Ameriprise 2008 Annual Report Download - page 33

We have continued to invest to deliver consistent and strong investment performance by enhancing our investment
management leadership, talent, technology infrastructure and distribution capabilities. Most recently, in November 2008 we
acquired the Seligman companies and retained key investment professionals and management to increase the company’s
alternative investment activities and to add breadth and depth to the RiverSource multi-investment boutique strategy.
Seligman offers asset management services emphasizing open- and closed-end mutual funds, hedge funds and institutional
accounts. Seligman manages the nation’s first growth mutual fund and helped develop single-state municipal funds.
Seligman is recognized in particular for its accomplished technology investment team, which manages several retail and
alternative portfolios, including Seligman Communications and Information Fund, and for its value-oriented offerings.
In addition to growth through acquisition strategy, we are continuing to capitalize on our broad asset management capabilities
by creating new retail and institutional investment products, including eight new RiverSource mutual funds, four new
Threadneedle hedge funds, and four funds within Threadneedle’s Open Ended Investment Company (‘‘OEIC’’) investment
range, one of which is a long/short strategy, and two new property unit trusts, all of which launched in 2008. We also provide
seed money to certain of our investment management teams to develop new products for our institutional clients.
Asset Management Offerings
Mutual Fund Families—RiverSource, Threadneedle and Seligman
We provide investment advisory, distribution and other services to three families of mutual funds: the RiverSource, Seligman
and Threadneedle mutual fund families.
Our RiverSource family of mutual funds consist of the RiverSource Funds, a group of retail mutual funds; the RiverSource
Variable Portfolio Funds (‘‘VP Funds’’), a group of variable product funds available as investment options in variable insurance
and annuity products; the Seligman Funds, a group of retail funds formerly managed by J. & W. Seligman Co. prior to its
acquisition by RiverSource Investments, LLC; the Seligman Variable Insurance Trusts (‘‘VITs’’), a group of variable product
funds; and the Seligman closed-end funds. We offer the RiverSource Funds to investors primarily through our financial advisor
network and to participants in retirement plans through various third-party administrative platforms. We also offer RiverSource
Retail Funds through third-party broker-dealer firms, third-party administrative platforms and banks. RiverSource VP Funds are
available as underlying investment options in our own RiverSource variable annuity and variable life products. Seligman VIT
Funds are available as underlying investment options in unaffiliated variable annuity and variable life products. The
RiverSource family of mutual funds includes domestic and international equity, fixed income, cash management and
balanced funds with a variety of investment objectives.
The RiverSource Funds had total managed assets at December 31, 2008 of $38.0 billion in 75 funds compared to
$61.3 billion at December 31, 2007 in 80 funds. RiverSource VP Funds had total managed assets at December 31, 2008 of
$19.7 billion in 27 funds compared to $25.6 billion at December 31, 2007 in 23 funds.
During 2008, the RiverSource Disciplined Large Cap Fund and five RiverSource Disciplined Asset Allocation Variable Portfolio
Funds were added to the RiverSource family of mutual funds.
RiverSource Distributors and RiverSource Fund Distributors, Inc. act as the principal underwriters (distributors of shares) for
the RiverSource family of mutual funds. In addition, RiverSource Investments acts as investment manager and several of our
subsidiaries perform various services for the funds, including accounting, administrative and transfer agency services.
RiverSource Investments performs investment management services pursuant to contracts with the mutual funds that are
subject to renewal by the mutual fund boards within two years after initial implementation, and thereafter, on an annual basis.
RiverSource Investments earns management fees for managing the assets of the RiverSource family of mutual funds based
on the underlying asset values. We also earn fees by providing other services to the RiverSource family of mutual funds.
RiverSource equity and balanced funds have a performance incentive adjustment that adjusts the level of management fees
received, upward or downward, based on the fund’s performance as measured against a designated external index of peers.
This has a corresponding impact on management fee revenue. In 2008, revenues were adjusted downward by $20.5 million
due to performance incentive adjustments. We earn commissions for distributing the RiverSource Funds through sales
charges (front-end or back-end loads) on certain classes of shares and distribution and servicing-related (12b-1) fees based
on a percentage of fund assets, and receive intercompany allocation payments. This revenue is impacted by our overall asset
levels.
The RiverSource family of funds also uses sub-advisors to diversify and enhance investment management expertise. Since the
end of 2003, Threadneedle personnel have provided investment management services to RiverSource global and
international equity funds. In addition to Threadneedle, unaffiliated sub-advisors provide investment management services to
certain RiverSource funds.
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