Ameriprise 2014 Annual Report Download - page 96

the prior year primarily due to strong growth in wrap account assets, increased client activity and expense management,
partially offset by the impact of low interest rates and lower earnings due to the transition of banking operations in the
fourth quarter of 2012. The negative impact of lower spreads on cash sweep accounts and certificates was approximately
$57 million compared to the prior year. Pretax operating earnings for the year ended December 31, 2012 included
$49 million of earnings from former banking operations. Pretax operating margin was 13.8% for the year ended
December 31, 2013 compared to 11.2% for the prior year.
Net Revenues
Net revenues exclude net realized gains or losses. Net revenues increased $422 million, or 11%, to $4.3 billion for the
year ended December 31, 2013 compared to $3.9 billion for the prior year reflecting retail client net inflows, market
appreciation and increased client activity, partially offset by lower net revenues due to the transition of banking operations
in the fourth quarter of 2012 and the negative impact of low interest rates. Net revenues for the year ended
December 31, 2012 included $111 million from former banking operations. Advice & Wealth Management delivered strong
growth in assets and revenues through the combination of improved advisor productivity and experienced advisor recruiting.
Operating net revenue per branded advisor was $440,000 for the year ended December 31, 2013, up 11% from the prior
year driven by the combination of asset growth and strong client activity.
Management and financial advice fees increased $302 million, or 17%, to $2.0 billion for the year ended December 31,
2013 compared to $1.7 billion for the prior year driven by growth in wrap account assets. Average advisory wrap account
assets increased $23.2 billion, or 20%, compared to the prior year due to net inflows and market appreciation. See our
discussion of the changes in wrap account assets above.
Distribution fees increased $216 million, or 11%, to $2.1 billion for the year ended December 31, 2013 compared to
$1.9 billion for the prior year primarily due to higher client assets and increased client activity.
Net investment income, which excludes net realized gains or losses, decreased $106 million, or 45%, to $127 million for
the year ended December 31, 2013 compared to $233 million for the prior year due to $103 million of lower net
investment income due to the transition of banking operations in the fourth quarter of 2012, as well as a lower asset
earnings rate on invested assets, partially offset by higher average certificate investment balances.
Expenses
Total expenses increased $264 million, or 8%, to $3.7 billion for the year ended December 31, 2013 compared to
$3.4 billion for the prior year due to a $320 million increase in distribution expenses driven by higher advisor
compensation due to strong growth in client assets, partially offset by a $53 million decrease in general and administrative
expense due to $62 million of lower expenses from the transition of banking operations in the fourth quarter of 2012 and
$34 million of lower expenses associated with the completion of the brokerage platform conversion, partially offset by
higher performance-driven compensation accruals.
Asset Management
In aggregate, we voluntarily waived fees of $11 million for both the years ended December 31, 2013 and 2012. See our
discussion on fee waivers within our Asset Management Results of Operations for the year ended December 31, 2014.
The following table presents ending balances and average managed assets:
Average(1)
December 31, December 31,
2013 2012 Change 2013 2012 Change
(in billions)
Columbia managed assets $ 356.7 $ 330.4 $ 26.3 8% $ 342.9 $ 335.8 $ 7.1 2%
Threadneedle managed
assets 147.4 127.8 19.6 15 133.3 120.9 12.4 10
Less: Sub-advised
eliminations (3.3) (2.8) (0.5) (18) (2.9) (3.4) 0.5 15
Total managed assets $ 500.8 $ 455.4 $ 45.4 10% $ 473.3 $ 453.3 $ 20.0 4%
(1) Average ending balances are calculated using an average of prior period’s ending balance and all months in the current period.
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