Ameriprise 2011 Annual Report Download - page 22

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 Separate Accounts (a separately managed account (‘‘SMA’’) program), which is a discretionary wrap account
service through which clients invest in strategies managed by us or by affiliated and non-affiliated investment managers.
We offer 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 account service that offers six strategic target allocations based on different risk profiles
and tax sensitivities. Active Portfolios investments includes: Active Accumulation Portfoliosᓼ investments, Active Income
Portfoliosᓼ investments, Active Diversified Funds Portfolios, Active Diversified Alternatives Portfolios, Active Diversified Yield
Portfolios and Active Opportunity ETF Portfoliosᓼ investments. Additionally, we offer discretionary wrap account services
through which clients may invest in SMAs, mutual funds and exchange traded funds.
Mutual Fund Offerings
In addition to the Columbia Management family of mutual funds (discussed below in ‘‘Our Segments — Asset
Management — Columbia Management — Mutual Funds’’), we offer mutual funds from more than 250 mutual fund
families on our brokerage platform and as part of our wrap accounts to provide our clients a broad choice of investment
products. In 2011, retail sales of other companies’ mutual funds accounted for the majority of our total retail mutual fund
sales. Client assets held in mutual funds of other companies on a stand-alone basis generally produce lower total revenues
than client assets held in our own mutual funds, as our Asset Management segment does not earn ongoing investment
management fees for assets held in the funds of other companies.
Mutual fund families of other companies generally pay us a portion of the revenue generated from the sales of those funds
and from the ongoing management of fund assets attributable to our clients’ ownership of shares of those funds. These
payments enable us to make the mutual fund families of other companies generally available through our affiliated advisors
and through our online brokerage platform. We also receive administrative services fees from most mutual funds sold
through our affiliated advisor network.
Insurance and Annuities
We offer insurance and annuities issued by the RiverSource Life companies (discussed below in ‘‘Business — Our
Segments — Annuities’’ and in ‘‘Business — Our Segments — Protection’’). The RiverSource insurance solutions available
to our retail clients include variable and fixed universal life insurance, traditional life insurance and disability income
insurance. RiverSource annuities include fixed annuities, as well as variable annuities that allow our clients to choose from
a number of underlying investment options and to purchase certain guaranteed benefit riders. In addition to RiverSource
insurance and annuity products, our affiliated advisors offer products of unaffiliated carriers on a limited basis, including
variable annuities and long term care insurance products issued by a select number of unaffiliated insurance companies.
We receive a portion of the revenue generated from the sale of life and disability insurance policies of unaffiliated
insurance companies. We are paid distribution fees on annuities sales of unaffiliated insurance companies based on a
portion of the revenue generated from such sales. Such insurance companies may also pay us an administrative service
fee in connection with the sale of their products.
Banking Products
We provide consumer lending and Federal Deposit Insurance Corporation (‘‘FDIC’’) insured deposit products to our retail
clients through our banking subsidiary, Ameriprise Bank. Our consumer lending products include first mortgages, home
equity loans, home equity lines of credit, and investment secured loans. We also offer credit card products, including the
Ameriprise World Elite MasterCard, World MasterCard and Platinum MasterCard. The majority of bank deposits are brokered
deposits from affiliated broker-dealers or they are in the Ameriprise Personal Savings Account, which we offer in connection
with the Ameriprise ONE Financial Account described above in ‘‘Brokerage and Investment Advisory Services — Brokerage
and Other Products and Services.’’ We also offer checking, savings and money market accounts and certificates of deposit.
We believe these products play a key role in our Advice & Wealth Management business by offering our clients an
FDIC-insured alternative to other cash products. These products also provide pricing flexibility generally not available
through money market funds.
To manage our exposure to residential real estate, we sell the majority of our originated first mortgage products to third
parties shortly after origination. All other lending products are originated and held on the balance sheet of Ameriprise Bank,
with the exception of investment secured loans, which are held on the balance sheet of Ameriprise Financial. As of
December 31, 2011, there were $1.15 billion in home loans/equity line of credit balances, $11 million in investment
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