Q3 2026 Ameriprise Financial, Inc. Earnings Conference Call - AMERIPRISE FINANCIAL INC

Welcome to the Q3 2026 earnings call. My name is Connor and I will be your operator for today's call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. During the question and answer session, if you have a question, please press star one on your touchtone phone. As a reminder, this conference is being recorded. I will now turn the call over to Stephanie Ravey. Stephanie, you may begin. Welcome to Ameriprise Financial's third quarter earnings call. On the call with me today are Jim Caracciolo, Chairman and CEO, and Walter Berman, Chief Financial Officer. Following their remarks, we'd be happy to take your questions. Turning to our earnings presentation materials that are available on our website, on slide two you'll see a discussion of forward-looking statements. Specifically, during the call you'll hear references to various non-GAAP financial measures which we believe provide insight into the company's operations reconciliation of non-gap numbers to their respective gap numbers can be found in today's materials and on our website at ir.ameriprise.com some statements that we make on this call may be forward-looking reflecting management's expectations about future events and overall operating plans and performance these forward-thinking statements speak only as of today's date and involve a number of risks and uncertainties a sample list of factors and risks that could cause actual results to be materially different from forward-looking statements can be found in our third quarter 2026 earnings release our 2025 annual report to shareholders and our 2025 10k report we make no obligation to publicly update or revise these forward- looking statements on slide three you see our gap financial results at the top of the page for the third quarter below that you'll see our adjusted operating results followed by operating results excluding unlocking which management believes enhances the understanding of our business by reflecting the underlying performance of our core operations and facilitates a more meaningful trend analysis we completed our annual unlocking in the third quarter many of the comments that management makes on the call today will focus on adjusted operating results and adjusted operating results excluding unlocking and with that i'll turn it over to jim good morning everyone and thanks for joining us today ameriprise had a strong third quarter our results reflect the quality of our business and the value we bring to clients and advisors we're performing well in an environment that remains positive but uncertain in the quarter Equity markets advance despite periods of volatility, persistent inflation, higher interest rates, and geopolitical unrest. Clients want to work with an advisor in a firm they can trust, with the advice, investment expertise, and solutions to fully serve their needs. That matters even more when conditions are complex. For the quarter, total assets under management, administration, and advisement reach $1.8 trillion dollars up 8 percent and the financial results we generate continue to be very strong excluding unlocking on an adjusted operating basis our net revenues increased 10 percent to 5.1 billion dollars supported by higher asset levels and transactional activity with earnings per share increasing 22 continuing our consistent record of earnings growth over time this resulted in our best-in-class return on equity, which rose to over 56 percent from 52.8 percent a year ago, reflecting our differentiated economics. We're helping clients achieve their goals, growing earnings, and investing in the business, all while returning substantial capital to shareholders. Let's turn to the business and our progress in the quarter. Now, with wealth management businesses high quality and high returning, client satisfaction continues to be excellent at 4.9 out of 5, reflecting the value of the advice and experience our advisors deliver. Information is everywhere. What makes the difference is the personal engagement and judgment our advisors bring, understanding each client's goals and putting their right solutions into action. That's what drives satisfaction, and that's our sweet spot. As investors seek help with important financial decisions, our advisors are well positioned. Our continued investment and support translated into more successful advisor practices and have helped Ameriprise advisors grow faster than competitors for many years. Strong organic growth led to advisor productivity increasing another 13% to a record $1.2 million per advisor. Total client assets increased 8% to $1.2 trillion. RAP assets reached $729 billion, up 12%. The continued growth in assets reinforces the durability of our fee-based earnings. Our investment and banking capabilities give us more ways to meet clients' needs and deepen relationships that drive long-term growth. To that end, Signature Wealth continued to gain traction in the quarter, with more than half of our advisors now using it for clients. It gives clients access to institutional quality investment management and helps advisors serve them more efficiently. And we continue to add features and investment choices. Greater adoption can support asset growth across both wealth management and asset management. Our bank helps us meet clients' broader financial needs and brings assets to Ameriprise. More advisors are incorporating deposit and lending solutions in their practices. As an example, pledge lending increased more than 50%, and our mortgage portfolio grew 74%. Cash balances remained stable, consistent with how our clients and advisors utilize our cash offerings, and transactional activities continued to increase. Also in the quarter, we recruited another 79 experienced advisors to Ameriprise. They're attracted to our culture and advice-based approach. And advisors who join us tell us our support is superior to where they came from, in particular our integrated technology. Our recruiting momentum continues in a highly competitive market. There will always be advisor movement and noise in this industry, particularly as people compete very aggressively for