Q1 2024 Ameriprise Financial Inc Earnings Call

Brianna: Welcome to the Q1 2024 earnings call. My name is Brianna, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. During the question and answer session, if you have a question, please press star 1 on your touchtone phone. As a reminder, this conference is being recorded. I will now turn the call over to Alicia Charity. Alicia, you may begin.

Welcome to the Q1 'twenty 'twenty four earnings call. My name is Brianna and I'll be your operator for today's call.

At this time all participants are in a listen only mode. Later, we will conduct a question and answer session.

During the question and answer session. If you have a question. Please press star one on your Touchtone phone.

As a reminder, the conference is being recorded.

I will now turn the call over to Alicia charity Alicia you may begin.

Alicia A. Charity: Thank you and good morning. Welcome to Ameriprise Financial's first quarter earnings call. On the call with me today are Jim Cracchiolo, Chairman and CEO, and Walter Berman, Chief Financial Officer. Following their remarks, we'd be happy to take your questions.

Alicia A. Charity: Thank you and good morning, welcome to Ameriprise Financial's first quarter earnings call.

Alicia: On the call with me today are Jim Cracchiolo, Chairman, and CEO, and Walter Berman Chief Financial Officer.

Speaker Change: Following their remarks, we'd be happy to take your questions.

Alicia A. Charity: Turning to our earnings presentation materials that are available on our website, on slide two, you will see a discussion of forward-looking statements. Specifically, during the call, you will hear references to various non-GAAP financial measures, which we believe provide insight into the company's operations. Reconciliation of non-GAAP numbers to their respective GAAP numbers can be found in today's materials and on our website.

Speaker Change: Turning to our earnings presentation materials that are available on our website on slide two you will see a discussion of forward looking statements.

Speaker Change: <unk> during the call you will hear references to various non-GAAP financial measures, which we believe provide insight into the company's operations.

Speaker Change: Reconciliation of non-GAAP numbers to their respective GAAP numbers can be found in today's materials and on our website.

Alicia A. Charity: Some statements that we make on this call may be forward-looking, reflecting management's expectations about future events and overall operating plans and performance. However, these forward-looking statements speak only as of today and involve a number of risks and uncertainties. A Simple List of Factors and Risks that could cause actual results to be materially different from forward-looking statements can be found in our first quarter 2024 earnings release, our 2023 Annual Report to Shareholders, and our 2023 10-K Report.

Speaker Change: Some statements that we make on this call may be forward, looking reflecting management's expectations about future events and overall operating plans and performance.

Speaker Change: These forward looking statements speak only as of today's date and involve a number of risks and uncertainties.

Speaker Change: Sample list of factors and risks that could cause actual results to be materially different from forward looking statements can be found in our first quarter 2024 earnings release.

Speaker Change: Our 2023 annual report to shareholders and our 2023 10-K report they.

Alicia A. Charity: We make no obligation to publicly update or revise these forward-looking statements. On slide three, you see our GAAP financial results at the top of the page for the first quarter. Below that, you see our adjusted operating results, which management believes enhances the understanding of our business by reflecting the underlying performance of our core operations and facilitates a more meaningful trend analysis. Many of the comments that management makes on the call today will focus on adjusted operating results. And with that, I'll turn it over to Jim.

Speaker Change: We make no obligation to publicly update or revise these forward looking statements.

Speaker Change: On slide three you see our GAAP financial results at the top of the page for the first quarter.

Speaker Change: Hello that you see our adjusted operating results, which management believes enhances the understanding of our business by reflecting the underlying performance of our core operations and facilitates a more meaningful trend analysis.

Speaker Change: Many of the comments that management makes on the call today will focus on adjusted operating results.

Speaker Change: And with that I'll turn it over to Jim.

James M. Cracchiolo: Good morning. Yesterday, Ameriprise reported good first-quarter results to start the year. We're positioned well and focused on helping our clients amid a complex climate, and we're also benefiting from our excellent capabilities across the business. But clearly, the operating environment remains dynamic.

James M. Cracchiolo: Good morning yesterday, Ameriprise reported a good first quarter results to start the year.

James M. Cracchiolo: We're positioned well and focused on helping our clients submit a complex climate and we're also benefiting from our excellent capabilities across the business.

Clearly the operating environment remains dynamic equity markets have had strong year over year growth as the U S economy is proving resilient.

James M. Cracchiolo: Equity markets have had strong year-over-year growth as the U.S. economy is proving resilient. However, inflation remains above the Fed's target and, therefore, interest rates remain high. The economic picture is not as strong in the UK and EMEA.

James M. Cracchiolo: However, inflation remains above the fed's target and therefore interest rates remain high the economic picture is not as strong in the U K and EMEA over.

James M. Cracchiolo: Overall, many investors are holding cash on the sidelines or in shorter-duration products, which will eventually move to other investments. This means opportunity for our business with our quality gold-based device and active solution. With that in mind, for our first quarter adjusted operating results, total revenue increased 11% to $4.1 billion.

James M. Cracchiolo: Overall, many investors are holding cash on the sidelines or in shorter duration products, which will eventually move to other investments. This means opportunity for our business with our quality go based device and active solutions with that backdrop for our first quarter adjusted operating results total revenue increased 11%.

James M. Cracchiolo: To $4 $1 billion earnings grew 10% to $878 million and earnings per diluted share was up 16% to $8.39 and our return on equity ex OCI remains outstanding at 49%.

James M. Cracchiolo: Earnings grew 10% to $878 million, and earnings per diluted share were up 16% to $8.39. XAOCI's return on equity, XAOCI, remains outstanding at 49%. Ameriprise assets under management and administration were $1.4 trillion, up 15% from a year ago, driven by client net flows and equity market appreciation. In wealth management, we remain on our path to provide goal-based advice to more clients backed by a highly satisfying and referable experience. I had the opportunity to speak to a number of our advisors at our first quarter field conferences.

James M. Cracchiolo: Ameriprise assets under management and administration were one four trillion.

James M. Cracchiolo: Up 15% from a year ago, driven by client net flows and equity market appreciation.

James M. Cracchiolo: In wealth management, we remain on our path to provide goal based device more clients backed by a highly satisfied and referral experience.

James M. Cracchiolo: I've had the opportunity to speak to a number of our advisers that our first quarter field conferences. They consistently shared that our client value proposition at a level of support we provide our real differentiator is both in terms of driving high client satisfaction and practice growth.

James M. Cracchiolo: They consistently shared that our client value proposition and the level of support we provide are real differentiators, both in terms of driving high client satisfaction and practice growth. Total client assets increased to $954 billion, up 19%. We saw a nice increase in transactional activity, up 17% in the quarter. Client inflows were good at $8.5 billion, while clients are still maintaining high cash holdings. Money is starting to move into other products, such as structured products, brokerage, and back into WRAP, including fixed income. WRAP inflows were $6.5 billion, and the platform has grown to $522 billion, up 20%. The bank is also an important complement.

James M. Cracchiolo: Okay.

James M. Cracchiolo: Total client assets increased to $954 billion up 19%, we saw a nice increase in transactional activity up 17% in the quarter client inflows with good at $8 $5 billion, while clients are still maintaining high cash holdings money is starting to move into.

James M. Cracchiolo: Other products, such as structured products brokerage and back into wrap including in fixed income.

James M. Cracchiolo: Inflows were $6 5 billion and the platform has grown to 522 billion up 20%.

James M. Cracchiolo: Bank is also an important compliment we're currently holding assets of more than $22 billion and generating very good spread revenue as we focus on deepening relationships and bringing in assets clients hold elsewhere.

James M. Cracchiolo: We're currently holding assets of more than $22 billion and generating very good spread revenue as we focus on deepening relationships and bringing in assets clients hold elsewhere. With $82 billion sitting in cash, we still have a significant opportunity to help clients reposition portfolios as markets settle. Our Ameriprise advisor force is one of the largest in the industry, and we've consistently delivered some of the highest growth rates. Productivity increased nicely again, up 11% to $942,000 in adjusted operating net revenue per advisor. Regarding recruiting, we added 64 experienced advisors in the quarter, and our pipeline looks good as we proceed through the year.

James M. Cracchiolo: With $82 billion sitting in cash we still have a significant opportunity to help clients reposition portfolios as market settled.

James M. Cracchiolo: Our Ameriprise advisor force is one of the largest in the industry and we've consistently deliver some of the highest growth rates productivity increased nicely again up 11% to $942000 in adjusted operating net revenue per advisor.

James M. Cracchiolo: Regarding recruiting we added 64 experienced advisors in the quarter and our pipeline looks good as we proceed through the year.

James M. Cracchiolo: As a long-standing leader in advice, Ameriprise and our advisor practices are well-positioned to serve the growing consumer need for advice across segments. We know that mass affluent and affluent consumers want advice, and that the opportunity continues to grow. In a recent study, 44% of affluent investors say they need even more advice today than in the past.

James M. Cracchiolo: As a long standing leader in advice Ameriprise and our advisor practices are well positioned to serve the growing consumer need for advice across segments, we know that the mass affluent and affluent consumers want advice and that the opportunity continues to grow from a recent study 44% of our fluid investors say they need.

James M. Cracchiolo: Even more advice today than in the past and there are also greater need among the majority of younger investors more people can benefit from what we offer.

