Q2 2024 Ameriprise Financial Inc Earnings Call

Welcome to the Q2 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.

Operator: Thank you, operator, and good morning. This is Ameriprise Financial's second quarter earnings call. On the call with me today are Jim Cracchiolo, Chairman and CEO, and Walter Berman, Chief Financial Officer. Now, turning to our earnings presentation materials that are available on our website. On slide two, you will see a discussion of forward-looking statements. A sample list of factors and risks that could cause actual results to be materially different from forward-looking statements can be found in our second quarter 2024 earnings release, our 2023 annual report to shareholders, and our 2023 10-K report.

Speaker Change: 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.

Speaker Change: Turning to our earnings presentation materials that are available on our website on.

Speaker Change: On slide two you will see a discussion of forward looking statements specifically during the call you will hear reference to various non-GAAP financial measures, which we believe provide insight into the company operations.

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

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: A sample list of factors and risks that could cause actual results to be materially different from forward looking statements can be found in our second quarter 2024 earnings release, our 2023 annual report to shareholders and our 2023 10-K report.

Speaker Change: 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 second quarter.

Speaker Change: So that you see our adjusted operating results.

Speaker Change: 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.

Jim: Good morning, everyone. As you saw in our release Ameriprise delivered another strong quarter and first half of the year continuing our record of delivering strong operating results over many years and operating environments looking at the external landscape in the quarter markets continue to be good with the expectation that there will be.

Operator: We make no obligation to publicly update or revise these forward-looking statements. Below that, you see our adjusted operating results. Many of the comments that management makes on the call today will focus on adjusted operating results. Good morning.

Speaker Change: Soft landing, while inflation remains sticky people assume that it's going to come down however that could take longer than expected.

Speaker Change: And there is also the ongoing geopolitical instability and the upcoming U S election. So all of this is top of mind for our clients.

Speaker Change: With that as a backdrop, our second quarter results were excellent.

Speaker Change: In terms of our operating results revenues were up 9% from positive business results and markets.

Speaker Change: <unk> reached a new record of $4 $2 billion.

Speaker Change: Earnings were also excellent with EPS, excluding disclosed severance costs, increasing 17% to $8 72.

Speaker Change: This is also a new high.

Speaker Change: It also generated free cash flow of 90% and returned another $693 million to shareholders and our return on equity was nearly 50% and continues to be best in class.

Speaker Change: Our assets under management and administration were $1 four trillion up 12% year over year with good client net inflows and market appreciation.

Speaker Change: We have also been a depth that maintaining a significant investment agenda that is complemented by our strong reengineering discipline for reinvestment we.

Speaker: We have also been adept at maintaining a significant investment agenda that is complemented by a strong re-engineering discipline for reinvestment. We freed up additional resources, which is why you're seeing some additional severance costs in the quarter that we will benefit from through the year. In fact, G&A was down 2% excluding those one-time costs.

Speaker Change: Freed up additional resources, which is why youre seeing some additional severance costs in the quarter, but we will benefit from through the year.

Speaker Change: G&A was down 2%, excluding those one time costs.

Speaker Change: In wealth management, we are building on what we know works quality engagements centered on advice and delivered through the Ameriprise client experience.

Speaker Change: <unk> satisfaction remains excellent at four nine out of five stars and we continue to receive important industry accolades.

Speaker Change: Total client assets in wealth management was strong at 972 billion up 17%.

Speaker Change: We will also attracting new clients in the 500000 to $5 million range on most recent research underscores that our premium client value proposition continues to appeal to people, who want to work with a trusted adviser and a trusted firm like Ameriprise and advice relationship.

Speaker: For the quarter, total client WRAP assets reached $535 billion, an increase of 18%. WRAP flows also grew nicely, up 34% year-over-year to $7.5 billion. And transactional activity was also up, increasing 19% from a year ago.

Speaker Change: For the quarter total client wrap assets reached $535 billion.

Speaker Change: An increase of 18% wrap flows also grew nicely up 34% year over year to $7 5 billion and transactional activity was also up increasing 19% from a year ago.

Speaker Change: Cash balances, though still at a higher level I'll begin to shift back to rap and other products, which represent a future growth opportunity for us we continue to provide exceptional support and capabilities for our advisers, both satisfaction and growth remain excellent productivity increased another 11% to 968000 in the.

Speaker Change: Quarter with.

Speaker Change: We're focused on leveraging our integrated and effective CRM engagement tools and digital capabilities for client deepening in acquisition to complement in person interactions. We're also using automation and analytics to drive efficiency, helping advisers enhanced personalization based on client needs and identifying.

Speaker Change: New growth opportunities.

Speaker Change: Our advisor force grew to nearly 10400 in the quarter. We added another 52 experienced advisors and we feel good about our pipeline as well as a differentiated value proposition.

Speaker: At Ameriprise, total assets were up year over year, and we closed the quarter at $23 billion. Strong contributions from bank earnings drove a nice increase in net investment income. We continue to have good advisor and client interest in lending, with notable growth in pledge loan volumes as our advisors engage their clients in our banking solution. During the quarter, I spent time with the top 10% of our advisor force at our largest recognition conference.

Speaker Change: At Ameriprise total assets were up year over year, and we closed the quarter at 23 billion strong contributions from bank earnings drove a nice increase in net investment income. We continue to have good advisor and client interest in lending with notable growth in pledged loan volumes as our advisors engage their clients and our banking salute.

Speaker Change: <unk>.

Speaker Change: During the quarter I spent time with the top 10% of our advisor force at our largest recognition conference. They appreciate what we've built together and that Ameriprise is not just another firm or group of practices, but we have a supportive and caring culture that helps them have highly successful practices.

Speaker: They appreciate what we built together and that Ameriprise is not just another firm or group of practices but that we have a supportive and caring culture that helps them have highly successful practices. Total assets under management increased 4% to $642 billion as market appreciation more than offset net outflows.

Speaker Change: And our retirement protection business is a consistent contributor to our positive results as our advisors provide more advice, they're appropriately incorporating annuity insurance solutions to serve clients complex needs. We're driving good sales in our targeted areas. For example, structured annuity sales were up 60% from a year ago.

Speaker Change: And in insurance sales were up 24%.

Speaker Change: Rps continues to add nicely to our overall earnings and free cash flow and we continue to feel very good about our product mix and position.

Speaker Change: In asset management, clearly the active industry remains dynamic.

Speaker Change: Team remains focused on client needs and generate an attractive investment performance.

Speaker Change: Total assets under management increased 4% to $642 billion as market appreciation more than offset net outflows. We continue to have good investment performance across asset classes and time periods globally, 68% of our funds are above the median for the three year period on an asset weighted basis with nearly 80%.

Speaker: We continue to have good investment performance across asset classes and time periods. Globally, 68% of our funds are above the median for the three-year period on an asset-weighted basis, with nearly 80% for five years and 90% for 10 years. We also have 114 4- and 5-star Morningstar-rated funds globally. Institutional flows were slightly positive in the quarter, driven primarily from winds in the APAC region.

Speaker Change: For five years and 90% for 10 years. We also have 114, four and five star Morningstar rated funds globally.

Speaker Change: Turning to flows total outflows were $4 billion, improving one 3 billion from a year ago, excluding the legacy insurance partner asset transfer, which came through both the retail and institutional channels.

Speaker Change: In retail overall, we had improvement in gross sales up 1 billion from last year with a slight improvement in redemptions, though were in net outflows. Our equity results are outpacing the industry and we see an opportunity to gain more flows in fixed income instead.

Speaker Change: Institutional flows were slightly positive in the quarter, driven primarily from wins in the APAC region and where.

Speaker Change: Putting additional emphasis on models SMA is in Etfs and beginning to gain traction we.

Speaker: We continue to focus on transforming our global asset management business to gain greater operational efficiencies, leveraging resources and technology globally. And in June, we officially recognized our 130th anniversary, and we're one of a select number of public companies with this legacy of success and performance. Our ROE of 50% is consistently among the best. Ameriprise has been the number one performer for TSR among the S&P 500 financials since our spinoff in 2005, and we continue to deliver excellent returns and returns to shareholders in a significant way. Now Walter will provide additional color on our financials. Walter?

Speaker Change: We continue to focus on transforming our global asset management business to gain greater operational efficiencies leveraging resources and technology globally.

Speaker Change: You saw that our G&A expenses decreased 6% in the quarter and we have a number of additional actions underway to further derived benefits throughout the year.

Speaker Change: In asset management, we are maintaining good fee levels and good margins.

Speaker Change: At Ameriprise, our model and overall firm has enabled us to perform very well over market and environmental cycles, we continue to leverage our global capabilities as well as steadily invest in technology digital analytics, AI products and solutions across our complementary businesses and in.

Speaker Change: June we efficiently recognized our 130 anniversary and we're one of a select number of public companies with this legacy of success and performance. Our ROE of 50% is consistently among the best Ameriprise has been the number one pro forma for <unk> among the S&P 500 financials.

Speaker Change: Since our spinoff in 2005, and we continue to deliver excellent returns and returns to shareholders in a significant way.

