Q1 2025 Ameriprise Financial Inc Earnings Call
Desiree: Welcome to the Q1 2025 Ernie's Call. My name is Desiree 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.
Desiree: During the question-and-answer session, if you have a question, please press star one on your touch-tone phone. As a reminder, the conference is being recorded. I will now turn the call over to Stephanie Raeby. Stephanie, you may begin.
John Barnidge, John Barnidge, Thomas Gallagher
Speaker Change: Porter Erning's call. On the call with me today are Jim Cracchiolo, Chairman and CEO , and Walter Berman, Chief Financial Officer. Following their remarks, we'd be happy to take your questions.
Desiree: Turning to our earnings presentation materials that are available on our website. On Slide 2, you will see a discussion of forward-looking statements.
Desiree: 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.
Desiree: The sample list of factors and risks that could cause actual results to be materially different from forward-looking statements can be found in our first quarter, 2025 earnings release, our 2020-24 Annual Report to Shareholders.
Desiree: and their 2024-10K report. We make no obligation to publicly update or revise these forward-looking statements.
Desiree: On Slide 3, you see our GAAP financial results at the top of the page for the first quarter. Below that, you see our adjusted operating results, which management believes enhances the understanding of our business by reflecting the underlying performance of our core operations and facilitates a more meaningful trend analysis.
Desiree: Many of the comments that management makes on the call today will focus on adjusted operating results.
and with that, I'll turn it over to Jim.
Jim Cracchiolo: Good morning, everyone. Thanks for joining our first quarter earnings call. Overall, Ameriprise had a good start to the year, where actively engaging our clients in delivering strong financial performance with contributions from across the business.
Jim Cracchiolo: I know that the current operating environment is top of mind for everyone. Clearly, we've seen elevated and ongoing market volatility due to lack of clarity around the tariffs in general economic uncertainty.
Jim Cracchiolo: and we heard from FedSharePOW last week that the Fed is still trying to navigate what it all means for the economy, inflation and interest rates.
Jim Cracchiolo: We know that we can navigate what's ahead because of our diversified business, strong client value proposition, and excellent record for managing economic uncertainty and market volatility. Our financial strength is another important differentiator.
Jim Cracchiolo: With the business growth and positive markets over on the quarter, assets on the management, administration and advisement grew nicely to $1.5 trillion.
Our first quarter adjusted operating results were also good.
Jim Cracchiolo: Total revenues increase 5% from a positive asset growth in flows and higher transactional activity.
Jim Cracchiolo: Earnings were up 8% from strong business growth and our ongoing expense discipline with EPS of 13%.
Jim Cracchiolo: and our return on equity, X-A-O-C-I, remains best in class of 52%.
Jim Cracchiolo: In terms of the business highlights, in wealth management, our advice value proposition and the way we engage clients is very effective in helping them remain on track to achieve their goals and feel competent and even more so during increased dislocation.
Jim Cracchiolo: Our clients have been strongly engaged in the quarter with assets of $7% to $1 trillion. We also had good inflows of $10.3 billion across our platform.
Jim Cracchiolo: Money has gone to work in a number of product categories. Wrap activity was strong, flows grew 34% to $8.7 billion, representing a 6% annualized flow rate in the quarter, and total wrap assets grew to $573 billion, up 10%.
Jim Cracchiolo: Transactional Activity was also robust, up 6% year-over-year, particularly in retail brokerage and financial planning. And client cash levels remain high overall at $86 billion, which represents a nice opportunity for money to be put back to work.
Jim Cracchiolo: We're working closely with advisors and directly with clients provide highly relevant investment and market insights as well as important contexts for maintaining a long-term perspective.
Jim Cracchiolo: And we continue to invest in our advice, value, proposition, and practice support. We have one of the best of the eyes of platforms in the business and the way we engage in support advisors with our entirely integrated ecosystem.
Jim Cracchiolo: This includes our significant investment in our goal-based and investment advisory solutions.
