Ameriprise - Better or Worse?

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Jun 10, 2005 4:12 pm

Will Ameriprise be a better broker dealer? Will she capitalize on her strengths - will technology get better - will service improve? Is it worth it to be affiliated with a brand. I like the payout, and pushing above fixed costs to pure profit increase. Plenty of access to non-prop, no pressure to sell insurance. Don't wear a neck tie! Or will we get hosed by the scorecard for not selling enough prop? Best or worst of all worlds (wanna be wealth manager, wanna be mass affluent)Anyone who has a serious vested business interest care to comment?

Jun 13, 2005 12:45 pm

I think it will depend on where you fall within the organization.  Many insiders have speculated that if the firm needs to, it can cut lower-producing P1 advisors and use the larger producers and P2s as a "profit-center".  Plus, goals may become more stringent to achieve as they strive to solidify their position as a BD independent of the blue box.


Just my take, but, I am an outsider.

Jun 13, 2005 5:54 pm

What was that?

Jun 14, 2005 7:55 pm

Oh, saw your Chinese "peace" characters and threw out some pin yin Mandarin, in case you speak Chinese. Sorry.

Jun 15, 2005 9:49 am

Not a problem.  I figured it was something along those lines.  I don't speak it, but have always found the language fascinating.  And, hey-will all of the pissing and bickering that goes on, I figure, why not have a little peace!


Jun 15, 2005 9:54 am

I've been working with a number of AEFA advisors recently as a recruiter.  I would say that the vast majority is cautiously optimistic and planning on staying put.  That said, there are many that are entertaining other options on the wire, bank and/or indy side. 


I think when all is said and done, it won't affect the top producers, but the newer or smaller advisors might feel a crunch within a few years.  They more than likely won't do anything drastic off the bat, since that would cause a mass exodus. 


I have encouraged many of the advisors I have spoken with over the past four months to at least listen to other firms and what they have to offer whether it is a firm we represent or not (I'm more of a consultant than anything).  Regardless if things change with AEFA, it might be a better opportunity.  The grass isn't always greener, but you can't know until you peek over that fence.


If you'd like to hear what some folks have been saying, PM me and let me know what you'd like to hear.  I'm by no means a gossip, but there are some interesting points that have been raised.

Jun 15, 2005 12:30 pm
BrokerRecruit:

I've been working with a number of AEFA
advisors recently as a recruiter.  I would say that the vast
majority is cautiously optimistic and planning on staying put. 
That said, there are many that are entertaining other options on the
wire, bank and/or indy side.


Hey BrokerRecruit, what's it like recruiting from Ameriprise? 
Do those reps take most of their clients with them?  Or is it
entirely different from recruiting from another wirehouse?


Also, what do you know about Waddell & Reed?  That's one company many don't know about.




Jun 15, 2005 5:19 pm

There's two major platforms at AEFA. P1 are typically new in the business and have to meet certain production levels to keep their jobs. It's a lesser payout with a draw.  P2 are independent franchise owners with a much higher payout but they pay all their own expenses. One nice thing about a P2 advisor is that they can sell their book when they leave.  But my experience has been that they take their clients with them just like any other firm.

Jun 15, 2005 5:46 pm

The major issue with AEFA reps is the proprietary investment issue.  There are many P1s and P2s that have a significant amount of clients and assets invested in these.  Many I have spoken with say they are around the 50-60%+ in proprietary.  They either have to leave these clients behind, or pay the surrender charges to move these accounts. 


It makes it increasingly difficult for folks in these situations to move to a wire.  Typically, they will go to a bank or an independent BD.


There is an indy BD that we work with that pays the surrender charges for proprietary products to help move those over.  I'm sure there are others out there, but in situations like AEFA, many want to exit as quickly as possible and it always isn't that easy.


I've got a number of reps, P1 and P2,that are currently visiting with this firm and they like what they hear so far.

Jun 15, 2005 6:39 pm

Another big issue with those P1's will be the contracts they signed when they joined AEFA. The firm is notorious for going after advisors that try to pull out assets when they depart. Since you can't ACAT any of their proprietary funds you have to liquidate & this sets off the fire alarm in Minneapolis & gets the TRO ball rolling.


