Ameriprise Financial, Inc.

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 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 first quarter 2025 earnings release, our 2024 annual report to shareholders, and our 2024 10K 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 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 We'll focus on adjusted operating results. And with that, I'll turn it over to Jim.

Good morning, everyone. Thanks for joining our first quarter earnings call. Overall, Ameriprise had a good start to the year. We're actively engaging our clients and delivering strong financial performance with contributions from across the business. I know that the current operating environment is top of mind for everyone. We've seen elevated and ongoing market volatility due to lack of clarity around the tariffs and general economic uncertainty. And we heard from Fed Chair Powell last week that the Fed is still trying to navigate what it all means for the economy, inflation, and interest rates. With that in mind, Ameriprise remains very well positioned. We know that we can navigate what's ahead because of our diversified business, strong client value proposition, and excellent record for managing economic uncertainty and market volatility. Our financial strength is another important differentiator. With the business growth and positive markets overall in the quarter, assets under management, administration, and advisement grew nicely to $1.5 trillion. Our first quarter adjusted operating results were also good. Total revenues increased 5%, from a positive asset growth and flows and higher transactional activity. Earnings were up 8% from strong business growth and our ongoing expense discipline with EPS up 13%. And our return on equity, XAOCI, remains best in class at 52%. In terms of the business highlights, In wealth management, our advice value proposition and the way we engage clients is very effective in helping them remain on track to achieve their goals and feel confident, and even more so during increased dislocation. Our clients have been strongly engaged in the quarter with assets up 7% to $1 trillion. We also have good inflows of $10.3 billion across our platform. Money has gone to work in a number of product categories. WRAP activity was strong. Flows grew 34% to $8.7 billion, representing a 6% annualized flow rate in the quarter. And total WRAP assets grew to $573 billion, up 10%. Transactional activity was also robust, up 6% year over year, particularly in retail brokerage and financial planning. And client cash levels remain high overall at $86 billion, which represents a nice opportunity for money to be put back to work. We're working closely with advisors and directly with clients to provide highly relevant investment and market insights, as well as important context for maintaining a long-term perspective. We had great client engagement, including record levels on our highly rated mobile app and secured site during the recent volatility. And we continue to invest in our advice, value proposition, and practice support. We have one of the best advisor platforms in the business in the way we engage and support advisors with our entirely integrated ecosystem. This includes our significant investment in our goal-based and investment advisory solutions. We're adding an even more comprehensive way for clients and advisors to manage investments. It's a powerful new UMA called Signature Wealth that offers the best features of our advisory platform in a streamlined and innovative way. We're currently testing it and plan to launch it more broadly later this quarter. The tech environment that we've built has helped us achieve excellent availability. Important at any time, but particularly during volatility, our proprietary client advisory systems have performed extremely well with increased traffic. and we continue to innovate and use emerging technology to further enhance how we do business. In fact, Ameriprise just earned the 2025 Technology Innovation Award from the Bank Insurance and Securities Association for our advisor practice tech platform. Practice tech streamlines key practice actions into one integrated platform that makes operations much more efficient and effective. With the quality of our advisors and our consistent investments, Advisor practices continue to grow nicely. Productivity increased 12% in the quarter to approximately $1.1 million per advisor, reflecting our best-in-class capabilities and strong asset growth. We also had another good quarter for recruiting, with 82 experienced, productive advisors joining Ameriprise based on our advisor value proposition, strong support, and financial strength. I am pleased to share that we continue to earn strong client satisfaction and advisor recognition. The Ameriprise client experience helped drive leading client engagement, and our clients continue to rate us 4.9 out of 5 for satisfaction. And Ameriprise recently earned Harts and Wallets' top performer recognition in the client categories of understands me and shares my values, and unbiased puts my interests first. And a large number of our advisors were recognized in the quarter in rankings like Forbes' top 1,200 wealth advisors. the best in state women wealth advisors, as well as the top 100 women wealth advisors list. We also launched the next phase of our advertising in the quarter to further promote a highly effective advice value proposition and excellent client satisfaction. Our bank is another important capability for Ameriprise. In just the past few years, assets have grown to more than $24 billion. The bank is generating attractive earnings as we focus on deepening client relationships and bringing in assets held elsewhere. The team has just launched our CDs and coming later this year will air HELOCs and checking accounts to our offering. The bank made important contributions during the quarter, minimizing the carryover impact from rate cuts. With the bank in our investment portfolio, we're able to generate sustained interest earnings, even if the Fed decides to change rates. Overall margin for wealth management remains strong at 29%. Turning to retirement protection