Less: Subadvisory and other pass through revenues 385 368

Adjusted operating revenues 1,679$ 1,843$

Pretax operating earnings 528$ 695$

Less: Operating net investment income 11 21

Add: Amortization of intangibles 40 17

Adjusted operating earnings 557$ 691$

Pretax operating margin 18.2% 23.1%

Adjusted net pretax operating margin 33.2% 37.5%

30


Percent of earnings from fee-based, lower capital businesses

($ in millions)

Q3 2017(1)

Advice & Wealth Management and Asset Management pretax operating earnings 498$

Less: Unlocking -

Advice & Wealth Management and Asset Management pretax operating earnings excluding unlocking 498$

Annuities and Protection pretax operating earnings 336$

Less: Unlocking 100

Annuities and Protection pretax operating earnings excluding unlocking 236$

Percent pretax operating earnings from Advice & Wealth Management and Asset Management 60%

Percent pretax operating earnings from Annuities and Protection 40%

Percent pretax operating earnings from Advice & Wealth Management and Asset Management excluding unlocking 68%

Percent pretax operating earnings from Annuities and Protection excluding unlocking 32%

(1) Excludes Corporate & Other segment

31


Operating net revenues

($ in millions) TTM

2011 9-30-2017

Total net revenues 10,192$ 11,929$

Less: CIEs revenue 136 121

Less: Net realized investment gains (losses) 6 46

Less: Market impact on indexed universal life benefits - (1)

Less: Market impact of hedges on investments - 49

Operating total net revenues 10,050 11,714

Less: Unlocking (20) (47)

Operating total net revenues excluding unlocking 10,070$ 11,761$

32

Reconciliation tablesOperating earnings per diluted share

($ in millions, except per share amounts)

TTM TTM

2011 9-30-2017 2011 9-30-2017

Net income attributable to Ameriprise Financial 1,116$ 1,699$ 4.53$ 10.72$

Less income (loss) from discontinued operations, net of tax (60) - (0.24) -

Net income from continuing operations attributable to Ameriprise Financial 1,176 1,699 4.77 10.72

Less net income (loss) attributable to the CIEs - - - -

Market impact on variable annuity guaranteed benefits(1)

62 336 0.25 2.12

Market impact on indexed universal life benefits(1)

- 11 - 0.07

Market impact of hedges on investments(1)

- (49) - (0.31)

Integration/restructuring charges(1)

95 1 0.39 0.01

Net realized investment losses (gains)(1)

(6) (44) (0.02) (0.28)

Tax effect of adjustments(2)

(53) (90) (0.22) (0.57)

Operating earnings 1,274 1,864 5.17 11.76

Less: Pretax impact of unlocking (14) 99 (0.06) 0.63

Less: Tax effect of unlocking(2)

5 (35) 0.02 (0.22)

Operating earnings excluding unlocking 1,283$ 1,800$ 5.21$ 11.35$

Weighted average common shares outstanding:

Basic 241.4 156.3

Diluted 246.3 158.5 (1)

Pretax operating adjustments.

(2) Calculated using the statutory tax rate of 35%.

Per Diluted Share

33

Reconciliation tablesOperating return on equity

($ in millions) Twelve Months Ended Twelve Months Ended

December 31, September 30,

2011 2017

Net income attributable to Ameriprise Financial 1,116$ 1,699$

Less: Income (loss) from discontinued operations, net of tax (60) -

Net income from continuing operations attributable to Ameriprise Financial 1,176 1,699

Less: Adjustments (1)

(98) (165)

Operating earnings 1,274 1,864

Less: Unlocking, net of tax (2)

(9) 64

Operating earnings excluding unlocking 1,283$ 1,800$

Total Ameriprise Financial, Inc. shareholders' equity 9,164$ 6,369$

Less: Assets and liabilities held for sale 29 -

Less: Accumulated other comprehensive income, net of tax 701 325

Total Ameriprise Financial, Inc. shareholders' equity from continuing

operations excluding AOCI 8,434 6,044

Less: Equity impacts attributable to the consolidated investment entities 478 1

Operating equity 7,956$ 6,043$

Return on equity, excluding AOCI 13.9% 28.1%

Operating return on equity, excluding AOCI (3)

16.0% 30.8%

Operating return on equity, excluding AOCI and unlocking 16.1% 29.8%

(3) Operating return on equity excluding accumulated other comprehensive income (AOCI) is calculated using the trailing twelve months of earnings excluding the after-tax net realized investment gains/losses, net of DSIC and DAC

amortization, unearned revenue amortization and the reinsurance accrual; market impact on variable annuity guaranteed benefits, net of hedges and related DSIC and DAC amortization; the market impact on indexed universal

life benefits, net of hedges and related DAC amortization, unearned revenue amortization, and the reinsurance accrual; the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain

investments; integration/restructuring charges; the impact of consolidating certain investment entities; and discontinued operations in the numerator, and Ameriprise Financial shareholders' equity excluding AOCI; the impact of

consolidating investment entities; and the assets and liabilities held for sale using a five-point average of quarter-end equity in the denominator. After-tax is calculated using the statutory tax rate of 35%.

(1) Adjustments reflect the trailing twelve months' sum of after-tax net realized investment gains/losses, net of deferred sales inducement costs ("DSIC") and deferred acquisition costs ("DAC") amortization, unearned revenue

amortization and the reinsurance accrual; the market impact on variable annuity guaranteed benefits, net of hedges and related DSIC and DAC amortization; the market impact on indexed universal life benefits, net of hedges and

related DAC amortization, unearned revenue amortization, and the reinsurance accrual; the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments; integration/restructuring

charges; and the impact of consolidating certain investment entities. After-tax is calculated using the statutory tax rate of 35%.

(2) After-tax is calculated using the statutory tax rate of 35%.

34


Operating earnings

($ in millions, except per share amounts)

YTD

2011 2012 2013 2014 2015 2016 9-30-2017

Net income attributable to Ameriprise Financial 1,116$ 1,025$ 1,334$ 1,619$ 1,562$ 1,314$ 1,299$

Less income (loss) from discontinued operations, net of tax (60) (2) (3) (2) - - -

Net income from continuing operations attributable to Ameriprise Financial 1,176 1,027 1,337 1,621 1,562 1,314 1,299

Less net income (loss) attributable to the CIEs - - - - - (2) 1

Market impact on variable annuity guaranteed benefits(1)

62 265 170 94 214 216 198

Market impact on indexed universal life benefits(1)

- - 13 6 1 (36) 16

Market impact of hedges on investments(1)

- - - - 21 (3) 8

Integration/restructuring charges(1)

95 71 14 - 5 - 1

Net realized investment losses (gains)(1)

(6) (7) (7) (37) (4) (6) (33)

Tax effect of adjustments(2)

(53) (115) (67) (22) (83) (60) (67)

Operating earnings 1,274$ 1,241$ 1,460$ 1,662$ 1,716$ 1,427$ 1,421$ (1)

Pretax operating adjustments.

(2) Calculated using the statutory tax rate of 35%.

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