Ameriprise Financial Stock

Welcome to the Second Quarter 2026 Earnings Call. My name is Rebecca, and I will be your operator for today's call. [Operator Instructions] As a reminder, the conference is being recorded. I will now turn the call over to Stephanie Rabe. Stephanie, you may begin.

Welcome to 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. Following their remarks, we'd be happy to take your questions. Turning to our earnings presentation materials that are available on our website. On Slide 2, you will see a discussion of forward-looking statements. Specifically, during the call, you'll hear references to various non-GAAP financial measures. which we believe provide insight into our company's operations. Reconciliation of non-GAAP numbers to their respective GAAP numbers can be found in today's materials and on our website at ir.ameriprise.com.

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. 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 second quarter 2026 earnings release, our 2025 annual report to shareholders and our 2025 10-K report.

We make no obligation to publicly update or revise these forward-looking statements. On Slide 3, you see our GAAP financial results at the top of the page for the second quarter. Below that, you see our adjusted operating results, which management believes enhances the understanding of our business by reflecting the underlying performance of our core operations and facilitates a more meaningful trend analysis. Many of the comments that management makes on the call today will focus on adjusted operating results. And with that, I'll turn it over to Jim.

Good morning, and thanks for joining our earnings call. Ameriprise delivered another great quarter, thanks to the strength of our team and the firm, our complementary businesses and the way we engage clients. We're performing well in a positive but dynamic market environment. That includes the impact of rates, inflation and geopolitical volatility more broadly. And we're all seeing AI in the headlines a lot more these days. Markets move, rates change and technology is always evolving. But the need for our trusted advice, strong solutions and service is only increasing in a world that is getting more complex. And that's why I feel so good about the business.

As you saw, our financial performance continues to be excellent. Revenues grew 13% to nearly $5 billion, driven by strong asset growth and client adviser engagement. And we're delivering that level of revenue and a nice mix of fee, transaction and spread-based business. Adjusted operating earnings were up 14% to $1 billion, a continuation of our consistently strong performance as we maintain attractive margins and continue to invest in new product solutions, technology and service.

And EPS was up strongly, increasing 22% to $11.07 as we consistently demonstrate strong operating earnings growth and exceptional return to shareholders that is consistently differentiated across financial services. Ameriprise ROE is another powerful advantage. Our return on equity remains best-in-class at 55%, up from 51.5% a year ago. We also hit a new milestone in assets under management and administration and advisement, which grew to $1.8 trillion, a 14% increase. What you see in our results is the benefit of the way Ameriprise is built. We consistently deliver strong results, invest strategically, while building a client-centric business that performs very well over time.

Speaking of client-centric, the Ameriprise client adviser value proposition continues to be a real differentiator. We consistently earn excellent client satisfaction of 4.9 out of 5, along with meaningful external recognition. Investors want help making decisions with confidence, and that's what our advisers excel at every day. Our experience drives deeper client relationships and higher adviser productivity over time. These fundamentals matter and they help drive our strong metrics in the quarter. Total client assets increased 15% to $1.2 trillion, driven by market appreciation and cumulative net inflows.

And our organic flows continue to be good, understanding that overall flows in the quarter were impacted by higher seasonal tax payments as well as adviser transitions in the quarter, including Comerica. Wrap assets reached a new record, up 19% to $732 billion, reflecting market appreciation, strong client engagement and the value of our advice experience. The launch of our Signature Wealth unified managed account has been our fastest-growing platform launch, and we continue to add capabilities, including SMAs.

Transactional activity also increased, up 13%, which is excellent. We invest significantly in industry-leading technology and support to help our advisers succeed. Ameriprise adviser productivity continues to increase nicely and reached a new record up 12% to $1.2 million, supported by our excellent client experience and adviser partnership. And the bank represents another growth opportunity. Assets now exceed $25 billion, up 6%. Lending growth was very strong, up 61% year-over-year, driven by pledge and mortgages.

With the introduction of HELOCs and checking accounts, we're giving advisers more ways to serve client needs and bring assets to the firm. We've seen a good response to our recent bank and certificate promotions, and we know from our early results that practices using our banking solutions manage nearly 10% more assets. In recruiting, we're bringing in good experienced advisers with another 79 joining during the quarter. We're attracting advisers who want to deliver a strong advice-based experience to be part of our terrific culture and grow.

Our excellent technology and J.D. Power award-winning service is a big part of the draw. Many of the advisers who join us feel underserved elsewhere, and we're frustrated with their tech, service and responsiveness. At Ameriprise, they see an integrated platform built around the way they want to work and serve clients. We're selected about who we bring in, and that discipline matters. It supports stronger long-term productivity and cultural alignment and a more attractive economic outcome over time.

In regard to our AFIG institutional business, we're on target to onboard Huntington Bank, which will bring in good assets beginning in the latter part of the year. Their advisers are excited to join us, and we're also adding other institutions along the way. adviser productivity is at a new record, and we're focused on continuing our journey. Ameriprise invests significantly every year to help drive our adviser success with a clear focus on client engagement, adviser growth and operating efficiency.

We have a very strong technology platform in place that is seamless, secure and has excellent availability and scalability essential during volatile markets and environments. We know that rapid advances in AI are reshaping expectations for what a premium client adviser experience should be. With regard to AI, we continue to advance our efforts here, building on years of investment and innovation to help advisers grow, operate more efficiently and deliver more personalized client advice. We anticipated these shifts and invested accordingly, building an interconnected technology ecosystem that brings together data, systems and automation. That foundation allows us to innovate faster and bring new capabilities to advisers in ways that fit seamlessly into how they work.

Our AI is providing many benefits to advisers that include accelerating practice growth using AI insights that identify growth opportunities and strengthen client relationships. The initial results show that advisers using the firm's insights capabilities are seeing a nice increase in client engagement and productivity. We're also helping advisers operate more efficiently to simplify everyday tasks, streamline workflows and administrative tasks so advisers have more time to serve clients, grow their businesses and deliver advice.

For example, on average, e-meeting automation saves advisers 10 to 20 hours per week. Meeting summarization helps give back 5 to 10 hours per week and Copilot premium saves another 2.5 hours per week. So practices using these 3 solutions can garner more than 30 hours per week in productivity saves. And we're embedding AI across the adviser experience to help advisers reduce friction, scale their practices and deliver more personalized advice while keeping relationships at the center of everything we do. Our efforts are being recognized. Ameriprise once again earned the Bank Insurance and Securities Association Technology and Innovation Award for 2026.

Within Wealth Management, we're also seeing good momentum in the Retirement & Protection Solutions business. Sales were strong again, up 20% in the quarter, led by structured products, VUL and variable annuities without living benefit riders. We continue to see good demand for solutions that address our clients' income and protection needs. The team is disciplined about having the right products to generate good client benefits and consistently earns good profitable returns for us. Our books are high quality, and they generate good free cash flow. Our margins and returns are also excellent. It's another example of the earnings diversity and free cash flow generation across Ameriprise.

We take the same thoughtful approach in asset management, where the team is executing well and focused on driving strong performance, profitable flows and enhanced efficiency. Assets under management and advisement increased 10% year-over-year to $759 billion. Investment performance remains a key strength. 69% of our funds are above the median for 1 year, 75% of funds above the median for 3- and 5-year periods and across 10-year period, that increases to 87%. We also have 97 Columbia Threadneedle funds globally earning 4- or 5-star ratings from Morningstar.

In terms of total flows, total net outflows improved to $6.5 billion, driven by higher gross sales in both North America and EMEA. For North America retail, our equity flow rate is ahead of active peers, although we're still a bit behind our peers in flow rate in fixed income, recognizing we have good products given our strong performance, including in taxable bond. We're gaining traction in active ETFs as we continue to build out our product line. In fact, last week, we launched 2 new active premium income ETF strategies. and our SMAs and models continue to gain good traction and growth, where we're a top 10 provider.

Gross and net sales are up across a number of key partners and channels, including Ameriprise. I also mentioned that a strong contributor to the increase of gross sales at Columbia Threadneedle is coming from our Signature Wealth program. And another real highlight is Seligman. We have strong asset growth and flows across their mutual fund strategies as well as technology and health care hedge funds. In addition, we're also seeing nice growth in our EMEA real estate portfolios as we further build out the real estate business. EMEA is also showing improvement in net flows with an increase in gross sales, though the environment across Europe has been a bit more volatile based on impacts of geopolitical events.

We've also recently launched 3 active ETFs in the EMEA region. And in institutional, we're in outflows in the quarter, but our won, not funded pipeline is in solid shape, including traction in Asia Pacific. In terms of transformation in Asset Management, the completion of our back office is on track to be finalized at the end of the third quarter, which is a real positive that will bring further efficiency and savings. We continue to invest across the asset management business in new products, AI and other technology enhancements as we continue to manage expenses well. In fact, this applies across the firm. We remain focused on transformation for growth and identifying opportunities where we can invest, simplify and improve efficiency. That helps us deliver strong margins in a very competitive industry.

Stepping back, Ameriprise is in an excellent position. What sets Ameriprise apart is the combination of everything we offer backed by our highly talented and dedicated team. We have a business that generates one of the highest ROEs, returns that you can see and expect on an ongoing basis. And our firm-wide margin is excellent. We're always investing in capabilities that make the firm more competitive over time and build long-term value. Ameriprise is well positioned to navigate a changing environment and do well.

We continue to earn important recognition in the marketplace. In 2026, we have been named one of America's Most Innovative Companies from Fortune. Newsweek's Most Trustworthy Companies in America, the Forbes Global 2000 list and America's Best Companies by TIME. Why do I mention recognition? It's because of the type of business that we have and the way we work with clients. Reputation is everything in this business, and ours has stood the test of time. With that, I'll ask Walter to provide additional color on our financials, and then we'll take your questions. Walter?

Thank you, Jim. Ameriprise continued to deliver strong financial results in the quarter with adjusted operating earnings per share up 22% to $11.07. These results reflect the strength of our diversified earnings profile and the operating leverage embedded in our business as well as the return from the significant investments we continue to make. Our ability to generate attractive growth and margins across cycles underscores the durability of our platform and the discipline we bring to execution. Total assets under management, administration and advisement increased 14% to $1.8 trillion, which coupled with strong client engagement drove a 13% increase in revenues to $4.9 billion.

General and administrative expenses increased 5% to $982 million, driven by volume-related expenses, continued investment for growth and higher compensation expense in our Seligman technology strategy team from asset growth and performance. Adjusted operating earnings increased 14%, and our pretax adjusted operating margin remained strong at 27%. In the quarter, we returned 91% of operating earnings to shareholders through share repurchases and dividends, including opportunistically repurchasing 1.7 million shares at an average price of $459. Our balance sheet remains exceptionally strong with $2.1 billion of excess capital and $2.8 billion of holding company available liquidity.

We are positioned well whether the environment remains risk on or we see a pivot to risk off. Our diversified model enables us to continue creating value for clients, advisers and shareholders. Let's turn to Wealth Management financials on Slide 6. Adjusted operating net revenues increased 16% to $3.2 billion, driven by asset growth and transactional activity growth across our solution-driven model. Adjusted operating expenses in the quarter increased 16%, with distribution expenses up 18%. I will note that adviser compensation within distribution expenses increased in line with revenues advisers generate.

Consistent with our expectations, G&A expenses increased 6%, primarily driven by volume and growth-related expenses, including bank expansion, AI transformation and automation initiatives. Moreover, these investments will further enhance the client and adviser experience, helping to ensure that Ameriprise remains a preferred destination for both advisers and clients. For the full year, we expect general and administrative expenses to increase in the mid-single-digit range. Pretax adjusted operating earnings increased 16% to $939 million with continued strong contribution from both core and cash earnings.

In addition, our operating results highlight the strength of our underlying operating performance. Our core earnings grew in the low 30% range, benefiting from higher client assets and advisory fees as well as strong transactional activity levels. The strong core earnings that we generate is unique relative to other wealth managers and demonstrates our focus on balancing growth and sustainable profitability across all aspects of our business model. We have clearly demonstrated continued excellent and consistent financial results despite some of the slower quarters of flows, given we are competing in a highly irrational environment and the impact of Comerica as well as the elevated tax impacts.

While our peers are more heavily reliant on cash earnings, we believe we are in a stronger position given our balanced earnings mix. Bank earnings grew in the low single-digit percentage range in the quarter, consistent with our expectations, while certificate earnings declined given the shift in client preferences to other products on our platform. In total, cash earnings were essentially flat from a year ago. We continue to take actions to build the bank portfolio in a way that supports a strong earnings contribution going forward. The overall bank has a yield of 4.7% with a 4.2-year duration. The investment portfolio is now only 6% floating rate securities.

In the quarter, new purchases at the bank were $1.1 billion at a yield of 5.2% with a 4.5-year duration. Last, our aggregate margins remain excellent at 29% as we managed expenses well relative to our revenues with a significant contribution from our core business. Let's turn to Slide 7. Advice & Wealth Management generated solid asset growth in the quarter. Total client assets grew 15% or $164 billion to $1.2 trillion and wrap assets increased 19% or $116 billion to $732 billion, driven by solid organic growth, strong adviser productivity and equity market appreciation. These results reflect our ongoing investment to enhance and automate adviser workflows as well as develop insights to meet client needs.

This allows advisers to spend less time on administrative tasks and more time cultivating client relationships. Client flows were $3.1 billion and wrap flows were $6.9 billion, reflecting a substantial acceleration of Comerica terminations exacerbated by the elevated tax payments in the quarter. On a normalized basis, our flows improved significantly sequentially. While our flows are below our normal historic range, they are within our expectations in light of the extremely aggressive recruiting environment, which is impacting inorganic activity.

Building off our stable organic growth trends, we have selectively adjusted our programs to grow inorganically net new assets that generate profitability in both a risk-on or risk-off environment to improve our trajectory going forward. In the quarter, we added 79 experienced advisers, a testament to the continued strength of our adviser value proposition. Saying that, many of the recruiting deals we are seeing today in this perceived risk-on environment exceed what we believe is a balanced risk return approach given the long cash paybacks and the marginal profitability benefits over the extended life of these arrangements.

We will continue to evaluate the facts and circumstances to assess the trade-offs between sustained profitability versus flows and associated risk. This approach will ensure decisions are driving sustained shareholder value creation. As we look ahead, it should be noted that outflows relating to Comerica will culminate with the completion of the contract and conversion in September. The addition of Huntington Bank is anticipated in the fourth quarter and will bring approximately 260 advisers and $28 billion of client assets onto our platform. This will more than offset the impact of Comerica. While the assets will move to our platform in the fourth quarter and in early 2027, we will benefit from the economics of the full book beginning in the fourth quarter.

We continue to actively engage additional financial institutions in partnership discussions and have the capacity to grow this platform. Separately, we are continuing to invest in our adviser succession strategies for both internal and external advisers, including expanding and leveraging Ameriprise Personal Wealth Group, our centralized adviser group as a potential succession option.

Turning to cash. Our total client cash of $84 billion was down 2% year-over-year. Bank assets increased 6% year-over-year to $25.5 billion, with the bank representing an increasing source of earnings going forward. Cash sweep balances were stable at $28.8 billion compared to $29.4 billion in the prior quarter, which is consistent with the seasonal tax pattern we would expect to see. Certificate balances declined to $7.4 billion given the current rate environment and client preferences. We continue to have elevated cash balances in the third-party money market funds at $46.6 billion. This remains an important opportunity when rates decline to see these cash balances deployed into other products on the platform.

Let's turn to Slide 8. Advice & Wealth Management generated solid productivity growth. Adjusted operating net revenues increased 16% to $3.2 billion. The core wealth business is performing well given the value of our planning model and the multiple touch points we have with clients to meet their needs holistically. Our fee-based and transactional revenues remain quite strong, increasing 18%, benefiting from growth in client assets and higher activity levels. Specifically, transaction activity remains strong, increasing 13% compared to the prior year. This is primarily from increased sales in annuity products and brokerage transactions.

I will note that our bank revenues increased in the mid-single-digit percentage range from business growth, including the expansion of our lending products, while revenues from cash sweep and certificates declined, particularly as clients reposition from term products into other offerings on our platform. Our adviser productivity continues to grow, reaching a new high of $1.2 million, up 12% year-over-year, driven by strong growth in wrap assets and related fees as well as enhancements to adviser efficiency from the integrated tools, technology and support we provide. We have demonstrated sustained adviser productivity growth of 10% annually over the past 5 years.

Turning to Asset Management on Slide 9. Financial results were strong in the quarter. Pretax adjusted operating earnings increased 23% to $274 million. Results reflected asset growth, excellent growth and performance in Seligman and the positive impact from transformation initiatives. Total assets under management and advisement increased to $759 billion, up 10% year-over-year from higher ending market levels. As Jim mentioned, net outflows improved in the quarter, most notably with strong and improved performance in our U.S. intermediary channel. Revenues increased 14% to $947 million, and the underlying fee rate remained stable at approximately 47 basis points.

Expenses increased 11% in total. In the quarter, general and administrative expenses were up 9%, driven by higher compensation expense in our Seligman technology strategy team from AUM growth and performance, volume-related expenses and unfavorable foreign exchange impact. For the full year, we expect general and administrative expenses to be flat, excluding Seligman and other performance fee compensation. Margin reached 43% in the quarter, which is above last year of 39% and our target range of 35% to 39%.

Let's turn to Slide 10. Retirement & Protection Solutions continued to deliver strong earnings and free cash flow generation, reflecting the high quality of the business that we built over a long period of time. Adjusted operating revenues increased 4% to $975 million. Pretax adjusted operating earnings were $202 million, consistent with our target range over time. Results are lower than last year, driven by continued variable annuity net outflows as well as higher distribution expenses associated with higher sales. Profitability of this business remains excellent at a 21% margin.

Turning to the balance sheet on Slide 11. Balance sheet fundamentals and free cash flow generation remain strong, which is core to our ability to invest for growth on a sustainable basis while also continuing to return capital to shareholders. Our return on equity is best-in-class at 55%. We have an excellent excess capital position of $2.1 billion. We have $2.8 billion of available liquidity at the holding company. Our assets and liabilities are well matched, and our investment portfolio is diversified and high quality. Our disciplined capital return is a key element of our ability to consistently generate strong long-term shareholder value.

In the quarter, we returned $932 million of capital to shareholders, which was 91% of operating earnings. We have increased capital return by 25% in the first half of '26 to $1.9 billion. This included repurchasing 3.3 million shares at an average price of $467 compared to 2.3 million shares at an average price of $507 in the first half of '25, 43% more shares. These actions are a demonstration of the confidence we have in our continued free cash flow generation and commitment to return capital to shareholders. As we go through '26, our strong foundation, coupled with our ERM capabilities and decisioning framework position us well to continue investing for growth in a targeted way and return capital to shareholders at differentiated pace.

In summary, on Slide 12, Ameriprise delivered solid results in the second quarter, consistent with our longer-term trend. Over the last 12 months, revenues grew 10%, adjusted EPS increased 15%, return on equity grew 260 basis points, and we returned $3.8 billion of capital to shareholders. We had similar growth trends over the past 5 years with 9% compounded annual revenue growth, 17% compounded annual EPS growth, return on equity improving 10 percentage points, and we returned $14 billion of capital to shareholders. These trends are consistent over the long term as well. So in closing, we have an excellent foundation and capacity moving forward that enables consistent and sustained profitable growth. With that, we will take your questions.

