Ameriprise (AMP) Q1 2026 Earnings Transcript

Motley Fool Transcribing, The Motley FoolThu, April 23, 2026 at 10:59 PM UTC

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Date

Thursday, April 23, 2026 at 5 p.m. ET

Call participants -

Chairman & Chief Executive Officer — James M. Cracchiolo

Executive Vice President & Chief Financial Officer — Walter S. Berman

Takeaways -

Adjusted operating revenue -- $4.8 billion, representing 11% growth, primarily driven by diversified earnings and client engagement.

Adjusted operating earnings per share -- $11.26, up 19%, marking a record level for the company.

Return on equity -- Above 54%, described as "best-in-class" by management and an increase from the previous year.

Total assets under management, administration, and advisement -- $1.7 trillion, rising 12% on positive net inflows and market appreciation.

Advice & Wealth Management client assets -- $1.1 trillion, up 12%; wrap assets reached $664 billion, a 16% increase.

Wrap net inflows -- $6 billion in the quarter amid moderating client flows and seasonal lumpiness.

Adviser productivity -- $1.2 million per adviser, up 10% year over year.

Transactional activity -- Increased 10%, benefiting from annuity and brokerage sales.

Client engagement score -- Client satisfaction remained at 4.9 out of 5.

Adviser team growth -- Sixty-one advisers recruited during the quarter, with activity picking up in the succeeding period.

Huntington Bank agreement -- Signed multiyear deal adding approximately 260 advisers and $28 billion in assets, onboarding planned for late 2026.

Bank assets -- $25.5 billion, up 6%, with stable earnings contribution; yield at 4.6% and duration of four years.

Cash sweep balances -- $29.4 billion, slightly down from $29.9 billion in the prior quarter due to seasonal tax movements.

Certificate balances -- $7.6 billion, down from $8.2 billion in prior quarter amid spread pressures.

Asset management segment AUM -- $706 billion, up 8%, supported by improved net outflows and market gains.

Asset management operating earnings -- $273 million, up 13%, reflecting transformation efforts.

Asset management operating margin -- 44% for this period, above the targeted 35%-39% range.

Net outflows (asset management) -- Improved to $5.9 billion, with retail flows in EMEA affected by geopolitical volatility.

ETF platform -- Surpassed $10 billion in assets under management.

Retirement & Protection Solutions pretax adjusted earnings -- $190 million, with business targeting $800 million earnings per year going forward.

Capital return to shareholders -- $936 million or 88% of operating earnings, including repurchase of 1.6 million shares.

Dividend increase -- Quarterly dividend raised by 6% as approved by the board.

Excess capital and liquidity -- Each at $2.3 billion, underpinning the company’s balance sheet.

Recognition -- Ranked third out of 23 in J.D. Power U.S. investor satisfaction and named one of America's Most Trustworthy Companies by Newsweek and Most Innovative Companies by Fortune for 2026.

Back-office transformation -- Ongoing in Asset Management with substantial completion expected by year-end to support operating leverage.

G&A expense (asset management) -- Increased 4%, with future pace expected to range from neutral to slightly negative as transformations proceed.

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Risks -

Comerica adviser departures caused accelerated outflows, expected to continue into the next two quarters, with financial impact described as immaterial but flow impact notable.

Competitive recruiting environment driving adviser attrition and requiring discipline in trade-offs between recruitment spending and long-term profitability.

Certificate balances declined further due to sustained spread pressures; risk of stabilization or further decline linked to interest rate environment.

Retail flows in EMEA impacted by "headwinds from geopolitical volatility during the quarter," contributing to net outflows despite improvements elsewhere.

Summary

Ameriprise Financial (NYSE:AMP) reported double-digit revenue and earnings growth, record-setting adviser productivity, and continued high client satisfaction, while also executing a major partnership with Huntington Bank to significantly expand advisers and assets later in the year. Margins in Asset Management remained well above targets, supported by ongoing efficiency programs and positive transformation results, even as the segment continued to navigate net outflows, especially in EMEA. Capital return to shareholders remained a key theme, with a raised dividend and high repurchase activity fueled by excess capital, and management emphasized that their core organic growth model, technology investments, and disciplined recruiting and retention approach will drive sustained profitability in the face of competitive industry and market volatility.

