Ameriprise Financial says its wealth management business was the key revenue driver last quarter as its asset management unit fell from a year ago in the face of lower-than-average equity markets and cumulative net outflows. More than half of Ameriprise Financial’s pretax adjusted operating earnings came from its Advice and Wealth Management unit during the first quarter of 2019.
Advice and wealth management pretax earnings were $350 million, up 11% year over year and driven by growth in fee-based activity.
The company added 90 advisors during the quarter, bringing its total to 9,979.
Average advisor productivity in the trailing 12 months was $628,000, an increase of 6.4% from a year ago and a record high, according to the company. Total retail client assets rose to $588 billion from $557 billion a year earlier, and the operating margin expanded by 140 basis points to 22.5%. Client brokerage cash balances were down slightly from a year ago, coming in at $25.3 billion from $25.4 billion in Q1 2018.
“Overall, I’m pleased with our results given at the beginning of the year as markets drove lower fee levels and muted client activity,” said Jim Cracchiolo, Ameriprise chairman and chief executive officer. “We ended the quarter with strong Ameriprise client net inflows and steady growth in advisor productivity.”
The company said it expects to launch its reentry into banking this quarter after receiving approval to open a federal savings bank from the Federal Reserve and the Office of the Comptroller of the Currency. Moving forward, the company will offer banking and credit products to its wealth management clients.
Overall, Ameriprise reported adjusted earnings of $3.75 per share, beating analyst estimates of $3.61 per share, according to a consensus compiled by Zacks.