Ameriprise Financial

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Ameriprise Financial, Inc.
Public company
Traded asNYSEAMP
S&P 500 Index component
IndustryFinancial services
Founded1894; 126 years ago (1894)
FounderJohn Tappan and J.R Ridgway
Headquarters
Area served
Worldwide
Key people
James M. Cracchiolo, Chairman & CEO
Walter S. Berman, CFO
Jeff Noddle, director
Lon R. Greenberg, director
ProductsInvestments
Services
RevenueIncrease $12.967 billion (2019)
Decrease $1.893 billion (2019)
AUMIncrease US$973 billion (2019)
Total assetsIncrease $151.828 billion (2019)
Total equityIncrease $5.729 billion (2019)
Number of employees
2,722 (2019)
Websitewww.ameriprise.com
Footnotes / references
[1]

Ameriprise Financial, Inc. is a diversified financial services company and bank holding company incorporated in Delaware and headquartered in Minneapolis, Minnesota.[1] It provides financial planning products and services, including wealth management, asset management, insurance, annuities, and estate planning.[1]

In 2019, over 85% of the company's revenues came from wealth management.[1]

The company's primary subsidiaries include Ameriprise Financial Services, RiverSource Life Insurance Company, and Columbia Threadneedle Investments, its global asset management brand, and a provider of investments to institutional and retail clients.

Ameriprise was formerly a division of American Express, which completed the corporate spin-off of the company in September 2005.

The company is ranked 249th on the Fortune 500.[2] It is on the list of largest banks in the United States. It is also the 9th largest independent broker-dealer based on assets under management.[3] It is one of the largest financial planning companies in the United States and is among the 25 largest asset managers in the world.[1] It is ranked 8th in long-term mutual fund assets in the U.S., fourth in retail funds in the U.K., and 27th in global assets under management.

Current operations[edit]

The company specializes in retirement-related financial planning for relatively well-off clients. The company offers variable annuities and life and disability insurance. It also operates Ameriprise Bank, FSB which offers a variety of consumer banking and lending products and personal trust and related services. Since 2015, its asset management arm operates under the name Columbia Threadneedle Investments. The company uses three principal brands for its businesses in the United States: Ameriprise Financial, Columbia Management and RiverSource. The Threadneedle brand is used for its international asset manager's products. Ameriprise Financial Services, a financial planning and retail distribution subsidiary, is a registered broker-dealer and registered investment adviser. It has an integrated model of comprehensive and personalized financial planning, diversified product manufacturing and affiliated and unaffiliated distribution through its network of financial advisors and registered representatives. The retail products and services that use the Ameriprise Financial brand include those that the company provides through its affiliated advisors (e.g., financial planning, investment advisory accounts, retail brokerage services and banking products) and products and services that it markets directly to consumers).[1]

Columbia Threadneedle Investments is the primary brand for the company's U.S. asset management products and services, including retail and institutional asset management products. Columbia Threadneedle Investments provides investment management products and services to clients in the United Kingdom, Europe, the Middle East and the Asia-Pacific region. Acquired by Ameriprise Financial in 2003, Threadneedle initially operated as an independent international asset manager, under its own brand name, management organization and operating, compliance and technology infrastructure. Since 2015 it has been merged with Columbia Management to create the combined Columbia Threadneedle Investments brand.[4]

RiverSource is the brand for the company's annuities products and for the protection products issued by the RiverSource Life companies, including life and disability income insurance products.[1]

Ameriprise advisors[edit]

Ameriprise Financial has more than 9,700 branded advisors, the 5th largest branded advisor force in the U.S.[1]

History[edit]

In 1894, John Tappan founded Investors Syndicate in Minneapolis.[5]

In 1925, West Coast businessman J. R. Ridgway merged his investment firm with Investors Syndicate, and took over as president.[5]

In 1937, upon the death of then 50-year-old J. R. Ridgway from leukemia, 23-year-old J. R. Ridgway, Sr. was appointed president.[5]

In 1940, Investors Syndicate introduced one of the first mutual funds, the Investors Mutual Fund, giving clients new investing options and two advantages: diversification and professional management. By the 1960s, Investors Mutual Fund was the largest balanced mutual fund in the world.[5]

In 1949, Investors Syndicate changed its name to Investors Diversified Services, Inc. (IDS).[5]

In 1958, IDS founded the Investors Syndicate Life Insurance and Annuity Company (now known as RiverSource Life Insurance Company).[5]

In 1974, the IDS Centre (now IDS Center) is opened in downtown Minneapolis as the company's headquarters.[5]

In 1979, the Ridgway family sold the last of its ownership interest. IDS became a wholly owned subsidiary of Alleghany Corporation pursuant to a merger.[5]