James M. Cracchiolo: And there is also a greater need among the majority of younger investors. Therefore, more people can benefit from what we offer. And, in fact, in the quarter, we were proud to earn a Hudson Wallets 2024 Top Performer in "understands me and shares my values," "unbiased," "puts my interests first," and "explains things in understandable terms." We also invest significantly to provide our advisors with a fully integrated technology suite, which is proven to simplify processes, help deliver a great client experience, and drive referrals.

And in fact in the quarter, we were proud to earn a hearts and wallets 2024 top performer in understands me and shares my values.

James M. Cracchiolo: Biased puts my interests first and explains things in understandable terms.

James M. Cracchiolo: We also invest significantly to provide a revised as a fully integrated technology suite, which has proven to simplify processes helped deliver a great client experience and drive referrals as we shared we're also investing in advanced analytics that can help to drive further efficiency and opportunity.

James M. Cracchiolo: As we shared, we're also investing in advanced analytics that can help to drive further efficiency and opportunity. And in the quarter, we were also recognized with a Bank Insurance Securities Association Technology Innovation Award for our exclusive e-meeting capability, which greatly simplifies and enhances client meeting preparation.

James M. Cracchiolo: And in the quarter were also recognized with a bank Insurance Securities Association Technology Innovation Award for our exclusive E meeting capability, which greatly simplifies and enhances client meeting preparation.

James M. Cracchiolo: Regarding financials, our margins and wealth management remain among the best in the business at nearly 30%. Looking ahead, our planning model positions us to sustain strong margins as clients adjust portfolios to reflect equity market and interest rate dynamics. Regarding retirement and protection, we also saw a good increase in sales in the first quarter. We recently made product enhancements to both structured annuities and VUL and adjusted our wholesaling support to help more advisors deliver these solutions and increase efficiencies in the business.

James M. Cracchiolo: Regarding financials are margins in wealth management remain among the best in the business at nearly 30% looking ahead, our planning model positions us to sustain strong margins as clients adjust portfolios to reflect the equity market and interest rate dynamics.

James M. Cracchiolo: Regarding retirement and protection. We also saw a good increase in sales in the first quarter. We recently made product enhancements in both structured annuities.

James M. Cracchiolo: And adjusted our wholesaling support to help more advisors deliver these solutions and increase efficiencies to the business.

James M. Cracchiolo: Variable annuity sales were up 32%, with very strong results in structured annuities consistent with investor appetite. In the four years since we launched our structured annuity product, it has become our top-selling annuity and ranks among the top ten in the industry. Sales are also very good, increasing 8%, with the majority of the sales in our higher margin accumulation variable universal light products, where we added new features at the start of the year.

James M. Cracchiolo: Variable annuity sales were up 32% with very strong results in structured annuities consistent with investor appetite in the four years since we launched our structured annuity product that has become our top selling annuity and ranks among the top 10 in the industry.

James M. Cracchiolo: In our insurance business sales were also very good increasing 8% with the majority of the sales in our higher margin accumulation variable universal life products, where we added new features at the start of the year.

James M. Cracchiolo: Overall, our retirement protection business consistently delivers strong earnings and profitability. By the way, in the quarter, long-term care continued to generate positive earnings of $16 million as we benefited from higher interest rates and consistent claim levels.

James M. Cracchiolo: Overall, our retirement protection business consistently delivered strong earnings and profitability.

James M. Cracchiolo: By the way in the corridor long term care continued to generate positive earnings of $16 million as we benefited from higher interest rates and consistent claim levels.

James M. Cracchiolo: We also continue to generate good earnings in asset management, even with flows being pressured. The team delivered strong performance for clients and focused on fully leveraging our global capabilities to drive efficiencies. Total assets under management were up 7% to $652 billion.

James M. Cracchiolo: We will also continue to generate good earnings and asset management, even with flows being pressured the team delivered strong performance for clients and focused on fully leveraging our global capabilities to drive efficiencies total assets under management were up 7% to $652 billion.

James M. Cracchiolo: Regarding our investment performance, we continue to generate good short, medium, and long-term performance across product lines. One weaker area was in fixed income through a difficult year in 2022, but that's working through our medium-term numbers. That said, we have had good overall performance. In fact, the strength of our numbers was reflected in the most recent Barron's rankings of the best fund families, where Columbia Threadneedle ranked in the top ten. I'll also highlight that in a recent survey of top asset management firms by institutional investors, Columbia Threadneedle ranked sixth out of 330 asset managers for our active engagement with issuers.

James M. Cracchiolo: Regarding our investment performance, we continue to generate good short medium and long term performance across product lines. One weaker area was in fixed income to a difficult year in 'twenty two but that's working through our medium term numbers that said we have good overall performance.

James M. Cracchiolo: In fact, the strength of our numbers was reflected in the most recent barron's rankings of the best Fund families, where Columbia Threadneedle ranked in the top 10.

James M. Cracchiolo: I'll also highlight that in a recent survey of top asset management firms by institutional investor.

James M. Cracchiolo: Columbia Threadneedle ranked sixth out of 330 asset managers for our active engagement with issuers.

James M. Cracchiolo: Though we remain in net outflows for the quarter, in retail, we did see improvement in gross sales. In North America, equity and fixed income flows improved. In EMEA, flows also improved, and they were in net inflows in continental Europe, giving a nice pickup in equities. In the UK, we remain pressured.

James M. Cracchiolo: Though we remain in net outflows for the quarter and retail we did see improvement in gross sales in North America equity and fixed income flows improved in EMEA flows also improve them. We're in net inflows in continental Europe, given the nice pickup in equities in the U K, we remain pressured in institutional we were in outflows.

James M. Cracchiolo: In institutional, we experienced outflows due to redemptions and lower fee mandates and impacts from previously announced portfolio manager changes, as well as slower new funding. We have a strong offering and are tailoring it to better serve client demand and drive flows. This includes expanding our model delivery in the U.S., advancing our real estate capabilities, as well as further strengthening our bank loan CLO business. In asset management, we continue to drive synergies and efficiency gains, and you can see that in our normalized G&A expenses, which are down 3%. In terms of overall asset management profitability, the North America region is performing well, while EMEA faces a bit more pressure based on market conditions.

James M. Cracchiolo: Due to redemptions and lower fee mandates and impacts from previously announced portfolio manager changes as well as slower new fundings.

James M. Cracchiolo: We have a strong offering and <unk> to better serve clients demand and drive flows. This includes expanding our model delivery in the U S advancing our real estate capabilities as well as further strengthening our bank loan CLO business.

James M. Cracchiolo: In asset management, we continue to drive synergies and efficiency gains and you can see that in a normalized G&A expenses down 3%.

James M. Cracchiolo: In terms of overall asset management profitability, the North America region is performing well, while EMEA faces a bit more pressure based on market conditions now that we're through the integration in EMEA, we're very much focused on leveraging our capabilities globally, gaining better efficiencies, while reducing expenses.

James M. Cracchiolo: Now that we've gone through the integration in EMEA, we're very much focused on leveraging our capabilities globally, gaining better efficiencies while reducing expenses. For Ameriprise overall, the level of results we consistently achieve is driven by the totality of what we have here, as well as our ability to invest for growth and manage expenses very well. This includes our excellent returns and earnings growth. And in terms of track records, our long-term track records are excellent.

James M. Cracchiolo: For Ameriprise overall the level of results. We consistently achieve is driven by the totality of what we have here as well as our ability to invest for growth and manage expenses very well. This includes our excellent returns and earnings growth and in terms of track record. So our long term track records are excellent just looking back over the last five years.

James M. Cracchiolo: Just looking back over the last five years, I would highlight EPS as an example where we have delivered 15% compounded annual growth. Our return on equity of 49% is among the highest in the industry, year after year. Also very significant, we consistently deliver a differentiated level of shareholder return, returning another $650 million in capital in the quarter, and we just announced another dividend increase of 10%. Overall, it was a great start to the year across many dimensions. What's behind our results? Our talented team.

James M. Cracchiolo: I would highlight EPS as an example, where we have delivered 15% compounded annual growth our return on equity of 49% is among the highest in the industry year. After year also very significant we consistently deliver a differentiated level of shareholder return returned another $650 million in capital in the quarter.

James M. Cracchiolo: And we just announced another dividend increase of 10%.

Okay.

James M. Cracchiolo: Overall, it was a great start to the year across many dimensions, what's behind our results our talented team in the quarter. We received additional external recognition for who we are and how we work together in fact Forbes put ameriprise is on their best America large employers 2024.

James M. Cracchiolo: In the quarter, we received additional external recognition for who we are and how we work together. In fact, Forbes put Ameriprise on their Best America Large Employers 2020 list. And Newsweek ranked us one of America's greatest workplaces for women. In closing, I would also like to highlight that in June, we will mark our 130th anniversary, which is a unique and significant milestone in any industry. Our priority has always been our clients.

James M. Cracchiolo: Banking and Newsweek ranked us one of America's greatest workplaces for women and.

James M. Cracchiolo: In closing I would also like to highlight that in June we will Mark our 130, <unk> anniversary, which is a unique and significant milestone in any industry.

James M. Cracchiolo: Our priority has always been our clients also keyed or longevity is our ability to innovate and evolve for the future Ameriprise is going to continue to navigate for clients and invest in opportunities for growth and I feel good about our ability to build on our position this year now.

