Q3 2025 Ameriprise Financial Inc Earnings Call
Speaker #1: At this time , all participants are in a listen only mode . Later , we will conduct a question and answer session . During the question and answer session , if you have a question , please press star one on your touch tone phone .
Speaker #1: As a reminder , the conference is being recorded . I will now turn the call over to Stephanie Rabe Stephanie . You may begin .
Speaker #2: On slide two , you will see a discussion of forward looking statements specifically during the call , you will hear references to various non-GAAP financial measures , which we believe provide insight into the company's operations .
Speaker #2: Reconciliation of non-GAAP numbers to their respective GAAP numbers can be found in today's materials and on our website at . 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 #2: These forward looking statements speak only as of today's date and involve a number of risks and uncertainties . 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 third quarter 2020 earnings Our 2024 Annual Report to shareholders and our 2024 10-K report .
Speaker #2: We make no obligation to publicly update or revise these forward looking statements on slide three . You see our GAAP financial results at the top of the page for release .
Speaker #2: We completed our annual unlocking in the third quarter . Many of the comments that management makes on today's call will focus on adjusted operating results and adjusted operating results , excluding unlocking .
Speaker #2: And with that , I'll turn it over to Jim .
These Solutions add to our suite of savings and lending products, including CDs, mortgages pledge, lending and credit cards. They also help to enhance our client experience in deep and relationships.
We're also growing our egg business partnering with banks and Credit Unions who can benefit from our sophisticated Wealth Management Solutions and advisor. Support tailored to institutional clients and we continue to add new financial institutions, have a strong pipeline into the year end in 2026.
At RPS performance remains strong driven by demand for annuities and Insurance Solutions that align with our clients financial planning goals.
We're seeing solid interest and variable universal lives, structured, annuities and variable. Annuities without living benefits, highlighting the relevance of our offering in today's market.
We'll also pursuing growth in our disability insurance business, including streamlining with approval process for clients applying for life insurance. In addition, we're using data analytics in our digital Insurance underwriting and I'll reinforce that we built 1 of the most profitable Insurance businesses in the industry.
In Asset Management. We continue to make good progress, as well as enhancements through the business.
Our investment performance remains strong over all time periods, over 65% of our funds. Outperform the medium on an asset weighted basis for 1 year, period More than 70% for the 3 and 5 year periods and over 80% for the 10 year.
And we maintain a good asset base with assets under management Administration up to 714 billion dollars.
In addition, net, outflows improved the cost of the board from last quarter as Redemption, slowed and both retail and institutional. And we had an increase in retail growth sales, particularly in North America.
Adding to our Solutions and high demand areas where we differentiate our capabilities. We'll also using data and analytics to better Target and segment, advisors, and we're gaining traction with smas and models, as well as our old business and active ETFs in the US. In addition, we'll soon be launching our active ETF capability in the UK and Europe.
Regarding institutional, we also had an improvement in flows in the quarter.
Looking forward, we'll continue to manage expenses effectively in Asset Management with the ability to generate good margins and profitability.
And that applies Across America as we continue to drive transformation and operational efficiency. What's clear? Our disciplined approach delivers results and that's evident in our strong margins.
And our digital transformation is not only enhancing the client advisor experience. It is also reducing costs and positioning us for sustainable growth.
We're also enhancing our Global operating platform for Asset Management. A recent example, is the announcement of our expanded partnership with State Street establishing a unified Global back office for many Columbia, thread. Needle funds these initiatives further strengthen profitability in our ability to reinvest in Innovation and growth. As you know, we manage the business with rigor and consistency from America price consistently delivers profitable growth, robust free, cash flow, and a strong return.
In fact, the return on capital remains exceptional, supported by healthy dividends and robust share repurchases.
That includes a capital return in the quarter that we increase to 842 million.
our financial strength and stability, enables us to reinvest strategically enact opportunistically
We believe that what also sets a measure apart or our relationships and consistent recognition, we earn for how we operate.
