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What changed in Ameriprise Financial's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Ameriprise Financial's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+424 added−523 removedSource: 10-K (2025-02-20) vs 10-K (2024-02-22)

Top changes in Ameriprise Financial's 2024 10-K

424 paragraphs added · 523 removed · 382 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

100 edited+9 added−15 removed117 unchanged
Biggest changeLeaders are further supported by a broad selection of online courses, workshops, mentoring opportunities, networking events and peer-to-peer programs. • In addition to recruiting talented professionals to join Ameriprise, we retained 95% of our high-performing employees. • Within our advisor force, the retention rate among affiliated advisors who have been with us for more than 10 years remained strong at 94%. • We have also continued to attract experienced, productive advisors, with 412 experienced advisors moving their practices to Ameriprise in 2023 and approximately 1,734 over the last 5 years. • Our global workforce is comprised of 40% women and among our U.S.-based employees 21% are ethnically diverse.
Biggest changeIn addition, we invested in a comprehensive modern learning platform for all employees to ensure they have access to relevant curriculum to help support their growth and career development, while still prioritizing our annual compliance training. • In addition to recruiting talented professionals to join Ameriprise, we retained 95% of our high-performing employees. • Within our advisor force, the retention rate among affiliated advisors who have been with us for more than 10 years remained strong at 94%. • We have also continued to attract experienced, productive advisors, with 278 experienced advisors moving their practices to Ameriprise in 2024 and approximately 1,691 over the last 5 years.
We utilize two go-to-market approaches in carrying out this strategy: Wealth Management and Asset Management. Wealth Management Our Advice & Wealth Management business is the primary growth engine of Ameriprise with a significant market opportunity. We are in a compelling position to capitalize on significant demographic and market trends driving increased demand for financial advice and solutions.
We utilize two go-to-market approaches in carrying out this strategy: Wealth Management and Asset Management. Wealth Management Our wealth management business is the primary growth engine of Ameriprise with a significant market opportunity. We are in a compelling position to capitalize on significant demographic and market trends driving increased demand for financial advice and solutions.
We design products and services as solutions for clients’ cash and liquidity, asset accumulation, income, retirement, protection, income generation and disbursement and estate and wealth transfer needs. The financial solutions we offer through our advisors include our own products and services as well as other providers’ products.
We design products and services as solutions for clients’ cash and liquidity, asset accumulation, retirement, protection, income generation and disbursement and estate and wealth transfer needs. The financial solutions we offer through our advisors include our own products and services as well as other providers’ products.
We support our advisors with an integrated technology platform, training, leadership and marketing programs to assist them in serving their clients and growing their practices. Our nationally recognized brand combined with these programs and other support creates a compelling value proposition for financial advisors relative to the broader financial services industry.
We support our advisors with an integrated technology platform, training, leadership and marketing programs to assist them in serving clients and growing their practices. Our nationally recognized brand, combined with these programs and other support, creates a compelling value proposition for financial advisors relative to the broader financial services industry.
We offer or make available the following products and services through our Asset Management segment with a range of investment strategies across these different vehicles and accounts: • U.S. registered funds through the Columbia Management family of funds, including retail mutual funds, exchange-traded funds and U.S. closed-end funds and variable insurance trust funds (“VIT Funds”) on which we earn management fees based on the underlying value of the assets and service fees. • Non-U.S. retail focused funds through Columbia Threadneedle include different risk-return options across regions, markets, asset classes and product structures, which include retail funds that are similar to U.S. mutual funds (such as Undertakings for the Collective Investment in Transferable Securities (“UCITS”) funds organized as Luxembourg-based investment companies with variable capital (“SICAVs”) and Irish and U.K. open-end investment companies (“OEICs”)).
We offer or make available the following products and services through our Asset Management segment with a range of investment strategies across these different vehicles and accounts: • U.S. registered funds through the Columbia Management family of funds, including retail mutual funds, exchange-traded funds and U.S. closed-end funds and variable insurance trust funds (“VIT Funds”) on which we earn management fees based on the underlying value of the assets and service fees. • Non-U.S. retail focused funds through Columbia Threadneedle, which include different risk-return options across regions, markets, asset classes and product structures, including retail funds that are similar to U.S. mutual funds (such as Undertakings for the Collective Investment in Transferable Securities (“UCITS”) funds organized as Luxembourg-based investment companies with variable capital (“SICAVs”) and Irish and U.K. open-end investment companies (“OEICs”)).
Our advisor network is the only distributor of new RiverSource annuity products, although advisors offer fixed, variable, and structured annuities from selected unaffiliated insurers. As part of the continued evolution of the business model for our Retirement & Protection Solutions segment, we focus on the accumulation solutions clients want (such as the structured variable annuity, a registered index-linked annuity).
Our advisor network is the only distributor of new RiverSource annuity products, although our advisors offer fixed, variable, and structured annuities from selected unaffiliated insurers. As part of the continued evolution of the business model for our Retirement & Protection Solutions segment, we focus on the accumulation solutions clients want (such as the structured variable annuity, a registered index-linked annuity).
Regulation Virtually all aspects of our business, including the activities of the parent company and our subsidiaries, are subject to various federal, state, local and foreign laws and regulations.
Regulation Virtually all aspects of our business, including the activities of our parent company and subsidiaries, are subject to various federal, state, local and foreign laws and regulations.
SEC regulations also impose notice requirements and capital 11 Index Ameriprise Financial, Inc. limitations on the payment of dividends by a broker-dealer to a parent, and they have proposed regulations regarding cybersecurity programs and the public reporting of incidents impacting broker-dealers like ours.
SEC regulations also impose notice requirements and capital limitations on the payment of dividends by a broker-dealer to a parent, and they have proposed regulations regarding cybersecurity programs and the public reporting of incidents impacting broker-dealers like ours. 11 Index Ameriprise Financial, Inc.
Universal life insurance may also contain product features that credit interest at a rate linked to an underlying equity market index. • Term life insurance provides a death benefit, but it does not accumulate cash value. • Disability income insurance provides monthly benefits to individuals who are unable to earn income either at their occupation at time of disability or at any suitable occupation for premium payments that are guaranteed not to change.
Universal life insurance may also contain product features that credit interest at a rate linked to an underlying equity market index. • Term life insurance that provides a death benefit, but does not accumulate cash value. • Disability income insurance that provides monthly benefits to individuals who are unable to earn income either at their occupation at time of disability or at any suitable occupation for premium payments that are guaranteed not to change.
Our second-generation comprehensive reimbursement LTC policies were written from 1997 until 2002. Our closed block LTC was sold on a guaranteed renewable basis which allows us to re-price in force policies, subject to regulatory approval. Premium rates for LTC policies vary by age, benefit period, elimination period, home care coverage and benefit increase option.
Our second-generation comprehensive reimbursement LTC policies were written from 1997 until 2002. Our closed block of LTC policies was sold on a guaranteed renewable basis which allows us to re-price in force policies, subject to regulatory approval. Premium rates for LTC policies vary by age, benefit period, elimination period, home care coverage and benefit increase option.
We also earn revenue and income through other sources, including the following: • We earn net investment income on owned assets from Ameriprise Certificate Company and Ameriprise Bank, both wholly owned subsidiaries of Ameriprise. • We earn financial planning fees as well as transaction and other fees. • We earn distribution fees for providing non-affiliated products and intersegment revenues for providing our affiliated products and services to our retail clients.
We also earn revenue and income through other sources, including the following: • We earn net investment income on owned assets from Ameriprise Certificate Company (“ACC”) and Ameriprise Bank, both wholly owned subsidiaries of Ameriprise. • We earn financial planning fees as well as transaction and other fees. • We earn distribution fees for providing non-affiliated products and intersegment revenues for providing our affiliated products and services to our retail clients.
For example, certain of our asset management subsidiaries are required to comply with the Markets in Financial Instruments Directive (“MiFID II”), Markets in Financial Instruments Regulation (“MiFIR”), Alternative Investment Fund Managers Directive (“AIFMD”), European Market Infrastructure Regulation (“EMIR”) , UCITS and the Sustainable Finance Disclosure Regulation (“SFDR”) and the Packaged Retail and Insurance-based Investment Products Regulation (“PRIIPs”).
For example, certain of our asset management subsidiaries are required to comply with the Markets in Financial Instruments Directive (“MiFID II”), the Alternative Investment Fund Managers Directive (“AIFMD”), the European Market Infrastructure Regulation (“EMIR”), UCITS, the Sustainable Finance Disclosure Regulation (“SFDR”) and the Packaged Retail and Insurance-based Investment Products Regulation (“PRIIPs”).
Investors can also access the website through our main website at ameriprise.com by clicking on the “Investor Relations” link located at the bottom of our homepage (ameriprise.com). We use our Investor Relations website to announce financial and other information to investors and to make available SEC filings, press releases, public conference calls and webcasts.
Investors can also access the website through our main website at ameriprise.com by clicking on the “Investor Relations” link located at the bottom of our homepage (ameriprise.com). We use our Investor Relations website to announce financial and other information to investors and to make available SEC filings, press releases, public conference calls, other communications and webcasts.
Columbia Threadneedle companies or activities are also subject to various local country or jurisdiction regulations and to corresponding regulators in Europe, Canada, Dubai, Hong Kong, Singapore, South Korea, South America and Australia. With our growth in the EU, we have (and will continue to have) greater engagement with the Luxembourg, Irish and Dutch regulators.
Columbia Threadneedle companies or activities are also subject to various local country or jurisdiction regulations and to corresponding regulators in Europe, Canada, Dubai, Hong Kong, Singapore, South America and Australia. With our growth in the EU, we have (and will continue to have) greater engagement with the Luxembourg, Irish and Dutch regulators.
Item 1. Business Overview Ameriprise Financial is a diversified financial services company with a nearly 130-year history of providing solutions to help clients confidently achieve their financial objectives. Ameriprise Financial, Inc. is a holding company incorporated in Delaware that primarily engages in business through its subsidiaries.
Item 1. Business Overview Ameriprise Financial, Inc. is a diversified financial services company with a 130-year history of providing solutions to help clients confidently achieve their financial objectives. Ameriprise Financial, Inc. is a holding company incorporated in Delaware that primarily engages in business through its subsidiaries.
In general, under the final rule, insurance savings and loan holding companies like us are required to aggregate state-based insurance capital requirements with banking capital requirements for non-insurance businesses to satisfy specific minimum total requirements and hold an additional capital conservation buffer.
In general, under the rule, insurance savings and loan holding companies like us are required to aggregate state-based insurance capital requirements with banking capital requirements for non-insurance businesses to satisfy specific minimum total requirements and hold an additional capital conservation buffer.
RiverSource seeks to partner with our advisors to address clients’ goals and long-term needs at a differentiated level and provide a strong risk profile. Retirement Solutions Through our advisors, we provide RiverSource annuity products to clients to help individuals address their asset accumulation and income goals.
RiverSource seeks to partner with our advisors to address clients’ goals and long-term needs at a differentiated level and provide a strong risk profile. Retirement Solutions Through our advisors, we provide RiverSource annuity products to help clients address their asset accumulation and income goals.
We continue to see enhanced legislative and regulatory interest regarding retirement investing and financial advisors, including proposed rules, regulatory priorities or general discussions around transparency and disclosure in advisor compensation and recruiting, identifying and managing conflicts of interest and enhanced data collection.
We continue to see enhanced legislative and regulatory interest regarding investing and financial advisors, including proposed rules, regulatory priorities or general discussions around transparency and disclosure in advisor compensation and recruiting, identifying and managing conflicts of interest and enhanced data collection.
The foreign operations of Ameriprise Financial, Inc. are conducted primarily through Columbia Threadneedle Investments UK International Limited, TAM UK International Holdings Limited and Ameriprise Asset Management Holdings Singapore (Pte.) and their respective subsidiaries (collectively, “Threadneedle”).
The foreign operations of Ameriprise Financial, Inc. are conducted primarily through Columbia Threadneedle Investments UK International Limited, TAM UK International Holdings Limited and Ameriprise Asset Management Holdings Singapore (Pte.) Ltd. and their respective subsidiaries (collectively, “Threadneedle”).
Products Through the RiverSource Life companies, we currently offer the following products: • Variable annuities provide returns linked to underlying investments of the contractholder’s choice of certain funds, as well as additional benefits, such as guaranteed minimum death benefits (but without living benefits for new sales after mid-2022). • Structured variable annuities use the performance of an underlying equity market index to determine earnings, subject to either a cap or floor. • Variable universal life insurance provides life insurance coverage along with investment returns linked to underlying investment accounts of the policyholder’s choice. • Universal life insurance credits interest at fixed interest rates.
Products We currently offer the following RiverSource Life products: • Variable annuities that provide returns linked to underlying investments of the contractholder’s choice of certain funds, as well as additional benefits, such as guaranteed minimum death benefits (but without living benefits for new sales after mid-2022). • Structured variable annuities that use the performance of an underlying equity market index to determine earnings, subject to either a cap or floor. • Variable universal life insurance that provides life insurance coverage along with investment returns linked to underlying investment accounts of the policyholder’s choice. • Universal life insurance that credits interest at fixed interest rates.
The costs of complying with such laws and regulations are significant and increasing, and the consequences for the failure to comply may include civil or criminal charges, fines, censure, the suspension of individual employees, restrictions on or prohibitions from engaging in certain lines of business (or in certain states or countries), revocation of certain registrations and reputational damage.
The costs of complying with such laws and regulations are significant and increasing, and the consequences for failing to comply may include civil or criminal charges, fines, censure, the suspension of individual employees, restrictions on or prohibitions from engaging in certain lines of business (or in certain states or countries), revocation of certain registrations and reputational damage.
The same complexity resulting from multiple standards exists for retirement investing where individual states and federal regulators continue to propose or enact their own rules. These legal and regulatory changes have impacted and may in the future impact how we are regulated and how we operate and govern our businesses.
Similar complexity resulting from multiple standards exists for retirement investing where individual states and federal regulators continue to propose or enact their own rules. These legal and regulatory changes have impacted and may in the future impact how we are regulated and how we operate and govern our businesses.
Our values are the following: • Client focused; • Integrity always; • Excellence in all we do; and • Respect for the individuals and for the communities in which we live and work. To ensure our long-term success, we must attract, retain, engage and develop a diverse, high-performing workforce.
Our values are the following: • Client focused; • Integrity always; • Excellence in all we do; and • Respect for the individuals and for the communities in which we live and work. To ensure our long-term success, we must continue to attract, retain, engage and develop a high-performing workforce.
The Federal Insurance Office (“FIO”) within the U.S. Department of Treasury does not have substantive regulatory responsibilities, though it is tasked with monitoring the insurance industry and the effectiveness of its regulatory framework in addition to providing periodic reports to the President of the United States and Congress.
The Federal Insurance Office (“FIO”) within the U.S. Department of Treasury does not have substantive regulatory responsibilities, though it is tasked with monitoring the insurance industry and the effectiveness of its regulatory framework in addition to providing periodic reports to the President of the U.S. and Congress.
Investors and others interested in the Company are encouraged to visit the Investor Relations website from time to time, as information is continuously updated and posted. Additionally, users can sign up to receive automatic notifications when new materials are posted.
Investors and others interested in the Company are encouraged to visit the Investor Relations website from time to time, as information is frequently updated and posted. Additionally, users can sign up to receive automatic notifications when new materials are posted.
Intersegment expenses for this segment include distribution expenses for services provided by our Advice & Wealth Management, Retirement & Protection Solutions, and Corporate & Other segments. All intersegment activity is eliminated in our consolidated results. Managed assets include external client assets and owned assets.
Intersegment expenses for this segment include distribution expenses for services provided by our Advice & Wealth Management and Retirement & Protection Solutions segments. All intersegment activity is eliminated in our consolidated results. Managed assets include external client assets and owned assets.
We have a competitive total rewards approach that includes base salary, annual cash awards and long-term incentives, as well as a comprehensive benefits strategy for employees that focuses on physical, social, emotional and financial wellness.
We have a competitive total compensation approach that includes base salary, annual cash awards and long-term incentives, as well as a comprehensive benefits strategy for employees that focuses on physical, social, emotional and financial wellness.
Our RiverSource Life companies are subject to various levels of regulatory intervention if their total adjusted statutory capital falls below defined RBC action levels. At the “company action level,” defined as total adjusted capital level between 100% and 75% of the RBC requirement, an insurer must submit a plan for corrective action with its primary state regulator.
Our RiverSource Life companies would be subject to various levels of regulatory intervention if their total adjusted statutory capital falls below defined RBC action levels. At the “company action level,” defined as total adjusted capital level between 100% and 75% of the RBC requirement, an insurer must submit a plan for corrective action with its primary state regulator.
For example, RiverSource Distributors, Inc. is registered as a broker-dealer for the limited purpose of acting as the principal underwriter and/or distributor for our RiverSource annuities and insurance products sold through Ameriprise Financial Services, LLC (“AFS”) and third-party channels.
For example, RiverSource Distributors, Inc., a wholly owned subsidiary, is registered as a broker-dealer for the limited purpose of acting as the principal underwriter and/or distributor for our RiverSource annuities and insurance products sold through Ameriprise Financial Services, LLC (“AFS”), a wholly owned subsidiary, and third-party channels.
The regulations introduce a new concept of impact tolerance and firms are also required to stress test their important business services and appoint a senior manager accountable for the regime. 12 Index Ameriprise Financial, Inc. • Financial Resilience: European Union (“EU”) and U.K. regulators have revised the prudential regime applying to asset managers and investment firms.
The regulations introduce a new concept of impact tolerance and firms are also required to stress test their important business services and appoint a senior manager accountable for the regime. 12 Index Ameriprise Financial, Inc. • Financial Resilience: U.K. regulators have revised the prudential regime applying to asset managers.
Competitive factors affecting the sale of variable annuity and insurance products include distribution capabilities, price, product features and innovation, hedging capability, investment performance, commission structure, reinsurance availability and pricing, perceived financial strength and financial strength ratings, claims-paying ratings, technology and service, advertising, brand recognition and financial strength ratings from rating agencies.
Competitive factors affecting the sale of variable annuity and insurance products include distribution capabilities, price, product features and innovation, hedging capability, investment performance, commission structure, reinsurance availability and pricing, perceived 8 Index Ameriprise Financial, Inc. financial strength and financial strength ratings, claims-paying ratings, technology and service, advertising, brand recognition and financial strength ratings from rating agencies.
Ameriprise Trust Company, as well as our investment adviser subsidiaries, may be subject to ERISA, and the regulations thereunder, insofar as they act as a “fiduciary” under ERISA with respect to certain ERISA clients. Insurance Regulation Our insurance subsidiaries are subject to supervision and regulation by states and other territories where they are domiciled or otherwise licensed to do business.
