Ameriprise Financial, Inc.

On the call with me today are Jim Cracciolo, 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 .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 to the current status 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 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 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 today's call will focus on adjusted operating results. And with that, I'll turn it over to Jim.

Good morning, everyone, and thanks for joining our call. As we shared in our release, Ameriprise had another good quarter in first half of 2025, continuing our record of generating strong results over many years in market environments. We feel very good about the strategic direction and competitive strengths of our business, and importantly, our ability to help clients achieve their long-term goals. Reflecting externally, equity markets moved around quite a bit in the quarter, and investors paused and kept more cash on the sidelines. That said, markets proved to be remarkably resilient given ongoing trade dynamics. As we saw, economic conditions were on a firm footing in the first half. However, questions remain around the next steps and impact of tariffs. With that backdrop, our assets under management, administration, and advisement grew to a new high of $1.6 trillion. And in terms of financials, adjusted operating results were also good. Total revenues increased 4% from asset growth and strong transactional activity. Earnings per share increased another 7%, and our return on equity remains among the industry's best at a very strong 52%. Across the business, we continue to implement a significant investment agenda. That includes investments in our leading client experience, technology, digital capabilities, advanced analytics, and AI. And this is made possible by our consistent expense discipline and ongoing transformation efforts across the firm. On the wealth side, we're delivering strong value through our quality client advisor engagement centered on our goal-based advice experience. And we see this reflected in the excellent client satisfaction that we consistently earn of 4.9 out of 5. We had strong client engagement, and client assets grew nicely again in the quarter to a new record of $1.1 trillion, was up 11%. Total RAP assets were also up, increasing 15%. RAP net inflows were 5.4 billion, and reflected the higher market uncertainty and seasonal impact of client tax payments. And transactional activity was also good. Client total cash holdings increased in the quarter and remained very high, as we would expect based on the market situation and near-term rates. And these assets on the sideline represent a future growth opportunity. We continue to provide exceptional support and capabilities to our advisors and teams. They're staying closely connected with clients and benefiting from the investments we're making. For example, our intelligence dashboards provide in-depth analysis of key areas of advisors' practice like client contact, prospects, and acquisition. We're also using automation analytics to drive efficiency, help advisors enhance personalization based on client needs, and identify opportunities for deepening and engagement. And in June, we made a significant addition to our wealth management capabilities with the launch of Signature Wealth, which we feel will help advisors to manage client assets even more holistically and efficiently. It brings the best of our current advisory platform into a flexible, unified management account and frees up capacity for our advisors to further focus on client engagements and practice growth. With the excellent platform we've built and the integrated support we provide, our advisors continue to be highly productive and engaged, and productivity grew another 11% to $1.1 million per advisor. Regarding recruiting, we continue to bring in good recruits, another 73 experienced advisors joining Ameriprise in the quarter, and we feel good about our pipeline, as well as our differentiated advisor value proposition. These advisors appreciate our reputable brand, practice, support, and financial strength and stability. We're also hearing how their clients feel overwhelmingly positive about moving to Ameriprise, which is terrific. The bank is also doing well. Total assets were up 6% and were earning good spread. Loan growth at the bank is also good, driven by pledge. As we've shared, we're launching new products like a new CD that came out in the second quarter, and in the coming months we'll be bringing out HELOCs and checking accounts to add to our product offering. And I would highlight that our wealth business consistently delivers best in class margin. It was 29% for the quarter. As part of our larger solution set, our retirement, income, and protection products helped serve clients' full financial picture. We're driving good sales in our targeted areas like variable universal life, variable annuities without living benefit riders, and structured annuities. In fact, we saw a nice pickup of 25% from the first quarter within our structured solutions. Advisors appreciate having these strong, consistent offerings on the platform that have been developed and seamlessly integrated with our client experience. And we're working closely to support them to engage clients to meet