business and publicity. And our retention remains very high. Every advisor's practice is different. We bring the strength of Ameriprise to each relationship to support growth, create value for clients, advisors, and the firm. That brings us to our recent win in financial institutions. Earlier this month, we welcomed approximately 260 Huntington Bank advisors with $28 billion in client assets, our largest AFIG deal, and one of the industry's most significant partnerships of its kind. This relationship expands our presence in the bank channel and demonstrates the competitiveness of our business. Huntington Advisors now have our integrated technology, planning capabilities, and investment solutions to deepen client relationships and grow assets. And with Huntington's recent acquisition of Cadence Bank, we'll add another 29 Advisors and $4 billion in assets moving from another program to us in mid-2027. partnerships, along with our advisor productivity growth, reflect the strength of what AmeriPrize offers from a client and advisor perspective. And we see more opportunities ahead to help advisors grow with our premium brand, integrated technology, and support. Following our full ad campaign, brand awareness among our target audience has reached an all-time high. The AmeriSprise brand rates very well with affluent and high net worth investors alongside other leading brands serving this target market. This recognition, together with our credentials, helps attract new clients and advisors. Technology and AI remain significant investment priorities. Our early investment in data, systems, and safeguards allow us to deploy AI at scale, helping advisors serve clients, gather assets, and reduce administrative work. In fact, practices using these current capabilities can generate more than 30 hours of additional capacity each week. That's time advisors can put towards clients and business growth. With the additional time, advisors and teams can use AI to bring even more recommendations to clients. In fact, we deliver tens of millions of AI-generated insights, and nearly three-quarters of practices are using these insights. This quarter, we're beginning the early release of an AI-powered meeting prep agent and AI service assistant. In 2027, we plan to expand these capabilities with broader data integration and more automated guided workflows, building on the investments we've made, and in addition to the other capabilities that we previously introduced. We invest thoughtfully and strategically in capabilities that work together on an integrated platform. That's a key advantage at Ameriprise. For example, our technology can connect client insights, meeting preparation, and follow-through to help advisors move from identifying a need to taking action. Because we don't simply want advisors to affiliate with Ameriprice, we want them to achieve here. Turning to retirement protection solutions, the business delivered very good results, including strong margins and good free cash flow generation. As we help more advisors incorporate these solutions for clients and their practices, sales increased 24%. This was driven by high demand for structured variable annuities, variable annruities without living benefit riders, and VUL. RPS strengthens our client experience, and we continue to enhance our product suite. And AI is helping us to accelerate underwriting and lowering processing costs while we maintain disciplined risk management. We're also simplifying the digital sales process to make it easier for advisors to bring these solutions to clients. Turning to asset management, we're delivering attractive investment performance and profitability while expanding our capabilities and distribution to support growth. Assets under management and advisement grow to $743 billion with growth in equities and alternatives. Strong investment performance is key. We offer 92 four- and five-star funds globally, and 78% of our retail funds are above-medium versus peers over three years, 74% over five years, and 87% over 10 years. Having good long-term track records is important in our business. Turning to flows. Outflows were $8.4 billion, excluding legacy insurance flows, primarily driven by certain larger institutional mandates, largely due to client asset allocation decisions. Overall, our retail flows continue to compare consistently with U.S. payers, with outperformance in equities and more opportunity for us to gain traction and fixed income. We're mitigating pressure in our legacy mutual fund franchise and from certain closed blocks that have good economics. We're building out our capabilities in active ETS, SMAs, and models where we're seeing good inflows. This includes in our signature wealth platform where we are earning a nice share. We also launched two new premium equity income strategies in the United States in the quarter. Our higher-fee alternatives business is also gaining momentum, and you're seeing the results in our stable fee rate and attractive margins. Seligman is a source of differentiated performance and nice flows through its long-only technology strategies and technology and healthcare hedge funds. We're also seeing good opportunities in our UK and European real estate business, including several attractive asset purchases. And we recently announced a strategic collaboration with Hamilton Lane, initially focused on launching a public-private growth equity interval fund in the coming months. In global asset management, we continue to simplify the business to lower costs and support profitability while investing in technology and AI. Here we're using AI to expand research capacity, help investment teams assess information faster, and better prepare our distribution teams for client discussions. Our firm-wide approach to AI combines the discipline, investment, and responsible oversight you expect from us, focused on enhancing the experience for clients, advisors, and employees, while driving growth and efficiency. At Ameriprise, trusted advice, broad capabilities, and excellent service drives client satisfaction, advisor productivity, and deeper relationships. That translates into attractive financial performance and returns. returns. We