Speaker Change: Looking forward, we have the right strategic focus growth investments, a talented team and a meaningful opportunity to drive greater growth.

Speaker Change: Now Walter will provide additional color on our financials Walter.

Walter S. Berman: Thank you Jim.

Walter S. Berman: Adjusted operating EPS grew 17% to eight.

Walter S. Berman: 72 <unk>.

Walter S. Berman: Adjusted for 19 of severance expense associated with the company's reengineering initiatives, reflecting earnings growth across all of our businesses.

Walter S. Berman: The diversified nature of our business is drive our consistent financial performance across market cycles and sets us apart from most.

Walter S. Berman: <unk> services industry.

Walter S. Berman: Assets under management and administration increased 12% to one four trillion.

Walter S. Berman: Benefiting from strong client flows over the past year and equity market appreciation.

Walter S. Berman: This has resulted in strong 90% revenue growth across our business. As you know, we continue to manage expenses tightly to maintain strong logic, and balance sheet fundamentals, including excess capital and liquidity, remain very strong. In 2024, we continue to expect to return 80% of operating earnings to shareholders. We are beginning to see clients put money back to work and introduce wrap and other products on our platform, and we expect this to continue over time as markets and rates normalize, which creates a significant opportunity.

Walter S. Berman: This has resulted in strong 9% revenue growth across our businesses.

Walter S. Berman: As you know we continue to manage expenses tightly to maintain strong margins.

Walter S. Berman: G&A expenses were down 2%, excluding severance expenses, demonstrating our continued focus on reengineering and operational transformation.

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

Walter S. Berman: Particularly in wealth management.

Walter S. Berman: We will maintain our expense discipline in 2024 to achieve growth and shareholder objectives.

Walter S. Berman: Our returns remain strong with a consolidated margin of 27, 4%, excluding severance expenses and a best in class return of equity of 50%.

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

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

Walter S. Berman: We returned $693 million of capital to shareholders in the quarter.

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

Walter S. Berman: On slide six Youll see the strong results from wealth management.

Walter S. Berman: Client and wrap assets increased 17, and 18% respectively.

Walter S. Berman: From strong net flows and market appreciation over the past year.

Walter S. Berman: Wrap flows were strong in the quarter at $7 5 billion or 6% annualized flow rate.

Walter S. Berman: In the quarter.

Walter S. Berman: Adjusted operating net revenues increased 13%.

Walter S. Berman: Two 6 billion from growth in client assets increased transactional activity and an 11% increase in net investment income in the bank.

Walter S. Berman: This drove revenue per advisor to a new high at 968000 up 11% from a year ago.

Walter S. Berman: Total cash balances, including third party money market funds and brokered Cds were $81 9 billion, which was over 8% of clients assets.

Walter S. Berman: As clients remain heavily concentrated in yield oriented products with highly liquid products like money market funds being more in favor than term products like certificates and brokerage Cds.

Walter S. Berman: We are beginning to see clients put money back to work in rap and over products on our platform and we expect this to continue over time as markets and rates normalized which creates a significant opportunity.

Walter S. Berman: Our cash balances, excluding money market funds and brokerage Cds were $40 6 billion driven by normal seasonal tax patterns and the transition of cash related to comerica partnership and other products underlay.

Walter S. Berman: Underlying cash sweep was stable in the quarter as expected, and that trend continues in July. A cash sweep is a transaction account for money in motion that is in between investments or for cash to pay fees, which is similar to a bank checking account. It is not meant to be an investment option for significant cash balances over extended periods, which is where a large portion of the excess cash has gone.

Walter S. Berman: Underlying cash sweep was stable in the quarter as expected and that trend continues in July.

Walter S. Berman: I want to provide some additional perspective on sweep cash.

Walter S. Berman: Our cash sweep is their transaction account for money in motion that is in between investments or for cash to pay fees, which is similar to a bank checking account.

Walter S. Berman: Cash sweep is not meant to be an investment option with significant cash balances over extended periods.

Walter S. Berman: We have a broad range of higher yielding products available for clients seeking to hold cash over extended periods, which is where a large portion of the excess cash is gone.

Walter S. Berman: As a result, our clients generally have very low cash rebalancing, which are now approximately $6000 on average at this point, we do not anticipate any changes in our approach to cash sweep.

Walter S. Berman: Adjusted operating expenses in the quarter increased 13 percent, with distribution expenses up 17 percent, reflecting business growth, including Comerica, and increased transactional activity. G&A expenses were flat at $409 million, reflecting investments for business growth offset by re-engineering initiatives.

Walter S. Berman: Adjusted operating expenses in the quarter increased 13% with distribution expenses up 17%.

Walter S. Berman: Reflecting business growth, including co America and increased transactional activity.

Walter S. Berman: G&A expenses were flat at $409 million, reflecting investments for business growth offset by reengineering initiatives.

Walter S. Berman: This combination of revenue growth and well managed expenses resulted in the business sustaining at an operating margin of 31%.

Speaker: Turning to asset management on slide seven, in the quarter, operating earnings increased 35 percent to $218 million as a result of equity market appreciation and disciplined expense management, which more than offset the cumulative impact of net outflows, and Margin increased 38% reflecting strong market appreciation and expense discipline, with general and administrative expenses down 6% from a year ago, reflecting the benefits from comprehensive expense management initiatives taken to date. Overall, retirement and protection solutions sales improved in the quarter. Turn to the balance sheet on slide 9.

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

Walter S. Berman: Financial results were very strong in the quarter and we continuing to manage the business well through a challenging environment for active asset management totally AUM increased 4% to $642 billion, primarily from higher equity market appreciation, partially offset by net outflows in.

Walter S. Berman: In the quarter operating earnings increased 35% to $218 million as a result of the equity market appreciation and disciplined expense management, which more than offset the cumulative impact of net outflows.

Walter S. Berman: And margin was 38%, reflecting strong market appreciation and expense discipline.

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

Walter S. Berman: General and administrative expenses down 6% from a year ago, reflecting the benefits from comprehensive expense management initiatives taken to date.

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

Walter S. Berman: Pre tax adjusted operating earnings in the quarter increased 4% to $196 million, reflecting the benefit from strong markets and higher interest rates, partially offset by higher distribution expenses associated with strong sales levels.

Walter S. Berman: Overall retirement and protection solution sales improved in the quarter.

Walter S. Berman: With protection sales up 21% to $93 million, primarily in higher margin <unk> products variable annuity sales grew 45% to $1 4 billion with strong momentum in our structured product.

Walter S. Berman: Turning to the balance sheet on slide nine balance.

Speaker: Boundary fundamentals and free cash photo generation remains strong with growth in excess capital to 1.7 billion. We have diverse sources of dividends from all our businesses, enabled by strong underlying fundamentals. This supports our ability to consistently return capital to shareholders and invest for future business growth.

Walter S. Berman: Balance sheet fundamentals and free cash flow generation remained strong with growth in excess capital to $1 7 billion.

Walter S. Berman: We have diverse sources of dividends from all our businesses enabled by strong underlying fundamentals.

Walter S. Berman: This supports our ability to consistently return capital to shareholders and invest for future business growth.

Speaker: In the last year, we returned 2.6 billion of capital to shareholders, including 690 trillion in a quarter. Ameriprise consistent capital return drives long-term shareholder value.

Walter S. Berman: And the last year, we returned $2 6 billion of capital to shareholders, including $693 million in the quarter.

Speaker: Ameriprise consistently delivers consistent capital return drives long-term shareholder value. Now, let's finish with slide 10, which delivered excellent growth in the second quarter, which is a continuation of a long track record across market cycles and our commitment to profitable growth. Over the last 12 months, revenues grew 10%. These trends are consistent over the longer term as well. 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. With that, we'll take your questions.

Walter S. Berman: Ameriprise consistent capital return drives long term shareholder value.

Speaker: Now a sentence was Slide 10. Ameriprise delivered excellent growth in the second quarter, which is a continuation of a long track record across market cycles and our commitment to profitable growth. Over the last 12 months, revenues grew 10%; earnings per share increased 15. All we grew 90 basis points is studio-mocking, and we returned 2.6 billion of capital to shareholders. We had similar growth trends over the past five years, with 7% revenue growth and 16% EPS compound annual growth. Return on equity improvement nearly 13 percentage points, and we returned 11.9 billion of capital to shareholders. These trends are consistent over the long-term as well.

Walter S. Berman: Now, let's finish with slide 10.

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

Walter S. Berman: Over the last 12 months revenues grew 10%.

Walter S. Berman: Earnings per share increased 15%.

Walter S. Berman: Roy grew 90 basis points, excluding on marketing and we returned $2 6 billion of capital to shareholders.

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

Walter S. Berman: With 7% revenue growth, 16% EPS compounded annual growth return on equity improvement nearly 13 percentage points and we returned $11 9 billion of capital to shareholders.

Walter S. Berman: These trends are consistent over the longer term as well.

Walter S. Berman: Compared to most financial services companies. This differentiated performance across multiple cycles speaks to the complementary nature of our business mix.