In 1984, American Express acquired IDS Financial Services from Alleghany Corporation.[5]

In 1986, IDS acquired Wisconsin Employers Casualty Company of Green Bay, Wisconsin and renamed it IDS Property Casualty Insurance Company.[5]

In 1994, IDS reached $100 billion in assets.[5]

Effective January 1, 1995, IDS changed its name to American Express Financial Corporation, doing business as American Express Financial Advisors (AEFA).[6]

In October 2003, AEFA acquired London-based Threadneedle Asset Management Holdings.[5][7]

In September 2005, American Express completed the corporate spin-off of AEFA as Ameriprise Financial, Inc., a public company.[5][8]

In September 2006, the company launched Ameriprise Bank, FSB.[5][9]

In February 2008, Threadneedle acquired Invesco Perpetual's full service defined contribution pension business with total assets of £470 million.[10]

In 2009, Ameriprise acquired Standard Chartered Bank's World Express Funds investment funds business, providing Threadneedle with an established Luxembourg-based SICAV platform with over US$2.38 billion worth assets under management.[11]

In August 2011, Threadneedle announced the acquisition of the £8 billion in investment assets of LV=.[12][13]

In November 2008, the company acquired H&R Block Financial Advisors for $315 million, and the asset management firm J. & W. Seligman & Co. for $400 million.[14]

During the Great Recession, the company declined an investment by the United States Department of the Treasury under the Troubled Asset Relief Program.[5][15]

In May 2010, Ameriprise Financial acquired Columbia Management, the long-term asset management business of Bank of America, for $1 billion.[16]

On April 25, 2011, Ameriprise announced that it was trying to find an "appropriate buyer" for Securities America Financial Corporation to allow its registered representatives to focus on growth opportunities.[17] In November 2011, Ameriprise completed the sale of Securities America to Ladenburg Thalmann Financial Services for $150 million in cash and potential future payments.[18] Securities America traced its roots to Financial Dynamics, an insurance marketing organization founded in 1984 by Steve Wild that had between 10,000 and 12,000 affiliated independent insurance agents. In 1993, Financial Dynamics created Securities America, an independent securities broker/dealer, to use its insurance sales force to offer investment management, financial advice and financial planning through a national network of independent financial advisors. In 1998, Securities America was acquired by American Express and was transferred to Ameriprise as part of the corporate spin-off in September 2005. In 2009, Securities America acquired Brecek & Young Advisors, a California-based broker/dealer.[19] Securities America received the inaugural Practitioner Thought Leadership Award from the Retirement Income Industry Association in 2011.[20]

In January 2012, the company opened services to individuals in India with US$40,000 equivalent minimum income.[21] Ameriprise also established an insurance brokerage entity in India that was licensed to deal in insurance products by India's Insurance Regulatory and Development Authority (IRDA). Ameriprise India established offices in Delhi, Gurgaon, Greater Noida, Mumbai & Pune. In May 2014, Ameriprise shut down the nascent financial planning division in India, citing poor prospects for fee-based advisory services.[22]

In January 2013, the company completed the conversion of its federal savings bank subsidiary, Ameriprise Bank, FSB, to a limited powers national trust bank, which conversion included changing the name of this subsidiary to Ameriprise National Trust Bank.[23]

In 2015, Threadneedle rebranded as Columbia Threadneedle.[4]

In 2017, the company acquired Investment Professionals, Inc.[24]

In 2019, the company sold Ameriprise Auto & Home Insurance to American Family Insurance for $1.05 billion.[25][26]

Criticism and controversy[edit]

In 2003, Securities America was fined $5.4 million for letting a broker work under a false name in its Orlando office and allegedly make bogus investments.[27]

In July 2005, New Hampshire reached a $7.4 million settlement with American Express Financial Advisors, alleging the company had violated the law by rewarding their financial advisers for recommending underperforming in-house mutual funds to clients.[28]

In December 2005, Ameriprise agreed to pay a $12.3 million to settle NASD charges relating to favorable treatment allegedly given to some mutual funds in exchange for brokerage business.[29]

In December 2005, the company agreed to pay $15 million to settle charges of market timing by the U.S. Securities and Exchange Commission.[30] The Minnesota Department of Commerce levied $2 million in fines for similar market timing violations and the National Association of Securities Dealers fined Ameriprise an additional $12.3 million for unsuitable share sales.[31] Ameriprise had not revealed which funds were timed, or the names of the people involved and the exact nature of the disciplinary action taken. Morningstar, Inc. temporarily reduced the stewardship grade for Ameriprise's funds, although it did not impact the fund's overall star ratings from that firm.[32]

In September 2006, Securities America reached a $16.3 million settlement with a group of ExxonMobil retirees for failing to supervise an associated broker.[33]