ATC, as well as our investment adviser subsidiaries, may be subject to ERISA, and the regulations thereunder, insofar as they act as a “fiduciary” under ERISA with respect to certain ERISA clients. Insurance Regulation Our insurance subsidiaries are subject to supervision and regulation by states and other territories where they are domiciled or otherwise licensed to do business.
For example, while we will be subject to the FRB’s “Building Block Approach” (discussed below in more detail), once Minnesota implements the NAIC’s “Group Capital Calculation”, a new capital calculation will exist for many insurance companies like ours that are not subject to FRB regulation as we are.
For example, while we are now subject to the FRB’s “Building Block Approach” (discussed below in more detail), once Minnesota implements the NAIC’s “Group Capital Calculation,” a new capital calculation will exist for many insurance companies like ours that are not subject to the FRB regulation as we are.
In addition, this also includes a range of listed Investment Trusts, including F&C Investment Trust PLC established in 1868. • European-based pooled investment funds designed for pensions, insurance companies and other institutional investors seeking solutions for liability or balance sheet asset management (“Liability Driven Investment” or “LDI”). 5 Index Ameriprise Financial, Inc. • Institutional and retail separately managed accounts for a range of clients, including pension, profit-sharing, employee savings, sovereign wealth funds and endowment funds, accounts of large- and medium-sized businesses and governmental clients, as well as the accounts of high net worth individuals and smaller institutional clients, including tax-exempt and not-for-profit organizations for which we receive management and performance-related fees. • Other separately managed accounts, including those offered through models that represent assets under advisement. • Management of owned assets such as assets held in the general account of our RiverSource Life companies, Ameriprise Certificate Company and Ameriprise Bank. • Management of CLOs, which includes providing collateral management services to special purpose vehicles that primarily invest in syndicated bank loans and issue multiple tranches of securities collateralized by the assets for which we earn fees based on the value of assets and performance-based fees. • Private funds of various types where we provide investment management and related services to private, pooled investment vehicles organized as limited partnerships, limited liability companies, or other entities for which we may receive fees based on the value of the assets or performance-based fees. • Collective funds and separately managed accounts sponsored by Ameriprise Trust Company (“ATC”) and offered to certain qualified institutional clients such as retirement, pension, and profit-sharing plans for which we receive management fees. • Sub-advised accounts for certain U.S. and non-U.S. funds, private banking individually managed accounts, common trust funds, and other portfolios sponsored or advised by other firms for which we earn management fees and possibly performance-based fees.
In addition, this also includes a range of listed Investment Trusts. • European-based pooled investment funds designed for pensions, insurance companies and other institutional investors seeking solutions for liability or balance sheet asset management (“Liability Driven Investment” or “LDI”). • Institutional and retail separately managed accounts for a range of clients, including pension, profit-sharing, employee savings, sovereign wealth funds and endowment funds, accounts of large- and medium-sized businesses and governmental clients, as well as the accounts of high net worth individuals and smaller institutional clients, including tax-exempt and not-for-profit organizations for which we receive management and performance-related fees. • Other separately managed accounts, including those offered through models that represent assets under advisement, for which we earn asset management fees based on model delivery assets under advisement. • Management of owned assets such as assets held in the general account of our RiverSource Life companies, ACC and Ameriprise Bank. • Management of CLOs, which includes providing collateral management services to special purpose vehicles that primarily invest in syndicated bank loans and issue multiple tranches of securities collateralized by the assets for which we earn fees based on the value of assets and performance-based fees. • Private funds of various types where we provide investment management and related services to private, pooled investment vehicles organized as limited partnerships, limited liability companies, or other entities for which we may receive fees based on the value of the assets or performance-based fees. • Collective funds and separately managed accounts sponsored by Ameriprise Trust Company (“ATC”), a wholly owned subsidiary, and offered to certain qualified institutional clients such as retirement, pension, and profit-sharing plans for which we receive management fees. • Sub-advised accounts for certain U.S. and non-U.S. funds, private banking individually managed accounts, common trust funds, and other portfolios sponsored or advised by other firms for which we earn management fees and performance-based fees.
This includes rules adopted pursuant to the Gramm-Leach-Bliley Act, the Fair and Accurate Credit Transactions Act, the Health Insurance Portability and Accountability Act (“HIPAA”), the Health Information Technology for Economic and Clinical Health (“HITECH”) Act, an ever increasing number of state laws and regulations such as the New York State Department of Financial Services’ Cybersecurity Requirements for Financial Services Companies, and California privacy legislation, as recently amended, EU data protection legislation, known as the Global Data Protection Regulation (“GDPR”), as implemented in the respective EU member states, the U.K.
This includes rules adopted pursuant to the Gramm-Leach-Bliley Act, the Fair and Accurate Credit Transactions Act, the Health Insurance Portability and Accountability Act (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health (“HITECH”) Act, an ever increasing number of state laws and regulations such as the NY DFS’ Cybersecurity Requirements for Financial Services Companies, and California privacy legislation, as recently amended, EU data protection legislation, known as the Global Data Protection Regulation (“GDPR”), as implemented in the respective EU member states, the U.K.
Generally, our policyholders are eligible for LTC benefits if they become cognitively impaired or unable to perform certain activities of daily living. Nursing home indemnity LTC policies provide a predefined daily benefit if the insured is confined to a nursing home, subject to various maximum benefit periods, regardless of actual expenses of the policyholder.
Generally, our policyholders are eligible for LTC benefits if they become cognitively impaired or unable to perform certain activities of daily living. 7 Index Ameriprise Financial, Inc. Nursing home indemnity LTC policies provide a predefined daily benefit if the insured is confined to a nursing home, subject to various maximum benefit periods, regardless of actual expenses of the policyholder.
For example, Columbia Management Investment Distributors, Inc. is registered as a broker-dealer for the limited purpose of acting as the principal underwriter and distributor for Columbia Management funds and other products.
For example, Columbia Management Investment Distributors, Inc., a wholly owned subsidiary, is registered as a broker-dealer for the limited purpose of acting as the principal underwriter and distributor for Columbia Management funds and other products.
Other Securities Regulation Ameriprise Certificate Company is regulated as an investment company under the Investment Company Act. As a registered investment company, Ameriprise Certificate Company must observe certain governance, disclosure, record-keeping, operational and marketing requirements.
Other Securities Regulation ACC is regulated as an investment company under the Investment Company Act. As a registered investment company, ACC must observe certain governance, disclosure, record-keeping, operational and marketing requirements.
As part of our goal-based approach to financial advice, our advisors help clients actively manage investing, saving and spending so they have a more complete picture of their financial life. A significant portion of revenues in this segment are fee-based and driven by the level of client assets, which is impacted by both market movements and net flows.
As part of our goal-based approach to financial advice, our advisors help clients actively manage investing, saving and spending so they have a more complete financial picture. 3 Index Ameriprise Financial, Inc. A significant portion of revenues in this segment are fee-based and driven by the level of client assets, which is impacted by both market movements and net flows.
In this closed block, as of December 31, 2023, we have $6.3 billion of account value associated with our fixed annuities of which 89% has been ceded by RiverSource Life on a coinsurance basis to Global Atlantic Financial Group’s subsidiary Commonwealth Annuity and Life Insurance Company (“Commonwealth”) under customary reinsurance arrangements with a comfort trust.
In this closed block, as of December 31, 2024, we have $5.7 billion of account value associated with our fixed annuities of which 89% has been ceded by RiverSource Life on a coinsurance basis to Global Atlantic Financial Group’s subsidiary Commonwealth Annuity and Life Insurance Company (“Commonwealth”) under customary reinsurance arrangements with a comfort trust.
In general, state insurance laws and regulations govern standards of solvency, capital requirements, the licensing of insurers and their agents, premium rates, policy forms, the nature of and limitations on investments, periodic reporting requirements and other matters. In addition, state regulators conduct periodic examinations into insurer market conduct and compliance with insurance and securities laws.
In general, state insurance laws and regulations govern standards of solvency, capital requirements, the licensing of insurers and their agents, premium rates, policy forms, the nature of and limitations on investments, periodic reporting requirements and other matters. In addition, state regulators conduct periodic examinations into insurer market conduct and 13 Index Ameriprise Financial, Inc. compliance with insurance and securities laws.
The ORSA Model Act requires that an insurer create and file, annually, its ORSA, which is a complete self-assessment of its risk management functions and capital adequacy. These laws were enacted by the Domiciliary Regulators. We complete and file these reports as required by the laws and regulations of those states.
The ORSA Model Act requires that an insurer create and file, annually, its ORSA, which is a complete self-assessment of its risk management functions and capital adequacy. These laws were enacted by the 14 Index Ameriprise Financial, Inc. Domiciliary Regulators. We complete and file these reports as required by the laws and regulations of those states.
Our Segments - Retirement & Protection Solutions RiverSource solutions are one way we deliver on the Ameriprise client experience and Confident Retirement ® approach. We offer clients annuities, life insurance and disability income insurance products to meet their needs or current stage in life—whether that is covering essentials, ensuring lifestyle, preparing for the unexpected or leaving a legacy.
Our Segments - Retirement & Protection Solutions RiverSource solutions are available within the Ameriprise client experience and Confident Retirement ® approach. We offer clients annuities, life insurance and disability income insurance products to meet their needs or current stage in life—whether that is covering essentials, ensuring lifestyle, preparing for the unexpected or leaving a legacy.
In general, since very little of our LTC business is subject to rate stability regulation, we have historically followed a policy of pursuing smaller, more frequent increases in order to align policyholder and historic shareholder objectives but modified our approach 7 Index Ameriprise Financial, Inc. in 2019 to seek larger increases as an additional method to manage the LTC business.
In general, since very little of our LTC business is subject to rate stability regulation, we have historically followed a policy of pursuing smaller, more frequent increases in order to align policyholder and historic shareholder objectives but modified our approach in 2019 to seek larger increases as an additional method to manage our LTC business.
Intersegment expenses for the protection products include distribution expenses for services provided by our Advice & Wealth Management segment, as well as expenses for investment management services provided by our Asset Management segment. All intersegment activity is eliminated in our consolidated results. 6 Index Ameriprise Financial, Inc.
Intersegment expenses for this segment include 6 Index Ameriprise Financial, Inc. distribution expenses for services provided by our Advice & Wealth Management segment, as well as expenses for investment management services provided by our Asset Management segment. All intersegment activity is eliminated in our consolidated results.
We have made and expect to need to continue to make significant investments in our compliance and supervision processes, enhancing policies, procedures and oversight to monitor our compliance with the numerous legal and regulatory requirements applicable to our business. We operate in a highly scrutinized regulatory environment and it remains subject to change.
We have made and expect to continue to make significant investments in our compliance and supervision processes, enhancing policies, procedures and oversight to monitor our compliance with the many legal and regulatory requirements applicable to our business. We operate in a highly scrutinized regulatory environment that remains subject to change.
RiverSource Life Insurance Company is domiciled in Minnesota and regulated by the Minnesota Department of Commerce (“MN DOC”) and RiverSource Life Insurance Co. of New York is domiciled in New York and regulated by the New York State Department of Financial Services (“NY DFS”), together with MN DOC the “Domiciliary Regulators”.
RiverSource Life Insurance Company is domiciled in Minnesota and regulated by the MN DOC and RiverSource Life Insurance Co. of New York is domiciled in New York and regulated by the New York State Department of Financial Services (“NY DFS”), and together with MN DOC are the “Domiciliary Regulators”.
Federal Banking and Financial Holding Company Regulation Ameriprise Bank is subject to regulation by the OCC, which is the primary regulator of federal savings banks, the Consumer Financial Protection Bureau (“CFPB”) and by the Federal Deposit Insurance Corporation (“FDIC”) in its role as insurer of Ameriprise Bank's deposits.
Federal Banking and Financial Holding Company Regulation Ameriprise Bank is subject to regulation by the Office of the Comptroller of the Currency (“OCC”), which is the primary regulator of federal savings banks, the Consumer Financial Protection Bureau (“CFPB”) and by the Federal Deposit Insurance Corporation (“FDIC”) in its role as insurer of Ameriprise Bank's deposits.
As a diversified financial services firm, we believe our ability to gather and retain assets is best measured by our aggregate assets under management and administration metric. As of December 31, 2023, we had $1.4 trillion in assets under management and administration, compared to $1.2 trillion as of December 31, 2022.
As a diversified financial services firm, we believe our ability to gather and retain assets is best measured by our aggregate assets under management and administration metric. As of December 31, 2024, we had $1.5 trillion in assets under management, administration, and advisement, compared to $1.4 trillion as of December 31, 2023.
Our Segments - Asset Management Through Columbia Threadneedle, we provide investment management, advice and products to retail, high net worth and institutional clients on a global scale. 4 Index Ameriprise Financial, Inc. Columbia Management primarily provides products and services in the United States.
Our Segments - Asset Management Through Columbia Threadneedle, we provide investment management, advice and products to retail, high net worth and institutional clients on a global scale. Columbia Management primarily provides products and services in the U.S. Threadneedle primarily provides products and services internationally. 4 Index Ameriprise Financial, Inc.
We offer the following products and services through our Advice & Wealth Management segment: • Financial planning and advice services to provide personalized financial planning and financial solutions for which we charge fees and may receive sales commissions for selling products that aid in our clients’ plans. • Discretionary and non-discretionary investment advisory accounts for which we receive fees based on the assets held in that account, as well as related fees or costs associated with the underlying securities held in that account. • Brokerage products and services for retail and institutional clients. • Cash management and banking products, including brokerage sweep programs, cash management accounts, savings accounts, credit cards, margin loans and pledged asset lines of credit. • Face-amount certificates through the Ameriprise Certificate Company, a wholly owned subsidiary. • Mutual fund offerings from our own Columbia funds as well as approximately 135 unaffiliated mutual fund families, representing approximately 2,150 mutual funds on our brokerage platform for which mutual fund families and other companies generally pay us a portion of the revenue generated from sales of those funds, administrative fees, and fees from the ongoing management attributable to our clients’ ownership in the fund. • Insurance and annuities products from both RiverSource Life companies as well as certain third parties, and we receive a portion of the revenue generated from the sale of unaffiliated products and certain administrative fees.
We offer the following products and services through our Advice & Wealth Management segment: • Financial planning and advice services to provide personalized financial planning and financial solutions for which we charge fees and may receive sales commissions for selling products that aid in our clients’ plans. • Discretionary and non-discretionary investment advisory accounts (also known as managed accounts) for which we receive fees based on the assets held in that account, as well as related fees or costs associated with the underlying securities held in that account. • Brokerage products and services for retail and institutional clients. • Cash management and banking products, including brokerage sweep programs, cash management accounts, savings accounts, residential mortgage loans, credit cards, margin loans and pledged asset lines of credit. • Face-amount certificates through ACC. • Mutual fund offerings from our Columbia funds as well as approximately 130 unaffiliated mutual fund families, representing approximately 2,125 mutual funds on our brokerage platform for which mutual fund families and other companies generally pay us a portion of the revenue generated from sales of those funds, administrative fees, and fees from the ongoing management attributable to our clients’ ownership in the fund. • Insurance and annuities products from both RiverSource Life companies as well as third parties, and we receive a portion of the revenue generated from the sale of unaffiliated products and certain administrative fees.
Our Shifting Business Mix and Integrated Model The financial results from the businesses underlying our go-to-market approaches are reflected in our operating segments: • Advice & Wealth Management; • Asset Management; • Retirement & Protection Solutions; and • Corporate & Other. 2 Index Ameriprise Financial, Inc.
Our Business Mix and Integrated Model The financial results from the businesses underlying our go-to-market approaches are reflected in our operating segments: • Advice & Wealth Management; • Asset Management; • Retirement & Protection Solutions; and • Corporate & Other.
The Holding Company Act revisions focus on the overall insurance holding 14 Index Ameriprise Financial, Inc. company system, establish a framework of regulator supervisory colleges, enhancements to corporate governance, and require the annual filing of an Enterprise Risk Management Report.
The Holding Company Act revisions focus on the overall insurance holding company system, establish a framework of regulator supervisory colleges, enhancements to corporate governance, and require the annual filing of an Enterprise Risk Management Report.
Furthermore, changes in investment preferences or investment management strategy (for example, “active” or “passive” investing styles), client interest in funds with particular environmental, social, or governance practices, client or regulatory requirements on use of client commissions for research, and downward pressure on fees may present various challenges to our business and could cause clients to favor certain competitors, such as those that focus more on “passive” or “value-style” investing.
Furthermore, changes in investment preferences or investment management strategy (for example, “active” or “passive” investing styles), client interest in funds with particular environmental, social, or governance practices, client or regulatory requirements on use of client commissions for research, and downward pressure on fees may present various challenges to our business and could cause clients to favor certain competitors.
These regulations impact our Retirement & Protection Solutions segment and our closed-blocks 13 Index Ameriprise Financial, Inc. included in Corporate & Other segment. The primary purpose of this regulation and supervision is to protect the interests of contractholders and policyholders.
These regulations impact our Retirement & Protection Solutions segment and our closed blocks included in Corporate & Other segment. The primary purpose of this regulation and supervision is to protect the interests of contractholders and policyholders.
Our Board of Directors engages in these topics and annually reviews our senior executive succession plans and broader talent development status in support of our corporate strategy, and frequently discusses talent topics at meetings.
Our Board of Directors engages in these topics and annually reviews our senior executive succession plans and broader talent development approach in support of our corporate strategy, and frequently discusses human capital topics at its meetings.
Ameriprise Certificate Company pays dividends to the parent company and is subject to capital requirements under applicable law and understandings with the SEC and the Minnesota Department of Commerce (Banking Division). Ameriprise Trust Company is primarily regulated by the Minnesota Department of Commerce (Banking Division) and is subject to capital adequacy requirements under Minnesota law.
Ameriprise Certificate Company pays dividends to the parent company and is subject to capital requirements under applicable law and understandings with the SEC and the Minnesota Department of Commerce (“MN DOC”) (Banking Division). ATC is primarily regulated by the MN DOC (Banking Division) and is subject to capital adequacy requirements under Minnesota law.
In addition, although the U.K. has now left the EU, the U.K. regulators may choose to implement future EU regulations and apply them in the U.K. potentially with significant variation from the EU regulations and potentially increasing the complexity and costs for our compliance with divergent sets of rules.
In addition , although the U.K. is not a part of the EU, the U.K. regulators may choose to implement future EU regulations and apply them in the U.K. potentially with significant variation from the EU regulations and potentially increasing the complexity and costs for our compliance with divergent sets of rules.