Speaker: Compared to most financial services companies, this differentiated performance, of course, multiple cycles, speaks to the complementary nature of our business mix, as well as our focus on profitable growth.

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

Speaker: With that, we'll take your question.

Walter S. Berman: With that we will take your questions.

Speaker Change: Thank you we will.

Speaker: Thank you.

Speaker: We will now begin the question and answer session. If you have a question, please press star 1 on your touch-tone phone. If you wish to be removed from the queue, please press star 1.

Speaker Change: Now begin the question and answer session.

Operator: 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.

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: If you're using a speaker phone, you may need to pick up the hands at first before pressing the numbers. Once again, if you have a question, please press star 1 on your touch-tone phone.

Speaker Change: 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: <unk> Kamath from Jefferies is online with your first question. Please go ahead, great. Thank you. Good morning, I wanted to start with the cash sweep commentary Walter.

Suneet Kamath: Sunny, come off from Jeffries, is online with your first question. Please go ahead. Great. Thank you.

Speaker: Great. Thank you. Good morning.

Jeffrey Schmitt: Good morning. I wanted to start with the cash sweep commentary, Walter. It doesn't sound like you're planning on making any big changes. But I know in the past, you've said that's always subject to the competitive environment. Obviously, we've seen a handful of companies take some actions on their cash sweep rate. So I guess the question is, I'm trying to reconcile those two. Is it that the moves that those peers are making are sort of catching up to you? Or is your sort of client account size different that you're just not experiencing the same need to make those changes?

Speaker: I wanted to start with the cash sweep commentary, Walter. So it doesn't sound like you're planning on making any big changes, but I know in the past you've said that's always subject to the competitive environment. Obviously, we've seen a handful of companies take some action on their cash sweep rate. So I guess the question is, I'm trying to reconcile those two. Is it that the moves that those peers are making are sort of catching up to you? Or is your sort of client account size different, so you're just not experiencing the same need to make those changes?

Speaker Change: It sounds like you're planning on making any big changes, but I know in the past you've said that's always subject to the competitive environment. Obviously, we've seen a handful of companies take some actions on their cash sweep.

Speaker: Got it. Okay.

Speaker Change: Right. So I guess the question is I'm trying to reconcile those two is it that the moves that those peers are making are sort of catching up to you or is your sort of client account size different that youre, just not experiencing the same need to to make those changes.

Walter Berman: Okay. Thanks.

Speaker Change: Okay. Thanks.

Walter Berman: I guess, let me start. We, as you know, we operate with the regulatory standards. And therefore, we feel certainly looking at sweep in its transactional assets, or cash emotions. It's totally appropriate in a while. I can't really comment on what is taking place with the wirehouses. I don't understand it. I really think we, all I know is what we do. But that's the endpoint, and all the actions we have taken to ensure that the money is in sweep is really for transactional purposes. And it's at the levels, you know, that we majority of it is in under 100,000.

Speaker Change: I guess, let me start.

Speaker Change: As you know we operate within regulatory on fiduciary standards.

Speaker Change: And therefore, we feel certainly looking at suite and as transactional aspects of cash and motions, it's totally appropriate and aligned.

Speaker Change: Really comment on what is what's taking place with the wire houses I don't understand it I really I think.

Speaker Change: All I know is what we do from that standpoint, and all the actions we have taken to ensure that the money is in Sweden is really for transactional purposes and it's at the levels you know that the majority of it is.

Speaker Change: As in the under 100000 account balances are on those $6000.

Walter Berman: The account balances are under $6,000. The rates are competitive. And we keep the appropriate level of cash that we think is necessary to operate. So that is the focus of us. And we feel very comfortable with that. And obviously we'll evaluate things as goes. But we, we look at what we have today. We think it's totally appropriate. Good. Got it. Okay.

Speaker Change: Our rates are competitive and.

Speaker Change: And we keep the appropriate level of cash that we think is necessary to operate so.

Speaker Change: That is the focus of us and we feel very comfortable with that obviously, we'll evaluate things as it goes but we are looking at what we have today, we think it's totally appropriate.

Speaker Change: Got it Okay and then.

Speaker: And then just another one on the bank. So I think, Latin, maybe on the fourth quarter call, Walter, you said you expected bank NII to be higher in 24 than 23, which seems to be the case here to date. But then you also made a comment about 25. Just wondering if you think that you could continue to see bank NII growth as we move into 25 over 24, and maybe unpack some of the underlying drivers. Thanks.

Walter Berman: And then just another one on the bank. So I think Latin, maybe it's the fourth quarter call, Walter. You said you expected bank NII would be higher in 24 than 23, which seems to be the case of your debate. But then you also made a comment about 25. Just wondering if you think that you could continue to see bank NII growth as we move into 25 over 24 and maybe unpack some of the underlying drivers. Thanks. As I remember what I said, clearly 24 over 23, but I still believe, you know, that it was slow, but yes, but the net, net interest income should be higher.

Walter S. Berman: Just another one on the bank, so I think Latin that maybe at the fourth quarter call. Walter You said, you expected bank NII would be higher in 2004 than 'twenty, three which seems to be the case a year to date, but then you also made a comment about 25. Just wondering if you think that you could continue to see bank NII growth as we move into 'twenty five over 24.

Speaker Change: And maybe unpack some of the underlying drivers thanks.

Speaker Change: If I remember what I said clearly 24 over 23.

Speaker Change: Still believe that it was slow, but yes, but the net net interest income should be higher.

Walter Berman: That's the minute you're still about. And the, and the drivers there? Well, the driver is, is obviously we're investing over 6%. And so we, we feel that that as maturities and short duration, that it will give us that and we, that momentum and we are adding, but we're obviously being measured, but we're adding. Got it. Okay. Thanks.

Speaker Change: The statement I think is still valid.

Speaker: is still valid. And are the drivers there?

Speaker Change: And the drivers there.

Speaker Change: Well the driver is obviously, we're investing over 6% and so we feel that that.

Speaker Change: As maturities in our short duration that it will give us that in.

Speaker Change: That momentum and we are adding will obviously be measured but we're adding.

Speaker Change: Got it okay. Thanks.

Ryan Krueger: Ryan Krueger with KBW is on with your next question. Please go ahead. Thanks. Good morning. First one was just can, can you disclose how much of your client cash is specifically held in your rapid advisory account? That's about 12 billion. Got it. Okay. Great. Thank you.

Speaker Change: Ryan Krueger with VW is on with your next question. Please go ahead.

Ryan Joel Krueger: Thanks, Good morning, first one Richard Kim can you disclose.

Speaker: Thanks. Good morning.

Ryan Joel Krueger: How much of your client cash.

Ryan Joel Krueger: Typically held in your rapid advisory account.

Speaker Change: It's about $12 billion.

Speaker Change: Got it okay, great. Thank you and then I.

Speaker: The first one was, can you disclose how much of your client cash is specifically held in your RAP advisory account? Got it. Okay, great. Thank you. And then I guess another question was just on recruiting your experienced recruits, which have slowed down a bit year-to-date. Can you comment on what you're seeing from a competitive environment for hiring experienced advisors and just kind of any thoughts on why the slowdown and your expectations for the rest of the year?

Ryan Krueger: And then I guess another question was just on recruiting, your, you know, your experience recruits that you don't have slowed down a bit. Your today, can you comment on, you know, what you're seeing from a competitive environment for hiring and experiencing advisors and just kind of any thoughts on why this slowed down and your, your expectations for the rest of the year? Yeah. We sort of, again, a bit of a slowdown as we, you know, entered a second quarter. You know, we can't tell you exactly why it looked like people would stay and put a little bit based on, you know, markets, et cetera, and moving into the, you know, I guess, into the seasonal.

Speaker Change: I guess another question was just on recruiting.

Speaker Change: Sure.

Speaker Change: <unk> experienced recruits.

Speaker Change: So down a bit year to date can you comment on what youre seeing from a competitive environment for hiring experienced advisors.

Speaker Change: And just kind of any thoughts on why the slowdown in your expectations for the rest of the year.

Speaker Change: Yes, we saw again a bit of a slowdown as we into the second quarter. We can't tell you exactly why it looks like people would stay and put a little bit.

Speaker: We saw, again, a bit of a slowdown as we moved into the second quarter. You know, we can't tell you exactly why it looks like people were staying put a little bit based on, you know, markets, et cetera, and moving into the, you know, I guess seasonal. We see a good pickup in our pipeline again, and so we think that will improve as we go forward. But, you know, speaking to the team, that's really what they saw.

Speaker Change: Based on.

Speaker Change: Markets et cetera, and moving into the.

Speaker Change: I guess into the seasonal.

Walter Berman: We see a good pickup in our pipeline again. And so, we think that will improve as we go forward. But you know, other than that, speaking to the team, that's really what they saw. Okay. Great. Thank you.

Speaker Change: We see a good pickup in our pipeline again.

Speaker Change: So we think that will improve as we go forward.

Speaker Change: But other than that I'm speaking to the team that's really what they saw.

Speaker Change: Okay, great. Thank you.

Alex: Alex <unk> from Goldman Sachs is online with your next question. Please go ahead.

