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Ameriprise Financial Inc. Reports Operating Results (10-K)

February 24, 2012 | About:

Ameriprise Financial Inc. (NYSE:AMP) filed Annual Report for the period ended 2011-12-31.

Ameriprise Finl has a market cap of $12.79 billion; its shares were traded at around $56.41 with a P/E ratio of 11.2 and P/S ratio of 1.3. The dividend yield of Ameriprise Finl stocks is 2%.

Highlight of Business Operations:

Our strong financial advisor retention rate speaks to the value proposition we offer advisors. As of December 31, 2011, over 55% of our affiliated advisors had been with us for more than 10 years, with an average tenure of nearly 18 years. Among affiliated advisors who have been with us for more than 10 years, we have a retention rate of over 97%. We believe this success is driven by the affiliation choices we offer affiliated advisors, together with our competitive payout arrangements and the broad support that helps them build their practices.

Through Ameriprise Achiever Circle, we offer benefits and rewards to clients who have $100,000 or more invested with us. Clients who have $500,000 or more invested with us are eligible for Ameriprise Achiever Circle Elite, which includes additional benefits. To qualify for and maintain Achiever Circle or Achiever Circle Elite status, clients must meet certain eligibility and maintenance requirements. Special benefits of the program may include fee reductions or waivers on Ameriprise IRAs and the Ameriprise ONE Financial Accounts, fee-waived Ameriprise Financial MasterCard®, fee or interest rate benefits on an Ameriprise® Savings or Advantage Savings Accounts, and fee or rate benefits on home equity lines of credit with Ameriprise Bank.

To manage our exposure to residential real estate, we sell the majority of our originated first mortgage products to third parties shortly after origination. All other lending products are originated and held on the balance sheet of Ameriprise Bank, with the exception of investment secured loans, which are held on the balance sheet of Ameriprise Financial. As of December 31, 2011, there were $1.15 billion in home loans/equity line of credit balances, $11 million in investment

At December 31, 2011, we had $2.8 billion in total certificate reserves underlying our certificate products. Our earnings are based upon the difference, or "spread," between the interest rates credited to certificate holders and the interest earned on the certificate assets invested. A portion of these earnings is used to compensate the various affiliated entities that provide management, administrative and other services to our company for these products. The certificates compete with investments offered by banks (including Ameriprise Bank), savings and loan associations, credit unions, mutual funds, insurance companies and similar financial institutions. In times of weak performance in the equity markets, certificate sales are generally stronger. In 2011, affiliated advisors' cash sales of our certificates were $729 million.

Substantially all of the variable annuity contracts we issue include guaranteed minimum death benefit ("GMDB") provisions designed to protect clients against market risk. Contract purchasers can choose to add optional benefit provisions to their contracts to meet their needs, including guaranteed minimum withdrawal benefit ("GMWB") and guaranteed minimum accumulation benefit ("GMAB") provisions. Approximately 98% of RiverSource Life's overall variable annuity assets include a GMDB provision and approximately 50% of RiverSource Life's overall variable annuity assets include a GMWB or GMAB provision. In general, these features can help protect contractholders and beneficiaries from a shortfall in death or living benefits due to a decline in the value of their underlying investment accounts.

Read the The complete Report

About the author:

Charlie Tian, Ph.D. - Founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

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