James M. Cracchiolo: Also key to our longevity is our ability to innovate and evolve for the future. Ameriprise is going to continue to look for clients and invest in opportunities for growth, and I feel good about our ability to build on our position this year. Now, Walter will share additional detail on the quarter and some of the numbers.

James M. Cracchiolo: Now Walter will share additional detail on the quarter and some of the numbers Walter.

Walter S. Berman: Thank you Jim.

Walter S. Berman: PPS grew 16% to $8.39 with growth across all segments. The diversified nature of our business drives our consistent financial performance across market cycles and sets us apart from most in the financial services industry. Assets under management and administration increased 15% to $1.4 trillion, benefiting from over $29 billion of client flows over the past year and equity market appreciation. This has resulted in strong 11% revenue growth across our businesses. We continue to manage expenses tightly to maintain strong margins. G&A expenses grew only 2% on a normalized basis, driven by our operational efficiency improvement.

Walter S. Berman: <unk> grew 16% to $8 39 with growth across all segments.

Walter S. Berman: The diversified nature of our business drives our consistent financial performance across market cycles and sets us apart from most in the financial services.

Walter S. Berman: Assets under management and administration increased 15% to one four trillion benefiting from over 29 billion of client flows over the past year and equity market appreciation.

Walter S. Berman: This has resulted in strong 11% revenue growth across our businesses.

Walter S. Berman: We continue to manage expenses tightly to maintain strong margins.

Walter S. Berman: G&A expenses grew only 2% on a normalized basis driven by our operational efficiency improvements.

Walter S. Berman: We continue to selectively invest in areas that will drive future business growth, particularly in wealth management. We will maintain this discipline in 2024 and plan to keep G&A expenses at 2023 levels. Our returns remain strong, with a consolidated margin of 26% and a best-in-class return on equity of 50.2% excluding unlocking. Additionally, balance sheet fundamentals, including excess capital and liquidity, remain strong. Our diversified business model benefits from significant and stable 90% free cash flow contributions across all business segments.

Walter S. Berman: We continue to selectively invest in areas that will drive future business growth, particularly in wealth management.

Walter S. Berman: We will maintain this discipline in 2024 and plan to keep G&A expenses at 2023 levels.

Walter S. Berman: Our returns remained strong with a consolidated margin of 26%.

Walter S. Berman: And our best in class return on equity of 52% excluding unlocking.

Walter S. Berman: Balance sheet fundamentals, including excess capital and liquidity remained strong.

Walter S. Berman: Our diversified business model benefits from significant and stable, 90% free cash flow contributions across all business segments.

Walter S. Berman: We returned $650 million of capital to shareholders in the quarter, and, as you saw, we announced a 10% dividend increase, a continuation of our differentiated track record. In 2024, we expect to return 80% of operating earnings to shareholders.

Walter S. Berman: We returned $650 million of capital to shareholders in the quarter.

Walter S. Berman: And as you saw we announced a 10% dividend increase a continuation of our differentiated track record.

Walter S. Berman: In 2024, we expect to returned 80% of operating earnings to shareholders.

Walter S. Berman: On slide six, you see the strong results for wealth management. Client and WRAP assets increased 19% and 20%, respectively, from strong net flows and market appreciation over the past year. Client flows in the quarter were $8.5 billion, down from quarter one, 2023, driven by higher net flows into third-party money market funds a year ago.

Walter S. Berman: On.

Walter S. Berman: <unk> six you see the strong results for wealth management.

Walter S. Berman: Client and wrap assets increased 19% and 20% respectively from strong net flows and market appreciation over the past year.

Walter S. Berman: Client flows in the quarter were $8 5 billion.

Walter S. Berman: Down from quarter, one 2023.

Driven by higher net flows into third party money market funds a year ago.

Walter S. Berman: In the quarter, adjusted operating net revenues increased 13% to $2.6 billion from growth and client assets, increased transactional activity, and a robust 30% increase in net investment income in the bank, which more than offset lower fees from off-balance sheet cash. This drove revenue per advisor to a new high of $942,000, up 11% from a year ago. Toll cash balances, including third-party money market funds and broker CDs, reached a new high this quarter at $82.4 billion, as clients remain heavily concentrated in yield-oriented products.

Walter S. Berman: In the quarter adjusted operating net revenues increased 13%.

Walter S. Berman: 226 billion from growth in client assets.

Walter S. Berman: Increased transactional activity.

Walter S. Berman: And a robust 30% increase in net investment income in the bank.

Walter S. Berman: Which more than offset lower fees from off balance sheet cash.

Walter S. Berman: This drove revenue per adviser to a new high of 942000 up 11% from a year ago.

Walter S. Berman: Total cash balances, including third party money market funds and brokerage Cds reached a new high this quarter at $82 4 billion.

Walter S. Berman: As clients remain heavily concentrated in yield oriented products cash balances were fairly stable at $43 3 billion with cash sweep down only $1 billion in the quarter, reflecting normal seasonal tax patterns.

Walter S. Berman: Cash balances were fairly stable at $43.3 billion, with cash sweep down only $1 billion in the quarter, reflecting the normal seasonal tax pattern. We expect clients will put money back to work in WRAP and other products on our platform over time as markets and rates normalize, which creates a significant opportunity. The financial benefit from cash at the bank remains significant and will be a sustainable source of earnings going forward. Adjusted operating expenses in the quarter increased 14%, with distribution expenses up 17%, reflecting business growth, including Comerica, acceleration and transactional activity, growth in experience advisory recruiting, and higher payroll taxes as the business group.

Walter S. Berman: We expect clients will put money back to work and ramp and other products on our platform over time as markets and rates normalize which creates a significant opportunity.

Walter S. Berman: The financial benefit from cash at the bank remains significant and we will be a sustainable source of earnings going forward.

Walter S. Berman: Adjusted operating expenses in the quarter increased 14%.

Walter S. Berman: With distribution expense is up 17%, reflecting business growth, including co America acceleration on transactional activity growth and experienced advisor recruiting.

Walter S. Berman: And higher payroll taxes as the business group.

Walter S. Berman: G&A expenses increased 7% to $420 million, reflecting higher volume-related expenses and the occlusion of Comerica. We continue to invest in our growing business while maintaining expense discipline in 2024. We are talking about a DNA increase in the mid-single-digit range for the full year.

Walter S. Berman: G&A expenses increased 7% to 420 million.

Walter S. Berman: Reflecting higher volume related expenses and the inclusion of <unk> America.

Walter S. Berman: We continue to invest in our growing business.

Walter S. Berman: Maintaining expense discipline in 2024.

Walter S. Berman: We are targeting a G&A increase in the mid single digit range for the full year.

Walter S. Berman: This combination of revenue growth and well-managed expenses resulted in the business sustaining an operating margin of approximately 30%. Turning to asset management on slide seven, financial results were very strong in the quarter, and we continued to manage the business well through a challenging environment for active asset managers. Total AUM increased 7% to $652 billion, primarily from higher equity market appreciation, partially offset by net outflows.

Walter S. Berman: This combination of revenue growth and well managed expenses resulted in the business sustaining an operating margin of approximately 30%.

Walter S. Berman: Turning to asset management on slide seven <unk>.

Walter S. Berman: Financial results were very strong in the quarter and we continue to manage the business well through a challenging environment for active asset managers.

Walter S. Berman: Total AUM increased 7% to $652 billion, primarily from higher equity market appreciation, partially offset by net outflows.

Walter S. Berman: In the quarter, operating earnings increased 25% to $206 million as a result of equity market appreciation, discipline, and expense management, which more than offset the cumulative impact of net outflows. And the margin was at the top end of our targeted range at 35% in the quarter. Adjusted operating expenses increased 2%, with general and administrative expenses flat from a year ago.

Walter S. Berman: In the quarter.

Walter S. Berman: Operating earnings increased 25% to $206 million as a result of equity market appreciation.

Walter S. Berman: <unk> expense management.

Walter S. Berman: Which more than offset the cumulative impact of net outflows.

Walter S. Berman: And the margin was in our top end of our targeted range at 35% in the quarter.

Walter S. Berman: Adjusted operating expenses increased 2%.

Walter S. Berman: General and administrative expenses flat from a year ago.

Walter S. Berman: On a normalized basis, general and administrative expenses were 3% lower than last year, reflecting the benefits from comprehensive expense management initiatives taken since 2023. We are looking globally, especially in EMEA, to enhance operational efficiencies and manage expenses so we are well positioned going forward.

Walter S. Berman: On a normalized basis general and administrative expenses was 3% lower than last year.

Walter S. Berman: Reflecting the benefits from comprehensive expense management initiatives taken since 2023.

Walter S. Berman: We are looking globally, especially in EMEA to enhance operational efficiencies and manage expenses. So we are well positioned going forward.

Walter S. Berman: Let's turn to slide eight.

Walter S. Berman: Retirement and Protection Solutions continues to deliver good earnings and free cash flow generation, reflecting the high quality of the business that has been built over a long period of time. Pre-tax adjusted offering earnings in the quarter increased 3% to $199 million, reflecting the benefit from strong markets and higher interest rates, partially offset by strong sales growth, which drove up distribution expense. Overall, retirement and protection solution sales improved in the quarter, with protection sales of 8% to $65 million, primarily in higher-margin BUL.

Walter S. Berman: Retirement and protection solutions continued to deliver good earnings and free cash flow generation.

Walter S. Berman: Reflecting the high quality of the business that has been built over a long period of time.

