Ameriprise 2010 Annual Report Download - page 34

families and alternative investment products such as exchange traded funds. Additionally, for mutual funds, high ratings
from rating services such as Morningstar or Lipper, as well as favorable mention in financial publications, may influence
sales and lead to increases in managed assets. As a mutual fund’s assets increase, management fee revenue increases
and the fund may achieve economies of scale that make it more attractive to investors because of potential resulting
reductions in the fund’s expense ratio. Conversely, low ratings and negative mention in financial publications can lead to
outflows, which reduce management fee revenues and can impede achieving the benefits of economies of scale.
Additionally, reputation and brand integrity are important in the mutual fund industry generally, and certain firms in
particular, have come under regulatory and media scrutiny. Our mutual fund products compete against products of firms
like Fidelity, American Funds and Oppenheimer. Competitive factors affecting the sale of mutual funds include investment
performance in terms of attaining the stated objectives of the particular products and in terms of fund yields and total
returns, advertising and sales promotional efforts, brand recognition, investor confidence, type and quality of services, fee
structures and distribution.
Our brokerage subsidiaries compete with securities broker-dealers, independent broker-dealers, financial planning firms,
registered investment advisors, insurance companies and other financial institutions in attracting and retaining members of
the field force. Competitive factors in the brokerage services business include price, service and execution.
Competitors of our RiverSource Life companies and Property Casualty companies consist of both stock and mutual
insurance companies such as Hartford, MetLife, Prudential, Lincoln Financial, AXA Financial, Principal Financial,
Nationwide, Allstate and State Farm. Competitive factors affecting the sale of annuity products include price, product
features, investment performance, commission structure, perceived financial strength, claims-paying ratings, service, brand
recognition and distribution capabilities. Competitive factors affecting the sale of all insurance products include the cost of
insurance and other contract charges, the level of premium rates and financial strength ratings from rating organizations
such as A.M. Best. Competitive factors affecting the sale of property casualty insurance products also include brand
recognition and distribution capabilities.
Technology
We have an integrated customer management system, which serves as the hub of our technology platform. In addition, we
have specialized recordkeeping engines that manage individual brokerage, mutual fund, insurance and banking client
accounts. Over the years we have updated our platform to include new product lines such as brokerage, deposit, credit
and products of other companies, wrap accounts and e-commerce capabilities for our financial advisors and clients. We
also use a proprietary suite of processes, methods, and tools for our financial planning services. We update our
technological capabilities regularly to help maintain an adaptive platform design that aims to enhance the productivity of
our branded financial advisors and will allow a faster, lower-cost response to emerging business opportunities, compliance
requirements and marketplace trends.
Most of our applications run on a technology infrastructure that we outsourced to IBM in 2002. Under this arrangement,
IBM is responsible for all mainframe, midrange and end-user computing operations and a portion of our web hosting and
help desk operations. Also, we outsource our voice network operations to AT&T. In addition to these two arrangements, we
have outsourced our production support and a substantial portion of the development and maintenance of our computer
applications to other firms. We initiated a major replacement of our brokerage and clearing platforms in the last quarter of
2009 and continue to roll out that implementation in stages across our branded advisor network.
We have developed a comprehensive business continuity plan that covers business disruptions of varying severity and
scope and addresses the loss of a geographic area, building, staff, data systems and/or telecommunications capabilities.
We review and 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 plan, we expect to be able to
continue doing business and to resume operations with minimal service impacts. However, under certain scenarios, the
time that it would take for us to recover and to resume operations may significantly increase depending on the extent and
geographic scope of the disruption and the number of personnel affected.
Geographic Presence
For years ended December 31, 2010, 2009 and 2008, approximately 88%, 85% and 86%, respectively, of our long-lived
assets were located in the United States and approximately 95%, 95% and 94%, respectively, of our net revenues were
generated in the United States. Our foreign operations are conducted predominantly through Threadneedle, as described in
this Annual Report on Form 10-K under ‘‘Business—Our Segments—Asset Management—International Asset
Management—Threadneedle.’’
Employees
At December 31, 2010, we had 10,472 employees, including 2,168 employee branded advisors (which does not include
our branded franchisee advisors or the unbranded advisors of SAI, none of whom are employees of our company). We are
not subject to collective bargaining agreements, and we believe that our employee relations are strong.
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