The Signature Wealth program demonstrated high early adoption, with a substantial portion of assets classified as new to the platform and additional capabilities such as SMAs in development.

Ameriprise Financial reported best-in-class return on equity and cited the durability of its diversified model as enabling both steady capital return and consistent margin performance through ongoing market cycles.

Management clarified that adviser exits and associated asset outflows from the Comerica relationship will be fully absorbed by end of the next two quarters, with $18 billion in AUM confirmed to exit and Huntington Bank’s $28 billion AUM set to import in late 2026, fundamentally rebalancing flows.

Adviser compensation rose in line with revenues, and management reiterated a deliberate focus on net profitability versus pure volume growth in the face of "aggressive" competitive packages being offered across both W-2 and franchise channels.

Industry glossary -

Wrap assets: Client investment accounts where a single fee covers all portfolio management and advisory services, typically emphasizing holistic, ongoing advice.

SMAs (Separately Managed Accounts): Individually managed investment portfolios, often tailored to high net worth clients and distinct from pooled funds.

AFIG (Ameriprise Financial Institutions Group): A business channel providing wealth management solutions and platform services to banks and credit unions.

Pledge lending: A lending solution allowing clients to borrow against the value of eligible assets held in their investment portfolios.

Full Conference Call Transcript

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 will turn it over to Jim.

Jim Cracchiolo: Good afternoon, and thank you for joining us. As you saw in our earnings release, Ameriprise Financial, Inc. 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 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 are 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 Financial, Inc. 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, and advisement grew 12% to $1.7 trillion, driven by our client net inflows and positive markets. The consistency of these results reflects the strength of our integrated business and the benefits of our approach.

Very clearly, Ameriprise Financial, Inc. 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 interests exceptionally well. That differentiation is reflected in 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% 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 remains 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 Financial, Inc. 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. Sixty-one advisers joined during the quarter, and we are seeing a pickup of activity in the second quarter. And in AFIG, 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 for 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 Financial, Inc. 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 are focused on clear, high-impact outcomes that deepen engagement and deliver relevant and actionable information while enabling highly personalized, quality experiences. In particular, we have designed our tech platform around how advisers work, not individual tools. It connects multiple capabilities like our CRM platform, eMeeting, Advice Insights, and practice workflows into an intelligent ecosystem enhanced with embedded AI and automation. To that end, we feel good about the progress we are making at scale.

Our focus is on using AI and intelligent automation capabilities that help advisers deliver a consistent, high-quality client experience while improving how they operate day to day. In terms of investments and solutions, after the initial launch of Signature Wealth UMA mid last year, we are now expanding the product capabilities and seeing positive early asset movement and engagement. There is meaningful upside as we continue to add capabilities, including the introduction of SMAs and as we broaden the strategy set over time. With regard to our bank solutions, which complement 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 Financial, Inc. ranked third out of 23 firms overall—a terrific result that underscores the quality of the experience we deliver. Turning to our Retirement & 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 B-UL. In addition to meeting client needs, this business continues to generate attractive margins and consistent earnings over time, with 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 median over the 1-, 3-, and 5-year periods, and 85% are above the median 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 four 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 are seeing nice sales within Ameriprise Financial, Inc. from good initial sales in Signature Wealth. Retail flows in EMEA also improved; however, they were impacted by headwinds from 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 longstanding track records and remain a top 10 provider with continued positive flows. In alternatives, our technology and healthcare hedge fund strategies delivered strong performance and sales momentum, and we see good opportunities ahead. Consistent with our approach in wealth management, we are applying advanced analytics and technology within asset management, including in investment research where these capabilities are contributing real value.