[Operator Instructions] Your first question comes from Brennan Hawken with BMO Capital Markets.

So Comerica advisers were expected to be a headwind this quarter, and you flagged that in your prepared remarks. Can you maybe help us size that magnitude that you saw and give us an update on what we should expect in the third quarter when they are offboarded as far as the total impact? I think you gave the HBAN expected benefit, but it would be helpful to understand where Comerica stands today when we refine the forecast.

Well, as we indicated at the end of the third quarter, it will be $19 billion approximately exiting. We really have not -- based on the client disclosed element, but it did accelerate significantly in the second quarter versus the first quarter. And it impacted basically our inorganic activity. But we really don't get into disclosing the amounts based on our client situation. But you'll see $19 billion in total be out by the end of the third quarter.

Okay. So even though it was a headwind, it didn't -- it wasn't enough to lower the size of the total amount that's going out in the third quarter?

Of course. Yes, it was because it's happening as advisers are leaving, we're seeing -- we saw results in the first quarter. We saw that result significantly increase in the second quarter, and then the rest will go out in the third quarter.

Right, right, right. I'm just trying to think about what -- how much is left, right? Is it possible to get an update versus that, I think it was 18.5% before...

No, I understand. That's why I'm saying it's, again, divulging of what's happening at a third-party client that we have by giving what's left is basically saying what's leaving and we've chosen not to do that.

Okay. Fair enough. And then thinking about recruiting, it sounds like the recruiting market remains noneconomic as you've indicated in the past. Are you seeing any early signs of rationality returning to the market in any way? And what are the sort of mile markers that you're watching when we think about that?

So I think what we see is still some of the deals that we're seeing, I mean, the paybacks are as high as 8 years on a cash basis, which is crazy because some of them have gotten really aggressive. Even advisers are looking at it knowing that someone is going to pull the wool out from what they get and how it's going to materialize. I would say we find that we are attracting people because when they come to us, when they join or even when they look at what we have, the service, the technology, the support, they actually say it's not very good for where they are. And I know there's a lot of promises and a lot of statements out there, but the reality of the people joining us are very clear about what it is.

I just spoke to a recruit and said their technology is 5 years behind what ours is. Another one said the lack of responsiveness and service. So there's a whole bunch of reasons. I think optically, people are looking at checks, but when you look and take into account the productivity growth, the support, the servicing, how they can operate, the economics in the end come out really in our favor. Having said that, it's a discussion you really have to have for people to kick the tires in the right way. But the promise is out there with -- and what's upfront is probably different than the reality. So what we see is, hopefully, over time, people will understand that better. And maybe as the market changes a bit, there might be more pressure there.

In our case, we feel very good about what we do and how we do it. And that's why we continue to generate very good profit and earnings and growth across the whole course. So optically, I know people like to see NAA from this type of activity. But I think you got to look through what the benefits truly are and whether that changes in different market environments. So that's the way we're thinking of it, and we feel very good about it. But I clearly would say that our service, our support, our technology, our capabilities, the leadership we provide, the training is what differentiates us.

Your next question comes from Craig Siegenthaler with Bank of America.

Our question is on the insurance side. What was the level of statutory earnings and dividends from the RiverSource life insurance entities in 2Q '26? Because I'm curious how it compared to the $202 million of retirement and protection pretax earnings in the quarter, given that you mentioned there was a sales acceleration. And just one related one, so I'll just ask it now, too. You bought back $774 million of stock in 2Q. That was up 35% year-over-year. Is that sustainable?

Okay. So on the statutory earnings, it will -- I don't have the exact number on that, but I will tell you, our statutory earnings will support what our expected dividend coming from the RPS. So there will be no denigration of the cash flow. And we'll get you to that number. And from the standpoint of supporting, yes, as we said, we certainly have the excess capital and the free cash flow generation. And we will stay in that 85%, 90% range and as we were in this quarter to be optimistic as we see opportunities to balance that shareholder value. And -- but yes, certainly is doable from that standpoint.

Your next question comes from Crispin Love with Piper Sandler.

Just first on margins in AWM and Asset Management. I think it was nearly 29% in AWM, 43% or so in asset management. Can you just discuss kind of thoughts on the outlook here? Do you believe that your investments in tech and AI could drive those even higher? And then maybe more so looking on the AWM side there, just outlook. And then -- but then also just like balancing the competitive landscape and some headwinds there. So just curious on the big picture there.

So as looking at the margin in AWM, yes, that is certainly sustainable from that standpoint. Obviously, there is a component of interest in there. But looking at the bank with net interest income generation, we feel very good about that and it's positive nature as we go through 2026. And certainly, as we're seeing in core, we are certainly generating with good revenue growth and very focused expense management with investing in the business.

So yes, that is certainly sustainable from that standpoint. Again, markets play a role in that. And then you mentioned, I think, asset management, and that's obviously, we're above our range, but that range is driven by transformation and the market. And certainly, as this continues, we believe that, that will be sustainable also again, market is a factor.

Great. And then just one follow-up for me on AI adoption across the firm, adviser productivity. That metric set a new record high for you guys. When you look at that metric, do you think there is significant runway there in improving productivity through tech and AI kind of over the next several quarters and years? Or is there some type of tipping point where that may level out? Just curious on how you're looking at, say, the recent history, how that's grown? And then as you look out over time, where can it accelerate? Or is it going to flatten out?

If I understand your question, I think you're saying the contribution AI is making towards our margin. Is that it? Because you broke up there for a minute.

Yes, we didn't understand what you...

Is that the essence of your question?

More so on how it's impacting adviser productivity and if adviser productivity can continue kind of accelerating.

Yes. So as we introduce these various tools and capabilities, as an example, our [ eMeeting ] capability and putting together for clients, how they can operate with their engagement with clients and their meetings, et cetera, advisers uptake that. So we have about 6,000 advisers utilizing that already, and they're seeing really good improvements in their time and their activities and the engagement and the conversations they can have.

So as we introduce these tools and they embed them in their practice, we are seeing those types of things are freeing up time and activity and improving. We've introduced even more informed insights. And so when the advisers use those insights, we've seen better engagement and better productivity increase. Now of course, advisers have to embed this in the way they operate. And so it's always sort of an introduction and a learning curve. But as they take them on and change how they process, we are definitely seeing those nice improvements.

And I think that it's going to really continue because it's really an adoption curve that occurs, and we continue to introduce more and more. Some of that's already embedded in the tools, but at the same time, advisers have to more utilize the capability more fully. and that's what they're uptaking. So there's always that learning curve across 10,000 advisers, but more and more are doing like eMeeting summarizations. They're actually uptaking that nice, and they're seeing nice benefits from it. So yes, I think that will be something that will add to the productivity of freeing up their time and energy and hopefully engaging clients even more deeply.

That's a great point on the adviser adoption of AI.

Your next question comes from Wilma Burdis with Raymond James.

Wrap flows looked robust, especially given the accelerated roll-off of Comerica in 2Q '26 and the environment. But the total client flows were a bit softer. Can you just talk about the drivers? Was it related to something with Comerica or something else?

On -- you're talking about the client flows? Yes. As I indicated, certainly, we are seeing acceleration in Comerica. It really did accelerate versus the first quarter, and that is impacting that. Plus as we indicated, the tax situation did also. But as I indicated, it's -- we feel very good about our organic basically flows. The inorganic is being impacted as we indicated by the aggressive nature that is taking place, both on the recruitment and on the retention, and that is a factor. But clearly, this quarter was impacted by the acceleration in Comerica.

Okay. And then what are Ameriprise's opportunities to promote Columbia Threadneedle within the A&WM book? Are there ways to incentivize clients to choose Columbia funds such as lower fees or other ways to incentivize those flows into the products there?

Yes. No, we don't. Every product we put from all investment firms is on a consistent level of compensation and relationship to that. Different products have different fee levels based on their asset expense fees and other things. So ETFs are lower than active funds and various things like that and some are a little different, just like USC and iShares versus another provider.

But what I would say is that Columbia has a good opportunity, and we see a nice increase in the sales activity in Columbia as they introduce their SMAs, their ETFs. We also see a nice take-up in the Signature Wealth platform, where they have the ability to actually work through the advisory part of that program very well as other providers have. So we have seen a nice pickup, and we think that will continue.

Your next question comes from Tom Gallagher with Evercore ISI.

If I look at the $6.9 billion of wrap flows in the quarter, does that include -- that does include the Comerica-related outflows? Or is that excluding the Comerica-related outflows?

Tom, that was impacted by also the outflows from Colombia -- from Comerica, excuse me.

Got you. So Walter, to get to a core number that we can expect after this outboarding is done, we should be adding something back because you're seeing -- like -- and you said it was accelerated. So I'll just pick a number out of the air. If it's $4 billion or $5 billion, that's the number that you would expect to be more trendable when we think about how this looks after 3Q. Is that a reasonable way to think about it?

Well, not to give a number because I said, yes, it is accelerated. I'm not using your number, but it did accelerate significantly. And as we look at it, yes, in this environment, as we indicated, what we historically have seen is really just not in the best interest of shareholders to pursue a number like that to try and get growth that is not profitable. So the number will be less in this environment, but clearly, it makes sense from a shareholder standpoint, and we are attracting good flows.

Yes. The only thing I would say, and maybe I was a little confused with what you said, wrap business is only -- it's one component of the client flow in Comerica. So there is other flow activity, Comerica, annuities, brokerage, other activities. So you can't -- it's not a one-for-one dollar between wrap and client flows. No, I'm sorry.

Got you. Got you. So that would be impacting the total client flows, probably more so.

Total of the $19 billion that will come out by the end of the September completely. That's total client flows. Wrap flows is a component of that within the $19 billion, but not -- I don't know the exact percentage per se, but it's less than -- definitely less than the 19%. And the only reason we're not mentioning what it is only because it's a client, so we don't -- so -- but at the end, that's all I would say is the complete amount will be out by the end of the third quarter.

Now offsetting that, as we said, is Huntington will be coming in, in a big way, and that will be in the fourth quarter, in the beginning of first quarter. And we also are winning other AFIG type of deals as well. So we feel like our pipeline and what will offset that will be very good. And it's unfortunate because advisers of Comerica really would like to stay with us because they love what we provided and their clients do. So I think -- so it's not because we lost it, it's because the decision made through an acquisition that people made.

Got you. That's helpful, guys. Just for my follow-up, so just getting back to your comment on extremely aggressive recruiting activity in the market for advisers. How would you expect that to manifest itself on your business when you think about your 29% margin this quarter. Do you still think you can hold the line considering it sounds like spreads are stable on the customer cash and what that impact might be on revenue and distribution expenses from the competition? And then I guess you also have Huntington getting onboarded. So there's a bunch of moving pieces here. But how do you feel about the 29% margin in light of all of those factors?

We feel good about it. Remember, we're generating this on a consistent basis across our entire business. I would probably ask you to look over the years about the continuation of that and the solid. You're always going to get some impacts based on environment and things such as that and market and behavior that's occurring out there. But what I fail to understand is how people don't look at the totality of it rather than just an NAA.

NAA might be good if it truly translates into real profitability on a consistent basis with strong margins. If it doesn't, then what are you paying for? It's like the eyeballs based on the Internet back in 2000, what really survives. I mean you have some of that occurring today with AI, what will happen in the end. But right now, we're still enamored with people paying up because they get some totality growth that may translate into profitability truly in the end. I don't know whether it will or not fully. But what we look at is we make those decisions in an informed basis. We definitely want people to join. We definitely give good appropriate compensation packages.

We also know the value that we truly provide and what that generates for an adviser over time. If you increase an adviser productivity year in and year out, and even in the end, when they're looking for succession, that equity has built up even more strongly and more higher value. And then you can sell that because of the system we have at a premium to what you would be selling outside of one of the other networks. Those things add tremendous value that an adviser understands or needs to understand.

Right now, people are taking some checks, but it doesn't mean it's going to translate to even they're going to benefit really better in the end. And so those are the things that we know are important. And when we're truly able to speak to people that way, they understand it, and that's why we attract them, and that's why we have a good network with our advisers here. But again, people can always think about what the short term is, and there's a lot of short-termism today.

Your next question comes from Ryan Krueger with KBW.

Walter, in the prepared remarks, you mentioned selectively changing adviser programs to generate, I think, better organic net new assets in both risk-on and risk-off environments. Can you expand on what you were referring to there and any impact that you expect going forward?

Yes. As I indicated, we have a group of programs that deal with various adviser needs and both as it relates to succession and growth and those programs. We also have an established program dealing on a remote basis with our PWG activity where we've been growing that. So there's additional activities from that standpoint, our organic capabilities are certainly more profitable and certainly for retention purposes and for meeting their objective needs.

So we offer a full spectrum of capabilities that the adviser in their cycles to allow them to achieve their objectives. And as those are set programs with them and those have been rolled out. And certainly, we're expanding, like I said, our remote adviser capability, and that is paying good dividends for us.

Got it. And then just a question on the recruiting pipeline. You've talked about irrational competition for a while now. Last quarter, I think despite that, you were talking about an improvement in the pipeline as the quarter progressed. I guess how has that trended since then, I guess, over the last few months?

Yes. So the pipeline you saw from the first to the second quarter increased nicely that we recruited and the third quarter looks even stronger.

Your next question comes from Suneet Kamath with Jefferies.

Just sticking with the recruiting outlook. Just based on the announcements that you made in the second quarter, we were calculating you announced about $800 million of practice additions. And if we track that just for the month of July, it's closer to $900 million, so already surpassing 2Q. Do you think that's a reflection of some of these changes that you're making? Or is that just the timing of when practices move?

I'm not following the question. I'm sorry, Suneet. Help me with that again.

Yes. So you guys announced these practice adds every once in a while, right? So we track those and that number was $800 million in 2Q. And now if we track it for July, it's already $900 million. So it's already above 2Q. So I guess my question is sort of a follow-up to Ryan's. Is this a function of some of the compensation package changes that you're making? Or is it just random when practices decide to move? That's what I'm getting at.

No, I think it's a combination of both from that standpoint. Certainly, we have -- as the value proposition, people evaluate, as Jim said. But certainly, as we indicated, we -- for the right advisers and the right situation, we will make adjustments, and that's what you're seeing.

Okay. And then just on this concept of A&WM earnings mix kind of core versus cash. I know you don't split it out, but we've tried to do some math around that, and we're getting to something like half of the earnings come from core and half of the earnings come from cash, give or take a little bit, which if that's right, it sort of strikes us as pretty significantly different from some of your peers where most, if not all, of the earnings comes from cash. So I just wanted to pressure test that those assumptions that we're using just to make sure we're not thinking about it incorrectly because it seems like a pretty stark difference.

Well, certainly, you're in the right ballpark. I would say there is more on the core.

It's definitely more than half in the core. It's more like 70%. It's...

Let's just say it's more in the core.

It's somewhere in between what you just said. How is that?

Okay. That's better. Any additional disclosures that you guys could give us on that would be helpful because I think it is a real differentiation.

Yes, it is. And it's not only that, it's also the stability where the bank is maintain that generation of earnings. Obviously, we have a bank, so we don't have to swap and we keep the premium. And certainly, the bank is growing in its net interest income. And so yes, I think we will look at doing that because there's certainly a big differential between the concentration we have and the concentration that exists in peers. I'll leave it at that.

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

[Audio gap]

[Operator Instructions] As a reminder, the conference is being recorded.

I'll now turn the call over to Stephanie Rabe. Stephanie, you may begin.

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

Turning to our earnings presentation materials that are available on our website. On Slide 2, you will see a discussion of forward-looking statements. Specifically, during the call, you will hear references to various non-GAAP financial measures, which we believe provide insight into the company's operations. Reconciliation of non-GAAP numbers to their respective GAAP numbers can be found in today's materials and on our website at www.ir.ameriprise.com.

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. These forward-looking statements speak only as of today's date and involve a number of risks and uncertainties. A 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 first quarter 2026 earnings release, our 2025 annual report to shareholders and our 2025 10-K report. We make no obligation to publicly update or revise these forward-looking statements.

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. 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.

Good afternoon, and thanks for joining us. As you saw in our earnings release, Ameriprise delivered a strong start to the year. driven by our disciplined execution and the benefits of our diversified business. While the first quarter was marked by ongoing market volatility and economic uncertainty, contributing to a more cautious client behavior. Our value proposition continued to clearly differentiate us. Across the firm, we remain deeply engaged with clients and delivered excellent financial performance. We're focused on maintaining a high-quality, well-positioned business, while continuing to invest and innovate to support deep long-term client relationships. Our business generates consistent earnings across market cycles. Equally important, we maintain a disciplined approach to capital allocation that enables Ameriprise to deliver strong value to shareholders. For the quarter, adjusted operating revenues were up 11% to $4.8 billion. Earnings and EPS were also up double digits with EPS up 19% to a record $11.26, and we continue to deliver best-in-class ROE, which increased to more than 54%. In addition, our assets under management administration advisement grew 12% to $1.7 trillion, driven by our client net inflows and positive markets.

The consistency of these results reflect the strength of our integrated business and the benefits of our approach. Very clearly, Ameriprise is distinguished by the compelling experience we deliver to both clients and advisers. Across the firm, we remain focused on serving client needs and best interest exceptionally well. That differentiation is reflected on a consistently earning excellent client satisfaction, which continues to be 4.9 out of 5 and also by the recognition our firm receives year after year. On the adviser side, our distinctive value proposition drives sustainable practice growth, higher productivity and recurring revenue over time.

Turning to our results. Total client assets grew 12% to $1.1 trillion with wrap assets growing 16% and to $664 billion. In the quarter, we were lighter on flows based on more cautious client behavior and some lumpiness in recruiting and terminations. We ended the quarter with $6 billion of wrap net inflows. Importantly, underlying activity was good. For the quarter, we kept clients closely engaged and delivered strong transactional activity up 10%. Our cash business remained stable with nearly $30 billion in sweep balances. As you saw, our advisers again generated meaningful productivity and revenue growth with productivity increasing another 10% in the quarter to a record $1.2 million per adviser. Our strategy remains grounded in organic growth, built, not bought. Advisers consistently value Ameriprise for the depth of our value proposition and the strength of our partnership. We continue to prioritize our core adviser team productivity, and we complement it by recruiting high-quality advisers who view us as a strategic partner, supporting strong client outcomes and practice growth. 61 advisers joined during the quarter and were seeing a pickup of activity in the second quarter.

And in AFIC, we continue to expand this channel as a premier platform for banks and credit unions. During the quarter, we signed a multiyear agreement to become the retail investment program provider the Huntington Bank. This relationship is expected to add approximately 260 advisers and $28 billion in assets with onboarding beginning later this year. Huntington selected Ameriprise for our leadership in advice, strong culture and capabilities. As we shared, we consistently invest across the firm to meet client needs today and further strengthen the business for the future. These are intentional multiyear investments across technology, systems and new capabilities. We're focused on clear high-impact outcomes that deepen engagement, deliver relevant and actionable information while enabling highly personalized quality experiences.