continue to generate substantial free cash flow, but return on equity above 56%. We also increased our share repurchases in the quarter, and our Board approved a new $5.5 billion share repurses authorization, reflecting the strength and confidence in the long-term value of Ameriprise. We consistently invest for growth and return significant capital to shareholders. At Ameriprise, our outcomes and their consistency set us apart. When markets are rising, many firms can perform well, but the real test is how you perform when conditions get tougher. We've been through that many times, and we've shown we can navigate change, keep growing, and deliver strong results to our clients, advisors, employees, and shareholders. In closing, in addition to the firm's differentiators I've mentioned, for 2027, Ameriprise was named to Forbes' Most Trusted Companies list and also recognized as one of Forbes' World's Best Employers. These awards reflect the confidence in Ameriprises, both a company to do business with and a place to work. With that, I'll turn things over to Walter for more detail on our financials, and then we'll take your questions. Walter? Thank you, Jim. Ameriprise continues to deliver strong financial results in the quarter in aggregate and within each of our businesses. Adjusted operating earnings, excluding unlocking, increased 14% and up 22% on a per share basis. These results reflect the strength and durability of our diversified earnings profile, operating leverage across businesses, and disciplined execution. Total assets under management, administration, and advisement increased 8% to $1.8 trillion, which coupled with strong client engagement drove a 10% increase in revenues to $5.1 billion, excluding unlocking. General and administrative expenses increased 3% to 975 million, driven by volume-related expenses, expenses, continuing investments for growth and higher compensation expense from asset growth and performance. The margin remains strong at 28% excluding unlocking. Our balance sheet remains exceptionally strong, enabling a 93% payout ratio in the quarter with diluted share count declining 7% to $90 million reflecting continued share repurchases. We closed the quarter with $2 billion of excess capital and $2.3 billion of holding company available liquidity. We are positioned well to invest in profitable growth and drive sustained value creation for clients, advisors, and shareholders through changing markets, rate, and competitive environments. Let's turn to wealth management financials on slide 6. Adjusted operating net revenues increased 13% to $3.4 billion. Our fee-based and transactional-based revenues remain quite strong, increasing 15%, benefiting from growth in client assets and higher activity levels. Specifically, transaction activity remains strong, increasing 6% compared to the prior year, primarily from increased sales in annuity products and brokerage transactions. We are managing expenses well with with G&A up 4%, primarily driven by volume and growth-related investments. For the full year, we continue to expect general and administrative expenses to increase in the mid-single-digit range. Pre-tax adjusted operating earnings increased 12% to $989 million, with continuous strong contributions from both core and cash earnings. Our core earnings grew more than 20%, benefiting from higher client assets and advisory fees, as well as strong transactional activity levels. These results are unique relative to other wealth managers and demonstrates our focus on balancing growth and sustainable profitability across all aspects of our business model. We believe we are in a strong position given our more balanced earnings mix relative to peers. Cash earnings were essentially flat two years ago driven by an increase in the bank offset by lower certificate balances and lower short-term rates. Last, our margin remained excellent at 29% with strength in both core and cash. We expect margins to stay in this range assuming normal market conditions. Let's turn to slide 7 on advice on wealth management. Total client assets grew 8% to $1.2 trillion and wrap assets increased 12% to 729 billion driven by solid organic growth, strong advisor productivity, and equity market appreciation. Excluding Comerica, client net inflows were up 56% versus last year to $5.3 billion, and WRAP net inflow was up 38% versus the last year, to $6.6 billion, reflecting continued solid underlying organic activity. Our focus remains on driving advisor productivity. In the quarter, revenue per advisor grew 13% to $1.2 million, which is a continuation of a strong track record of growth from consistent strategic investment in the operating framework for AWM in total and for our advisors. This drives sustainable value creation at the practice and company level. Specific areas of focus to drive these productivity improvements include an excellent value proposition, support and operational foundation for our advisors to consistently deliver a differentiated client experience, organic and inorganic advisor practice growth strategies across the full lifecycle of their practices, services, stability and depth of our operating and technological capabilities, and our strong field leadership structure. Our approach reinforces the long-term partnership between the firm and the advisor and represents a two-way commitment. As a result of our consistent support over many years, our advisor retention remains strong across our overall advisor base, including long-tenured advisors who have been with the firm for more than 10 years, where retention remains in the high 90% range. This focus led to strong and improving organic client flows, which increased sequentially. Our organic flow rate remained in the 4% range, the inorganic recruiting environment remains competitive in this perceived risk-on backdrop. In the quarter, we onboarded 79 advisors with good production levels. The pipeline is good, and we have selectively adjusted our offers to reflect a continued competitive environment. We have a proven track record of effective onboarding and on the ability to increase advisor productivity. The combination of organic net new asset growth, coupled