Jim Cracchiolo: We're adding an even more comprehensive way for clients and advisors to manage investments. It's a powerful new UMA called Signature Welp that offers the best features of our advisory platform in a streamlined and innovative way. We're currently testing it and plan to launch it more broadly later this quarter.
Jim Cracchiolo: The tech environment that we've built has helped us achieve excellent availability, important at any time for particularly during volatility, our proprietary client advisory systems that perform extremely well would increase traffic, and we continue to innovate and use emerging technology to further enhance how we do business.
Jim Cracchiolo: We also had another good quarter for recruiting with 82 experienced productive advisors joining the Ameriprise based on our advisor value proposition, strong support and financial strength.
Jim Cracchiolo: I am pleased to share that we continue to earn strong client satisfaction and advisor recognition. The Ameriprise client experience helped drive leading client engagement and our clients continue to rate as 4.9 out of 5 for satisfaction.
Jim Cracchiolo: and Ameriprise recently earned Hawkson Wallet's top performer recognition in the client categories of understands me and shares my values and unbiased puts my interest first.
Jim Cracchiolo: And a large number of our visors were recognized in the quarter in rankings like Forbes, Top 1200, [inaudible]
Jim Cracchiolo: The Best and State Woman Well Devises, as well as the Top 100 Woman Well Devises Less.
Jim Cracchiolo: We also launched the next phase of our advertising in the court to further promote a highly effective device value proposition in excellent client satisfaction.
Jim Cracchiolo: Our bank is another important capability for Ameriprise, and just the past few years assets
Jim Cracchiolo: The bank is generating attractive earnings as we focus on deepening client relationships and bringing in assets held elsewhere. The team has just launched a CD's and coming later this year will air heat locks and checking accounts to our offering.
Jim Cracchiolo: With the bank and our investment portfolio, we're able to generate sustained interest earnings, even if the Fed decides to change rates.
Overall, margin for wealth management remains strong at 29% .
Jim Cracchiolo: Turning to retirement protection solutions, the business continues to drive transactional activity within wealth management and generate strong earnings.
Jim Cracchiolo: In annuities, we had significant growth in our traditional VA without living benefits up 28% and had good sales in our structured product. And we continue to see strong sales in our life business where we're focused on VUL which is up 22% and disability products.
Jim Cracchiolo: I also reinforce that RPS consistently deliver strong earnings, profitability, and free cash flow as part of our diversified business.
Jim Cracchiolo: We consistently generate one of the highest returns on equity in the industry, and RPS also provides important stability, which is particularly meaningful during periods of volatility.
Jim Cracchiolo: And in asset management, we continue to generate good earnings that reflect the actions we've taken, but it was a more challenging quarter for flows.
Jim Cracchiolo: For the quarter, assets on the management and advisement was $657 billion. Overall, investment performance remains quite good even in volatile environment. We delivered good performance across one, three, and ten year periods.
Jim Cracchiolo: In total, we have 101 Columbia Threadnidle 4-5-Star Morningstar rated funds.
Jim Cracchiolo: And we were just rated in the latest barren's best fun family rankings. Columbia Threadneedle was in the top 15 for all three time frames, one five and ten years.
Jim Cracchiolo: In this climate, active management is even more important than we believe in the benefits it can provide.
Jim Cracchiolo: In terms of priorities, we're focused on ensuring that we're positioning strategies that are appropriate for the environment and help us gone afloat. We're also looking to build momentum and key product capabilities, including active ETFs, SMAs and model delivery.
Jim Cracchiolo: and the team has made excellent progress over the past two years significantly transforming and improving our course base while maintaining a fee rate.
Jim Cracchiolo: They've driven important operational efficiencies that combined have helped us expand margins. In fact, the margin in the quarter was extremely strong at 43%.
Jim Cracchiolo: and for Ameriprise overall, we continue to both invest in the business and manage expenses very well as you saw expenses across the firm with down 5% due to our transformation efforts.
Jim Cracchiolo: And a difficult environment, like we've seen so far in the second quarter, I'd like to reinforce some important themes from the company's perspective.