In particular, we've designed our tech platform around how advisers work, not individual tools. It connects multiple capabilities like our CRM platform, e-meeting, advice insights and practice the workflows into an intelligent ecosystem, enhanced with embedded AI and automation. To that end, we feel good about the progress we're making. Our focus is on using AI and intelligent automation capabilities at scale to help advisers deliver a consistent, high-quality client experience, while improving how they operate day to day. In terms of investments in solutions, at the initial launch of our signature Wealth UMA mid-last year, we're now expanding the product capabilities and seeing positive early asset movement and engagement. There is meaningful upside as we continue to expand capabilities, including the introduction of SMAs and as we broaden the strategy set over time.

With regard to our bank solutions, which complements our overall offering, bank assets now exceed $25 billion with continued strength in pledge lending. With the recent introduction of products, including HELOCs and checking accounts, we now offer a complete suite. As we reach more of our advisers and clients, we expect this will present opportunities to bring additional assets to the firm. To close out AWM, we received new recognition in the quarter. For the 2026, J.D. Power U.S. investor satisfaction study Ameriprise ranked 3rd out of 23 firms overall, a terrific result that underscores the quality of the experience we deliver.

Turning to our Retirement and Protection business. As advisers deliver more comprehensive advice, they are thoughtfully incorporating annuity and insurance solutions to address clients' increasingly complex needs. Sales were solid in the quarter, supported by continued demand across annuities and BUL. In addition to meeting client needs, this business continues to generate attractive margins and consistent earnings over time, but RiverSource again recognized as one of the most profitable insurers in the industry.

Moving to asset management. Assets under management and advisement increased 8% year-over-year to $706 billion in the quarter. Investment performance remains a strength. More than 70% of our funds are performing above the peer medium of a 1-, 3- and 5-year periods and 85% are above the medium over 10 years. This sustained performance continues to be recognized externally in the most recent Barron's Best Fund Family rankings, Columbia Threadneedle placed in the top 10 across all time periods, and our U.S. fixed income team recently earned for 2026 Lipper Awards. Importantly, net outflows improved significantly year-over-year to $5.9 billion, reflecting better trends across both retail and institutional channels.

Gross retail sales in North America continued to improve, up 26% even in a volatile market environment, and we're seeing nice sales within Ameriprise from good initial sales in Signature Wealth. Retail flows and EMEA also improved. However, they were impacted by headwinds from the geopolitical volatility during the quarter.

On the product side, we continue to advance our strategy across ETFs, SMAs and alternatives with a clear focus on scale, consistency and performance. Our ETF platform surpassed $10 billion in assets under management, supported by a differentiated offering across North America and EMEA. In SMAs, we benefit from long-standing track records and remain a top 10 provider with continued positive flows. In alternatives, our technology and health care hedge fund strategies delivered strong performance and sales momentum, and we see good opportunities ahead.

Consistent with our approach in wealth management, we're applying advanced analytics and technology within asset management, including an investment research where these capabilities are contributing real value. At the same time, we're transforming how we leverage our global platform. We're driving greater efficiency across the front, middle and back office, while continuing to strengthen our data foundation. We're also making good progress on back-office outsourcing with a substantial portion of the conversion expected to be completed later this year. These initiatives complement our broader efforts to streamline systems and support operating leverage over time.

Now for Ameriprise overall, our focus is having a premium branded client-focused business that delivers strong financial performance and attractive returns. Over the past year, we have achieved record earnings and generated best-in-class return on equity now exceeding 54%, as I mentioned. Given this performance and our current valuation, we continue to view our shares as an attractive buying opportunity. As a result, as you know, we increased our share repurchases in the fourth quarter and continued our strong return to shareholders with 88% returned in the first quarter, and our board just approved another 6% increase in our dividend. Ameriprise is built to perform across market cycles. We're well positioned to deliver meaningful value over time, manage risk responsibly and generate resilient performance.

Before I close, I want to highlight the iconic Ameriprise reputation, which remains an important competitive advantage. We are proud to have a company that continues to be widely recognized in the marketplace for who we are, and how we operate. In the minds of consumers, employees and investors, Ameriprise has been named one of America's most trustworthy companies in 2026 by Newsweek. And from fortune, Ameriprise is also one of America's most innovative companies for 2026, affirming our leadership in technology in driving transformational change.

In closing, Ameriprise offers a differentiated combination of an excellent client and adviser value proposition, sustainable, profitable growth and attractive capital return.

With that, I'll turn it over to Walter to discuss our financials in more detail.

Thank you, Jim. Ameriprise delivered strong financial results in the quarter, with adjusted operating earnings per share up 19% to $11.26 and an operating margin of 28%. These results reflected the strength of our diversified earnings profile and the operating leverage embedded in our businesses as well as the return from significant investments we have continued to make. Our ability to generate attractive growth in margins across cycles underscores the durability of our platform and the discipline we bring to execution. Total assets under management, administration and advisement increased 12% to $1.7 trillion, which coupled with strong client engagement drove an 11% increase in revenues to $4.8 billion. In the quarter, we returned 88% of operating earnings to shareholders through share repurchases and dividends. Our balance sheet remains exceptionally strong with $2.3 billion of both excess capital and holding company available liquidity.

Let's turn to Wealth Management financials on Slide 6. Adjusted operating net revenues increased 14% to $3.2 billion. The core distribution business is performing well given the value of our planning model and the multiple touch points we have with the client to meet their needs holistically. Our fee-based and transaction revenues remained quite strong, increasing 17%, benefiting from growth in client assets and higher activity levels. In addition, our bank revenues increased 6% from business growth, including the expansion of our lending products, while revenues from cash sweep and certificates deployed.

Adjusted operating expenses in the quarter increased 12%, with distribution expenses up 14%. I will note that adviser compensation within distribution expenses increased in line with the revenues advisers generate. G&A expenses were up 4%, primarily driven by volume and growth-related expenses, including investments in Signature Wealth and banking products. This level was consistent with our expectations.

Pretax adjusted operating earnings increased 20% to $951 million with continued strong contribution from core distribution and core cash earnings. In the quarter, Comerica exercised their option for early termination of the relationship with us. This resulted in a onetime $25 million make-whole payment for onboarding costs and future earnings, which finalized all payments that were due to us for this termination. Excluding this benefit, earnings increased 17%. Our core distribution earnings grew in the mid-30% range, benefiting from higher client assets and advisory fees as well as strong activity levels. The strong level of core distribution earnings that we generated is unique relative to other independent wealth managers and demonstrates our focus on ensuring that our growth is profitable.

Bank earnings grew 6% in the quarter, while certificate earnings declined. In total, core cash earnings were essentially flat from a year ago. We continue to take actions to build the bank portfolio in a way that supports stable earnings contributions going forward. The overall bank has a yield of 4.6% with a 4-year duration with now only 7% of the portfolio floating rate securities. In the quarter, new purchases at the bank were $1.9 billion at a yield of 5% with a 4.1 year duration. Last, our aggregate margins remained excellent at 30%, up from 28% a year ago. Underlying that, our core distribution margin is over 20%, with a solid contribution from cash.

Let's turn to Slide 7. Advice & Wealth Management generated solid asset growth in the quarter. Client assets grew 12% to $1.1 trillion and wrap assets increased 16% to $664 billion, driven by solid organic growth, strong adviser productivity and equity market appreciation. Our new Signature Wealth program continues to gain momentum and a significant portion of the assets are new money to Ameriprise. Client flows were $4.2 billion and wrap flows were $6 billion in the quarter. This reflected several moving pieces that I will explain. Same-store sales levels remained strong and consistent aside from the normal seasonal impacts and client caution resulting from volatility in the quarter. However, in the quarter, we had some lumpiness and our flows caused by a combination of the aggressive recruiting environment, which drove higher adviser departures as well as the acceleration of Comerica advises departing as a result of their acquisition. We anticipate the higher pace of outflows related to Comerica will continue in the second and third quarters. accommodating with the conversion occurring near the end of the third quarter. While we have significant capacity to recruit, the recruiting deals we are seeing today in this perceived risk on environment exceed what we believe is a balanced risk return approach given the long cash paybacks and marginal P&L benefits over the extended life of these arrangements.

We will continue to evaluate the facts and circumstances, whether for recruiting or retention to assess the trade-offs between sustained profitability versus flows and associated risk. This approach will ensure decisions are driving sustained shareholder value creation.

Lastly, I will note that in the latter part of the quarter, we've seen improving trends. As we look ahead, the addition of Huntington Bank is anticipated in the fourth quarter and will bring approximately 260 advisers and $28 billion of client assets onto our platform. Separately, we are further enhancing our adviser succession strategies for both internal and external advisers, including expanding and leveraging Ameriprise's personal wealth group, our centralized Advisor Group as a potential succession option.

Let's turn to Slide 8. Advice & Wealth Management generated solid productivity growth. Our adviser productivity continues to grow, reaching a new high of $1.2 million, up 10% year-over-year, driven by strong growth in wrap assets and related fees as well as enhancements to adviser efficiency from the integrated tools, technology and support we provide. In addition, transactional activity remains strong, increasing 10% compared to the prior year. This is primarily from nice growth in annuity products and brokerage transactions.

Total client cash of $86 billion was essentially flat year-over-year and sequentially. Bank assets increased 6% year-over-year to $25.5 billion, with the bank representing a stable source of earnings going forward. Cash sweep balances decreased slightly to $29.4 billion compared to $29.9 million in the prior quarter, which is consistent with the seasonal tax pattern we would expect to see.

Certificate balances declined to $7.6 million from $8.2 billion in the prior quarter, given the interest rate environment. We continue to have elevated cash balances in third-party money market funds at nearly $48 billion. We have seen that decline for the first time in January and February. But with the volatility later in the quarter, we saw cash levels build modestly again. This remains an important opportunity when rates decline to see these cash balances deployed into other products on the platform.

Turning to Asset Management on Slide 9. Financial results were strong in the quarter. Operating earnings increased 13% to $273 million. Results reflected asset growth and the positive impact from transformation initiatives. Total assets under management advisement increased to $706 billion, up 8% year-over-year from higher ending market levels. As Jim mentioned, net outflows improved in the quarter. Revenues increased 8% to $910 million, and the underlying fee rate remained stable at approximately 47 basis points. Expenses increased 5% in total. In the quarter, general and administrative expenses were up 4%, driven by volume-related expenses and unfavorable foreign exchange translation. Margin reached 44% in the quarter which is above our targeted range of 35% to 39%.

Let's turn to Slide 10. Retirement & Protection Solutions continued to deliver strong earnings and free cash flow generation, reflecting the high quality of the business that was built over a long period of time. Pretax adjusted operating earnings was $190 million, which reflected higher distribution expenses associated with strong sales levels and continued outflows from variable annuities with living benefits, partially offset by higher equity market levels. However, we continue to expect earnings over time to be in the $800 million range per year. This business has excellent risk-adjusted returns and continues to be an important part of AWM's client value proposition.

Turning to the balance sheet on Slide 11. Balance sheet fundamentals and free cash flow generation remain strong, which is a core to our ability to invest for growth on a sustainable basis while also continuing to return capital to shareholders. We have an excellent excess capital position of $2.3 billion. We have $2.3 billion of available liquidity. Our asset liabilities are well matched and our investment portfolio is diversified and high quality. We have no exposure to middle market lending directly or through funds and BDCs in our owned assets. Similarly, we have limited direct exposure to broadly syndicated loans in our own assets.

Our disciplined capital return is a key element of our ability to consistently generate strong long-term shareholder value. In the quarter, we returned $936 million of capital to shareholders, which was 88% of operating earnings. This included the opportunistic repurchase of 1.6 million shares to take advantage of the decline in our PE multiple in the quarter. We also raised the quarterly dividend by 6%. These actions are a demonstration of the confidence we have in our continued free cash flow generation and commitment to return capital to shareholders.

As we go through 2026, our strong foundation, coupled with our ERM capabilities and decisioning framework positions us well to continue investing for growth in a targeted way and return capital to shareholders at a differentiated pace.

In summary, on Slide 12, Ameriprise delivered solid results in the first quarter. Over the last 12 months, revenues grew 8%. Adjusted EPS increased 12%, return on equity grew 140 basis points, and we returned $3.6 billion of capital to shareholders. We had similar growth trends over the past 5 years, with 9% compounded annual revenue growth, 20% compounded annual EPS growth, return on equity improving over 17 percentage points, and we returned $14 billion of capital to shareholders. These trends are consistent over the long term as well. We have an excellent foundation of capacity moving forward that enables consistent and sustained profitable growth.

With that, we will take your questions.

[Operator Instructions] Your first question comes from the line of Wilma Burdis of Raymond James.

First question, why didn't Ameriprise lean in more to return more than 88% of operating earnings in 1Q especially given the stock was back to kind of liberation day levels at certain points. And should we expect 2Q '26 capital return levels more in line with 4Q '25 if the stock stays at the current level?

Okay, you can -- as we indicated, we will be buying back 85% to 90%. Certainly, looking at the PE ratio and where we are right now, that it's a reasonable expectation that we would take advantage of that and be purchasing up to a higher number. and then evaluate it because we certainly have the capacity to do that and invest in the business continually.

Okay. And could you quantify the outflows from the Comerica advisers just to help us arrive at a more normalized net flow number for 1Q '26. And along the similar lines, if you could talk about the remainder of the year. Should we expect additional outflows from Comerica and talk a little bit about the Huntington Bank inflow expectations.

Okay. So the Comerica outflow started as it relates to the acquisition in the fourth quarter and certainly continue in the first. They were a reasonable portion of the outflows that we had. We are certainly seeing because of the acquisition, a more accelerated pattern. We expect that pattern to continue and accelerate actually in the second and third quarter. And as I indicated, based on our current plans, it should -- we should finalize the contract by the end of the third quarter. And it's -- yes, that's the level. It's certainly -- we're seeing that activity.

Well, the contract was executed and finalized. And so any financial impact from that is already in what we collected. So we're fine, but those flows will continue to come out, and they will be completed at the end of September, I think. And then Huntington will come in, in the fourth quarter, and that will be moved in, in the fourth quarter.

And that would be, as I indicated, the -- about $28 billion.

Your next question comes from the line of Brennan Hawken of BMO Capital Markets.

I'd like to follow up on that last one. So it's -- I'd like to get a mark-to-market on Comerica. I believe it was $18 billion of assets. I think you said that it started to come out in the fourth quarter. You saw a little this quarter and you expect some the next 2. I know you just chose not to quantify, but is it reasonable just to take that '18 and kind of like allocated across four quarters and call it a day, or Will there be some lumpiness in concentration in particular quarters?

It's hard to know exactly what that trend line. I mean it really -- this is -- [ Fifth ] Third has taken over the activity I think from our perspective, just so we know, the deal was concluded. That's why after receiving back what we needed to receive back in the compensation and the reimbursements, et cetera, we booked the $20-some-odd million in the quarter for a make whole. And so it might -- it will come through the flows, but the impact financially to us is immaterial. And so -- but we can't give exactly how they'll transfer at it. But we're mentioning it is in the flow. And maybe as we go forward, we'll try to break things to be a little clearer on it. But that's -- I can't sit here to tell you exactly what will come out quarter-to-quarter. [indiscernible] all of it will be out by at the end of the third quarter.

Yes. So clearly, again, we are seeing because we are getting certainly advisers giving us notice on terminations. And that's what I'm saying it is built up. And like Jim said, it -- we can't really predict the amount, but we are certainly seeing heavier activity take place in the first and starting now in the second quarter.

Okay. But is my $18 billion at least, right, that...

Yes, yes, yes. $18 billion in total. Correct. Absolutely. Sorry I didn't answer that.

Okay. Cool. And then obviously, it doesn't matter you're made all that. It just helps to know what the amount of noise is so that people can get to...

We understand that we'll try to be clearer as we go forward.

I appreciate it. Okay. And then there's a lot of focus within the wealth space on the the cash and whether or not these AI tools are going to allow for optimization of cash. it's not a huge central feature for you guys in your business model. But how are you thinking about that as you move forward? I know you've got the bank as part of the strategy now. But have you considered looking at some of these tools within your own network? And how are you considering that development. That's why I could to come down the pike?

A good question. So first and foremost, and I think Walter has tried to give you some further information of the cash contribution as we looked at it for this quarter as we reported. And you can see, as cash adds a certain amount to our margin, but the bulk of our earnings and profitability is from the real wealth management part of that component with the fees and the transactions or things that we conduct on behalf of the clients. Our transaction revenue from the sweep, as we said, is a very, very small part. It's only a few percent. And so from our perspective, it's not the bulk of all earnings, number one. And honestly, I don't know why the people wouldn't look at the core margin and give it even more valuation than where people are making all of their earnings from cash. Now in our case, what we tried to do is then develop the bank in a way that we can add value added from both lending activities and savings programs that we'll be ramping up with -- even on checking in activities. But the amount of cash that will still be a transaction, whether AI assisted or not, will is so low that money will be moving in and out to do that, just like a basic checking account to some extent. From -- and looking at it, we already provide so much in capability and ease for our advisers to do that on behalf of their clients and with their clients, that that's where our cash levels that we maintain is on average, $100. So we're not as concerned with it. And if there are other capabilities that come about that makes sense, we will look at them. But we're not looking at that as a major change to what's being held there.

So just let me emphasize again, as we -- our average balance now is $6,000. We -- as Jim said, we're are very active. And certainly, it's at transactional levels that meet that minimum standard in the account. So again, we are constantly evaluating it, but I think we're at a very good level. And the percentage of our earnings that come from cash is certainly at the level that is probably lower than most of our peers, and therefore, certainly manage because we've had that balance.

Your next question comes from the line of Michael Cyprys of Morgan Stanley.

Just wanted to ask about the bank with the new initiatives that you have lending savings. I was hoping you could elaborate on how those are contributing today. I realize it's early days. I was hoping you could talk about the steps you're taking to drive broader engagement, how you see that ramping? And what are some of the other initiatives you guys are thinking about in the coming quarters?

Thank you for the question. So the one that we had launched previously that is growing nicely, and there's still a very large opportunity for us is pledged. And as more of our advisers get familiar with it and activate their activities around it. So that's the one that's probably -- the one that's a little more mature in that channel, but the opportunity compared to someone like a Morgan Stanley and others, there's a lot more opportunity for us there that we are focused on. We just completed the launch of the checking account, which is always a core component of banking. And that in complement with things like HELOCs mortgages and now some of the savings programs, we're starting to now ramp that up as we start to get that out to advisers and also have that types of information for the client to access. And so this is at the early stages of what we think we can do there. We see some early signs as we did some initial launches with advisers, and they like what we're providing and the benefits. So we're hoping that this becomes a much stronger contribution as we go, but we're at the early stages of it.

Great. And then just as a follow-up question on AI. I was hoping you could update us on the AI tools that you have available for advisers today. How you see that evolving over the next year or so? And where do you see some of the biggest opportunities? How meaningful could this be as you think about adviser productivity and ultimately, efficiency saves for Ameriprise.