Alexander Blostein: Alex Blostin from Goldman Sachs is online with your next question. Please go ahead. Hey, thanks. Good morning. So I wanted to go back to your comments regarding clients starting to put capital to work. I'm on you to work in rapid. We saw those net flows pick up a little bit. Can you talk a little bit about where the cash is coming from? Is it ultimately coming out of the kind of $40, $41 billion balance that currently sits and sweeps and your certificates business? Or is this coming out from other sources, kind of like money market funds that sit off balance sheet or outside of the sweep program?

Operator: Alex Blostein from Goldman Sachs is on line with your next question. Please go ahead.

Alex: Hey, Thanks, good morning.

Speaker Change: So I wanted to go back to your comments regarding clients starting to put capital to work or money to work and rapid and we saw those net flows pick up a little bit.

Speaker Change: Can you talk a little bit about where the cash is coming from is it ultimately coming out of the kind of $4 $41 billion balance that currently sits in sweep and youre certificates business or is this coming out from other sources kind of like money market funds that set off balance sheet or outside of the sweet program and maybe just remind us how much cash ultimately.

Walter Berman: And maybe just remind us how much cash ultimately fills on the sidelines outside of that $40, $41 billion number. So the, if I understand Alex, your question about, I think our total cash is about eight to 81 billion. And so therefore, in the money markets and in third-party CDs is about 40-someone billion dollars. And we are seeing that certainly money is still coming into, I would say, money markets are probably money markets, and but it's slowed a little on the CD side. And so from that standpoint, there is, we are seeing less in CDs and there is a shift.

Speaker Change: Still on the sidelines outside of that $40 billion to $41 billion number.

Speaker: So if I understand your question, Alex, about $81 billion, and so therefore, in the money markets and in third-party CDs, it's about $40-some-odd billion. And we are seeing that certainly money is still coming into, I would say, the money markets, third-party money markets, but it's slowed a little on the CD side. And so from that standpoint, there is, we are seeing less in CDs, and there is a shift. People are staying shorter from that standpoint as they're trying to take advantage of the yield curve. That's the trend that we're seeing right now.

Speaker Change: So if I understand.

Speaker Change: Your question about I think our total cash is about $80 81 billion and so therefore.

Speaker Change: In the money markets and third party Cds is about 40, some odd million dollars.

Speaker Change: And we are seeing certainly money is still coming in some I.

Speaker Change: I would say money markets.

Speaker Change: Money markets, and but it's slowed a little on the CD side.

Speaker Change: So from that standpoint, there is we are seeing less in Cds and there is a shift.

Walter Berman: People are staying shorter. From that standpoint, is they're trying to take a bench on the yield curve. That's the trend that we're seeing about.

Speaker Change: We are staying shorter from that standpoint, as they're trying to take advantage on yield curve. That's the trend that we're seeing about now.

Walter Berman: Gotcha. I guess I'm going to try to get to it as clients, re-risk and extenderation and put capital to work, which you've captured those economics in your rep program, which is great. But should we expect that to put any pressure on the $40 billion balance across sort of sweep and your certificate's business, or could that remain fairly stable as money comes out of other forms of kind of cash options? Good question. We do anticipate, because obviously, from an economic standpoint, that'll be beneficial to us. We had new money go in there, and yes, as it gets redeployed, that would be beneficial, and we think that certainly will be a source of the repositioning.

Speaker Change: Got you I guess, what I'm trying to get to it as clients re risking extend duration and put capital to work, which you capture those economics in your Rep program, which is great.

Speaker: Gotcha. I guess what I'm trying to get at is clients re-risk and extend duration and put capital to work, which you capture in your rep program, which is great. But should we expect that to put any pressure on the $40 billion balance across SOTA sweep and your certificates business? Or could that remain fairly stable as money comes out of other forms of cash options?

Speaker Change: But should we expect that to put any pressure on the $40 billion balance across sort of sweep and youre certificates business or could that remained fairly stable as money comes out of other forms of kind of cash options.

Speaker Change: Good question, we do anticipate because obviously from an economic standpoint that'll be beneficial to us.

Speaker Change: New money go in there and yes as it gets redeployed that would be beneficial and we think that certainly we will be a source of the repositioning.

Speaker: Okay, gotcha. And then a quick follow-up, so GNA, really well managed. I think if you look at this quarter, excluding severance, I think you're at like 910 million or something like that for Q2. How should you sort of think about GNA evolving through the rest of the year? And I know you highlighted a number of some kind of savings programs that you continue to sort of find, so maybe any sort of early thoughts on your 2025 GNA outlook would be helpful. Thank you.

Speaker: Gotcha.

Speaker Change: Okay got you.

Speaker: And then quick follow-up to GNA, really well-managed. I think if you look at this quarter, excluding severance, I think you're at like $910 million or something like that. For Q2, how should you sort of think about GNA evolving through the rest of the year? And I know you highlighted a number of sort of savings programs that you continue to sort of find. So maybe any sort of early thoughts on your 2025 GNA outlook would be helpful. Thank you. On 25, I can say that we feel certainly the expenses are being well-managed, and certainly as we reposition and look at our process changes and efficiencies that we're getting there.

Speaker Change: And then quick follow up G&A really well managed I think if you look at this quarter exclude.

Speaker Change: Excluding severance I think you're at like $910 million or something like that.

Speaker Change: For Q2.

Speaker Change: How should you sort of think about G&A evolving through the rest of the year and I know you highlighted a number so it kind of savings programs.

Speaker Change: Do you continue to sort of find.

Speaker Change: So maybe any sort of early thoughts on your 2025 G&A outlook would be helpful. Thank you.

Walter S. Berman: All of us, and on 25, I can say that we feel certainly the expenses are being well-managed and, certainly, as we reposition, look at our process changes and the efficiencies that we're getting there. So I think I feel comfortable, as we said, for 24. 25, we certainly will continue, we're going to be investing in the business, so I would say you should see well-managed expenses, but we are going to be investing for growth. I think a lot of the way you've seen us operate in prior years and, certainly, especially in 24, we manage our expenses in a portion to our revenue and manage our margin.

Speaker Change: All of US on 25 as I can say that we feel certainly where the expenses are being well managed and certainly as we reposition and look at our process changes and other efficiencies that we're getting you. There. So I think I feel comfortable as we said for 24.

Speaker: So I think feel comfortable, as we said, for 24, 25 certainly will continue. We're going to be investing in the business. So I would say you should see well-managed expenses, but we are going to be investing for growth. Okay.

Speaker Change: 25, we certainly will continue we're going to be investing in the business. So I would say you should see well managed expenses, but we are going to be investing for growth.

Speaker Change: Yes.

Speaker Change: Okay. Thank you.

Speaker: Thank you. A lot of the way you certainly have seen we've operated in prior years, and certainly especially in 24, we manage our expenses in proportion to our revenue and manage our margin. Yeah, I got to. Okay, great.

Speaker Change: You.

Speaker Change: You certainly have seen we've operated in in prior years, and certainly, especially in 'twenty four.

Speaker Change: We manage our expenses in proportion to our revenue.

Speaker Change: Manage our margin.

Speaker: Yeah, I got you. Okay, great. Thanks, Walt.

Speaker Change: I gotcha, okay, great. Thanks, a lot.

Speaker: Thanks, Paul.

Brennan Hawken: Brennan Hawking with UVS is online with your next question. Please go ahead. Good morning. Thanks for taking my questions. I'm curious to drill down a little bit on the $12 billion of sweep within advisory accounts. So do you know what portion of that $12 billion would include a merit prize as a fiduciary or investment advisor? So a little more specifically, what portion of that $12 billion would be in the employee channel and in any portfolios where a merit prize, you know, would centrally manage or central models where a merit prize is the advisor? A lot of our, I'll go, a lot of our central models are really run by outside managers, institutional, and oversight is there.

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

Operator: Brennan Hawken with UBS is online with your next question. Please go ahead.

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

Speaker: Good morning. Thanks for taking my questions.

Brennan Hawken: I'm curious to drill down a little bit on the $12 billion of sweep within.

Speaker: I'm curious to drill down a little bit on the $12 billion of sweep within advisory accounts. So do you know what portion of that $12 billion would include Ameriprise as a fiduciary or investment advisor? And more specifically, what portion of that $12 billion would be in the employee channel and in any portfolios where Ameriprise, you know, with centrally managed or central models where Ameriprise is the advisor?

Brennan Hawken: Advisory accounts, so do you know what portion of that $12 billion.

Speaker Change: Would include Ameriprise, as a fiduciary or investment advisor.

Speaker Change: A little more specifically what portion of that $12 billion would be in the employee channel and in any.

Speaker Change: Portfolios, where.

Speaker Change: Ameriprise.

Speaker Change: Centrally managed or central models, where ameriprise as the adviser.

Speaker: A lot of our central models are really run by outside managers, institutional, and oversighted there. So, and again, even in those types of models, there's roughly around 2% or so. And even at our advisor discretion, it's actually less than on the institutional models. So I would probably say, you know, as you look at it now, we haven't broken that out between, you know, employee, non-employee, et cetera, because these models are all run in certain ways.