Jim Cracchiolo: The Versified Business Generates Substantial Free Cash Flow Across Market Cycles
Jim Cracchiolo: We maintain excellent liquidity. With our cash flow, we're able to invest and return to share holders at attractive levels. We have a strong excess capital position that also gives us the flexibility to be opportunistic.
Jim Cracchiolo: In terms of our capital return for the quarter, we continue to return strongly to shareholders, another $765 million to shareholders through our dividend and share repurchase program.
Jim Cracchiolo: In fact, today we announced an 8% increase in our dividend. This is the 21st dividend increase in our spin-off 20 years ago.
Jim Cracchiolo: And with that, our board just approved a new sizable $4.5 billion share repurchase authorization given we are completing our current authorization early.
Jim Cracchiolo: For the firm overall, it was a good start to the year. The high level of results that we consistently achieved is driven by the totality and strength of Ameriprise.
Jim Cracchiolo: and while it's a more volatile environment, we remain well-positioned. [inaudible]
Jim Cracchiolo: Finally, the team and I are always proud of the accolades we earn in the marketplace. In addition to the awards I referenced, Ameriprise has just been recognized by Fortune as one of America's most innovative companies, 2025.
Walter Berman: Now, Walter will provide more detail on the quarter, and then we'll take your questions, Walter.
Thank you, Jim.
Ameriprise delivered continued solid performance with exceptional balance sheet strength.
Walter Berman: Providing us flexibility to be optimistic, Ameriprise had strong underlying performance across our diversified businesses.
Walter Berman: with adjusted operating EPS, increasing 13% to $9.50 in the quarter.
Walter Berman: This result reflects positive flows and activity levels in wealth management.
Walter Berman: The initial impact of proactive changes made to the banks on investment portfolio, including the reduction in floating rate exposure.
and the benefit to expenses from our transformation and issues.
Walter Berman: We have an excellent excess capital position of 2.4 billion with 2.5 billion of available liquidity.
Walter Berman: Our head programs continue to perform extremely well, and we have strong and consistent pre-catch flow generation across all segments.
We have a successful track record of navigating market cycles.
Walter Berman: Looking ahead at the potential for continued, elevated, volatile levels, we continue to be well positioned to navigate these scenarios with the flexibility to be optimistic based on the diversity of our businesses, the quality of our earnings and margins.
and underlying balance sheet strength.
Walter Berman: Assets on the Management, Administration, and Abysment increased to 1.5 trillion, benefit from strong net client flows over the past year and equity market appreciation, which more than also the impact of outflows in S-Mantra.
We deliver strong profitability of consolidated margins of 27 percent.
At the same time, GNA expenses were down 5% [inaudible]
Walter Berman: GNA expenses continue to be well-managed and demonstrate a focus on operating efficiency and effectiveness while still making the right investments in areas that will drive future business growth.
Walter Berman: Our stable 90% pre-cashful generation, of course, are segments combined with strong down-sheet fundamentals.
Walter Berman: and Able Dust to return $765 million, or 81% of operating owners to share all of this in the quarter.
Walter Berman: We remain committed to returning capital to shareholders at a differentiated pays, an announced an 8% dividend increase, and a new shareer we purchased authorization of 4.5 billion through June 30th, 2027.
Walter Berman: On site 7, you see the strong metrics results from wolf management.
John Barnidge, John Barnidge, Thomas Gallagher,
Walter Berman: Revue per our vice, it grew 12% to a new high of 1.1 million.
Braf Assets were up 10% to 573 billion.
In addition, transactional activity levels continue to improve.
Walter Berman: We continue to take actions to build the bank investment portfolio in a way that supports stable earnings contributions going forward.
Walter Berman: The overall bank portfolio has a yield of 4.6% and a 3.6-year duration.
Walter Berman: We reduced cash levels at the bank and further reduced our floating rate securities to only 15% of the securities portfolio, both of which have reduced our exposure to lower rates.
Walter Berman: We also brought an additional 500 million of balances onto the bank's balance sheet.
Walter Berman: Those balances, as well as portfolio maturities and prepayments, were invested at a 5.5 percent yield and 4-year duration.