At the same time, we are transforming how we leverage our global platform. We are driving greater efficiency across the front, middle, and back office while continuing to strengthen our data foundation. We are 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 Financial, Inc. 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 Financial, Inc. is built to perform across market cycles. We are well positioned to deliver meaningful value over time, manage risk responsibly, and generate resilient performance. Before I close, I want to highlight that the iconic Ameriprise Financial, Inc. reputation 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 Financial, Inc. has been named one of America's Most Trustworthy Companies in 2026 by Newsweek. And from Fortune, Ameriprise Financial, Inc. is also one of America's Most Innovative Companies for 2026, affirming our leadership in technology and driving transformational change. In closing, Ameriprise Financial, Inc. offers a differentiated combination of an excellent client and adviser value proposition, sustainable, profitable growth, and an attractive capital return. With that, I will turn it over to Walter to discuss our financials in more detail.

Walter Berman: Thank you, Jim. Ameriprise Financial, Inc. 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 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 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 us 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 remain 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 declined. 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 their relationship with us.

This resulted in a one-time $25 million make-whole payment for onboarding cost 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 generate 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 four-year duration, with now only 7% of the portfolio in 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. Lastly, 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 us 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; a significant portion of the assets are new money to Ameriprise Financial, Inc. 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 remain 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 in our flows caused by a combination of the aggressive recruiting environment, which drove higher adviser departures, as well as the acceleration of Comerica advisers 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, culminating 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 have 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 adviser group, as a potential succession option. Let us 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 billion in the prior quarter, which is consistent with the seasonal tax pattern we would expect to see. Certificate balances declined to $7.6 billion 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 had 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 and 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 us 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 were $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 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 and 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 owned 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 P/E 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 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 Financial, Inc. delivered solid results in the first quarter. Over the last twelve 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 five 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 and capacity moving forward that enables consistent and sustained profitable growth. With that, we will take your questions.

Operator: Thank you. We will now open the call for questions. We will now begin the question-and-answer session. If you wish to be removed from the queue, simply press 1 again. If you are using a speakerphone, you may need to pick up your handset first before pressing the numbers. Once again, if you have a question, please press 1 on your touch-tone phone. Your first question comes from the line of Wilma Burdis of Raymond James. Your line is open.

Wilma Burdis: Hey, good afternoon. First question, why did not Ameriprise Financial, Inc. lean in more—return more than 88% of operating earnings in 1Q 2026? Especially given the stock was back to kind of Liberation Day levels at certain points? And should we expect 2Q 2026 capital return levels more in line with 4Q 2025 if the stock stays at the current level? Thanks.

Walter Berman: As we indicated, we will be buying back 85% to 90%. Certainly, looking at the P/E ratio and where we are right now, it is a reasonable expectation that we would take advantage of that and be approaching us up to a higher number, and then evaluate it, because we certainly have the capacity to do that and invest in the business continually.

Wilma Burdis: Okay. Thank you. And could you quantify the outflows from the Comerica advisers just to help us arrive at a more normalized net flow number for 1Q 2026? And along 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? Thanks.

Walter Berman: The Comerica outflows started as it relates to the acquisition in the fourth quarter and certainly continued in the first. They were a reasonable portion of the outflows that we had. We are seeing, because of the acquisition, a more accelerated pattern. We expect that pattern to continue and accelerate in the second and third quarter. And as I indicated, based on our current plans, we should finalize the contract by the end of the third quarter. We are seeing that activity.

Jim Cracchiolo: The contract was executed and finalized, and so any financial impact from that is already in what we collect. We booked the $20-some-odd million in the quarter for a make-whole. And so it will come through the flows, but the impact financially to us is immaterial. We cannot give exactly how they will transfer it, but when we are mentioning it, it is the flow. Maybe as we go forward, we will try to break things to be a little clearer on it. But assume that all of it will be out by the end of the third quarter.

And then Huntington will come in the fourth quarter, and that will be moved in the fourth quarter, and that would be, as I indicated in my remarks, about $28 billion.

Wilma Burdis: Okay. Thank you.

Operator: Your next question comes from the line of Brennan Hawken of BMO Capital Markets. Your line is open.