Core to Our Success is how our clients feel? We consistently earn top client satisfaction and continues to be exceptional of 4.9 out of 5 and our advisors are also very engaged in being selected for top Awards. In fact we had 20 American prize advisors on The Baron's top, 100 independent financial advisors list for 2025. Also key our Employee Engagement, consistently best-in-class across Industries as confirmed by our latest internal survey results received in the third quarter.
And JD Power once again, recognized the Merit press with their outstanding customer service, certification for our phone support for the 7th consecutive year for advisors. And the second year for clients which is tremendous. In addition,
Forbes named. The Marr is 1 of America's. Best companies Newsweek honored us as 1 of America's most responsible companies,
Fortune listed America prized among America's most Innovative companies. And I also highlight that Newsweek recently ranked us as 1 of America's greatest companies.
In closing, I feel very good about America price and the totality of the firm.
Earlier this month, we officially marked, 20 years of Independence, and our listing on the New York Stock Exchange over the last 2 decades are press, has built an exceptional track record for achieving High client satisfaction and industry-leading results Guided by our proven strategy and management principles.
and that includes generating, the number 1 total shareholder return within the S&P, 500 financials index since our spin-off in 2005,
As I look ahead, a price is well positioned and represents attractive value at these levels, regardless of market momentum.
With that, I'll turn it over to Walter for his perspective and then we'll take your questions.
Thank you, Jim amerise delivered. Another quarter of solid performance underpinned, by exceptional balance, sheet strength.
uh, focus on sustainable profitable, growth continues to serve us well, in delivering consistently strong financial results and client satisfaction demonstrated by
Adjusted operating EPS excluding unlocking up. 12% to $9.92 cents with a strong margin of 27% across the firm, adjusted operating, net revenues excluding unlocking.
Increased 6% to 4.6 billion driven by asset growth. Expense discipline remains strong from our ongoing firmwide transformation initiatives.
In the quarter, G&A expenses improved 3%. It was another solid quarter, driven by the sustained benefit from the leverage within our integrated business model.
Our stable 90% free cash flow generation across our segments combined, with the foundation, of strong, balance sheet and Enterprise risk management capabilities.
To returning Capital to shareholders at a differentiated pace and are targeting an 85% payout ratio for the fourth quarter, based upon our share price and substantial free cash flow on slide 6. You'll see EPS growth of 12%, demonstrating the strength and leverage across our businesses assets under management Administration and advisement, increased 8% to a record high of 1.7 trillion. We delivered strong firm wide margins from 6% Revenue growth while reducing GNA expenses by 3% on a full year basis. We are targeting a GNA decline of 3%.
We continue to generate a best-in-class return on Equity of 53%.
Let's turn to slide 7 underlying performance metrics and wealth management remains strong across all measures client assets, grew nicely to a record 1.1 trillion with 29 billion of flows over the past year, wrap assets were up 14% to 650 billion with rap flows of 30 billion over the past year.
In the quarter.
Client and wrap flows, were impacted by the departure of 2, large advisor teams.
Excluding those departures, climb flows were solid at $6.5 billion, and wrap flows were $8 billion. When also adjusted for administrative changes, the flows from our legacy advisor and client base have been consistent. In addition, transactional activity levels remain strong.
Near record levels reflecting the full scope of our planning model. Cash we balances were stable at 27.1 billion compared to 27.4% in our experience advisor recruiting with 90, ADV is joining mer. Prize this quarter, our value proposition is resonating with the viruses and we remain focused on ensuring our transition packages are attractive to experience the barges that share our values and commitment to the client experience.
And more importantly, a Visa productivity, grew 10% to a new high of 1.1 million. Let's turn to wealth management Financial results on slide 8 adjusted operating net revenues increased 9% to 3 billion. The core business is performing very well. A fee-based and transactional revenues were quite strong increasing in the Low. T percentage range benefiting from higher client assets and activity levels. Our cash revenues, which include net investment income distribution, fees related to off-balance sheet, cash and Banking and deposit. Interest expense.