more of their needs. It was another strong quarter for RPS. The business consistently generates good returns for the company and strong free cash flow. The RPS business is one of the most profitable insurance businesses in the industry. Turning to asset management, we continue to deliver attractive earnings and drive operational efficiencies. Total assets in the management administration increased to $690 billion, up 2% year over year, and 5% sequentially. Our investment performance continues to be strong across both equity and fixed income. We had excellent long-term performance. More than 70% of our funds were above the median on asset weighted basis for the five-year period, and more than 80% over 10 years. Regarding the one year, equity performance slipped a bit. However, short-term fixed income performance is very strong at more than 80% above the median. And 99 of our funds were rated four or five stars by Morningstar. Regarding flows, we had 8.7 billion of our flows in the quarter, largely driven by higher institutional impacts. In global retail, gross sales increased about 10% year over year, but like others, we had higher underlying redemptions. April was especially tough for the industry, given the markets. Looking at a flow rate in the US versus active peers, we're a bit ahead in terms of equities and a bit below in fixed income, but we've narrowed the gap. And in EMEA retail, higher redemptions were also a fact that it drove outflows in the quarter, although we did see a nice pickup in UK multi-asset strategies. On the retail product front, we're adding to our active research enhanced index ETF lineup in the US and gaining flows. And in coming months, we will be extending this capability in EMEA with the launch of a series of active ETFs in the UK and Europe. In terms of the institutional business, we have some higher redemptions that included the previously announced limestone outflow. As we move forward, we're adding more CLOs and earning key equity fixed income and hedge fund mandates across regions as we had some good results in terms of cross-sell and deepening relationships with current clients. In asset management, we continue to manage expenses extremely well. We're driving efforts to realign resources, streamline systems and enhance our processes in the US and globally. We're significantly transforming the business while at the same time maintaining our fee rate. Asset management margin was 39% in the quarter at the top end of our target range up nicely from our expense discipline. For Ameriprise overall, our complement of businesses has enabled us to perform very well over different environments and market cycles. Overall, we continue to generate very strong free cash flow and we have one of the highest returns on equity at more than 50%. We're also having a good balance of share buybacks and dividends. And we continue to return to shareholders in a significant way and we'll be looking to increase in targeting an 85% payout ratio for the balance of the year. I'd highlight that Ameriprise received some new recognition that adds to the portfolio of accolades that we've earned. We were recently recognized in 2025 by Kiplinga's Reader's Choice Award for outstanding overall satisfaction, quality of advice, trustworthy advisors, and for being the most recommended among wealth managers. And second, Ameriprise was also named one of America's most innovative companies 2025 by fortune. Looking forward, we feel very good about our ability to continue to manage and adjust for the environment. We're staying focused on our strategic priorities and generating good returns for the business. Now, Walter will provide additional color on our financials. Walter?

Thank you, Jim. Ameriprise delivered continued solid performance with exceptional balance sheet strength in a volatile and uncertain environment. Adjusted operating EPS increased 7% to $9.11 with a strong margin of 27%. Adjusted operating net revenues increased 4% to $4.3 billion from asset growth while absorbing the market and rate impacts across our businesses. Expense discipline remains strong from our ongoing firm-wide transformation initiatives. -to-date G&A expenses improved 3% and we will maintain G&A expenses at this level for the remainder of the year. It was a solid quarter across our businesses and we'll get into the details of our segment results on the upcoming slides. As we exited the quarter, our balance sheet fundamentals remain very strong and we are well positioned to navigate potential volatility going forward. A stable 90% cash flow generation across our segments combined with our strong balance sheet fundamentals enabled us to return 81% of operating earnings to shareholders in the quarter. We remain committed to returning capital to shareholders at a differentiated pace and plan to increase our payout ratio to 85% for the second half of the year. On slide 6, you'll see the EPS growth of 7% was impacted by the market dynamics in the quarter. Assets under management, administration, and advisement increased to a record high of $1.6 trillion, benefiting from strong wealth management client flows over the past year in equity market appreciation. We delivered strong profitability with consolidated margin of 27% from 4% revenue growth and continued expense discipline. We continue to generate