Yes. So I know AI has come up. And every time someone comes out with a new tool, say that they have some kind of service. So let me give you a little -- and I tried to -- in my talking points in opening, we view AI as more of an extension of our total technology strategy that we've been building for many years. It's not a stand-alone initiative. What differentiates what we're trying to do is that these capabilities are embedded in an integrated platform built around how advisers work, supported by the data foundation, which is very critical in a highly regulated business, and the governance for it. Now the integration allows us to deploy AI directly into everyday workflows like across advice, ops, service and rather than layering it as a tool in a fragmented system. The result is greater efficiency, better insights and more time that our advisers can really spend on the client relationships, which actually drives the outcomes that you're looking for. In the near term, we see productivity gains and selective automation. Longer term, we see capabilities supporting the growth by enabling advisers to serve more clients with the highest standards of advice. Now that's embedded, as I've said previously, into many of the tools and capabilities that we have. And so if you look at things like client acquisition, meeting planning, meeting schedule, meeting preparation, goal-based device but products and solutions, meeting follow-up and summarization and business planning, those are the things that we've embedded in the tools. So our e-meeting, as an example, capability that's already integrated, can pull all the data from adviser engagement with the client, the past cases that they're in, the opportunities that we get from adviser insight so that they can say, what's the next thing possibly the client may be interested based on where they are in their financial situation. So that's what we do, and we'll continue to enhance. Over time, we'll introduce more AI agents to do some of the actual adviser work, whether it's necessary or appropriate to ease and give them more productivity rather than adding more staff. So those are the things we're embedding from the adviser, but we also do that from a company perspective. And so does that help you understand how we're thinking?

Yes. That's helpful. Just curious if you're able to quantify any of the productivity gains that you've seen so far?

I would say, it's at the -- we see clear productivity where advisers have enabled it. We see, as an example, our meeting takes away hours of work within an adviser practice every week. Okay, we haven't extrapolated what advisers then do with that productivity, but those are things that we will try to figure out the metrics appropriate for them.

Your next question comes from the line of Suneet Kamath of Jefferies.

I wanted to come back to A&WM organic growth. If I remember correctly, last quarter, I think you guys expressed some confidence in the 4% to 5% target for the year. I think quarters now, we've been talking about increased competition. You're talking about it again now. But based on what you're seeing, do you still think you can achieve that 4% to 5% this year, or is the increase in competition that you're talking about sort of taking you off that glide path?

Okay. So let's break it. For the -- what we talk about the organic, the same-store, we are seeing good growth. Yes, the area that deviates on that is on the attrition side of it. And certainly, in this quarter, Comerica certainly contributed towards that. And that's the variable that affects -- when you look at these arrangements that are being offered at this stage, both on the attrition side and then on the recruiting side. But the solid core of our growth is there, and that's what we feel very comfortable with and then managing the net on the inorganic is the element that deviate. So the answer is certainly, as you saw in the last quarter, we were up this quarter, it was down. It's going to be -- one of these things that could be, I hate to use the word lumpy, but that's exactly what it is as we manage through it deign how aggressive we see the environment and then how we gauge the appropriateness of responding on that basis. But our objective, yes, because we think that is a good jurist core is solid. Now it's a matter of the implication of it as it relates to aggressive bidding on the recurring side or on retention.

It's sort of funny because people -- I mean, I know how much focus is on this metric. But you think about it. So as an example, for us, our core assets and all that grew strongly over the year, and we generated the revenue from it that translated into real profitability we brought to the bottom line. You can always -- you can do, for instance, where I would call an appropriate acquirer, but we would never pay way more on an acquisition for a business just because we want to grow our size if we don't see a good appropriate return over time. Advisers like that will take a big check. It doesn't mean they'll stay with you after that check is up in some fashion. So what you want to do is recruit people that know that you can help add value and give them a good practice support development and really a good strong client value proposition. And so our firm stands out in that regard. Our client satisfaction, the idea of the one of the most trusted firms out there. If you look at some of the players out there, they don't register. And so it depends on what you want to play in. And in our case, we have a lot of capital, as you know, to buy up. We could buy some of these firms, we can put advisers on it. We don't look at that the best way for us to grow our business to deliver a strong premium value and really have a good culture of the type of advisers that we really think are important to work with clients. And so that's what we do. And listen, some of our advisers will take a big check, especially when they know it's more value than what it's pertaining to. So -- but just like in the fourth quarter well per se, we attracted more in than last in the first quarter. We had a little more on that soon the number, but the size -- and now our pipeline is ramping up again for the second quarter. So to Walter's point, that will be a little bumpy, but the underneath it of where we focus, productivity growth across 10,000 is what we think will drive true profitability.

Yes. That makes sense. I mean -- and I get it that people sometimes over-index to 1 number in 1 quarter. So obviously strong last quarter...

No, I know I appreciate you asking the question, honestly.

My other question, I just wanted to drill into this AFIG opportunity, and I'll just tell you the way I'm thinking about it and maybe get your response. So it seems like the cost of being in this business are going to go up, maybe AI helps that. Maybe it actually adds to that. Who knows? But if you have these banks out there that want to be in the wealth management business, but don't want to make the investments that are required it seems to me that, that's just -- that like plays into your hand in terms of this AFIG opportunity and that we'll likely see more of these. And I just want to make sure that I'm thinking about it right.

You're thinking about 100% correct. Let me give you an example. When we spoke to Huntington Bank, they kicked the tires, and they were out there looking at who would be the best provider, et cetera. They -- their goal is having excellent banking complemented by this, and they knew that they wanted to focus their energies with this being of where they can get the type of support, the capabilities, the culture the environment to deliver great for their clients. And so they kick the ties on any other firm out there, and they clearly chose us for those reasons. We think we'll have a great partnership. Comerica actually was working fabulously for the bank. You can speak to chief executive, who's now stepped down, the people who headed their wealth management, we help them grow their advisers, their productivity advisers love us, would love to stay. So it's not that we lost the business, [ Fifth ] Third purchased them, and they wanted to keep it with what they're operating. So I think that capability is there. And I think as people understand what we can provide them, I think there'll be a lot more opportunity for us.

One of those is really the deepening of the relationship is what we do with our clients. And certainly, they recognize our capability of doing that with their bank clients.

Your next question comes from the line of Christen Love of Piper Sandler.

So just first, the operating margins in the asset management business, very strong at 44% in the quarter. Are the expense management actions from that segment complete or still ongoing? And then any other key call-outs for the mortgage strength. And is that level sustainable? Or would you expect it to trend back to that 35% to 39% targeted range?

So the transformation certainly is working is with you. And the back office transformation has really not taken hold yet, so that you'll see as it goes through. And as part of the way we operate, you will see continual certainly transformation and streamlining of that. But again, also you see the operating expenses go up because of volume and other related things. But yes, we are certainly committed to the transformation and improvement of our processes and getting the benefit of that. And the biggest one right now is that the back office has not worked its way through the numbers yet.

Yes. And we are advancing. We're extending our product line in ETFs, SMAs, et cetera. We're adding other capabilities. And so I think we're trying to -- we will continue to drive the progress on how we leverage our global platform we put in place with the back office, but at the same time, we are investing. So we'll keep the expense base in check. And hopefully, that will continue to maintain good margins.

Perfect. And then just on the Huntington Bank when you announced earlier in the quarter, can you just give a little bit more color there. Was this a competitive takeaway? And just a little overview on the process or competition to get this win? And how long did it take to get over the finish line, how long are we working on that one?

No, this was actually Huntington Bank ran their own activities, broker deal, et cetera. And so they were very careful because they did not want to give up that unless they had someone that would really provide what they were looking for and take it to another level for them. And so those things are very important because we love clients that really care about their clients.

A Process was over a year.

Your next question comes from the line of Steven Chubak of Wolfe Research.

So I wanted to double-click a little bit into the discussion around NNA and appreciate the disciplined approach to recruitment or reluctance to chase given the more aggressive TA packages in the market. Are channel checks indicate that TA rates have been and should remain relatively sticky. I just want to better understand; one, how that informs your outlook for core NNA over the course of the year, so [indiscernible] noise related to Comerica, but also the interplay with the distribution expense, which surprised positively and declined about 100 bps year-on-year.

I'm sorry on that one. Could you just repeat to sorry, I just didn't get the essence of it.

Just trying to understand like the interplay with core M&A expectations over the remainder of the year, recognizing that TA rate should be sticky and that the distribution expense was also a a positive surprise in the quarter. And presumably, that should be lower if you're not, that will be chasing some of these more aggressive packages in the marketplace?

Well, again, we've been fairly stable on that rate as you saw. And yes, it does we will continue to certainly -- it's not that we're not going to compete. And certainly, the -- we've told you before, we will move up in our tolerances. So -- but I would say that you should see that number pretty much stay in that range, as it relates to -- as we go through the year. And we would participate both on the basis of where appropriate increase our compensation for it. But it's pretty much going to be in that range.

Okay. And...

I'm sorry, I want to make sure...

No, no, that is -- I think it's really also about the interplay around M&A expectations. I know you touched on a little bit with an earlier question...

As I said, on the NNA, the core is there. Certainly, we're going to see -- and Comerica is going to play through that. But the issue there is the core is there. And when we -- certainly, it's on recruitment, those elements should marginally affect it going up, but it it should be aligned with our objective set to certainly as it relates to NNA and that correlation to that rate.

Yes, because the bulk of our activity is organic. So it should be pretty stable.

Got it. And just for my follow-up on Signature Wealth, you highlighted really strong momentum there. I was hoping you could provide some KPIs just in terms of the level of penetration across the platform, recognizing it's early days here. What's been the pace of adoption in terms of the attachment rate. And just trying to gauge how we should think about the incremental fee opportunity as adoption steadily builds across the platform.

Yes. So we initially launched this in the second half of last year. And with its rollout and then getting advisers initially. So it's starting to really taken uphold across the advisers. As you know, any new platform, people take a little time to people who actually activate it, like it and moving more assets in, as Walter said, a lot of the money going in includes new money. So they like it as far as them. Now having said that, money is coming from other of the various platforms. But because of how they need to adjust their portfolios and move them in and other things, that takes a bit more time. We're also adding more capabilities to it. Like we just added some of our SMAs, et cetera. So I think we're -- what my team says is that for previous wrap launches, this is 1 of the quickest and it's really progressing nicely against what they had expected. And so I think as we get further along, we'll probably give you some more information on it.

Your next question comes from the line of Tom Gallagher of Evercore ISI.

First question is really just on the competition and how you're approaching it. And so if there are irrational deals being offered in the market and you're holding the line not capitulating on some of the more aggressive packages. I guess my question is, what's the scale of this activity? Is it limited enough, or you're not that worried, or is there a risk here that this starts to really become bigger and could meaningfully impact the size of your adviser base? Like how broad is this right now? And is it still limited enough that you think you could still achieve your objectives? Or is it something you're going to have to react to more forcefully at some point?

No. This is -- let me give it. You could have an RIA where a team thinks that, that is something that they already want to move to for a certain reason or based on what they're giving them as the financial incentives, et cetera. So you've got those types of things that happen. We got a large adviser for us, right? So you're going to have a few of those things. And they always impact when they occur, then you have a little bit where some of the competitors, they are offering big checks, and they promise what they have. And I'll give you an example, and advisers sometimes have a hard time. When we bring in advisers from these platforms, and I won't mention names, but they look at what they get here, the technology, the capability and all that compared to what they have. And they're like, it's night and day. And so what people sell as a story and then get a big check sounds wonderful. But that's what will occur. What we do is when that's happening, we'll talk to our advisers will explain, we'll target what the reality is. And most of them say, "Hey, no, that's not." But remember, people dabble big checks in front of people, and they sometimes jump, sometimes they listen, but it isn't large. And in fact, on net recruiting, less what we lost last year was still very positive. So -- but this is going to happen because that's what's happened in the industry. When I was in the industry many years ago with the warehouses, it happened because people got overly aggressive. There are some people that always started with the idea. The street always looked at was favorable and then it blew up on them, but it was after the fact, and so people think that's the best way you look at those people growing top line, whether they pay back in a number of years or not, I don't know. But right now, you're giving all the credit because of cash and earnings. But at the same time, you're worried about cash going away. So it's interesting, but that's what's happening. So when you jack up PEs based on it, people think it's a free good, right? And that's what's happening in our environment in the market today. Everything are pretty good.

And if you correlate it, as we said, listen, looking at in looking at the growth we had in client assets, certainly, it's very strong. And based on the elements of organic and growth, the other elements, when you start evaluating G, you're looking at your growth coming from net new assets and when you you look at the differential on payback that you almost have to be twice as much to even get marginally close to what you're doing. That's what I'm saying. So the impact factor has to be consideration to the size of what we have and the growth and profitability of that, and how we manage that -- the organic side of it.

And you would look, the turnover in the industry when someone leaves for a big check, they most likely leave again. If they leave in because they want to go to a place that has a better environment, culture support, et cetera, that they can relate to with their client scan, they usually stay. So there isn't -- now you won't see that initially, right, because of everybody to transitioning, but that's the reality.

That's helpful perspective, Jim. And so is the level setting of this, if I x out the Comerica attrition in the quarter, are we talking about the advisers that left outside of that in the quarter? Is that under 100. Just can you dimension that....

No, there wasn't a lot of advisers. What I'm saying is there are some adviser practices. Again, that left then with that, you get a couple of billion dollars of flows, just like when we brought people in, in the fourth quarter, you got a couple of billion in the other way. So what I'm driving at, it wasn't necessary that there was a large movement of advisers and that's why Walter said it's lumpy. And listen, what you should be looking at is, and you can compare it is when we had growth of our total asset base and our total revenue base, and that translated to a very strong bottom line consistent with that, that's what I would pay for if I'm investing in the company. If I got a lot of top line growth, but I'm not translating that after all the expenses at the amortization, half the expenses for financing. All those things, then that's a different question. And I wouldn't invest like I wouldn't buy that company.

Got you. And then just for my quick follow-up here. How should I compare the HBAN deal with a normal, I'll say, 10 to 20 person adviser practice that you would hire and the type of package you give them? Is it comparable? I assume with more scale, you can offer better terms to HBAN. But how would you compare like the IRR to that deal versus a normal smaller deal...

It's a 10-year deal, a growing deal with basically a strong adviser base. So it's -- and the paybacks for this are -- certainly, we feel are within our ranges and makes sense for both of us. So you have to look at -- this is really a big transaction that will stay with us, we'll grow with us and has the stability of it. So you can't really look at one-off. This is certainly IRRs are very good. and certainly appropriate, but it's the stability of it and the growth potential of it.

Your next question comes from the line of Kenneth Lee of RBC Capital.

Just one follow-up on the Huntington deal. Just for completeness, Fair to say that the $28 billion in AUM is going to materialize in either client inflows or wrap inflows after the fourth quarter just throughout the next couple of quarters there.

No, it will -- sorry.

Go ahead.

We're targeting that most of that will occur in the fourth quarter.

Okay. Great. And then one follow-up, if I may, just in terms of the G&A expense and recognizing the back office optimization, you're still ongoing within asset management. Any updated outlook around overall G&A expenses there?

On G&A, you're talking for the company. Asset Management certainly should track in being in the range of neutral or a small negative. We really -- we still are getting the momentum. As I mentioned, we have the back office coming through. So that's in that range.

Your next question comes from the line of Alex Blostein of Goldman Sachs.

This is Anthony on for Alex. Maybe just a follow-up to the recruiting discussion. I guess what channels are you seeing the most aggressive recruiting packages. And I appreciate you guys holding the line there. But at what point would you maybe need to revise your payout packages if the industry continues to trend in that direction?

Well, actually, I think you're seeing it in both the WTO and in the franchise where they have gotten both of them have got extremely aggressive on upfront and commitment levels. So it's across the board. And again, this makes sense on looking at payback, looking at really the risk return of it and you gauge it because we rely on organic. And then we certainly have to make sense to really give the payback looking at all factors, not just trying to get volume.

Got you. That's helpful. And maybe just for my follow-up, the certificate balances kind of continues to trend downward. So how are you thinking about the trajectory of balances from here?

That's strictly a spread play really as it relates to it. And so I think we're going to see candidly probably stabilize and stay in this range or increase a little go up? Again, but it's strictly spread depending on where rates are going from that standpoint.

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

Good morning, everyone. Thank you for joining Bank of America's 34th Annual Financial Services Conference. This is Craig Siegenthaler, North American Head of Diversified Financials at BofA. And I'm pleased to introduce Ameriprise's CFO, Walter Berman. Walter is CFO and has been with Ameriprise for more than 2 decades, following a distinguished 30-year career at the company's former parent, American Express. Walter, thank you for joining us in Miami.

You're welcome.

So Ameriprise operates 3 core businesses: A wealth management franchise with over $1.1 trillion in assets under advisory; a global asset management platform with more than $700 billion in AUM and a robust insurance business.

We will begin with opening remarks from Walter. So Walter, the floor is yours.

Sure. So listen, we do operate 3 businesses but I think it's more important to think of us as an integrated business model that leverages the capability between us. And that is a distinction that I think does serve us well and has served us extremely well over the time cycle of us being a public company. As we've navigated various crises and our continued growth during those crises, it's attributed to really looking at the essence of each one of these businesses and how they leverage each other and how we're able to basically provide the capabilities to our customers in a way that is seamless and efficient and effective because we have these 3 businesses and how we have shaped them over that time cycle.

So on that basis, I'll certainly take questions as it looks, I think our record does stand for itself. And now I guess we're here to talk about what that's history, what's going to happen going forward what's going to happen going forward.

So I remember you've been the best-performing financial stock in the S&P 500 since the spin. Is that still the case?

Yes. Yes, from that total point. Obviously, in the shorter window, we've had our ups and downs.

I think it was 2005, right?

But cumulatively, yes.

Okay. So we've entered the fourth year of the U.S. bull market. M&A IPOs are expected to accelerate. The Fed might cut interest rates a couple of times. So as you look ahead to 2026, how sensitive is your business to future rate decline? What actions have you taken across the business to reduce that exposure? And then is a bull market and the impact across 2 of your businesses really just a big offset to that?

Okay. So obviously, if you look at the equity markets, they've been up over the last several years, on average, 14%, 15%, 16% per year. There's certainly a lot of wind at your back. When we basically went back into banking after we debanked back in 2012, we built the bank to allow us to service our clients but also to have a steady capability of earnings that will create the stability of an asset wealth manager source of using the sweep accounts. What we've done in the recent years looking at the environment is invested out where our reliance on short-term earnings has been reduced to the lowest level possible and maintaining an asset liability matching capability that you would expect from us with the asset quality. So therefore, we're at the lowest level of exposure to short-term interest rates.

We anticipate this year, there will probably be 3 Fed cuts. And certainly, we have about, at this stage in off-balance sheet short-term and short-term cash inside of the bank. approximately $7 billion, which is the low point. And looking at our activity, both from paydown and maturities and the growth that we will have with the bank, that should be offset that impact to a large extent. So we feel very comfortable. We've managed through the exposure profile. We have a duration of almost 3.8 years and the earnings -- the average earning rate is around 5% what we just invested in. So there will be a combination of offsets, and we feel like we do have this at an optimal level to navigate.

On the [indiscernible] side, it's a spread business. We'll manage that spread to 120 basis points, and that will be just adjusting as we look at where our investments are. So that will go up and down. That will probably stay in the same $5 billion, $6 billion range depending on where interest rates go and how we adjust. And then on off-balance sheet sweep, that's where the impact is going to be, and we'll take some hit but it's at a marginal level.

