Ameriprise 2014 Annual Report Download - page 81

Management and financial advice fees increased $374 million, or 18%, to $2.4 billion for the year ended December 31,
2014 compared to $2.0 billion for the prior year driven by growth in wrap account assets. Average advisory wrap account
assets increased $25.7 billion, or 19%, to $163.9 billion at December 31, 2014 compared to the prior year primarily due
to net inflows and market appreciation. See our discussion of the changes in wrap account assets above.
Distribution fees increased $118 million, or 6%, to $2.2 billion for the year ended December 31, 2014 compared to
$2.1 billion for the prior year due to higher client assets, as well as increased client activity.
Expenses
Total expenses increased $311 million, or 8%, to $4.0 billion for the year ended December 31, 2014 compared to
$3.7 billion for the prior year due to a $302 million increase in distribution expenses driven by higher advisor
compensation due to strong growth in client assets.
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 non-U.S. equivalents, 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, individually managed accounts, collateralized loan obligations, hedge funds,
collective funds and property funds. Collateralized loan obligations, hedge funds and certain private funds are often
classified as alternative assets. Revenues in this 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.
Our Asset Management segment also provides 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.
Fee waivers have been provided to the Columbia Money Market Funds (the ‘‘Funds’’) by Columbia Management and
certain other subsidiaries performing services for the Funds for the purpose of reducing the expenses charged to a Fund in
a given period to maintain or improve a Fund’s net yield in that period. Our subsidiaries may enter into contractual
arrangements with the Funds identifying the specific fees to be waived and/or expenses to be reimbursed, as well as the
time period for which such waivers will apply. In aggregate, we voluntarily waived fees of $10 million and $11 million for
the years ended December 31, 2014 and 2013, respectively.
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