Walter Berman: Ann, you're aware of the crediting rates changes on cash sweeps that were made early in the quarter.
Walter Berman: These factors all help to offset the carrier over impact from the Fed Fund's reduction since September and will support net investment income in the bank going forward.
Walter Berman: On slide 8, you see the strong financial results from wealth management.
Walter Berman: Precats adjusted operating earnings increased 4%, to $792 million with strong contribution from both core and cash activities.
Walter Berman: Core contributions continue to double digit increase driven by good business fundamentals and equity market appreciation.
Walter Berman: Revenue growth from higher client assets and increased transactional activity driven by the visor productivity, more than off set lower spent revenues.
Walter Berman: Adjusted operating expenses in the quarter increased 11% with distribution expenses of 14% reflecting a business mix and higher transactional activity.
Walter Berman: GNA expenses increased only 1% to 424 million in the quarter reflecting strong expense discipline with continued growth, investments, and volume related expenses due to business growth.
Margins, remain followed at 29% [inaudible]
Walter Berman: The business is well positioned to navigate potential volatility, going forward based upon continued strong advisor productivity, the high quality investment portfolio that will benefit from actions we've taken and continued discipline expense management.
Turing to ask the management on slide time [inaudible]
Financher results with solid in the quarter
Operating earnings increased 17% to $241 million.
Walter Berman: The strong quarter reflected equity market appreciation and the positive impact from expense management actions.
Parsley was set by the cumulative impact of net outflows.
Toll Adcents on the Management and Abosment Decreased to 657 Billion
Net Alphose were elevated at 18.3 billion.
Walter Berman: Reflecting institutional outflows from a large client repositioning into passive and the exit of limestone.
The fee rate was stable in the quarter.
Walter Berman: GNA expenses improve 12% from a year ago primarily driven by proactive transformation and issues as well as lower performance de-compensation.
Walter Berman: These transformation initiatives will continue to benefit results and help to offset the impact of net outflows.
Margin Street, 43% in the quarter. [inaudible]
Let's turn to slide ten.
Walter Berman: Retirement and pretexted solutions continue to deliver strong earnings and free cash flow generation.
Walter Berman: Reflecting the high quality of the business that was built over a long period of time.
Walter Berman: Pre-tax adjusted operating earnings in the quarter increased 8% to 215 million.
Walter Berman: The strong and consistent performance of the business reflects the benefit from stronger interest earnings and higher equity markets.
Walter Berman: These high-quality books of business continue to generate strong free cash flow with excellent risk-adjusted returns and continue to be an important contributor to the diverse of our business model.
Walter Berman: Overall, retirement and protected sales were strong at 1.2 billion, fueled by client-a-man, and prostructed variable annuities and variable universal light products.
Walter Berman: In the corporate segment, I want to mention long-term care pre-tax-adjusted operating errands was 14 million.
Walter Berman: Turning to the balance sheet on slide 11. Balance sheet fundamentals and pre-cash flow generation remain strong with 2.4 billion of excess capital, 2.5 billion of available liquidity and a diversified high-quality investment portfolio.
Walter Berman: We have the birth bike sources that dividends from all of our businesses, enabled by strong on the line from the metals.
Walter Berman: This supports our ability to consistently return capital to shareholders in the best for future business growth.
Ameriprise's consistent capover turn strategy drives long-term shareholder value.
Walter Berman: In Summer On Slide 12, Ameriprise delivered external growth in the first quarter.
Walter Berman: Ameriprise has a proven track record of navigating through challenging Hawken environments over the longer term.
Walter Berman: Over the last 12 months, revenues grew 10%, adjusted EPS, increased 16%, returned on equity 280 basis points, and we returned 2.9 billion of capital to shareholders.
Walter Berman: We had similar growth trends over the past five years with 8% compounded annual revenue growth, 15% compounded annual EPS growth.
Walter Berman: Return on equity, improving 13 percentage points, and we returned over 12 billion of capital to shareholders. These trends are consistent over the long term as well.
