Ameriprise Financial, Inc. Financial Community Presentation Jim Cracchiolo, Chairman & Chief Executive Officer November 15, 2006

Transcription

1 Ameriprise Financial, Inc. Financial Community Presentation Jim Cracchiolo, Chairman & Chief Executive Officer November 15, 2006 Ameriprise Financial Services, Inc. Member NASD and SIPC Ameriprise Financial Inc. All rights reserved.

2 Forward-Looking Statements Some of the statements that we make in this presentation may constitute forward-looking statements." These statements reflect management's expectations about future events and operating plans and performance and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. A list of factors that could cause actual results to be materially different from those expressed or implied by any of these forward-looking statements is detailed under the heading "Forward-Looking Statements" in our 2005 Annual Report to Shareholders, a complete copy of which is available on our website, and under the heading "Risk Factors" and elsewhere in our K report, already on file with the Securities and Exchange Commission (SEC). We undertake no obligation to update publicly or revise these forward-looking statements for any reason. During the presentation, we refer to various non-gaap financial measures like "adjusted earnings" or "adjusted premiums." We believe that the presentation of these adjusted financial measures best reflects the underlying performance of the Company's ongoing operations. The adjusted numbers exclude discontinued operations, AMEX Assurance and non-recurring separation costs. The presentation of adjusted earnings is consistent with the non-gaap financial information presented in the Company's annual report and Form 10-K for the year ended 2005 and quarterly report on Form 10-Q for the quarter ended September 30, Reconciliations of non-gaap numbers discussed in this presentation to the respective GAAP numbers can be found in the Company s earnings releases and quarterly statistical supplements, which are on file with the SEC and available on our website. This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 2

3 Agenda Jim Cracchiolo, Chairman & CEO Brian Heath, President, U.S. Advisor Group Simon Davies, CEO Threadneedle Investments Open Forum This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 3

4 Investor Update Retail Financial Services Journey Significant Progress Since Spin Large Opportunity & Focused Strategy Operating & Financial Implications This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 4

5 Ameriprise Financial This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 5

6 Who Are We? Long Term Relationships Based on Financial Planning Client Centric Serving the Mass Affluent+ Retail Financial Services Player Large Distribution Force Multiple Goal-Based Solutions to Meet Client Needs Market-Driven, Public Company with Operating Leverage This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 6

7 Points of Differentiation Asset Persistency Needs-Based Relationship One-to-One Service Broad Range of Products & Services Large Nationwide Advisor Force 1 Leading Share of Wallet 4 Most CERTIFIED FINANCIAL PLANNER TM Professionals 2 Most Financial Planning Clients 3 See source references & notes on p. 42 This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 7

8 Investor Update Retail Financial Services Journey Significant Progress Since Spin Large Opportunity & Focused Strategy Operating & Financial Implications This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 8

9 Turning Questions into Strengths 1. Could we establish a brand? 2. Would we retain advisors & grow productivity? 3. How would we manage the complex separation? 4. Did we have the right capital structure? This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 9

10 Successful First Year This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 10

11 Could We Establish a Brand? Comprehensive Re-Branding This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 11

12 Could We Establish a Brand? Building Brand Awareness 51% See source references & notes on p. 42 This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 12

13 Could We Establish a Brand? While building the brand, we grew mass affluent clients # of Total Mass Affluent Clients +7% $300K+ average assets per newly acquired mass affluent client 28% of mass affluent clients enrolled in Ameriprise Advantage up 49% 59% planning penetration of new mass affluent clients Data: As of 9/30/06 This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 13

14 Would We Retain Advisors & Grow Productivity? Advisors Highly Motivated Embracing the Brand & Energized by Independence Focused on Building Their Practices Advisor Satisfaction with Technology Doubled Retention Close to All-Time High This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 14

15 Would We Retain Advisors & Grow Productivity? Stable Advisor Force & Increased Productivity Total Advisor Force Total Gross Dealer Concession (Millions) 15% 2% This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 15

16 How Would We Manage the Complex Separation? Separation on Track, on Budget 15+ New Public Company Functions Complete Change-Out of Advisor & Consumer Facing Materials Technology Projects Executed Governance & Legal Entity Structures This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 16

17 Did We Have the Right Capital Structure? Secured Strong Credit Ratings Strong Earnings & Liquidity Enhanced Capital Structure Generating Excess Capital Initiated Redeployment This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 17

