The stock and bond volatility linked with the tariffs that President Donald Trump unveiled in April on "Liberation Day" hurt the quarterly earnings of one of the largest wealth management firms.
The Ameriprise Advice and Wealth Management unit's profit took a 1% hit in the second three months of the year, due to that brief slump as well as the Fed's interest rate cuts in 2024, the Minneapolis-based firm said in its July 24
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To see the key wealth management takeaways from Ameriprise's second-quarter earnings statement, scroll down the page. And follow these links to see analysis of the company's results from
Financial advisor recruiting and productivity
While the company no longer discloses the exact number of advisors across its independent franchise and employee channels, Ameriprise stated that the amount of recruited experienced brokers jumped 40% year over year to 73 in the second quarter.
Meanwhile, stronger advisor productivity tied to business growth and asset appreciation boosted adjusted operating net revenue per advisors on a trailing 12-month basis by 11% to a record $1.07 million.
Client assets
The flow of incoming client assets tapered off significantly, even as climbing asset values compared to the same time a year ago pushed advisory and overall customer holdings to new highs. In addition, the company said it received "a good initial response" from advisors and clients to the launch of its unified managed account, the
Total client assets rose 11% to $1.08 trillion, while advisory wrap assets surged 15% to $615.2 billion. On the other hand, total asset flows fell 35% to $4.28 billion, while the amount of incoming advisory holdings dropped 28% to $5.38 billion.
The wealth management unit's results "were impacted by elevated market volatility driven by global trade policy uncertainty, as well as normal seasonal tax payment trends," according to the firm. "Clients and advisors remained focused on positioning portfolios to meet long-term financial planning goals."
Expenses
The advisors' productivity, in turn, helped push up the firm's costs in the second quarter. Expenses increased 9% from the same time a year ago to $2 billion, driven by higher costs from compensating the advisors for their expanded business, alongside capital investments into growth programs.
Bottom line
For the quarter, the firm's wealth management unit generated pretax adjusted operating earnings of $812 million on topline revenue of $2.81 billion, for a profit margin of 28.9%. That margin slipped by 220 basis points from the second quarter of 2024, while the income ticked down 1% and the revenue escalated by 6%.
Those figures "reflected the impact from market volatility on fee-based earnings within the quarter, as well as lower interest revenue from the 100 basis point reduction in the federal funds effective rate in late 2024," according to the firm. "The equity market
Remark
In a prepared statement, Ameriprise CEO Jim Cracchiolo cited the volatile capital markets in the second quarter, alongside the record metrics on advisor productivity and client assets.
"Our advice value proposition is differentiated in the industry and helps clients feel confident about achieving their long-term goals," Cracchiolo said. "That's why we're continuing to invest in the business and transforming our operating model to drive best-in-class margins and sustainable shareholder value creation."