Were impacted by the FED funds rate reduction over the past year and decline in the mid single-digit range. As you would expect adjusted operating expenses in the quarter, increased 10% in the quarter distribution expenses increased 11%, I would note that a buyer's a compensation within distribution expenses increased in line with the revenues advises generate GNA expenses, increase 5% to 439 million in the quarter.
Primarily driven by volume and growth related expenses including investments in signature wealth and banking products expenses. Remain well-managed for the full year. We continue to expect low to mid single-digit growth in GNA pre-tax, adjusted operating earnings increased 7% to 881 million.
We saw continued strong contributions from both core and cash earnings in the quarter. Our core earnings grew in the high teen percentage range, benefiting from higher asset levels.
Strong transactional activity and well-controlled GNA the strong level of core earnings that we generated is unique and demonstrates our focus on profitable growth cash. Earnings had a mid single-digit percentage decline as expected from rates our strategy of leveraging, America. Price bank has been important and minimizing the impact from fed funds effective rate reductions on our awm business. And
Fact, net investment income in the bank was flat this quarter. We continue to take actions to build the bank Investment Portfolio in a way that supports stable earnings contributions going forward. The overall Bank portfolio has a yield of 4.6%,
With a 3.7 year duration.
In the quarter.
New purchases at the bank were nearly 700 million at a yield of 5.3% with a 4.4 year duration lasts our margins remain, excellent at 29.5%, turning to Asset Management on slide 9 Financial results were solid in the quarter.
Actions partially offset by the impact of net. Outflows total assets under management and advisement increased to 714 billion of both year-over-year and sequentially from higher ending market levels.
Net, outflows significantly improved on a sequential basis to 3.4 billion.
With Improvement in both retail and institutional, retail flows benefited from higher growth sales, which included a nice win in model delivery, institutional flows benefit primarily from lower redemptions in both the US and emea revenues increased 3% to 966 million with a stable fee rate at 46 basis points.
G&A expenses increased 1%.
For the full year. We expect mid single-digit GNA, expense decline, excluding performance fees margin reached 42% in the quarter which is above our target range, driven by favorable markets and continued expense discipline. Let's turn to slide 10. Retirement and protection Solutions. Continue to deliver strong earnings and free cash flow generation reflecting the higher quality of the businesses that was built over a long period of time pre-tax adjusted, operating earnings scooting and locking in the quarter, or 200 million in line with our expectations, the strong and consistent performance of the business. Reflects the benefit from strong interest earnings and higher Equity markets.
Overall, retirement protection Solutions sales, with solid at 1.4 billion.
With a continuing demand for structured variable annuities, 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 diversified business model.
The company completed its annual actuarial assumption update in the quarter.
Which resulted in an unfavorable after tax impact of 5 million in retirement, protection Solutions. There was a favorable Insurance model change.
Which was possibly offset by unfavorable changes to variable annuities to render and utilization assumptions and long-term care.
It was an immaterial impact from changes to morbidity and mortality assumptions.
Overall, LTC policy holder behavior is in line with expectations.
Before we move to the balance sheet, I'd like to take a moment to address to corporate segment. The pretax operating loss is scooting and locking was 93 million.
Which was a significant improvement from a year ago due to lower Severance and Cloud. Migration expense, as well as favorable share based compensation expense.
Turn to balance sheet on slide. 11 balance sheet, fundamentals and free cash flow generation, remain strong. We have an excellent excess Capital position of 2.2 billion. We have 2.5 billion of available liquidity.
And our Investment Portfolio is Diversified and high quality. We have Diversified source 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 prices, consistent, Capital return. Strategies is a key element of our ability to consistently generate strong. Long-term shareholder value in summary on slide 12 Amir price delivered. Solid results in the third quarter.
Which is a continuation of a long track record. Navigating various Market environments over the longer term over the last 12 months, revenues grew 7%.
Adjusted EPS increased 12%.