Walter S. Berman: Pretax adjusted operating earnings in the quarter increased 3% to 199 million.

Walter S. Berman: Reflecting the benefit from strong markets and higher interest rates, partially offset from strong sales growth, which drove up distribution expense.

Walter S. Berman: Overall.

Walter S. Berman: Retirement and protection solutions sales improved in the quarter.

Walter S. Berman: With protection sales up 8% to $65 million, primarily in higher margin <unk> variable annuity sales grew 32% to $1 2 billion.

Walter S. Berman: Variable annuity sales grew 32% to $1.2 billion with strong momentum in our structured product. Turn to slide 9, delivered excellent growth in the first quarter, which is a continuation of the long track record across market cycles and our commitment to profitable growth. Over the last 12 months, revenue grew 10%, earnings per share increased 19%, and ROE grew 240 basis points excluding unlock. We had similar growth trends over the past five years, with 7% revenue growth, 15% EPS compounded annual growth, and ROE improved 13 percentage points.

Walter S. Berman: With strong momentum in our structured product.

Walter S. Berman: Turning to slide nine.

Walter S. Berman: Ameriprise delivered excellent growth in the first quarter, which is a continuation of the long track record across market cycles, and our commitment to profitable growth.

Over the last 12 months revenue grew 10%.

Walter S. Berman: Earnings per share increased 19%.

In row grew 240 basis points, excluding unlocking.

Walter S. Berman: We had similar growth trends over the past five years.

Walter S. Berman: With 7% revenue growth, 15% EPS compounded annual growth.

Walter S. Berman: And ROA improved 13 percentage points.

Walter S. Berman: Compared to most financial services companies, this differentiated performance across multiple cycles speaks to the complementary nature of our business mix, as well as our focus on profitable growth. Now, let's finish with the balance sheet on slide 10. Balance Sheet Fundamentals and Pre-Cash Flow Generation remain strong and support our ability to consistently return capital to shareholders and invest for future business growth. In the last year, we returned $2.6 billion of capital to shareholders, which included $650 million and a quarter.

Compared to most financial services companies this differentiated performance across multiple cycles speak to the complementary nature of our business mix as.

Walter S. Berman: As well as our focus on profitable growth.

Walter S. Berman: Now, let's finish with the balance sheet on slide 10.

Walter S. Berman: Balance sheet fundamentals and free cash flow generation remains strong and support our ability to consistently return capital to shareholders.

Walter S. Berman: Best for future business growth.

Walter S. Berman: And the last year, we returned $2 6 billion of capital to shareholders.

Walter S. Berman: Which included $650 million in the quarter.

Walter S. Berman: In addition, we announced our annual dividend increase of 10%, taking the quarterly dividend to $1.48 per share. Ameriprise's consistent capital return strategy drives long-term shareholder value. Over the past five years, we have returned $12 billion to shareholders with the repurchase of 40 million shares at an average price of $227, resulting in a net reduction of a share count of 25%. With that, we'll take your questions.

Walter S. Berman: In addition, we announced our annual dividend increase of 10%, taking the quarterly dividend to $1 48 per share.

Walter S. Berman: Milk prices consistent capital return strategy drives long term shareholder value.

Walter S. Berman: Over the past five years.

Walter S. Berman: We returned $12 billion to shareholders with the repurchase of 40 million shares at an average price $227.

Walter S. Berman: Resulting in a net reduction in average share count of 25%.

Speaker Change: With that we'll take your questions.

Operator: Thank you. We will now begin the question and answer session. If you have a question, please press star 1 on your touchtone phone. If you wish to be removed from the queue, please press star 2. If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, please press star 1 on your touchtone phone. Brennan Hawken from UBS is online with your first question. Please go ahead.

Speaker Change: Thank you we will now begin the question and answer session.

Speaker Change: If you have a question. Please press star one on your Touchtone phone.

Speaker Change: If you wish to be removed from the queue. Please press star one.

Speaker Change: If you are using a speakerphone you may need to pick up the handset first before pressing the numbers.

Speaker Change: Once again, if you have a question. Please press star one on your Touchtone phone.

Speaker Change: Brennan Hawken from UBS is online with your first question. Please go ahead.

Brennan Hawken: Good morning, thanks for taking my questions. You spoke about growth and experienced advisor recruiting, so I was hoping you could maybe provide some perspective on how you view the competitive environment for FAA recruiting right now. And based on that view, do you think it's a better time to pull back or lean into the market, and why is that?

Speaker Change: Okay.

Brennan Hawken: Good morning, Thanks for taking my questions.

Brennan Hawken: Spoke to growth and experienced advisor recruiting so was hoping you could maybe provide some perspective on how you view the competitive environment for FAA recruiting right now and based on that view do you think it is a better time to pull back or lean into the market and why is that.

James M. Cracchiolo: So, as you saw in the first quarter, we attracted 65 high-quality recruits into the business. I think recruiting is a little slower in the first quarter. With the markets that ran, people were staying put a little more. I do believe that the market is very competitive, and some of the competitors are actually, I think, being a little more irrational in that regard. So we're much more focused on quality people that really think about where they need to work. They want to build good practices, become more productive, and want the support they need to do that. And those are the type of people that we've been focused on.

Brennan Hawken: So as you saw in the first quarter, we attracted 65 high quality recruits into the business I think the recruiting is a little slower in the first quarter with the markets that ran people were staying put a little more.

Brennan Hawken: I do believe that the market is very competitive and some of the competitors are actually I think being a little more rational in that regard. So we're much more focused on quality people that really think about where they need to associate they want to build good practices become more productive want the support they need.

Brennan Hawken: To do that and those are the type of people that we have been focused on.

Brennan Hawken: Yep, that makes sense. Okay, thanks. And then maybe for my follow-up, something a little more tactical.

Speaker Change: Yes that makes sense.

Speaker Change: Thanks, and then maybe for my follow up something a little more tactical cash balances have been in focus we all know that April is a big month for taxes.

Walter S. Berman: Cash balances have been in focus. We all know that April is a big month for taxes and sometimes has an impact on your business. So could you comment on what trends you've seen in cash balances here to date, what the impact was that we should expect from taxes, and were those largely funded out of SWEAP or other cash vehicles?

Speaker Change: And sometimes has an impact on your business. So could you talk comment on what trends you're seeing in cash balances here month to date, what the impact was that we should expect from taxes and where those large we funded out of sweep or other cash vehicles.

Walter S. Berman: What we've seen in April is basically a small amount going out before taxes out of sweep. We have started to see some actually shifting out of money market, third-party money markets. Again, I can't say it's taxes, but clearly the pattern is there. Sweep is stable, and we've seen a little pattern of shifting in money market, third-party money markets.

Speaker Change: Okay.

Speaker Change: We have seen in April.

Basically a small amount going out before taxes.

Speaker Change: We have started to see some actually shifting out of money market third party money markets.

Speaker Change: Again, I can't say, it's taxes, but clearly the patterns there sweep is stable and.

Speaker Change: We've seen a little pattern on shifting on money market third party money market.

Brennan Hawken: Got it. But an overall month-to-day stable sweep is the right way to think about it. Great, thanks for that color.

Speaker Change: Got it but overall month to date stable sweep is the right way to think about it.

Speaker Change: Absolutely.

Speaker Change: Great Thanks for that color.

Suneet Laxman L. Kamath: Your next question comes from Suneet Kamath with Jeffreys. Please go ahead.

Speaker Change: Your next question comes from Sydney come off with Jefferies. Please go ahead.

Walter S. Berman: Thanks. I just wanted to go back to the wealth management comments about the bank's net investment income rising 30%. Obviously, that's not a number that we can pull out of your supplements, but I was just curious where you see that going in the balance of the year and into next year in terms of growth. I know you talked about growth this year over last year and growth next year over this year, but can you just put some broad numbers around what you're expecting? I wouldn't guess it would be 30%, but I'm just curious what you're seeing there.

Speaker Change: Thanks.

Sydney: I just wanted to go back to the wealth management comments about the bank net investment income rising 30%.

Sydney: That's not a number that we can pull out of your supplement, but just curious where you see that going in the balance of the year and into next year in terms of growth I know you talked about growth. This year over last year and growth next year over this year, but can you just put some broad numbers around what you're expecting.

Speaker Change: I wouldn't guess it would be 30%, but just curious what youre seeing there.

Walter S. Berman: It won't be 30%. As I mentioned, Suneet, what you'll see is that we have about $3 billion in each year that will be reinvested, and you should figure that we'll pick up, listen, rates stay where they are, somewhere 100 to 125 basis points on that. So that will make a contribution because that will be almost 35% of our total AUM outstanding at the bank. So it's going to, and I see it continuing. It's going to slow down, obviously, as we get into the 25 and as we progress through the year, but it'll be very healthy, and profitability is quite good.

Speaker Change: Won't be 30% as I mentioned.

Speaker Change: What youll see is that we have each year about $3 billion each year that will be reinvested in you should figure that will pick up but listen if rates stay where they are somewhere 100 to 125 basis points on that so that will make a contribution because that will be almost 35% of our total AUM outstand.

Speaker Change: <unk>.

Speaker Change: At the bank. So it's good news IC are continuing it's going to slow obviously as we get into the 25 and as we progress through the year, but it will be very healthy and our profitability is quite good.