So let's focus in on the wealth management business. Can you discuss the drivers of the profitability across both your core wealth management business but also the related cash held at the bank?

Sure. Okay. So if you look -- you have to look at what are really our objective set is, and we operate under a stewardship model, and that applies to the wealth management business, the asset management business and the RPS business. And that is basically, first and foremost, is meeting clients' needs and expectations profitably, then doing that in the most efficient and effective way from a risk and operating standpoint and then having the talent of the people to be able to drive that on a horizontal across, and that's what creates shareholder value from our standpoint on a sustainable basis. So what we've had, the bank side of this is clearly an extension. It was an important element for us to serve our wealth management clients and do that in the same way we manage the business with the underlying strength and providing liability and asset products to basically serve our clients and build that.

So right now, the bank has reached a point of almost $23 billion in assets. Its earnings profile, like I said, is quite good. It has a duration that's over 3.6 years, good investment characteristics and certainly meeting our liability and it's an important element as we expand the AWM profit capabilities and client capabilities. So we'll be offering basically checking accounts, HELOCs, we'll be expanding our pledged loans. All those elements are built in to provide the stability of deepening our relationship with our clients, providing the earnings.

As it relates to the model within our AWM, it is built on a basis of providing a branded capability across to our advisers that really allow them to serve their clients in a personal way, looking at solution sets over multiple cycles. It is not just investment advice. It is about managing solutions that allow their clients to meet the needs, and that's what we're committed to. And that's why the products that we offer, both banking, insurance and others and asset management is a critical integral part to that success story. And that's what distinguishes us.

So Walter, in the wealth management business, how do you think about your competitive offering and what attracts advisers to your business versus peers?

Okay. So the first thing I think distinguishes is the value proposition we believe in the capability we provide. We provide advisers the ability to grow and to expand, to expand their capability to invest in their business and either help them through attracting clients by referrals building their infrastructure capability by our resources that we have in the field and the investments we make to allow them to grow and offering an integrated tool capability to allow them to service their clients in a very effective and personal way with frequent contacts as a CFO of those clients. That's what distinguishes us. And I think the stability of our operations and our effectiveness is a hallmark.

You then get into the situation that is what we provide. And then you look from that standpoint, the value that's created. In this current environment with the pressures that you see as it relates to offers being made to advisers and that has been increasing. That has put some pressure on us because the advisers look at, yes, we're providing value. They're willing to pay a premium for that. But now they're looking at offers coming from other IBDs or coming from basically PE firms and they're questioning that. So that is basically -- we've relooked at our situation as it relates to recruitment and looked at the situation relating to basically retention. And we are basically changing our approaches as what we're willing to provide advisers to be competitive. And that's put some pressure on that standpoint. But we have the margin to absorb it, and we will continue to reengineer and adjust to ensure we're able to do that.

So it's a matter of that value got out of sync because of basically offers that I would say are interesting from a standpoint of affordability and sustainability. But the reality is from ours, we make -- we earn in both core and in cash, and we will -- we are now adjusting our value proposition to retain and to basically attract new advisers. But again, the right of advisers is that really do want to demonstrate the value that we -- use the value we create to grow and create their terminal value and service their clients in a way that aligns with our objective set.

Walter, net new assets is a key focus from the investment community. Last quarter, you added 91 advisers, I think 336 in 2025. How should we think about the forward trajectory of advisers going forward?

Sure. So it's -- advisers are one of your key components, attracting advisers is a key component to net new assets. And obviously, from that standpoint, we have a very active program. And certainly, 91 was a demonstration that program is succeeding. You should anticipate that we are totally committed to that and certainly recognizing the change in value propositions that are out there in Transcom, we will compete, and we are committed to growth. We're committed to growth for both from the standpoint of attracting advisers and their clients, retaining and also organic growth. And that's one of the things that we excel in. If you look at our track record on adviser growth, organic, it is the highest in the industry from that standpoint.

And so that combination gets you to your net new assets to allow that to grow. We are totally committed. The target range is this 4%, that basically -- and that is on average, over time, focus on it. And certainly, in '26, we are aiming for it, but you are going to see bumps in the road because it is influenced by attrition, it is influenced by recruitment but we are totally committed to continue to grow and grow at levels that will drive the sustainability of our value proposition and margin.

On the guidance front, G&A expenses is another focus. How should we think about the growth of G&A expenses over time? What's the flexibility there in terms of if we head into a choppy market versus a strong bull market? And then when you think about the bottom line, how much of that can dribble down and drive operating leverage over time?

Sure. One of the hallmarks of us is really, if you look over our track record, we have certainly been committed to investing in the business and basically having the ability to invest by reengineering our processes, not just by cutting costs but reengineering how we operate in a more effective way, not just within the individual business but across the businesses as we leverage. So as you look at operating expense, you have to keep in mind of what we are investing in the business to afford. Clearly, in the wealth management business, we continue to invest heavily as it relates to both our adviser proposition, our technology. And I believe we have some of the strongest technology use of tools, integrated tools into servicing our clients and adviser. So that is a backdrop. So we will, on that basis, continue to invest in AWM, the broker side of the activity to grow. And that would probably stay in the ranges that you've seen, which is about the mid, say, 5% range of growth. It's the combination of effective management of expense and investing.

On the asset management side, as you looked at it, we took a look at the revenue situation that all active managers were experiencing. We adjusted our operating base, and we've done that substantially to manage our margin but also reinvest back on how we service our clients and what products we offer. And that -- while we're certainly seen reduced expenses in -- excluding performance fees in the asset management, that will continue at probably a slow pace.

But -- and then finally, in RPS, that's been maintaining the course and the corporate staff groups have been a major contributor to the reduction in expense. So you should look at expense management, yes, and managing our expenses overall to stay within that say, 2% -- 0% to 2% growth range but it's what we're doing and investing in the businesses while we're managing the expenses and it's where it's coming across as process change, not cost reduction, and that's by using strategic and structural reengineering to do that. So we'll continue to invest in the business, continue to manage our expenses well, manage our margin and then return to shareholders.

So Walter, we've just entered year 4 of the bull market. Normally in longer bull markets, competition picks up for financial advisers. We've also had some private equity money entered the space. There's been some ISJ departures across the industry. How would you characterize the competitive landscape right now?

It's aggressive. It continues to be aggressive. I think what has fueled it is clearly the -- what is being earned on the cash side of the business, which now -- is now settling back towards a probable 3 reductions, probably even heading under that 3% element, which I believe is where you're going to start seeing people start reassessing their ability to fund their growth because the question is funding profitable growth. So it has been aggressive. I would say the IBDs certainly continue to be aggressive, but in a more measured way, but there's certainly aggressive nature on Transcom. And on the PE firms, yes, they are coming in. They offer a different value proposition, and there's trade-offs in it because family, the servicing levels that basically a PE firm believes and where they're taking the adviser and their clients is a different value, and we've had discussions with advisers as it relates to the pluses and minuses. And I think we do quite well. But we have certainly raised the bar, as I indicated, to compete, but compete effectively for the advisers that we want to retain and also the advisers that we want to attract.

So I would say it's going to continue, certainly on the PE side and probably abate a little as we get into the situation of really affordability because, again, we earn good margins, 20% margins in our core business, and we certainly earn on the cash side of it. That's not necessarily the situation with others that we compete against, and that will then have an impact, and I think it will settle down. But interest and earnings on the cash side has certainly fueled it. The PE firms have different objectives set as they're looking to see take a business that they feel they can basically integrate and then commercialize and that attracts some advisers but not necessarily all the advisers because they -- it's a different model.

So if I look across your FAs, I see an employee channel, an independent channel, sort of a bank channel. Given what you know about the organic growth trends and sort of pricing, how do you expect that mix to trend over the next 3 to 5 years?

Okay. Clearly, we have an excellent franchise channel that grows. And certainly, we feel very comfortable with that. And it's higher competition but we have the margin to compete there. The employee channel, the same thing. It's been a little tighter now as the wirehouses have certainly become more aggressive in retaining advisers. So therefore -- but we are still growing there. And then on -- you're right, we have now certainly entered the bank channel. We certainly announced our recent win with Huntington, and that certainly will fuel. It's very large, and it's really, I think, a testament to how we operate and the differentiation that we bring in to help a bank grow their client base in the wealth space.

There's another channel that we have, which is our remote channel. And that is basically teams that basically do direct business with clients. in different geo ZIP codes. And it's a team driven. We've had this for multiple years. We are certainly investing in that on 2 basis to grow it and also to give our advisers -- as succession planning as they're looking, they -- one of the big advantages we have is our advisers certainly generate higher terminal value when they sell to each other because the commonality and the continuity within the network allows easier transfer of clients, service capabilities. And we are certainly offering that if they want to basically have different succession planning, if they want sell their practices, we will certainly enter into buying them either partial or full purchasing, giving us leverage as we own the client and therefore, we can invest differently, leverage than we have or grow.

So it's that supports. Those are the channels will grow. And I think we are expecting good growth coming out of the bank channel and the remote and continued strong growth in the 2 core.

So if I look at client assets divided by a number of advisers, the average adviser at a wire, I think, is a lot bigger on average than Ameriprise average advisers. Push back me think I'm wrong. But how do you attract that? Like where -- what type of advisers do you go after at the wires? Or you mean kind of banks broadly?

Clearly at the wires, it's larger. At the independent broker dealer, no. And we are focused more -- certainly, as we talked to affluent and we started this 100,000 plus. That has now moved to the 500,000, 1 million plus. And we have certainly demonstrated our traction of advisers and their client base being in that upper range. And so it's not just the number of clients -- number of advisers you bring, it's the quality of the advisers we're bringing, and we're tracking it much higher. And I think that really pertains to what we offer. and the ability for them to grow, and we are becoming more competitive in our -- basically narrowing that gap of value that is in place.

So I think we are certainly attracting the right advisers with the right client base that really does want to take advantage of what we offer. And that has resulted in us attracting higher value basically advisers and client bases.

Great. Let's talk about client cash sweep for a moment. Starting with money market funds actually. So do you see a meaningful amount of money market fund money in motion potential, especially as the Fed keeps cutting rates? And if that does go out, where do you see that money flowing into?

Okay. So right now, if we look at the cash that we control and taking a sweep account and looking at that, that's probably at the level -- operating level that you need 2% to 3% in that range to operate the account. And that's been a hallmark of we've always -- we've been exposed to sorting, but minimal because we've always basically -- the advisers have ensured that their clients did not keep idle cash sitting where it's not earning, okay? So that's been -- we've also, during this period, attracted almost $45 billion of money market -- third-party money market and basically CDs into our network. That we earn 5 basis points on. That will be redeployed as we see it, depending on the environment, and that gives us an opportunity.

But as far as the operating cash that we see in sweep, that's at a pretty low level at this stage. And I would say it's at the appropriate level for transaction accounts. So we don't see much risk going on there. And we do see big opportunity as money gets deployed from the third-party money markets and CDs. That will be an upside for us.

So what is your philosophy on pricing in the cash sweep business?

Listen, we weekly run competitive screens. We are probably slower to react on reducing the credit rate to clients but it is based on competition compares, and we take this very seriously to make sure it's a balanced situation. It is at a low level now for everybody. But we -- it is done strictly on benchmarking, and it's done under regulated and has a complete process attached to it where it's not just a subjective change. And we are probably the last to make the change. We're slower to make reductions.

So you announced Signature Wealth in May of 2025.

Yes.

Trying to solve. And I believe this is going to connect both components of the Wealth Management and the Asset Management business.

Yes. So what it was meant -- listen, the wirehouses had this, we've had a version of it. And what we invested is basically combining all our capability to be able to service the client more efficiently by offering a more seamless investment strategy, SMA, all those components brought together to allow us to manage that with the advisers more effectively and efficiently rather than be in sleeves. It is now available as across the border, similar to what the wirehouses do, having that capability of having one-stop shopping to allow them to look at what they can manage their clients' money more effectively, which gives them the ability to be more efficient and effective rather than managing money in sleeves. This capability gives them a lot more flexibility and efficiency.

It also allows us to certainly service the client better. But for the longest time, we've been an important part of our wrap product has been discretionary. And CTI has not been able to -- we -- our asset managers have not been able to participate in that because it basically is affiliated. This is now a different adviser structure so they can participate. And the CTI business has a reasonable share in the nondiscretionary element. This will now get them to have a greater -- that same share in proportion and network, but the product capability and understanding the clients within our adviser network is good. So they will have this additional opportunity.

So you're getting efficiency for the adviser from that standpoint, the effectiveness of offering to your clients a better capability, more seamless capability. We just launched 38 new SMAs in that, and you get the operating efficiencies and CTI can participate. So it's a win-win for us. And we're getting really strong adoption of it and a substantial amount of new money coming in. So we feel very good about it.

Walter, I want to come back to the Huntington Bank relationship. I think you just announced it on February 4. So congrats on that $20 billion of assets, 260 financial advisers. What do you think is differentiated about your financial institution group business that allows you to win this? Because I assume it's a competitive process.

It's interesting because we also, at the same time, certainly, Comerica has been certainly acquired by Fifth Third. What has allowed us is to demonstrate -- I'd say through Comerica actually was an interesting party in helping convince Huntington the value we brought to expanding and deepening the relationship and how we do that and how effective we are as a wealth manager. And it's our commitment to grow and penetrate the client base and make sense for their objective set financially and for deepening a relationship that was there. So that was -- and listen, I think we have a better mousetrap, and I think we demonstrated it.

And now we'll see what happens. That will come on board. I don't think we set the date yet, but that's certainly working through that to come on in 2026. And then we'll just have to see what's going to happen with Fifth Third.

Okay. Well, on that point, so you partnered with Comerica back in 2023. I think it added $15 billion of assets. Maybe it's larger now. And I guess now with Fifth Third acquiring them, there are several scenarios here, which we don't know it will happen. But I don't know, maybe just an update on the situation and maybe run through kind of the likely path of this. I think there is a scenario where you're able to convince Fifth Third, this is a great solution and maybe win more business with us?

Yes, we'd like to hope so. We certainly met with them and certainly with Comerica's management to demonstrate the value creation that we have but they do have their own model. And certainly, we understand they'll have to evaluate what is in the best interest, what they think is in the best interest from their client base and their current operation. As you imagine, when you enter arrangements like this, your contractual arrangements contemplate all sorts of situations. So if it turns out, we'll be disappointed, certainly if they decide to take the course and bring in inside. But we have the right protections to ensure that the investment we've made in that business and certainly, the upfront money that we've given will be returned, and we would be compensated for the investment we made in the earnings that we are losing. So that's standard contractual arrangements. Hopefully, we don't need that but we do have protections.

So let's flip it into the Asset Management business. How much of your Asset Management AUM is derived from the wealth manager? And is the wealth manager a key advantage that your asset management business has that other third parties don't have?

Yes. So listen, CTI asset manager in the U.S. it's about somewhere in 15%, 17% of the activity levels. It's earned. It's a level playing field. There's no advantage given versus any other asset manager in there. They understand their network. It's an important part of it. Yes, it does provide capabilities because they certainly have an in-house capability that they get awareness and certainly, people recognize it, and they certainly earn it because they participate in working with the advisers very specifically, and they certainly have created products that work for them.

So what is Jim has actually pushed them even further to recognize the importance of the AWM. It's always been important to reemphasize it. So that is going on right now, and that gives them a leg in. They've already launched multiple active ETF products. They have interval funds, other products they're working with us to develop. So that, I think, is -- and I just mentioned the Signature Wealth, obviously, that will open up the capability on discretionary. So it is an important part of that element. And I think they earn it but they have the opportunity to have basically an affiliated distribution capability that they earn and have that opportunity. So yes, it's a big opportunity for them.

So let's talk net flows. Is there a pathway to positive net flows at the asset management business?

The answer is yes. It's a long journey. We've made progress, and we're making progress on multiple fronts, certainly looking at our legacy capability like all of our active managers looking at how we're improving. And it starts with good performance. We have great performance in equity. We've had less great performance in the fixed. That has been really related to basically a positioning we took back several years ago on duration, we were wrong. That's working its way through. And our capabilities on credit and there is quite good.

We're also looking at launching new product capability to meet our solution set, both for our retail and institutional investors. And we have certainly launched and seeded a substantial amount of new product, which is taking hold as it relates to that. So -- and I just mentioned the growth within the AWM capability. So yes, I think we do see a path. What we've done in the interim is manage our expense base to ensure. And again, this is not expense cutting. This is true process reengineering, structural and strategic to be more effective in serving our clients and do that in a more efficient way, and that's allowed us to maintain our margin.

And I would say, yes, it gives us the opportunity then to adjust what we control as we're building up our capability to get into positive flows. But it's a longer journey like other active managers are experiencing. But we do see some light at the end of the tunnel but it's going to be -- it's going to take time.

So when you did the tax-free spin out of American Express, I think 2005, the insurance business was a much bigger piece of the pie. It's a lot smaller now. How does that insurance business fit into the strategic vision of the entire business, which is mostly now driven by Wealth and Asset Management.

Okay. Back in that day, insurance was 80% of the activity profitability. The real value, again, was the adviser network, and that's what Jim and the team realized looking at it, it is now about somewhere in the 15% in that range. It is an important contributor because it basically it provides solution set capabilities to our clients. And they understand the client, they understand the planning model. They develop the products, they wholesale it, they do it well, and they help the advisers service their clients across the spectrum of offering solution set. That said, we are constantly evaluating manufacturing versus distribution. Over the years, we have adjusted the risk profile of this company to really allow it to basically coexist appropriately from a shareholder perspective with managing the risk return.

We certainly have made -- we've gotten rid of auto and home. We certainly reinsured risk transfer, the fixed annuity business as we grew the bank. But we've done that in a way where we ensure that our clients are protected and we don't really have the exposure going forward. So we didn't take the lowest -- highest offer. We took the most appropriate offer to maintain the quality of that servicing.

We've also discontinued our basically products of living benefits that we offered on VA. So we've managed the entire risk profile. So we've gone to the point of accepting is this in the best interest of doing it? It is because it provides unique capabilities to our clients and it really allows us to harvest that. At the same time, we have entertained risk transfer programs. We've looked at things. It really, at this stage, looking at the quality of the book, what it does, it's an important part to continue.

Would we have ever gone out and bought an insurance company now or buy it? The answer is no. But having it and really having the quality there, it is in the best interest of our shareholders to continue it because of the client and the risk return profile and the stability of the cash flows that it provides.

Great. At this point, I just want to look at the audience and see if anyone has a question. So please raise your hand if there's any questions.

We have one in the second row.

I don't think you're on.

You have a strong balance sheet, we think with about $2 billion in excess capital. How do you rank capital uses in 2026 with buybacks, dividends, organic growth investments and M&A? And what would cause you to change that ranking?

Okay. So yes, the answer is yes, we have -- it's not a strong excess capital position but we have a strong liquidity position. In -- let me try and get the essence question. In 2025, we returned to shareholders through dividends and buyback 88%. looking at -- and we assess our model is really what drives our calculations on excess is looking over multiple years, multiple scenarios and the business model and what outside stress, outside changes we do and then we assess our ability to buy back shares each quarter and look at that in dividend.