with our Our ability to compete effectively for the right advisors will enable growth while preserving our margins as we move forward. We will continue to evaluate the facts and circumstances and assess the trade-offs between sustained profitability, flows, and associated risk. Our approach reflects disciplined stewardship of the business with a focus on sustained shareholder value creation over the long term. regard to a financial institution's business. As Jim said, Ameriprise and Huntington Bank completed the transition of their advisors to Ameriprice on October 19th. We continue to actively engage additional firms in partnership discussions and have the capacity to grow this platform further. Turning to cash, a total client cash of $81 billion was down 5% year-over-year, primarily from third-party money market funds, as well as Comerica Transition. Bank assets increased 2% year-over-year, and underlying cash sweep balances were stable. I note that cash sweep has been very consistent with an average account size of approximately $5,000. We benchmark our cash sweep rates regularly to ensure we remain competitive with the industry. Turning to asset management on slide 8, financial results were strong in the quarter, with pre-tax adjusted operating earnings of 18% to $308 million and an excellent margin of 46%. Total assets under management and advisement increased to $743 billion of 4% year-over-year from higher-ending market levels. Revenues increased 9% to $990 million, and the underlying fee rate remained consistent at approximately 48 basis points. Expenses remained well-managed. General and administrative expenses were up 2%, driven by higher saliquent compensation expense and volume-related expenses. For the full year, we continue to expect general and administrative expenses to be flat, excluding settlement and other performance fee compensation. Let's turn to slide nine. Retirement and protection solutions continue to deliver strong and consistent earnings and free cash flow generation, reflecting the high quality of the business, excluding unlocking pre-tax adjusted operating earnings or $198 million. This reflected continued market appreciation and favorable life claims offset by impacts from variable annuity outflows and higher distribution expenses related to strong structured annuity sales. The company completed its annual actuarial assumption update in the quarter, which resulted in an unfavorable after-tax impact of $74 million, as described in the earnings release. I'll note the long-term care business is performing well and in line with our expectations, and we've included additional information in the appendix of my presentation. Turning to the balance sheet on slide 10. Balance sheet fundamentals and free cash flow generation remain strong, which is core to Ameriprise and our ability to invest for growth on a sustainable basis while also returning significant capital to shareholders. Our return on equity is best in class at 56%, excluding unlocking. Given our capital strength and share price opportunity, we accelerated our capital return to $1 billion, which was 93% of operating earnings. We have increased capital return by 24% in the year to $2.9 billion. This included repurchasing 4.9 million shares at an average price of $491 compared to 3.7 million shares and an average of $508 in year-to-date 2025. We have also announced a new larger share repurchase authorization of $5.5 billion through September 30, 2028. These actions are a demonstration of our confidence we have in our continued free cash flow generation and commitment to return capital to shareholders. In summary on slide 11, Ameriprise delivered very good results in the third quarter, consistent with our longer-term trend. Over the last 12 months, revenues grew 11 percent, adjusted EPS increased 19 percent, Return on equity grew 340 basis points, and we returned $3.9 billion of capital to shareholders. This was an acceleration of our very good growth trends in the past five years, with 8% compounded annual revenue growth, 17% compound annual EPS growth, return on equity improving six percentage points and we returned over 14 billion dollars of capital to shareholders our unique model consistently generates strong overall results proper growth free cash flow and a differentiated outcome for our clients advisors and shareholders in closing we have an excellent foundation and capacity moving forward to make investments for growth drive organic net new assets and effectively recruit enabling consistent and sustained profitable growth we will continue to evaluate trade-off decisions in the context of delivering on our stewardship principles maintaining strong margins across our businesses and commitment to sustained shareholder value creation with that we'll take your questions thank you we will now begin the question and answer session If you have a question, please press star 1 on your touchtone phone. If you wish to be removed from the queue, please press star one again. If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question please press Star 1 on you're touchtone phone. Please stand by as we compile the Q&A roster. The first question is from Sunit Kamath of Jefferies. Your line is open. Please go ahead. Great. Thanks. Good morning. I wanted to start with the comments on the wealth management recruiting and retention strategy. So it sounds like you're making some changes to your packages, some of that's been reported in the press. So we're getting a lot of questions on and I was just wondering if you could maybe detail widespread are these changes? What are you doing? And just any additional information on that would be helpful. Thanks. It's Walter. How are you? First premise, we are not making changes. Our entire focus has always been on organic growth. And the strategies that we have are focused on growing their practices and understanding the value proposition we give and how we can improve that with them. That is totally consistent. The way we've managed this, that is not a change. That is a focus of the way we operate our business to grow organically and to meet our clients' needs and their needs to that investment. That