Speaker Change: A lot of our I'll go to a lot of our central models are really run by outside managers institutional.

Speaker Change: Oversight is there so and again even in those type of models is roughly around 2% or so.

Walter Berman: So and again, even in those types of models, as roughly around 2% or so, and even in our advisor discretion, it's actually less than on the institutional models. So I would probably say, you know, as you look at it, now we haven't broken that out between, you know, employee, non-employee, et cetera, because it's these models are all run in certain ways. But, you know, it is, as Walter said, a very low balance; it's less by 2% or so, and there are constant trading activities, fees being pulled, the foreign taxes being paid, things like that. So it's not as though this, and a lot of the asset cash, if there's any higher balance, whether institutional otherwise, they are moved into money markets and other short duration products as well.

Speaker Change: And even in our advisors discretion, it's actually less than on the institutional models, So I would probably say.

Speaker Change: As you look at it now we havent broken that out between employee non employee et cetera. Because these models are all.

Speaker Change: Run in certain ways.

Speaker: But you know, it is, as Walter said, a very low balance. It's less than 2% or so. And there are constant trading activities, fees being pulled, foreign taxes being paid, things like that. So it's not as though this, and a lot of the actual cash, if there's any higher balance, whether institutional or otherwise, is moved into money markets and other short-duration products as well.

Speaker Change: But it is as Walter said are very low balance.

Walter S. Berman: At 2% or so.

Walter S. Berman: There is constant trading activities fees being pulled the foreign taxes being paid things like that so it's not as though this in a lot of the cash if there is any higher balanced.

Speaker Change: Whether institutional otherwise they are moved into money markets and other short duration products.

Speaker Change: Well so that's that's how we look at it and manage it.

Walter Berman: So that's how we look at it and manage it. And that has been appropriate.

Speaker: So that's how we look at it and manage it. And that has been appropriate. We disclosed that very clearly. And from a compliance and legal perspective, we feel very comfortable with what that is.

Walter S. Berman: That has been appropriately disclosed that very clearly.

Walter Berman: We disclose that very clearly, and from a client's and legal perspective, we feel very comfortable with what that is. Thanks for that, Cohen Jim. And then you spoke to an increased engagement in your banking offering, and we've heard some firms, some competitive firms of yours note that we may be seeing the beginning of improvement in pledgelon growth. So, curious whether you're seeing that or perhaps even just early signs of that. Yeah, so we saw nice increases in our pledgelon as we again go through the year. We will be launching another effective rate one, which we know has been popular out in the industry.

Walter S. Berman: And from a compliance and legal perspective, we feel very comfortable with what that is.

Walter S. Berman: Great. Thanks for that color Jim.

Speaker: Great. Thanks for that, Cole or Jim.

Speaker Change: And then you spoke to in increased engagement in your banking offering.

Speaker: And then you spoke of increased engagement in your banking offering. And we've heard some firms, some competitor firms of yours, note that we may be seeing the beginning of improvement in pledge loan growth. Curious whether you're seeing that or perhaps even just early signs of that.

Speaker Change: <unk> heard some firms some competitive firms of yours note that we may be seen at the beginning of improvement and pledge loan growth. So just curious whether youre seeing that or perhaps even just early signs of that.

Speaker: Yeah, so we saw nice increases in our pledged loans as we, again, go through the year. We will be launching another fixed-rate one, which we know has been popular in the industry. So that will be coming on board over the next quarter or so. We've also seen some increase as we started to put some direct CDs and savings programs in for cash to come in externally from that, from our clients.

Speaker Change: Yes, so we saw nice increases in Unpledged loan.

Speaker Change: Again go through the year.

Speaker Change: We will be.

Speaker Change: Launching another okay.

Speaker Change: Great one, which we know has been popular out in the industry, so that will be coming onboard over the next quarter or so.

Walter Berman: So, that will be coming on board over the next quarter or so. We've also seen some increase as we started to put some direct CDs and savings programs in for cash to come in externally from that from our clients. Again, we're just starting that up. But no, we think that as we launch these other products in the bank, we advise our looking for them and we feel like they will over time go on our bulk assets as well as we can then deal with some of the lending activities appropriate. Okay, but no specific pickup in the pledge run yet.

Speaker Change: We've also seen some.

Speaker Change: Some increase as we started to put some.

Speaker Change: Direct the Cds and savings programs in for cash to come in externally from that from our clients again, we're just starting that up.

Speaker: Again, we're just starting that up. But no, we think that as we launch these other products in the bank, advisors are looking for them, and we feel like they will, over time, garner both assets as well as we can then deal with some of the lending activities appropriately.

Speaker Change: No we think that as we launch these other products in the bank advisers are looking for them and we feel like that will over time gone are both assets as well as we can then deal with some of the lending activities appropriate.

Speaker: Okay, but no specific pick up in the points run yet? Yes.

Speaker Change: Okay, but no specific pickup into play to run yet.

Speaker: Yes, we saw a nice pickup truck. I don't have it in front of me. We can get it for you, but we saw a nice pickup truck in the quarter. Great, thank you.

Walter Berman: Yes, we saw a nice pickup. I don't have them front of me. We can get it for you, but we saw a nice pickup in the quarter. Great.

Speaker Change: Yes, we saw a nice pickup I don't have it in front of me.

Speaker Change: Got it.

Speaker Change: We can get it for you, but we saw a nice pickup in the quarter.

Speaker Change: Great. Thank you.

Speaker: Thank you.

Steven Chubak: Even Chubok with Wolf Research is online with your next question. Please go ahead. Hey, good morning.

Speaker Change: Steven <unk> with Wolfe Research is on line with your next question. Please go ahead.

Operator: Steven Chubak with Wolf Research is online with your next question. Please go ahead. Hi, good morning.

Steven: Hi, good morning.

Speaker Change: So.

Speaker: So, why did they ask about the competitive landscape and just an end to acid trends more broadly? Rap flows, as you know, were quite strong in the quarter, certainly an encouraging sign, but consolidated flows were a bit weaker.

Steven: Wanted to ask about the competitive landscape and just net new asset trends more broadly wrap flows as you noted were quite strong in the quarter or certainly an encouraging sign but.

Speaker Change: Our consolidated flows were a bit weaker I know on the last quarter's call you alluded to some irrational actors just more aggressive pay packages.

Speaker: I know in the last quarter's call, you alluded to some irrational actors, just more aggressive pay packages, potentially impacting the pace of organic growth, which is something we can get some sort of market to market. Any update in terms of what you're seeing on the outlook for improvement? So, certainly, as you indicated, rap was quite strong on the client as they were. We saw both in certificates and nudity, some lapsing, and that impacted it. And now we look at our growth rates, and we certainly feel that they're relying with the industry. So, at that standpoint, we are getting traction; we feel comfortable with it, and so we see that trajectory. Basically, we feel comfortable.

Speaker Change: Impacting the pace of organic growth. We're just hoping we can get some sort of a mark to market any update in terms of what youre seeing on the outlook for event.

Speaker Change #102: So certainly as you indicated was quite strong on the client.

Speaker Change: There were.

Speaker: We saw some lapsing in certificates and annuities, and that impacted it. And we look at our growth rates, and we certainly feel that they're aligned with the industry. So from that standpoint, we are getting traction. We feel comfortable with it.

Speaker Change: We saw both <unk> certificates and annuity some lapsing that impacted it.

Speaker Change: We look at our growth rates and we certainly feel that they are aligned with the industry.

Steven: So from that standpoint.

Steven: Well we are getting.

Steven: Getting traction we feel comfortable with it.

Steven: <unk>.

Steven: So we see that trajectory basically we feel comfortable.

Speaker Change #100: Yes, I mean, we looked at it there was a little bit of a slowing to your point in the second quarter overall.

Speaker: Yeah, I mean, we looked at it; there was a little bit of a slowing, to your point, in the second quarter overall, and we did look and say, okay, is there any in particular, you know, outside of the usual activities. People just didn't add as much revises, I guess, with the market and everything. And very clearly, it looked the same way as we looked at some of the, of course, the industry, so it wasn't like we're an outlier. No, that's helpful.

Steven: We did look and say okay is there any in particular.

Speaker Change: Outside of the usual activities.

Speaker Change: People just didn't add as much advisers, I guess with the market and everything.

Steven: And very clearly it look the same way as we looked at some of the across the industry. So it wasn't like we're an outlier.

Speaker Change: No. That's helpful. And then just for my follow up on the asset management margin. Despite the pressure on fees. The operating margins continue to run above target certainly encouraging to see we're hoping you to speak to the margin outlook over the next few quarters.

Speaker: That's helpful. And then just for my follow-up on the asset management margin, you know, despite the pressure on fees, the operating margins continue to run above target, so it's certainly encouraging to see. We're hoping you can speak to the margin outlook over the next few quarters, whether you believe you can sustainably run above the longer-term target of 31 to 35%, barring any negative or exogenous market shock.

