Ameriprise 2012 Annual Report Download - page 22

Our Segments — Advice & Wealth Management
Our Advice & Wealth Management segment provides financial planning and advice, as well as full-service brokerage
services, primarily to retail clients through our advisors. Our 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 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.
Our Financial Advisor Platform
We provide clients financial planning, advice and brokerage services through our nationwide network of more than 9,700
advisors, of which more than 2,300 are employees of our company and more than 7,400 are independent franchisees or
employees or contractors of franchisees.
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
leadership, training, 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’’), our
dedicated platform 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.
We continue to invest in and enhance the public awareness of the Ameriprise Financial brand and the performance of our
advisors. In 2012, we continued to build upon our award-winning advertising campaign focused on our MORE WITHIN
REACHᓼ brand platform, which highlights the Company’s rich history, financial strength and commitment to clients. We also
completed a multi-year project to convert all of our advisors to an enhanced brokerage platform designed to be the core
technology tool our 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. Finally, we introduced the Confident Retirementᓼ approach, which serves as a framework for advisors to help their
clients create a sound retirement plan. This approach involves a comprehensive assessment of retirement income sources
and assets, a client’s plans and goals for retirement and an analysis of what is needed to fund the four principal types of
expenses and liabilities encountered during retirement: covering essentials, ensuring lifestyle, preparing for the unexpected
and leaving a legacy. We believe this comprehensive approach to retirement planning allows our advisors to create a plan
that best matches our products and services to our clients’ needs and results in greater client satisfaction and confidence.
Our strong financial advisor retention rate speaks to the value proposition we offer advisors. As of December 31, 2012,
over 56% of our advisors had been with us for more than 10 years, with an average tenure of nearly 19 years. Among
advisors who have been with us for more than 10 years, we have a retention rate of over 96%. We believe this success is
driven by the affiliation choices we offer our advisors, together with our competitive payout arrangements and the broad
support that helps them build their practices.
Our 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.
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