Return on Equity Group 2110 basis points and we returned 3.1 billion of capital to shareholders. We had similar growth Trends over the past 5 years.
with 9% compounded, annual revenue growth
18% compounded, annual EPS growth return on Equity improving 17 percentage points and we returned 13 billion dollars of capital to shareholders.
These Trends are consistent over the long term as well. This differentiated performance across multiple Cycles speaks to the complimentary nature of our business, mix
as well as our consistent focus on proper growth.
And maintaining our strong values as a company.
With that, we'll take your questions.
Thank you. We will now begin the question and answer session. If you have a question, please press star 1 on your touchtone phone.
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And our first question comes from the line of sight. Cayman with Jeffrey's, please go ahead.
Great, thank you, good morning. Um, first question on awm, can you comment on the Chimera relationship given the m&a that we saw, um, you know, recently and and maybe remind us of what the, um, assets under management or account values are with respect to that relationship.
So I can do a comment on the first part, uh, as Walter on the, the assets level. Um, first of all, we have an excellent relationship with call America our, uh, since we've done the arrangement and put them on our platform and capability working with the advisors, uh, and their clients. Um, we have gotten very strong favorable reviews from Chimera themselves from their Executives, from their wealth management group. And their advisors, uh, they love the platform, the capabilities, the tools, Etc. So we feel very good about that relationship. We know in acquisition has occurred. Uh, we'll be working with them as they decide how they want to proceed. Um, and uh, we feel very comfortable with the arrangement we had in place with them, uh, and the the, uh, contract and agreements. Uh, so it's more of a stay tuned as uh, I guess they're going through their their own uh, decisions on what they need to do. We'll look at but we have great capability to
You don't need SSR, it's around 15 billion dollars and like in any contract of this nature, there is a protections.
Okay. Okay, um, and then and then in your um,
prepared comments. You called out to practices that uh have left uh that were pretty sizable. Can you maybe just unpack what happened there? And is this an indication that the recruiting environment is just getting incrementally more competitive?
Well, as we had mentioned the previous quarter, um, you know, you always going to have some 1 off some other Farms have similar things over the last few quarters, uh, these 2 practices went Ria. Um, and uh, listen there, there are, uh, checks being given out and other things but, uh, overall, it it's fine for my, we recruited very strongly. Um, we have a 90 people joining us a pipeline is quite good. Uh, our underlying organic business is very solid. Our I, advise the satisfaction is very strong, but you're always going to have some 1 off, as we mentioned. Uh, but we, we look at the totality of what we're doing and how we're doing it, you know, environments will change. There's always a price to pay. Uh, we feel very good about our position.
Okay, thank you.
Your next question comes from the line of Wilma. Bertis with Raymond James, please go ahead.
hey um good morning giving your excellent track record of managing the wealth business and I know you just touched on this a little bit but
Uh, you've seen a little bit lower flow activity this year. Is that, is that an indicator that just maybe the Market's a little bit too hot or pricing a little bit irrational. Maybe just comment a little bit on that. Thanks.
Um, I think it's a combination of those things. Um, I would probably say that, uh, as we look at the underlying of our client base and activity, it's still quite good. Uh, people have done a lot of rebalancing and allocations, so transactions are quite strong. Um, the balances of the book are very good. Uh, the clients are highly engaged but uh again the market has gone up pretty substantially. There is money on the sidelines, our cash balances are very high. Uh so there's a bit of that going on and then there's a bit of like exactly what you said on the environment, um, recruiting and what's happening in in that regard. Um, you know, I think there has to be over time. There will be rational we've always played in more of a balanced equation, which is good for us. Long term for our advisors long term for clients long term, and that's how we approach things.
I guess kind of a follow-up, and you mentioned the high cash balances. But, uh, some of these advisor roll-up operations seem potentially a little bit over-leveraged, or maybe they're getting a little bit aggressive. Do you see that as something that could present an opportunity in the future? Thanks.