You can look -- so we feel comfortable in this environment, and we constantly evaluate this every quarter when we make our decisions as it relates to that -- it's good to think that this year, we see today, and I'll talk about that in a minute, to target somewhere between 85%, 90% return with the events of recent days yesterday and today, we will opportunistically be buying back more aggressively because it's really -- for us, it's a good buying opportunity. But we are, for the time being, certainly sticking with the 85% to 90%. And if we have to, we will go up and we have the capacity to do that.

Again, we're constantly investing in the business. So this is not sacrificing in any manner, shape or form, the ability to invest and improve our capability. This is excess capital and cash. And that is something, again, and we look at the fundamentals and we manage it but we will -- you should assume we'll be buying back more at these levels.

Great. I think with that, we can wrap it up. But Walter, on behalf of all of us at Bank of America, thank you very much for joining us.

Thank you.

Welcome to the Q4 2025 Earnings Call. My name is Tina, and I will be your operator for today's call. [Operator Instructions] As a reminder, the conference is being recorded.

I will now turn the call over to Stephanie Rabe. Stephanie, you may begin.

Thank you operator, and good morning. Welcome to Ameriprise Financial's Fourth Quarter Earnings Call. On the call with me today are Jim Cracchiolo, Chairman and CEO; and and Walter Berman, Chief Financial Officer. Following their remarks, we'd be happy to take your questions.

Turning to our earnings presentation materials that are available on our website. On Slide 2, you will see a discussion of forward-looking statements. Specifically, during the call, you will hear references to various non-GAAP financial measures, which we believe provide insight into the company's operations. Reconciliation of non-GAAP numbers to their respective GAAP numbers can be found in today's materials and on our website at www.ir.ameriprise.com.

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. These forward-looking statements speak only as of today's date and involve a number of risks and uncertainties. A sample list of these factors and risks that could cause actual results to be materially different from forward-looking statements can be found in our fourth quarter 2025 earnings release, our 2024 annual report to shareholders and our 2024 10-K report.

We make no obligation to publicly update or revise these forward-looking statements. On Slide 3, you see our GAAP financial results at the top of the page for the fourth quarter. Below that, you see our adjusted operating results, which management believes enhances our understanding of the business by reflecting the underlying performance of our core operations and facilitates a more meaningful trend analysis.

Many of the comments that management makes on the call today will focus on adjusted operating results. And with that, I'll turn it over to Jim.

Good morning, everyone, and thanks for joining our call. I'll begin with an overview of the business and our progress, and then Walter will discuss our financials in more detail. Ameriprise delivered a strong fourth quarter to complete a very good year in 2025, reflecting the strength of our business effective strategy and excellent client experience.

Looking externally, equity markets performed well in the quarter, supported by resilient U.S. economic growth and the overall environment remains quite positive. With that backdrop, Ameriprise delivered new all-time records across the board in the fourth quarter. On an adjusted operating basis, revenue grew 10% to $4.9 billion driven by strong organic client flows and markets. We also had double-digit growth in our earnings, up 10% to over $1 billion as well as an earnings per share which increased 16% to $10.83.

And Ameriprise return on equity was again excellent, increasing over 100 basis points to 53.2% our highest ever. We completed 2025 with assets under management, administration and advisement at $1.7 trillion, up 11% and another new high. Across the firm, we're leveraging the strength of our businesses and capabilities to deliver good results while investing in organic growth opportunities and innovation.

Supported by our strong financial foundation, we're making key investments across the company in top-tier technology, digital capabilities, AI and cloud infrastructure. We're also bringing out new product solutions in each of our businesses to further serve more investment needs and deepen relationships. These investments help further enhance our client and adviser experience and drive organic growth. These investments extend to advice and wealth management, where our leading adviser value proposition and integrated technology continue to drive excellent client satisfaction as well as strong organic flows and adviser productivity.

Total client assets reached a new record of $1.2 trillion at year-end, up 13% from our focused action to drive flows as well as from positive markets. Total client inflows were $13.3 billion, up 18%, which is one of our best quarters for flows. These results reflect the strength of our legacy flows from our adviser engagement, client acquisition in the target market and our recruiting success. Our Wrap business also grew strongly. Assets increased 17% to $670 billion with meaningful growth in flows. This included good flow momentum in our new Signature wealth unified management account which we launched at midyear in 2025.

It's been one of our most successful rollouts and early adviser feedback has been very positive. We continue to build on these early results as more advisers integrate the new platform into their practices. Advisers are seeing real value in the enhanced personalization, automated portfolio monitoring, rebalancing, reporting and centralized trading. We're also adding new capabilities and strategies through our Signature Wealth platform as we move forward.

In addition, we continue to have good transaction activity, up 5% year-over-year. Our bank products complement the business nicely with assets up to $25.3 billion. We're rolling out and testing new offerings, including expanding our lending book where we saw good growth led by pledge and nice initial uptake in mortgage loans. After our initial launch of HELOC we're seeing strong early interest. We just launched checking accounts, which rounds out our complete bank offering and will be important to enable greater uptake of savings and lending products and adviser practices going forward.

Adviser productivity continues to increase nicely, as I mentioned, up 8% to $1.1 million per adviser in the quarter. Our proven adviser value proposition helps them achieve this level of productivity. This includes our interconnected systems and capabilities, anchored by our strong digital advice, CRM and extensive practice management resources. As we shared, we're also innovating with AI and automation to help advisers identify meaningful client insights and growth opportunities while reducing time-consuming tests.

Also key our integrated capabilities drive strong system reliability, efficiency and resiliency. Our best-in-class service is another competitive advantage this year J.D. Power recognized Ameriprise for the seventh consecutive time for delivering an outstanding customer service experience to advisers for our phone support. And for the second straight year, we earned J.D. Power's certification for our client phone support as well, which is terrific. We're known for our commitment to client and adviser success. Experience advisers continue to choose Ameriprise. We've added 91 quality advisers building on a strong momentum in the third quarter. And the pipeline for experienced recruits across channels remains attractive. And by the way, our total adviser count is up 1% year-over-year.

Ameriprise advisers continue to stand out industry-wide for exceptional service, growth and high-quality practices. We had a record 478 teams named to the Forbes Best-in-State wealth management teams 2025 ranking. Earlier this month, I attended the AWM field leader kickoff for the year. Our AWM team is made up of strong cadre of field leaders who help advisers leverage our value proposition and client experience to build even more successful practices.

Our Retirement and Protection Solutions are also contributing nicely to transactional activity, organic growth and deeper share of wallet. Structured annuity sales were up 7% in the quarter and Life & Health sales grew 14% and with most of the focus on accumulation-focused variable universal life. Our overall portfolio continues to perform very well. Here again, we're investing in product enhancements and leveraging AI and digital to increase efficiencies in underwriting and overall service. In Asset Management, we're delivering meaningful financial results as we leverage our global capabilities for greater efficiency and future growth. Assets under management and advisement reached $721 billion for the quarter, up 6%. We had continued strong investment performance with 103 4- and 5-star Morningstar rated funds at year-end. Nearly 70% of our funds globally were above the median for the 1-year time frame on an asset-weighted basis and stronger for long-term time frames with 80% of our funds above the median for 3- and 10-year performance periods.

Regarding flows, we generated $1.9 billion in net inflows in the quarter, which included higher reinvested dividends. Overall, we had net inflows and model delivery strategies and improvement in institutional growth sales. We continue to invest to further broaden out our investment capabilities to meet evolving market demand. That includes expanding our active ETF lineup and further building out our SMA model delivery and alternatives offering.

During the quarter, we launched 6 new active managed and research enhanced ETFs in the U.S. along with our initial launch of ETFs and EMEA. Across asset management, we're leveraging our global footprint to generate additional operational efficiencies. Our back-office transformation and data foundation work we'll continue to increase the cost effectiveness of data delivery and help ensure our solutions are scalable. Reflecting on Ameriprise overall, our business and financial results remain strong with record revenue, earnings, EPS and return on equity as well as a differentiated level of capital return. As you saw, we increased our capital return to more than 100% in the quarter. We were opportunistic with a discount in the share price and the size of the buyback brought our total capital return for the year to nearly 90%, one of our highest levels in recent years. We've also consistently maintained a healthy and resilient balance sheet.

2025 was another terrific year for us, our 20th as a public company. In just 2 decades, we've established Ameriprise as a premier brand built on helping millions of clients achieve their most important financial goals and we're continually innovated and transformed how we go to market, earning best-in-class recognition and results across a wide range of environments. Equally important, we earned a highly respected reputation over the years for who we are and how we operate the firm. In fact, Ameriprise was just named one of America's most iconic companies by time, we rank among the top 50 across industries and we're also the leading diversified financial services firm on the list. And this award adds to many others.

We were again included on the Wall Street Journal's list of Best Managed Companies for 2025. And America's most responsible companies 2026 list from Newsweek as well as Ameriprise is one of America's best companies 2026 according to Forbes.

In closing, we feel very good about the business and how we're positioned as we look to 2026. We're executing our clear, consistent strategy and driving innovation and using operating leverage where we see opportunity. With that, Walter will discuss the numbers in more detail, and then we'll take your questions.

Thank you, Jim. Ameriprise delivered excellent financial and metric performance in the quarter with adjusted operating earnings per share up 16% to $10.83 and a strong operating margin of 27%. The -- we had record assets of $1.7 trillion, up 11%, which coupled with strong client engagement, drove record revenues of $4.9 billion. We continue to make good investments for growth, particularly within Wealth Management. We are optimistic with share repurchase in 2025, given share price and accelerated our capital return. In the quarter, we returned over 100% of operating earnings to shareholders. Our balance sheet remained exceptionally strong with excess capital of approximately $2.1 billion and holding company available liquidity of $2.2 billion. .

Let's turn to Slide 6. Performance metrics and wealth management were strong across all measures, notably with client Matlow rates in our historic ranges. Total client assets grew 13% to a record high of $1.2 trillion with strong client flows of $13.3 billion, representing a 4.7% annualized flow rate. Rop assets increased 17% to a record high of $670 billion, with $12.1 billion of net inflows in the quarter, representing 7.4% annualized flow rate. These are near record levels of flows and we saw both our client and [indiscernible] rates built each month of the quarter.

The improvement in both client and rat flows was a result of continued strong core flows, higher Viser recruiting in the back half of the year and very strong retention levels. In addition, transactional activity remained strong, increasing 5% compared to the prior year, primarily from growth in annuity products and brokerage. Cash sweep balances increased to $29.9 billion compared to $27.1 billion in the third quarter, which is consistent with the normal seasonal trend we typically see near the end of the fourth quarter.

Our adviser trends remain solid as well. Retention was good across all channels, and we saw a strong momentum in our experienced adviser recruiting with 91 advisers joining us in the quarter. Our value proposition resonates with advisers, and we remain focused on ensuring our transition packages are attractive to experienced advisers that share our values and commitment to the client experience. In total, our adviser productivity continues to grow, reaching a new high of $1.1 million.

Let's turn to Wealth Management financial results on Slide 7. Adjusted operating net revenues increased 12% to $3.2 billion. The core business is performing very well given the value of our planning model and the multiple touch points we have with the client to meet their needs holistically. Our fee-based and transaction revenues were quite strong, increasing in the low-teen percentage range benefiting from higher client assets and activity levels.

Our cash revenues, which include net investment income, distribution fees related to all balance sheet cash and banking and deposit interest expense increased modestly despite the impact from the Fed funds rate reduction since September of 2024. Adjusted operating expenses in the quarter increased 11%, with distribution expenses up 12%. I would note that adviser compensation within distribution expense increased in line with the revenues advisers generate.

Distribution expenses in the quarter was 65.8% of total management and financial advice fees and total distribution fees, excluding off-balance sheet sweep cash, which is consistent with the 66% level we have guided to. Full year G&A expenses were up 4.5% and primarily driven by volume and growth-related expenses, including investments in signature wealth and banking products.

This level was consistent with the guidance we provided. Pretax adjusted operating earnings increased 13% to $926 million, with continued strong contribution from both core and cash earnings. Our core earnings grew in the mid-20% range, benefiting from higher client assets and advisory fees as well as strong activity levels. The strong level of core earnings that we generate is unique and demonstrates our focus on profitable growth. Cash earnings increased modestly despite the impact from the Fed funds rate reduction since September of 2024.

Our strategy of leveraging Ameriprise Bank has been important in minimizing the impact from Fed funds effective rate reductions on our AWM business. In fact, net investment income in the bank was flat for the year. We continue to take actions to build the bank investment portfolio a way that supports stable earnings contributions going forward. The overall bank portfolio has a yield of 4.6% and with a 3.8-year duration, with now less than 9% of the portfolio in floating rate securities. In the quarter, new purchases at the bank were $2.7 billion at a yield of 5% with a 4.3-year duration.

Last, our margins remained excellent at 29.3%. Turning to Asset Management on Slide 8. Financial results were strong in the quarter. Operating earnings increased 17% to $293 million. Results reflected asset growth, higher performance fees and the positive impact from transformation initiative. Total assets under management and advisement increased to $721 billion up both year-over-year and sequentially from higher ending market levels. Revenues increased 12% to $1 billion. benefiting from higher performance fee revenue than a year ago.

Performance fees are an important revenue stream for the asset management business and this quarter were recognized due to very strong performance in our hedge fund. Expenses increased 10% in total, with distribution expenses up 5%. We -- in the quarter, general and administrative expenses were up 13% as a result of higher performance fee compensation and foreign exchange translation. Margins reached 40% in the quarter, which is above our target range.

Let's turn to Slide 9. Retirement and Protective Solutions continued to deliver strong earnings and free cash flow generation, reflecting the high quality of the business that was built over a long period of time. Pretax adjusted operating earnings were $200 million, in line with our target range. This business has excellent risk-adjusted returns and continues to be an important part of the AWM client value proposition.

Turning to the balance sheet on Slide 10. And Balance sheet fundamentals and free cash flow generation remain strong, which is a core to our ability to invest for growth on a sustainable basis while also continuing to return capital to shareholders. We have an excellent excess capital position of $2.1 billion. We have $2.2 billion of available liquidity. Our assets and liabilities are well matched and our investment portfolio is diversified and high quality. Ameriprise consistent capital return strategy is a key element. quarter, which is 11% of operating earnings.

For the full year, we returned $3.4 billion of capital, which was 88% of operating [indiscernible]. As we enter 2026 and -- our strong foundation, coupled with our ERM capabilities and decisioning framework positions us well to continue investing for growth in a targeted way. and return capital to shareholders at a differentiated pace.

In summary, on Slide 11, Ameriprise delivered solid results in the fourth quarter to conclude a strong 2025. In 2025, revenues grew 6%. Adjusted EPS increased 12%, and Return on equity grew 60 basis points, and we returned $3.4 billion of capital to shareholders. We have an excellent foundation and capacity moving forward that enables consistent and sustainable profitable growth.

With that, we will take your questions.

[Operator Instructions] Our first question comes from the line of Steven Chubak with Wolfe Research.

So I wanted to start off on organic growth. The 4Q acceleration was quite impressive, especially in light of a tougher recruiting backdrop cited by some of your peers. -- you also spoke of maintaining competitive TA rates as part of your recruiting packages. And I was hoping you could help us reconcile the acceleration in net new flows that we saw in the quarter with the lower distribution expense ratio -- and can you speak to the outlook for both organic flows and distribution expense in the coming year?

So I'll start, and then I'll ask Walter to handle more on the expense side. First of all, I want to apologize for the delay. We were having some technical difficulties. Our flows in the fourth quarter were very strong. It was both organic growth, new clients added flows from current clients as well as, as you saw a pickup in the [indiscernible] a little delayed from some of our peers in that regard from a quarterly basis.

From an overall perspective, we feel good about how we're moving into 2026. From an expense perspective, it's very much in line with the productivity increases that our advisers generated and the volume of what they generated. Walter, I'll ask you to cover the expense side.

Yes. On the distribution expense side, we certainly see it's in line where we've seen with the revenue growth. So on that basis, we Steve, that will be in the ranges that you've seen, and we feel comfortable with it. Obviously, there -- as we talked about, we are competing. So you could see some increase in distribution, but it is certainly within the ranges that we feel very comfortable and the revenue generation associated with it.

It's helpful color. And maybe switching gears to the expense side. Given a number of areas on the investment front that were cited in the prepared remarks, I was hoping you could provide preliminary guidance on for '26 growth in firm-wide OpEx as well as G&A growth within AWM, just given higher percentage of investment likely being allocated on the wealth side.

Let me just start what we have and we continue to invest aggressively in technology capabilities, AI, product solutions and services. We've rolled out a good number of them including some of the stuff we mentioned for the bank, expanding some of our product services, our signature wealth, et cetera. So we feel good, and we got a good agenda to continue. But having said that, we continue to reengineer and transform and free up and get some productivity improvements from things like AI and intelligent automation, et cetera, as well as where we locate our resources. So I'll turn it over to Walter.

Yes. So as it relates to -- and the key point is what Jim said is while we continue to invest, we also are basically transforming our expense base by constantly evaluating and improving the way we operate. So the net effect of that should be, as you look at the company, staying within the ranges that you saw, again, based on volume and up, but certainly seeing a small increase versus last year and on -- as it relates to AWM, with that combination of investing and then and streamlining and transformation, probably in the same range of mid single digits -- probably. But again, there's investments in there being offset.

Our next question comes from the line of Wilma Burdis with Raymond James. .

Great results on flows in '25 -- could you give us a little bit more color on what to expect into early '26 SL9 advisers recruited in 4Q, which seems to imply a pretty solid result for 1Q. So maybe give us a little more color there.

Yes. So as we talked about, the drivers of that certainly are organic and looking at that and looking at the components of organic recruiting and certainly terms that we believe we were seeing good results, but there is seasonality attached to that. But certainly, as the fundamentals, we do see good results as it relates to those elements of getting the traction. And so it's -- we just feel like we certainly on recruiting and organic was certainly there.

And then we certainly are competing on to ensure that we retain our advisers. But there is a seasonality factor as to it.

And then how should we think about the buyback going forward, a strong result in the quarter? And could you also remind us what you consider the best use of $2.1 billion of excess capital particularly in this environment.

Sure. So the key -- and again, as you saw, we said we will be optimistic and we certainly were as we saw the amount of buyback and dividends in the fourth quarter. And again, that's with investment in the businesses and looking at all aspects of it. So we feel comfortable with the generation as we look into 2026. And as certainly an important element to return to shareholders. And at this point, I would say that the range that you saw for the year was -- we returned 88% with dividends and buyback. That's a pretty good range of 85% to 90% based on what we -- today, with our capabilities and the ability to return to shareholders as a value point.

The next question comes from the line of Craig Siegenthaler with Bank of America.

Jim and Walter, hope everyone is doing well. We have a follow-up on the strong net new assets in wealth management in the quarter. So I heard your response just to Wellness question that there's a seasonal factor that we should account for. But what about a second factor from elevated financial adviser movement in the quarter due to integration at a peer should we also be adjusting for this going forward?

