Ameriprise 2008 Annual Report Download - page 52

amended, or Rule 12b-1. We believe that these fees are a critical element in the distribution of our own mutual funds.
However, an industry-wide reduction or restructuring of Rule 12b-1 fees could have a material adverse effect on our ability to
distribute our own mutual funds and the fees we receive for distributing other companies’ mutual funds, which could, in turn,
have an adverse effect on our revenues and earnings.
Consumer lending activities at our bank are subject to applicable laws as well as regulation by various regulatory bodies.
Changes in laws or regulation could affect our bank’s ability to conduct business. These changes could include but are not
limited to our bank’s ability to market and sell products, fee pricing or interest rates that can be charged on loans outstanding,
changes in communication with customers that affect payments, statements and collections of loans, and changes in
accounting for the consumer lending business.
The majority of our affiliated financial advisors are independent contractors. Legislative or regulatory action that redefines the
criteria for determining whether a person is an employee or an independent contractor could materially impact our
relationships with our advisors, and our business, resulting in adverse effect on our results of operations.
For a further discussion of the regulatory framework in which we operate, see Item 1 of this Annual Report on Form 10-K—
‘‘Business—Regulation.’’
We face risks arising from acquisitions.
We have made acquisitions in the past and expect to continue to do so. We face a number of risks arising from acquisition
transactions, including difficulties in the integration of acquired businesses into our operations, difficulties in assimilating and
retaining employees and intermediaries, difficulties in retaining the existing customers of the acquired entities, unforeseen
liabilities that arise in connection with the acquired businesses, the failure of counterparties to satisfy any obligations to
indemnify us against liabilities arising from the acquired businesses, and unfavorable market conditions that could negatively
impact our growth expectations for the acquired businesses. These risks may prevent us from realizing the expected benefits
from acquisitions and could result in the impairment of goodwill and/or intangible assets recognized at the time of acquisition.
A failure to appropriately deal with conflicts of interest could adversely affect our businesses.
Our reputation is one of our most important assets. As we have expanded the scope of our businesses and our client base, we
increasingly have to identify and address potential conflicts of interest, including those relating to our proprietary activities and
those relating to our sales of non-proprietary products from manufacturers that have agreed to provide us marketing, sales
and account maintenance support. For example, conflicts may arise between our position as a provider of financial planning
services and as a manufacturer and/or distributor or broker of asset accumulation, income or insurance products that one of
our affiliated financial advisors may recommend to a financial planning client. We have procedures and controls that are
designed to identify, address and appropriately disclose conflicts of interest. However, identifying and appropriately dealing
with conflicts of interest is complex, and our reputation could be damaged if we fail, or appear to fail, to deal appropriately with
conflicts of interest. In addition, the SEC and other federal and state regulators have increased their scrutiny of potential
conflicts of interest. It is possible that potential or perceived conflicts could give rise to litigation or enforcement actions. It is
possible also that the regulatory scrutiny of, and litigation in connection with, conflicts of interest will make our clients less
willing to enter into transactions in which such a conflict may occur, and will adversely affect our businesses.
Misconduct by our employees and affiliated financial advisors is difficult to detect and deter and could
harm our business, results of operations or financial condition.
Misconduct by our employees and affiliated financial advisors could result in violations of law, regulatory sanctions and/or
serious reputational or financial harm. Misconduct can occur in each of our businesses and could include:
• binding us to transactions that exceed authorized limits;
• hiding unauthorized or unsuccessful activities resulting in unknown and unmanaged risks or losses;
• improperly using, disclosing or otherwise compromising confidential information;
• recommending transactions that are not suitable;
• engaging in fraudulent or otherwise improper activity;
• engaging in unauthorized or excessive trading to the detriment of customers; or
• otherwise not complying with laws, regulations or our control procedures.
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