investment has commitments from us and from them to continue that in a very focused way. And you've seen the results of that as it relates to our performance and implication as it relates to that the strategy and what has generated our margins will continue that way because it's consistent the way we're doing it and we get certainly the investment and the payback as it relate to that so that i what's in the press i guess i guess my standpoint is not dealing with our organic approach to it and not a churn factor to it. We want to grow our value proposition. We're a Barza and we're doing that. And that's what is the focus. Okay. So, I mean, not to pin you down, but it sounds like what you're saying is the stuff that's being reported in the press is not consistent with the approach that you're taking. Yeah. So it's a neat, first of all, we're out recruiting like everyone else. And we just mentioned that we brought in another good group of advisors. Very clearly, what we really put out there is what we do for advisors. So I just read another letter last night from an advisor that joined us a year ago from another firm, said they were blown away about the support, the technology, the capabilities. They've never grown as quick over the last year, even through transition. And they said, we have a very large practice. And to be very honest, they said we're always concerned if we were to move what the implications to our clients and the practice would be and said you know they thanked us they thanked the leadership the recruiting because of what they have here and they never thought it would be as good so that's what we do and we explain that including with advisors that might be thinking as selling getting settled the package what you see out there is there's a lot of movement we've always had movement in our industry in terms of advisors, our retention remains very high. It's in the high 90s, very high for anyone leaving to a competitor. Now, we have retention because of succession. We have a retention, you know, that are impacted by debts. We Have 10,000 somehow. So our advisor count is consistent year over year. We haven't lost in that regard. You know, there's a lot of noise out there from anonymous sources, from recruiters with their own agendas. I don't want to comment. You can write into anything today and it gets published. We work with advisors to understand what they're looking to do and grow, including people that may be getting office out there. We evaluate arrangements with the advisors to help them achieve their objectives, whether that's through practice acquisition, succession strategies, liquidity, and we even make adjustments for complex teams so it's equitable to them and their practices. And, you know, that's what we look to do to help then accomplish their objectives at the same time accomplish our firm objectives. So we work in partnership with our advisors, whether they're here and not looking to leave or that they, you know, get an offer or there's something that they think is always evaluated based on what people are saying out there, whether they deliver it or not. So whether it's going to an RIA or another firm, you know, we look at the comparison. Some advisors don't understand. They think there's something that's rosy or whatever until you really have to explain to them and understand what the differences, what they give up, and what it might mean to them. So, but people will always move, right? Just like all of you go from one firm to another at certain points in time. So for our perspective, our retention is very high. What we look at is that productivity. And as Walter said, that productivity continues to be strong. We have good margins and we maintain it. You know, I would just say this, people say, well, five and 10 years out or whatever, you know, there's going to be a big payback from this. I look at it and say, great, but markets will change, environments will change. Private equity may move someplace else quickly if they can't get their multiple return. Merit Prize is going to be here. But more importantly, our advisors are going to be highly productive and supported. And that's what we do. So I can't handle anything published in the industry. But, you know, sometimes people need to understand a little more before they write things so let me just add as a final point too because it always comes down to so what of it our strategy that jim does describe is what has generated our performance our margins our sustained value it's currently doing it and it will do that in the future we see no denigration from that standpoint that strategy is basically does drive our sustained profitability and meet our stewardship of serving our clients serving our advisors and doing it in the most effective way Okay, that's helpful. And then on the follow-up, just on the fig opportunity, I think that you said that you're looking at some other opportunities out there. I guess, how should we think about the size of those? Should we think of HBAN as sort of the elephant or the big whale and everything else you're look at would likely be smaller, or are there actually opportunities of similar size? Thanks. So, Sydney, we already have other smaller farms. Again, we don't mention every one that bring in or in the pipeline uh but you know huntington was is one of the largest ever done out there and um i think that's going really well we're there to support and make sure that they can really capitalize on what we brought together and grow um and i think there will be other opportunities um and I would think that we're now very well established um Huntington will show others that we can support larger activities and do that well. Our capabilities are something that is differentiated out there and what we do to support advisors and help them really grow productivity, but also serve their clients well. And that's what banking institutions want and that we Can provide that service and consistency. So I think that this is a good opportunity, and it opens the door for us. Got it. Okay. Thanks, guys. Brennan Hawken from BMO Capital Markets is online with a question. Please go ahead. Good morning. Thanks for taking