Walter Berman: as well as our focus on profitable growth. With that, we'll take your questions.
Speaker Change: Thank you. We will now begin the question and answer session. If you have a question, please press bar one on your touch stone phone.
Walter Berman: If you wish to be removed from the queue, please press the star 1. If you are using a speaker phone, 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 touch on phone.
Speaker Change: And our first question comes from the line of Suneet Kamath with Jeff Lee. Your line is open.
Sunit Kamath: Great, thank you. Walter, could you talk a little bit about your outlook for A&WM NII, as well as for the bank in terms of cash levels and earnings, just some high level commentary of how you feel the year would play out to be helpful.
Sunit Kamath: I see it right now based on what we've done that it should actually be improving as we look at basically what actions we've taken first from shifting of floating to fixed.
and Schiffing the portfolio. Next.
Managed and let it interesting come [inaudible]
Speaker Change: Yeah, the signature weld is a very comprehensive UMA type platform that has a lot of flexibility. We have a lot of...
Speaker Change: Advisory platforms that our advisors use for their different models and capabilities depending on whether using discretion, whether the client has discretion, whether
The company has discretion.
Speaker Change: This gives them the ability to put everything sorted together and over time they'll have flexibility with different sleeves of how they want to manage those assets from individuals, stop papolios to institutional papolios etc.
Speaker Change: So we think it will be a state of the art type of UMA platform in the industry.
Got it. That's helpful. Thank you, Jim.
Speaker Change: Our next question comes from the line of Steven Chubak with Wolf Research. Your line is open.
Stephen Trubach: Hi, good morning, and thanks so much for taking my questions.
Unknown Attendee.
Speaker Change: So I wanted to start off with a question on AWM flows which were quite resilient in a tough tape. It was hoping you could speak to what you're seeing in the marketplace as press reports have indicated more competitive TA in compensation packages.
Unknown Speaker 06.02.17
Speaker Change: Both pretty comprehensive question. So, on overall we've seen good client activity and engagement with the advisors regarding client portfolios and keeping them on track to their goals, rebalancing and current, etc. We saw new assets being added.
Speaker Change: Of course, you know, a little more in cash as well, but we saw money going back to work, both in the transactional activity as well as in the portfolios and wrap that was very good. So both client flows coming in was strong, new clients being added.
Speaker Change: as well as the idea of some money going back to work. [inaudible]
Speaker Change: So that looks good. Now of course there's volatility out there every day and depends on what happens with the market or the outlook. We'll affect some of that. But we feel good about what that flow rate was.
Speaker Change: From a perspective of new advisors we're adding, it was pretty good for the first quarter. We have a good pipeline that has continued to be there in the second quarter.
We feel very good about what our value proposition.
Speaker Change: particularly our technology capability. So a lot of people are having issues and problems in the first quarter with, you know, handling trade activities and the system availability and other things like that.
Speaker Change: All of our systems that were all proprietary systems were all available. You always have some issues with, you know, an external vendor per se, but other than that, you're in good shape particularly how we've set up our...
Speaker Change: and we actually have a great advisor tech platform with integrated capabilities and that's one of the things really attracting a lot of advisors to us with the strength of the firm. So that we feel good about. I don't know if there's something else in your question that I missed.
Unknown Speaker 0 . . . .
Speaker Change: No, they're largely co-hosted, I mean, just love it, you're on the number now. None of our competitors really, you know, report that anymore. We looked at the wirehouses, some of the independents, they don't really put number of evisors or number of on retention. And in the retention numbers, we were constantly trying to explain where, you know, people were retiring and other things like that are transferring their books and it was all rolled into the numbers. So we figured it would be easier just to do what the competitors are doing right now and not
Disclosed that.
Speaker Change: Unknown Attendee, Walter Berman, Unknown Attendee, Unknown Attendee, Unknown Attendee, Unknown
Speaker Change: Fair enough. And for my follow-up, just a bit of a cheeky tack question just on April Trends, given the recent volatility, was hoping you could speak to what you're seeing so far in terms of cash build, as well as NNA and recruitment, just given the market volatility can be disruptive to advisor movement.
