Ameriprise 2009 Annual Report Download - page 32

Competitors of our RiverSource Life companies and Property
Competition Casualty companies consist of both stock and mutual insurance
We operate in a highly competitive industry. As a diversified companies, as well as other financial intermediaries marketing
financial services firm, we compete directly with a variety of insurance products such as Hartford, MetLife, Prudential, Lincoln
financial institutions, including registered investment advisors, Financial, Principal Financial, Nationwide, Allstate and State
securities brokers, asset managers, banks and insurance Farm. Competitive factors affecting the sale of annuity products
companies. We compete directly with these entities for the include price, product features, investment performance,
provision of products and services to clients, as well as for our commission structure, perceived financial strength, claims-paying
financial advisors and investment management personnel. Our ratings, service, brand recognition and distribution capabilities.
products and services also compete indirectly in the marketplace Competitive factors affecting the sale of all insurance products
with the products and services of our competitors. include the cost of insurance and other contract charges, the level
of premium rates and financial strength ratings from rating
Our financial advisors compete for clients with a range of other
organizations such as A.M. Best. Competitive factors affecting the
advisors, broker-dealers and direct channels, including
sale of property casualty insurance products also include brand
wirehouses, regional broker-dealers, independent broker-dealers,
recognition and distribution capabilities.
insurers, banks, asset managers, registered investment advisers
and direct distributors. Technology
To acquire and maintain managed and administered assets, we We have an integrated customer management system, which
compete against a substantial number of firms, including those in serves as the hub of our technology platform. In addition, we have
the categories listed above. Our mutual funds, like other mutual specialized recordkeeping engines that manage individual
funds, face competition from other mutual fund families and brokerage, mutual fund, insurance and banking client accounts.
alternative investment products such as exchange traded funds. Over the years we have updated our platform to include new
Additionally, for mutual funds, high ratings from rating services product lines such as brokerage, deposit, credit and products of
such as Morningstar or Lipper, as well as favorable mention in other companies, wrap accounts and e-commerce capabilities for
financial publications, may influence sales and lead to increases in our financial advisors and clients. We also use a proprietary suite
managed assets. As a mutual fund’s assets increase, management of processes, methods, and tools for our financial planning
fee revenue increases and the fund may achieve economies of scale services. We update our technological capabilities regularly to
that make it more attractive to investors because of potential help maintain an adaptive platform design that aims to enhance
resulting reductions in the fund’s expense ratio. Conversely, low the productivity of our branded financial advisors and will allow a
ratings and negative mention in financial publications can lead to faster, lower-cost response to emerging business opportunities,
outflows, which reduce management fee revenues and can impede compliance requirements and marketplace trends.
achieving the benefits of economies of scale. Additionally,
reputation and brand integrity are important in the mutual fund Most of our applications run on a technology infrastructure that
industry generally, and certain firms in particular, have come we outsourced to IBM in 2002. Under this arrangement, IBM is
under regulatory and media scrutiny. Our mutual fund products responsible for all mainframe, midrange and end-user computing
compete against products of firms like Fidelity, American Funds operations and a substantial portion of our web hosting and help
and Oppenheimer. Competitive factors affecting the sale of mutual desk operations. Also, we outsource our voice network operations
funds include investment performance in terms of attaining the to AT&T. In addition to these two arrangements, we have
stated objectives of the particular products and in terms of fund outsourced our production support and a portion of our
yields and total returns, advertising and sales promotional efforts, development and maintenance of our computer applications to
brand recognition, investor confidence, type and quality of other firms. We initiated a major replacement of our brokerage
services, fee structures, distribution, and type and quality of and clearing platforms in the last quarter of 2009 and continue to
service. roll out that implementation in stages across our branded advisor
network.
Our brokerage subsidiaries compete with securities broker-
dealers, independent broker-dealers, financial planning firms, We have developed a comprehensive business continuity plan that
registered investment advisors, insurance companies and other covers business disruptions of varying severity and scope and
financial institutions in attracting and retaining members of the addresses the loss of a geographic area, building, staff, data
field force. Competitive factors in the brokerage services business systems and/or telecommunications capabilities. We review and
include price, service and execution. test our business continuity plan on an ongoing basis and update it
as necessary, and we require our key technology vendors and
service providers to do the same. Under our business continuity
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