my question. So thank you for laying out the net new assets excluding Comerica. I believe you had previously said that the starting point for that asset base was $19 billion, so just wanted to confirm that. And assuming it's right, could you help us understand what the profile of the $5 and change billion headwind that preceded this quarter looked like across the quarters ahead of time, just so we can get an underlying assessment of the net new X and Y? Thanks. Yeah, so as we talked about the Co-America, yes i can confirm on that basis uh the uh the math from that standpoint the swing and the majority of co-america is out from that stand point and and we've experienced 19 billion there will be some small portion going out going forward and we are again our organic uh flows and that's where we're focused and are certainly stable and growing based on the investments that we talked about and uh So from that standpoint, I feel comfortable as we look forward that we will continue to generate good organic growth and certainly deal with the recruitment in an effective way, as we said we would do, on a fact and a certain extent, based to make sure we generate the right returns that make sense for us and for the right of ours that's coming into the network. Is that good? Yeah, no, that helps. Thanks, Walter. And then just to follow up to Sunit's question, so, you know, when we look at the trends around your advisor loan growth over the past few years, it's been in line with most peers, despite, you Know, your stated aversion to recruiting. You know, you guys touched on and gave plenty of color around how you view the press reports, so that's super clear. But, you know, the topic of retention loans, could you maybe touch specifically on those tools and your view on those tools and whether or not maybe the attention might have drawn more FAA attention to such optionality here recently? What we do and where some of our loan build is because we help with succession, we help with practice acquisitions. So advisors actually buy other practices and we help to do that transition so there's a liquidity for the selling advisor and that the teams taking them over can then you know substantially build without putting out all that cash so we work in partnership and that's part of the big loan practices that we we do that helps both them grow but also it's good for the company and it serves the clients well and so that's what we look at and then as i said as people are evaluating, we will make adjustments based on what they're committed to achieve, what they need to do in their practices for that liquidity or for team members. We make adjustments if they're complex practices, so it's equitable that will help them achieve what they need to achieve here. So those are the things that we work on and we do that in partnership. But what we do across 10,000 advisors is help them grow. We don't just associate and say it's up to them. We give them the technology. We work with them in their practice management to see where there's opportunity and how they can do that. We provide experts in coaching. We give them support in practice with individual support that we provide. Those are the things that differentiate Ameripress because we care for them and we care about what they can deliver to the client so that satisfaction. That's what makes Ameripresse strong and that's what makes the practices strong. So you can term it whatever you want, but that's what we do, and we've been successful. And so you can look at our numbers consistently. You can look at our retention consistently.You can look at our productivity consistently. But there's a lot of promises out there. You know, you've got good markets. You've got a good environment. People get aggressive. You get people that are trying to start new firms, consulting, sell their wares. Listen, you can't. That's way the industry is right now. I think, you know, it'll change again. It has over the years. I've been in the business for many, many years, but Ameriprise will stay good and strong and our advisors will be supported and highly productive. So let me just add one thing, because this is based upon understanding the advisor. This is not a commodity approach to things or just throwing money. This has understanding their objective sets, what we bring to the table for a long-term sustainable element that works for them and works for us this is geared around their practice to ensure that their practice grows and we help them grow building on the capabilities we already give them and them seizing upon that opportunity and so this is not done as one fits all it is done for basically on a individual basis based on their objective sets and our objective sets and the key operator where it's strategically aligned. Great. Thanks for taking my question. Stephen Chuback from Wolf Research is online with a question. Please go ahead. Hi, this is Chris O'Brien. I'm for Stephen. Thanks so much for taking our question. I wanted to ask something a little bit more broad on the competitive environment with potentially two more rate hikes coming in the next 12 months. I'm curious if this changes your outlook at all for the overall competitive environment for recruiting, and if it changes your output as to what you expect for some of the feedback firms that have offered some of more aggressive packages. Well, yeah, the answer is obviously we've looked at the environment. We certainly do multivariable analysis of what the implications are if those two hikes come. We certainly think there's a probability, as you look at certainly where the Fed and numbers have indicated where that is. The key element to us when we build this in, it is basically a factor of it's a non-controllable. It's a benefit. It is something that you don't bank on that is going to continue because you don t control it. But I do expect in this situation of risk on, people will seize the moment to basically invest more and provide deals that are out there that go even stretch beyond the seven and eight years because they are counting on that cash. I can't get into their models. I know what we do. We do it for sustainability. Makes sense considering