Ameriprise 2010 Annual Report Download - page 22

paying down debt, increasing savings and investment, protecting income and assets, creating a will, and including tax
qualified formats in the client’s allocation of savings and investment—as well as products to address these objectives with
clients accepting what they determine to be an appropriate range and level of risk. Our financial planning relationships with
our clients are characterized by an ability to thoroughly understand their specific needs, which enables us to better help
them meet those needs, achieve higher overall client satisfaction, hold more products in their accounts and increase the
company’s assets under management.
Our financial planning clients pay a fee for the receipt of financial planning services. This fee is based on the complexity of
a client’s financial and life situation and his or her advisor’s particular practice experience. The fee is generally not based
on or related to actual investment performance; however, our clients may elect to pay a consolidated, asset-based advisory
fee for financial planning and managed account services. If clients elect to implement their financial plan with our
company, we and our affiliated financial advisors generally receive a sales commission and/or sales load and other
revenues for the products that we sell to them. These commissions, sales loads and other revenues are separate from and
in addition to the financial planning fees we and our affiliated financial advisors may receive.
Brokerage and Other Products and Services
We offer our retail and institutional clients a variety of brokerage and other investment products and services.
Our Ameriprise ONEᓼ financial account is a single integrated financial management account that combines a client’s
investment, banking and lending relationships. The Ameriprise ONE financial account enables clients to access a single
cash account to fund a variety of financial transactions, including investments in mutual funds, individual securities, cash
products and margin lending. Additional features of the Ameriprise ONE financial account include unlimited check writing
with overdraft protection, a MasterCard debit card, online bill payments, ATM access and a savings account.
We provide securities execution and clearing services for our retail and institutional clients through our registered broker-
dealer subsidiaries. As of December 31, 2010, we administered $104.2 billion in assets for clients. Clients can use our
online brokerage service to purchase and sell securities, obtain independent research and information about a wide variety
of securities, and use self-directed asset allocation and other financial planning tools. We also offer shares in public
non-exchange traded Real Estate Investment Trusts (‘‘REITs’’), and other alternative investments and structured notes
issued by unaffiliated companies.
Through Ameriprise Achiever Circle, we offer special benefits and rewards to recognize clients who have $100,000 or more
invested with us. Clients who have $500,000 or more invested with us are eligible for Ameriprise Achiever Circle Elite,
which includes additional benefits. To qualify for and maintain Achiever Circle or Achiever Circle Elite status, clients must
meet certain eligibility and maintenance requirements. Special benefits of the program may include fee reductions or
waivers on Ameripriseᓼ IRAs and the Ameriprise ONE financial accounts, fee-waived Ameriprise Financial MasterCardᓼ, fee
or interest rate benefits on an Ameriprise Savings or Advantage Savings Accounts, and fee or rate benefits on home equity
lines of credit with Ameriprise Bank.
Fee-based Investment Advisory Accounts
In addition to purchases of affiliated and non-affiliated mutual funds and other securities on a stand-alone basis, clients
may purchase mutual funds, among other securities, in connection with investment advisory fee-based ‘‘wrap account’’
programs or services. The wrap fee is for the added services and investment advice associated with these accounts and is
based on a percentage of their assets. We currently offer both discretionary and non-discretionary investment advisory wrap
accounts. In a discretionary wrap account, we (or an unaffiliated investment advisor) choose the underlying investments in
the portfolio on behalf of the client, whereas in a non-discretionary wrap account, clients choose the underlying
investments in the portfolio based on their own or on their financial advisor’s recommendation. Investors in discretionary
and non-discretionary wrap accounts generally pay an asset-based fee (for investment advice and other services) based on
the assets held in that account as well as any related fees or costs included in the underlying securities held in that
account (e.g., underlying mutual fund operating expenses, investment advisory or related fees, Rule 12b-1 fees, etc.). A
significant portion of our affiliated mutual fund sales are made through wrap accounts. Client assets held in affiliated
mutual funds in a wrap account generally produce higher revenues to us than client assets held in affiliated mutual funds
on a stand-alone basis because, as noted above, we receive an investment advisory fee based on the asset values of the
assets held in a wrap account in addition to revenues we normally receive for investment management of the funds
included in the account.
We offer several types of investment advisory accounts. We sponsor Ameriprise Strategic Portfolio Service Advantage, a
non-discretionary wrap account service, as well as SPS—Advisor, a discretionary wrap account service. We also sponsor
Ameriprise Separately Managed Accounts (‘‘SMAs’’), a discretionary wrap account service through which clients invest in
strategies offered by us and by affiliated and non-affiliated investment managers and a similar program on an
accommodation basis where clients transfer assets to us and do not maintain an investment management relationship
with the manager of those assets. We also sponsor Active Portfoliosᓼ investments, a discretionary mutual fund wrap
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