Speaker: And then just for my follow-up on the SM management margin, despite the pressure on fees, the operating margins continue to run above target; it's certainly encouraging to see. We're hoping you to speak to the margin outlook over the next few quarters, whether you believe you can sustainably run above the longer term target of 31 to 35%, barring any negative or exogenous market charts. Well, as you saw, we're maintaining consistent, stable fee levels. Yes, we had some additional outflows with, you know, a very low fee basis. And we are adjusting our model and expense-based leveraging the technology, leveraging our global resources, et cetera, that we continue to do that helps offset any pressure that we received from a flow basis.

Speaker Change #101: Do you believe you can sustainably run above the longer term target of 31% to 35% barring any negative or <unk> market shocks.

Speaker Change: Well as you saw.

Speaker Change: Maintaining.

Speaker Change: Consistent stable fee levels, yes, we had some additional outflows with.

Speaker Change: Very low fee basis.

Speaker Change: And we are adjusting our model and expense base, leveraging the technology, leveraging our global resources et cetera that we continue to do that helps offset any pressure that we received from a flow basis.

Speaker: Again, barring changes in market conditions, we think that we can maintain sort of a good margin for the business based on what we're doing. We are investing, so we're not cutting from areas that we want to grow in. As I mentioned, we gain flows even though it's not in the numbers we've discussed to you with models. Some more money is gone in there. We're starting to gain traction as well in SMAs, which we think will be good, and as well in ETFs. And we will be, you know, looking as we even pursue some active ETFs as we go forward.

Speaker Change: Ken.

Ken: Barring changes in market conditions, we think that we can maintain sort of a good margin for the business based on what we're doing we are investing so we're not cutting from areas that we want to grow in as I mentioned, we gained flows even though it's not in the numbers we discussed to you with models.

Ken: So more money has gone in there with.

Speaker Change: We're starting to gain traction as well in SMA, which we think will be good and as well in Etfs and we will be looking as we even pursue some active etfs as we go forward. So there are things that we are doing at.

Speaker: So there are things that we are doing. At the same time, we are trying to free up expenses and resources based on the investments we've made, and use our resources globally to get more efficiencies. Great color. Thanks for taking my questions.

Speaker Change: At the same time, we are trying to free up expenses and resources based on the investments we've made.

Speaker: And use our resources globally to get more efficiencies.

Speaker Change: Great color, thanks for taking my questions.

Speaker Change: Okay.

Speaker: The Wilma Bertis from Raymond James is online with your next question. Please go ahead. Good morning. I know you talked a little bit about the margin, but do you think there's a lot more wiggle room on expenses and the stagnant investment? So yes, we feel like, as we continue, as you saw, there was additional severance we took in the second quarter. Part of that was in the asset management business. And there are continued changes that we're looking to make. And improving and tightening the way we operate with our processes and efficiencies and freeing up resources and things that are in generating the value that we need.

Speaker Change: <unk> <unk> from Raymond James is online with your next question. Please go ahead.

Speaker Change: Hey, good morning.

Speaker Change: I know you talked a little bit about the margin that you think will go a lot more.

Speaker Change: On expenses.

Speaker Change: Anthony.

Speaker Change: Yes.

Anthony: So, yes, we feel like.

Anthony: As we continue as you saw there was additional severance we took in the second quarter part of that was in the asset management business.

Anthony: And there are continued changes that we're looking to make.

Speaker Change: And improving and tightening the way, we operate with our processes and efficiencies and freeing up resources and things that aren't generating the value that we need.

Speaker: And so we are actually pursuing those things as well. And there will be some further adjustments as we move forward.

Anthony: And so.

Anthony: We are actually pursuing those things as well and.

Speaker: There will be some further adjustments as we move forward.

Speaker: I know you guys don't get asked too much about the insurance business anymore, but the margin seems pretty good there. It seems like you grew a little bit in the quarter. Is that more interesting to grow at this time? Or how are you thinking about that? Thanks. Yes, so you spoke good growth in the insurance and in newities, the structured instrument and the VUL products, which are both very good products for us. And actually the reason there wasn't more earnings for one is because when you first book that, you got the distribution expense up front that you're, you know, is the cost.

Speaker: I know you guys don't get asked too much about the insurance business anymore, but the margins seem pretty good there. It seems like you grew a little bit in the quarter. Is it more interesting to grow at this time, or how are you guys thinking about that?

Speaker Change: I know you guys don't get out too much about the insurance business anymore, but the margins seem pretty good there.

Speaker Change: It seems like you grew it a little bit in the quarter.

Speaker Change: Is that more interesting to grow at this time or how are you guys thinking about that thanks.

Speaker Change: Yes.

Speaker Change #103: And the insurance and annuities, the structured instrument and the <unk> products, which are both very good products for us.

Speaker: Thanks, the insurance and annuities, the structured instrument, and the VUL products, which are both very good products for us. And actually, the reason there wasn't more earnings falling is because when you first booked that, you got the distribution expense up front. That is the cost. So over time, that increase in volumes will also add to the earnings mix. We also got very good rates now as we reinvested on the investment side and the spreads there.

Speaker Change: And actually the reason there wasn't more earnings fallen is because when you look that you got the distribution expense upfront.

Speaker: As the costs so over time, though that increase in volumes will also add to the earnings mix.

Speaker: So over time, though, that increase in volumes will also add to the earnings mix. We also got very good rates now as we re-invested on the investment side and the spreads there. So I think the business will be a good, strong, consistent contributor, and a lot of that is free cash flow that we utilize for buyback. So we feel very good. And you also saw in the quarter again, even in the LTC business that we had nice earnings there as we continue to make adjustments, take rate, invest appropriately, invest out. So we're feeling very good about how that will add to the total of the company.

Speaker Change: We also got very good rates now as we reinvested on the investment side and the spreads there. So I think the business will be a good strong consistent contributor and a lot of that is free cash flow that we utilize for buybacks. So we feel very good and you also saw in the quarter again, even in the LTC.

Speaker: So I think the business will be a good, strong, consistent contributor. And a lot of that is free cash flow that we can utilize for buyback. So we feel very good. And you also saw in the quarter again, even in the LTC business, that we had nice earnings there as we continue to make adjustments, take rates, invest appropriately, and invest out. So we're feeling very good about how that will add to the total value of the company.

Speaker Change: Business that we had nice earnings there as we continue to make adjustments take rate.

Speaker Change: Best appropriately invest out so we're feeling very good about how that will add to the total of the company.

Thomas Gallagher: Thomas Gallagher from Evercore ISI is online with your next question.

Thomas George Gallagher: Thomas Gallagher from Evercore ISI is on line with your next question. Please go ahead.

Operator: Thomas Gallagher from Evercore ISI is on line with your next question. Please go ahead.

Speaker: Please go ahead.

Thomas Gallagher: Good morning. Walter, just to come back, just a quick one on the cash. Based on your answer to Suneet's question, it sounds like you aren't very focused on what the big peers are doing competitively on cash-sweet crediting rates. Now, to me, that just implies you probably don't really see it as a big issue for Ameriprise either competitively, regulatory, litigation-wise. Is that a fair conclusion, or maybe you can expand a little more on that?

Thomas George Gallagher: Good morning.

Thomas George Gallagher: Walter just to come back just a quick one on on the.

Thomas George Gallagher: On the cash sweep the based on your introduce you need to question. It sounds like you aren't very focused on what the big peers Youre doing competitively on cash sweep crediting rates now.

Speaker: on the cash sweep. Based on your answer to Suneet's question, it sounds like you aren't very focused on what the big peers are doing competitively on cash sweep crediting rates. Okay, so the question is, I don't understand what the drivers are. We certainly understand their rates, and it is part of an evaluation that we go through, so that was all you should read into what I was saying. Certainly, we did evaluate.

Speaker Change: Now to me that just implies you probably don't really see it as a big issue for Ameriprise either competitively.

Speaker Change: Tori litigation wise.

Speaker Change: Is that is that a fair conclusion, or maybe you can expand a little more on that.

Walter Berman: Okay, so the question is, I don't understand what the drivers are. We certainly understand their rates; then it is part of an evaluation that we go through. So that was all you should read into what I was saying. Certainly, we evaluated a competitive element as we look at it, but it is, I just can't comment on some of the drivers or the elements that are creating more to changes for. Yeah, and Tom, as we look at it, again, we have a very low balance of every low percentage, and particularly in the wrap that is there.

Speaker: So the question is I don't understand what the drivers are are we certainly understand their rates as part of an evaluation that we go through so that was all you should read into what I was saying.

Speaker: Certainly we evaluated.

Speaker: A competitive element as we look at it but it is.

Speaker Change: I just can't comment on some of the drivers of it are the elements that are creating more to changes or.

Speaker: As we look at it, again, we have a very low balance, a very low percentage, and particularly in the RAP that is there. However, we do see the money through transactions and fees. You don't want to go where you don't have it or sell a security. At the same time, you're pulling on some of these things or clearing. We look at institutional accounts; it's the same thing. We're not exactly sure what the changes are from the wire house, etc., but again, until we know anything differently, we feel very comfortable and, from a competitive standpoint, the same way. This is not money. We have a lot of different places where our advisors move money to, and the same thing with models.