From our perspective, we know things are happening from an industry perspective. Our recruiting, as we showed you in the fourth quarter, our pipeline in the first quarter was quite strong. So we feel from our perspective that we'll continue to bring on good experienced people -- and we continue with all of the resources that we've been applying and the technology focused very much on our advisers generating continued organic growth in our and that's the core of our business. So I don't know if that answers your question. From a recruitment, listen, it's a competitive market out there. We're also very much focused on retaining our advisers. Our retention was quite strong in the fourth quarter. But we feel very good about where we are. I don't want to comment from an industry perspective from other competitors.

And just a follow-up on client cash, also in Wealth Management. Overall trends are pretty good in the quarter. And -- but we saw some mixing in the underlying balances, especially with off balance sheet. What's going on with that mix? How should we think about the mix going forward? And seasonality will flip from positive to kind of tougher in 1Q. What are your thoughts on cash sweep growth in the first half of 2026?

Okay. So the [indiscernible] that, yes, you saw the seasonality that you would see in the fourth quarter, and we feel very good about it. But we are seeing certainly looking at discrete component, looking at the on balance sheet or [indiscernible] balance sheet comfortable with the generation and the management. But we do say with certainly managing that as in the first quarter, you will see utilization for tax or other reasons. But we do -- we have positive generation.

And the other thing as it relates to our strategy, we have certainly minimized the amount of floating certainly within our purpose, but we intend and we to basically continue to implement our strategy to basically invest out longer. So the impact, even if rates come off, that we can absorb that and certainly -- and offset some of that.

Your next question comes from the line of Brennan Hawken with BMO.

I'd love to drill into the bank channel. We see continued consolidation among the regional banks. You guys are intending that yourselves with the America deal. So curious about -- I believe you guys have spoken though, despite that consolidation about a desire to continue to grow. So how do you manage the risk of consolidation, if you're going to continue to look to grow in that channel? And how is the engagement going with your partners at Comerica as they approach the close of their deal with Fifth Third?

So we continue to see good opportunity in the financial institutions business. So we've been adding a number of institutions through the latter part of the year. We feel the opportunity is really good there for us to continue -- we know that consolidation occurs, that can both present opportunities or challenges depending on how that takes place and what the interesting parties may be considering -- in regard to Tal America, we have a very good relationship with them. I know they're going through their acquisition. I know that will be assumed closing.

So we'll see exactly where the proceed there. But we have really generated really good value in our partnership with them. Their advisers love our platforming capabilities and to support their clients as well, et cetera. I know, Comerica is very positive on our relationship. But again, that's a decision now for [indiscernible] to make as part of whatever deal and arrangement. I know they already had their own activities in-house, et cetera. So we'll see where that goes, but we still feel very strongly that with what we can provide and what we deliver and the satisfaction that every party who have joined us has with us, both the adviser and the client and the institution we feel good opportunity for us to continue to move forward.

The only thing I would add to that, as you would imagine, any contractual arrangement that you have contemplates these sort of contingencies and there were protections built into the contract. .

Understood. Appreciate it. Following up on Steven's question, you guys spoke to expense outlook. Thanks for that color. I believe, Walter, when you spoke to some of the growth that you saw in G&A investments were flagged as a driver. Certainly, we've seen some of your competitors in wealth leaning in on expense growth and making investments in the platform. Can you speak to what portion of expense growth we should expect to come from investments? And how how long a duration those investments will take in order to finish up and then what you -- sort of to the extent that you are comfortable competitively, what kind of enhancements you're looking to make? Jim?

Yes. So what I would say is I think as we continue to proceed, we'll continue to make very good investments. So technology continues to change. capabilities are continuing to one where we really look to help our advisers really manage their business really highly productively with information and data and the use of analytics and AI. So I would say our investments are going to continue. It's not like one like tranche, and that's it. .

Having said that, as you would know from following us is over the years, we continue to transform our business and free up resources from other places. So I would say if we were just doing the investment and not the reengineering, we would have a much higher expense increase every year, but we are very good at what we do and how we do it. so that we offset some of that increase, if it's just purely if you're thinking about investments.

So the largest part of our expense growth really is from volume increase, as you would imagine. But I would say we feel very comfortable. But I will also say, we have a leading technology capability platform out there, I'd put against anyone in the industry and the way it's all integrated and the way the adviser can be productivity on it because when we attract advisers in coming from you name on the house, they are very positive about our capabilities here.

The other thing I would just add is, yes, and with the scope of Ameriprise, we have the ability to leverage across our entire platform to support all the businesses. So that gives us an advantage to really provide that capability in a more efficient and effective way because we can leverage it over a broader base.

Your next question comes from the line of Suneet Kamath with Jefferies.

I wanted to start with Signature Wealth. Can you give an update in terms of what percentage of advisers are using it? And when you roll out these platforms, is there a material difference in terms of utilization for the franchisee advisers relative to the employee advisers?

So Suneet, when we started the initial launch of it back in the mid-summer time frame, it always takes a little time as you then you have to roll out and launch the platform, advise the advisers of how to utilize and train them on it, et cetera, et cetera. So our uptake from the rollouts we've done of previous wrap-type advisory programs is actually 1 of the best so far. -- and the amount of assets, the number of advisers uptaking it. Having said that, it's more of they start, they sample it and then they start to continue to go down that journey. And as they get comfortable with it, then they start really picking up their level of activity.

We have a reasonable good percentage of accounts open from advisers, a number of advisers across both channels. So we feel very good about that. But I think this will be something that, as an example, it is a new more comprehensive platform. And all of its capabilities the advisers are getting used to from how they do the portfolio construction, et cetera, but they love the idea of the proposals that generates how it monitors the portfolio, how it rebalances the portfolio, how it does more centralized trading for the portfolio, et cetera, and the reporting that they're able to provide the client and the intelligence from it. So -- we think it will be very good. We've recently added managed SMAs to it that will continue to roll out. We're adding other capabilities as we do that. So over the course of this year, we'll have a full spectrum of all of the various types of subset of programs in it that they can then utilize more comprehensively. So I think we're in good shape with our initial launch, and it's proceeding very well.

So fair to say, we're kind of still in the early innings of this -- and there's a lot more [indiscernible].

Early [indiscernible] but very good progress.

Okay. That's helpful. And then just on the organic growth. I know you talked about the seasonality. But can you maybe quantify how much of a benefit that was in the quarter in terms of seasonality? And then just longer term, do you still think 4% to 5% organic growth in Advice & Wealth is a reasonable bogey for you?

As we said, the seasonality is, again, it occurs in the fourth quarter, actually, there wasn't that much anything more as it relates to the first and on the quarter. But it -- yes. The range that we're talking about, and especially driven by the organic aspect is probably -- is appropriate. You then get the changes as it relates to one-off events of that. So yes, I think the 4% to 5% is a good measure, and you would have adjustments as seasonality takes place within it, but that's our annual as we think about it on a roll rate basis. .

Your next question comes from the line of Alex Blostein with Goldman Sachs.

This is Luke on for Alex. I had just a couple of quick clarifications. So obviously, expenses have been very well maintained for a few years, and you kind of spoke to a similar outlook in 2026. As you think maybe longer term, it sounds like investments remain a big focus. I'm sure you guys will keep finding ways to reengineer the base. But do you think that kind of like low single-digit growth is the right way to think about the expense algorithm beyond 2026 at a high level?

Yes. Yes. I think so. I mean you still got a level of inflation and other things. And even as you look at other services that you actually buy externally, prices have gone up, particularly from various vendors that provide things. So I think, yes, you got to consider that. I mean, I don't know about you, but when you look at inflation still at roughly 3%. You got to deal with that as a factor into. And technology companies and others, even though there are savings or improvements in the lowering of some costs, other technology services have been charged higher and higher they invest in their capabilities and AI, et cetera, so.

Yes. And that is one input, but obviously, you're always managing to margin to ensure that you have that relationship of expense revenue and -- but as you said, we continually invest. So this was -- and we're continuing to reengineering, that's in the oil market where we manage.

Yes, loud and clear. And just one more clarification for me. You mentioned positive cash generation during the quarter in the AWM business. I just wanted to make sure, does that mean like ex seasonality you're still seeing kind of like cash growth on an organic basis? And then like maybe more high level, how do you think about the pace of cash growth, particularly as we head into potentially in an environment where rates continue to migrate lower?

Yes. Yes. In the fourth quarter, you do see that, but I do see there's an underlying element as it relates to cash generation as it relates to cash coming in from that standpoint, but also new product capabilities, which will generate additional cash for us. The answer is yes. So again, it is an area of growth for us because it meets our clients' needs, and there's certainly a key element to building relationship with our clients and providing that product.

Yes. I would also say if rates continue to come down on the short end of the curve, people will continue to start to move more from what their place than money markets, et cetera. So you saw it already move from term type loans, I mean CDs and certificates, et cetera, to money markets. Money markets are still very high. I think the money markets will then start to continue to move into the market in one way or the other. So I think once that does, it will move into sweep a bit more for more transactional and investment purposes.

Your next question comes from the line of John Barnidge with Piper Sandler.

What does the consolidation opportunity look like for asset management in your opinion?

I would probably -- I mean you've seen consolidation over the many years in asset management. I think with the markets being so good, there's more of a probably a wait and see, so to speak, in some regards. What we've been doing really is really transforming our platform capability in a sense so that we have the good real strong technology capability to add more assets to introduce more products and services more effectively, efficiently and to set up our resources in locations that can lower our cost, including where we might outsource. So we feel good about that.

We've been introducing a number of new products, whether ETFs growing our SMAs and our model capability and getting that launched as well as expanding some of our alternative acts like our hedge funds and other things like that. So we are in a good organic state of what we're changing around and maintaining the margins and the fee basis even though we are impacted by some of the flow situation in the active.

I actually think, over time, active will reassert itself just like it's starting to do in different types of formats like in the active ETFs. I think the consolidation will continue out in the industry. And I think there's an opportunity in that regard as we think about it, to partner. But right now, we're very much focused on getting our position in a very good state. And I think we are at this point for how we're managing the expense base and investing and I feel really good about that. And our investment performance is quite strong over the track record. So we're in a good state depending on what the environment is for us to capitalize.

My follow-up question, maybe sticking with that, and I colyacknowledge your comments that with markets being favorable, it's kind of a wait-and-see mode, but you've also really transformed the tech capability. And I know that's like a continual investment type of thing, but what inning do you think we are in, in that initial transformation of the expense base to better position the organization to add additional AUM.

We're probably in the later innings. We're completing what we will be doing the work right now, and we'll complete it sometime later this year on the the back office part of that. We are really doing more on the front end, we're using AI and intelligent automation and other things like that and leveraging the demographics that we have offshore, et cetera. So we're pretty far along in that regard. So I feel pretty good. Walter, do you want to comment?

No, no. I think you [indiscernible] very well.

Our next question comes from the line of Tom Gallagher with Evercore ISI.

First question, where do you see AWM margins going in '26? Do you think you can maintain this 29% to 30% range?

Certainly, if you look at core and as Related, again, we are generating very good strong consistent margins and core. The other thing is going to be on interest, and now we minimize that also because of the way we invested. So -- it is in a good range as we look at what the Fed is saying and other things of that nature that will be in the certain range. And just if there are other third-party elements that we just can't manage like government or changes as it relates to interest. But as it relates to the core, we feel we're tracking well. And so it's a reasonably good range. .

And then I know you mentioned, Jim, you felt good about the pipeline for recruiting FAs for 26 how do you feel about retention of existing advisers? Would you -- any color there?

So I think overall, we feel very good. It doesn't mean you won't lose some people because it depends on what people put out there and offer them. But we're also very good in a sense of where we can -- when that happens to show why we actually help the adviser more over time generate value than the check. So -- but those things will come along. We got hit with a little last year as you recognize, and others do. So we know that this is something we are dealing with. But -- so what we try to [indiscernible] help our advisers really achieve and then recruiting people who want to actually have the capability and have a strong focus on their growth and how we can assist them in their growth.

We're not looking to just attract anyone here. We have an excellent platform. We have excellent capabilities. We have excellent leadership that help advisers. I continue to get notes from people who have come to us from the independents from wirehouses, from RIAs, and they said their only mistake was not coming to us sooner and their growth since they got here has been tremendous. And I can name any firm that you mentioned, and I can show you that.

So again, now it's a very competitive people say a lot out there. They promise a lot out there. I think that's all I can say is when they're here we deliver.

Got you. That's helpful color. And if I could just squeeze one more in. The elevated mortality in RPS this quarter, -- was that more a large claim volatility or higher frequency of claims?

It is higher claims at this stage. I think it is more frequency. It's you know what, it's a balance. It's nothing really that -- it's in both elements. So it's -- I think it's both actually to contribute on both. Nothing exceptional way. .

And we don't see it as something that will impact where we -- what we've been seeing over the longer term.

Yes. It's certainly within the range. So there's nothing there from that standpoint. And it's a -- so I would say it's a balanced situation both. There was nothing that elevated us to even think there was any issue. .

And our final question comes from the line of Tyler Mueler with William Blair.

Just one on Asset Management. I know you called out the strong hedge fund performance driving higher performance fees. Were there any other strategies or regions contributing to that? And then can you give any color on the hedge fund performance and outlook there?

Yes. No, we've had some really good flows in and a number of disciplines. So both in equity and retail, if you look at some of our different areas there, the dividend income, contrary in core, things like that. We've had it in institutional in things like our Japan and other strategies, some of the fixed income. But I would just say, and we have been getting very good flows into our hedge fund area, et cetera. We picked up some real estate last year in Europe, et cetera, that was very good. So we see really pockets of good growth and consistency there. But as you know, there's also the rotation in some of things like LDI and other things that have impacted us. So we feel looking into '26, we're in a good state, and we're hoping that, that will continue to show its improvement. And I think we're doing some of the right things and our performance is quite strong. .

We just need to pick up a bit more in the fixed income area where our performance was really good. And I think that's where we can pick up a bit more share as we get that identified.

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

Welcome to the third Quarter 2025 earnings call. My name is Tina, and I will be your conference operator today. [Operator Instructions] As a reminder, the conference is being recorded.

I will now turn the call over to Stephanie Rabe. Stephanie, you may begin.

[Audio Gap]

On Slide 2, you will see a discussion of forward-looking statements. Specifically, during the call, you'll hear references to various non-GAAP financial measures, which we believe provide insight into the company's operations. Reconciliation of non-GAAP numbers to their respective GAAP numbers can be found in today's materials and on our website at www.ir.ameriprise.com.

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. 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 2025 earnings release, our 2024 annual report to shareholders and our 2024 10-K report. We make no obligation to publicly update or revise these forward-looking statements.

On Slide 3, you see our GAAP financial results at the top of the page for the third quarter. Below that, you'll see our adjusted operating results, followed by operating results excluding unlocking, 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. 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.

And with that, I'll turn it over to Jim.

Good morning, everyone, and thanks for joining our call. I'll begin with my perspective on the business, and Walter will follow with more detail on our third quarter metrics and financials. As you saw in our release, Ameriprise delivered another strong quarter and generated significant value as we built on our performance from the first half of the year.

Regarding the operating environment, clearly, it remains fluid. We've continued to see strong bull markets, but investors still have many variables to navigate. Inflation remains elevated. In terms of interest rates, the Fed announced yesterday that they cut rates by another 0.25 point. Meanwhile, there are signs of softening in the labor market, along with lingering questions around tariffs and ongoing geopolitical impacts. And our business continues to demonstrate both its relevance and resilience in that regard. In a dynamic landscape, Ameriprise consistently generates strong results driven by a diversified business and disciplined management, And our third quarter financials, excluding unlocking, reflect this momentum.

Assets under management, administration and advisement grew to a new high of $1.7 trillion, up 8% year-over-year. We continue to deliver strong earnings and also generated double-digit EPS growth of 12%. And our firm-wide margin of 27% is exceptionally strong as we continue to invest significantly in the business.

I would also highlight that the Ameriprise ROE is best-in-class year after year and one of the highest in financial services at nearly 53%. In fact, Ameriprise is well positioned even if the environment becomes more challenging. Our complementary mix of revenue streams, effective expense management and strong margins help enable us to sustain strong financial performance.

Regarding the overall business, we're driving nice progress across many areas. Our advisers are leveraging our proven advice value proposition and generating high client value, satisfaction and practice growth. Overall, we had continued strong AWM client asset growth, up 11%. Wrap assets were also up nicely, up 14% year-over-year. And our adviser count is up and adviser productivity continues to be very strong, increasing another 10%. And we're back to strong recruiting levels, bringing in 90 experienced advisers in the quarter, one of our best. The Ameriprise value proposition, as well as the strength and stability of the firm, continue to differentiate us in the recruiting space, and our pipeline in the fourth quarter is strong.

Across the business, we're leveraging our investments to further elevate our value proposition and drive long-term economic returns. In September, we launched a new [ advertising ] that reinforces our premium brand and helps create strong awareness among our target market. And we continue to invest in advanced capabilities that empower our advisers to further engage clients and deepen relationships.

Our digital and AI investments are creating strong experiences and streamlining workflows. In fact, we're seeing record digital adoption from our clients, and our mobile app satisfaction hit an all-time high in the quarter. And our advice insights [ to the ] next-generation capability that uses big data and machine learning to create client-centric insights to drive engagement save time and support business growth.

We're also investing to enhance our comprehensive solution suite, both to broaden our offering and position the business for sustainable growth. Over the summer and into the fall, we've been working closely with advisers to integrate new capabilities. As an example, the launch of our Signature Wealth platform has proven to be quite successful. It's early, but it's already helping advisers attract new assets and manage client portfolios more efficiently, and it has great potential.

At the bank, we recently launched HELOCs and also began a soft launch of our checking accounts, with a full rollout plan for later this year. These solutions add to our suite of savings and lending products, including CDs, mortgages, pledged lending and credit cards. They also help to enhance our client experience and deepen relationships. We're also growing our [ AFG ] business, partnering with banks and credit unions who can benefit from our sophisticated wealth management solutions and adviser support tailored to institutional clients. And we continue to add new financial institutions to 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 in variable universal life, structured annuities, and variable annuities without living benefits, highlighting the relevance of our offering in today's market. We're also pursuing growth in our disability insurance business, including streamlining it 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 one of the most profitable insurance businesses in the industry.

In Asset Management, we continue to make good progress as well as enhancements to the business. Our investment performance remains strong over all time periods. Over 65% of our funds outperformed the median 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 and administration up to $714 billion.

In addition, net outflows improved across the board from last quarter as redemption slowed in both retail and institutional, and we had an increase in retail growth sales, particularly in North America. As I shared, we're investing and adding to our solutions in high-demand areas where we differentiate our capabilities. We're also using data and analytics to better target and segment advisers, and we're gaining traction with SMAs and models as well as our alt business and active ETFs in the U.S. In addition, we'll soon be launching our active ETF capability in the U.K. 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 Ameriprise 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 adviser experience, it is also reducing cost 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 Threadneedle funds. These initiatives further strengthen profitability and our ability to reinvest in innovation and growth.

As you know, we manage the business with rigor and consistency. Ameriprise 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 increased to $842 million. Our financial strength and stability enables us to reinvest strategically and act opportunistically.

