Ameriprise Financial CFO Outlines Adviser Growth Strategy as Talent Competition Heats Up

Key Points

• Ameriprise plans to prioritize organic adviser growth through technology, practice acquisitions and succession support, while recruiting externally with discipline amid intense competition for talent.
• Its Huntington partnership is expected to bring in about $28 billion, mostly in the fourth quarter, with roughly 260 advisers moving and retention described as very high; an additional approximately $4 billion Cadence-related portion is expected in the second quarter.
• CFO Walter Berman expects margins to remain in the high-20% to 30% range and says AI investments are designed to improve adviser efficiency, not replace advisers.

Ameriprise Financial NYSE: AMP plans to maintain a disciplined approach to recruiting financial advisers as competition for talent remains intense, Chief Financial Officer Walter Berman said during a company news event.

Berman said the company’s primary focus is on growing existing adviser practices through investments in technology, practice acquisitions and succession planning. Ameriprise also recruits externally, he said, but weighs those opportunities against the economics of expanding its current network.

“We will certainly compete in the inorganic side, but we will stay core to our capabilities of investing to get growth in the organic side,” Berman said.

He expects adviser recruiting to remain active across independent broker-dealers, registered investment advisers and wirehouses. But he cautioned that firms relying heavily on cash-related earnings may eventually need to reassess their business models if market conditions change. Approximately 30% of earnings in Ameriprise’s advice and wealth management business come from cash, with the remainder coming from its core operations, he said.

Adviser investment and retention

Berman said Ameriprise helps advisers expand their practices and manage succession by providing financing and other resources. The company evaluates advisers’ growth potential and investment plans before making commitments, he said, and uses protections that can include collateral and liquidated damages.

Advisers facing competing offers must weigh the benefits of staying against the cost and disruption of leaving, Berman said. He noted that Ameriprise has also sought to develop assistant advisers within existing practices, allowing them to grow and buy into those businesses over time.

Asked about adviser compensation relative to competitors, Berman said Ameriprise believes its technology, operating support and assistance with practice growth create value for advisers. He described the company’s offering as competitive and said advisers continually assess that value against other options.

Bank partnerships and lending

Berman said Ameriprise’s work with Comerica helped establish a track record that contributed to its relationship with Huntington. Comerica’s endorsement was a major factor in demonstrating what Ameriprise could deliver to a bank partner, he said.

Most of the approximately $28 billion associated with Huntington was expected to come through in the fourth quarter, with the balance arriving in the first quarter, Berman said. He said about 260 advisers were moving and described retention as very high. A separate portion associated with Cadence, which he said Huntington acquired, was expected in the second quarter and represented around $4 billion.

Berman said large bank partnerships can take roughly two years to secure, while sales cycles for smaller and medium-sized institutions can be about six months. He said Ameriprise remains comfortable with its pipeline.

In lending, Ameriprise plans to bring the remaining portion of a pledged-loan book onto its balance sheet through 2027 as its arrangement with Goldman concludes and it moves to a new provider, Berman said. Ameriprise currently underwrites a little over 60% of the book, he said, and sees room to increase lending to existing clients and recruits.

Margins and artificial intelligence

Berman said he expects margins to remain in the high-20% to 30% range referenced by the event’s operator. He pointed to stable cash-related earnings, operating efficiency and continued investment in the core business. He also said reinvestment opportunities and loan growth support the prospect of higher net interest income.

On artificial intelligence, Berman said Ameriprise is investing in tools intended to make advisers more effective and efficient, rather than replace them. He said he does not expect the technology to displace advisers broadly because their judgment and relationships remain important to clients.

The company’s wealth, asset management and retirement and protection businesses also provide complementary capabilities and earnings streams, Berman said. He described the combination as supporting free cash flow and the company’s ability to return capital to shareholders.

About Ameriprise Financial (NYSE:AMP)

Ameriprise Financial is a financial services company focused on helping individuals and institutions plan for and manage their finances. Its offerings include financial planning and investment advice, brokerage services, asset management, insurance and annuity products. The company traces its roots to Investors Syndicate, founded in Minneapolis in 1894. It became an independent public company in 2005 after separating from American Express, and remains headquartered in Minneapolis. Ameriprise serves clients primarily in the United States through its network of financial advisors.

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