Ameriprise Sees 11% Increase in Advisor Productivity

What You Need to Know

Ameriprise was the first U.S. life and annuity issuer to post second-quarter earnings.
The company has tried to cut insurance guarantee risk by focusing on other operations.
It now has about 10,200 advisors.

Ameriprise Financial says its move to sell financial services products from other companies is going well.

James Cracchiolo, the Minneapolis-based company’s CEO, noted Wednesday that the company has built up a force of 10,200 financial advisors, and that the average productivity of those advisors increased 11% between the second quarter of 2021 and the latest quarter, to $814,000 per advisor.

“We’re also seeing nice engagement with advisor recruits,” Cracchiolo told securities analysts on a conference call the company held to go over its second-quarter results, which were posted Tuesday.

The company added 99 highly productive advisors in the second quarter, and the advisor recruiting pipeline continues to look good, Cracchiolo said.

Ameriprise is a major writer of U.S. life and annuity products as well as an asset manager and investment advisory firm. It was the first major writer of U.S. life and annuity products to release its second-quarter earnings.

Cracchiolo described the company’s life and annuity business as “performing well in this environment,” but variable annuity sales fell 29%, to $1.2 billion, and life and disability insurance sales fell 23%, to $65 million, because of the company’s ongoing move away from life and annuity products that offer living benefits guarantees.

What It Means

In theory, rising interest rates should improve the supply of life and annuity products that offer strong benefits guarantees, because issuers will be able to support the products with investments in high-quality bonds that offer high, fixed interest rates.

But moving back toward expanding guarantees, rather than slashing them, may take issuers some time.

The Earnings

The second quarter ended June 30.

Despite geopolitical upheaval and stock market volatility, Ameriprise is reporting $756 million in net income for the quarter on $3.5 billion in revenue, up from $591 million in net income on $3.4 billion in revenue for the second quarter of 2021.

The distribution fees Ameriprise earned from selling other companies’ products increased 1%, to $458 million.