In December 2006, a NASD arbitration panel awarded $9.3 million to three retired American Airlines pilots against Securities America and a formerly associated broker for allegedly mishandling their savings.[34][35]

Also in December 2006, the company settled charges regarding a lost laptop containing customer data.[36]

On July 11, 2007, the NASD fined Securities America $375,000 for improperly sharing directed brokerage commissions from a mutual fund company with a former Securities America broker.[37]

In September 2008, the company agreed to pay as much as $33 million to cover investor losses in the Reserve Primary Fund.[38]

On July 10, 2009, the company agreed to pay $17.3 million after the Securities and Exchange Commission (SEC) announced an enforcement action against the company for receiving millions of dollars in undisclosed revenue sharing as a condition for selling certain real estate investment trusts (REITs) to its brokerage customers before the spinoff from American Express.[39][40]

On April 15, 2011, Securities America, Inc. (SAI) and its holding company, Securities America Financial Corporation, entered into settlement agreements related to the sale of private placement securities issued by Medical Capital and Provident Royalties that resulted in a $118 million pre-tax charge in the first quarter of 2011. The charge is in addition to a $40 million pre-tax charge in the fourth quarter of 2010.[41]

In April 2008, the company agreed to pay New Hampshire $3.8 million to settle allegations that its Portsmouth agents forged clients’ signatures to cut corners and increase their income.[42]

In October 2010, Michael Loscalso, a branch manager in West Conshohocken, Pennsylvania who earned $260,000 per year, sued the company after being fired, allegedly for raising serious allegations about the firm’s oversight of brokers.[43]

In October 2014, a former Ameriprise adviser in Plymouth, Minnesota admitted to stealing $1 million from client accounts, which she spent at Victoria's Secret, on Caribbean cruises, salon visits and donations to a local Catholic Church.[44]

In March 2015, the company paid $27.5 million to settle a lawsuit that it charged its own employees high fees in funds in its 401(k) program.[45]

In December 2016, the company settled with the U.S. Department of Labor, agreeing to pay $128,200 in back wages for discriminating against 20 black employees by paying them less than similarly situated white workers.[46]

In May 2017, NFL running back Darren McFadden sued the company for $15 million, claiming the company kept quiet when it found out one of its financial advisers was looting his account.[47]

In February 2018, the company paid $230,000 to settle allegations by the U.S. Securities and Exchange Commission that it put customers into higher fee funds.[48]

In August 2018, the company paid $4.5 million to settle charges that it failed to safeguard retail investor assets from theft by its representatives after 5 Ameriprise representatives committed fraudulent acts, including forging client documents and stole more than $1 million in client funds over a four-year period.[49]

References[edit]