Speaker Change: Yes, so from a cash perspective, outside of some tax polls, etc, it's been relatively flat. We feel pretty good about where that is right now and what's happening.
Um.
Speaker Change: From a perspective of the pipeline is still very good. I mean sometimes even in volatility people do want to go to a firm that has strength, particularly around the balance sheet, the consistency, having great technology and being consistent on from a good strong cultural perspective. And so that's the type of people we're attracting. Thank you very much.
Great color. Thanks for taking my questions.
Speaker Change: John Barnidge, John Barnidge, John Barnidge, John Barnidge
Speaker Change: Next question comes from the line of Alex Blostein with Goldman Sachs. Your line is open.
Hey, I'm good morning guys. Thank you for the question.
You mentioned a couple of times in the call.
Speaker Change: sort of like Ameriprise's capital position, liquidity position, obviously being very strong, that's not new, but you mentioned that, you know, that gives you an opportunity perhaps to be a little more proactive, a little more opportunistic in this environment. I just wanted to dig in a little more, what the messaging here really is when it comes to potential acquisitions, whether it's an AWM or asset management, was that a broadly generic common, or is there something in particular you guys are looking a little closer up?
Alex, I think it was a more general statement.
Speaker Change: Unknown Attendee, Walter Berman, Unknown Attendee, Walter Berman, Unknown Attendee, Unknown Attendee,
Speaker Change: So, a combination of things that's all we were addressing is that we have flexibility and it's good to have especially in these type of environments.
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Yeah, okay, superclare, just want to make sure.
Speaker Change: and then my follow-up is related to one of the early questions but just kind of related to cash revenues broadly. I know Walter, you talked about NII at the bank specifically, but as you look at all the sources of cash revenues between the surds, the all-balanced sheet stuff, and obviously the bank.
Speaker Change: How do you guys think that is likely to evolve here through...
Speaker Change: 2025, Relative to Last year, and maybe just double-clicking on one of the new-
Speaker Change: Products that you launched related to my question, but when you think about the CD offering, how will that interact with the search business? Do you see that as incremental in addition to, or is there a risk that this could just kind of cannibalize some of the certificates balances?
This is incremental, we don't believe it will ...
and materially, catalyzed the search. [inaudible]
Okay, as-
Speaker Change: As relates to looking out, obviously, it's going to be subject to, again, what is going on in the external remark with the Fed and other things of that nature, but as we...
Speaker Change: The bank is as I indicated, the earnings that we see coming out, it's really, I think we've balanced that and it's going to be quite stable and we will be...
Speaker Change: Increasing the libels and will well position from that standpoint. On certs, certs, it breaks go up, you basically, it shifts with that, but the impact factor is manageable, as relates to, and then the floating, which we've reduced overall, but certainly, uh...
Speaker Change: from standpoint on the sweep count. It's going to be impacted by rates going down but less impactful. So we feel quite good to compensate these.
Speaker Change: Ability of the Earnings, and so we're looking at, we can navigate on any of the changes, because I think it's a gym set. You have a high volatility on the upside-down side, and I think we position the books to basically navigate that.
Yeah, that makes sense. Great. Thank you guys.
Speaker Change: Next question comes from the line of Wilma Burdis with Raymond James. Your line is open.
Speaker Change: Hey, good morning. Thank you for the question. First, could you talk about the advisor recruiting environment is now a good time to grow? And are you seeing any changing trends in advisor transition? This is some fact that you think.
Unknown Attendee So,
Speaker Change: and we have the capacity and capability to continue to work closely across
Speaker Change: the channels as well as with different institutions for devices to come over.
Speaker Change: We have a great ability to unblood them quicker and from an industry perspective that they ramp up quicker when they do come over here.
Speaker Change: So we feel good about that. Again, markets change, environments change, but advisors will still look for a good home during that change.
And that's what we are really focused on.
Speaker Change: Thank you. And I think I touched on this earlier, but I just want to be a little bit more specific. Is that good time to lean in on the Sherry purchases? Thanks.
