Ameriprise 2009 Annual Report Download - page 43

rates that can be charged on loans outstanding, changes in Our reputation is also dependent on our continued identification
communication with customers that affect payments, statements of and mitigation against conflicts of interest. As we have
and collections of loans, and changes in accounting for the expanded the scope of our businesses and our client base, we
consumer lending business. increasingly have to identify and address potential conflicts of
interest, including those relating to our proprietary activities and
The majority of our affiliated financial advisors are independent those relating to our sales of non-proprietary products from
contractors. Legislative or regulatory action that redefines the manufacturers that have agreed to provide us marketing, sales and
criteria for determining whether a person is an employee or an account maintenance support. For example, conflicts may arise
independent contractor could materially impact our relationships between our position as a provider of financial planning services
with our advisors, and our business, resulting in an adverse effect and as a manufacturer and/or distributor or broker of asset
on our results of operations. accumulation, income or insurance products that one of our
affiliated financial advisors may recommend to a financial
For a further discussion of the regulatory framework in which we planning client. We have procedures and controls that are
operate, see Item 1 of this Annual Report on Form 10-K — designed to identify, address and appropriately disclose conflicts
‘‘Business — Regulation.’’ of interest. However, identifying and appropriately dealing with
conflicts of interest is complex, and our reputation could be
We face risks arising from acquisitions.
damaged if we fail, or appear to fail, to deal appropriately with
We have made acquisitions in the past and expect to continue to
conflicts of interest. In addition, the SEC and other federal and
do so. We face a number of risks arising from acquisition
state regulators have increased their scrutiny of potential conflicts
transactions, including difficulties in the integration of acquired
of interest. It is possible that potential or perceived conflicts could
businesses into our operations, difficulties in assimilating and
give rise to litigation or enforcement actions. It is possible also
retaining employees and intermediaries, difficulties in retaining
that the regulatory scrutiny of, and litigation in connection with,
the existing customers of the acquired entities, unforeseen
conflicts of interest will make our clients less willing to enter into
liabilities that arise in connection with the acquired businesses,
transactions in which such a conflict may occur, and will adversely
the failure of counterparties to satisfy any obligations to indemnify
affect our businesses.
us against liabilities arising from the acquired businesses, and
unfavorable market conditions that could negatively impact our Misconduct by our employees and affiliated financial
growth expectations for the acquired businesses. These risks may advisors is difficult to detect and deter and could harm
prevent us from realizing the expected benefits from acquisitions our business, results of operations or financial
and could result in the impairment of goodwill and/or intangible condition.
assets recognized at the time of acquisition. Misconduct by our employees and affiliated financial advisors
could result in violations of law, regulatory sanctions and/or
A failure to protect our reputation, including the proper
serious reputational or financial harm. Misconduct can occur in
management of conflicts of interest, could adversely
each of our businesses and could include:
affect our businesses.
Our reputation is one of our most important assets. Our ability to > binding us to transactions that exceed authorized limits;
attract and retain customers, investors, employees and affiliated > hiding unauthorized or unsuccessful activities resulting in
financial advisors is highly dependent upon external perceptions unknown and unmanaged risks or losses;
of our level of service, business practices and financial condition.
> improperly using, disclosing or otherwise compromising
Damage to our reputation could cause significant harm to our
confidential information;
business and prospects and may arise from numerous sources,
including litigation or regulatory actions, failing to deliver > recommending transactions that are not suitable;
minimum standards of service and quality, compliance failures, > engaging in fraudulent or otherwise improper activity;
unethical behavior and the misconduct of employees, affiliated
financial advisors and counterparties. Negative perceptions or > engaging in unauthorized or excessive trading to the detriment
publicity regarding these matters could damage our reputation of customers; or
among existing and potential customers, investors, employees and > otherwise not complying with laws, regulations or our control
affiliated financial advisors. Adverse developments with respect to procedures.
our industry may also, by association, negatively impact our
reputation or result in greater regulatory or legislative scrutiny or We cannot always deter misconduct by our employees and
litigation against us. affiliated financial advisors, and the precautions we take to
prevent and detect this activity may not be effective in all cases.
Preventing and detecting misconduct among our branded
28 ANNUAL REPORT 2009