The advice & wealth management division of Ameriprise Financial has posted pre-tax operating earnings of $231m for the third quarter of 2016, up 5% compared to $219m a year earlier.
For the third quarter ended 30 September 2016, the unit's pretax operating margin increased to 18.2% from 17.6% in the prior year.
Operating net revenues stood at $1.3bn, a 2% rise from wrap account net inflows and higher earnings on cash balances.
Operating expenses rose 1% to $1bn, mainly from higher distribution expenses related to increased wrap fees, while general and administrative expenses dropped 1% from a year ago.
Total retail client assets increased to $476bn, due to client net inflows and new client acquisition, and market appreciation.
Wrap net inflows stood at $2.8bn in the quarter, leading to a contributed to a 14% year-over-year rise in wrap balances to $197bn.
The company’s total advisors at the end of the quarter were 9,747.
The pre-tax operating earnings at the asset management arm for the third quarter of 2016 were $155m, a decline of 14% from $180m during the same quarter in 2015.
The unit's operating net revenues dropped to $740m from the prior year, reflecting the impact of
lower asset levels and foreign exchange rates.
Total segment AUM dipped 1% year-on-year to $468bn from $471bn, driven by net outflows and unfavorable foreign exchange rates, partially offset by higher equity markets.
The division’s operating expenses was down by 3% to $585m from $602m in the prior-year quarter, owing to well managed general and administrative expenses and lower distribution expenses.
Net outflows for the third quarter of 2016 were $4.3bn, compared to outflows of $7.4bn in the corresponding quarter of 2015.
Overall, Ameriprise Financial group reported net income of $215m for the third quarter of 2016, a 46% slump from $397m a year ago.
Ameriprise chairman and CEO Jim Cracchiolo said: “Ameriprise delivered solid results in the third quarter on an operating basis, led by Advice and Wealth Management. With good inflows in investment advisory accounts, retail client assets grew to a record high. Experienced advisors continue to move their practices to Ameriprise as our advice value proposition, level of support and capital strength are attractive in this environment.
“In Asset Management, retail flows have improved in the U.S., and the July volatility in the UK and Europe subsided in the quarter. In a more volatile climate and period of change for the industry, we are managing expenses well and have a strong business to serve our clients and advisors while consistently delivering meaningful shareholder value.”