Speaker Change: From our perspective, as we mentioned to you in the end of the year, in the January that we initially targeted our roughly 80% on a consistency fashion.
Speaker Change: But as we just approved and we're finishing our previous buyback early again, we have flexibility to take that up and adjust as we see both the environment and the opportunity based on the share price. So it gives us good flexibility and we will be looking at that as we proceed through the year.
Thank you.
Speaker Change: Next question comes from the line of Tom Gallagher with Evercore ISI. Your line is open.
Good morning. Jim just wanted to come back to the
AWM advisor
Speaker Change: Retention, and I know, I heard you're coming about the...
Speaker Change: Piers aren't disclosing those total numbers. Are you seeing a slippage in headcount?
Speaker Change: and anytime I see someone removing disclosure, usually, I think there's going to be some suspicion that...
Speaker Change: Yeah, there's something in the numbers that caused the company to remove it. I just want to be clear, like...
Speaker Change: Are those numbers under some pressure for some reason? Maybe just any color you can give on the retention side. There's no change on the retention side and in fact the retention is quite good.
Speaker Change: You know, as I said, the highest amount of our retention is more of people retiring and transitioning practices for the people that remain here. As the other piece of our retention that's a little low is just the new people that come in that turn over, but again those books and activities stay. So now there's nothing, head count is actually up.
You know, if we did, you know, provide it.
Speaker Change: So that's not in any way a change but you know all the wirehouses removed it I think you saw a few of the other players remove it I will mention their names but you could look at all of them so we just we followed the disclosures and
So, we figured that was appropriate.
Speaker Change: That's great. Thanks for clarifying that. The other question I had is just I know there was some
Speaker Change: Outflows in Asset Management Discord, can you talk about visibility for the balance of 2025, any other like Chunky or Alumpy Outflows to Flag, or do you think you're through the worst of those?
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Speaker Change: Yeah, I think from a larger, I think there's another piece of lion stone to go out.
Um...
Speaker Change: and that will be a continued way, but that was what we disclosed at the end of the year or last year when we sort of exited the business.
We've positioned in portfolios, etc. We're up.
Speaker Change: The large one we had in the first quarter was a move to passive. It was in an international firm.
Speaker Change: that they needed to do that for other reasons they had. And so, we feel comfortable that, again, we're navigating like everyone else's.
Speaker Change: Retail is actually the sales were up year over year and retail is just more redemptions picked up as you would have saw in the first quarter in the flow picture but I think you saw that out in the industry.
Speaker Change: We're probably not picking up as much on the fixed side that we would like to increase that. We just in certain categories.
Walter Berman: of there that we haven't gotten as much in the flow, but our equities are actually a bit better than the industry. So it depends on when you put it all together that's where we had some of the negative from the redemptions.
Gotcha, thank you.
Speaker Change: Next question comes from the line of Craig Siegenthaler of Bank of America. Your line is open.
Hey, good morning, Jim.
Speaker Change: Walter, but whoever is doing well. We did want to follow up to Tom's question with Advising Health Management, organic growth, and also echo a comment. Like one of the reasons that many of your comps don't report that data is because they're organic growth.
Speaker Change: Haslots, if your data is stronger, advice would be to disclose it. But with that, I did hear a lot of good, strong, and up-so-high level qualitative color. Do you have any data you can share for 1Q25 behind recruiting, financial advisor, headcount, and advisor attention? And if not, I can ask another. Thank you very much.
and others. Thank you. Thank you.
Speaker Change: Yeah, so we did mention that we brought in, you know, 80 devices in the first quarter, so that's pretty consistent with our recruiting over the, you know, the quarters.
and the quality was very good.
Speaker Change: and as I said, that pipeline is holding up nicely through the second quarter and we feel good about it. I don't know what else I can say. We don't give much more information on that.
Speaker Change: from a perspective of our own both retention but also client activity is quite strong.