18 Investor Update Retail Financial Services Journey Significant Progress Since Spin Large Opportunity & Focused Strategy Operating & Financial Implications This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 18

19 Large Market Opportunity Fastest Growing Segment 29MM Mass Affluent Households of which 50% are Baby Boomers 1 Retirement Asset Transition Challenging Landscape Corporate Pension Declines Reduced Health Coverage Longevity Revolution Pension Protection Act Personalized Advice Right Company, Right Time See source references & notes on p. 42 This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 19

20 Focused Strategy Clients Grow mass affluent & affluent client base Financial Planning & Advice Strengthen lead in financial planning Advisors Deliver profitable growth & productivity in advisor network Products & Solutions Capture assets with broad solution set & extended distribution Operating Foundation Ensure increasingly strong & efficient infrastructure This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 20

21 Enhance Client Experience We shape financial solutions for a lifetime. Conversation Beyond the Numbers Comprehensive Plan & Solutions Personalized Ongoing Engagement This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 21

22 Enhance Client Experience Client Dreams, Goals & Worries Financial Plan Potential Actions Develop & Manage Asset Allocation Balance Sheet Management Manage Qualified Assets Develop Income Solutions Comprehensive Protection Solutions Client Results/ Dashboard + New Life Developments + Updated Financial Plan + New Actions Life Health This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 22

23 360 º Brand Experience National Advertising Tiered Consumer Value Propositions Locally-Based Marketing Programs New Online Experience This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 23

24 Delivering Increased Advisor Productivity & Profitable Growth Productivity Mass Affluent+ Focus Ongoing Planning Goal-Based Solutions Key Enablers Marketing Training Desktop Technology Compliance Focused Growth Selectivity in Employee Channel Experienced Advisor Recruiting Practice Acquisitions This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 24

25 Product Depth & Breadth Accumulation & Income Protection Investments & Brokerage Mutual Funds IRAs REITs Stocks / Bonds Certificates Investment Advisory Wrap Accounts Separately Managed Accounts Annuities Variable Annuities Fixed Annuities Banking Money Market Checking Accounts Savings Accounts Credit Cards Consumer Loans Mortgages Home Equity Personal Trust Services Life Fixed Universal Life Variable Universal Life Whole Life Term Life Group Life Auto & Home Auto Insurance Home Insurance Health Disability Income Long Term Care Individual & Group Medical Medicare Supplemental This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 25

26 Transforming Asset Management Capabilities Created Multiple Investment Platforms Built Talent Enhanced Technology Capabilities Improved Investment Performance This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 26

27 Multiple Investment Platforms Fixed Income Team Minneapolis Deep Value Equity Team Minneapolis Large Cap Equity Team Boston Collateralized Debt Obligations Fixed Income Team Los Angeles Mid & Small Cap Growth Team Minneapolis International Team Threadneedle London Subadvised Strategies Team Minneapolis Disciplined Equity & Asset Allocation Team Cambridge Kenwood Capital Management Team Minneapolis This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 27

28 Building Longer-Term Track Records Investment Teams Reaching 3 & 5-Year Tenures RiverSource Funds Percentage of Internally-Managed RiverSource Funds Above the Lipper Median as of Rolling 12-month 3YR 5YR 10YR Equity Fixed Aggregated equity rankings exclude RiverSource S&P 500 Index Fund & funds managed by unaffiliated managers & include RiverSource Portfolio Builder Series & other balanced & asset allocation funds that invest in both equities & fixed income. Figures shown above represent A share only. Aggregated fixed income data includes taxable & tax-exempt mutual funds & does not include cash management & tax exempt money market funds. Figures shown above represent A- shares only. Past performance does not guarantee future results. Please refer to the Q3 06 Quarterly Performance Summary for individual RiverSource mutual performance & important disclosures. This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 28

29 RiverSource Mutual Fund Flows Gaining Traction Flows do not include Threadneedle This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 29

30 Goal-Based Solutions Examples Strategic Allocation Fund Portfolio Builder Series Income Builder Series Retirement Plus Series Variable Annuities with Portfolio Navigator Variable Annuities with Living Benefits This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 30

31 Extending Distribution Growing VA Market Share in Bank & IBD Channels 1 60% Third Party Sales Growth (3Q06 vs. 3Q05) Extending Relationships through Third Parties RiverSource Institutional Advisors See source references & notes on p. 42 This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 31