Brennan Hawken: Hey. Good afternoon, Jim and Walter. Thanks for taking my question. I would like to follow up on that last one. I would 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 two. I know you chose not to quantify, but is it reasonable just to take that $18 billion and allocate it across four quarters and call it a day? Or will there be some lumpiness and concentration in particular quarters? Thanks.

Jim Cracchiolo: It is hard to know exactly what that trend line is. This is Fifth Third that has taken over the activity. The deal was concluded; we received what we needed to receive back and the reimbursements, etc. We booked the $20-some million in the quarter for a make-whole. It will come through the flows, but the impact financially to us is immaterial. We cannot predict exactly how they will transfer it, but we understand the need for clarity, and we will try to be clearer as we go forward. You should assume that all of it will be out by the end of the third quarter.

Walter Berman: We are getting advisers giving us notice on terminations. That is why I say it has built up. We cannot really predict the amount, but we are seeing heavier activity take place in the first and starting now in the second quarter.

Brennan Hawken: Okay. But is my $18 billion at least right?

Jim Cracchiolo: $18 billion is right in total. Correct. Absolutely.

Brennan Hawken: Okay. Cool. And then there is a lot of focus within the wealth space on the cash and whether or not these AI tools are going to allow for optimization of cash. It is 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 have the bank as part of the strategy now. Have you considered looking at some of these tools within your own network, and how are you considering that development that is likely to come down the pike?

Jim Cracchiolo: Good question. First and foremost, as Walter outlined, the cash contribution this quarter adds a certain amount to our margin, but the bulk of our earnings and profitability is from the real wealth management part of our business with the fees and the transactions we conduct on behalf of clients. Our revenue from the sweep is a very small part—only a few percent. From our perspective, it is not the bulk of our earnings. We have developed the bank in a way that we can add value from both lending activities and savings programs, including checking.

The amount of cash that will still be in transactional balances, whether AI-assisted or not, will be so low that money will be moving in and out, just like a basic checking account. We already provide significant capability and ease for our advisers and clients to move cash efficiently. That is why our cash levels that we maintain in transactional accounts are, on average, about $100 per account. We are not as concerned. If there are other capabilities that come about that make sense, we will look at them, but we are not looking at that as a major change to what is being held there.

Walter Berman: Our average transactional balance now is about $6,000. As Jim said, it is very active and at transactional levels that meet the minimum standards in the account. The percentage of our earnings that come from cash is lower than most of our peers and therefore certainly manageable.

Brennan Hawken: All fair. Thanks very much for taking my question.

Operator: Your next question comes from the line of Michael J. Cyprys of Morgan Stanley. Your line is open.

Michael J. Cyprys: Great. Thanks for taking the question. I wanted to ask about the bank with the new initiatives that you have across lending and savings. Hoping you could elaborate on how those are contributing today—I realize it is early days. Could you talk about the steps you are taking to drive broader engagement, how you see that ramping, and what are some of the other initiatives you are thinking about in the coming quarters?

Jim Cracchiolo: Thank you for the question. The one that we had launched previously that is growing nicely, and there is still a very large opportunity for us, is pledge lending. As more of our advisers get familiar with it and activate their activities around it, that continues to grow, and compared to some peers, there is a lot more opportunity for us there. We just completed the launch of the checking account, which is a core component of banking, and, in complement with HELOCs, mortgages, and savings programs, we are starting to ramp that up as we get it out to advisers and make information available for clients. This is at the early stages of what we think we can do.

We see some early signs from initial launches, and advisers like what we are providing and the benefits. We hope this becomes a stronger contribution as we go, but we are at the early stages.

Michael J. Cyprys: Great. And then as a follow-up on AI, could you 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 you see some of the biggest opportunities? How meaningful could this be as you think about adviser productivity and, ultimately, efficiency savings for Ameriprise Financial, Inc.?