solutions, the business continues to drive transactional activity within wealth management and generate strong earnings. In annuities, we had significant growth in our traditional VA without living benefits, up 28%, and had good sales in our structured product. And we continue to see strong sales in our life business, where we're focused on VUL which is up 22% in disability products. I also reinforce that RPS consistently delivers strong earnings, profitability, and free cash flow as part of our diversified business. We consistently generate one of the highest returns on equity in the industry, and RPS also provides important stability, which is particularly meaningful during periods of volatility. And in asset management, we continue to generate good earnings that reflect the actions we've taken, but it was a more challenging quarter for flows. For the quarter, assets under management and advisement were $657 billion. Overall, investment performance remains quite good, even in a volatile environment. We delivered good performance across one, three, and ten-year periods. In total, we have 101 Columbia Threadneedle four- and five-star Morningstar-rated funds. And we were just rated in the latest Barron's Best Fund Family Rankings. Columbia Threadneedle was in the top 15 for all three timeframes, 1, 5, and 10 years. Regarding flows, we had higher outflows of $18.3 billion in the quarter. Retail outflows were $5.8 billion, driven by higher redemptions. And institutional outflows of $11.5 billion were impacted by a large client repositioning into passives. as well as the exit of the limestone business. In this climate, active management is even more important, and we believe in the benefits it can provide. In terms of priorities, we're focused on ensuring that we're positioning strategies that are appropriate for the environment and help us garner flows. We're also looking to build momentum and key product capabilities, including active ETFs, SMAs, and model delivery. And the team has made excellent progress over the past few years, significantly transforming, improving our cost base while maintaining our fee rate. They've driven important operational efficiencies that combined have helped us expand margins. In fact, the margin in the quarter was extremely strong at 43%. And for Ameriprise overall, we continue to both invest in the business and manage expenses very well. As you saw, expenses across the firm were down 5% due to our transformation efforts. In a difficult environment, like we've seen so far in the second quarter, I'd like to reinforce some important themes from the company's perspective. Our diversified business generates substantial free cash flow across market cycles. We maintain excellent liquidity. With our cash flow, we're able to invest and return to shareholders at attractive levels. we have a strong excess capital position that also gives us the flexibility to be opportunistic. And our discipline and proven risk management is highly effective even during periods of increased volatility. In terms of our capital return for the quarter, we continue to return strongly to shareholders. Another $765 million to shareholders through our dividend and share repurchase program. In fact, today we announced an 8% increase in our dividends. This is the 21st dividend increase since our spinoff 20 years ago. And with that, our board just approved a new sizable $4.5 billion share repurchase authorization, given we are completing our current authorization early. For the firm overall, it was a good start to the year. The high level of results that we consistently achieve is driven by the totality and strength of Ameriprise. And while it's a more volatile environment, we remain well positioned. Finally, the team and I are always proud of the accolades we earn in the marketplace. In addition to the awards I referenced, Ameriprise has just been recognized by Fortune as one of America's most innovative companies, 2025. Now, Walter will provide more detail on the quarter, and then we'll take your questions. Walter?

Thank you, Jim. Ameriprise delivered continued solid performance with exceptional balance sheet strength, providing us flexibility to be opportunistic. Ameriprise had strong underlying performance across our diversified businesses, particularly in light of the slowing equity market appreciation and the full impact of the Fed Fund's rate reductions since September, with adjusted operating EPS increasing 13% to $9.50 in the quarter. This result reflects positive flows and activity levels in wealth management, the initial impact of proactive changes made to the bank's investment portfolio, including the reduction in floating rate exposure, and the benefit to expenses from our transformation initiatives. As we exit the quarter, our balance sheet fundamentals remain very strong and we are well positioned to navigate potential volatility going forward. We have an excellent excess capital position of $2.4 billion with $2.5 billion of available liquidity. The investment portfolio is diversified and highly rated. Our hedge programs continue to perform extremely well, and we have strong and consistent free cash flow generation across all segments. We have a successful track record of navigating market cycles Looking ahead at the potential for continued elevated volatility levels, we continue to be well positioned to navigate these scenarios with the flexibility to be opportunistic based on the diversity of our businesses, the quality of our earnings and margins, and underlying balance sheet strength. On slide six, you will see the strong EPS growth demonstrates the strength and leverage points within our business model. Assets under management, administration, and advisement increased to $1.5 trillion, benefiting from strong net decline flows over the past year and equity market appreciation, which more than offset the impact of outflows in asset management. We delivered strong profitability with consolidated margins of 27%. Revenues grew 5%, reflecting slower equity market appreciation, and impacts from lower Fed funds rates since September. At the same time, G&A expenses were down 5%. G&A expenses continue to be well