Tom: Yes, Tom.

Speaker: As we look at it again, we have very low balance of overload percentage and particularly in.

Speaker: The wrap that is there.

Walter Berman: We do see the money through transactions and fees. So you don't want to go where you don't have it or sell it in a security. At the same time, you're pulling on some of these things or clearing. So we look at institutional counts as the same thing. So we're not exactly sure what the changes from the wirehouse, etc. But again, until we know anything different, we feel very comfortable. And from a competitive frame, the same way. I mean, this is not money. We have a lot of different places where our advisors move money, too, and same thing with models.

Speaker: We do see the money two transactions and fees. So you don't want to go where you don't habit of selling a security.

Speaker: At the same time, you're pulling on some of these things or clearing so.

Speaker: We look at institutional accounts, it's the same thing so we're not exactly sure what the changes from the wire house et cetera, but again.

Speaker: Until we know anything differently, we feel very comfortable and from a competitive frame. The same way I mean this is not money we have a lot of different places, where our advisers move money too.

Speaker: And same thing with models.

Walter Berman: And the money, if it is positional, is in those other type of earning assets rather than we keep it in sweep. Yeah, and the one proof point, again, which really, we're on this $6,000, and if you look at the industry there between 10 and 15, so it plays, we have just less levels there because it's strictly use the cash emotion.

Speaker: And the money if it is positional is in those other type of earning assets rather than we keep it in sweep.

Speaker Change: One proof point again, which really were under $6000 and if you look at the industry. There between 10 and 15 so it please.

Speaker Change: We have just less.

Speaker Change: Levels, there because it's strictly use the cash for motion.

Walter Berman: And you don't see any issues with the new DOL fiduciary standards related to this, nothing on that front that you're focused on. Okay, thanks.

Speaker Change: And you.

Speaker Change: You don't see any issues with the new Dol fiduciary standards related to this not nothing nothing on that front that you're focused on.

Speaker: We are.

Speaker: Okay. Thanks, and then just for a follow up on the Rps segment.

Walter Berman: And then just for a follow-up on the RPS segment, I guess, you know, one thing that strikes me is your NII has been up a lot, particularly year-over-year in that segment. And even quarter-over-quarter, it's up a lot. And Jim, I heard your point about distribution expenses, and that is true. I mean, you could see the numbers. Those are higher based on better sales. But if you were to told me a year ago that your NII would be up as much as it would, I would have thought the run rate would be a lot higher in that segment right now.

Speaker Change: I guess.

Speaker Change: One thing that strikes me is your NII has been up a lot, particularly year over year in that segment even even.

Speaker Change: Quarter over quarter, it's up a lot.

Speaker: And Jim I heard your point about distribution expenses and that is true I mean, you could see the numbers. Those are those are higher based on better sales.

Speaker Change: But if you would've told me a year ago that your NII would be up as much as it would I would have thought the run rate would it would be a lot higher in that segment right now.

Walter Berman: So I guess my question is what is going on with the other kind of components of your P&L and that business? Are you seeing higher mortality or disability claims? Is it the annuity earnings that have been a drag? Maybe just a little perspective on, you know, kind of what's really driving the ship here because it does, you know, for the strength and NII, it's a little surprising that we're not seeing more hitting the bottom line.

Speaker Change: So I guess my question is what is going on with the other kind of components European now in that business are you seeing higher mortality or disability claims is it the annuity earnings that had been a drag maybe just a little perspective on.

Speaker Change: Kind of what's really driving the ship here because it does for the strength in NII, it's a little surprising that we're not seeing more hitting the bottom line. Thanks.

Walter Berman: Thanks. Well, there's nothing that really stands out. As you look at it, our disability claims are quite good, and actually, our insurance claims are within expectations. So there is no one driver from that standpoint. So I have to guess we are performing where we thought we would. Let me take that away and see where you're driving at because I just don't see it at this stage. It's a fair point. So let me take a look at it and see what you're going, and we can get back.

Speaker Change: Nothing that really stands out as you look at it our disability claims are quite good and actually in our insurance claims are within expectations. So there is no one driver from that standpoint so.

Speaker Change: I Hope you have to guess, we're performing where we thought we would.

Speaker Change: Let me take that away and see where you drive app because I just don't see it at this stage look it's a fair point. So let me let me take a look at it and see what you are growing and we can get back.

Walter Berman: All right. How's that? That would be great. Thanks, Walter.

Speaker: <unk>.

Speaker: It would be great. Thanks Walter.

John Barnidge: John Barnidge from Piper Samler is online with your next question. Please go ahead. Good morning. Thank you for the opportunity. You called off the election in your comments. Can you talk about how you're expecting that to impact operations and planning for such? Can imagine it can impact some asset management, product demand, but do you think it has an impact on advisor recruitment or how you think about marketing? Thank you.

Speaker: John Barnidge from Piper Sandler is online with your next question. Please go ahead.

Operator: John Barnidge from Piper Sandler is online with your next question. Please go ahead.

Speaker Change: Good morning, Thank you for the opportunity you called off the election in your comments can you talk about how you're expecting that to impact operations and planning for such can imagine it can impact from asset management product demand, but do you think it has an impact on advisor recruitment or how you think about marketing expense. Thank you.

Walter Berman: No, well, I think it's more from a client perspective, right? So clients want to understand the bit better. What does it mean based on who gets in, what policies, how it would affect investments? I think you can hear that even from, you know, mock opponents speaking in the airways. So again, that's always the top of mind, triggered by those types of things that they hear. So we provide market strategies. We look at what the implications of changes in policy, maybe, or what type of investments are appropriate. And so that's more of where it is. Now, how does that work with advisors?

John Bakewell Barnidge: No I think it's more from a client perspective, like so clients want to understand a bit better.

Speaker Change: What does it mean based on who gets in what policies how will it affect the investments I think you can hear that even from market <unk> and speaking on the airwaves. So again, that's always the top of mind triggered by those types of things that they are here. So we provide market strategies, we look at what the implications of changes in <unk>.

John Bakewell Barnidge: Policy may be or what type of investments appropriate.

John Bakewell Barnidge: And so that's more of where it is now how does that work with advisors. It depends on how clients are.

Walter Berman: It depends on how clients are. You know, if they feel like more comfortable, then they'll put more money to work. And the same thing with the advisor, if they feel a little bit that there will be a change or implications that hold. At this point, they don't seem fundamentally anything, you know, driving it in a major way. But as you get closer to the election and there's more conversations, I think you know, and that's what we usually see before an election. I don't think it fundamentally changes it, but you do see, you know, based on who gets in and whether policy changes, whether there are impacts as far as what people invest or what they rotate out of.

Speaker Change: They feel like more comfortable than they will put more money to work and the same thing with the advisor if they feel a little bit that there will be a change or implications. The hold item at this point I don't see fundamentally anything.

John Bakewell Barnidge: Driving it in a major way, but as you get closer to the election and there is more conversations I think.

John Bakewell Barnidge: And Thats, what we usually see before election, I don't think it fundamentally changes it.

John Bakewell Barnidge: But you do see based on who gets in and where the policy changes whether there are impacts as far as what people invest what they rotate out of.

Walter Berman: Thank you for that answer. My follow-up question. Can you talk about some examples of leveraging the global operation or efficiencies for that management business in the way maybe we're not previously doing so. Thank you. So when I talk, we spent a lot of time in energy, you know, as an example of integrating the beam acquisition with red needle, but also putting them on global platforms that we have, you know, our global trading platform or, you know, ensuring that we have the right attribution across how we leveraging research, all those various things. And with that, we feel like we can now move the people in the processes to operate more consistently, get more efficiencies, where we locate the resources, whether we have them in the US, we have them in Europe, we have an NDR, etc.

Speaker Change: Thank you for that answer my follow up question can you talk about some examples of leveraging the global operational efficiencies for the asset management business and the way maybe you were not previously doing so thank you.

Speaker: Thank you for that answer. My follow-up question: can you talk about some examples of leveraging global operational efficiencies for the asset management business in a way you might not have previously done so? Thank you.

Speaker Change: So when I talk we spent a lot of time and energy as.

Speaker Change: As an example of integrating the BMO acquisition with Threadneedle, but also putting them on global platforms that we have.

Speaker Change: Our global.

Speaker Change: <unk> platform.

Speaker:

Speaker Change: Ensuring that we have the right attribution across how we leveraging research all of those various things.

Speaker Change: And with that we feel like we can now move the people and the processes to operate more consistently get more efficiencies, where we locate the resources, whether we have them in the U S. We have some in Europe, we have in India et cetera. So we look at that as well to drive efficiencies.

Walter Berman: So we look at that as well to drive efficiencies. And then with that, we really want to ensure that we are leveraging the technology more fully. And so those are the things that we're doing as we look across. You know, sometimes because of the overlaps, like we had a lot of overlaps because of the female acquisition with what we had in place, we couldn't really do that until the technology, until the legal entities, until all of the human resources were dealt with appropriately. And so now there's another opportunity for us to further streamline that and get some further efficiencies from that.

Speaker Change: And then with that we really want to ensure that we are.