Is excellent. We have a strong brand, the premium value proposition in the marketplace. Uh, so those are all the things that I think are really important as you go through these, these, uh, events where things always look Rosy. Until they're not,
Thank you.
Our next question comes from the line of Brennan Hawkins with Bank of Montreal. Please go ahead.
David into here on behalf of Brendan Hawkins, appreciate you guys taking the questions. I just wanted to do a quick follow-up. On the new asset side, on top of the 2 teams that you mentioned were leaving. You also stated that there were some administrative changes, could you just dive into a little bit of what those are? Uh, also on top of that, the advisor had count was, uh, 10,427 at year end. 2024, could you just give an update on where that number stands today? Appreciate it.
Yeah, as far as the adjustment, we went through all of our wrap programs and set up things. Consistently certain clients we had adjusted uh, out of the the various programs, some of that will come back in uh, and may changes. Uh, so we feel very good, that's a 1, 1, you know, a time sort of an adjustment as we uh, adjust at how we, uh, looked at each program and the arrangements we had, uh, and it made sense for both of us. And, and the client, uh, in regards to, uh, the business overall, for w. I I think it'll be quite strong and, uh, Etc. Also from an advised account. It is up, nicely year-over-year. We, we stopped getting
Giving numbers, so I'm not going to give that but uh, there was no change in sort of what you were uh, in in sort of a normal um, uh way of looking at that advisor growth over the over the years. Uh so it's still consistent with that.
Great, and then I just had one quick follow-up. Um, do you expect the risk from the regional bank M&A to limit deals in the bank channel? Um, does any of this uncertainty provide maybe an opportunity?
Um, you know, I think you, you see some recent merges in the bank as they feel the regulatory environment has eased a bit. Uh, so I think some of that Regional activity will continue, um, you know, from our perspective, uh, yes, that always presents certain, you know, adjustments that out in the marketplace, um, we from our own banking. Uh, we look at it as more of growing that as an organic wealth management business that we have, uh, to our clients. So, we're not looking to get into the banking business in a, for the light, at this point in time.
Great. I appreciate you guys taking the questions.
Our next question.
Comes from the line of Jeffrey Schmidt with William Blair, please go ahead.
Hi. Thank you in uh Asset Management. Could you discuss some of the expense actions you've taken there over the last year or 2? And when do you expect those initiatives to be complete?
So we we did a um, more comprehensive review of our operating uh, environment globally. Uh, We've made a number of adjustments over the last 2 years that uh streamline the operations particularly after our integration of the beimo acquisition um 2 years ago. And with that put them on consistent platforms, uh, Systems Technology trading. Uh um uh and also in addition to that look that geographically where we're located for certain Services, we perform. Uh, so that we got real scale out of that. And, and, uh, right demographics, um, that would give us some efficiency and uh, lower price, uh, costs. Um, we are completing that transformation with now, the back office, uh, as we mentioned with our arrangement, with State Street, uh, so we'll be in really great uh, position, uh, to really operate on a more scale.
Okay.
And is there any guidance you could provide on how to think about credit? Uh crediting rates coming down? Yeah, for both the bank and certificates as the FED Cuts rates.
And certainly we're invested at higher levels and is the rates come down, we'll credit less. So, that will be a positive and as it relates to the sweep counts, I think we've adjusted like the industry has. So there's not much room in that. So uh, and our core Investments are now longer dated, as we to because of the way we reap. The system portfolio, will be less impacted by the drop in interest rates.
And the reason we really developed the bank and part of that is so that we can maintain that spread as interest rates due to decline at the same time of giving us, um, get a greater engagement with the client for giving them favorable treatment, uh, with the banking products that we can offer. So, for us, it was, it's a, a good capability, but also, uh, ensures a bit more of our spread Revenue, continuing
Okay, thank you.
Our next question comes from the line of Steven chebec, with wolf research. Please go ahead.
Hi, good morning, and thanks for taking my questions.