Suneet Laxman L. Kamath: Got it. And then, I guess, on cost savings. I mean, it seems to me like we've spent more time talking about that on this call and other recent calls. And I guess what I want to get a handle on is what you're trying to do – what are you seeing on the revenue side? It would seem to me, given your history, that you tend to talk a lot about cost savings when there's revenue pressure.

Speaker Change: Got it and then I guess on the cost savings I mean.

Speaker Change: It seems to me like we spent more time talking about that.

Speaker Change: On this call in more recent calls and I guess, what I want to get a handle on is what are you trying to what are you seeing on the revenue side of it would seem to me given your history you tend to talk a lot about cost savings when theres revenue pressure, obviously, we see it in asset management, but it sounds like there might be incremental pressure than other segments I just wanted to get a <unk>.

Suneet Laxman L. Kamath: Obviously, we see it in asset management, but it sounds like there might be incremental pressure in other segments. I just want to get a sense of what you are responding to. Is it more than just pressure in the asset management business?

Speaker Change: What are you responding to is it more than just pressure in the asset management business.

Walter S. Berman: No, Suneet. I think that when we look at asset management, we do believe what we have put together, the technology and the capabilities and the geographical type of makeup, there is an opportunity for us to further improve efficiencies in asset management, and that's very much our focus. In regard to the other business and across the company from a corporate perspective, we again feel like there's an opportunity for us to even tighten our operating model a bit more and get even a bit more efficiency based on a combination of the technology and all the capabilities that we put in place and how we're operating, including geographically. So we're looking at that. It is not because of any external pressure per se.

Speaker Change: No need I think when we look at the asset management, we do believe with what we have put together the technology and the capabilities and the geographical.

Speaker Change: Type of makeup there is an opportunity for us to further get efficiencies in the asset management and that's very much our focus.

Speaker Change: Hey, good to the other business and across the company from a corporate perspective, we again feel like there is an opportunity for us to even tightened our operating model a bit more and get even a bit more efficiency based on a combination of the technology and other capabilities that we put in place and how we're operating.

Speaker Change: Including geographically so we're looking at that its not because of any external pressure per se. It's something that you know that we've done over cycles as we reengineer and continue to invest but at the same time, we are making good new investments in AI and data and analytics and technology platform.

Walter S. Berman: It's something that you know we do over cycles as we re-engineer and continue to invest. But at the same time, we are making good new investments in AI and data and analytics, technology platforms, and cybersecurity. And so what we're trying to do is we know that we want to invest, and we know that if we can get some other efficiencies on the expense base, that's always helpful for us. And again, we can't dictate what the market conditions are, but it gives us flexibility. And then just one comment I had, just on the experience.

Speaker Change: <unk> and <unk> security and so what we're trying to do is we know that we want to invest and we know that if we can get some other efficiencies on the expense base. That's always helpful for us and again, we can't dictate what the market conditions, but it gives us flexibility.

Speaker Change: Got it and then just one comment I had just on the experienced advisor recruits.

Speaker Change: For many quarters, you've given us the number of recruits which is helpful. But.

Suneet Laxman L. Kamath: Got it. And then just one comment I had on the experienced advisor recruits. I think for many quarters you've given us the number of recruits, which is helpful, but I think there's also been a change in the size of the practices that you've been bringing on board. So, you know, maybe at some point, if you could give us a look at, over this period of time, this is how much assets came in from those recruits, I think that would be helpful. I will do so. Thank you.

Speaker Change: There's also been a change in like the size of the practices that <unk> been bringing on board. So.

Speaker Change: Maybe at some point if you can give us a look at over this period of time. This is how much assets came in from those recruits I think that would be helpful.

Speaker Change: Okay. Thank you.

Speaker Change: Your next question comes from Wilma BARDA with Raymond James. Please go ahead.

Wilma BARDA: Hey, good morning.

Wilma BARDA: Is there any pressure from clients to pass through for our short term interest rate benefits, especially as the rates can stay higher for longer.

Wilma Carter Jackson Burdis: Your next question comes from Wilma Burdiss with Raymond James. Please go ahead. Hey, good morning.

Wilma BARDA: Well as you saw I mean, we have a lot of cash balances and a lot are invested in whether it be money market broker Cds, our own certificate programs et cetera, even in a bank now we have higher savings products et cetera. So no because whats left in sweep is more of that transactional.

Wilma Carter Jackson Burdis: Is there any pressure from clients to pass through more short-term interest rate benefits, especially as

Walter S. Berman: Well, you know, as you saw, we have a lot of cash balances, and a lot are invested in, whether it be money market, brokered CDs, our own certificate programs, etc. Even in our bank now, we have higher savings products, etc. So no, because what's left in sweep is more of that transactional liquidity type thing, just like you maintain in your bank account sort of, but in this case, it's more activity within the overall business that they have and maintain and the cash moves. So, you know, if everything was sitting in sweep, then the answer would probably be yes. But that's not the case. Thank you.

Wilma BARDA: Liquidity type thing just like you maintained your bank account set up and in those cases where activity within the overall.

Wilma BARDA: Business that they have and maintain in the cash moves so.

Wilma BARDA: If everything was sitting in sweep then the answer would probably be yes, but thats not the case.

Speaker Change: Okay. Thank you.

Speaker Change: Can you just talk a little bit about.

Speaker Change: How you guys think about acquisitions in AWS and helping you win any.

Wilma Carter Jackson Burdis: And then can you talk a little bit about how you guys think about acquisitions in the A&W phase? Especially, you know, maybe for scale, a little bit, something a little bit larger, just kind of curious what you're seeing there regarding assets. What we look at, as we said, is we look to associate people that really feel that we can add value to their practices and what we can bring. We look at other things that may make sense for us, but again, we're not just looking to roll up firms and put them on a network. We really look for people to join us and build out under what we provide from a client experience perspective. So that's the way we go about thinking about it.

Speaker Change: Especially maybe for scale, a little bit something a little bit larger just kind of curious what you're seeing there. Thanks.

Speaker Change: Regarding asset.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Look as we said as we look to associate people that really feel that we can add value to their practices and what we can bring.

Speaker Change: We look at other things that may make sense for us, but again, we're not just looking to roll up firms and put it on our network, we really look for people to join us and build out under what we provide from a client experience perspective. So that's the way we go about thinking about it.

Speaker Change: Thank you.

Thomas George Gallagher: Your next question comes from Tom Gallagher with Evercore ISI. Please go ahead.

Speaker Change: Your next question comes from Tom Gallagher with Evercore ISI. Please go ahead.

Speaker Change: Okay.

Thomas George Gallagher: Morning. Can you provide some color on what kind of margin you're getting on new flows, the eight and a half billion of net inflows overall to AWM? You know, when I look at Jim, I agree with your comment, like 30% margin is certainly impressive, but just curious as you think about organic growth, what that's going to do to margins, assuming, you know, we keep the macro constant on kind of your in-force earnings.

Thomas George Gallagher: Good morning. First question is can you can you provide some color on what kind of margin you're getting.

Thomas George Gallagher: On new flows.

Thomas George Gallagher: The $8 5 billion of net inflows overall to AWS.

Thomas George Gallagher: When I look at.

Thomas George Gallagher: Jim I agree with your comment 30% margin is certainly.

Thomas George Gallagher: Impressive, but just curious as you think about.

Thomas George Gallagher: Organic growth, what that's going to do to margins, assuming we keep the macro constant on kind of your in force earnings.

James M. Cracchiolo: So, Tom, you know, as you look at even in the first quarter, what we saw was a nice increase in core business activities. And what you had a little more of was the cash side, that came off a little bit in the total contribution to the margin. And so when you look at the totality of it, that underlying business, particularly as you kind of combine the business that's there, transactional, wrapped fee business, and what they're sitting on the cash sidelines coming back in, which would give us higher margins if it weren't in cash, certificates, brokerage, other things like that.

Thomas George Gallagher: So.

Thomas George Gallagher: Tom.

Thomas George Gallagher: Look like even in the first quarter, what we saw was a nice increase in core business activities.

Thomas George Gallagher: And what you had a little more is on.

Thomas George Gallagher: On the cash side that came off a little bit in the total contribution to the margin and so when you look at the totality of that underlying business.

Thomas George Gallagher: Particularly as you kind of a combination of business that's their transactional.

Thomas George Gallagher: <unk> fee business and.

And what they are sitting on the cash sidelines coming back in which would give us higher margins. If it's not in the cash certificates brokered other things like that so I would probably say there is there is a good opportunity there based on People's cycling back into the markets. We saw a nice start.

James M. Cracchiolo: So I would probably say there's a good opportunity there based on people cycling back into the markets. There's a good opportunity to see this start to increase in fixed income again, rather than just short-term cash. So I think there's some of that that will occur. Part of that's from the new flow, as you said, but part of it's really from the core of what came in and what's sitting there. And so, you know, I would probably say in the past year or two, a bit more of that has been on the cash side.

Thomas George Gallagher: An increase in fixed income again, rather than just short term cash.

Thomas George Gallagher: So I think there is some of that that will occur part of that's from the new flow as you said, but part of it is really from the core of what came in and what's sitting there.

Thomas George Gallagher: And so.

Thomas George Gallagher: I would probably say in the past year or two a bit more of that has been in the cash side.

