Ameriprise 2008 Annual Report Download - page 31

Face-Amount Certificates
We currently issue four different types of face-amount certificates through Ameriprise Certificate Company, a wholly owned
subsidiary that is registered as an investment company under the Investment Company Act of 1940. Owners of our
certificates invest funds and are entitled to receive, at maturity or at the end of a stated term, a determinable amount of
money equal to their aggregate investments in the certificate plus interest at rates we declare, less any withdrawals and early
withdrawal penalties. For two types of certificate products, the rate of interest is calculated in whole or in part based on any
upward movement in a broad-based stock market index up to a maximum return, where the maximum is a fixed rate for a
given term, but can be changed at our discretion for prospective terms.
At December 31, 2008, we had $4.9 billion in total certificate reserves underlying our certificate products. Our earnings are
based upon the difference, or ‘‘spread’’, between the interest rates credited to certificate holders and the interest earned on
the certificate assets invested. A portion of these earnings is used to compensate the various affiliated entities that provide
management, administrative and other services to our company for these products. The certificates compete with
investments offered by banks (including Ameriprise Bank), savings and loan associations, credit unions, mutual funds,
insurance companies and similar financial institutions, which may be viewed by potential customers as offering a comparable
or superior combination of safety and return on investment. In times of weak performance in the equity markets, certificate
sales are generally stronger. In 2008, branded financial advisors’ cash sales more than tripled to $2.7 billion, with total
certificate reserves of nearly $5 billion.
Business Alliances
We provide workplace financial planning and educational programs to employees of major corporations and small businesses
through our Business Alliances group. Our Business Alliances group focuses on helping the individual employees of client
companies plan for and achieve their long-term financial objectives. It offers financial planning as an employee benefit
supported by educational materials, tools and programs. In addition, we provide training and support to financial advisors
working on-site at company locations to present educational seminars, conduct one-on-one meetings and participate in
client educational events. We also provide financial advice service offerings, such as Financial Planning and Executive
Financial Services, tailored to discrete employee segments.
Strategic Alliances and Other Marketing Arrangements
We use strategic marketing alliances, local marketing programs for our branded advisors and on-site workshops through our
Business Alliances group to generate new clients for our financial planning and other financial services. An important aspect of
our strategy is to leverage the client relationships of our other businesses by working with major companies to create alliances
that help generate new financial services clients for us. For example, AFSI currently has relationships with Delta Air Lines,
Office Depot, Borders, Inc. and The Association of Women’s Health, Obstetric and Neonatal Nurses, and AASI has a
relationship with H&R Block, Inc.
Our alliance arrangements are generally for a limited duration of one to five years with an option to renew. Additionally, these
types of marketing arrangements typically provide that either party may terminate the agreements on short notice, usually
within sixty days. We compensate our alliance partners for providing opportunities to market to their clients.
In addition to our alliance arrangements, we have developed a number of local marketing programs for our branded advisors
to use in building their client bases. These include pre-approved seminars, seminar- and event-training and referral tools and
training, which are designed to encourage both prospective and existing clients to refer or bring their friends to an event.
Ameriprise Advisor Center
Our Ameriprise Advisor Center (‘‘AAC’’) is a dedicated call center for remote-based sales and service for AFSI. AASI maintains
a service group that provides a similar function. It provides support for retail customers who do not have access to or do not
want a face-to-face relationship with a financial advisor. Financial consultants in the AAC provide personal service and
guidance through phone-based interactions and may provide product choices in the context of the client’s needs and
objectives.
Our Segments—Asset Management
Our Asset Management segment provides investment advice and investment products to retail and institutional clients.
RiverSource Investments predominantly provides U.S. domestic products and services and Threadneedle predominantly
provides international investment products and services. U.S. domestic retail products are primarily distributed through our
Advice & Wealth Management segment and also through unaffiliated advisors. International retail products are primarily
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