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Ameriprise Financial
Ameriprise Financial, Inc. offers financial advice and products, and is the successor of American Express Financial Advisors (AEFA), a company which was the subsidiary of the American Express Company. Amerprise provides financial planning, products, and services, which are specifically designed for its clients in providing solutions for their asset accumulation, income, and protection needs. As of 31st December, 2006, the company had a network of more than 12,000 financial advisors, which included affiliated financial advisors. The company also had approximately 2.8 million individual, business, and institutional clients. The financial solutions that the company provides include its own products and services, and products of other companies as well.
Amerprise has two operating divisions, the first one being asset accumulation and income, and the other is protection. The first segment offers its own and other company mutual funds, along with its own annuities and other asset accumulation products. The company, under this segment, offers income products and services to its retail customers, through the various category of financial advisor network that it has. As far as the second segment is concerned, the company offers life insurance, disability income, and brokered insurance products. To its retail clients, the company offers auto, and home insurance products on a direct basis. The company merged its five life insurance subsidiaries, and renamed the subsidiaries into two RiverSource-branded entities.
Amerprise is the 4th largest financial advisory organization in the US, specializing in providing financial advices to its affluent clients in the country. As regards to client satisfaction, the company ranked 10th out of 13 other companies, in providing satisfactory services to its clients. In a survey of over 37,000 US companies in the year 2006, Businessweek placed Ameriprise as the 19th best company for launching a career. As of 26th January, 2007, Ameriprise has received a Stewardship Grade of 'C' from Morningstar, and is also considered to be a 2 star rated company out of a possible 5 star.
Asset Accumulation and Income
At the end of the fiscal year 2006, 73% of the company's revenue earnings came from its asset accumulation and income business. In addition to providing services for an array of asset accumulation and income services, protection, and others, the company also offers a range of investment management products and services to retail and institutional clients outside the US. This service is offered through Threadneedle Asset Management Holdings Limited, which is known as Threadneedle Investments. The company also offers variety of services to 401(K), along with other qualified and non-qualified employee retirement plans, including individuals, and small and mid-sized businesses.
Threadneedle Investments offer a range of asset management products and services to institutional clients, as well as to retail clients, which include, segregated asset management, mutual funds, and hedge funds. These services are offered through intermediaries, banks, and fund platforms in Europe, which comprise of most asset classes, including equities, fixed income, cash and real estate. The investment company also offers services to the US based investment companies, and other US based institutional clients, which include the RiverSource investment funds. The services are also offered to the non-US institutional clients.
There are two groups of funds, offered by RiverSource family of mutual funds. These are the RiverSource Funds, which are essentially a group of retail mutual funds, and the RiverSource Variable Portfolio Funds, normally known as VP funds. The VP funds belong to the variable product funds group, available from Riversourse as investment options in variable insurance and annuity products. The RiverSource Funds are offered to investors through the financial advisor network, and through various third-party administrative platforms to client participants in retirement plans. The VP fund is offered as underlying investment options, within the company's own services and products. Both the funds include:
- Domestic and international equity
- Fixed income
- Cash Management
- Balanced funds with a variety of investment objectives
The company services the accounts of large and medium-sized businesses and governmental clients, pension, profit-sharing, employee savings, and endowment funds. The services are extended to the accounts of high-net-worth individuals and smaller institutional clients, where the clients include tax-exempt and not-for-profit organizations. The company offers management services, which include discretionary or non-discretionary based investment of funds, which takes into account trading, cash management and reporting. The management of assets, held in the general and separate accounts of the RiverSource Life companies, is also serviced by the company. The company also provides collateral management services in Los Angeles and Minneapolis to special purpose vehicles that issue collateral security as debt obligations.
Through Ameriprise Certificate Company, Ameriprise issues face-amount certificates of five categories, which are types of investment products. Through RiverSource Life companies, the company also offers annuity products. All these products include deferred variable and fixed annuities, which accumulates the asset till it is surrendered, or the holder or the annuitant dies, or the legitimate holder starts receiving benefits under an annuity payout option. Immediate annuities are also offered by the company, in which the payments start within a year of issue of the annuity. This either continues for life or for a fixed period of time. The company also has consumer lending products to offer, which include, first mortgages, home equity loans, home equity lines of credit, investment secured loans and lines of credit, and unsecured loans and lines of credit.
Protection
To address the protection needs of its retail clients, Ameriprise offers a variety of protection products, which include:
- Life
- Disability income
- Brokered life and health insurance
- Personal auto and home insurance
These insurance products are primarily offered to its clients having financial plans, and except for auto and home insurance, all of these products are offered through the company's branded advisors. The company issues both variable and fixed universal life insurance, traditional life insurance, including whole life and term life, and disability income insurance, through the RiverSource Life companies. The fiscal year 2006 saw the company's protection business contributing 24% to Ameriprise revenues.
Criticism
The State of New Hampshire, for the firt time in history, imposed a fine of $7.4 million on Ameriprise, for the company's involvement in fraudulent utilization of financial plans. The company used this as a vehicle to sell its proprietary products, which breaches the fiduciary duties of the company towards its clients. Charges of market timing in the company’s involvement in a $15 million settlement with SEC were also brought in the year 2005. This settlement was done between January 2002 and August 2003. The company failed to prevent market timing, while the prospectus of the company was amended to include explicit prohibitions against the practice.
More-over, Amerprise did not reveal this incident to its shareholders of its funds. These were marketed in the name of RiverSource, since the company was spun off from American Express. Though a disclosure was made by American Express in its regulatory filings, the disclosure was only available to the American Express shareholders. After Ameriprise became an independent organization, it failed to disclose which funds were timed, and more-over, did not reveal the names of the people who were involved in the act.
In 2006, the company was faced with threatened NASD suspension, since it failed to pay an arbitration award to a former broker. A group of retired persons from Exxon Mobil Corp., accused America Inc. of improperly investing their funds in high risk areas. Consequently, a sum of $22 million was awarded to those retirees. In another incident, the arbitration panel of NASD imposed a penalty of $9.3 million on the company against Securities America, which is the brokerage unit of Ameriprise. This was done against the complaints received from three retired American Airlines pilots, who had their money invested into more aggressive funds by the broker firm.
Languages
English
Address
- 200 Vesey St
- New York NY 10285 US
Contact
- American Express Company, Domain Manager
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- +1 612 678 2214