Speaker Change: and we're bringing in nice new clients. And, you know, I know a lot of people rely on just new recruits to increase their, you know, their flow picture. Oz is mainly from the increase in productivity of our advisory base, which I feel good about.
and the underlying...
Speaker Change: Modgins and Capability of our core business. Production on the line, we mentioned 9% revenue, but...
Speaker Change: The production was higher, that tied to the distribution fees of 14%, it was, you know, there's like 13 something.
Walter Berman: Plus Percent on Production, which is quite good. And our underlying margins on a production business is quite strong compared to many others in the industry. I would think it's probably one of the best.
Got it, and then just for my follow-up
Walter Berman: Heading into 2Q, given that most of April is behind us, so you're seeing some data there.
How do you see recruiting? [inaudible]
Walter Berman: Advisor Headcount, Retention, Tracking, 2Q25, especially given a lot has changed since April 2nd.
Walter Berman: From our perspective, it's a continuation of what we've just reported in the first quarter.
Thank you, Jim.
Speaker Change: Next question comes from the line of John Barnidge with Piper Sandler. Your line is open.
Speaker Change: Good morning, thank you for the opportunity. My questions on retirement and protection solution earnings, they've been coming in better than the $200 million quarterly number of the last few quarters. In light of current macro distribution of the rate environment, do you have any updated views or is it seem to be earning above that now? Thanks.
Speaker Change: The earnings are solid and predictable, and even though we've had a higher transaction, which you know on a time of sale, it will impact the P&L, basically the investment strategy and other elements.
Speaker Change: and it's basically prevailing, so we feel comfortable. The book is, as we said, good risk adjusted in turn, so we feel we it's working quite well.
Speaker Change: Thank you. And my follow-up question on retail with an asset management.
Speaker Change: Is there something that the typical retail investor needs to see from maybe a cost of living perspective or macro to re-engage or to your comments about having the flexibility to take advantage of other companies maybe dislocation? Is there additional products that need to be added in the organic? [inaudible]
Wood. Thank you.
Speaker Change: So what we are doing is we are rolling out more active ETFs. You've seen that pick up a bit more in the industry. I think it's gives rise a little more flexible in their activities and trading how they build their portfolios.
We are coming out with an interval fund.
Speaker Change: with the public and private market soon that will be launching just in the market later this year.
Speaker Change: We'll be looking at other opportunities like that as we proceed. We've launched another hedge fund that's starting to gain traction.
Speaker Change: So there were things like that that we're doing. As you would imagine, I would say the gross sales were up year over year on the gross size, just redemptions picked up and you saw that across the industry as people, you know, they got a little more conservative or they put cash on the sidelines where they, you know, they wanted to adjust in the period. So that's what we saw a bit more in the asset management business. Now remember, if not an asset management just for our business, I mean, it's a cost.
National Domestic, etc.
Thank you.
Walter Berman: Unknown Attendee, Walter Berman, Unknown Attendee, Walter Berman, Unknown Attendee, Unknown Attendee,
Speaker Change: Next question from Ryan Krueger, the KBW. Your line is open.
Ryan Krueger: Good morning. My first question was on TNA expenses. They were down 5% in the quarter. Can you give some commentary on how you're thinking about TNA for the rest of the year?
Thanks, and then...
Ryan Krueger: Just one other question on April . I think you've addressed cash in recruiting trends, but can you give any commentary on just how clients are behaving? Are they pulling back at all from transactional activity or putting new money to work, or can you give any commentary there?
Ryan Krueger: I think what you've seen in April is an increased level of volatility, so I think again, you know, I can't sit here with a crystal ball of what comes next, but I see it maintaining at a certain, you know, a level of consistent. I haven't seen a dramatic shift or change yet, but it depends on what continues in the marketplace. You know, some days are really, people get a little more concerned, some days they see it as an opportunity. [inaudible]
Ryan Krueger: So I think we keep them focused on the long-term and to keep money invested so I would probably say no change in our picture at this point.
Anderson, thanks for the comments.
Ryan Krueger: And we have no further questions at this time. This concludes the base conference. Thank you for participating and you may now disconnect.