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Jim Cracchiolo: We view AI as an extension of our total technology strategy that we have been building for many years. It is not a standalone initiative. What differentiates what we are doing is that these capabilities are embedded in an integrated platform built around how advisers work, supported by the data foundation—which is critical in a highly regulated business—and the governance for it. The integration allows us to deploy AI directly into everyday workflow across advice, operations, and service, rather than layering it as a tool in a fragmented system. The result is greater efficiency, better insights, and more time that advisers can spend on client relationships, which drives the outcomes you are looking for.

In the near term, we see productivity gains and selective automation. Longer term, we see capabilities supporting growth by enabling advisers to serve more clients with a higher standard of advice. This is embedded into many of the tools we have: client acquisition, meeting planning and scheduling, meeting preparation, goal-based advice, products and solutions, meeting follow-up and summarization, and business planning. Our eMeeting capability, for example, is already integrated and can pull all the data from adviser engagement with the client, past cases, and the opportunities that we get from Advice Insights to suggest next best actions based on the client's financial situation.

Over time, we will introduce more AI agents to do some of the actual adviser work where appropriate to increase productivity rather than adding staff. We are also embedding capabilities at the company level.

Michael J. Cyprys: That is helpful. Just curious if you are able to quantify any of the productivity gains that you have seen so far.

Jim Cracchiolo: We see clear productivity where advisers have enabled it. For example, our eMeeting takes away hours of work within an adviser practice every week. We have not extrapolated what advisers then do with that, but those are things we will try to quantify as appropriate.

Operator: Your next question comes from the line of Suneet Kamath of Jefferies. Your line is open.

Suneet Kamath: I wanted to come back to AWM organic growth. If I remember correctly, last quarter you expressed some confidence in the 4% to 5% target for the year. I think three quarters now we have been talking about increased competition—you are talking about it again now. Based on what you are seeing, do you still think you can achieve that 4% to 5% this year, or is the increase in competition taking you off that glide path? Thanks.

Walter Berman: When we talk about the organic, the same-store, we are seeing good growth. The area that deviates is on the attrition side. Certainly, in this quarter, Comerica contributed toward that. That is the variable that affects when you look at these arrangements that are being offered at this stage—both on the retention side and on the recruiting side. But the solid core of our growth is there, and we feel very comfortable with it. Then managing the net on the inorganic is the element that deviates. Last quarter, we were up. This quarter, it was down.

It will be lumpy as we manage through it, depending on how aggressive we see the environment and how we gauge the appropriateness of responding. Our objective remains, because we think that is a good objective—the core is solid. Now it is a matter of the environment as it relates to aggressive bidding on recruiting or on retention.

Jim Cracchiolo: People over-index to one metric sometimes. Our core assets grew strongly over the year. We generated the revenue that translated into real profitability we brought to the bottom line. You can always add growth—be an acquirer—but we would never pay way more on an acquisition just to grow size if we do not see an appropriate return over time. Advisers who take a big check may not stay after that check is up. We want to recruit people who know we can help add value and give them strong practice support and a strong client value proposition. Our firm stands out in that regard—client satisfaction, trust.

We have a lot of capital, but we do not look at buying firms as the best way to deliver strong premium value and culture. Some advisers will take a big check, but our pipeline is ramping up again for the second quarter. Underneath, our focus on productivity growth across 10 thousand advisers is what will drive true profitability.

Suneet Kamath: That makes sense. People sometimes over-index to one number in one quarter. My other question: I wanted to drill into this AFIG opportunity. It seems like the cost of being in this business is going to go up. If you have banks that want to be in wealth management but do not want to make the required investments, it seems like that plays into your hand in terms of AFIG opportunities. Will we likely see more of these?

Jim Cracchiolo: You are 100% correct. Huntington Bank kicked the tires and looked for the best provider. Their goal is excellent banking complemented by wealth, and they wanted a partner who could provide the support, capabilities, culture, and environment to deliver great outcomes for their clients. They clearly chose us for those reasons. We think we will have a great partnership. Comerica was working fabulously for the bank—their executives would attest to that. Advisers loved us and would love to stay. We did not lose the business; Fifth Third purchased them and kept it with their operating platform. There will be more opportunity for us.