managed and demonstrate our focus on operating efficiency and effectiveness while still making the right investments in areas that will drive future business growth. Our stable 90% free cash flow generation costs Our segments combined with strong balance sheet fundamentals enabled us to return $765 million or 81% of operating earnings to shareholders in the quarter. We remain committed to returning capital to shareholders at a differentiated pace and announced an 8% dividend increase and a new share repurchase authorization of $4.5 billion through June 30, 2027. On slide seven, you see the strong metrics results from wealth management. Revenue per advisor grew 12% to a new high of $1.1 million. This resulted from a 7% increase in client assets to $1 trillion with strong client flows of $10.3 billion. RAP assets were up 10% to $573 billion from $8.7 billion of RAP flows in the quarter and $35.3 billion over the past year. In addition, transactional activity levels continue to improve. AWM cash balances declined 8% year-over-year to $40 billion. Bank balances increased in the quarter, while certificates and off-balance sheet cash declined. 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% and a 3.6 year duration. We reduced cash levels at the bank and further reduced our floating rate securities to only 15% of the securities portfolio, both of which have reduced our exposure to lower rates. We also brought an additional $500 million in balances onto the bank's balance sheet. Those balances, as well as portfolio maturities and prepayments, were invested at a 5.5% yield and four-year duration. And you're aware of the crediting rates changes on cash sweeps that were made early in the quarter. These factors all help to offset the carryover impact from the Fed funds reduction since September and will support net investment income in the bank going forward. On slide eight, you see the strong financial results from wealth management. Pre-tax adjusted operating earnings increased 4% to $792 million, with strong contribution from both core and cash activities. Core contributions continued a double-digit increase driven by good business fundamentals and equity market appreciation. Cash experienced a single-digit decrease primarily driven by Fed funds' effective rate reductions since September. Adjusted operating net revenues increased 9%, to $2.8 billion even with fewer fee and trading days. Revenue growth from higher client assets and increased transactional activity driven by advisor productivity more than offset lower spread revenues. Adjusted operating expenses in the quarter increased 11% with distribution expenses of 14% reflecting a business mix and higher transactional activity. G&A expenses increased only 1% to $424 million in the quarter, reflecting strong expense discipline with continued growth investments and volume-related expenses due to business growth. Margins remain solid at 29%. The business is well positioned to navigate potential volatility going forward based upon continued strong advisor productivity, the high-quality investment portfolio that will benefit from actions we've taken, and continued disciplined expense management. Turning to asset management on slide nine. Financial results were solid in the quarter. Operating earnings increased 17% to $241 million. This strong quarter reflected equity market appreciation and the positive impact from expense management actions partially offset by the cumulative impact of net outflows. Total assets under management and advisement decreased to $657 billion. Net outflows were elevated at $18.3 billion, reflecting institutional outflows from a large client repositioning into passive and the exit of limestone. Revenues were at $846 million, down 1%, reflecting slower market appreciation, net outflows, and fewer fee days. The fee rate was stable in the quarter. Adjusted operating expenses decreased 7%. G&A expenses improved 12% from a year ago, primarily driven by proactive transformation initiatives, as well as lower performance fee compensation. These transformational initiatives will continue to benefit results and help to offset the impact of net outflows. Margins reached 43% in the quarter. Let's turn to slide 10. Retirement and protected solutions continue 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. Pre-tax adjusted operating earnings in the quarter increased 8% to $215 million. The strong and consistent performance of the business reflects the benefit from stronger interest earnings and higher equity markets. 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. Overall retirement and protection sales were strong at 1.2 billion fueled by client demand for structured variable annuities and variable universal life products. In the corporate segment, I want to mention long-term care pre-tax adjusted operating earnings was $14 million. Turning to the balance sheet on slide 11. Balance sheet fundamentals and pre-cash flow generation remain strong with $2.4 billion of excess capital, $2.5 billion of available liquidity, and a diversified high-quality investment portfolio. We have diversified sources of dividends from all of our businesses enabled by strong underlying fundamentals. This supports our ability to consistently return capital to shareholders and invest for future business growth. Ameriprise's consistent capital return strategy drives long-term shareholder value. In summary, on slide 12, Ameriprise delivered excellent growth in this first quarter, which is a continuation of a long track record of outperforming our stated financial targets. Ameriprise has a proven track record of navigating through challenging market environments over the longer term. Over the last 12 months, revenues grew 10%, adjusted EPS increased 16%, return on equity grew 280 basis points, and we returned $2.9 billion of capital to shareholders. We had similar growth trends over the past five years, with 8% compounded annual revenue growth, 15% compounded annual EPS growth, return on equity improving 13 percentage points, and we returned over $12 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 focus on profitable growth. With that, we'll take your questions.