Our financial advisors provide a distinctive, holistic approach to financial planning and have access to a broad selection of both affiliated and non-affiliated products to help clients meet their financial needs and goals. Banking, lending and cash management solutions help clients establish financial flexibility while planning for both short and long- 3 Index Ameriprise Financial, Inc. term needs.
Our financial advisors provide a distinctive, holistic approach to financial planning and have access to a broad selection of both our and other providers’ products to help clients meet their financial needs and goals. Banking, lending, and cash management solutions help clients establish financial flexibility while planning for both short and long-term needs.
As of December 31, 2023, our Asset Management segment had $637 billion in worldwide managed assets. Our Asset Management segment also provides asset management services for Ameriprise Financial subsidiaries. The fees for such services are reflected within the Asset Management segment results through intersegment transfer pricing.
As of December 31, 2024, our Asset Management segment had $681 billion in managed and advised assets. Our Asset Management segment also provides asset management services for Ameriprise Financial subsidiaries. The fees for such services are reflected within the Asset Management segment results through intersegment transfer pricing.
States in the U.S. and jurisdictions outside the U.S. continue to add new complexity to the patchwork of laws and regulations already in existence relating to privacy, cybersecurity, artificial intelligence and other areas and we are expecting similar new laws at the federal level and in multiple states in the U.S.
States in the U.S. and jurisdictions outside the U.S. continue to add new complexity to the patchwork of laws and regulations already in existence relating to privacy, cybersecurity, artificial intelligence and other areas, and we expect this to continue at the federal and state level.
Our sales of RiverSource individual life insurance in 2023, as measured by scheduled annual premiums, lump sum and excess premiums and single premiums, consisted of approximately 95% variable universal life, 2% universal life and 3% term life.
Our sales of RiverSource individual life insurance in 2024, as measured by scheduled annual premiums, lump sum and excess premiums and single premiums, consisted of approximately 96% variable universal life, 1% universal life and 3% term life.
Investment Management Capabilities and Products Our investment management business has a presence in 17 key markets globally with investment offices in seven countries, including France, Germany, Luxembourg, the Netherlands, Singapore, the U.K. and the U.S.
Investment Management Capabilities and Products Our investment management business has a presence in 16 key markets globally, including France, Germany, Luxembourg, the Netherlands, Singapore, the U.K. and the U.S.
In an evolving and highly competitive industry, we have continued to successfully execute on our strategy and deliver solid performance, reflecting the strength and resiliency of our values-based, inclusive culture and the effectiveness of our human capital strategy. 9 Index Ameriprise Financial, Inc.
In an evolving and highly competitive industry, we have continued to successfully execute on our strategy while delivering solid performance, reflecting the strength and resiliency of our values-based, inclusive culture and the effectiveness of our human capital strategy.
All intersegment activity is eliminated in our consolidated results. Protection We provide life and disability income insurance products to address the protection and risk management needs of our retail clients. New RiverSource insurance products are exclusively offered through our advisor network. Our advisors also offer insurance products of unaffiliated carriers.
Protection Solutions We provide life and disability income insurance products to address the protection and risk management needs of our retail clients. New RiverSource insurance products are exclusively offered through our advisor network. Our advisors also offer insurance products of unaffiliated carriers.
Beyond traditional acquisitions, we pursue other strategies to grow our Wealth Management business such as experienced advisor recruiting and partnerships with banks and credit unions, like the transaction to become Comerica Bank’s new investment program provider. Over the years, we have also sought to optimize the organizational structure in which we offer certain banking products.
Beyond traditional acquisitions, we pursue other strategies to grow our wealth management business such as experienced advisor recruiting, practice acquisitions, advisor loans, and partnerships with banks and credit unions. Over the years, we have also sought to optimize the organizational structure in which we offer certain banking products.
In May 2019, we received regulatory approvals and converted Ameriprise National Trust Bank to Ameriprise Bank, FSB (“Ameriprise Bank”) to expand the products and services we can provide directly to our customers.
In May 2019, we converted Ameriprise National Trust Bank to Ameriprise Bank, FSB (“Ameriprise Bank”) to expand the products and services we provide directly to our clients.
This is being phased in over a five-year period and introduces a number of new concepts, including new capital requirements. • FCA Consumer Duty: The FCA recently introduced a new Consumer Duty that sets higher expectations for the standard of care that firms provide to retail consumers. • Sustainability Disclosure Requirements : The FCA recently finalized new requirements that will take effect during 2024 and 2025 that will introduce new ESG retail product labels, naming and marketing rules, additional ESG disclosure requirements both at an entity and product level, and an anti-greenwashing rule covering all products and services irrespective of the investor category. • DEI : The FCA recently launched a consultation on a potential new regulatory framework on diversity and inclusion in the financial sector.
This is being phased in over a five-year period and introduces a number of new capital requirements. • FCA Consumer Duty: The FCA recently introduced a new Consumer Duty that sets higher expectations for the standard of care that firms provide to retail consumers. • Sustainability Disclosure Requirements : The FCA recently finalized new requirements that have started to take effect relating to new sustainability product labels, naming and marketing rules, additional ESG disclosure requirements both at an entity and product level, and an anti-greenwashing rule covering client communications. • Diversity, Equity and Inclusion : The FCA recently launched a consultation on a potential new regulatory framework on diversity and inclusion in the financial sector.
Intersegment revenues for this segment reflect fees paid by our Asset Management segment for marketing support and other services provided in connection with the availability of VIT Funds. Intersegment expenses for this segment include distribution expenses for services provided by our Advice & Wealth Management segment, as well as expenses for investment management services provided by our Asset Management segment.
Intersegment revenues for this segment reflect fees paid by our Asset Management segment for marketing support and other services provided in connection with the availability of VIT Funds.
RiverSource Life and RiverSource Life of NY maintain capital levels well in excess of the company action level required by state insurance regulators as noted below as of December 31, 2023: Entity Company Action Level RBC Total Adjusted Capital % of Company Action Level RBC (in millions, except percentages) RiverSource Life $ 512 $ 3,093 604 % RiverSource Life of NY 40 244 614 % Ameriprise Financial, as a direct and indirect owner of its insurance subsidiaries, is subject to the insurance holding company laws of Minnesota and New York (the states where its insurance subsidiaries are domiciled).
RiverSource Life and RiverSource Life of NY maintain capital levels well in excess of the company action level required by state insurance regulators as noted below as of December 31, 2024: Entity Company Action Level RBC Total Adjusted Capital % of Company Action Level RBC (in millions, except percentages) RiverSource Life $ 489 $ 2,700 552 % RiverSource Life of NY 38 219 579 % Ameriprise Financial, as a direct and indirect owner of its insurance subsidiaries, is subject to the insurance holding company laws of Minnesota and New York (the states where its insurance subsidiaries are domiciled).
We evaluate these laws and changes to understand if and when they 15 Index Ameriprise Financial, Inc. impact our business, such as the new law in California requiring certain climate disclosure.
We evaluate these laws and changes to understand if and when they impact our business, such as the laws in California requiring certain climate-related disclosure.
In the U.S., the ongoing transition of baby boomers into retirement, as well as younger generations currently building their wealth and planning for retirement, continues to drive demand for financial advice and solutions. Our primary target market is households with $500,000 to $5,000,000 in investable assets, and we are also well-suited to serve those outside this asset range.
In the United States (“U.S.”), the ongoing transition of baby boomers into retirement, as well as younger generations currently building their wealth and planning for retirement, continues to drive demand for financial advice and solutions. Our primary target market is households with $500,000 to $5,000,000 in investable assets.
In October 2023, the FRB issued its final rule establishing a consolidated capital framework termed the “Building Block Approach” for savings and loan holding companies like Ameriprise Financial that are significantly engaged in insurance activities (commonly referred to as insurance savings and loan holding companies).
Ameriprise Financial reports to the FRB under a consolidated capital framework termed the “Building Block Approach” (“BBA”) for savings and loan holding companies that are significantly engaged in insurance activities (commonly referred to as insurance savings and loan holding companies).
To the extent the discussion includes references to statutory and regulatory provisions, it is qualified in its entirety by reference to these statutory and regulatory provisions and is current only as of the date of this report. 10 Index Ameriprise Financial, Inc.
To the extent the discussion includes references to statutory and regulatory provisions, it is qualified in its entirety by reference to these statutory and regulatory provisions and is current only as of the date of this report. 10 Index Ameriprise Financial, Inc. Advice & Wealth Management Regulation Certain of our subsidiaries are registered with the U.S.
The Board and the Compensation and Benefits Committee are regularly updated on human capital management topics and dedicate time to reviewing and discussing our company culture, talent development, retention and recruiting initiatives, diversity, our equity and inclusion (“DEI”) strategy, and our annual engagement survey feedback.
The Board and the Compensation and Benefits Committee are regularly updated on topics impacting our workforce and dedicate time to reviewing and discussing our company culture, talent development, retention and recruiting initiatives, and engagement survey feedback.
Our investment management capabilities and products span a broad range of asset classes and investment styles to meet a variety of client needs with our $637 billion in assets under management diversified across geographies, strategies and clients.
Our investment management capabilities and products span a broad range of asset classes and investment styles to meet a variety of client needs with our $645 billion in assets under management diversified across geographies, strategies and clients as depicted in the graphic below. 5 Index Ameriprise Financial, Inc.
We are committed to providing an excellent employee and advisor experience for all of our people. This includes approximately 13,800 global 8 Index Ameriprise Financial, Inc. employees, including our corporate employees and employee financial advisors. We have approximately 8,400 non-employee advisors who choose to affiliate with us through our franchise advisor group.
We are committed to providing an excellent employee and advisor experience for our global workforce. This includes approximately 13,600 employees, including our corporate employees and employee financial advisors. We have approximately 8,200 non-employee advisors who choose to affiliate with us through our franchise advisor group. Leadership skills and development of all our employees are core to our culture and history.
Department of Labor (“DOL”) finalized its voluntary exemption for providing investment advice to retirement account clients and has reinstated prior guidance for determining who is an investment advice fiduciary under pension regulations.
Department of Labor (“DOL”) finalized its voluntary exemption for providing investment advice to retirement account clients and has reinstated prior guidance for determining who is an investment advice fiduciary under pension regulations. The DOL finalized a new regulation expanding the definition of investment advice fiduciary, but that regulation has been stayed by the courts.
We continue to pursue opportunities to leverage the collective capabilities of our global asset management business in order to enhance our investment solutions and to develop new solutions that are responsive to client demand in an increasingly complex and competitive marketplace.
We continue to pursue opportunities to leverage the collective capabilities of our global asset management business in order to enhance our investment solutions and to develop new solutions that are responsive to client demand in an increasingly complex and competitive marketplace. History and Development Our company has provided solutions to help clients confidently achieve their financial objectives for 130 years.
In addition to regulations noted in this section, within the EU and the U.K. we have been and will continue to address regulatory reforms or structural changes including but not limited to: Sustainable Disclosure Regulation (“SDR”), U.K. Retail Disclosure framework, AIFMD II, Digital Operational Resilience Act (“DORA”), and Corporate Sustainability Reporting Directive (“CSRD”).
In addition to regulations noted in this section, within the EU and the U.K. we have been and will continue to address regulatory reforms or structural changes including but not limited to: Consumer Composite Investments, Retail Investment Strategy, AIFMD 2.0, EMIR 3.0 , SFDR 2.0, Digital Operational Resilience Act (“DORA”), Corporate Sustainability Reporting Directive (“CSRD”), and Corporate Sustainability Due Diligence Directive (“CSDDD”).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAny future downgrade in our financial strength ratings, or the announced potential for a downgrade, could potentially have a significant adverse effect on our financial condition and results of operations in many ways, including: (i) reducing new sales of insurance and annuity products and investment products; (ii) adversely affecting our relationships with our advisors and third-party distributors of our products; (iii) materially increasing the number or amount of policy surrenders and withdrawals by contractholders and policyholders; (iv) requiring us to reduce prices for many of our products and services to remain competitive; and (v) adversely affecting our ability to obtain reinsurance or obtain reasonable pricing on reinsurance.
Biggest changeAny future downgrade in our financial strength ratings, or the announced or perceived potential for a downgrade, could potentially have a significant adverse effect on our financial condition and results of operations.
The occurrence of any one of these risks could negatively affect our international business and, consequently, our results of operations generally. Additionally, operating in international markets also requires significant management attention and financial resources and we cannot be certain these operations will produce desired levels of revenues or 25 Index Ameriprise Financial, Inc. profitability.
The occurrence of any one of these risks could negatively affect our international business and, consequently, our results of operations generally. Additionally, operating in international markets also requires significant management attention and financial resources and we cannot be certain these operations will produce desired levels of revenues or profitability. 25 Index Ameriprise Financial, Inc.
Pending legal and regulatory actions include proceedings relating to aspects of our businesses and operations that are specific to us and proceedings that are typical 26 Index Ameriprise Financial, Inc. of the industries and businesses in which we operate. Some of these proceedings have been brought on behalf of various alleged classes of complainants.
Pending legal and regulatory actions include proceedings relating to aspects of our businesses and operations that are specific to us and proceedings that are typical of the industries and businesses in which we operate. Some of these proceedings have been brought on behalf of various alleged classes of complainants. 26 Index Ameriprise Financial, Inc.
The risk that our claims experience may differ significantly from our pricing assumptions is particularly significant for our LTC insurance products notwithstanding our ability to implement future price increases with regulatory approvals. Though we discontinued offering LTC products in 2003, LTC insurance policies provide for long-duration coverage and, therefore, our actual claims experience will emerge over many years.
The risk that our claims experience may differ significantly from our pricing assumptions is particularly significant for our LTC insurance products notwithstanding our ability to implement future price increases with regulatory approvals. Though we discontinued offering LTC products in 2003, LTC insurance policies provide for long-duration coverage and, therefore, our actual claims experience will continue to emerge over many years.
As these threats, and government and regulatory oversight of associated risks, continue to evolve, we may be required to expend additional resources (both direct financial resources and indirect costs like people) to enhance or expand upon the technical and operational security and response measures we currently maintain or that we allow franchise advisors to maintain and control locally.
As these threats, and government and regulatory oversight of associated risks, continue to evolve, we may be required to expend significant additional resources (both direct financial resources and indirect costs like people) to enhance or expand upon the technical and operational security and response measures we currently maintain or that we allow franchise advisors to maintain and control locally.
If the counterparties to our reinsurance arrangements default or otherwise fail to fulfill their obligations, we may be exposed to risks we had sought to mitigate, which could adversely affect our financial condition and results of operations. We use reinsurance to mitigate certain of our risks.
Insurance Risks If the counterparties to our reinsurance arrangements default or otherwise fail to fulfill their obligations, we may be exposed to risks we had sought to mitigate, which could adversely affect our financial condition and results of operations. We use reinsurance to mitigate certain of our risks.
Further, the capital requirements imposed upon our subsidiaries may be impacted by heightened regulatory or rating organization scrutiny and intervention, which could negatively affect our and our subsidiaries’ ability to pay dividends or make other permitted payments.
Further, the financial and capital requirements imposed upon our subsidiaries may be impacted by heightened regulatory or rating organization scrutiny and intervention, which could negatively affect our and our subsidiaries’ ability to pay dividends or make other permitted payments.
In addition, conducting and increasing our international operations subjects us to additional risks that, generally, we do not face in the U.S., including: (i) potentially adverse cross-border tax consequences, including the complexities of foreign value added tax systems and restrictions on the repatriation of earnings; (ii) the localization of our solutions and related costs; (iii) the burdens of complying with a wide variety of foreign laws and different, potentially conflicting legal standards, including laws and regulations; and (iv) social and economic situations outside of the U.S.
In addition, conducting and increasing our international operations subjects us to additional risks that, generally, we do not face in the U.S., including: (i) potentially adverse cross-border tax consequences, including the complexities of transfer pricing, foreign value added tax systems and restrictions on the repatriation of earnings; (ii) the localization of our solutions and related costs; (iii) the burdens of complying with a wide variety of foreign laws and different, potentially conflicting legal standards, including laws and regulations; and (iv) social and economic situations outside of the U.S.
We must make judgments and interpretations about the application of these inherently complex tax laws when determining the provision for income taxes and must also make estimates about when in the future certain items affect taxable income in the various tax jurisdictions.
We make judgments and interpretations about the application of these inherently complex tax laws when determining the provision for income taxes and also make estimates about when in the future certain items affect taxable income in the various tax jurisdictions.
Additionally, the rating organizations effectively impose various capital requirements on our company and our insurance company subsidiaries in order for us to maintain our ratings and the ratings of our insurance subsidiaries.
Additionally, the rating organizations effectively impose various financial and capital requirements on our company and our insurance company subsidiaries in order for us to maintain our ratings and the ratings of our insurance subsidiaries.
Further some controls are manual and are subject to inherent limitations and we have a general model risk where there is a risk of loss associated with insufficient or inaccurate models that we use to support our decision. This could cause us to incur investment losses or cause our hedging and other risk management strategies to be ineffective.
Further some controls are manual and are subject to inherent limitations and we have a general model risk where there is a risk of loss associated with insufficient or inaccurate models that we use to support our decisions. This could cause us to incur investment losses or cause our hedging and other risk management strategies to be ineffective.
We are, and in the future may be, subject to legal and regulatory actions in the ordinary course of our operations, both domestically and internationally. Actions brought against us may result in awards, settlements, penalties, injunctions or other adverse results, including reputational damage.
We are, and in the future may be, subject to legal and regulatory actions in the ordinary course of our operations, both domestically and internationally. Actions brought against us may result in judgements, verdicts, awards, settlements, penalties, injunctions or other adverse results, including reputational damage.
We also have exposure to financial institutions in the form of unsecured debt instruments, derivative transactions (including with respect to derivatives hedging our exposure on variable annuity contracts with guaranteed benefits), reinsurance, repurchase and underwriting arrangements and equity investments.
We also have exposure to financial institutions in the form of unsecured debt instruments, derivative transactions (including with respect to derivatives hedging our exposure on variable annuity contracts with guaranteed benefits and structured variable annuities), reinsurance, repurchase and underwriting arrangements and equity investments.
Our clients can also reduce the aggregate amount of managed assets or shift their funds to other types of accounts with different fee rate structures, for any number of reasons, including investment performance, changes in prevailing interest rates, changes in investment preferences or investment management strategy (for example, “active” or “passive” investing styles or the proliferation of exchange traded funds (“ETFs”) or other vehicles like separately managed accounts (“SMAs”)), changes in our (or our advisors’) reputation in the marketplace, a client’s view of ESG factors, changes in client or relationship management, loss of key investment management personnel and financial market performance.