it. But the issue is we recognize it's a non-controllable and we have a balance between our core profitability and cash profitability. I would just say one other thing. You know, Fed raises rates. Why are they raising rates? I think, you know, you never know what that causes and cracks in the environment and the market for that matter. So listen, we go through cycles it's not always a good thing and it's then i always kind of go up so ameriprise is looks at those things uh challenges what that is and ensures that we're in good stead i can't talk for others but you know they may be continue as walter said to do get more aggressive or they may get you know and understand that the environment could change and there are impacts when it does Great. Thank you so much. My apologies. I will bring him back on stage. Please hold for one technical difficulty. here while i restage uh tom gallagher is online with a question from evercore isi and i will bring the other person back on stage on current levels sorry your line is open please go ahead we were not hearing you okay can you hear me now yeah we can hear yes okay so walter i think you mentioned you expect stable awm margins that are on current levels um does that contemplate uh customer cash balances declining because i know this quarter you had more moving into money market funds uh which i guess pressured the balances um would you expect that trend to continue um in terms of seeing a decline uh or is there something unusual about the quarter No, the quarter is actually, normally in this quarter it drops and then it starts building up in the fourth quarter. We had Co-America coming through, which distorted that number. But again, that is the fact of it. Actually, it's stable. It's tracking exactly where we are. And so that has, it is incorporated in building, as we said, growing from that standpoint and getting the benefits of certainly as we go, paydowns, maturities and other things as you go forward. so we feel quite comfortable and with and with the sweet money uh canly it is well managed and we have alm capability that is understand from that standpoint so there's nothing unusual so walter you would not expect to see a decline in margin and the aum that you make on customer cash going forward is that a fair yes that's a fair statement how's that okay good my my follow up is, I know institutional flows were softer this quarter in asset management. Jim, from the way you described it, it sounded like there were some chunky reallocations-related outflows in the quarter. Would you expect that to improve, or do you think that that may continue for a while here on the institutional side? No, I expect that it will improve. There's a lot of volatility, particularly, you know, in Europe, et cetera, over the last 20 months. And so I expect that to improve. As I also mentioned in my talking points, we're seeing some good activity in some of our alternatives area, which is great, our real estate area. ETFs will be launching some more. We just put two premium ones to the market. And we will actually be doing more next year. Our model business is doing well. Signature Wealth is doing Well for Columbia. So underneath it, I mean, even in the outflows in retail, the equity is like half of the outflow in the industry on a rate basis. Where we're a little weaker is in fixed income. We're not getting some in certain of the categories, and that's what we're focused on. But we think that we can get that over time as well. But overall, I think we're making some underlying adjustments, but the institution is what is the visibility right now, but we think we can come wins there. Okay, thanks. Stephen Chewbac from Wolf Research is online with a question. Your line is open. Please go ahead. Hey, we already got our questions, so thank you much. all right kareem sif of bank of america is online with a question please go ahead hi good morning everyone thank you so much for taking my question um just one question on the gross fee yields recognize that the fed rate hike happened late in the quarter but if i look at like you know 2q versus 3q there was a sequential decline in the gross yields across like you know the bank certificates and others so could you maybe speak to that a little bit you know from that standpoint as it relates to our strategy obviously are we have invested out with the bank and everything so there is uh that is an element that we got the benefit of the short rates and kindly it's just our certs and others there's nothing unusual in there that i would talk about uh as it relates to yield at all because it we it will work its way through and and that's it and one bank uh are most are invested out and from standpoint you'll see some benefits so i'm not sure we'll check what you're saying but there is no implication to that got it thank you Wilma Burtis from Raymond James and Associates Inc. is online with a question. Please go ahead. Hey, good morning. Was the higher share repurchases in the quarter, can you talk about how you think about that? Was it driven more by the share price in the quarter or does it represent a change in how you do you think repurchase? Thanks. So, as we have always said, we have the capacity and we will evaluate as we look at opportunistic situations, and that's what occurred in the quarter. We thought it was opportunistic, and we have a capacity to do it, and so we did. you. And overall, this seems like a pretty good quarter, nice beat on the EPS, good recruiting, good flows in the wrap, and overall, just pretty normal results. Seems like Comerica, or not Comerca, Huntington Bank is a good win there. Do you guys feel pretty good about the outlook? Maybe just talk about that. Is this a good run rate type quarter? Thanks. Yeah, we feel very good. I think, and you look at it as well, if you look at the fundamentals of the business, the core activities of the business, the consistency and the productivity, all that we feel good about. Our pipeline continues to be good from a recruiting. Our retention continues to be very high. Overall, from a company perspective, we're managing investments well and investing in a lot of good areas that we're seeing good