Ameriprise 2014 Annual Report Download - page 27

Face-Amount Certificates
We currently issue five types of face-amount certificates through Ameriprise Certificate Company, a wholly owned subsidiary
of Ameriprise Financial that is registered as an investment company under the Investment Company Act of 1940
(‘‘Investment Company Act’’). Owners of our certificates invest funds and are entitled to receive at maturity or at the end
of a stated term, a determinable amount of money equal to their aggregate investments in the certificate plus interest at
rates we determine, less any withdrawals and early withdrawal penalties. For two types of certificate products, the rate of
interest is calculated in whole or in part based on any upward movement in a broad-based stock market index up to a
maximum return, where the maximum is a fixed rate for a given term, but can be changed at our discretion for prospective
terms.
At December 31, 2014, we had $4.2 billion in total certificate reserves underlying our certificate products. Our earnings
are based upon the difference, or ‘‘spread,’’ between the interest rates credited to certificate holders and the interest
earned on the certificate assets invested. A portion of these earnings is used to compensate the various affiliated entities
that provide management, administrative and other services to our company for these products. The certificates compete
with investments offered by banks, savings and loan associations, credit unions, mutual funds, insurance companies and
similar financial institutions. In times of weak performance in the equity markets, certificate sales are generally stronger. In
2014, advisors’ cash sales of our certificates were $2.4 billion.
Financial Wellness Program
We provide workplace financial planning and educational programs to employees of major corporations, small businesses
and school district employees through our Financial Wellness Program. Our Financial Wellness Program helps employees of
client companies plan for and achieve their long-term financial objectives and it offers financial planning as an employee
benefit supported by educational materials, tools and programs. For example, AFSI has entered into a national Financial
Wellness Program with Lowe’s, the world’s second largest home improvement chain. In addition, we provide training and
support to financial advisors working on-site at company locations to present educational seminars, conduct one-on-one
meetings and participate in client educational events. We also provide financial advice service offerings, such as financial
planning and executive financial services, tailored to discrete employee segments.
Strategic Alliances and Other Marketing Arrangements
We use strategic marketing alliances, local marketing programs for our advisors, and on-site workshops through our
Business Alliances group to generate new clients for our financial planning and other financial services. An important
aspect of our strategy is to create alliances that help us generate new financial services clients within our target market
segment, the mass affluent. Our alliance arrangements are generally for a limited duration of one to five years with an
option to renew. Additionally, these types of marketing arrangements typically provide that either party may terminate the
agreements on short notice, usually within sixty days. We compensate our alliance partners for providing opportunities to
market to their clients.
In addition to our alliance arrangements, we have developed a number of local marketing programs for our advisors to use
in building their client bases. These include pre-approved seminars, seminar and event training and referral tools and
training designed to encourage both prospective and existing clients to refer or bring their friends to an event.
Ameriprise India
In 2014, we discontinued the offering of retail financial planning and distribution services in India.
Our Segments — Asset Management
Our Asset Management segment provides investment advice and investment products to retail, high net worth and
institutional clients on a global scale through Columbia Management and Threadneedle. Columbia Management primarily
provides products and services in the U.S., and Threadneedle primarily provides products and services internationally. 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 U.S. mutual funds and their non-U.S. equivalents, exchange-traded funds (‘‘ETFs’’)
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 (‘‘CLOs’’), hedge fund strategies,
collective funds and property funds. CLOs, hedge fund strategies and certain private funds are often classified as
alternative assets. Our Asset Management segment also provides 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
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