So, maybe to start just on the investment philosophy. So, if looking at the last 2 quarters despite strong top and bottom line, results, helped in large part by good expense discipline. The core brokerage kpis, including nna and sweep. Cache have lagged tears and I was hoping you could speak to some of the factors that are driving this off to organic growth. But bigger picture your willingness to lean more heavily in.
To investing to maybe help re accelerate growth, which Emily could eat into margins as well.
Yeah, so listen, I can't speak to you. You're who you're referencing competitors. I know there's been a lot of Roll-Ups and Acquisitions and paying up to bring advisors in, at
What I would say top dollar so maybe that's part of their incremental growth that they're doing. We look at it as bringing good people on the have quality books, that will, uh, generate good value for them and US based on what we can provide to them as well as what we look to have associated with us. Um, from a core perspective, uh I think we've been very consistent, our flow rate around the industry. You can't look at just 1 quarter but over the the course of the year, 2 years, 3 years, um, our flow rate has been very good and consistent out there and, and very competitive in that regard. Uh, from an investment perspective, we're making quite strong investments in our capabilities and technology and solution sets. Um, and I would compare us to having 1 of the best platforms out there, um, and leading in many areas. Uh, so I feel very good about that. And those investments will continue as far as
Um, recruiting Investments, we've upped the, our packages a bit, uh, in this competitive frame. But still for us very rational and appropriate for long-term profitability. Um, and, uh, we always will look at the environment and make adjustments, but we always look at not just in the short term, but the longer term, uh, and that's where, um, maybe people are getting a bit over levered.
Yeah, on the cash, us on the cash. Uh, certainly for our standpoint. It's stable and we do see it uh, growing in its normal pattern in the fourth quarter. So we feel quite comfortable with that.
So, maybe, maybe I'm packing that a little bit further, just giving the sweep cash Trends in 3Q, you didn't necessarily see the uptick that we saw some of your peers. Um but I was hoping you could speak to what uh you saw in terms of cache behavior following. The September rate cut since that was the month where it appears most of your peers. Did see an uptick and just in anticipation of additional Cuts? How are you thinking about the pace of sweep, cash growth looking ahead to next year,
Well we saw this a pattern with when the cuts it really didn't deviate that much uh from that standpoint and but with the cuts that we anticipate in this fourth quarter, we will see an increase like we normally will. So we don't really anticipate. The cuts will have an impact on the, the rates of the volume in uh, sweep. And, uh, we certainly are as we indicated. We're we've already planned for with the lowering. The amount of cash.
Exposure. We have on the short term to ensure that we actually have the profitability sustained throughout the awm. So we feel comfortable with the balances and certainly with the positioning of our investments and the duration of it. So not concerned.
Our helpful caller. Thanks for taking my questions.
Your next question comes from the line of Alex blowing.
With Goldman Sachs, please go ahead.
To the bank. Um, if we look at the bank's uh, average earning assets and really zoning in on the Securities portfolio. I think the earning yield there is running at around 5%, maybe High fours. So so maybe just kind of help us think about the reinvestment yields. You expect on that book? Is that rolls off over the next couple of quarters, couple of years, relative to that install base of kind of 4 and a half to 5, um and the implications that will have uh on the Nim at the bank.
So, uh, as we indicated, uh, we anticipate with the roll offs, in certain maturities that we see coming that will be reinvesting in, in the high fours, low fives. So, uh, we will be able to maintain our net interest income at the bank, uh, from that standpoint. So and we feel quite comfortable about that as we go for the next few. Uh, certainly
I would say, 3, 3 quarters, uh, beyond that. It becomes a little more difficult, depending on where the FED goes with it and where the long-term rates go. But we, we certainly plan for this and we feel comfortable with that, uh, strategy,
Right. Understood. Okay. Uh and then when it comes to the search business certificates business, those balances have been coming down now for several quarters, which, which makes sense, I guess, given how elevated they've been running at. So now we're sitting I think, at around 9 billion, um, just looking back. What do you guys expect these balances to ultimately stabilize and how would you frame that, uh, you know, that level?
