Morningstar | Excess Capital Deployment Continues To Be a Key Topic for Ameriprise Financial
With roots in insurance, Ameriprise has transformed itself into a financial powerhouse, with around $900 billion in total assets under management and advisement and 10,000 financial advisors. The firm continues to shift away from insurance and to place more emphasis on asset and wealth management operations. In 2019, the company announced the sale of its auto and home insurance business, but it will still have its life insurance business. Columbia Threadneedle Investments, the firm's global asset-management business, turned Ameriprise into a contender in the U.S. fund industry. We believe this transition could help Ameriprise set itself apart from many of its peers, with its balanced business mix providing it with the best of both worlds--high returns and low capital requirements in the asset-management business and stable cash flows from its insurance operations.Since its 2005 spin-off from American Express, Ameriprise has gradually moved up the value chain to provide customized services and financial planning solutions to the mass affluent and affluent client groups. Ameriprise's focus on personal relationships helps the firm build on its switching-cost advantage. By positioning itself as a one-stop shop for the baby boomers, offering advice in financial planning, fund investment, and insurance purchase, the firm makes it that much harder for the boomers to switch to another provider.Ameriprise's two-pronged business model is also not unique in the industry overall, though, as a number of other industry players have made inroads in the asset-management business. We think this trend is likely to continue as traditional insurance companies look for ways to generate recurring-fee income and reduce capital requirements. In the case of Ameriprise's 2010 acquisition of Columbia, we think the firm has been able to leverage the brand name, making itself a full-service brokerage platform.Ameriprise Financial is a holding company. Through its subsidiaries, the company provides a range of products and services to individual and institutional clients. The company's segments are: Advice and Wealth Management, which provides financial planning and advice, as well as brokerage services, to retail clients through its advisors; Asset Management, which provides investment management, advice and products to clients through the Columbia Threadneedle Investments? brand; Annuities, which provides variable and fixed annuity products to clients; and Protection, which provides products to address the protection and risk management needs of the company's retail clients including life, disability income insurance.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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