32 Increasingly Strong Operating Platform Infrastructure Implementing leading-edge technology platform to enable competitive advantage Investing in superior end-to-end client & advisor experience Simplify the way we do business Reengineering for growth Legal & Compliance Effective, efficient processes, oversight & supervision to meet obligations This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 32

33 Creating a Peak Performance Organization Engagement Talent Client & Advisor Experience Market-Driven Culture This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 33

34 Summary: Long Range Goals Clients Be the most sought after financial planning & services firm for the mass affluent Financial Planning & Advice Advisors Products & Solutions Leader in ongoing, comprehensive & modular planning Among the nation s largest distributors, delivering profitable growth & productivity Leading provider of goal-based solutions Operating Foundation High performing culture with a strong & flexible public company support model This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 34

35 Investor Update Retail Financial Services Journey Significant Progress Since Spin Large Opportunity & Focused Strategy Operating & Financial Implications This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 35

36 Financial Implications Executing our strategy is expected to result in Growth in our Broker-Dealer Business Continued Asset Management Turnaround Emphasis on Variable vs. Fixed in Our Insurance and Annuities Businesses Creation of Shareholder Value This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 36

37 Benchmarking Revenue Expected revenue shift to fee-based activities Current 2007 / 2008 *Excludes Corporate segment & impact of the sale of the 401(k) defined contribution recordkeeping business This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 37

38 Benchmarking Profit Operating pretax income contribution also expected to shift to fee-based activities Current 2007 / 2008 *Excludes Corporate segment & gain resulting from disposition of the 401(k) defined contribution recordkeeping business This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 38

39 Growing Excess Equity Position Excess equity expected to increase by more than 50%, providing multiple redeployment options *Excludes OCI This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 39

40 ROE Improvement Substantial Progress Made in Closing Gap to Our Return on Equity Target 1.3% Target 12%-15% By 2008 *9/30/05 ROE restated to include a full year impact of the capital contribution from American Express. See p. 43 for Reconciliations. This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 40

41 Financial Targets On Average, Over Time Revenue Growth 6 8% Net Income Growth 10 13% Return on Equity 12 15% This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 41

42 Source References / Notes By Slide Number Slide 7: Points of Differentiation 1 4th largest sales force as ranked by SAI, 3rd ranked in terms of number of registered representatives (Cerulli Quantitative Update Advisor Metrics 2006) 2 CFP Board of Standards, Based on the number of financial plans annually disclosed in Form ADV, Part 1A, Item 5 available at J.D. Power Full Service Broker Satisfaction Survey Slide 13: Could We Establish a Brand? Source: Company-sponsored research through Phoenix Group, 2006 Slide 20: Large Market Opportunity 1 Source: US Census Bureau Slide 32: Extending Distribution 1 VARDS: 4th Quarter 2005 Variable Annuity Industry Sales & Asset Survey This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 42

43 Reconciliations Return on Equity Calculation for the Twelve Months Ended September 30, 2006 ROE excluding Discontinued (in millions, unaudited) Operations (1) Adjustments Adjusted ROE (2) Return $ 571 $ 236 $ 807 Equity $ 7,550 (336) $ 7,214 Return on Equity 7.6% 11.2% Return on Equity Calculation for the Twelve Months Ended September 30, 2005 ROE excluding Discontinued Restatement (in millions, unaudited) Operations (1) Adjustments Adjusted ROE (2) of Equity Restated ROE (3) Return $ 674 $ 29 $ 703 $ - $ 703 Equity $ 6,828 (92) $ 6,736 $ 396 $ 7,132 Return on Equity 9.9% 10.4% 9.9% (1) Return on equity calculated using the 12 month trailing income before discontinued operations in the numerator and the average of shareholders' equity before the assets and liabilities of discontinued operations as of the last day of the preceding four quarters and the current quarter in the denominator. (2) Adjusted return on equity calculated using adjusted earnings (income before discontinued operations excluding non-recurring separation costs and AMEX Assurance) in the numerator and equity excluding both the assets and liabilities of discontinued operations and equity allocated to expected non-recurring separation costs as of the last day of the preceding four quarters and the current quarter in the denominator. (3) Adjusted return on equity, restated assumes the capital contribution from American Express was in place for the entire 12 month measurement period. This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 43

