Ameriprise 2011 Annual Report Download - page 20

Our Segments — Advice & Wealth Management
Our Advice & Wealth Management segment provides financial planning and advice, as well as full-service brokerage and
banking services, primarily to retail clients through our affiliated advisors. Our affiliated advisors have access to a diversified
selection of both affiliated and non-affiliated products to help clients meet their financial needs. A significant portion of
revenues in this segment is fee-based, driven by the level of client assets, which is impacted by both market movements
and net asset flows. We also earn net investment income on owned assets primarily from certificate and banking products.
This segment earns revenues (distribution fees) for providing non-affiliated products and earns intersegment revenues
(distribution fees) for providing our affiliated products and services to our retail clients. Intersegment expenses for this
segment include expenses for investment management services provided by our Asset Management segment. All
intersegment activity is eliminated in our consolidated results. In 2011, 28% of our revenues from external clients were
attributable to our Advice & Wealth Management business.
Our Financial Advisor Platform
We provide clients financial planning, advice and brokerage services through our nationwide network of more than 9,700
affiliated advisors, of which more than 2,200 are employees of our company and more than 7,500 are independent
franchisees or employees or contractors of franchisees. With the sale of Securities America, we no longer offer a platform
for unbranded financial advisors.
Advisors can choose to affiliate with our company in two different ways. Each affiliation offers different levels of support
and compensation, with the amount of compensation we pay to each advisor determined by the type of service or product
provided, the type of advisor affiliation and other criteria. The affiliation options are:
•Employee Advisors. Under this affiliation, a financial advisor is an employee of our company. We pay
compensation competitive with other employee advisor models and provide a high level of support, including
local office space and staff support in exchange for a payout rate lower than that of our franchisee advisors.
Employee advisors are also employed in the Ameriprise Advisor Center (‘‘AAC’’), a dedicated center for remote-
based sales and service to Ameriprise retail customers. Advisors in the AAC serve retail customers who do not
have access to a local advisor or who prefer a remote relationship with a financial advisor.
•Franchisee Advisors. Under this affiliation, a financial advisor is an independent contractor franchisee who
affiliates with our company and has the right to use the Ameriprise brand. We pay our franchisee advisors a
higher payout rate than our employee advisors as they are responsible for paying their own overhead, staff
compensation and other business expenses. In addition, our franchisee advisors pay a franchise association
fee and other fees in exchange for the support we offer and the right to utilize our brand name. The support
we offer to our franchisee advisors includes generalist and specialist leadership support, technology platforms
and tools, training and marketing programs.
During 2011, we took a number of steps to enhance the public awareness of the Ameriprise brand and the performance
of our affiliated advisors. In September, we introduced a new advertising campaign that builds on our MORE WITHIN
REACHᓼ brand platform and highlights the Company’s rich history, financial strength and commitment to clients. We
continued to invest in and implement the conversion to an enhanced brokerage platform designed to be the core
technology tool our affiliated advisors use to service clients. The enhanced technology platform integrates with other
advisor resources to help advisors run a more efficient practice, increase productivity and offer clients additional products
and services. We expect to have all advisors on this technology platform by the end of 2012. We also continued to recruit
experienced financial advisors from other firms and to affiliate such advisors within our affiliated advisor platform. Over the
past three years, more than 1,100 experienced financial advisors have joined Ameriprise.
Our strong financial advisor retention rate speaks to the value proposition we offer advisors. As of December 31, 2011,
over 55% of our affiliated advisors had been with us for more than 10 years, with an average tenure of nearly 18 years.
Among affiliated advisors who have been with us for more than 10 years, we have a retention rate of over 97%. We
believe this success is driven by the affiliation choices we offer affiliated advisors, together with our competitive payout
arrangements and the broad support that helps them build their practices.
Our affiliated advisors can offer clients a diversified set of cash and liquidity, asset accumulation, income, protection, and
estate and wealth transfer products and services, as well as a selection of products from other companies, as described
below.
Brokerage and Investment Advisory Services
Individual and Family Financial Services
The personalized financial planning approach of our affiliated advisors focuses on all aspects of our clients’ finances. After
understanding our clients’ needs, our advisors seek to identify solutions to address those needs across four cornerstones:
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