American Express follows up the spin-off of its American Express Financial Advisors (AEFA), announced on February 1, 2005, with a May 25 rollout of Ameriprise Financial. Amex also announced that its new asset management and annuity advisory service will be known as Riversource.

AEFA will go to its shareholder base, thus forming an independent, publicly traded financial advisory company. According to Amex spokesperson David Kanehan, the changeover won't take place until the third quarter of 2005. The Ameriprise Financial brand won't kick-start until August 1, 2005.

Amex isn't talking much about what effect, pro or con, the spin-off and the Ameriprise rollout will have on its advisor base. "It's just too early to talk about any impact yet," he said. "We'll know a lot more later in the year."

But industry observers say that the financial services giant was only too happy to jettison its financial advisory arm. "I think the spin-off is great news for American Express and its shareholders," says Ned Bennett, chief executive officer of Chicago-based Brokers Express. "Amex has really struggled with the financial advisers market so it's a net plus for them to move on and focus on their core brands like travel packages and credit cards."

But Bennett isn't so sure that the spin-off is good news for advisers. "It's problematic," he adds. "American Express financial advisers are in a tough spot. Do you fish or cut bait? I know that I'd be exploring other options."

American Express is expected to support the Ameriprise Financial brand with a
"huge" nationwide advertising campaign, starting in autumn, 2005.

----------------------------------------------

Ameriprise Financial: At a Glance

Number of Financial Advisors– 10,500

Assets -- $400 Billion

Number of Clients– 2.5 Million

----------------------------------------------