Thomas George Gallagher: And Jim, sorry, just to follow up there, would you, or maybe this is for Walter, would you say the incremental margin you're getting on new flows is above or below the 30% level? I haven't looked at exactly how much of the new flow came and went right into the market yet.

Thomas George Gallagher: And that cash goes into money market or into brokerage Cds et cetera that doesn't give us as much margin.

Thomas George Gallagher: And that should come back in.

Speaker Change: And Jim Sorry, just a follow up there would you. So would you say or maybe this is for Walter would you say the incremental margin you're getting on new flows is above or below the 30% level.

Walter S. Berman: You would just isolate lasalle.

Walter S. Berman: Didnt look at exactly how much of the flow came and went right into the market yet I would probably say, it's relatively consistent because our advisors don't put it all to work immediately when it comes in.

James M. Cracchiolo: I would probably say it's relatively consistent because our advisors don't put it all to work immediately when it comes in. So I would probably look at it that way, that it's probably relatively the same at this point. Gotcha. That's helpful. And then just one follow-up.

Speaker Change: So I would probably look at it that way that it's probably relatively the same at this point.

Speaker Change: Got you that's helpful. And then just one follow up.

Thomas George Gallagher: The long-term care risk transfer, Walter, I think you mentioned last quarter that you were sort of encouraged by the bid-ask spread narrowing. Can you talk about where your head is at with that? Is that something you're actively pursuing? Would you have to bundle other risks to potentially transact on that? So, Tom, as I said last quarter, we certainly looked at the manualized transaction, and we are evaluating it. We really are. We continue to do that and evaluate the trade-offs, and certainly... It moved the bar, and we're just evaluating that.

Speaker Change: Long term care risk transfer of Walter I think you mentioned last quarter.

Speaker Change: That you were sort of encouraged by bid ask spread narrowing can you talk about where your head is at with that.

Speaker Change: Is that is that something you're actively pursuing.

Speaker Change: Would you have to bundle other risks to potentially transact.

Speaker Change: <unk> on that.

Speaker Change: So Tom as I said last quarter, we saw.

Speaker Change: Certainly.

Speaker Change: Annualized transaction and we are evaluating we really or will continue to do that and evaluate the trade offs.

Speaker Change: Certainly.

Speaker Change: It's.

Speaker Change: It moved the bar and were just evaluating that.

Speaker Change: Okay. Thanks.

Walter S. Berman: Your next question comes from Ryan Krueger with KBW. Please go ahead.

Speaker Change: Your next question comes from Ryan Krueger with <unk>. Please go ahead.

Ryan Joel Krueger: Hi, thanks. Good morning. My first question was just on, can you give us some sense of your expectations for bank, not NII, but just bank asset growth in 2024, whether it be moving more from cash sweep or growing it organically?

Ryan Joel Krueger: Hi, Thanks. Good morning. My first question was just on the can you give us some sense of your expectations for bank.

Ryan Joel Krueger: Not at NII, but just bank asset growth in 2020 for whether it be moving more from cash sweep or growing that organically.

Walter S. Berman: Yeah, so we're looking at that now and obviously we do have buffers in the sweep account, so it would be we haven't decided on the amount yet, we just evaluate it, but it will increase. It's certainly not at the levels we've increased previously, but certainly there's potential to increase it, and then of course, we're going to be picking up basically interest earnings on basically when we reposition the three million dollars, three So it's a combination, and we certainly have room to do that.

Speaker Change: Yes, so we're looking at that now and obviously, we do have buffers in the sweep accounts. So it would be we haven't decided on the amount yet.

Speaker Change: Does evaluate but it will increase.

Speaker Change: Certainly not at the levels, we've increased previously but that's.

Speaker Change: Certainly there is potential to increase it and then of course, we're going to be picking up all basically <unk>.

Speaker Change: Interest earnings on basically.

Speaker Change: Reposition.

Speaker Change: $3 million $3 billion each year, so I would say that it's.

Speaker Change: We will be increasing but and then also will be launching other products. There too. So it's a combo and we certainly have room to do that.

Ryan Joel Krueger: Great, thanks. And then, I guess. Back to Tom's question, just curious, to what extent are you, I guess, interested specifically in risk transfer with RiverSource, or would you consider something that's more broad, a more broad strategic move with RiverSource rather than limiting it to a risk transfer deal? So, you know.

Speaker Change: Okay.

Speaker Change: Great. Thanks, and then.

Speaker Change: I guess back to Tom's question Im just curious to what extent are you I guess are you interested specifically in risk transfer with river source or or I guess would you consider something more broad.

Speaker Change: Our broad strategic move with river source, rather than than isolating risk transfer deal.

Speaker Change: So.

James M. Cracchiolo: So, you know, we do evaluate different possibilities, but as I said, I think our business is performing really well. I mean, even in long-term care, you know, I mentioned we earn $16 million, but even if you look over the last four quarters, we had some nice positive income, and we think that's pretty stable now.

Speaker Change: We do evaluate different.

Speaker Change: <unk> abilities, but as I said I think our business is performing really well I mean, even in long term care.

I mentioned about we earning $16 million, but even if you look over the last four quarters. We had some nice positive income and we think that's pretty stable.

James M. Cracchiolo: And so, you know, if an opportunity came along that made sense for us with a good strategic type of partner or a reinsurance type, we would be very open to exploring that. But on the other side, I think we have a really good hand, and it gives us a lot of free cash flow, and, you know, again, good solutions. And we have a really large complement of solutions on our shelf, so it's not like we have to be the provider of, you know, and we're not. So we pick our spots, but we feel good about it, but again, we will always look at if there's a better opportunity for us.

Speaker Change: Now and so.

Speaker Change: An opportunity came along that made sense for us with a good strategic type of partner.

Speaker Change: On a reinsurance type we would be very open to explore that but on the other side I think we have a really good hand, and it gives us a lot of free cash flow and.

Speaker Change: Again, the good solutions and we have a real large complement of solutions on the shelf. So it's not like we have to be the provider of.

Speaker Change: So we pick our spots, but we feel good about it but again.

Speaker Change: We will always look at if there's a better opportunity for us.

Speaker Change: Great. Thank you.

Alexander Blostein: Your next question comes from Alex Blostein with Goldman Sachs. Please go ahead.

Speaker Change: Your next question comes from Alex <unk> with Goldman Sachs. Please go ahead.

Alexander Blostein: Hey, Zoom Walter, good morning. Just one for me.

Alex: Hey, Jim Walter Good morning, just one for me.

Walter S. Berman: You guys talked about expense management, and in your earlier comment, you suggested that there's a little bit, maybe, of a broader effort of consulting across the organization to focus on efficiencies, and it's great to see G&A being held flat versus 2023. So, but I guess looking beyond 2024, how do you think these efficiencies will impact G&A growth, sort of on a multi-year basis? Should we think of that being below the trend of what we've seen from the kind of the prior several years or, you know, sort of 2024 as a one-off benefit? So on the expense side.

Alex: You guys talked about expense management and your earlier comments you suggested that there's a little bit maybe of a broader effort that's unfolding across the organization to focus on efficiencies and it's great to see G&A being held flat versus 2023, so but I guess looking beyond 24, how do you think these efficiency impact G&A growth sort of like on a multiyear basis.

Alex: Should we think of that being below the trend of what we've seen from the kind of the prior several years or sort of 2024. It was a one off benefit.

Walter S. Berman: So on the expense side, Alex, certainly we will garner a reasonable amount in 24, but there'll be carryover, and certainly of the initiatives that we take in 24, and then, of course, the ones that will continue. So you should expect that this is part of it. We've always done re-engineering, but this, I would say, has an improved trajectory as we look at it and the opportunities to process re-engineering.

Alex: So on the expense side Alex.

Certainly we will garner.

Alex: Single amount in 'twenty, four, but there'll be carryover and certainly.

Alex: Of the initiatives that we've taken 24 and that of course the ones that will continue. So you should expect that this is part of what we've always done reengineering.

Speaker Change: I would tell you is.

Speaker Change: So an improved trajectory as we look at it and the opportunities to process reengineering.

Speaker Change: Great Alright, thank you.

Craig William Siegenthaler: Your next question comes from Craig Siegenthaler with Bank of America. Please go ahead.

Speaker Change: Your next question comes from Craig Siegenthaler with Bank of America. Please go ahead.

Craig William Siegenthaler: Good morning, Jim, and Walter. The first one is on recruiting. So I know you don't disclose this before the queue, but advisor loans grew 20% last year. And I'm wondering how you expect them to grow this year in 2024 and also given your comments to an earlier question on recruiting. How have your transition assistance rates changed roughly over the last three years just given the intensifying competition on the advisor recruiting front?

Craig William Siegenthaler: Good morning, Jim Walter first one is on recruiting.

Craig William Siegenthaler: So I know you don't disclose this.

Craig William Siegenthaler: Before the Q, but advisor loans grew 20% last year.

Craig William Siegenthaler: And I'm wondering how you expect them to grow this year in 2024 and also given your comments to an earlier question on on recruiting how have your transition assistance rates changed roughly over the last three years, just given intensifying competition on the advisor recruiting front.

Speaker Change: Okay. So.

Walter S. Berman: Okay, so on the advisor loans, yes, we have increased them, and certainly we are competitive, so you should expect that that would increase as we are on the transcom proposals and as we start tracking more and more advisors, but that would stay within our limits, but you should see those loans increasing, for short. And we certainly have the cash capacity to do that.

