Ameriprise 2012 Annual Report Download - page 89

Wrap account assets increased $5.9 billion, or 6%, to $103.4 billion at December 31, 2011 compared to the prior year
due to net inflows, partially offset by market depreciation. The ending S&P 500 Index was flat in 2011 compared to 2010.
Average wrap account assets increased $13.6 billion, or 15%, in 2011 compared to 2010 driven by net inflows and
market appreciation. The average S&P 500 Index increased 11% in 2011 compared to 2010.
The following table presents the results of operations of our Advice & Wealth Management segment on an operating basis:
Years Ended
December 31,
2011 2010 Change
(in millions)
Revenues
Management and financial advice fees $ 1,590 $ 1,370 $ 220 16%
Distribution fees 1,849 1,696 153 9
Net investment income 261 272 (11) (4)
Other revenues 61 71 (10) (14)
Total revenues 3,761 3,409 352 10
Banking and deposit interest expense 48 67 (19) (28)
Total net revenues 3,713 3,342 371 11
Expenses
Distribution expenses 2,203 1,954 249 13
General and administrative expense 1,104 1,066 38 4
Total expenses 3,307 3,020 287 10
Operating earnings $ 406 $ 322 $ 84 26%
Our Advice & Wealth Management segment pretax operating income, which excludes net realized gains or losses and
integration and restructuring charges, increased $84 million, or 26%, to $406 million for the year ended December 31,
2011 compared to $322 million for the prior year due to improved advisor productivity and new client flows. Pretax
operating margin was 10.9% for the year ended December 31, 2011 compared to 9.6% for the prior year.
Net Revenues
Net revenues exclude net realized gains or losses. Net revenues increased $371 million, or 11%, to $3.7 billion for the
year ended December 31, 2011 compared to $3.3 billion for the prior year driven by higher management and distribution
fees from growth in wrap account assets and increased client activity.
Management and financial advice fees increased $220 million, or 16%, to $1.6 billion for the year ended December 31,
2011 compared to $1.4 billion for the prior year driven by growth in wrap account assets. Average wrap account assets
increased $13.6 billion, or 15%, in 2011 compared to 2010 driven by net inflows and market appreciation. See our
discussion of changes in wrap account assets above.
Distribution fees increased $153 million, or 9%, to $1.8 billion for the year ended December 31, 2011 compared to
$1.7 billion for the prior year primarily driven by growth in wrap account assets and increased client activity.
Net investment income, which excludes net realized gains or losses, decreased $11 million, or 4%, to $261 million for the
year ended December 31, 2011 compared to $272 million for the prior year due to a decrease in investment income on
fixed maturity securities driven by lower invested assets resulting from net outflows in certificates driven by the low interest
rate environment, partially offset by higher banking invested asset balances and $6 million of additional bond discount
accretion investment income related to prior periods resulting from revisions to the accounting classification of certain
structured securities in the third quarter of 2011.
Banking and deposit interest expense decreased $19 million, or 28%, to $48 million for the year ended December 31,
2011 compared to $67 million for the prior year primarily due to lower certificate balances, as well as a decrease in
crediting rates on certificate products.
Expenses
Total expenses exclude integration and restructuring charges. Total expenses increased $287 million, or 10%, to
$3.3 billion for the year ended December 31, 2011 compared to $3.0 billion for the prior year primarily due to an
increase in distribution expenses.
Distribution expenses increased $249 million, or 13%, to $2.2 billion for the year ended December 31, 2011 compared
to $2.0 billion for the prior year primarily due to higher advisor compensation from business growth.
General and administrative expense, which excludes integration and restructuring charges, increased $38 million, or 4%, to
$1.1 billion for the year ended December 31, 2011 compared to $1.1 billion for the prior year primarily due to an
increase in investment spending, including costs associated with our new brokerage platform.
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