Walter Berman: One of those is really the deepening of the relationship—what we do with our clients. They recognize our capability to do that with their bank clients.

Operator: Your next question comes from the line of Analyst of Piper Sandler. Your line is open.

Analyst: Thank you. Good afternoon. I appreciate you taking my questions. First, the operating margin in the asset management business was very strong at 44% in the quarter. Are the expense management actions from that segment complete or still ongoing? And any other key callouts for the margin strength? Is that level sustainable, or would you expect it to trend back to your 35% to 39% targeted range?

Walter Berman: The transformation is working its way through, and the back-office transformation has not taken hold yet. You will see it as it goes through. As part of the way we operate, you will see continual transformation and streamlining. Operating expenses will also go up with volume and other related items. We are committed to the transformation and improvement of our processes and getting the benefit of that. The biggest one right now—back office—has not worked its way through the numbers yet.

Jim Cracchiolo: We are advancing—extending our product line in ETFs and SMAs, adding capabilities. We will continue to drive progress on leveraging our global platform with a strong backbone, while investing. We will keep the expense base in check and aim to maintain good margins.

Analyst: Thank you. And then on the Huntington Bank win you announced earlier in the quarter, can you give more color? Was this a competitive takeaway? An overview on the process or competition to get this win, and how long did it take to get over the finish line?

Jim Cracchiolo: This was actually Huntington Bank running their own activities—broker-dealer, etc. They were very cautious because they did not want to give that up unless they had someone who would really provide what they were looking for and take it to another level for them. We love clients that really care about their clients.

Walter Berman: The process was over a year, by the way.

Analyst: Great. Thank you. I appreciate you taking my questions.

Operator: Your next question comes from the line of Steven Chubak of Wolfe Research. Your line is open.

Steven Chubak: Hi. Good evening, Jim and Walter, and thanks for taking my questions. I wanted to double click into the discussion around M&A and appreciate the disciplined approach to recruitment, the reluctance to chase given the more aggressive packages in the market. Our channel checks indicate that TA rates have been and should remain relatively sticky. I want to better understand, one, how that informs your outlook for core NNA over the course of the year, ex the noise related to Comerica, but also the interplay with the distribution expense, which surprised positively and declined about 100 bps year on year.

Walter Berman: We have been fairly stable on that rate, as you saw. We will continue to compete where appropriate and move up within our tolerances. You should see that number pretty much stay in that range as we go through the year. We will participate where appropriate, including compensation. It is pretty much going to be in that range.

Steven Chubak: Thank you. And then on the interplay around M&A expectations?

Walter Berman: As I said, on the NNA, the core is there. Comerica will play through that. Recruitment should marginally affect it going up, but it should be aligned with our objective set as it relates to NNA and that correlation to that rate.

Jim Cracchiolo: The bulk of our activity is organic, so it should be pretty stable.

Steven Chubak: Got it. And for my follow-up on Signature Wealth, you highlighted strong momentum. Could you provide some KPIs—the level of penetration across the platform, the pace of adoption, attachment rate—and how we should think about the incremental fee opportunity as adoption builds?

Jim Cracchiolo: We initially launched in the second half of last year, and with rollout and getting advisers initially engaged, it is starting to really take hold. Any new platform takes time. Advisers who activate it like it and are moving more assets in. A lot of the money going in includes new money. Some comes from other platforms, but repositioning takes time. We are adding capabilities like SMAs. My team says that versus previous wrap launches, this is one of the quickest, and it is progressing nicely against expectations. As we get further along, we will provide more information.

Steven Chubak: That is helpful. Thanks so much for taking my questions.

Operator: Your next question comes from the line of Thomas George Gallagher of Evercore ISI. Your line is open.

Thomas George Gallagher: Hi. First question is on the competition and how you are approaching it. If there are irrational deals being offered in the market and you are holding the line, what is the scale of this activity? Is it limited enough where you are not that worried, or is there a risk that this becomes bigger and could meaningfully impact the size of your adviser base? How broad is this right now, and is it still limited enough that you think you can achieve your objectives, or is it something you will have to react to more forcefully?