Speaker Change: <unk>.

Speaker Change: Our Basel loans, yes.

Speaker Change: Yes, we have increased and certainly we are competitive so you should expect that that would increase as we.

Speaker Change: On transcon proposals and as we start tracking more and more boxes.

Speaker Change: But that would stay within our limits, but you should see those loans increasing.

Speaker Change: For sure and we certainly have the cash capacity to do that.

Craig William Siegenthaler: Thanks, and I have a follow-up on wealth manager operating efficiency. So if you look at the ratio of distribution expenses relative to margin fees and distribution expenses, sorry, distribution revenues, it's sort of a payout ratio. But that ratio hit an all-time high this quarter. At the same time, G&A growth remained elevated at 7%, which was in line with last year, but it's above your mid-single-digit target for the year. I'm just wondering what drove up expenses in the first quarter, and how we should think about the forward trajectory within the wealth manager. On distribution, it was payroll taxes.

Speaker Change: Thanks, Dan.

Speaker Change: A follow up on wealth manager operating efficiency. So if you look at the ratio of distribution expenses relative to margin fees and distribution expenses.

Speaker Change: I'm sorry distribution.

Speaker Change: Revenues.

Speaker Change: Sort of a payout ratio, but that ratio hit an all time high this quarter and at the same time G&A growth.

Speaker Change: Remained elevated at 7%, which was in line with last year, but it's above your mid single digit.

Target for the year I'm, just wondering what drove up.

<unk> in the first quarter and how should we think about the forward trajectory within the wealth manager segment.

Speaker Change: On distribution payroll taxes and of course, you have all our distribution when you have higher transactional elements of from that standpoint.

Walter S. Berman: On distribution, it was payroll taxes, and of course, you have a high distribution when you have higher transactional elements from that standpoint, and as far as the 7%, as we indicated, the first quarter usually does flip up, but we are staying within what we've indicated in the middle single digits is a growth area for us, and so we'll be investing, but that's the target range.

Speaker Change: As far as the 7% as we indicated the first quarter, usually does flip up but we are staying within what we've indicated in the middle single digits as a growth area for us and so we will be investing but that's the target range.

Great. Thank you guys.

Michael J. Cyprys: Your next question comes from Michael Cypress with Morgan Stanley. Please go ahead.

Speaker Change: Your next question comes from Michael Cyprus with Morgan Stanley. Please go ahead.

James M. Cracchiolo: Hi, good morning. Thanks for taking the time to answer the question. I wanted to circle back to your commentary on the large amounts of customer cash on the sidelines, I think over $80 billion overall, about $39 billion or so, and money fund balances and broker TDs. I was hoping you could speak to some of the steps that you're taking to help facilitate the movement of this cash into RAP accounts in terms of what you can do to make it as frictionless as possible, and what rate backdrop do we need to see for And if you look out over the next couple of years, what would success be in your view in terms of capturing what portion of this cash?

Michael Anthony Anagnostakis: Hi, Good morning, Thanks for taking the question I wanted to circle back to your commentary on the large amounts of customer cash on the sidelines I think over $80 billion overall about $39 billion or so and money fund balances in brokerage Cds I was hoping you could speak to some of the steps that you're taking to help facilitate the movement of this cash into wrap accounts in terms of what can you do to make it as.

Michael Anthony Anagnostakis: Frictionless as possible and what rate backdrop, do we need to see for this cash to move more meaningfully.

Michael Anthony Anagnostakis: And to wrap accounts and if you look out over the next couple of years, what would success be in your view in terms of capturing what portion of this cash.

James M. Cracchiolo: Well, I mean, listen, it's hard to say because it does depend a little bit on market conditions. And what I mean by market conditions, like the equity market's been up strong, but if you look at how fast it ran, and then you looked at where rates dropped so quickly initially on the long end of the curve, and now they're starting to come back up again, and they are up nice, again, back to a more reasonable level, I do believe that there is an opportunity as people start to think about rotating back into fixed income for the longer term, as well as if the equity markets do pull back as they have over the last month, so to speak, and become a little more.., what I would call less reliant on just a few of the high-tech stocks, etc., you will see a rotation back in because of that amount of money is abnormal to sit on the sidelines.

Michael Anthony Anagnostakis: Hello.

Speaker Change: Listen, it's hard to say because it does depend a little bit on market conditions, and what I mean by market advantage things like the equity market has been up strong, but if you look at how fast that ran and then you looked at where rates dropped. So quickly initially on the long end of the curve now.

Speaker Change: Starting to come back up again, and they are nice again back to a more reasonable level I do believe that there is an opportunity as people start to think about rotating back into fixed income for the longer term as well as with the equity markets do pull back as they have over the last months.

Speaker Change: Speed and become a little more.

Speaker Change: What I would call less.

Speaker Change: Reliance on just a few of the high tech stocks et cetera.

Speaker Change: You will see a rotation back in because of that amount of money is abnormal to sit on the sidelines.

James M. Cracchiolo: But again, at a 5% rate in the short term, it makes sense, and it's not like our clients or advisors are active traders back and forth in the market. So I do believe that as they are able to read what that market is over time, and they feel more that it's not like they're getting caught on the high end, that money will start to rotate. Now, how much goes back in is anyone's guess, but we're no different than what you see out there across the industry today.

Speaker Change: But again at a 5% rate in the short term it makes sense and it's not like our clients are our advisors are active traders back in and out of the market. So I do believe that as they are able to read what that market is over time and they feel more that its not like theyre getting caught on the high.

Speaker Change: And.

Speaker Change: That money will start to rotate that how much goes back and it's anyone's guess, but we're no different than what you see out there across the industry today.

James M. Cracchiolo: We saw some flows, as an example, even in our asset management on our growth side start to pick up a little, and same thing in fixed income, but some in equities. So I think some of that money will go back, but it was a high point like we hit last year because of the cycle.

Speaker Change: We saw some flows as an example, even in our asset management on a gross side start to pick up a little.

Speaker Change: And same thing in fixed income, but some in equities.

Speaker Change: I think some of that money will go back.

Speaker Change: But it was a high point as we hit last year because of the cycle.

Michael J. Cyprys: Great, just a follow-up question. I was hoping you could maybe update us on your lending solutions, including pledged assets, and lines that you have for advisors and for their clients. Just curious how built out this lending offering is compared to where you'd like that to be. Maybe you could speak to some of the steps and initiatives that you might be looking to take over the next year or two in order to drive greater uptake amongst advisors and clients from the lending solution.

Speaker Change: Great and just a follow up question I was hoping you could maybe update us on your lending solutions, including pledged assets.

Speaker Change: Lines that you have for advisors and for their clients just curious how built out this lending offering as compared to where you'd like that to be and maybe you could speak to some of the steps and initiatives that you might be looking to take over the next year or two in order to drive greater uptake amongst the advisers and clients from the lending solutions.

At a bank Cds and certainly.

Walter S. Berman: We're looking at bank CDs and certainly we'll be looking at launching basic checking capabilities and also new mortgage capabilities, HELOCs, and things of that nature. So there's a full program that is there. Plus, as you know, we have a fairly extensive pledge and that we'll certainly be looking to penetrate that more. And that is certainly totally aligned with building a relationship with our clients and deepening that relationship. Yeah, we just came up with a, you know,

Speaker Change: And we are we will be looking at to launching a checking capabilities and.

Speaker Change: Also new mortgage capabilities.

Speaker Change: Awesome things of that nature. So there's a full program that is.

Speaker Change: That is they are plus as you know we have affiliate extensive.

Speaker Change: And that will certainly be looking to penetrate that more and that is certainly totally aligned on building the relationship with our clients and deepening that relationship. We just came up with.

James M. Cracchiolo: Yeah, we just came up with a segment of that for a fixed pledge as well, and so that is also going to help grow. So yeah, we're probably still under-penetrated on the pledge side of it compared to some others, which we think will be an opportunity for us.

Speaker Change: <unk>.

Speaker Change: Both segments have therefore fixed pledge as well and so that is also going to help grow. So we're probably still underpenetrated on the pledge side of it compared to some others that we think will be an opportunity for us.

Speaker Change: Great. Thank you.

Jeffrey Paul Schmitt: Your next question comes from Jeff Schmitt with William Blair. Please go ahead.

Your next question comes from Jeff Schmidt with William Blair. Please go ahead.

Walter S. Berman: Hi, good morning. So you've been signing some partnerships in the financial institution channel recently. Is there potential for that pace to pick up or maybe for you to sign larger partnerships, just given some of your competitors may be running out of capacity?

Jeffrey Paul Schmitt: Hi, good morning, so you've been signing some partnerships in the financial institution Channel recently is there potential for that pace to pick up or maybe for you to sign larger partnerships just given some of your competitors may be running out of capacity right now.

Jeffrey Paul Schmitt: Yes, certainly with Co-America, that has turned out to be a very good relationship, and yes, we have a pipeline that we are certainly evaluating, and we feel we do have the value proposition not just to satisfy the clients but really provide them with the capabilities that we provide for basically planning and other aspects from that standpoint. And we are signing some small deals; we don't put them out there as much to publicize them, but we are bringing in some other deals, and the pipeline is good.

Speaker Change: Yes, certainly.

Certainly.

America.

Speaker Change: That has turned out to be very very good relationship and yes, we have a pipeline that we are certainly evaluating and we feel we do have the value proposition.