a best in class return on equity of 52%. On slide 7, you see the solid metric results from wealth management given the elevated market volatility and normal seasonal tax payment trends. Revenue per advisor grew 11% to a new high of 1.1 million. This resulted from 11% increase in client assets to 1.1 trillion with client net inflows of 34 billion over the past year. Wrap assets were up 15% to 615 billion with wrap flows of 33 billion over the past year, representing a 6% annualized flow rate consistent with the prior year. With the volatility in the early part of the quarter and tax season in April, we saw slower flows in the second quarter following a strong first quarter. In total this year, wrap flows have been 14 billion consistent with the prior year. In addition, transactional activity levels remain strong. Cash sweet bounces were in line with expectations at 27.4 billion compared to 28.6 billion in the prior quarter, reflecting normal seasonal tax payments. We are seeing nice momentum in our experienced advisor recruiting. Being affiliated with a firm that has an excellent reputation and strong balance sheet fundamentals is attractive to advisors, particularly in the volatility and uncertain environments we've seen this year. Advisors find our value proposition to be compelling, and we are focused on making sure our transition factors are attractive to experienced advisors that share our values and commitment to the client experience. On slide eight, you'll see strong financial results from wealth management. Adjusted operating net revenues increased 6% to 2.8 billion. Revenue growth benefited from strong cumulative wrap net inflows and market appreciation over the past year, which more than offset lower spread revenues and the impact from unfavorable markets within the quarter. Adjusted operating expenses in the quarter increased 9%, with distribution expenses up 10%, reflecting growth and advisor productivity. G&A expenses increased 6% to 435 million in the quarter, which was a result from higher growth investments and volume related expenses due to business growth. However, for the year, we expect low to mid single digit growth in G&A. Pre-tax adjusted operating earnings were 812 million, which included the impact on wrap assets from the dip in equity markets in April. However, we saw a substantial recovery in the equity markets by the end of June, which positions us well as we enter the third quarter. In fact, advisory wrap assets on June 30th were 6% higher than the average for the second quarter. We saw a continued strong contribution from both core and cash earnings in the quarter. Our core earnings grew in the low to mid single digit range after absorbing the market impact in the quarter. Cash earnings saw a high single digit decline from the impact of the Fed funds effective rate reduction since the latter part of 2024. Our strategy leveraging Ameriprise Bank has been important in minimizing the impact from Fed funds effective rate reductions on our AWM business. In fact, we continue to see a modest increase in net investment income in the bank this quarter. Margins remain best in class at 29%. Turning to asset management on slide nine, financial results were solid in the quarter. Up earnings increased 2% to 222 million. This strong quarter reflected equity market appreciation and the positive impact from expense management actions, partially offset by the impact of net outflows. Total assets under management and advisement increased to 690 billion, up both for year over year and sequentially from higher ending market levels. Revenues were 830 million with a stable fee rate of 46 basis points. Adjusted operating expenses improved 3% and importantly, GNA expenses improved 5%. As Jim said, we are proactively driving operational transformation across our global footprint, including leveraging capabilities across Ameriprise and the benefits from these initiatives is evident in our GNA expense reductions. Margins reached 39% in the quarter, which is at the high end of our target range. Let's turn to slide 10. Retirement and protection 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 9% to 214 million. The strong and consistent performance of the business reflects the benefits from favorable life claims, strong 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 solution sales were solid at 1.4 billion. Structured annuity sales remain strong, but were down relative to a very strong level in the prior year. Turning to the balance sheet on slide 11. Balance sheet fundamentals and free cash flow generation remain strong. We have an excellent excess capital position of 2.3 billion above regulatory requirements, and we have 2.1 billion of available liquidity, and our investment portfolios diversified and high quality. 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 solid results in the second quarter, which is a continuation of our long track record navigating various market environments. Over the last 12 months, revenues grew 8%, adjusted EPS increased 13%, return on equity grew 240 basis points, and we returned $3 billion to shareholders. We had similar growth trends over the past five years, with 8% compounded annual revenue growth, 17% compounded annual EPS growth, return on equity improving 16 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.