activity on. And at the same time, we manage our expense base well, so the margins will hold. And as we move forward, again, we very much focus on that consistency of what we're delivering. And you can see it in the last five years, 10 years, whatever you want to look at, and including this year. So to your point, I think you can say, based on the fundamentals of the business and what we're doing, we feel good. Thank you very much. Kenneth Lee from RBC Capital Markets is online with a question. Please go ahead. Hey, good morning, and thanks for taking my question. Just one on the retirement side there, just given the current rate outlook, higher long-term yields there, do you see potential benefits over time in terms of the earnings generation uh within that business especially uh as you get potentially higher new money yields thanks yes listen uh our obvious rps business is one that makes huge contributions uh from to our other businesses and yes we have managed that risk return it is an accumulation of business and we feel very comfortable with its contributions the stability of its contribution and the way we manage it and yes going forward it will be stable it will also provide a counterbalance when in cycle changes and other things so it is exactly performing the way we designed it and currently making a contribution not just on the financial side but also on what it contributes to our ability to meet our clients needs in awm and asset management yeah and the way we're investing um will continue to generate good uh spread there um and and and good investments that will give us a good return but yep gotcha very helpful there uh and just one uh follow-up uh if i may just on in terms of the the annual unlock the actuarial uh review there any further color around uh some of the key policyholder behavior assumption changes uh that were made there. Thanks. Yeah, what you're seeing there is something that is expected and the performance on the behavioral side, both in the variable annuities and insurance, is all within basically boundaries of one's understanding of the behavioral aspects of it. So we feel very comfortable for how we're managing the risk return on that portfolio, the behavioral characteristics. And yes, it is an environment when you have so much appreciation in the equity marks and others, it's totally within our anticipation. So we feel very comfortable with managing that portfolio, and the impact is, we feel as we project out, is totally aligned. Gotcha. Very helpful there. Thanks again. Tom Gallagher Tom Gallagher from Evercore ISI is online with a question. Your line is open. Please go ahead. Hey, thanks for the follow-up. Hey, Jim, I just wanted to come back to kind of the elephant in the room. And I know you've been asked about it already. But when we look at some of those press reports that talked about how, you know, I think the implication was there was some broad retention program being rolled out. It sounds like that's not happening from what you're saying, just to confirm that. And the other thing I've noticed is, I guess in some of the prior calls, you were talking about irrational competition for recruiting in terms of some of the packages being offered. I didn't really notice you mentioning that, this call. But just a few different questions there. But how are you thinking about that kind of broader trend? Are you still seeing that level of irrational competition for recruiting? And is it fair to say that you're managing it just one team at a time? And so if it makes sense, you might do something about retention, but there's nothing broad that was sort of suggested in some of the articles that were out there. I just want to get a better handle on this. Thanks. So you get a write in from an anonymous source. I mean, people are trying to make hay out there in different ways. I would just say there's no program. And as we said, and I went through extensive detail in the last two comments, so I don't need to repeat it again. I think you can look it up. But very clear, we work with advisors. We're partnering with them. We do what's necessary to help them grow, succeed, acquisitions, liquidity, things like that. From our perspective, I would say I'm not sure where that came from or what, but let me leave it at that. At the same time, from a recruiting perspective or a package perspective, it's still, you know, people are, you know, it is out there for, you now, long periods. And so maybe when people say to you, well, five or ten years from now, you will get, you know, we don't work that way. We are very rational. But we bring in people based on a value proposition, what we help them do, and what we achieve. And we got an excellent track record for the people who are coming in. their productivity is strong they actually thank us for bringing them in they just say we wish you we would have spoke to you sooner and contemplated it so you know listen it's it is what it is and environments go through this i've been in the business for many many years um and uh you know all is not what it seems so tom let me ask this i review these deals when they get to certain size and certainly i can say on a reverse re-engineering i scratch my head when even when you consider the benefits that we have and we provide for growth and all the things that you mentioned about the investment and yes the impact of leaving and when you're dislocating and when we take a look of what you have to believe they're being offered and these are having seven eight year paybacks on cash it is i just scratched my head uh again we know what we offer we know the value we create i don't get into what other people do but i would say to the question i was asked before with interest rates potentially going up yeah it's probably going to fuel it like it's non-controllable but if people want to use that in their offering there's a point you do have to get paybacks and those paybacks are a pretty extended low and short rates as they go up will come down once the inflation or economy slows a bit gotcha thank you guys we have no further questions at this time this concludes today's conference thank you for participating you may now disconnect