Jim Cracchiolo: You could have an RIA where a team thinks that is where they want to move based on what they are being offered. You get a few of those. Then you have competitors offering big checks and promising what they have. When we bring in advisers from some of those platforms, they look at our technology and capability compared to what they had, and it is night and day. What people sell as a story with a big check sounds wonderful, but that is what will occur. We talk to our advisers, explain the reality, and most of them stay. People dangle big checks; some jump, some listen. It is not large in scale.

Our net recruiting, less what we lost last year, was still very positive. This happens in cycles; aggressive packages can blow up later. Some are getting credit for top-line growth, but whether it pays back in a number of years, I do not know. We focus on core profitability, not just cash earnings that the market might overvalue.

Walter Berman: Looking at client growth in client assets—very strong—based on organic growth. When you evaluate growth coming from new assets via aggressive packages and you look at the differential on payback, you almost have to be twice as much to get marginally close to what we are doing organically. The impact factor must be considered given our size and the growth and profitability we have from organic. Turnover in the industry shows when someone leaves for a big check, they most likely leave again. If they leave for a better environment, culture, support that they and their clients relate to, they usually stay.

Thomas George Gallagher: That is helpful perspective, Jim. Level-setting this: if I exclude the Comerica attrition in the quarter, are the advisers that left outside of that under 100? Can you dimension that?

Jim Cracchiolo: There were not a lot of advisers. There were some adviser practices that left, and with that, you get a couple of billion dollars of flows—just like when we brought people in the fourth quarter, you get a couple billion the other way. It was not a large movement of advisers; that is why Walter said it is lumpy. What you should be looking at is our growth of total asset base and total revenue base, and that translated to very strong bottom line—consistent with that. That is what I would pay for if I am investing. If I have a lot of top-line growth but it is not translating after expenses, amortization, financing, etc., that is different.

Thomas George Gallagher: Got it. And then for my quick follow-up, how should I compare the Huntington deal with a normal 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 Huntington. How would you compare the IRR on that deal versus a normal smaller deal?

Walter Berman: It is a 10-year deal—a growing deal with a strong adviser base. The paybacks are within our ranges and make sense for both of us. This is a large transaction that will stay with us and grow with us, with stability. You cannot compare it to a one-off. The IRRs are very good and appropriate, with strong stability and growth potential.

Operator: Your next question comes from the line of Kenneth Lee of RBC Capital. Your line is open.

Kenneth Lee: Hey, good evening. Thanks for taking my question. 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 and throughout the next couple of quarters?

Walter Berman: Most of that will occur in the fourth quarter.

Kenneth Lee: Okay. Great. And one follow-up, if I may, in terms of the G&A expense, recognizing the back-office optimizations still ongoing within Asset Management. Any outlook around overall G&A expenses there?

Walter Berman: In Asset Management, G&A should track in the range of neutral to a small negative. We are getting momentum, and as I mentioned, we have the back office coming through. So it is in that range.

Kenneth Lee: Got it. Very helpful.

Operator: Next question comes from the line of Alexander Blostein of Goldman Sachs. Your line is open.

Alexander Blostein: Hey, good afternoon. This is Anthony on for Alex. To follow up on the recruiting discussion, what channels are you seeing the most aggressive recruiting packages? I appreciate you holding the line there, but at what point would you need to revise your payout packages if the industry continues to trend in that direction?

Walter Berman: You are seeing it in both the W-2 and the franchise channels—both have gotten extremely aggressive on fronts and commitment levels. It is across the board. We gauge payback and the risk-return of it. We rely on organic growth. Any adjustments must make sense with payback across all factors, not just trying to get volume.

Alexander Blostein: That is helpful. For my follow-up, certificate balances continue to trend downward. How are you thinking about the trajectory of balances from here?

Walter Berman: That is strictly a spread play. We will probably see it stabilize and stay in this range or increase a little more—again, strictly spread depending on where rates are going.

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

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