I'm surprised only 50%-60% of assets are in proprietary since the firm up until a few years ago they didn't have a P2 and the payout & ticket charges for buying funds other than IDS made it unattractive.


Jun 16, 2005 10:16 am

The FAs have moved a great number of assets out of these investments.  Even just a few years ago, they were much, much higher.  Many FAs have started realizing that they are typically not as strong as other investments (many, to the best of my knowledge, are third or fourth quartile).


Rumors have been circulating that AEFA will open up their prop investments.  I think this, if nothing else, will open the flood gates since it will make it much easier for FAs to leave.  Plus, I don't think other firms really care that they will be available.  It isn't like they're offering Berkshire stock at a one-day sale price of $10/share.  It won't add too much value to other firms.


But...that is just this guy's opinion.

Jun 26, 2005 1:58 pm

Well on a different spin - im an outsider and newbie just offered a job with aefa/ameriprise and from the sound of it - is they want to heavily advertise this new brand.


That can be a good thing.  It will bring in people whether it brings in clients will be up to the advisor.

Jun 27, 2005 9:59 am

They are going to advertise very strongly.


The only issue is that they will be marketing a brand new firm.  Regardless of the fact that it was previously AEFA, it is brand new to new investors.  They will have to spin it a certain way to get a big impact, I think.


Just my thoughts.  I've been wrong before, could be wrong again.

Jul 4, 2005 12:59 am

Non-props have been in the system for a decade as well as the fee based business.  The prop business is approx. 18% on the commission side and 7% within the wrap accounts as of April 05.  It is pretty easy for us to leave.  I have seen other advisors leave.  My quick glance is that they make very good money in the first year moving over the annuity business and life business that is movable and then they get kind of stuck figuring out what kind of business model they follow...either financial planning or asset manager.  Most become asset managers.  Given the assets that do not move over, usually by client choice, I am not sure if a lot of them do better in the long run in terms of income.  Especially those in the higher payout ranges.  I do not know of any one who is seriously thinking of leaving.  It seemed like a good time to check out other firms but it actually looks like there will be some improvements coming down the pipeline. The advertising is nice but we (p2s) get all of our clients via referrals like most other veteran advisors, so the ads won't have much of an impact. As honest as I can be. out

Jul 4, 2005 3:34 am

Well I will be getting my feet wet at Ameriprise so thanks for the post.  Atleast it wasnt another AEFA sux post.

Jul 4, 2005 4:47 am

Some great comments. I am researching alternative b/ds, and stopped selling Amex prop stuff a long time ago. The only thing, Sr., is will the scorecard be used to push prop and "planning" fees? Things could get a lot better - Ameriprise certainly could get positioned to help us sign up a lot of those folks who are turning 60 (every ten seconds). Will wait and see for a while.

Jul 5, 2005 10:32 am

I don't spend a lot of time on scorecard (I am at 88%) but I do  not see how selling prop investments helps the scorecard. Assets under mgmt, gdc, and size of clients seems to drive most of the points.  As far as planning fees....they are a good thing...my associate advisor is my planner and I pay a fee...and am glad to have someone do the work for me and my family.  It seems to me that if you followed the scorecard and tried to do well in each category, that you would have a very strong business.  Maybe you could help me and let me know how selling prop business boosts the scorecard.  I don't see it.

Jul 15, 2005 10:03 pm

You get a higher score if you sell annuities, and financial plans. Financial plans are a product (because you get paid trails, commissions in addition). No way around that.

Jul 20, 2005 1:59 am

Scorecard is on its way out.  The idea was to increase business results and it is not doing what was intended and has been a negative.  Plans are being put into place to have a set payout and to reward higher producers with a stock deferral plan.  I don't like the scorecard and it gave me a 3% higher payout!  How do you think the people feel who took a payout cut... I have hope given that the higher ups are willing to change.



Jul 22, 2005 8:54 pm

The new stock plan is interesting, it will be interesting to see how
that works out. Not to mention, the bonus stock for signing up clients
to the gold of platinum plan on top of the HVC amount they bring in. A
decent advisor could easily bring in about $10k in stock each year as a
bonus.