It it will. I think Direction it will come down as certainly as we manage our spread uh for that but it it gets to a set level and it won't deviate that much but depends on the movement in the rates but it it follows a pattern uh strictly based on the spread uh and then the money gets recirculated. So that's I I don't want to see a precipitous drop coming off.
Yeah, I guess that before the dynamic in 2023, this balance is used to run it like a $56 billion range. Is that sort of where you expect it to normalize?
I would I let me just say I I think it's certainly, that is a range where is is is normal where it gets to when you stop managing but I don't know if it's going to drop that precipitously.
At this stage but certainly that'll be the bottom in my opinion about it.
Okay, that makes sense. Thanks, guys.
Our next question comes from the line of John Barnes with Piper Sandler. Please go ahead.
Good morning, thank you for the opportunity.
Others with asset management businesses and life insurance have gone out and partnered with other asset managers, which is actually rather unique.
For new product creation of interval, or Evergreen funds.
Is this something under consideration or that needs to happen for America?
Um, you know, there's a number of different Arrangements. I mean not a lot has come to market for some of this stuff that has been out there. So we'll see what actually takes hold. Um, we we are looking at various Arrangements ourselves. We just, we launched our own interval fund. Um, that's in the marketplace, uh, that we brought out. Um, there's other things that we're working on in the alternative space, some will be with Partners, some will be, um, organic for us but, uh, yeah, that that will be an opportunity that we're looking at.
Thank you for that answer. Um, my questions about awm in the competitive environment.
There's been a deceleration in inflows since the 11.1% order. Are you outflowing more from someone on a net basis from teams leading than you're adding? Or is there a way to Dimension? How much that has been an impact to you this year? Thank you.
Yes, so what I, I would say there is in the past. We were more inflow than outflow there. As we said, uh, when you lose some, you know, a large team or 2 Etc. In the short term, then your outflow becomes a bit more than your inflow and that's exactly what has occurred. Uh, but now our pipeline is is
The way a little more from fundamentals. But that's really what's important over the long term and even the medium and short term when you you you but people right now it's so much focused on some of the the near-term of what they see in the top. Uh we look at we look through that to look at what that provides us longer term uh and what's good for the client and the advisor and that's how we invest.
Thank you.
My next question comes from the line of Tom Gallagher with evercore isi. Please go ahead.
Good morning. Um, uh, just a follow-up on the 2, large advisor teams that left uh, well that have any tail to it. Um, meaning uh, would you would you expect to continue to outflows for the next few quarters related to that? Or would you expect rap flows to bounce back closer to 8 billion in in 42?
Okay, so as it relates to the 2 barrs. So we'll have some uh carry over into the fourth quarter. Uh as it relates to our, what we're seeing on our uh basically our attrition patterns now know is actually stable and then we feel comfortable all from that standpoint. As Jim has indicated um,
Gotcha. And then, um, I guess just a follow-up on this more broadly, uh, guys, the
You think and Jim I think you referenced your upping some of your packages for new recruits. Just, that's the reality of the market. Uh, what about payouts on existing advisors, have you kind of re-examined or examined your payout grid and do you think you need to make any tweaks to to pay outs on your
on your advisors more broadly uh, in order to make sure that during a more competitive market that your your retention holds in
Yeah, we, uh, we'll look and have always looked at that in a bit, on a balanced equation, um, and what we provide the advisors and the support we give in combination with payout, um, and those things that we've invested heavily to help them grow and support them. So, it's all in a balanced equation.
Okay, but no, no broad-based changes or anything like that that you're considering.
I am not at the, the point to, you know, talk about anything like that because you know we're in a good position right now of how we're thinking. But we, we always make adjustments that period periodically and that's what we'll continue to do.
Okay, thank you.
Our next question comes from the line of Kenneth Lee with RBC, please go ahead.
Hey, good morning. Uh, thanks for taking my question. Uh, 1 on Asset Management. Uh, looks like there there's some benefit, uh, from operating leverage that you saw on the quarter.