We believe that what also sets Ameriprise apart are our relationships and consistent recognition we earn to how we operate. Core to our success is how our clients feel. We consistently earn top client satisfaction and continues to be exception of 4.9 out of 5, and our advisers are also very engaged in being selected for top awards. In fact, we had 20 Ameriprise advisers on the Barron's Top 100 Independent Financial Advisers 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 J.D. Power once again recognized Ameriprise with their Outstanding Customer Service certification for our phone support for the seventh consecutive year for advisers and the second year for clients, which is tremendous. In addition, Forbes named Ameriprise as one of America's Best Companies. Newsweek honored us as one of America's Most Responsible Companies. Fortune listed Ameriprise among America's Most Innovative Companies. And I also highlight that Newsweek recently ranked us as one of America's Greatest Companies.

In closing, I feel very good about Ameriprise 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, Ameriprise 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 #1 total shareholder return within the S&P 500 Financials Index since our spin-off in 2005.

As I look ahead, Ameriprise 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. Ameriprise delivered another quarter of solid performance, underpinned by exceptional balance sheet strength. Our 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 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 firm-wide 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, enabled us to increase our capital return to 87% of operating earnings in the quarter. We remain committed 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 [ termwide ] margins from 6% revenue growth while reducing G&A expenses by 3%. On a full year basis, we are targeting a G&A 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 wrap flows of $30 billion over the past year. In the quarter, client and wrap flows were impacted by the departure of 2 large adviser teams. Excluding those departures, client flows were solid at $6.5 billion, and wrap flows were $8 billion when also adjusted for an administrative change. The flows from our legacy adviser 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 sweep balances were stable at $27.1 billion compared to $27.4 billion in the prior quarter. We are also seeing strong momentum in our experienced adviser recruiting, with 90 advisers joining Ameriprise this quarter. Our value proposition is resonating with advisers, and we remain focused on ensuring our transition packages are attractive to experienced advisers that share our values and commitment to the client experience. And more importantly, adviser 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. Our fee-based and transactional revenues were quite strong, increasing in the low-teen 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 declined 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 adviser compensation within distribution expenses increased in line with the revenues advisers generate.

G&A expenses increased 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 G&A. Pretax 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 G&A. The strong level of core earnings that we generate 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 Ameriprise Bank has been important in minimizing the impact from Fed funds effective rate reductions on our AWM business. In 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. Last, our margins remained excellent at 29.5%.

Turning to Asset Management on Slide 9. Financial results were solid in the quarter. Operating earnings increased 6% to $260 million. The strong quarter reflected equity market appreciation and the positive impact from expense management actions, partially offset by the impact of net outflows. Total assets under management and advisement increased to $714 billion, up 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 gross sales, which included a nice win in model delivery.

Institutional flows benefited primarily from lower redemptions in both the U.S. and EMEA. Revenues increased 3% to $906 million with a stable fee rate at 46 basis points. G&A expenses increased 1%. For the full year, we expect mid-single-digit G&A 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 & Protection Solutions continued 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. Pretax adjusted operating earnings, excluding unlocking in the quarter, were $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 were solid at $1.4 billion, with a continued 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 partially offset by unfavorable changes to variable annuity surrender and utilization assumptions. In long-term care, there was an immaterial impact from changes to morbidity and mortality assumptions. Overall, LTC policyholder behavior is in line with expectations.

Before we move to the balance sheet, I'd like to take a moment to address the Corporate segment. The pretax operating loss, excluding unlocking, 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.

Turning to balance sheet on Slide 11. Balance sheet fundamentals and free cash flow generation remains 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 consistent return capital to shareholders and invest for future business growth. Ameriprise's consistent capital return strategy is a key element of our ability to consistently generate strong long-term shareholder value.

In summary, on Slide 12, Ameriprise delivered solid results in the third quarter, which is a continuation of our 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 grew 210 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 of capital to shareholders. These trends are consistent over the long term as well. This differentiated performance across multiple cycles speaks to the complementary nature of our business mix as well as our consistent focus on profitable growth and maintaining our strong values as a company.

With that, we'll take your questions.

[Operator Instructions] And our first question comes from the line of Suneet Kamath with Jefferies.

First question on AWM. Can you comment on the Comerica relationship given the M&A that we saw recently and maybe remind us of what the assets under management or account values are with respect to that relationship?

Sue, I can comment on the first part. I'll ask Walter on the asset level. First of all, we have an excellent relationship with Comerica since we've done the arrangement and put them on our platform and capability, working with their advisers and their clients. We have gotten very strong favorable reviews from Comerica themselves from their executives, from their wealth management group and their advisers. They love the platform, the capabilities, the tools, et cetera. So we feel very good about that relationship.

We know an acquisition has occurred. We'll be working with them as they decide how they want to proceed. And we feel very comfortable with the arrangement we had in place with them and the contract and agreements. So it's more of a stay tuned as I guess they're going through their own decisions on what they need to do or look at. But we have great capability to support them.

On the asset side, it's around $15 billion. And like in any contract of this nature, there is protections.

Okay. And then in your prepared comments, you called out 2 practices that have left 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 in the previous quarter, you're always going to have some one-offs. Some other firms have similar things over the last few quarters. These 2 practices went RIA. And listen, there are checks being given out in other things. But overall, it's fine for them. We've recruited very strongly. We have 90 people joining us, our pipeline is quite good. Our underlying organic business is very solid. Our adviser satisfaction is very strong, but you're always going to have some one-offs, as we mentioned. But we look at the totality of what we're doing and how we're doing it. Environments will change. There's always a price to pay. We feel very good about our position.

Your next question comes from the line of Wilma Burdis with Raymond James.

Given your excellent track record of managing the wealth business -- and I know you just touched on this a little bit, but you've seen a little bit lower flow activity this year. Is that an indicator that just maybe, the market is a little bit too hot or pricing is a little bit irrational? Maybe just comment a little bit on that.

I think it's a combination of most things. I would probably say that as we look at the underlying of our client base and activity, it's still quite good. People have done a lot of rebalancing and allocations, so transactions are quite strong. the balances of the book are very good. The clients are highly engaged.

But again, the market has gone up pretty substantially. There is money on the sidelines. Our cash balances are very high. So there's a bit of that going on. And then there's a bit of exactly what you said on the environment on recruiting and what's happening in that regard. 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 advisers 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 some of these adviser rollout operations, they seem potentially a little bit over-levered or maybe they're getting a little bit aggressive. Do you see that as something that could present an opportunity in the future?

The answer to that is absolutely yes. People forget that you go through downturns and changes in the market have been in the industry many years, over many decades, many years ago. So I do understand that, and I don't think people do. That's why we have really good sound fundamentals, strong margins. We invest for the long term. Our capabilities are strong. Our client satisfaction is excellent. We have a strong branded premium value proposition in the marketplace. So those are all the things that I think are really important as you go through these events where things always look rosy until they're not.

Our next question comes from the line of [ Brennan Hawken ] with Bank of Montreal.

[ David Intu ] here on behalf of [ Brennan Hawken ]. I just wanted to do a quick follow-up on the net new asset side on top of the 2 teams that you mentioned were leaving, you also that there were some administrative changes. Could you just dive into a little bit of what those are? Also on top of that, the adviser headcount was 10,427 at year-end 2024. Could you just give an update on where that number stands today? I appreciate it.

Yes. As far as the adjustment, we went through all of our wrap programs and set up things consistently. Certain clients, we had adjusted out of the various programs. Some of that will come back in and made changes. So we feel very good. It's a onetime sort of an adjustment as we adjusted how we looked at each program and the arrangements we had, and it made sense for both us and the client.

In regard to the business overall for wrap, I think it will be quite strong and et cetera. Also from an adviser count, it is up nicely year-over-year. We stopped giving numbers, so I'm not going to give that, but there was no change in sort of what you were -- in sort of a normal way of looking at that adviser growth over the years. So it's still consistent with that.

Great. And then I just had one quick follow-up. Do you expect the risk from the regional bank M&A to limit deals in the bank channel? Does any of this uncertainty provide maybe an opportunity?

I think you see some recent mergers in the bank as they feel the regulatory environment has eased a bit. So I think some of that regional activity will continue. From our perspective, yes, that always presents certain adjustments out in the marketplace. We, from our own banking, we look at it as more of growing that as an organic wealth management business that we have to our clients. So we're not looking to get into the banking business in a further light at this point in time.

Our next question comes from the line of Jeffrey Schmitt with William Blair.

In 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 did a more comprehensive review of our operating environment globally. We've made a number of adjustments over the last 2 years that streamlined their operations, particularly after our integration of the BMO acquisition 2 years ago. And with that, put them on consistent platforms, systems, technology, trading. And also in addition to that, looked at geographically where we're located for certain services we perform so that we got real scale out of that and right demographics. That would give us some efficiency and lower price cost.

We are completing that transformation with now, the back office, as we mentioned with our arrangement with State Street. So we'll be in a really great position to really operate on a more scaled basis as we move forward. A lot of that change has been already completed. The last one is what we're doing with the back office. And so those savings are being baked in, as you see. So the expenses have gone down in the G&A. And we've been investing now in new products and capabilities and AI to support the asset management business.

Okay. And is there any guidance you could provide on how to think about crediting rates coming down for both the bank and certificates as the Fed cuts rates?

Well, of course, those will be adjusted in light of the environment. Same thing with CDs. As you're investing at different levels, you would adjust the rates that you provide from a client. Walter, do you have any more?

No. Obviously, in the service business, which is a spread business, we will manage that as rates come down. And certainly, we're investing at higher levels, and as the rates come down, we'll credit less. So that will be a positive. And as it relates to sweep counts, I think we've adjusted like the industry has, so there's not much room in that. So -- and our core investments are now long dated as to -- because of the way we reposition the portfolio, we'll 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 do decline at the same time of giving us -- get greater engagement with the clients for giving them favorable treatment with the banking products that we can offer. So for us, it was -- it's a good capability, but also ensures a bit more of a spread revenue continuing.

Our next question comes from the line of Steven Chubak with Wolfe Research.

So maybe to start, just on the investment philosophy. So 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 cash have lagged peers. 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 into investing to maybe help reaccelerate growth, which admittedly could eat into margins as well?

Yes. So listen, I can't speak to who you're referencing competitors. I know there's been a lot of roll-ups and acquisitions and paying up to bring advisers 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 that have quality books that will 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.

From a core perspective, I think we've been very consistent. Our flow rate around the industry, you can't look at just 1 quarter, but over the course of the year, 2 years, 3 years, [ off low ] rate has been very good and consistent out there and very competitive in that regard. From an investment perspective, we're making quite strong investments in our capabilities in technology, in solution sets. And I would compare us to having one of the best platforms out there and leading in many areas. So I feel very good about that, and those investments will continue.

As far as recruiting investments, we've upped our packages a bit in this competitive frame, but still for us, very rational and appropriate for long-term profitability. And 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, and that's where maybe people are getting a bit over-levered.

On the cash, certainly, from our standpoint, it's stable, and we do see it growing in its normal pattern in the fourth quarter. So we feel quite comfortable with that.

Also maybe unpacking that a little bit further. Just given the sweep cash trends in 3Q, you didn't see the uptick that we saw at some of your peers. I was hoping you could speak to what you saw in terms of cash behavior following the September rate cuts since that was a 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 source a pattern when the cuts -- it really didn't deviate that much 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 rates -- the volume in sweep. And we certainly -- as we indicated, we're -- we've already planned for with lowering the amount of cash exposure we have on the short term to ensure that we actually have the profitability sustained all throughout AWM. So we feel comfortable with the balances and certainly with the positioning of our investments and the duration of it. So not concerned.

Your next question comes from the line of Alex Blostein with Goldman Sachs.

Just building on some of the questions around cash revenues, really related to the bank. If we look at the bank's average earning assets and really zoning in the securities portfolio, I think the earning yield there is running at around 5%, maybe high 4s. So maybe just kind of help us think about the reinvestment yields you expect on that book. As that rolls off over the next couple of quarters, couple of years, relative to that installed base of kind of 4.5% to 5% and the implications that will have on the NIM at the bank?

So as we indicated, we anticipate with the roll-off and certain maturities that we see coming that we'll be reinvesting in the high 4s, low 5s. So we will be able to maintain our net interest income at the bank from that standpoint. And we feel quite comfortable about that as we go for the next -- certainly, I would say, 3 quarters. Beyond that, it becomes a little more difficult, depending on where the Fed goes with and where the long-term rates go. But we certainly plan for this, and we feel comfortable with that strategy.

Right. Understood. Okay. And then when it comes to the certs business, certificates business, those balances have been coming down now for several quarters, which makes sense, I guess, given how elevated they've been running at. So now we're sitting, I think, at around $9 billion. Just looking back, where do you guys expect these balances to ultimately stabilize? And how would you frame that level?

It will -- I think directionally, it will come down, certainly as we manage our spread for that. But it gets to a set level and won't deviate that much, but it depends on the movement in the rates. But it follows a pattern. It's strictly based on the spread, and then the money gets recirculated. So that's -- I wouldn't see a precipitous drop coming off.

Yes. I guess like before the dynamic in 2023, these balances used to run at like a $5 billion, $6 billion range. Is that sort of where you expect it to sort of normalize?

I would -- let me just say, I think it's -- certainly, that is a range where it is normal where it gets to when you start managing it, but I don't know if it's going to drop that precipitously at this stage. But certainly, that will be the bottom, in my opinion.

Our next question comes from the line of John Barnidge with Piper Sandler.

Others with asset management businesses in 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 Ameriprise?

There's a number of different arrangements. I mean, not a lot has come to market for some of the stuff that has been out there. So we'll see what actually takes hold. We are looking at various arrangements ourselves. We just -- we launched our own interval fund that's in the marketplace that we brought out. There's other things that we're working on in the alternative space. Some will be with partners, some will be organic for us. But yes, that will be an opportunity that we're looking at.

My question is about AWM and the competitive environment. There's been a deceleration in inflows since the $11.1 billion high water mark in the [ fourth ] quarter. Are you outflowing more from -- on a net basis from teams leaving than you're adding? Or is there a way to mention how much of that has been an impact to you this year?

Yes. So what I would say there is, in the past, we were more inflow than outflow there. As we said, when you lose some large team or two, et cetera, in the short term, then your outflow becomes a bit more than your inflow, and that's exactly what has occurred. But now our pipeline is strong, et cetera. As an example, we just brought in someone with $1.7 billion coming in. So that's sort of what is occurring.

But overall, we've been in a good state there, but you do have a little bit -- in a quarter-to-quarter basis, that does occur. But our organic under that is what we really rely on and focus on. That's really what we work with our advisers to increase their productivity and what they do.

People don't really concentrate in this market environment. They look at the top line and momentum. We look at the margins, look at the core business, look at the client satisfaction, look at what you see as a consistent basis over time. People move away a little more from fundamentals, but that's really what's important over the long term. And even the medium and short term, but people right now are so much focused on some of the near term of what they see in the top. We look at -- we look through that and to look at what that provides us longer term and what's good for the client and the adviser. And that's how we invest.

Our next question comes from the line of Tom Gallagher with Evercore ISI.

Just a follow-up on the two large adviser teams that left. Will that have any tail to it? Meaning, would you expect continued outflows for the next few quarters related to that? Or would you expect wrap flows to bounce back closer to $8 billion in 4Q?

Okay. So as it relates to the two advisers, it will have some carryover into the fourth quarter. As it relates to what we're seeing on our -- basically, our attrition patterns now is actually stable, and we feel comfortable from that standpoint, as Jim has indicated.

Got you. And then I guess just a follow-up on this more broadly, guys. The -- when you think -- and Jim, I think you referenced you're upping some of your packages for new recruits, just that's the reality of the market. What about payouts on existing advisers? Have you kind of reexamined or examined your payout grid? And do you think you need to make any tweaks to payouts on your advisers more broadly in order to make sure that during a more competitive market, that your retention holds in?

Yes. We will look and have always looked at that in a bit on a balanced equation and what we provide the advisers and the support we give in combination with payout 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 broad-based changes or anything like that, that you're considering?

I'm not at the point to talk about anything like that because we're in a good position right now of how we're thinking, but we always make adjustments periodically, and that's what we'll continue to do.

Our next question comes from the line of Kenneth Lee with RBC.

One on asset management. Looks like there's some benefit from operating leverage that you saw in the quarter. I wonder if you could just talk a little bit more about any sort of variable expenses, that could increase as markets or AUM grow over time? And relatedly, any updated margin outlook with that business?

Well, as far as the expenses, you have the normal volume-related variable expenses, and certainly from that standpoint, we've managed that well. And we feel comfortable with our transformation -- management of that. So that will still continue. And so on the expense side, it will be strictly volume-driven type of expenses that you would have in normal course of increasing your activity.

Got you. Very helpful there. And just one follow-up, if I may, just piggyback on the previous question there within AWM. Sounds like the distribution expense ratio outlook most likely would remain within that previous range you had articulated, that 66%, 67% range. But just want to make sure that, that's still the case?

That is the case.

Our final question comes from the line of Ryan Krueger with KBW.

On the client cash within the wealth management platform that is in non Ameriprise products, have you started to see any movement there as the Fed is starting to hit another cutting cycle? Or has it remained pretty stable so far?

No, the cash has remained stable. That's what I was indicating before.

Yes. I mean, it was -- you got a quarter cut last time and a quarter cut now. So I don't think there will be a fundamental change from that.

Okay. Just to clarify, I wasn't referring to the cash on Ameriprise's...

No, no, I know. We're talking...

The third-party product.

Yes, the third party and money markets, et cetera. You're still as now probably 3.25 or something -- so it's not a move fundamentally. I think as people start to rethink based on markets and fixed income, et cetera, they'll start making adjustments. But right now, I think it's still been pretty stable that way.

Okay. Got it. And then just any update on the Signature Wealth rollout and how that's been going so far? I know it's probably early stages.

Yes. It's very early, but it's going very well. We're getting the adviser to really look at that platform and understand what they do and take the training for it. And people who have opened accounts really like it and are starting to move. We're getting both new assets as well as conversion of some assets from other of their wrap programs over it. And so those things, as you roll them out, they're very substantial for them. And -- but I think it will be a great platform. So far, the flows into it is probably one of our best launches. So -- but it's early stages. We think it has a good opportunity.

We have one final question from the line of [ Karim Savitt ] with Bank of America.

My first one is on the Asset Management business. It was kind of like nice to see the deceleration in growth redemptions on the institutional side year-to-date and like gross sales kind of like have been stable, around like $9 billion to $10 billion. I was wondering if you could kind of like maybe unpack for us, some of the deceleration in the outflows. Is that mostly from Lionstone? And are there any kind of like remaining assets that will be onboarded -- off-boarded, sorry, relating to Lionstone in the fourth quarter?

No. Lionstone is still in [ probe ], but the majority of it has been outflow at this stage is maybe $0.5 billion left.

Got it. And then my final question is on the wealth side. So you guys called out that there are some -- I guess, like last quarter, you said some irrational bids out there for advisers. I was wondering if you could maybe -- is it safe to assume that in light of the disruption in M&A consolidation in the environment, that this level will persist over the next, call it, 6 to 12 months?

Listen, I can't -- I think you'd probably have to speak to others on that. From my perspective, I know people look at the favorable markets and spread revenue right now and the way the equity markets continue to go up. And so maybe they bake that into all their rationalization. But if that changes a bit, I think you'll see a little different environment for that type of arrangement.

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