Our clients can also reduce the aggregate amount of managed assets or shift their funds to other types of accounts with different fee rate structures, for any number of reasons, including investment performance, changes in prevailing interest rates, changes in investment preferences or investment management strategy (for example, “active” or “passive” investing styles or the proliferation of ETFs or other vehicles like separately managed accounts (“SMAs”)), changes in our (or our advisors’) reputation in the marketplace, a client’s view of ESG factors, changes in client or relationship management, loss of key investment management personnel and financial market performance.
Such factors, which can be global, regional, national or local in nature, include: (i) the level and volatility of the markets, including equity prices, interest rates, commodity prices, currency values and other market indices and drivers; (ii) geopolitical strain, terrorism and armed conflicts, (iii) political dynamics or elections and social, economic and market conditions; (iv) the availability and cost of capital; (v) global health emergencies (such as the coronavirus disease 2019 (“COVID-19”) pandemic); (vi) technological changes and 16 Index Ameriprise Financial, Inc. events; (vii) U.S. and foreign government fiscal and tax policies; (viii) U.S. and foreign government ability, real or perceived, to avoid defaulting on government securities; (ix) the availability and cost of credit and hedge markets; (x) periods of elevated inflation; (xi) natural disasters such as weather catastrophes; and (xii) other factors affecting investor sentiment and confidence in the financial markets.
Such factors, which can be global, regional, national or local in nature, include: (i) the level and 16 Index Ameriprise Financial, Inc. volatility of the markets, including equity prices, interest rates, commodity prices, currency values and other market indices and drivers; (ii) geopolitical strain, terrorism and armed conflicts, (iii) political dynamics or elections and social, economic and market conditions; (iv) the availability and cost of capital; (v) global health emergencies; (vi) technological changes and events; (vii) U.S. and foreign government fiscal and tax policies; (viii) U.S. and foreign government ability, real or perceived, to avoid defaulting on government securities; (ix) the availability and cost of credit and hedge markets; (x) periods of elevated inflation; (xi) natural disasters such as weather catastrophes; and (xii) other factors affecting investor sentiment and confidence in the financial markets.
Changes in our business or technological advancements may also require corresponding changes in our systems, networks and data security and response measures. While accessing our products and services, our customers may use computers and other devices that sit outside of our security control environment.
Changes in our business or technological advancements may also require corresponding changes in our systems, networks and data security and response measures. While accessing our products and services, our clients may use computers and other devices that sit outside of our security control environment.
Climate risks can also arise from the inconsistencies and conflicts in the manner in which climate policy and financial regulation is implemented in the many regions where we operate, including initiatives to apply and enforce policy and regulation with extraterritorial effect.
Climate risks can also arise from the inconsistencies and conflicts in the manner in which climate policy, disclosure requirements and financial regulation is implemented in the many regions where we operate, including initiatives to apply and enforce policy and regulation with extraterritorial effect.
We set prices for RiverSource insurance products (and historically LTC insurance) as well as some annuity products based upon expected claims payment patterns, derived from assumptions we make about our policyholders and contractholders, including expenses, fees, investment returns, and morbidity and mortality rates. The long-term profitability of these products depends upon how our actual experience compares with our pricing assumptions.
We set prices for insurance products as well as some annuity products based upon expected claims payment patterns, derived from assumptions we make about our policyholders and contractholders, including expenses, fees, investment returns, and morbidity and mortality rates. The long-term profitability of these products depends upon how our actual experience compares with our pricing assumptions.
If we are unable to offer appropriate product alternatives which encourage customers to continue purchasing in the face of actual or perceived market volatility, our sales and management fee revenues could decline.
If we are unable to offer appropriate product alternatives which encourage clients to continue purchasing in the face of actual or perceived market volatility, our sales and management fee revenues could decline.
Such disasters and catastrophes may also impact us indirectly by changing the condition and behaviors of our customers, business counterparties and regulators, as well as by causing declines or volatility in the economic and financial markets.
Such disasters and catastrophes may also impact us indirectly by changing the condition and behaviors of our clients, business counterparties and regulators, as well as by causing declines or volatility in the economic and financial markets.
Many of the products we issue or on which our businesses are based (including both insurance products and non-insurance products) receive favorable treatment under current U.S. federal income or estate tax law.
Many of the products we offer or on which our businesses are based (including both insurance products and non-insurance products) receive favorable treatment under current U.S. federal income or estate tax law.
These regulator-driven changes may adversely impact the client experience by, for example, requiring multiple means of verifying the identity of a client before they can interact with us.
These regulator-driven changes may adversely impact the client experience by, for example, requiring multiple or new means of verifying the identity of a client before they can interact with us.
Our ability to attract and retain customers, investors, employees and advisors is highly dependent upon external perceptions of our company. Damage to our reputation could cause significant harm to our business and prospects.
Our ability to attract and retain clients, investors, employees and advisors is highly dependent upon external perceptions of our company. Damage to our reputation could cause significant harm to our business and prospects.
In addition, changes to the Internal Revenue Code, state or foreign tax laws, administrative rulings or court decisions could increase our provision for income taxes and reduce our earnings. Furthermore, guidance issued by the U.S. Department of Treasury and others can be critical to the application and impact of new laws and in avoiding unintended impacts from legislation.
In addition, changes to the Internal Revenue Code, state or foreign tax laws, administrative rulings or court decisions could increase our provision for income taxes and reduce our earnings. Furthermore, guidance issued by the U.S. Department of Treasury and others has been critical to the application and impact of new laws and in avoiding unintended impacts from legislation.
Risks in acquisition transactions include difficulties in the integration of acquired businesses into our operations and control environment (including our risk management policies and procedures), difficulties in assimilating and retaining employees and intermediaries, difficulties in retaining the existing customers of the acquired entities, assumed or unforeseen liabilities that arise in connection with the acquired businesses, difficulties with the software, technology and systems of the acquired entities that were subject to a different control posture before the acquisition (and until such time as we can replace these or make investments to uplift their capabilities), the failure of counterparties to satisfy any obligations to indemnify us against liabilities arising from the acquired businesses, and unfavorable market conditions that could negatively impact our growth expectations or expected synergies for the acquired businesses.
Risks in acquisition transactions include difficulties in the integration of acquired businesses into our operations and control environment (including our risk management policies and procedures), difficulties in assimilating and retaining employees and intermediaries, difficulties in retaining the existing clients of the acquired entities, assumed or unforeseen liabilities that arise in connection with the acquired businesses, difficulties obtaining regulatory approval or integrating into regulatory regimes, difficulties with the software, technology and systems of the acquired entities that were subject to a different control posture before the acquisition (and until such time as we can replace these or make investments to uplift their capabilities), the failure of counterparties to satisfy any obligations to indemnify us against liabilities arising from the acquired businesses, and unfavorable market conditions that could negatively impact our growth expectations or expected synergies for the acquired businesses.
The occurrence of natural disasters and catastrophes, including earthquakes, hurricanes, floods, tornadoes, fires, blackouts, severe winter weather, explosions, pandemic disease and global health emergencies (such as COVID-19) and man-made disasters, including acts of terrorism, riots, civil unrest including large-scale protests, insurrections and military actions, could adversely affect our results of operations or financial condition.
The occurrence of natural disasters and catastrophes, including earthquakes, hurricanes, floods, tornadoes, fires, blackouts, severe winter weather, explosions, pandemic disease and global health emergencies and man-made disasters, including acts of terrorism, riots, civil unrest including large-scale protests, insurrections and military actions, could adversely affect our results of operations or financial condition.
If we were found to have infringed or misappropriated a third-party patent or other intellectual property rights, we could incur substantial 28 Index Ameriprise Financial, Inc. liability, and in some circumstances could be enjoined from providing certain products or services to our customers or utilizing and benefiting from certain methods, processes, copyrights, trademarks, trade secrets or licenses, or alternatively could be required to enter into costly licensing arrangements with third parties, all of which could have a material adverse effect on our business, results of operations and financial condition.
If we were found to have infringed or misappropriated a third-party patent or other intellectual property rights, we could incur substantial liability, and in some circumstances could be enjoined from providing certain products or services to our clients or utilizing and benefiting from certain methods, processes, copyrights, trademarks, trade secrets or licenses, or alternatively could be required to enter into costly licensing arrangements with third parties, all of which could have a material adverse effect on our business, results of operations and financial condition.
We have established policies and implemented such technical and operational measures ourselves and have in place policies that require our service providers and franchisee advisors, each of which control locally their own technology operations, to do the same. The increase in hybrid working among our employees adds complexity to monitoring and processing procedures.
We have established policies and implemented such technical and operational measures ourselves and have in place policies that require our service providers and franchisee advisors, each of which control locally their own technology operations, to do the same. The hybrid work environment among our employees adds complexity to monitoring and processing procedures.
Ratings agencies have and may continue to increase the frequency and scope of their credit reviews, adjust upward the capital and other requirements employed in the rating organizations’ models for maintenance of ratings levels (including adjusting the framework under which they view our Company’s business mix that drives these requirements), or downgrade ratings applied to particular classes 18 Index Ameriprise Financial, Inc. of securities or types of institutions, and our ratings could be changed at any time and without any notice by the rating organizations.
Ratings agencies have and may continue to increase the frequency and scope of their credit reviews, adjust upward the capital and other requirements employed in the rating organizations’ models for maintenance of ratings levels (including adjusting the framework under which they view our business mix that drives these requirements), or downgrade ratings applied to particular classes of securities or types of institutions, and our ratings could be changed at any time and without any notice by the rating organizations.
We invest a portion of our owned assets in certain privately placed fixed income securities, mortgage loans, and limited partnership interests, all of which are relatively illiquid. These asset classes represented 7% of the carrying value of our investment portfolio as of December 31, 2023.
We invest a portion of our owned assets in certain privately placed fixed income securities, mortgage loans, and limited partnership interests, all of which are relatively illiquid. These asset classes represented 8% of the carrying value of our investment portfolio as of December 31, 2024.
Actual experience can differ from our assumptions for many reasons over the time an insurance product is held. If mortality rates are higher than our pricing assumptions, we could be required to make 21 Index Ameriprise Financial, Inc. greater payments under our life insurance policies and annuity contracts with guaranteed minimum death benefits than we have projected.
Actual experience can differ from our assumptions for many reasons over the time an insurance product is held. If mortality rates are higher than our pricing assumptions, we could be required to make greater payments under our life insurance policies and annuity contracts with guaranteed minimum death benefits than we have projected.
In addition, a significant portion of our revenue is derived from investment management agreements with the Columbia Management family of mutual funds which are terminable on 60 days’ notice.
In addition, a significant portion of our revenue is derived from investment management agreements with the Columbia Management family of mutual funds or other investment managers which are terminable on 60 days’ notice.
For most of our life insurance and deferred annuity products, actual persistency that is lower than our persistency assumptions could have an adverse impact on profitability, especially in the early years of a policy or contract because we would be required to accelerate the amortization of expenses we deferred in connection with the acquisition of the policy or contract.
For most of our life insurance 21 Index Ameriprise Financial, Inc. and deferred annuity products, actual persistency that is lower than our persistency assumptions could have an adverse impact on profitability, especially in the early years of a policy or contract because we would be required to accelerate the amortization of expenses we deferred in connection with the acquisition of the policy or contract.
Additional financing depends on a variety of factors such as market conditions, the general availability of credit, the volume of trading activities, the overall availability of credit to the financial services industry, our credit ratings and credit capacity, actions by our regulators, and perceptions held by shareholders, customers or lenders.
Additional financing depends on a variety of factors such as market conditions, the general availability of credit, the volume of trading activities, the overall availability of credit to the financial services industry, our credit ratings and credit capacity, actions by our regulators, and perceptions held by stakeholders, clients or lenders.
Maintaining the security and integrity of our software, information and these systems and networks, and appropriately responding to any cybersecurity and privacy incidents (including attempts), is critical to the success of our business operations, including our reputation, the retention of our advisors and clients, and to the protection of our proprietary information and our clients’ personal information.
Maintaining the security and integrity of our software, information and these systems and networks, and appropriately responding to any cybersecurity and privacy incidents (including attempts to attack or access our network), is critical to the success of our business operations, including our reputation, the retention of our advisors and clients, and to the protection of our proprietary information and our clients’ personal information.
Dividends and returns of capital from our subsidiaries and permitted payments to us under our intercompany arrangements with our subsidiaries are our principal sources of cash to pay shareholder dividends and to meet our financial obligations. These obligations include our operating expenses and interest and principal on our borrowings.
Dividends and returns of capital from our subsidiaries and permitted payments to us under our intercompany arrangements with our subsidiaries are our principal sources of cash to pay shareholder dividends and to meet our financial obligations. These obligations include our operating expenses, interest and principal on our borrowings, and any other contractual commitments.
Market conditions, regulatory actions, tax laws, and our competitive industry environment are among the reasons current shareholders in our mutual funds, OEICs, SICAVs, unit trusts, investment trusts and other pooled investment vehicles, contractholders in our annuity products and policyholders in our protection products may opt to withdraw cash values for those products (or for certain protection products, to reduce their withdrawal activity).
Market conditions, regulatory actions, tax laws, and our competitive industry environment are among the reasons current shareholders in our mutual funds, closed-end funds, exchange traded funds (“ETFs”), hedge funds, OEICs, SICAVs, unit trusts, investment trusts and other pooled investment vehicles, contractholders in our annuity products and policyholders in our protection products may opt to withdraw cash values for those products (or for certain protection products, to reduce their withdrawal activity).
We are also dependent on our network of advisors to drive growth and results in our wealth management business (and for a significant portion of the sales of our products) and recruiting and retaining financial advisors is highly competitive and ever-changing.
We are also dependent on our network of advisors to drive growth and results in our wealth management business (and for a significant portion of the sales of our products). Recruiting and retaining financial advisors is highly competitive and constantly evolving.
Artificial intelligence (including generative artificial intelligence) presents many benefits in terms of operating efficiency, but also new risks that we need to seek to mitigate through our strategic and risk management policies, such as reliance on information that may be inaccurate or biased results.
Artificial intelligence (including generative artificial intelligence) presents many benefits in terms of operating efficiency, but also certain risks that we need to seek to mitigate through our strategic and risk management policies, such as reliance on information that may be inaccurate or unfairly discriminatory results.
Furthermore, changes in consumer economic variables, such as the number and size of personal bankruptcy filings, the rate of unemployment, decreases in property values, and the level of consumer confidence and consumer debt, may substantially affect consumer loan levels and credit quality, which, in turn, could impact client activity in all of our businesses.
Furthermore, changes in consumer economic variables, such as the number and size of personal bankruptcy filings, the rate of unemployment, decreases in property values, and the level of consumer confidence and consumer debt, may substantially affect consumer financials, which, in turn, could impact client activity in all of our businesses.
With respect to secured transactions, our credit risk may be exacerbated when the collateral we hold cannot be realized upon or is liquidated at prices insufficient to recover the full amount of the loan or derivative exposure.
With respect to secured transactions, our credit risk may be exacerbated when the collateral we 19 Index Ameriprise Financial, Inc. hold cannot be realized upon or is liquidated at prices insufficient to recover the full amount of the loan or derivative exposure.
As such, valuations may include inputs and assumptions that are less observable and may require greater estimation as well as valuation methods that are more sophisticated, which may result in values less than the value at which the investments may be ultimately sold.
As such, valuations may include inputs and assumptions that are less observable and may require greater estimation as well as valuation methods that are more sophisticated, 20 Index Ameriprise Financial, Inc. which may result in values less than the value at which the investments may be ultimately sold.
Substantial risk and uncertainties are associated with the introduction and ongoing maintenance of new products and services, including the implementation of new and appropriate operational controls and 24 Index Ameriprise Financial, Inc. procedures, shifting and sometimes contradictory client and market preferences, the introduction of competing products or services and compliance with regulatory requirements.
Substantial risk and uncertainties are associated with the introduction and ongoing maintenance of new products and services, including the implementation of new and appropriate operational controls and procedures, shifting and sometimes contradictory client and market preferences, the introduction of competing products or services and compliance with regulatory requirements.
Despite the measures we have taken and may in the future take to address and mitigate cybersecurity, privacy and technology risks, we cannot be certain that our systems and networks, or those used by our vendors, will not be subject to successful attacks, breaches or interference.
Despite the measures we have taken and may in the future take to address and mitigate cybersecurity, privacy and technology risks, we cannot be certain that our systems and networks, or those used by our vendors and franchisees, will not be subject to successful 23 Index Ameriprise Financial, Inc. attacks, breaches or interference.
In addition, rating agencies continually evolve their ratings and other methodologies, and these changes can be to our detriment or benefit and have a material impact on how we view our liquidity and capital.
In 18 Index Ameriprise Financial, Inc. addition, rating agencies continually evolve their ratings and other methodologies, and these changes can be to our detriment or benefit and have a material impact on how we view our liquidity and capital.
If employees or advisors who maintain relationships with our clients leave, we may not be able to retain valuable relationships and our clients may choose to leave for a competitor.
If employees or advisors who maintain relationships with our clients leave or retire without succession plans, we may not be able to retain valuable relationships, and our clients may choose to leave for a competitor.
Market Risks Our results of operations and financial condition may be adversely affected by market fluctuations and by economic, political and other factors. Our results of operations and financial condition may be materially affected by market fluctuations and by economic and other factors.
Market Risks Our results of operations and financial condition may be adversely affected by market fluctuations and by economic, political and other factors. Our results of operations and financial condition may be materially affected by market fluctuations and by economic and other factors (whether actual or perceived).
A drop in our investment performance as compared to that of our competitors could negatively impact our revenues and profitability. Investment performance is a key competitive factor for our retail and institutional asset management products and services.
A drop in our investment performance as compared to that of our competitors could negatively impact our revenues and profitability. Investment performance is a key competitive factor for our retail and institutional asset management products and services and is a key driver of growing assets under management and economies of scale.
Further, avoiding introducing or encouraging certain new products (such as cryptocurrency) creates the risk of losing assets or new flows to competitors who encourage or support those products.
Further, avoiding introducing or encouraging certain new products (such as cryptocurrency) creates the risk of losing assets or new flows to 24 Index Ameriprise Financial, Inc. competitors who encourage or support those products.
Ongoing changes to regulation and oversight of the financial industry may generate outcomes, the full impact of which cannot be immediately ascertained as government intervention could distort customary and expected commercial behavior. Certain examples of legislative and regulatory changes that may impact our businesses are described below. Some of the changes could present operational challenges and increase costs.