Speaker Change: Two basically satisfied declines and really provide them with the capabilities that we provide for basically planning a number of aspects from that standpoint, and we are signing some small deals we don't put them out there as much in the publicize them, but we we are bringing in some other deals in our pipeline is good.

Jeffrey Paul Schmitt: So again, the larger ones, we wanted to really do Co-America really well, etc., and so we learned a lot from it and set up our capabilities, so we think there's an opportunity as well in that category.

Speaker Change: So again the larger ones. We wanted to really do come go America, really well et cetera. So we learned a lot from it and set up our capabilities. So we think theres an opportunity as well in that category.

Walter S. Berman: Okay, great. And then on client cash levels, you know, how much is sitting with Comerica right now? And I guess, do they all have to transition to Ameriprise sweep options in the second half? Is that right? So some of that cash could kind of either leave or go into the market or or what have you?

Speaker Change: Okay, Great and then.

Speaker Change: On client cash levels.

Speaker Change: Sitting with Comerica right now and I guess do they so they all have to transition to ameriprise sweep options in the second half is that right. So some of that cash could kind of either leave or go into the market or or what have you.

Speaker Change: About $2 5 billion.

Jeffrey Paul Schmitt: This is about $2.5 billion, and they are certainly, as part of the program, transitioning, and we'll see. We just don't have the full information now about what that's going to be. We'll probably have a better idea at the end of the second quarter.

Speaker Change: And they are certainly is.

Speaker Change: As part of program, they're transitioning MLC, we just don't have the full information now about what thats going to be.

Speaker Change: Probably have a better idea at the end of the second quarter.

Speaker Change: Okay, great. Thank you.

Speaker Change: Yeah.

Speaker Change: Your next question comes from John Barnidge with Piper Sandler. Please go ahead.

John Bakewell Barnidge: Okay, great. Thank you. Your next question comes from John Barnidge with Piper Sandler. Please go ahead.

John Bakewell Barnidge: Good morning. Thank you for the opportunity can you maybe talk about the slowdown in institutional asset management mandates that were excited is the conversion rate being a long dated elongated along with fewer discussion. What are you hearing is the most common pushback. Thank you.

James M. Cracchiolo: Good morning. Thank you for the opportunity. Can you maybe talk about the slowdown?

John Bakewell Barnidge: Yes, I mean, some of it was a bit elongated than you would expect from the fundings or even the cycle, but there is growing interest back again, both in the fixed income area as well as in equities. So we actually think that this will pick up as we go further into the year, and the mandates that we sort of lost in the first quarter were sort of some lower fees, a pension, things like that that we, you know, they're a little lumpy in that regard.

John Bakewell Barnidge: Yes.

John Bakewell Barnidge: Some of it.

John Bakewell Barnidge: A bit elongated that you would expect the fundings or even the cycle, but there is a growing interest back again.

John Bakewell Barnidge: Both in the fixed income area as well as in the equities.

John Bakewell Barnidge: So we actually think that this will pick up as we go further into the year.

John Bakewell Barnidge: And the mandates that we sort of lost in the first quarter were sort of some lower fee pension things like that that we know.

John Bakewell Barnidge: They are a little lumpy in that regard so, but we feel that we can win some more as we go forward that the appetites there out there in the industry both not just in the U S but internationally.

John Bakewell Barnidge: But we feel that we can win some more as we go forward, that the appetite's there in the industry, both not just in the U.S. but internationally. So we're very much focused on that. Thank you.

John Bakewell Barnidge: So we're very much focused on that.

James M. Cracchiolo: And then my follow-up question: I think there was a bit of severance in the quarter. Is that expected to impact flows prospectively at all? We had some of the remnants of the changes we made that came out in the first quarter that were in the flow picture, but no, we don't expect more from that.

Speaker Change: Thank you and then my follow up question I think there was a bit of severance in the quarter is that expected to impact flows prospectively at all.

Speaker Change: We had some of the remnants of the changes we made that came out in the first quarter that was in the flow picture, but no. We don't expect more from that.

Speaker Change: Thank you.

James M. Cracchiolo: Your final question comes from Steven Chubak with Wolf Research. Please go ahead.

Speaker Change: Your final question comes from Steven <unk> with Wolfe Research. Please go ahead.

Michael Anthony Anagnostakis: Hey, good morning. This is Michael Anagnostakis on behalf of Steven.

Speaker Change: Hey, Good morning. This is Michael <unk> on for Stephen I guess, just a couple here on capital.

Michael Anthony Anagnostakis: I guess just a couple here on capital. BMO is largely integrated at this point. How are you thinking about prioritizing excess capital deployment? And is strategic M&A something you're looking at more closely? If so, where might you look to buy rather than build? Thanks.

Michael Anthony Anagnostakis: BMO largely integrated at this point how are you.

Michael Anthony Anagnostakis: Are you thinking about prioritizing excess capital deployment and his strategic M&A something youre looking at more closely if so where might you look to buy rather than build thanks.

James M. Cracchiolo: So we actually, you know, we continue to buy back nicely. I mean, in the first quarter, it was a little less than we normally have done, but that will pick up as we go through the year.

Speaker Change: So we actually.

Speaker Change: We continue to buyback nicely I mean in the first quarter was a little less than we normally have done but that will pick up as we go through the year.

James M. Cracchiolo: And I think Walter had mentioned that we're targeting initially around the 80% mark. And then, as we said, we just raised the dividend again. That will take some more of the cash.

Speaker Change: And I think Walter had mentioned that we're targeting initially around the 80% Mark.

Speaker Change: And then as we said we just raised the dividend again that will take some some more of the cash.

James M. Cracchiolo: But we still have a healthy balance sheet. You know, we're not out there looking to acquire per se. You know, there's always, if there's an opportunity or the market falls out, or something that gives us value, we'll look at it. But we're very much focused on continuing to invest organically and really focused on getting operating efficiencies, particularly in the asset management business now. And we feel good about that, including what we do from an overall investment cycle for our technology and capabilities and products. I mean, we're working on a number of different new product areas for us in asset management, like active ETFs, et cetera. So you know, we feel good.

Speaker Change: But we still have a healthy balance sheet.

Speaker Change: We're not out there looking to acquire per se. There's always if there is an opportunity of the market forces out or something that gives us a value we'll look at it but we're very much focused on continuing to invest organically.

Speaker Change: And really focus on getting the operating efficiencies, particularly in the asset management business now.

Speaker Change: And we feel good about that.

Speaker Change: <unk>, what we do from.

Speaker Change: And overall.

Speaker Change: Investment cycle for our technology and capabilities and products I mean, we're working on a number of different new product areas for us in asset management like active Etfs et cetera.

Speaker Change: So we feel good.

Michael Anthony Anagnostakis: We're looking to build out a little further on our international property areas, et cetera, our CLO business. So there are things that we're investing in a bit more organically as well. But again, we don't rule out acquisitions, but we're not necessarily looking to target things at this point.

Speaker Change: Looking to build out a little further on our international property areas et cetera.

Speaker Change: Our CLO business. So there are things that we're investing in.

Speaker Change: Bit more organically as well.

Speaker Change: But again, we don't rule out acquisitions, but we're not necessarily looking to target things at this point.

Michael Anthony Anagnostakis: Okay, great. That's super helpful.

Speaker Change: Okay, Great that's super helpful and just on the buyback so 80% payout still the expectation.

Michael Anthony Anagnostakis: And, you know, just on the buyback, so, you know, 80% payout is still the expectation. It sounds like you guys are more focused on the organic internal investment. But, you know, given the banks have largely built out, maybe M&A is less of a focus here, and you're generating strong cash flow, why not ramp the payout ratio back to the 90 to 100% zone that you historically ran at?

It sounds like you guys are more focused on the organic internal.

Speaker Change: But given that the banks largely built out maybe M&A is less of a focus here and you are generating strong cash flow why not ramp the payout ratio back to the 90% to 100% zone that you historically ran out.

Walter S. Berman: Thanks.

Speaker Change: Thanks.

Michael Anthony Anagnostakis: Well, we certainly have the capacity to do that, and we evaluate it as an opportunistic situation as we look at it. But yes, we do have the capacity. At this stage, we feel 80 percent is a good return level. And there are other areas that we certainly, as I said, we will be going to banks on, so it would require additional. But I would say at this stage, we have the capability. We just feel it's opportunistic. We look at it, and then we evaluate it. And you've seen in prior times, we have gone up. But at this stage, we feel that 80% is an appropriate level.

Speaker Change: Well listen we certainly have the capacity to do that and we evaluate it on an opportunistic situation as we look at it.

Speaker Change: But yes, we do have the cash we had at this stage, we feel the 80% is a good return level.

Speaker Change: <unk>.

Speaker Change: There is.

Speaker Change: There are other areas that we certainly as I said, we will be growing the bank. So it would require additional but I would say at this stage.

Speaker Change: Have the capability, we just feel it's opportunistic we look at it and then we evaluated.

Speaker Change: <unk> seen in prior times, we have gone up.

Speaker Change: But at this stage, we feel that 80% is an appropriate level.

Operator: Got it. Thank you.

Speaker Change: Got it thank you.

Operator: We have no further questions at this time. This concludes today's conference. Thank you for participating. You may now disconnect.

Speaker Change: We have no further questions at this time. This concludes today's conference. Thank you for participating you may now disconnect.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Okay.