Speaker Change: Leveraging the technology more fully.

Speaker Change: So those are the things that we're doing as we look across.

Speaker Change: Sometimes because of the overlaps like we had a lot of overlap because of the BMO acquisition with what we had in place we couldn't really do that until the technology until the legal entities until all of the human resources, where the delta it appropriately and so now there's another opportunity for us to further streamline that.

Speaker Change: And get some further efficiencies from that is that helpful to you.

Speaker: Is that helpful to you? It is indeed. Thank you very much.

Speaker Change: It is indeed, thank you very much.

Speaker: It is indeed. Thank you very much.

Speaker: Michael Cyprus from Morgan Stanley is online with your next question. Please go ahead.

Michael Cyprys: Michael Cyprys from Morgan Stanley is online with your next question. Please go ahead. Great. Thank you. Just wanted to circle back to the cash sweep commentary. Just hoping you could clarify for us how and to what extent our advisors compensated on cash sweep balances. And more broadly, they're just giving some of the industry movements and understanding your commentary and views there. But just curious more broadly.

Operator: Michael Cyprys from Morgan Stanley is online with your next question. Please go ahead.

Speaker: Great, thank you. Just wanted to circle back to the cash sweep commentary, just hoping you could clarify for us how and to what extent advisors are compensated on cash sweep balances, and more broadly there, given some of the industry movements and understand your commentary and views there, but just curious more broadly how you see the scope over time for the way customers pay for services to evolve and potentially over time move away from sweep. And that draconian scenario or scenario over time plays out where economics and things shift. Just curious how you might be able to continue to capture economics. What are other ways that customers could pay for services?

Michael J. Cyprys: Great. Thank you just wanted to circle back to the cash sweep commentary just hoping you could clarify for us how and to what extent are advisors compensated on cash sweep balances.

Speaker: Broadly there just given some of the industry movements I understand your commentary and your views there, but just curious more broadly how you see the scope for time for the way customers pay for services to evolve and potentially over time move away from sweep.

Walter Berman: How you see the scope over time for the way customers pay for services to evolve and potentially over time move away from sweep and in that draconian scenario or scenario over time plays out or economics and things shift. Just curious how you might be able to continue to capture economics. What are other ways that customers could pay for services? Well, again, as it said, wherever you are, you have transactional activity that you want to settle, and you have to do that timely. You don't want to put people on margin. You don't want to throw out of other securities at the wrong time.

Speaker: That track Kodiak scenario or scenario over time plays out where economics and things shift just curious how you might be able to continue to capture economics, what are other ways that customers can pay for services.

Speaker: Well, again, as I said, wherever you are, you have transactional activity that you want to settle, and you have to do that timely, right? You don't want to put people on the margin.

Speaker Change: Well again as I said.

Speaker: Wherever you are you have transactional activity that you want to settle and you want US you have to do that timely right. You don't want to put people on margin you don't want to go.

Speaker: You don't want to draw down on other securities at the wrong time. So there's always a certain level of cash. Now what we really do is monitor, and if cash is in any account at a larger level, we really look for it to be moved. And so, as you saw, as people moved out of some fixed income instruments or were putting further into the market, they did invest in a lot of cash instruments, money markets, CDs, various other short-term duration fixed.

Speaker Change: Through our out of other securities at the wrong time, So there's always a certain lower level of cash now what we really do is monitor and if cash is and any account at a larger level that we really look for it to be moved.

Walter Berman: So there's always a certain lower level of cash. Now what we really do is monitor, and if cash is in any account at a larger level, but we really look for it to be moved. And so, as you saw, as people moved out of some fixed income instruments or were, Larry put them further into the market, they did invest in a lot of cash instruments, money markets, CDs, and various other short-term duration fixed. And so we saw that occur in the reality of it, and actually the sweep actually went lower rather than increased. And so that's the same thing in all of the wrap and institutional.

Speaker: So as you saw as people moved out of some fixed income instruments or.

Speaker: Leery of putting further into the market. They did invest in a lot of cash instruments money market Cds various other short term duration fixed.

Speaker: And so we saw that occurring, the reality of it, and actually, the sweep actually went lower rather than increased. And so that's the same thing in all of the RAPs and institutions. Now within that, if there is more money sitting in that account, we don't want that cash to be a high balance, even if it's invested out, because that's not the purpose of the RAP account. But in so doing, if there is positional cash, and they're in earning instruments, then the advisors do get paid, et cetera.

Speaker: And so we saw that occur in the reality of it and actually the sweep actually went lower rather than increase and so that's the same thing in all of the RAF and institutional now within that if there is more money sitting in the account, we don't want that cash to be a high balance even if it's invested out because.

Walter Berman: Now, within that, if there is more money sitting in that account, we don't want that cash to be a high balance even if it's invested out because that's not the purpose of the wrap account. But in so doing, if there is positional cash and they're in earning instruments, then the advisors do get paid, et cetera. But again, that's something that's monitored, and we feel very comfortable with it.

Speaker: That's not the purpose of the wrap account, but in so doing if there is positional cash and they are in earning instruments than the advisors do get paid.

Speaker: But again, that's something that's monitored, and we feel very comfortable with it. So as far as the future is concerned, there are always adjustments that will occur in pricing and what you would have to do to offset some of the cost of your services that we will constantly look at. But if you're asking about the near term, we feel very good about where that is right now. We're not exactly sure what some of the changes that some people are bringing about for what reasons. So I'm not sure that was as clear as it was to you, you know, maybe to you, but it wasn't to us.

Speaker Change: All of it but again, that's something that's monitored and we feel very comfortable with it.

Walter Berman: So, as far as the future is concerned, there's always adjustments that will occur in pricing and what you would have to do to offset some costs of your services that we will constantly look at. But if you're asking in the near term, we feel very good about where that is right now. We're not exactly sure what some of the changes that some people are bringing about for what reasons.

Speaker: So as far as the future is concerned there is always adjustments that will occur in pricing and what you have to do to offset the cost of your services that we will constantly look at but if youre asking in the near term.

Speaker: Feel very good about where that is right now we're not exactly sure what some of the changes that some people are bringing in about for what reasons. So I am not sure that was as clear as it.

Speaker: So I'm not sure that was as clear as it, you know, maybe to you, but it wasn't to us. Great.

Speaker: Maybe to you, but it wasn't to us.

Speaker Change: Great and then just a follow up question on the asset management business I was hoping you can elaborate a bit on some of the wins you referenced in the APAC region, and maybe you can elaborate on that and remind us of your footprint in APAC.

Michael Cyprys: And then just a follow-up question on the asset management business. I hope you can elaborate a bit on some of the wins you referenced in the APAC region, and maybe you can elaborate on that and remind us of your footprint in APAC. And where you see some of the best opportunities there as you look out over the next couple of years, just in terms of countries there and strategies. Thank you. Yeah. So, you know, we mainly, we have a small wholesaling, you know, working with private banks, etc., in the region. But a lot of it's more institutional basis.

Speaker Change: And where you see some of the best opportunities there as you look out over the next couple of years just in terms of countries there and strategies. Thank you.

Speaker: Yes, so, you know, we mainly do, we have a small wholesaling business, you know, working with private banks, etc., in the region, but a lot of it is on an institutional basis. And it's against, as you would imagine, some of the core products we have both in Europe, in equities, for example, or in the U.S., and maybe even things like our, you know, fixed So we've been gaining some traction there.

Speaker Change: Yes so.

Speaker: Yes, so, you know,

Speaker: We mainly we have a small wholesaling working with private banks et cetera in the region, but a lot of it is more institutional basis and it's against as you would imagine some of the core products, we have both in Europe and equities as an example or in.

Walter Berman: And it's against, as you would imagine, some of the core products we have both in Europe, in equities, as an example, or in the U.S., and maybe even things like our, you know, fixed income, investment grade, various things like that. So we've been gaining some traction there; same thing, a bit more that was seen as potential opportunities in our real estate. So those are the things that we have on the way. You know, we recently expanded a little bit in Japan. You know, we're in career, in places like that, Singapore, Australia. So there are different places where we are getting it mainly from, you know, larger institutions, from some pension funds, some sovereign wealth, things like that.

Speaker: The U S and maybe even things like our.

Speaker: Our fixed income investment grade various things like that so we have been gaining some traction there same thing a bit more that was seen as potential opportunities in our real estate. So those are the things that we have underway.

Speaker: Same thing, a bit more that was seen as potential opportunities in our real estate. So those are the things that we have on the way. You know, we recently expanded a little bit in Japan. We're in Korea and places like that, Singapore, Australia. So there are different places where we are getting it, mainly from, you know, larger institutions, from some pension funds, some sovereign wealth, things like that.

Speaker: We recently expanded a little bit in Japan.

Speaker: We're in career and places like that Singapore, Australia. So there are different places, where we are forgetting it mainly from larger institutions.

Speaker: From some pension funds.

Speaker: Sovereign wealth things like that.

Speaker Change: Great. Thank you.

Walter Berman: Great. Thank you.

Speaker: 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: Okay.

Speaker: Yeah.