Ongoing changes to regulation and oversight of the financial industry may generate outcomes, the full impact of which cannot be immediately ascertained as government intervention could distort customary and expected commercial behavior. Some of the legislative and regulatory changes could present operational challenges and increase costs.
Further, while we require their existence by contract, we cannot control the execution of any business continuity or incident response plans implemented by our service providers or our franchise advisors.
Further, we cannot control the execution of any business continuity or incident response plans implemented by our service providers or our franchise advisors.
Changes in interest rates may affect our results of operations and financial condition. Certain of our insurance, annuity, investment products, wrap fees and banking products are sensitive to interest rate fluctuations (inclusive of changes in credit spreads), which could cause future impacts associated with such fluctuations to differ from our 17 Index Ameriprise Financial, Inc. historical costs.
Certain of our insurance, annuity, investment products, wrap fees and banking products are sensitive to interest rate fluctuations (inclusive of changes in credit spreads), which could cause future impacts associated with such fluctuations to differ from our historical results of operations.
The determination of the amount of allowances taken on certain loans and investments is subject to management’s evaluation and judgment and could materially impact our results of operations or financial position.
Decreases in value may have a material adverse effect on our results of operations or financial condition. The determination of the amount of allowances taken on certain loans and investments is subject to management’s evaluation and judgment and could materially impact our results of operations or financial position.
We have a vendor management process, but at times our software or service providers could push through updates that are not fully disclosed to us (or tested by them) and that could alter the control posture of their products.
Furthermore, human error occurs from time to time and such mistakes can lead to the inadvertent disclosure of sensitive information. We have a vendor management process, but at times our software or service providers could push through updates that are not fully disclosed to us (or tested by them) and that could alter the control posture of their products.
It is possible that accounting changes could have a material effect on our results of operations and financial condition. The Financial Accounting Standards Board (“FASB”), the SEC and other regulators often change the financial accounting and reporting standards governing the preparation of our financial statements.
It is possible that accounting changes could have a material effect on our results of operations and financial condition. The Financial Accounting Standards Board, the SEC and other regulators often change the financial accounting and reporting standards governing the preparation of our financial statements. These changes are difficult to predict and could impose additional governance, internal control and disclosure demands.
A reinsurer’s insolvency or its inability or unwillingness to make payments under the terms of our reinsurance agreement could have a material adverse effect on our financial condition and results of operations.
A reinsurer’s insolvency or its inability or unwillingness to make payments under the terms of our reinsurance agreement could have a material adverse effect on our financial condition and results of operations. The failure of other insurers could require us to pay higher assessments to state insurance guaranty funds.
We face risks arising from acquisitions and divestitures. We have made acquisitions and divestitures (including sales of insurance blocks via reinsurance transactions and other strategic partnerships) in the past and may pursue similar strategic transactions in the future.
We face risks arising from acquisitions and divestitures. We have made acquisitions and divestitures in the past and may pursue similar strategic transactions in the future.
Changes in U.S. federal income or estate tax law could reduce or eliminate the tax advantages of certain of our products and thus make such products less attractive to clients or cause a change in client demand and activity. We may not be able to protect our intellectual property and may be subject to infringement claims.
Changes in U.S. federal income or estate tax law could 27 Index Ameriprise Financial, Inc. reduce or eliminate the tax advantages of certain of our products and thus make such products less attractive to clients or cause a change in client demand and activity.
In addition, the investment performance of our asset management products and services, and the retention of our products and services by our clients, are dependent upon the strategies and decisions of our portfolio managers and analysts.
The investment performance of our asset management products and services, as well as retention of our products and services by our clients, depend on the strategies and decisions of our portfolio managers and analysts.
In the event of insolvency of one or more unaffiliated insurance companies, our insurance companies could be adversely affected by the requirement to pay assessments to the guaranty fund associations.
Our insurance companies are required by law to be members of the guaranty fund association in every state where they are licensed to do business. In the event of insolvency of one or more unaffiliated insurance companies, our insurance companies could be adversely affected by the requirement to pay assessments to the guaranty fund associations.
Depending on how rapidly rates increase and other factors, we may need to access liquidity sources that are more costly, which could have a material adverse impact on profitability or our results of operations or financial condition. Interest rate fluctuations also could have an adverse effect on the results of our investment portfolio.
Depending on 17 Index Ameriprise Financial, Inc. how rapidly the market moves and other factors, we may need to access liquidity sources that are more costly, which could have an adverse impact on profitability or our results of operations or financial condition. Changes in interest rates may affect our results of operations and financial condition.
We rely on a combination of contractual rights and copyright, trademark, patent registrations and trade secret laws to establish and protect our intellectual property. Although we use a broad range of measures to protect our intellectual property rights, third parties may infringe or misappropriate our intellectual property or attempt to use the same to defraud others.
Although we use a broad range of measures to protect our intellectual property rights, third parties may infringe or misappropriate our intellectual property or attempt to use the same to defraud others.
Insurance, banking and securities laws and regulations, including the FCA’s Investment Firms Prudential Regime and the FRB’s recent final rules for the “Building Block Approach” may regulate the ability of many of our subsidiaries (such as our insurance, banking and brokerage subsidiaries and our face-amount certificate company) to pay dividends, return capital or make other permitted payments or practically impact our capital structure and dividends or other payments from our subsidiaries.
Insurance, banking and securities, and other laws and regulations may regulate the ability of many of our subsidiaries (such as our insurance, banking and brokerage subsidiaries, FCA-regulated asset management entities, and our face-amount certificate company) to pay dividends, return capital or make other permitted payments or practically impact our capital structure and dividends or other payments from our subsidiaries.
Downturns and volatility in markets (including equity, fixed income, real estate, alternatives such as infrastructure and private equity and other markets) have had, and may in the future have, an adverse effect on the revenues and returns from our asset management services, retail advisory accounts, variable annuity contracts, banking products and other products.
Downturns and volatility in markets or the departure of a key client have had, and may in the future have, an adverse effect on the revenues and returns from our asset management services, retail advisory accounts, variable annuity contracts, banking products and other products.
In addition, interest rate fluctuations could result in fluctuations in the valuation of certain minimum guaranteed benefits contained in some of our variable annuity products, something we saw as a result of volatility that resulted from the COVID-19 pandemic.
In addition, interest rate fluctuations could result in fluctuations in the valuation of certain minimum guaranteed benefits contained in some of our variable annuity products.
While we regularly assess our exposure to different industries 19 Index Ameriprise Financial, Inc. and counterparties, the performance and financial strength of specific institutions are subject to rapid change, the timing and extent of which cannot be known.
While we regularly assess our exposure to different industries and counterparties, the performance and financial strength of specific institutions are subject to rapid change, the timing and extent of which cannot be known. Many transactions with and investments in the products and securities of other financial institutions expose us to credit risk in the event of default of our counterparty.
We rely on the third parties with whom we do business to identify and remediate software and other vulnerabilities before they can be exploited by bad actors, but they cannot always do so. For example, zero-day vulnerabilities in software and other technology solutions are immediately exploitable by bad actors as occasionally happens with certain of our vendors in the industry.
We rely on the third parties with whom we do business to identify and remediate software and other vulnerabilities in the assets and systems they use to run their business before they can be exploited by bad actors, but the third parties cannot always do so.
Declines and volatility in U.S. and global market conditions (such as those that resulted from the COVID-19 pandemic and subsequent economic environment, from other recent geopolitical tensions or from situations like the 2023 regional bank crisis) have impacted our businesses in the past, are impacting us now and may continue to impact us in the same, new or different ways in the future.
Declines and volatility in U.S. and global market conditions have impacted our businesses in the past, are impacting us now and may continue to impact us in the same, new or different ways in the future.
During periods of market disruption, including periods of significantly rising or high interest rates and rapidly widening credit spreads or illiquidity, it may be difficult to value certain of our securities. There may be certain asset classes that were in active markets with significant observable data that become illiquid due to the financial environment.
During periods of market disruption, including periods of significantly rising or high interest rates and rapidly widening credit spreads or illiquidity, it may be difficult to value certain of our securities and the value of our securities as reported within our Consolidated Financial Statements and the period-to-period changes in value could vary significantly.
Ameriprise Financial is subject to ongoing supervision by the FRB, including supervision and prudential standards, certain capital requirements, stress-testing, resolution planning, information security and privacy, and certain risk management requirements.
Ameriprise Financial is subject to ongoing supervision by the FRB, including supervision and prudential standards, capital requirements, stress-testing, resolution planning, information security and privacy, and risk management requirements. Further, as a financial holding company, our activities are limited to those that are financial in nature, incidental to a financial activity or, with FRB approval, complementary to a financial activity.
Poor investment performance could also adversely affect our ability to expand the distribution of our products through unaffiliated third parties. Further, any drop in market share of mutual funds sales by our advisors or through third party intermediaries, may further reduce profits as sales of other companies’ mutual funds are less profitable than sales of our proprietary funds.
Further, any drop in market share of mutual funds sales by our advisors or through third party intermediaries, may further reduce profits as sales of other companies’ mutual funds are less profitable than sales of our proprietary funds. We face intense competition in attracting and retaining key talent.
These changes are difficult to predict and could impose additional governance, internal control and disclosure demands. In some cases, we could be required to apply a new or revised standard retrospectively, resulting in our restating prior period financial statements.
In some cases, we could be required to apply a new or revised standard retrospectively, resulting in our restating prior period financial statements. Item 1B. Unresolved Staff Comments None.
From time to time there are regulatory-driven or other trends and developments within the industry, such as changes around the Protocol for Broker Recruiting or the recent proposal by the Federal Trade Commission (and similar state proposals and general scrutiny) around non-competition or non-solicitation agreements, that could potentially impact the dynamics between us and our competitors or negatively impact our business.
From time to time there are regulatory-driven or other trends and developments within the industry that could potentially impact the dynamics between us and our competitors or negatively impact our business.
This reduction in managed assets, and the associated decrease in revenues and earnings, could have a material adverse effect on our business. Most of our variable annuity products contain guaranteed minimum death benefits and a majority of our variable annuity products in force contain guaranteed minimum withdrawal and accumulation benefits.
Most of our variable annuity products contain guaranteed minimum death benefits and a majority of our variable annuity products in force contain guaranteed minimum withdrawal and accumulation benefits.
Our 2021 acquisition of the BMO Global Asset Management (EMEA) business heightened these risks as it significantly expanded our asset management business in EMEA. The occurrence of natural or man-made disasters and catastrophes could adversely affect our results of operations and financial condition.
The occurrence of natural or man-made disasters and catastrophes could adversely affect our results of operations and financial condition.
Any drop or perceived drop in investment performance as compared to our competitors could cause a decline in sales of our mutual funds and other investment products, an increase in redemptions and the termination of institutional asset management relationships. These impacts may reduce our aggregate amount of assets under management and reduce management fees.
There can be no assurance as to how future investment performance will compare to our competitors or that historical performance will be indicative of future returns. Any drop or perceived drop in investment performance as compared to our competitors could cause a decline in sales of our investment products, an increase in redemptions and the termination of asset management relationships.
Preventing and detecting misconduct among our franchisee advisors who are not employees of our company presents additional challenges in that they control their own technology environment on a day-to-day basis and could have an adverse effect on our business. Our reputation depends on our continued identification of and mitigation against conflicts of interest.
We seek to aid our advisors and provide certain requirements and support to protect our non-employee franchise advisors’ technology solutions to run their businesses, but they control their own technology environment on a day-to-day basis and could have an adverse effect on our business. Our reputation depends on our continued identification of and mitigation against conflicts of interest.
We face intense competition in attracting and retaining key talent. Our continued success depends to a substantial degree on our ability to attract, motivate, engage and retain qualified people in a very competitive market. While we are seeing the employment market stabilize compared to recent years, the financial services industry has always been a highly competitive industry.
Our continued success depends on our ability to attract, motivate, engage and retain high-performing and high-potential talent in a highly competitive industry. Although the employment market is stabilizing compared to recent years, the financial services sector remains a highly competitive industry, especially for top talent.
These developments as well as other developments could negatively impact our business and operations. 27 Index Ameriprise Financial, Inc. As a Savings and Loan Holding Company, we are subject to supervision by the FRB and various prudential standards that may limit our activities and strategies.
Ultimately the complexities and increased costs of legislative and regulatory changes could have an impact on our ability to offer cost-effective and innovative products to our clients. As a Savings and Loan Holding Company, we are subject to supervision by the FRB and various prudential standards that may limit our activities and strategies.
Nor can we guarantee that franchise advisors will comply with our policies and procedures in this regard, or that clients 23 Index Ameriprise Financial, Inc. will engage in safe and secure online practices. Furthermore, human error occurs from time to time and such mistakes can lead to the inadvertent disclosure of sensitive information.
Nor can we guarantee that advisors and employees will comply with our policies and procedures in this regard, that clients will engage in safe and secure online practices, or that vendors and franchisees will effectively deploy and maintain the security measures and protocols that we impose.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeDuring 2023, the Audit and Risk Committee reviewed our identity theft prevention and privacy programs and discussed, among other topics: mandatory staff training on fraud prevention, including threats from social engineering, identity theft experience and trends; the effectiveness of existing controls and planned enhancements to those controls; and key areas of focus for the identity theft and privacy programs.
Biggest changeDuring 2024, the Audit and Risk Committee reviewed and received reports on our identity theft prevention and privacy programs, including the following topics: emerging risks, identity theft threats, experience and trends; the effectiveness of existing controls and planned enhancements to controls; and key areas of focus for the identity theft and privacy programs. 29 Index Ameriprise Financial, Inc.
For third-party service providers that do go through our formal procurement process and vendor risk management assessment, our vendor risk management team assigns tiers.
For third-party service providers that do go through our formal procurement process and vendor risk management assessment, our Enterprise Third-Party Risk Management team assigns tiers.
Our Audit and Risk Committee has semiannual trainings, to which the full board is also invited, to stay educated on ever-evolving cybersecurity topics.
Our Audit and Risk Committee has semiannual trainings, to which the full Board of Directors is also invited, to stay educated on ever-evolving cybersecurity topics.
Our Vendor Risk Management Office provides oversight and support to the business teams as end-users of the third-party service providers’ goods and services, while also providing a conduit through which oversight can be conducted by our management and board.
Our Enterprise Third-Party Risk Management Office provides oversight and support to the business teams as end-users of the third-party service providers’ goods and services, while also providing a conduit through which oversight can be conducted by our management and Board of Directors.
We have documented expectations for the patching and updating of our software environment and set similar expectations for our financial advisors and third-party service providers where they retain control of their environment. Our cybersecurity approach supports both business continuity and risk mitigation.
We have documented expectations for the patching and updating of our software environment and set similar expectations for our financial advisors and third-party service providers where they retain control of their environment. Our cybersecurity approach supports both business 28 Index Ameriprise Financial, Inc. continuity and risk mitigation.
When a third-party service provider is off-boarded through our procurement and vendor management process, they are subject to an off-boarding review when the relationship ends that is designed to obtain the return or destruction of our information. Our vendor management teams provide risk assessment reporting to business teams, internal risk management committees and our executive leadership.
When a third-party service provider is off-boarded through our procurement and third-party risk management process, they are subject to an off-boarding review when the relationship ends that is designed to obtain the return or destruction of our information. Our Enterprise Third-Party Risk Management Office provides risk assessment reporting to business teams, internal risk management committees and our executive leadership.
The tiers are based on a combination of criteria, including the services provided and the information to which they have access, to focus the most detailed reviews and the most frequent assessments on highest tiered third-party service providers, while also 29 Index Ameriprise Financial, Inc. maintaining an appropriate level of review and monitoring on lower tiers.
The tiers are based on a combination of criteria, including the services provided and the information to which they have access, to focus the most detailed reviews and the most frequent assessments on highest tiered third-party service providers, while also maintaining an appropriate level of review and monitoring on lower tiers.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe that the facilities owned or occupied by our company suit our needs and are well maintained.
Biggest changeWe are also opening a new support office in Hyderabad, India in early 2025. • We also occupy a Charlotte, North Carolina location in a 53,000 square feet space that we lease for corporate and business support. We believe that the facilities owned or occupied by our company suit our needs and are well maintained.
Item 2. Properties We operate our business from two principal locations, both of which are located in Minneapolis, Minnesota: the Ameriprise Financial Center, a 959,000 square foot building that we lease, and our Client Service Center, an 871,000 square foot building, that we own.
Item 2. Properties We operate our business from two principal locations, both of which are located in Minneapolis, Minnesota: the Ameriprise Financial Center, a 959,000 square foot building that we lease, and the Ameriprise Financial Headquarters, an 871,000 square foot building, that we own.
Columbia Threadneedle also leases approximately 66,000 square feet of a shared building in London plus an additional 60,000 square feet in three shared buildings in London (as well as additional locations in Swindon, U.K., Dorking, U.K. and Edinburgh, U.K.), approximately 39,000 square feet of a shared building in New York and also leases property in a number of other cities to support its global operations; • Las Vegas, Nevada (supporting aspects of our Advice & Wealth Management businesses) and Gurugram and Noida India (supporting our broader business in the U.S. and globally). • We recently opened a Charlotte, North Carolina location in a 53,000 square feet space that we lease for corporate and business support.
Columbia Threadneedle also leases approximately 66,000 square feet of a shared building in London plus an additional 60,000 square feet in three shared buildings in London (as well as additional locations in Swindon, U.K., Dorking, U.K. and Edinburgh, U.K.), approximately 39,000 square feet of a shared building in New York and also leases property in a number of other cities to support its global operations; • Las Vegas, Nevada (supporting aspects of our Advice & Wealth Management businesses) and Gurugram and Noida, India (supporting our broader business in the U.S. and globally).
In 2023, we started the process to consolidate our Minneapolis office footprint, and we plan to move all our Minneapolis based employees to our Client Service Center by 2025.
In 2023, we started the process to consolidate our Minneapolis office footprint, and we plan to move all our Minneapolis based employees to the Ameriprise Financial Headquarters by June 30, 2025.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 30 PART II 31 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 31 Item 6. [Reserved] 31 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 32 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 65 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 30 PART II 31 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 31 Item 6. [Reserved] 31 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 32 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 56 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(1) In January 2022, our Board of Directors authorized an expenditure of up to $3.0 billion for the repurchase of our common stock through March 31, 2024, which was exhausted during the fourth quarter of 2023. On July 24, 2023, our Board of Directors authorized an additional $3.5 billion for the repurchase of our common stock through September 30, 2025.
