Ameriprise 2008 Annual Report Download - page 72

Separation Costs
Separation costs include expenses related to our separation from American Express. These costs were primarily associated
with establishing the Ameriprise Financial brand, separating and reestablishing our technology platforms and advisor and
employee retention programs. Our separation from American Express was completed in 2007.
General and Administrative Expense
General and administrative expense includes compensation, share-based awards and other benefits for employees (other
than employees directly related to distribution, including financial advisors), professional and consultant fees, information
technology, facilities and equipment, advertising and promotion, legal and regulatory, minority interest and corporate related
expenses. Minority interest is related to certain consolidated limited partnerships, which primarily consist of the portion of net
income (loss) of these partnerships not owned by us.
Our Segments
Our five segments are Advice & Wealth Management, Asset Management, Annuities, Protection and Corporate & Other. See
Note 26 of our Consolidated Financial Statements for a description of our segments.
Owned, Managed and Administered Assets
Owned assets include certain assets on our Consolidated Balance Sheets for which we do not provide investment
management services and do not recognize management fees, such as investments in non-proprietary funds held in the
separate accounts of our life insurance subsidiaries, as well as restricted and segregated cash and receivables.
Managed assets include managed external client assets and managed owned assets. Managed external client assets include
client assets for which we provide investment management services, such as the assets of the RiverSource family of mutual
funds and Seligman family of mutual funds, assets of institutional clients and client assets held in wrap accounts. Managed
external client assets also include assets managed by sub-advisors selected by us. Managed external client assets are not
reported on our Consolidated Balance Sheets. Managed owned assets include certain assets on our Consolidated Balance
Sheets for which we provide investment management services and recognize management fees in our Asset Management
segment, such as the assets of the general account and RiverSource Variable Product funds held in the separate accounts of
our life insurance subsidiaries.
Administered assets include assets for which we provide administrative services such as client assets invested in other
companies’ products that we offer outside of our wrap accounts. These assets include those held in clients’ brokerage
accounts. We do not exercise management discretion over these assets and do not earn a management fee. These assets are
not reported on our Consolidated Balance Sheets.
We earn management fees on our owned separate account assets based on the market value of assets held in the separate
accounts. We record the income associated with our owned investments, including net realized gains and losses associated
with these investments and other-than-temporary impairments on these investments, as net investment income. For
managed assets, we receive management fees based on the value of these assets. We generally report these fees as
management and financial advice fees. We may also receive distribution fees based on the value of these assets. We
generally record fees received from administered assets as distribution fees.
Fluctuations in our owned, managed and administered assets impact our revenues. Our owned, managed and administered
assets are impacted by net flows of client assets, market movements and foreign exchange rates. Owned assets are also
affected by changes in our capital structure. In 2008, RiverSource managed assets had $12.9 billion in net outflows
compared to net outflows of $6.2 billion during 2007 and market depreciation of $28.8 billion in 2008 compared to market
appreciation of $5.7 billion in 2007. These negative impacts to RiverSource managed assets were partially offset by a
$12.8 billion increase in managed assets due to the acquisition of Seligman in the fourth quarter of 2008. Threadneedle
managed assets had $15.8 billion in net outflows in 2008 compared to net outflows of $21.1 billion in 2007 and market
depreciation of $19.8 billion in 2008 compared to market appreciation of $7.5 billion in 2007. The negative impact on
Threadneedle managed assets due to changes in foreign currency exchange rates was $28.6 billion in 2008 compared to a
positive impact of $2.0 billion in 2007. Our wrap accounts had net inflows of $3.7 billion in 2008 compared to net inflows of
$11.7 billion in 2007 and market depreciation of $26.8 billion in 2008 and market appreciation of $5.8 billion in 2007. The
net decline in wrap account assets was partially offset by a $2.1 billion increase due to the acquisition of H&R Block Financial
Advisors, Inc. In 2008, RiverSource variable annuities had net inflows of $2.7 billion, but variable annuity contract
accumulation values decreased $13.9 billion, net of market-driven declines in separate account asset values. These changes
in variable annuities affected both RiverSource managed owned assets and owned assets. Our fixed annuities had total net
outflows of $0.7 billion in 2008 compared to net outflows of $2.9 billion in the prior year, which impacted our RiverSource
managed owned assets. Administered assets increased $4.5 billion compared to the prior year due to an increase of
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