Ameriprise 2014 Annual Report Download - page 47

loan or derivative exposure due to it. We also have exposure to financial institutions in the form of unsecured debt
instruments, derivative transactions (including with respect to derivatives hedging our exposure on variable annuity
contracts with guaranteed benefits), reinsurance, repurchase and underwriting arrangements and equity investments. There
can be no assurance that any such losses or impairments to the carrying value of these assets would not materially and
adversely impact our business and results of operations.
Downgrades in the credit or financial strength ratings assigned to the counterparties with whom we transact or other
adverse reputational impacts to such counterparties could create the perception that our financial condition will be
adversely impacted as a result of potential future defaults by such counterparties. Additionally, we could be adversely
affected by a general, negative perception of financial institutions caused by the downgrade or other adverse impact to the
reputation of other financial institutions. Accordingly, ratings downgrades or other adverse reputational impacts for other
financial institutions could affect our market capitalization and could limit access to or increase our cost of capital.
A number of the products and services we make available to our clients are those offered by third parties, for which we
may generate revenue based on the level of assets under management, the number of client transactions or otherwise.
The poor performance of such products and services, or negative perceptions of the firms offering such products and
services, may adversely impact our sales of such products and services and reduce our revenue. In addition, such failures
or poor performance of products and services offered by other financial institutions could adversely impact consumer
confidence in products and services that we offer. Negative perceptions of certain financial products and services, or the
financial industry in general, may increase the number of withdrawals and redemptions or reduce purchases made by our
clients, which would adversely impact the levels of our assets under management, revenues and liquidity position.
A drop in our investment performance as compared to that of our competitors could negatively impact our
revenues and profitability.
Investment performance is a key competitive factor for our retail and institutional asset management products and
services. Strong investment performance helps to ensure the retention of our products and services by our clients and
creates new sales of products and services. It may also result in higher ratings by ratings services such as Morningstar or
Lipper, which may compound the foregoing effects. Strong investment performance and its effects are important elements
to our stated goals of growing assets under management and achieving economies of scale.
There can be no assurance as to how future investment performance will compare to our competitors or that historical
performance will be indicative of future returns. Any drop or perceived drop in investment performance as compared to our
competitors could cause a decline in sales of our mutual funds and other investment products, an increase in redemptions
and the termination of institutional asset management relationships. These impacts may reduce our aggregate amount of
assets under management and reduce management fees. Poor investment performance could also adversely affect our
ability to expand the distribution of our products through unaffiliated third parties. Further, any drop in market share of
mutual funds sales by our advisors may further reduce profits as sales of other companies’ mutual funds are less profitable
than sales of our proprietary funds.
We may not be able to maintain our unaffiliated third-party distribution channels or the terms by which
unaffiliated third parties sell our products.
We distribute certain of our investment products and fixed annuities through unaffiliated third-party advisors and financial
institutions. Maintaining and deepening relationships with these unaffiliated distributors is an important part of our growth
strategy, as strong third-party distribution arrangements enhance our ability to market our products and to increase our
assets under management, revenues and profitability. There can be no assurance that the distribution relationships we
have established will continue, as our distribution partners may cease to operate or otherwise terminate their relationship
with us. Any such reduction in access to third-party distributors may have a material adverse effect on our ability to market
our products and to generate revenue in our Asset Management and Annuities segments.
Access to distribution channels is subject to intense competition due to the large number of competitors and products in
the investment advisory and annuities industries. Relationships with distributors are subject to periodic negotiation that
may result in increased distribution costs and/or reductions in the amount of our products marketed. Any increase in the
costs to distribute our products or reduction in the type or amount of products made available for sale may have a
material effect on our revenues and profitability.
We face risks arising from acquisitions and divestitures.
We have made acquisitions and divestitures in the past and may pursue similar strategic transactions in the future. Risks
in acquisition transactions include difficulties in the integration of acquired businesses into our operations, difficulties in
assimilating and retaining employees and intermediaries, difficulties in retaining the existing customers of the acquired
entities, assumed or unforeseen liabilities that arise in connection with the acquired businesses, the failure of
counterparties to satisfy any obligations to indemnify us against liabilities arising from the acquired businesses, and
unfavorable market conditions that could negatively impact our growth expectations for the acquired businesses. Risks in
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