Biggest change(1) On July 24, 2023, our Board of Directors authorized an additional $3.5 billion for the repurchase of our common stock through September 30, 2025.
Information regarding our equity compensation plans can be found in Part III, Item 12 of this Annual Report on Form 10-K. Information comparing the cumulative total shareholder return on our common stock to the cumulative total return for certain indices is set forth under the heading “Performance Graph” provided in our 2023 Annual Report to Shareholders and is furnished herewith.
Information regarding our equity compensation plans can be found in Part III, Item 12 of this Annual Report on Form 10-K. Information comparing the cumulative total shareholder return on our common stock to the cumulative total return for certain indices is set forth under the heading “Performance Graph” provided in our 2024 Annual Report to Shareholders and is furnished herewith.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock trades principally on The New York Stock Exchange under the trading symbol AMP. As of February 9, 2024, we had approximately 11,751 common shareholders of record.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock trades principally on The New York Stock Exchange under the trading symbol AMP. As of February 7, 2025, we had approximately 11,118 common shareholders of record.
Share Repurchases The following table presents the information with respect to purchases made by or on behalf of Ameriprise Financial, Inc. or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Exchange Act), of our common stock during the fourth quarter of 2023: (a) (b) (c) (d) Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) October 1, 2023 to October 31, 2023 Share repurchase program (1) 273,963 $ 324.02 273,963 $ 3,474,380,514 Employee transactions (2) 1,613 $ 321.01 N/A N/A November 1, 2023 to November 30, 2023 Share repurchase program (1) 475,133 $ 346.37 475,133 $ 3,309,808,008 Employee transactions (2) 18,664 $ 344.13 N/A N/A December 1, 2023 to December 31, 2023 Share repurchase program (1) 516,544 $ 369.23 516,544 $ 3,119,083,448 Employee transactions (2) 92,825 $ 370.31 N/A N/A Totals Share repurchase program (1) 1,265,640 $ 350.86 1,265,640 Employee transactions (2) 113,102 $ 365.29 N/A 1,378,742 1,265,640 N/A Not applicable.
Share Repurchases The following table presents the information with respect to purchases made by or on behalf of Ameriprise Financial, Inc. or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Exchange Act), of our common stock during the fourth quarter of 2024: (a) (b) (c) (d) Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) October 1, 2024 to October 31, 2024 Share repurchase program (1) 355,544 $ 510.95 355,544 $ 1,325,717,875 Employee transactions (2) 25,979 $ 502.42 N/A N/A November 1, 2024 to November 30, 2024 Share repurchase program (1) 406,996 $ 554.89 406,996 $ 1,099,878,072 Employee transactions (2) 93,420 $ 560.03 N/A N/A December 1, 2024 to December 31, 2024 Share repurchase program (1) 384,296 $ 551.67 384,296 $ 887,872,922 Employee transactions (2) 18,229 $ 556.12 N/A N/A Totals Share repurchase program (1) 1,146,836 $ 540.19 1,146,836 Employee transactions (2) 137,628 $ 548.64 N/A 1,284,464 1,146,836 N/A Not applicable.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table presents summary financial information by segment: Years Ended December 31, 2023 2022 (in millions) Advice & Wealth Management Net revenues $ 9,418 $ 8,461 Expenses 6,567 6,269 Adjusted operating earnings $ 2,851 $ 2,192 Asset Management Net revenues $ 3,278 $ 3,506 Expenses 2,558 2,662 Adjusted operating earnings $ 720 $ 844 Retirement & Protection Solutions Net revenues $ 3,476 $ 3,124 Expenses 2,791 2,257 Adjusted operating earnings $ 685 $ 867 Corporate & Other Net revenues $ 533 $ 479 Expenses 853 785 Adjusted operating loss $ (320) $ (306) The following table presents the segment pretax adjusted operating impacts on our revenues and expenses attributable to our annual assumption updates, referred to as unlocking, for the years ended December 31: Segment Pretax Adjusted Operating Increase (Decrease) 2023 2022 Retirement & Protection Solutions Corporate Retirement & Protection Solutions Corporate (in millions) Premiums, policy and contract charges $ 1 $ — $ 1 $ (2) Total revenues 1 — 1 (2) Benefits, claims, losses and settlement expenses (17) — 6 (1) Remeasurement (gains) losses of future policy benefit reserves: LTC unlocking — (5) — (6) Unlocking, excluding LTC (6) — 6 — Total remeasurement (gains) losses of future policy benefit reserves (6) (5) 6 (6) Change in fair value of market risk benefits 128 — (139) — Amortization of DAC — — — (2) Total benefits and expenses 105 (5) (127) (9) Pretax income (loss) $ (104) $ 5 $ 128 $ 7 42 Index Ameriprise Financial, Inc.
Biggest changeThe following table presents the segment pretax adjusted operating impacts on our revenues and expenses attributable to our annual assumption updates, referred to as unlocking, for the years ended December 31: Segment Pretax Adjusted Operating Increase (Decrease) 2024 2023 Retirement & Protection Solutions Corporate Retirement & Protection Solutions Corporate (in millions) Premiums, policy and contract charges $ (5) $ — $ 1 $ — Total revenues (5) — 1 — Benefits, claims, losses and settlement expenses 4 — (17) — Remeasurement (gains) losses of future policy benefit reserves: LTC unlocking — 4 — (5) Unlocking, excluding LTC (24) — (6) — Total remeasurement (gains) losses of future policy benefit reserves (24) 4 (6) (5) Change in fair value of market risk benefits 105 — 128 — Total benefits and expenses 85 4 105 (5) Pretax income (loss) $ (90) $ (4) $ (104) $ 5 Advice & Wealth Management The following table presents Advice & Wealth Management total client assets as of December 31: 2024 2023 (in billions) Wrap assets (1) $ 573.9 $ 488.2 Brokerage and other assets (1) 455.0 412.3 Total client assets $ 1,028.9 $ 900.5 (1) Total cash balances (included in the wrap and brokerage and other assets above) $ 85.4 $ 81.5 Total client assets increased $128.4 billion, or 14%, to $1.0 trillion compared to a year ago primarily due to market appreciation and client net inflows.
While our Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), management believes that adjusted operating measures, which exclude net realized investment gains or losses, net of the reinsurance accrual; the market impact on non-traditional long-duration products (including variable and fixed deferred annuity contracts and universal life (“UL”) insurance contracts), net of hedges and the reinsurance accrual; mean reversion related impacts (the impact on variable annuity and variable universal life (“VUL”) products for the difference between assumed and updated separate account investment performance on the reinsurance accrual and additional insurance benefit reserves); the market impact of hedges to 32 Index Ameriprise Financial, Inc. offset interest rate and currency changes on unrealized gains or losses for certain investments; block transfer reinsurance transaction impacts; gain or loss on disposal of a business that is not considered discontinued operations; integration and restructuring charges; income (loss) from discontinued operations; and the impact of consolidating CIEs, best reflect the underlying performance of our core operations and facilitate a more meaningful trend analysis.
While our Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), management believes that adjusted operating measures, which exclude net realized investment gains or losses, net of the reinsurance accrual; the market impact on non-traditional long-duration products (including variable and fixed deferred annuity contracts and universal life (“UL”) insurance contracts), net of hedges and the reinsurance accrual; mean reversion related impacts (the impact on variable annuity and variable universal life (“VUL”) products for the difference between assumed and updated separate account investment performance on the reinsurance accrual and additional insurance benefit reserves); the market impact of hedges to offset interest rate and currency changes on unrealized gains or losses for certain investments; block transfer reinsurance transaction impacts; gain or loss on disposal of a business that is not considered discontinued operations; integration and restructuring charges; 32 Index Ameriprise Financial, Inc. income (loss) from discontinued operations; and the impact of consolidating CIEs, best reflect the underlying performance of our core operations and facilitate a more meaningful trend analysis.
Such factors include, but are not limited to: • market fluctuations and general economic and political factors, including volatility in the U.S. and global market conditions, client behavior and volatility in the markets for our products; • changes in interest rates; • adverse capital and credit market conditions or any downgrade in our credit ratings; • effects of competition and our larger competitors’ economies of scale; • declines in our investment management performance; • our ability to compete in attracting and retaining talent, including financial advisors; • impairment, negative performance or default by financial institutions or other counterparties; • the ability to maintain our unaffiliated third-party distribution channels and the impacts of sales of unaffiliated products; • changes in valuation of securities and investments included in our assets; • the determination of the amount of allowances taken on loans and investments; • the illiquidity of some of our investments; • failures by other insurers that lead to higher assessments we owe to state insurance guaranty funds; • failures or defaults by counterparties to our reinsurance arrangements; 64 Index Ameriprise Financial, Inc. • inadequate reserves for future policy benefits and claims or for future redemptions and maturities; • deviations from our assumptions regarding morbidity, mortality and persistency affecting our insurance profitability; • damage to our reputation arising from employee or advisor misconduct or otherwise; • direct or indirect effects of or responses to climate change; • interruptions or other failures in our operating systems and networks, including errors or failures caused by third-party service providers, interference or third-party attacks; • interruptions or other errors in our telecommunications or data processing systems; • identification and mitigation of risk exposure in market environments, new products, vendors and other types of risk; • ability of our subsidiaries to transfer funds to us to pay dividends; • changes in exchange rates and other risks in connection with our international operations and earnings and income generated overseas; • occurrence of natural or man-made disasters and catastrophes; • risks in acquisition transactions, or other potential strategic acquisitions or divestitures; • legal and regulatory actions brought against us; • changes to laws and regulations that govern operation of our business; • supervision by bank regulators and related regulatory and prudential standards as a savings and loan holding company that may limit our activities and strategies; • changes in corporate tax laws and regulations and interpretations and determinations of tax laws impacting our products; • protection of our intellectual property and claims we infringe the intellectual property of others; and • changes in and the adoption of new accounting standards.
Such factors include, but are not limited to: • market fluctuations and general economic and political factors, including volatility in the U.S. and global market conditions, client behavior and volatility in the markets for our products; • changes in interest rates; • adverse capital and credit market conditions or any downgrade in our credit ratings; • effects of competition and our larger competitors’ economies of scale; • declines in our investment management performance; • our ability to compete in attracting and retaining talent, including financial advisors; • impairment, negative performance or default by financial institutions or other counterparties; • the ability to maintain our unaffiliated third-party distribution channels and the impacts of sales of unaffiliated products; • changes in valuation of securities and investments included in our assets; • the determination of the amount of allowances taken on loans and investments; • the illiquidity of some of our investments; • failures or defaults by counterparties to our reinsurance arrangements; • failures by other insurers that lead to higher assessments we owe to state insurance guaranty funds; • inadequate reserves for future policy benefits and claims or for future redemptions and maturities; • deviations from our assumptions regarding morbidity, mortality and persistency affecting our insurance profitability; • damage to our reputation arising from employee or advisor misconduct or otherwise; • direct or indirect effects of or responses to climate change; • interruptions or other failures in our operating systems and networks, including errors or failures caused by third-party service providers, interference or third-party attacks; • interruptions or other errors in our telecommunications or data processing systems; • identification and mitigation of risk exposure in market environments, new products, vendors and other types of risk; • ability of our subsidiaries to transfer funds to us to pay dividends; • changes in exchange rates and other risks in connection with our international operations and earnings and income generated overseas; • occurrence of natural or man-made disasters and catastrophes; • risks in acquisition transactions, or other potential strategic acquisitions or divestitures; • legal and regulatory actions brought against us; • changes to laws and regulations that govern operation of our business; • supervision by bank regulators and related regulatory and prudential standards as a savings and loan holding company that may limit our activities and strategies; • changes in corporate tax laws and regulations and interpretations and determinations of tax laws impacting our products; • protection of our intellectual property and claims we infringe the intellectual property of others; and • changes in and the adoption of new accounting standards.
Assets Under Management and Administration Assets under management (“AUM”) include external client assets for which we provide investment management services, such as the assets of the Columbia Threadneedle Investments funds, institutional clients and clients in our advisor platform held in wrap accounts as well as assets managed by sub-advisors selected by us.
Assets Under Management, Administration, and Advisement Assets under management (“AUM”) include external client assets for which we provide investment management services, such as the assets of the Columbia Threadneedle Investments funds, institutional clients and clients in our advisor platform held in wrap accounts as well as assets managed by sub-advisors selected by us.
Assets under administration (“AUA”) include assets for which we provide administrative services such as client assets invested in other companies’ products that we offer outside of our wrap accounts. These assets include those held in clients’ brokerage accounts. We generally record revenues received from administered assets as distribution fees.
Assets under administration include assets for which we provide administrative services such as client assets invested in other companies’ products that we offer outside of our wrap accounts. These assets include those held in clients’ brokerage accounts. We generally record revenues received from administered assets as distribution fees.
References to “Ameriprise Financial,” “Ameriprise,” the “Company,” “we,” “us,” and “our” refer to Ameriprise Financial, Inc. exclusively, to our entire family of companies, or to one or more of our subsidiaries. Overview Ameriprise Financial is a diversified financial services company with a nearly 130-year history of providing financial solutions.
References to “Ameriprise Financial,” “Ameriprise,” the “Company,” “we,” “us,” and “our” refer to Ameriprise Financial, Inc. exclusively, to our entire family of companies, or to one or more of our subsidiaries. Overview Ameriprise Financial is a diversified financial services company with a 130-year history of providing financial solutions.
In addition, the valuation of embedded derivatives is impacted by an estimate of our nonperformance risk adjustment. This estimate includes a spread over the U.S. Treasury curve as of the balance sheet date. As our estimate of this spread over the U.S. Treasury curve widens or tightens, the liability will decrease or increase.
In addition, the valuation of embedded derivatives is impacted by an estimate of our nonperformance risk adjustment. This estimate includes a spread over the U.S. Treasury curve as of the balance sheet date. As our estimate of this spread widens or tightens, the liability will decrease or increase, respectively.
Because of our holding company structure, our ability to meet our cash requirements, including the payment of dividends on our common stock, substantially depends upon the receipt of dividends or return of capital from our subsidiaries, particularly our life insurance subsidiary, RiverSource Life, our face-amount certificate subsidiary, Ameriprise Certificate Company (“ACC”), Ameriprise Bank, AMPF Holding, LLC, which is the parent company of our retail introducing broker-dealer subsidiary, Ameriprise Financial Services, LLC (“AFS”) and our clearing broker-dealer subsidiary, American Enterprise Investment Services, Inc.
Because of our holding company structure, our ability to meet our cash requirements, including the payment of dividends on our common stock, substantially depends upon the receipt of dividends or return of capital from our subsidiaries, particularly our life insurance subsidiary, RiverSource Life, our face-amount certificate subsidiary, ACC, Ameriprise Bank, AMPF Holding, LLC, which is the parent company of our retail introducing broker-dealer subsidiary, Ameriprise Financial Services, LLC (“AFS”) and our clearing broker-dealer subsidiary, American Enterprise Investment Services, Inc.
Guarantees accounted for as market risk benefits include guaranteed minimum death benefit (“GMDB”), guaranteed minimum income benefit (“GMIB”), guaranteed minimum withdrawal benefit (“GMWB”) and guaranteed minimum accumulation benefit (“GMAB”). Variable Annuities We have approximately $81 billion of variable annuity account value that has been issued over a period of more than fifty years.
Guarantees accounted for as market risk benefits include guaranteed minimum death benefit (“GMDB”), guaranteed minimum income benefit (“GMIB”), guaranteed minimum withdrawal benefit (“GMWB”) and guaranteed minimum accumulation benefit (“GMAB”). Variable Annuities We have approximately $86 billion of variable annuity account value that has been issued over a period of more than fifty years.
The nonperformance risk adjustment is based on observable market data adjusted to estimate the risk of our life insurance company subsidiaries not fulfilling these liabilities. Consistent with general market conditions, this estimate resulted in a spread over the U.S. Treasury curve as of December 31, 2023.
The nonperformance risk adjustment is based on observable market data adjusted to estimate the risk of our life insurance company subsidiaries not fulfilling these liabilities. Consistent with general market conditions, this estimate resulted in a spread over the U.S. Treasury curve as of December 31, 2024.
In December 2021, the Organization for Economic Co-operation and Development (“OECD”) published the Pillar Two model rules which introduce new taxing mechanisms aimed at ensuring multinational enterprises (“MNEs”) pay a minimum level of tax on profits from each jurisdiction in which they operate.
In December 2021, the Organization for Economic Co-operation and Development published the Pillar Two model rules which introduce new taxing mechanisms aimed at ensuring multinational enterprises pay a minimum level of tax on profits from each jurisdiction in which they operate.
Under the terms of the committed credit facility, we can increase the availability to $1.25 billion upon satisfaction of certain approval requirements. Available borrowings under this facility are reduced by any outstanding letters of credit. At December 31, 2023, we had no outstanding borrowings under this credit facility and had $1 million of letters of credit issued against the facility.
Under the terms of the committed credit facility, we can increase the availability to $1.25 billion upon satisfaction of certain approval requirements. Available borrowings under this facility are reduced by any outstanding letters of credit. At December 31, 2024, we had no outstanding borrowings under this credit facility and had $1 million of letters of credit issued against the facility.
The average attained age is 79 and the average attained age of policyholders on claim is 86. Thirty-four percent of daily benefits in force in this block are lifetime benefits. We utilize three primary levers to manage our LTC business.
The average attained age is 80 and the average attained age of policyholders on claim is 86. Thirty-four percent of daily benefits in force in this block are lifetime benefits. We utilize three primary levers to manage our LTC business.
The diversified variable annuity block consists of $37 billion of account value with no living benefit guarantees and $44 billion of account value with living benefit guarantees, primarily GMWB provisions. The business is predominately issued through the Ameriprise Financial ® advisor network. The majority of the variable annuity contracts currently offered by us contain GMDB provisions.
The diversified variable annuity block consists of $43 billion of account value with no living benefit guarantees and $43 billion of account value with living benefit guarantees, primarily GMWB provisions. The business is predominately issued through the Ameriprise Financial ® advisor network. The majority of the variable annuity contracts currently offered by us contain GMDB provisions.
AUA also include certain assets on our Consolidated Balance Sheets for which we do not provide investment management services and do not recognize management fees, such as investments in non-affiliated funds held in the separate accounts of our life insurance subsidiaries.
Assets under administration also include certain assets on our Consolidated Balance Sheets for which we do not provide investment management services and do not recognize management fees, such as investments in non-affiliated funds held in the separate accounts of our life insurance subsidiaries.
Peer groupings of Columbia funds are defined by Lipper category and are based on the Primary Share Class (i.e., Institutional if available, otherwise Advisor or Instl3 share class), net of fees. Peer groupings of Threadneedle funds are defined by either IA or Morningstar index and are based on the Primary Share Class. Comparisons to Index are measured gross of fees.
