Ameriprise Financial, Inc. Q2 2010 Earnings Call Transcript

In addition, we are maintaining our reengineering and expense focus, and we continue to reinvest the portion of our savings to drive growth initiatives. In the quarter, while distribution expenses increased along with advisor productivity, our controllable expenses remained well managed.

Now I’ll discuss our segment performance. First, in Advice & Wealth Management, we reported pre-tax operating earnings of $88 million compared with $21 million a year ago and $54 million last quarter. Our pre-tax operating margin in the segment was up 3% sequentially to 9.1%.

Our advisors remain satisfied and engaged and our retention rates remain high, especially among our most productive advisors. We continue to provide a high standard of advisor support, technology and tools as well as marketing and training.

We’re continuing the phased rollout of our new brokerage platform, which is one of our largest current investments. It provides advisors with important additional capabilities. Advisor productivity continues to rebound in the quarter, with operating revenue per advisor increasing 32% over a year ago and 12% sequentially.

At $83,000 of operating revenue per advisor for the quarter, our productivity has returned to pre-crisis levels. During the quarter, clients continued to increase their activity.

For example, in our wrap business we recorded another quarter of net inflows of more than $2 billion, and brokerage volumes increased. Of course, more recent market conditions could be worst as positive trend. If the downward market movement continues, clients can once again seek safety. Client confidence has rebounded somewhat, but given the depth and duration of the recession, we believe confidence is still quite fragile.

You’ll notice that our advisor count declined again this quarter. As we’ve told you in the past, we strongly focused on productivity and less productive advisors are leaving the system. While experienced advisor recruiting slowed in the quarter, we remained focused on bringing in more productive advisors and we believe we have a compelling offer and value proposition.

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