Wonder, if you could just talk a little bit more about any sorts of variable expenses that could increase as markets or AUM, grow over time and relatedly any updated margin Outlook uh with that business. Thanks.
Well, as far as the expenses, uh,
You have the normal volume related variable expenses and certainly off in that standpoint. We've managed that. Well and we feel comfortable with the uh, our transformation and all the management of that. So with that will still continue. Uh, and so on the expense side, it'll it'll be strictly, volume driven type of of expenses that you would have in normal cost of increasing your activity.
Gotcha very helpful.
Just 1.
Previous question there. Uh, within awm sounds like the, the distribution expense ratio Outlook, uh, most likely would remain within that that previous range. You, you, you articulated, uh, that 6667 percent range but just want to to make sure that that's still the case.
Thanks. That is the case.
Great, very helpful there, thanks.
Our final question comes from the line of Ryan Krueger with KBW. Please go ahead.
On the mayor prize products, have you started to see any movement there, as the FED is, is starting to hit another cutting cycle or or is it remained? You know, pretty stable so far.
No, the cache is remain stable.
There'll be a fundamental change from that.
Okay. Just just to clarify. I wasn't referring to the the cash on America's no, no. I know you were talking third party product. Yeah. The third party and money markets Etc. You still you know as to now probably 3 and a quarter or something rear so it it's not a move fundamentally I think as people start to you know rethink based on markets and and fixed income Etc they'll stop making adjustments. But right now I I think it's still been pretty stable that way.
Okay, got it. And then does any update on the signature wealth, roll out and and how that's been going. That's it. You know, so far. I know it's still probably the early stages.
Yeah, it's very early but it's going very well. Um, we're getting um, the advisor to really, you know, look at that platform and understand what they do and take the training for it. Um, and people who have opened the accounts really liked it, uh, and are starting to move. We're getting a both new assets, as well as conversion of some assets from other of their wrap programs over it. Um and so those things as you roll them out, they're they're very uh substantial for them. Um and uh but I think it'll be a great platform. Um so far the flows into it is probably 1 of our best launches. Uh so but it's early stages. Uh we think it has a good opportunity.
Thank you.
We have 1 final question from the line of Kareem safe with Bank of America. Please go ahead.
Hi, good morning. Uh, and thank you so much for taking my questions. Uh, my first 1 is on the, uh, Asset Management business. Uh, it was kind of like, you know, nice to see the deceleration and growth, uh, redemptions on the institutional side year to date, uh, and like, you know, gross sales kind of like, you know, been stable around like, you know, 9 to 10 billion. Uh, I was wondering if you could kind of, like, maybe unpack for us some of the deceleration, uh, in the outflows that mostly from, uh, you know, Limestone and uh, are there any kind of like, you know, remaining assets that, uh, will be, uh, on boarded off boarded, sorry, uh, relating to, uh, lines on in the fourth quarter.
No launch time is still in progress but the majority of it has been um uploaded at this stage is maybe a half a billion dollars left.
Got it. Um, and then, uh, my final question is on the, um, you know, wealth, uh, side. Uh, so you guys are like, you know, called out that there are some, um, you know, I guess like, you know last quarter, you said some irrational bids out there, uh, for advisors. Um, I was wondering if you could maybe
Is it safe to assume that, in light of the disruption in M&A and consolidation in the environment, this level will persist over the next, call it 6 to 12 months?
You know, listen, I I don't, I can't, you know, I think you'd probably have to, you know, speak to others on that. From my perspective, I know people look at these favorable markets and spread um, revenue right now and the way the equity markets continue to uh, go up and so, you know, maybe they bake that into all their rationalization. But um, if that changes a bit, um, I think you'll you'll see uh, a little different environment for that type of arrangement.
Got it, okay.
Thank you so much for taking my questions.
We have no further questions at this time, this concludes today's conference, thank you for participating. You may now disconnect it connect.