  1. ^ a b c d e f g h "Ameriprise Financial, Inc. 2019 Form 10-K Annual Report". U.S. Securities and Exchange Commission.
  2. ^ "Fortune 500: Ameriprise". Fortune.
  3. ^ "Top 15 Broker-Dealer Firms". Investopedia.
  4. ^ a b Lobo, Dylan (January 12, 2015). "Threadneedle to rebrand on major investment merger". Citywire.
  5. ^ a b c d e f g h i j k l m n o "Our history". Ameriprise Financial.
  6. ^ "IDS, an Amex unit, to get new name". American Banker. July 28, 1994.
  7. ^ "American Express Completes Acquisition of Threadneedle Asset Management" (Press release). Business Wire. October 1, 2003.
  8. ^ "Tax Information for Ameriprise Spin-off" (PDF). American Express. October 3, 2005.
  9. ^ "Ameriprise Launches Bank". Thinkadvisor. September 19, 2006.
  10. ^ "Threadneedle buys Invesco Perpetual DC unit". Pensions & Investments. February 6, 2008.
  11. ^ "Threadneedle acquires World Express Funds". Investmentasia.net.
  12. ^ Cobley, Mark (August 15, 2011). "Threadneedle formally acquires LV= funds business". FnLondon.
  13. ^ "Threadneedle To Acquire £8B LVAM". Institutional Investor. July 10, 2011.
  14. ^ "Ameriprise Financial Completes Acquisition of H&R Block Financial Advisors" (Press release). Business Wire. November 3, 2008.
  15. ^ Barr, Colin (May 15, 2009). "Insurer to Treasury: No thanks on TARP". Fortune.
  16. ^ "Ameriprise Financial Completes Columbia Management Acquisition" (Press release). Business Wire. May 3, 2010.
  17. ^ CRAIG, SUSANNE (April 25, 2011). "Ameriprise to Sell Securities America". The New York Times.
  18. ^ "Ladenburg Thalmann Completes Securities America Acquisition" (Press release). Ladenburg Thalmann Financial Services. November 7, 2011.
  19. ^ "SECURITIES AMERICA COMPLETES ACQUISITION OF SUNSET FINANCIAL SERVICES ASSETS" (Press release). Securities America. November 18, 2014.
  20. ^ "SECURITIES AMERICA RECEIVES INCOME DISTRIBUTION THOUGHT LEADER AWARD" (Press release). Securities America. June 9, 2011.
  21. ^ Sinha, Prabhakar (January 12, 2012). "US-based financial planning major enters India". The Times of India.
  22. ^ "Ameriprise Financial closes financial planning division in India". The Times of India. May 2, 2014.
  23. ^ "Ameriprise Financial, Inc. 2012 Form 10-K Annual Report". U.S. Securities and Exchange Commission.
  24. ^ "Ameriprise Financial Announces Agreement to Acquire Investment Professionals, Inc" (Press release). Business Wire. April 24, 2017.
  25. ^ "American Family enterprise adds customers, spreads storm risk with acquisition of Ameriprise Auto & Home" (Press release). Business Wire. April 2, 2019.
  26. ^ Lesk, Sari (April 2, 2019). "American Family to buy De Pere-based Ameriprise Auto & Home for $1.05B". American City Business Journals.
  27. ^ Cowan, Lynn (August 8, 2003). "American Express broker used stolen identity". USA Today.
  28. ^ "Amex Settles With N.H. for $7.4 Million". WCIV. Associated Press. July 12, 2005.
  29. ^ "NASD collects record $125.4 m in '05 fines". The Boston Globe. Reuters. December 28, 2005.
  30. ^ "AMERICAN EXPRESS FINANCIAL CORPORATION, NOW KNOWN AS AMERIPRISE FINANCIAL, INC., TO PAY $15 MILLION TO SETTLE MARKET TIMING CHARGES" (Press release). U.S. Securities and Exchange Commission. December 1, 2005.
  31. ^ Garrison-Sprenger, Nicole (December 5, 2005). "NASD, state fine Ameriprise $14.3 million". American City Business Journals.
  32. ^ Dutta, Arijit (December 8, 2005). "Ameriprise Settles with SEC". Morningstar, Inc.
  33. ^ "Securities firm will make restitution to former workers". Houston Chronicle. Bloomberg News. September 15, 2006.
  34. ^ "Panel Rules Against Ameriprise". The Wall Street Journal. December 28, 2006.
  35. ^ "Ameriprise unit is ordered to pay up to $9.3 million to 3 investors". Los Angeles Times. Bloomberg News. December 28, 2006.
  36. ^ Vomhof Jr., John (December 11, 2006). "Ameriprise settles data-loss case". American City Business Journals.
  37. ^ "LETTER OF ACCEPTANCE, WAIVER AND CONSENT" (PDF). Financial Industry Regulatory Authority.
  38. ^ McGuire, Kara (September 25, 2008). "Ameriprise set to pay millions to protect clients". Star Tribune.
  39. ^ "SEC Charges Ameriprise in Fraudulent Scheme to Obtain Undisclosed Compensation" (Press release). U.S. Securities and Exchange Commission. July 10, 2009.
  40. ^ Grayson, Katharine (July 10, 2009). "Ameriprise pays $17.3M to settle SEC charge". American City Business Journals.
  41. ^ "Ameriprise Financial Reports First Quarter 2011 Results" (Press release). Business Wire. April 25, 2011.
  42. ^ "Ameriprise to pay state $3.8m over practices". New Hampshire Business Review. April 25, 2008.
  43. ^ Kelly, Bruce (February 28, 2011). "Ex-Ameriprise manager: I got fired for flagging violations". InvestmentNews.
  44. ^ Furst, Randy (October 18, 2014). "Former Ameriprise adviser from Plymouth admits to swindling $1 million from clients". Star Tribune.
  45. ^ Kennedy, Clare (March 27, 2015). "Ameriprise will pay $27.5 million to settle suit over employee retirement funds". American City Business Journals.
  46. ^ Hughlett, Mike (December 8, 2016). "Ameriprise settles discrimination charges by U.S. Department of Labor". Star Tribune.
  47. ^ Meitrodt, Jeffrey (May 15, 2017). "NFL player sues Ameriprise over broker he claims stole $15 million". Star Tribune.
  48. ^ Moyer, Liz (February 28, 2018). "Ameriprise put retirement savers at 'disavantage' in higher-fee funds, SEC says". CNBC.
  49. ^ "SEC Charges Ameriprise Financial Services for Failing to Safeguard Client Assets" (Press release). U.S. Securities and Exchange Commission. August 15, 2018.

External links[edit]