44 Important Information You should consider the investment objectives, risks, charges and expenses of mutual funds or certificates carefully before investing. For a free prospectus, which contains this and other important information about the funds, call Read the prospectus carefully before investing. Investment products, including shares of mutual funds, are not federally or FDIC-insured, are not deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value. Standard & Poor s ", S&P, "S&P 500," and Standard & Poor s 500 are trademarks of the McGraw-Hill Companies, Inc. These trademarks and service marks have been licensed for use by Ameriprise Financial, Inc. The Funds are not sponsored, endorsed, sold or promoted by Standard & Poor's or any of their subsidiaries or affiliates (the "Licensors") and the Licensors make no representation regarding the advisability of investing in the Funds. The Standard & Poor's 500 Index (S&P 500 Index), an unmanaged index of common stocks, is frequently used as a measure of market performance. The index reflects reinvestment of all distributions and changes in market prices, but excludes brokerage commissions or other fees. RiverSource SM mutual funds are distributed by RiverSource Distributors, Inc. and Ameriprise Financial Services, Inc., Members NASD, and managed by RiverSource Investments, LLC. These companies are part of Ameriprise Financial, Inc. This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 44

45 Important Information Ameriprise Financial Services, Inc. (Distributor), Member NASD, a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). RiverSourceSM insurance and annuity branded products are issued in New York by IDS Life Insurance Company of New York, Albany, NY, an Ameriprise Financial company. RiverSource SM insurance and annuity branded products are also issued and distributed outside of New York by IDS Life Insurance Company, Member NASD, a wholly-owned subsidiary of Ameriprise Financial. Ameriprise Certificates are issued by Ameriprise Certificate Company and distributed by Ameriprise Financial Services, Inc. Member NASD. Ameriprise certificates are backed by reserves of cash and qualified assets on deposit. The assets backing the certificates have varying ratings and generally increase in market value as interest rates fall and decrease in market value as interest rates rise. Bank CDs are FDIC-insured. There are risks associated with fixed income investments, including credit risk, interest rate risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer-term securities. The RiverSource Portfolio Builder Series funds are "funds of funds comprised of holdings in several different RiverSource Funds, which may include small-cap, mid-cap, large-cap, money market, international, bond, and/or sector funds. Each of the underlying funds in which the portfolio invests has its own investment risks, and those risks can affect the value of each portfolio s shares and investments. There are risks associated with fixed income investments, including credit risk, interest rate risk, and prepayment and extension risk. The Income Builder funds are "funds of funds" comprised of holdings in several different RiverSource Funds, which may include small-cap, mid-cap, large-cap, money market, international, bond, and/or sector funds. Each of the underlying funds in which the portfolio invests has its own investment risks, and those risks can affect the value of the portfolio s shares and investments. The RiverSource Retirement Plus Series funds are "funds of funds" comprised of holdings in several different RiverSource Funds, which may include small-cap, mid-cap, large-cap, money market, international, bond, and/or sector funds. Each of the underlying funds in which the portfolio invests has its own investment risks, and those risks can affect the value of each portfolio s shares and investments. This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 45

46 Important Information Managed accounts, including the Ameriprise Premier Portfolio Services, are offered by Ameriprise Financial Services, Inc. Auto and Home insurance is underwritten by AMEX Assurance Company,IDS Property Casualty Insurance Company or Ameriprise Insurance Company, De Pere, WI. Each company is a wholly owned subsidiary of Ameriprise Financial, Inc., independent of American Express. Coverages may vary by state. Financial planning services are optional, offered separately, and priced according to the client's individual goals and objectives and complexity of their financial situation. Not every client receives a comprehensive financial plan, it must be specifically purchased by the client. Non-investment grade securities generally have more volatile prices and carry more risk to principal and income than investment grade securities. International investing involves increased risk and volatility due to potential political and economic instability, currency fluctuations, and differences in financial reporting and accounting standards and oversight. Risks are particularly significant in emerging markets. Investments in small- and mid-capitalization companies often involve greater risks and potential volatility than investments in larger, more established companies. See the Funds prospectus for more information on these and other risks that may be associated with the underlying funds. Ameriprise Bank, FSB, Member FDIC-pending, provides certain lending and deposit products and personal trust services for Ameriprise Financial, Inc. Ameriprise Bank, FSB deposit products are FDIC-insured up to $100,000 per depositor. Ameriprise Financial Services, Inc. and Ameriprise Bank, FSB are subsidiaries of Ameriprise Financial, Inc. Ameriprise Financial is no longer owned by American Express Company. This presentation is for investors in Ameriprise Financial common stock, AMP (NYSE) 46