Peer groupings of Columbia funds are defined by Lipper category and are based on the Primary Share Class (i.e., Institutional if available, otherwise Institutional 3 share class), net of fees. Peer groupings of Threadneedle funds are defined by either IA or Morningstar index and are based on the Primary Share Class. Comparisons to Index are measured gross of fees.
As of December 31, 2023, our comprehensive reimbursement LTC block had approximately $113 million in gross in force annual premium and future policyholder benefits and claim reserves of approximately $1.3 billion, net of reinsurance. This block has higher premiums per policy than the nursing home indemnity LTC policies.
As of December 31, 2024, our comprehensive reimbursement LTC block had approximately $111 million in gross in force annual premium and future policyholder benefits and claim reserves of approximately $1.3 billion, net of reinsurance. This block has higher premiums per policy than the nursing home indemnity LTC policies.
Account values with living benefit riders declined to 54% as of December 31, 2023 compared to 57% a year ago reflecting our actions to optimize our business mix. This trend is expected to continue and meaningfully shift the mix of business away from products with living benefit guarantees over time.
Account values with living benefit riders declined to 50% as of December 31, 2024 compared to 54% a year ago reflecting our actions to optimize our business mix. This trend is expected to continue and meaningfully shift the mix of business away from products with living benefit guarantees over time.
Cash held by CIEs is not available for general use by Ameriprise Financial, nor is Ameriprise Financial cash available for general use by its CIEs. Cash and cash equivalents segregated under federal and other regulations is held for the exclusive benefit of our brokerage customers and is not available for general use by Ameriprise Financial. 63 Index Ameriprise Financial, Inc.
Cash held by CIEs is not available for general use by Ameriprise Financial, nor is Ameriprise Financial cash available for general use by its CIEs. Cash and cash equivalents segregated under federal and other regulations is held for the exclusive benefit of our brokerage customers and is not available for general use by Ameriprise Financial.
Ameriprise Bank calculates these ratios under the Basel III standardized approach in order to assess compliance with both regulatory requirements 61 Index Ameriprise Financial, Inc. and Ameriprise Bank’s internal capital policies. As permitted under the rules of the Basel III capital framework, we have elected to exclude AOCI from the calculation of regulatory capital.
Ameriprise Bank calculates these ratios under the Basel III standardized approach in order to assess compliance with both regulatory requirements and Ameriprise Bank’s internal capital policies. As permitted under the rules of the Basel III capital framework, we have elected to exclude AOCI from the calculation of regulatory capital.
General and Administrative Expense General and administrative expense includes compensation, share-based awards and other benefits for employees (other than employees directly related to distribution, such as financial advisors), professional and consultant fees, information technology, facilities and equipment, advertising and promotion, legal and regulatory and corporate related expenses.
General and Administrative Expense General and administrative expense includes compensation, share-based awards and other benefits for employees (other than employees directly related to distribution, such as financial advisors), professional and consultant fees, information technology, facilities and equipment, advertising and promotion, legal and regulatory and corporate related expenses. 37 Index Ameriprise Financial, Inc.
In addition to the particular regulations restricting dividend payments and establishing subsidiary capitalization requirements, we take into account the overall health of the business, capital levels and risk management considerations in determining a strategy for payments to our parent holding company from our subsidiaries, and in deciding to use cash to make capital contributions to our subsidiaries. 62 Index Ameriprise Financial, Inc.
In addition to the particular regulations restricting dividend payments and establishing subsidiary capitalization requirements, we take into account the overall health of the business, capital levels and risk management considerations in determining a strategy for payments to our parent holding company from our subsidiaries, and in deciding to use cash to make capital contributions to our subsidiaries.
First, we have taken an active approach of steadily increasing rates since 2005, with cumulative rate increases of 251% on our nursing home indemnity LTC block (excluding home care riders) and 154% on our comprehensive reimbursement LTC block as of December 31, 2023. Second, we have a reserving process that reflects the policy features and risk characteristics of our blocks.
First, we have taken an active approach of steadily increasing rates since 2005, with cumulative rate increases of 268% on our nursing home indemnity LTC block (excluding home care riders) and 164% on our comprehensive reimbursement LTC block as of December 31, 2024. Second, we have a reserving process that reflects the policy features and risk characteristics of our blocks.
ACC is registered as an investment company under the Investment Company Act of 1940 (the “1940 Act”). ACC markets and sells investment certificates to clients. ACC is subject to various capital requirements under the 1940 Act, laws of the State of Minnesota and understandings with the SEC and the Minnesota Department of Commerce.
ACC is registered as an investment company under the Investment Company Act of 1940 (the “1940 Act”). ACC markets and sells investment certificates to clients. ACC is subject to various capital requirements under the 1940 Act, laws of the State of Minnesota and understandings with the SEC and MN DOC.
The main market drivers contributing to these changes are summarized below: • Equity market impact on the variable annuity guaranteed benefits liability net of the impact on the corresponding hedge assets resulted in a benefit for 2023 compared to an expense in the prior year. • Interest rate and bond impact on the variable annuity guaranteed benefits liability net of the impact on the corresponding hedge assets resulted in a lower benefit for 2023 compared to the prior year. • Volatility impact on the variable annuity guaranteed benefits liability net of the impact on the corresponding hedge assets resulted in a lower expense for 2023 compared to the prior year. • Other unhedged items, including the difference between the assumed and actual underlying separate account investment performance, transaction costs and various behavioral items, were a lower net expense for 2023 compared to the prior year.
The main market drivers contributing to these changes are summarized below: • Equity market impact on the variable annuity guaranteed benefits liability net of the impact on the corresponding hedge assets resulted in a higher benefit for 2024 compared to the prior year. • Interest rate and bond impact on the variable annuity guaranteed benefits liability net of the impact on the corresponding hedge assets resulted in a higher benefit for 2024 compared to the prior year. • Volatility impact on the variable annuity guaranteed benefits liability net of the impact on the corresponding hedge assets resulted in a higher expense for 2024 compared to the prior year. • Other unhedged items, including the difference between the assumed and actual underlying separate account investment performance, transaction costs and various behavioral items, were a lower net expense for 2024 compared to the prior year. • An increase in expense due to market appreciation on contractual fees.
After-tax is calculated using the statutory tax rate of 21%. (2) Adjusted operating return on equity, excluding AOCI is calculated using adjusted operating earnings in the numerator and Ameriprise Financial shareholders’ equity, excluding AOCI and the impact of consolidating investment entities using a five-point average of quarter-end equity in the denominator. After-tax is calculated using the statutory rate of 21%.
After-tax is calculated using the statutory tax rate of 21%. (2) Adjusted operating return on equity, excluding accumulated other comprehensive income (“AOCI”) is calculated using adjusted operating earnings in the numerator and Ameriprise Financial shareholders’ equity, excluding AOCI and the impact of consolidating investment entities using a five-point average of quarter-end equity in the denominator.
DAC are amortized on a constant-level basis for the grouped contracts over the expected contract term to approximate straight-line amortization. 37 Index Ameriprise Financial, Inc. Interest and Debt Expense Interest and debt expense primarily includes interest on corporate debt and CIE debt, the impact of interest rate hedging activities and amortization of debt issuance costs.
DAC are amortized on a constant-level basis for the grouped contracts over the expected contract term to approximate straight-line amortization. Interest and Debt Expense Interest and debt expense primarily includes interest on corporate debt and CIE debt, the impact of interest rate hedging activities and amortization of debt issuance costs.
As of December 31, 2023 and 2022, we estimated $12.3 billion and $9.0 billion, respectively, of borrowing capacity from the Federal Reserve in addition to the FHLB capacity and there were no outstanding obligations.
As of December 31, 2024 and 2023, we estimated $11.9 billion and $12.3 billion, respectively, of borrowing capacity from the Federal Reserve in addition to the FHLB capacity and there were no outstanding obligations.
Examples of such forward-looking statements include: • statements of the Company’s plans, intentions, positioning, expectations, objectives or goals, including those relating to asset flows, mass affluent and affluent client acquisition strategy, client retention and growth of our client base, financial advisor productivity, retention, recruiting and enrollments, the introduction, cessation, terms or pricing of new or existing products and services, acquisition integration, benefits and claims expenses, general and administrative costs, consolidated tax rate, return of capital to shareholders, debt repayment and excess capital position and financial flexibility to capture additional growth opportunities; • statements about the expected trend in the shift to lower-risk products, including the exit from variable annuities with living benefit riders; • statements about the strategic and regulatory outcome from the withdrawal of our application to convert Ameriprise Bank to a state-chartered bank and national trust bank; • statements about the anticipated deposit growth or statements about rising interest rates and the impacts on investment portfolio yield; • other statements about future economic performance, the performance of equity markets and interest rate variations and the economic performance of the United States and of global markets; and • statements of assumptions underlying such statements.
Examples of such forward-looking statements include: • statements of the Company’s plans, intentions, positioning, expectations, objectives or goals, including those relating to asset flows, mass affluent and affluent client acquisition strategy, client retention and growth of our client base, financial advisor productivity, retention, recruiting and enrollments, the introduction, cessation, terms or pricing of new or existing products and services, acquisition integration, benefits and claims expenses, general and administrative costs, consolidated tax rate, return of capital to shareholders, debt repayment and excess capital position and financial flexibility to capture additional growth 54 Index Ameriprise Financial, Inc. opportunities; • statements about the expected trend in the shift to lower-risk products, including the exit from variable annuities with living benefit riders; • statements about the anticipated deposit growth or statements about rising interest rates and the impacts on investment portfolio yield; • other statements about future economic performance, the performance of equity markets and interest rate variations and the economic performance of the United States and of global markets; and • statements of assumptions underlying such statements.
Expenses Distribution expenses increased $143 million, or 3%, for 2023 compared to the prior year primarily reflecting higher advisor compensation from higher average wrap account assets and increased transactional activity, as well as investments in recruiting experienced advisors, partially offset by the cumulative impact of Asset Management net outflows.
Expenses Distribution expenses increased $946 million, or 19%, for 2024 compared to the prior year primarily reflecting higher advisor compensation from higher average wrap account assets and increased transactional activity, as well as investments in recruiting experienced advisors, partially offset by the cumulative impact of Asset Management net outflows.
Our credit facility contains various administrative, reporting, legal and financial covenants. We remain in compliance with all such covenants at December 31, 2023. In addition, we have access to collateralized borrowings, which may include repurchase agreements and Federal Home Loan Bank (“FHLB”) advances, and advances at the Federal Reserve.
Our credit facility contains various administrative, reporting, legal and financial covenants. We remained in compliance with all such covenants as of December 31, 2024. In addition, we have access to collateralized borrowings, which may include repurchase agreements, Federal Home Loan Bank (“FHLB”) advances, and advances at the Federal Reserve.
(5) Actual capital and regulatory capital requirements are determined in accordance with U.K. regulatory legislation. (6) Actual capital and regulatory capital requirements are determined in accordance with rules defined under Basel III capital framework. As permitted, AOCI is excluded from the calculation of regulatory capital.
(6) Actual capital and regulatory capital requirements are determined in accordance with rules defined under Basel III capital framework. As permitted, AOCI is excluded from the calculation of regulatory capital.
Out of 149 Threadneedle funds rated (based on highest-rated share class), 21 received a 5-star Overall Rating and 52 received a 4-star Overall Rating. The Overall Morningstar Rating is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) Morningstar Rating metrics.
Out of 137 Threadneedle funds rated (based on highest-rated share class), 20 received a 5-star Overall Rating and 48 received a 4-star Overall Rating. The Overall Morningstar Rating is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) Morningstar Rating metrics.
In addition, Ameriprise Bank maintains access to borrowings from the Federal Reserve which are collateralized with residential mortgage backed securities, commercial mortgage backed securities and 60 Index Ameriprise Financial, Inc. corporate debt securities.
In addition, Ameriprise Bank maintains access to borrowings from the Federal Reserve which are collateralized with residential mortgage backed securities, commercial mortgage backed securities and corporate debt securities.
Expenses Benefits, claims, losses and settlement expenses, which exclude the market impact on SVA indexed account embedded derivative (net of hedges) and mean reversion related impacts, increased $275 million, or 59%, for 2023 compared to the prior year primarily reflecting the impact of higher sales of life contingent payout annuities and increased volume in SVAs. 47 Index Ameriprise Financial, Inc.
Benefits, claims, losses and settlement expenses, which exclude the market impact on SVA indexed account embedded derivative (net of hedges) and mean reversion related impacts, increased $183 million, or 25%, for 2024 compared to the prior year primarily reflecting increased volume in SVAs and the impact of higher sales of life contingent payout annuities. 48 Index Ameriprise Financial, Inc.
The secondary guarantee ensures that, subject to specified conditions, the policy will not terminate and will continue to 35 Index Ameriprise Financial, Inc. provide a death benefit even if there is insufficient policy value to cover the monthly deductions and charges.
The secondary guarantee ensures that, subject to specified conditions, the policy will not terminate and will continue to provide a death benefit even if there is insufficient policy value to cover the monthly deductions and charges.
The following table reconciles net income to adjusted operating earnings and the five-point average of quarter-end equity to adjusted operating equity: Years Ended December 31, 2023 2022 (in millions) Net income $ 2,556 $ 3,149 Less: Adjustments (1) (555) 264 Adjusted operating earnings $ 3,111 $ 2,885 Total Ameriprise Financial, Inc. shareholders’ equity $ 4,116 $ 4,170 Less: AOCI, net of tax (2,297) (1,769) Total Ameriprise Financial, Inc. shareholders’ equity, excluding AOCI 6,413 5,939 Less: Equity impacts attributable to CIEs (4) — Adjusted operating equity $ 6,417 $ 5,939 Return on equity, excluding AOCI 39.9 % 53.0 % Adjusted operating return on equity, excluding AOCI (2) 48.5 % 48.6 % (1) Adjustments reflect the sum of after-tax net realized investment gains/losses, net of the reinsurance accrual; the market impact on non-traditional long-duration products (including variable and fixed deferred annuity contracts and UL insurance contracts), net of hedges and the reinsurance accrual; mean reversion related impacts; block transfer reinsurance transaction impacts; the market impact of hedges to offset interest rate and currency changes on unrealized gains or losses for certain investments; gain or loss on disposal of a business that is not considered discontinued operations; integration and restructuring charges; income (loss) from discontinued operations; and net income (loss) from consolidated investment entities.
The following table reconciles net income to adjusted operating earnings and the five-point average of quarter-end equity to adjusted operating equity: Years Ended December 31, 2024 2023 (in millions) Net income $ 3,401 $ 2,556 Less: Adjustments (1) (134) (555) Adjusted operating earnings $ 3,535 $ 3,111 Total Ameriprise Financial, Inc. shareholders’ equity $ 5,109 $ 4,116 Less: AOCI, net of tax (1,739) (2,297) Total Ameriprise Financial, Inc. shareholders’ equity, excluding AOCI 6,848 6,413 Less: Equity impacts attributable to CIEs (3) (4) Adjusted operating equity $ 6,851 $ 6,417 Return on equity, excluding AOCI 49.7 % 39.9 % Adjusted operating return on equity, excluding AOCI (2) 51.6 % 48.5 % (1) Adjustments reflect the sum of after-tax net realized investment gains/losses, net of the reinsurance accrual; the market impact on non-traditional long-duration products (including variable and fixed deferred annuity contracts and UL insurance contracts), net of hedges and the reinsurance accrual; mean reversion related impacts; block transfer reinsurance transaction impacts; the market impact of hedges to offset interest rate and currency changes on unrealized gains or losses for certain investments; gain or loss on disposal of a business that is not considered discontinued operations; integration and restructuring charges; income (loss) from discontinued operations; and net income (loss) from consolidated investment entities.
For additional discussion on our interest rate risk, see Item 7A. “Quantitative and Qualitative Disclosures About Market Risk.” In the third quarter, we conducted our annual review of life insurance, annuity and long term care (“LTC”) valuation assumptions relative to current experience and management expectations including modeling changes. These annual assumption updates are collectively referred to as unlocking.
For additional discussion on our interest rate risk, see Item 7A. “Quantitative and Qualitative Disclosures About Market Risk.” In the third quarter, we conducted our annual review of life insurance, annuity and long term care (“LTC”) valuation assumptions relative to current experience and management expectations including modeling changes.
See Note 28 to the Consolidated Financial Statements for further information on the presentation of segment results and our definition of adjusted operating earnings. 41 Index Ameriprise Financial, Inc.
See Note 28 to the Consolidated Financial Statements for further information on the presentation of segment results and our definition of adjusted operating earnings.
We have recorded in shareholders’ equity an estimate of the excise tax liability based on our interpretation of the current guidance. As the Internal Revenue Service issues additional guidance related to the IRA, we will continue to evaluate any impact to our consolidated financial statements.
We have recorded in shareholders’ equity an estimate of the excise tax liability based on our interpretation of the current guidance. As additional guidance is issued related to the IRA, we will continue to evaluate any impact to our consolidated financial statements.
During the year ended December 31, 2023, we repurchased a total of 5.9 million shares of our common stock at an average price of $330.94 per share. Cash Flows Cash flows of CIEs and restricted and segregated cash and cash equivalents are reflected in our cash flows provided by (used in) operating activities, investing activities and financing activities.
During the year ended December 31, 2024, we repurchased a total of 4.9 million shares of our common stock at an average price of $453.15 per share. Cash Flows Cash flows of CIEs and restricted and segregated cash and cash equivalents are reflected in our cash flows provided by (used in) operating activities, investing activities and financing activities.
As of December 31, 2023, we had 43,000 policies that were closed with claim activity, as well as 8,000 open claims. We apply this experience to our in force policies, which were 80,000 as of December 31, 2023, at a very granular level by issue year, attained age and benefit features.
As of December 31, 2024, we had 46,000 policies that were closed with claim activity, as well as 7,000 open claims. We apply this experience to our in force policies, which were 75,000 as of December 31, 2024, at a very granular level by issue year, attained age and benefit features.
As of December 31, 2023 and 2022, we had an estimated maximum borrowing capacity of $8.6 billion and $8.0 billion, respectively, of borrowing capacity under the FHLB facilities, of which $201 million was outstanding as of both December 31, 2023 and 2022, and is collateralized with commercial mortgage backed securities.
As of December 31, 2024 and 2023, we had $8.5 billion and $8.6 billion, respectively, of estimated borrowing capacity under the FHLB facilities, of which $201 million was outstanding as of both December 31, 2024 and 2023, and is collateralized with commercial mortgage backed securities and residential mortgage backed securities.
