Ameriprise Financial, Inc.

Welcome to the Q2 2024 earnings call. My name is Brianna and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. During the question and answer session, if you have a question, please press star one on your touchtone phone. As a reminder, the conference is being recorded. I will now turn the call over to Alicia Charity. Alicia, you may begin.

Thank you, operator, and good morning. Welcome to Ameriprise Financial's second quarter earnings call. On the call with me today are Jim Caracciolo, 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 two you will see a discussion of forward-looking statements. Specifically, during the call, you will hear reference to various non-GAAP financial measures, which we believe provide insight into the company operations. Reconciliation of non-GAAP numbers to their respective GAAP numbers can be found in today's materials and on our website. 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 2024 earnings release, our 2023 annual report to shareholders, and our 2023 10-K report. We make no obligation to publicly update or revise these forward-looking statements. On slide three, 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, everyone. As you saw in our release, Ameriprise delivered another strong quarter and first half of the year, continuing our record of delivering strong operating results over many years and operating environments. Looking at the external landscape in the quarter, markets continue to be good with the expectation that there will be a soft landing. While inflation remains sticky, people assume that it's going to come down. However, that could take longer than expected. And there is also the ongoing geopolitical instability and the upcoming U.S. election. So all of this is top of mind for our clients. With that as a backdrop, our second quarter results were excellent. In terms of our operating results, revenues were up 9% from positive business results in markets and, in fact, reached a new record of $4.2 billion. Earnings were also excellent, with EPS excluding disclosed severance costs increasing 17% to $8.72. This is also a new high. We also generated free cash flow of 90% and returned another $693 million to shareholders. And our return on equity was nearly 50% and continues to be best in class. Our assets under management and administration were $1.4 trillion, up 12% year-over-year, with good client net inflows and market appreciation. We have also been adept at maintaining a significant investment agenda that is complemented by a strong reengineering discipline for reinvestment. We freed up additional resources, which is why you're seeing some additional severance costs in the quarter that we will benefit from through the year. In fact, G&A was down 2%, excluding those one-time costs. In wealth management, we're building on what we know works, quality engagement centered on advice and delivered through the Ameriprise client experience. Client satisfaction remains excellent at 4.9 out of 5 stars, and we continue to receive important industry accolades. Total client assets in wealth management was strong at $972 billion, up 17%. We're also attracting new clients in the $500,000 to $5 million range. Our most recent research underscores that our premium client value proposition continues to appeal to people who want to work with a trusted advisor and a trusted firm like Ameriprise in an advice relationship. For the quarter, total client RAP assets reached $535 billion, an increase of 18%. RAP flows also grew nicely, up 34% year-over-year to $7.5 billion. and transactional activity was also up, increasing 19% from a year ago. Cash balances, though still at a higher level, are beginning to shift back to WRAP and other products which represent a future growth opportunity for us. We continue to provide exceptional support and capabilities to our advisors. Both satisfaction and growth remain excellent. Productivity increased another 11% to 968,000 in the quarter. We're focused on leveraging our integrated and effective CRM, engagement tools, and digital capabilities for client deepening and acquisition to complement in-person interactions. We're also using automation and analytics to drive efficiency, helping advisors enhance personalization based on client needs and identifying new growth opportunities. Our advisor force grew to nearly 10,400 in the quarter. We added another 52 experienced advisors and we feel good about our pipeline as well as our differentiated value proposition. At Ameriprise, total assets were up year over year and we closed the quarter at $23 billion. Strong contributions from bank earnings drove a nice increase in net investment income. We continue to have good advisor and client interest in lending with notable growth in pledge loan volumes as our advisors engage their clients in our banking solutions. During the quarter, I spent time with the top 10% of our advisor force at our largest recognition conference. They appreciate what we've built together and that Ameriprise is not just another firm or group of practices, but that we have a supportive and caring culture that helps them have highly successful practices. And our retirement protection businesses have consistently contributed to our positive results. As our advisors provide more advice, they're appropriately incorporating annuity and insurance solutions to serve clients' complex needs. We're driving good sales in our targeted areas. For example, structured annuity sales are up 60% from a year ago, and in insurance, VUL sales are up 24%. RPS continues to add nicely to our overall earnings and free cash flow, and we continue to feel very good about our product mix and position. In asset management, clearly the active industry remains dynamic. Our team remains focused on client needs and generating attractive investment performance. Total assets under management increased 4% to $642 billion as market appreciation more than offset net outflows. We continue to have good investment performance across asset classes and time periods. Globally, 68% of our funds are above the median for the three-year period on an asset-weighted basis. with nearly 80% for five years and 90% for 10 years. We also have 114 four and five star Morningstar rated funds globally. Turning to flows, total outflows were $4 billion, improving $1.3 billion from a year ago, excluding the legacy insurance partner asset transfer, which came through both in retail and institutional channels. In retail overall, We had improvement in gross sales, up $1 billion from last year, with a slight improvement in redemptions. Though we're in net outflows, our equity results are outpacing the industry, and we see an opportunity to gain more flows and fixed income. Institutional flows were slightly positive in the quarter, driven primarily from wins in the APAC region, and we're putting additional emphasis on models, SMAs, and ETFs and beginning to gain traction. We continue to focus on transforming our global asset management business to gain greater operational efficiencies, leveraging resources and technology globally. You saw that our G&A expenses decreased 6% in the quarter, and we have a number of additional actions underway to further derive benefits throughout the year. In asset management, we're maintaining good fee levels and good margins. At Ameriprise, our model and overall firm has enabled us to perform very well over market and environmental cycles. We continue to leverage our global capabilities as well as steadily invest in technology, digital, analytics, AI, products and solutions across our complementary businesses. And in June, we officially recognized our 130th anniversary and we're one of a select number of public companies with this legacy of success and performance. Our ROE of 50% is consistently among the best. Ameriprise has been the number one performer for TSR among the S&P 500 financials since our spinoff in 2005. And we continue to deliver excellent returns and returns to shareholders in a significant way. Looking forward, we have the right strategic focus, growth investments, a talented team, and a meaningful opportunity to drive greater growth. Now, Walter will provide additional color on our financials. Walter?