Ameriprise 2012 Annual Report Download - page 26

third-party product manufacturers to purchase recommended investment and/or insurance products. We generally receive a
commission from such third-party product manufacturers for making these referrals.
Our Segments — Asset Management
Our Asset Management segment provides investment advice and investment products to retail, high net worth and
institutional clients. Such products and services are provided on a global scale through Columbia Management and
Threadneedle. Columbia Management primarily provides U.S. domestic products and services, and Threadneedle primarily
provides international investment products and services. We provide clients with U.S. domestic individual products through
unaffiliated third-party financial institutions and through our Advice & Wealth Management segment, and we provide
institutional products and services through our institutional sales force. International retail products are primarily distributed
through third-party financial institutions and unaffiliated financial advisors. Individual products include mutual funds,
exchange-traded funds and variable product funds underlying insurance and annuity separate accounts. Institutional asset
management services are designed to meet specific client objectives and may involve a range of products, including those
that focus on traditional asset classes, separately managed accounts, collateralized loan obligations, hedge funds,
collective funds and property funds. Collateralized loan obligations and hedge funds are classified as alternative assets. In
addition to the products and services provided to third-party clients, management teams serving our Asset Management
segment provide all intercompany asset management services for Ameriprise Financial subsidiaries. The fees for such
services are reflected within the Asset Management segment results through intersegment transfer pricing. Intersegment
expenses for this segment include distribution expenses for services provided by our Advice & Wealth Management,
Annuities and Protection segments. All intersegment activity is eliminated in our consolidated results.
Revenues in the Asset Management segment are primarily earned as fees based on managed asset balances, which are
impacted by market movements, net asset flows, asset allocation and product mix. We may also earn performance fees
from certain accounts where investment performance meets or exceeds certain pre-identified targets. At December 31,
2012, our Asset Management segment had $455.4 billion in managed assets worldwide. Managed assets include
managed external client assets and managed owned assets. Managed external client assets include client assets for which
we provide investment management services, such as the assets of the Columbia Management and Threadneedle families
of mutual funds and the assets of institutional clients. Managed external client assets also include assets managed by
sub-advisers we select. Our external client assets are not reported on our Consolidated Balance Sheets. Managed owned
assets include certain assets on our Consolidated Balance Sheets (such as the assets of the general account and the
variable product funds held in the separate accounts of our life insurance subsidiaries) for which the Asset Management
segment provides management services and recognizes management fees. For additional details regarding our assets
under management and administration, see ‘‘Management’s Discussion and Analysis of Financial Condition and Results of
Operations’’ included in Part II, Item 7 of this Annual Report on Form 10-K.
Columbia Management
The investment management activities of Columbia Management are conducted primarily through investment management
teams located throughout the United States. Each investment management team may focus on particular investment
strategies, asset types, products and on services offered and distribution channels utilized. These teams manage the
majority of assets in our Columbia Management family of mutual funds, as well as the assets we manage for institutional
clients in separately managed accounts, collective funds, hedge funds, the general and separate accounts of the
RiverSource Life companies, the assets of IDS Property Casualty and Ameriprise Certificate Company. These investment
management teams also manage assets under sub-advisory arrangements.
We believe that delivering consistent and competitive investment performance will positively impact our assets under
management by increasing the interest in our investment products. To achieve such performance, our investment teams
use a ‘‘5P’’ process that focuses on the five factors we believe are most significant for delivering results to clients: product
definition, investment philosophy, people, investment process and performance expectation. These factors are continuously
monitored and provide a framework around which portfolio managers can better define their objectives and the processes
through which they plan to achieve them.
Each investment management team focuses on particular investment strategies and product sets. Our U.S. investment
management teams are located in multiple locations, including Boston, Charlotte, Chicago, Los Angeles, Minneapolis, New
York, Menlo Park and Portland, Oregon. We have implemented a multi-platform approach to equity asset management
using individual investment management teams with a combination of dedicated centralized analytical and equity trading
resources. The portfolios we manage focus on varying sizes and categories of domestic and global equity securities. Our
U.S. fixed income teams are organized by sectors, including investment grade, high yield, municipal, global and structured.
This sector-based approach creates focused and accountable teams organized by expertise. Portfolio performance is
measured to align client and corporate interests, and asset managers are incented to collaborate, employ best practices
and execute in response to changing market and investment conditions consistent with established portfolio management
principles.
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