See Note 16 to our Consolidated Financial Statements for information regarding the fair value measurement of embedded derivatives.
See Note 16 to our Consolidated Financial Statements for information regarding the fair value measurement of embedded derivatives. 35 Index Ameriprise Financial, Inc.
Our statutory reserves are $265 million higher than our GAAP reserves and include margins on key assumptions for morbidity and mortality, as well as $345 million in asset adequacy reserves as of December 31, 2023. Lastly, we have prudently managed our investment portfolio primarily through a liquid, investment grade portfolio.
Our statutory reserves are $346 million higher than our GAAP reserves as they include margins on key assumptions for morbidity and mortality and include $330 million in asset adequacy reserves as of December 31, 2024. Lastly, we have prudently managed our investment portfolio primarily through a liquid, investment grade portfolio.
Expenses Distribution expenses increased $169 million, or 4%, for 2023 compared to the prior year primarily reflecting higher advisor compensation from higher average wrap account assets and increased transactional activity, as well as investments in recruiting experienced advisors.
Expenses Distribution expenses increased $935 million, or 19%, for 2024 compared to the prior year primarily reflecting higher advisor compensation from higher average wrap account assets and increased transactional activity, as well as continued investments in recruiting experienced advisors.
AUM and AUA do not include assets under advisement, for which we provide advisory services such as model portfolios but do not have full discretionary investment authority.
Assets under advisement includes assets for which we provide advisory services such as model portfolios but do not have full discretionary investment authority.
Closed Block LTC Insurance As of December 31, 2023, our nursing home indemnity LTC block had approximately $68 million in gross in force annual premium and future policyholder benefits and claim reserves of approximately $1.4 billion, net of reinsurance, which was 51% of GAAP reserves.
Closed Block LTC Insurance As of December 31, 2024, our nursing home indemnity LTC block had approximately $63 million in gross in force annual premium and future policyholder benefits and claim reserves of approximately $1.3 billion, net of reinsurance, which was 50% of GAAP reserves.
Adjusted operating earnings should not be viewed as a substitute for GAAP pretax income. We believe the presentation of segment adjusted operating earnings as we measure it for management purposes enhances the understanding of our business by reflecting the underlying performance of our core operations and facilitating a more meaningful trend analysis.
We believe the presentation of segment adjusted operating earnings as we measure it for management purposes enhances the understanding of our business by reflecting the underlying performance of our core operations and facilitating a more meaningful trend analysis.
Dividends Paid to Shareholders and Share Repurchases We paid regular quarterly dividends to our shareholders totaling $569 million and $553 million for the years ended December 31, 2023 and 2022, respectively. On January 24, 2024, we announced a quarterly dividend of $1.35 per common share.
Dividends Paid to Shareholders and Share Repurchases We paid regular quarterly dividends to our shareholders totaling $593 million and $569 million for the years ended December 31, 2024 and 2023, respectively. On January 29, 2025, we announced a quarterly dividend of $1.48 per common share.
Liquid securities predominantly include U.S. government agency mortgage back securities. Additional sources of liquidity include a line of credit with an affiliate up to $727 million and an unsecured revolving committed credit facility for up to $1.0 billion that expires in June 2026.
Liquid securities predominantly include U.S. government agency mortgage back securities. Additional sources of liquidity for Ameriprise Financial, Inc. include a line of credit with an affiliate up to $714 million and an unsecured revolving committed credit facility for up to $1.0 billion that expires in November 2029.
Management’s estimate of liquidity available to the parent company in a volatile and uncertain economic environment as of December 31, 2023 was $1.8 billion which includes cash, cash equivalents, unencumbered liquid securities, the line of credit with an affiliate and a portion of the committed credit facility.
Management’s estimate of liquidity available to the Ameriprise Financial, Inc. in a volatile and uncertain economic environment as of December 31, 2024 was $2.1 billion which includes cash, cash equivalents, unencumbered liquid securities, the line of credit with an affiliate and a portion of the committed credit facility.
The following table presents relevant market indices: Years Ended December 31, 2023 2022 Change S&P 500 Daily average 4,285 4,100 5% Period end 4,770 3,840 24% Weighted Equity Index (“WEI”) (1) Daily average 2,808 2,699 4% Period end 3,102 2,549 22% (1) Weighted Equity Index is an Ameriprise calculated proxy for equity market movements calculated using a weighted average of the S&P 500, Russell 2000, Russell Midcap and MSCI EAFE indices based on North America distributed equity assets.
The following table presents relevant market indices: Years Ended December 31, 2024 2023 Change S&P 500 Daily average 5,428 4,285 27% Period end 5,882 4,770 23% Weighted Equity Index (“WEI”) (1) Daily average 3,456 2,808 23% Period end 3,676 3,102 19% (1) Weighted Equity Index is an Ameriprise calculated proxy for equity market movements calculated using a weighted average of the S&P 500, Russell 2000, Russell Midcap and MSCI EAFE indices based on North America distributed equity assets.
Banking and deposit interest expense increased $485 million for 2023 compared to the prior year primarily reflecting higher average crediting rates and higher average balances on certificates and bank cash deposits.
Banking and deposit interest expense increased $101 million, or 18%, for 2024 compared to the prior year primarily reflecting higher average crediting rates and higher average balances on certificates and Ameriprise Bank cash deposits.
Asset Management The following tables present the mutual fund performance of our retail Columbia Threadneedle Investments funds as of December 31, 2023: Retail Fund Rankings in Top 2 Quartiles or Above Index Benchmark - Asset Weighted (1) 1 year 3 year 5 year 10 year Equity 43% 69% 79% 89% Fixed Income 84% 68% 77% 90% Asset Allocation 90% 54% 83% 90% 4- or 5-star Morningstar Rated Funds (2) Overall 3 year 5 year 10 year Number of rated funds 113 73 95 102 (1) Retail Fund performance rankings for each fund are measured on a consistent basis against the most appropriate peer group or index.
Asset Management The following tables present the mutual fund performance of our retail Columbia Threadneedle Investments funds as of December 31, 2024: Retail Fund Rankings in Top 2 Quartiles or Above Index Benchmark - Asset Weighted (1) 1 year 3 year 5 year 10 year Equity 68% 69% 79% 87% Fixed Income 69% 69% 80% 93% Asset Allocation 89% 67% 82% 91% 4- or 5-star Morningstar Rated Funds (2) Overall 3 year 5 year 10 year Number of rated funds 108 73 79 99 (1) Retail Fund performance rankings for each fund are measured on a consistent basis against the most appropriate peer group or index.
Other revenues decreased $21 million, or 9%, for 2023 compared to the prior year primarily reflecting the yield on deposit receivables arising from reinsurance transactions. 48 Index Ameriprise Financial, Inc.
Other revenues decreased $23 million, or 11%, for 2024 compared to the prior year primarily reflecting the yield on deposit receivables arising from reinsurance transactions. 49 Index Ameriprise Financial, Inc.
Advice & Wealth Management The following table presents the changes in wrap account assets and average balances for the years ended December 31: 2023 2022 (in billions) Beginning balance $ 412.1 $ 464.7 Net flows 24.2 27.5 Market appreciation (depreciation) and other 51.9 (80.1) Ending balance $ 488.2 $ 412.1 Advisory wrap account assets ending balance (1) $ 483.3 $ 407.8 Average advisory wrap account assets (2) $ 437.8 $ 419.9 (1) Advisory wrap account assets represent those assets for which clients receive advisory services and are the primary driver of revenue earned on wrap accounts.
The following table presents the changes in wrap account assets and average balances for the years ended December 31: 2024 2023 (in billions) Beginning balance $ 488.2 $ 412.1 Net flows 33.1 24.2 Market appreciation (depreciation) and other 52.6 51.9 Ending balance $ 573.9 $ 488.2 Advisory wrap account assets ending balance (1) $ 568.3 $ 483.3 Average advisory wrap account assets (2) $ 528.3 $ 437.8 (1) Advisory wrap account assets represent those assets for which clients receive advisory services and are the primary driver of revenue earned on wrap accounts.
In October 2023, the Federal Reserve Board (“FRB”) issued its final rule establishing a consolidated capital framework termed the “Building Block Approach” for savings and loan holding companies like Ameriprise Financial that are significantly engaged in insurance activities. The rule is effective January 1, 2024, with reporting to the FRB beginning in 2025.
In October 2023, the Federal Reserve Board (“FRB”) issued its final rule establishing a consolidated capital framework termed the “Building Block Approach” (“BBA”) for savings and loan holding companies like Ameriprise Financial that are significantly engaged in insurance activities.
(2) Global Institutional inflows and outflows include net flows from our structured variable annuity product and Ameriprise Bank. (3) Included in Market appreciation (depreciation) and other for Global Institutional is the change in affiliated general account balance, excluding net flows related to our structured variable annuity product and Ameriprise Bank.
(2) Global Institutional inflows and outflows include net flows from our SVA product and Ameriprise Bank. (3) Included in Market appreciation (depreciation) and other for Global Institutional is the change in affiliated general account balance, excluding net flows related to our structured variable annuity product and Ameriprise Bank. (4) Assets under advisement are presented on a one-quarter lag.
The higher investment income is driven by higher yields and the growth in Ameriprise Bank customer deposits and certificate business growth. Investing Activities Our investing activities primarily relate to our Available-for-Sale investment portfolio and in recent quarters is significantly affected by the net flows of our face amount certificates and bank deposit activity.
Investing Activities Our investing activities primarily relate to our Available-for-Sale investment portfolio and in recent quarters is significantly affected by the net flows of our face amount certificates and bank deposit activity.
This decrease was the result of an unfavorable $865 million change in the market impact on variable annuity guaranteed benefits reserves, partially offset by a favorable $96 million change in the market impact on derivatives hedging the variable annuity guaranteed benefits.
This decrease was the result of a favorable $538 million change in the market impact on variable annuity guaranteed benefits reserves and an unfavorable $311 million change in the market impact on derivatives hedging the variable annuity guaranteed benefits.
Short-term contractual obligations for the year 2024 include investment certificate maturities of $12.3 billion and estimated insurance and annuity benefits of $2.2 billion in addition to operating liquidity needs and maturing long-term debt in October 2024 of $550 million. We also hold banking and brokerage deposits of $23.9 billion that are payable on demand.
Short-term contractual obligations for the year 2025 include investment certificate maturities of $10.8 billion and estimated insurance and annuity benefits of $2.8 billion in addition to operating liquidity needs and maturing long-term debt in April 2025 of $500 million. We also hold banking and brokerage deposits of $24.6 billion that are payable on demand.
Net Revenues Management and financial advice fees decreased $126 million, or 1%, for 2023 compared to the prior year primarily reflecting the cumulative impact of Asset Management and variable annuity net outflows, partially offset by continued wrap account net inflows.
Net Revenues Management and financial advice fees increased $1.2 billion, or 14%, for 2024 compared to the prior year primarily reflecting market appreciation and continued wrap account net inflows, partially offset by the cumulative impact of Asset Management and variable annuity net outflows.
Change in fair value of market risk benefits, which exclude the market impact on variable annuity guaranteed benefits (net of hedges), increased $256 million, or 69%, for 2023 compared to the prior year primarily reflecting the impact of unlocking.
Change in fair value of market risk benefits, which exclude the market impact on variable annuity guaranteed benefits (net of hedges), increased $56 million, or 9%, for 2024 compared to the prior year primarily reflecting market appreciation on contractual fees.
Actual capital and regulatory capital requirements for our wholly owned subsidiaries subject to regulatory capital requirements were as follows: Actual Capital Regulatory Capital Requirements December 31, December 31, 2023 2022 2023 2022 (in millions) RiverSource Life (1) $ 3,093 $ 3,103 $ 512 $ 571 RiverSource Life of NY (1) 244 320 40 40 ACC (3)(4) 765 534 717 496 TAM UK International Holdings Ltd.
Actual capital and regulatory capital requirements for our wholly owned subsidiaries subject to regulatory capital requirements were as follows: Actual Capital Regulatory Capital Requirements December 31, December 31, 2024 2023 2024 2023 (in millions) RiverSource Life (1) $ 2,700 $ 3,093 $ 489 $ 512 RiverSource Life of NY (1) 219 244 38 40 ACC (3)(4) 644 765 596 717 TAM UK International Holdings Ltd.
Net cash used in investing activities decreased $4.3 billion to $9.3 billion for the year ended December 31, 2023 compared to $13.6 billion for the prior year primarily reflecting a $2.3 billion decrease in purchases of Available-for-Sale securities and a $1.6 billion increase in proceeds from maturities, sinking fund payments and calls of Available-for-Sale securities.
Net cash used in investing activities decreased $8.7 billion to $551 million for the year ended December 31, 2024 compared to $9.3 billion for the prior year driven by a $6.5 billion increase in proceeds from maturities, sinking fund payments and calls of Available-for-Sale securities, a $1.6 billion increase in proceeds from sales of Available-for-Sale securities and a $1.2 billion decrease in purchases of Available-for-Sale securities.
The following table reconciles our GAAP measures to adjusted operating measures: Per Diluted Share Years Ended December 31, Years Ended December 31, 2023 2022 2023 2022 (in millions, except per share amounts) Net income $ 2,556 $ 3,149 $ 23.71 $ 27.70 Less Adjustments: Net realized investment gains (losses) (1) (32) (93) (0.30) (0.82) Market impact on non-traditional long-duration products (1) (608) 483 (5.63) 4.25 Mean reversion related impacts (1) — (1) — (0.01) Integration/restructuring charges (1) (62) (50) (0.58) (0.44) Net income (loss) attributable to CIEs — (4) — (0.04) Tax effect of adjustments (2) 147 (71) 1.36 (0.61) Adjusted operating earnings $ 3,111 $ 2,885 $ 28.86 $ 25.37 Weighted average common shares outstanding: Basic 105.7 111.3 Diluted 107.8 113.7 (1) Pretax adjusted operating adjustments.
The following table reconciles our GAAP measures to adjusted operating measures: Per Diluted Share Years Ended December 31, Years Ended December 31, 2024 2023 2024 2023 (in millions, except per share amounts) Net income $ 3,401 $ 2,556 $ 33.05 $ 23.71 Less Adjustments: Net realized investment gains (losses) (1) (21) (32) (0.20) (0.30) Market impact on non-traditional long-duration products (1) (153) (608) (1.49) (5.63) Mean reversion related impacts (1) 1 — 0.01 — Integration/restructuring charges (1) — (62) — (0.58) Net income (loss) attributable to CIEs 3 — 0.03 — Tax effect of adjustments (2) 36 147 0.35 1.36 Adjusted operating earnings $ 3,535 $ 3,111 $ 34.35 $ 28.86 Weighted average common shares outstanding: Basic 101.0 105.7 Diluted 102.9 107.8 (1) Pretax adjusted operating adjustments.
The following table presents managed assets by type: December 31, Change Average (1) Change December 31, 2023 2022 2023 2022 (in billions) (in billions) Equity $ 323.0 $ 301.2 $ 21.8 7 % $ 309.2 $ 333.1 $ (23.9) (7) % Fixed income 238.4 210.0 28.4 14 221.7 232.0 (10.3) (4) Money market 23.8 21.9 1.9 9 22.6 17.1 5.5 32 Alternative 33.5 33.7 (0.2) (1) 34.5 37.3 (2.8) (8) Hybrid and other 18.2 17.2 1.0 6 17.3 19.8 (2.5) (13) Total managed assets $ 636.9 $ 584.0 $ 52.9 9 % $ 605.3 $ 639.3 $ (34.0) (5) % (1) Average ending balances are calculated using an average of the prior period’s ending balance and all months in the current period. 44 Index Ameriprise Financial, Inc.
The following table presents managed assets by type: December 31, Change Average (1) Change December 31, 2024 2023 2024 2023 (in billions) (in billions) Equity $ 343.0 $ 323.0 $ 20.0 6 % $ 340.1 $ 309.2 $ 30.9 10 % Fixed income 231.5 238.4 (6.9) (3) 234.3 221.7 12.6 6 Money market 20.3 23.8 (3.5) (15) 21.9 22.6 (0.7) (3) Alternative 30.9 33.5 (2.6) (8) 32.7 34.5 (1.8) (5) Hybrid and other 19.2 18.2 1.0 5 19.0 17.3 1.7 10 Total managed assets $ 644.9 $ 636.9 $ 8.0 1 % $ 648.0 $ 605.3 $ 42.7 7 % (1) Average ending balances are calculated using an average of the prior period’s ending balance and all months in the current period. 45 Index Ameriprise Financial, Inc.
This increase was the result of a favorable $955 million change in the market impact on derivatives hedging the SVA embedded derivative and an unfavorable $1.8 billion change in the market impact on the SVA embedded derivative.
This decrease was the result of a favorable $644 million change in the market impact on derivatives hedging the SVA embedded derivative and an unfavorable $448 million change in the market impact on the SVA embedded derivative.
Banking and Deposit Interest Expense Banking and deposit interest expense primarily includes interest expense related to investment certificates and banking deposits. Distribution Expenses Distribution expenses primarily include compensation paid to our financial advisors, registered representatives, third-party distributors and wholesalers.
Other Revenues Other revenues primarily include the accretion on the fixed annuities reinsurance deposit receivables and other miscellaneous revenues. Banking and Deposit Interest Expense Banking and deposit interest expense primarily includes interest expense related to investment certificates and banking deposits. Distribution Expenses Distribution expenses primarily include compensation paid to our financial advisors, registered representatives, third-party distributors and wholesalers.
The following table presents the changes in global managed assets: Years Ended December 31, 2023 2022 (in billions) Global Retail Funds Beginning assets $ 309.3 $ 409.4 Inflows 47.9 60.9 Outflows (65.2) (84.7) Net VP/VIT fund flows (5.0) (4.3) Net new flows (22.3) (28.1) Reinvested dividends 8.1 11.4 Net flows (14.2) (16.7) Distributions (9.4) (12.9) Market appreciation (depreciation) and other 45.1 (65.6) Foreign currency translation (1) 4.1 (4.9) Total ending assets 334.9 309.3 Global Institutional Beginning assets 274.7 344.7 Inflows (2) 42.7 59.1 Outflows (2) (45.7) (49.0) Net flows (3.0) 10.1 Market appreciation (depreciation) and other (3) 21.9 (65.0) Foreign currency translation (1) 8.4 (15.1) Total ending assets 302.0 274.7 Total managed assets $ 636.9 $ 584.0 Total net flows $ (17.2) $ (6.6) Legacy insurance partners net flows (4) $ (4.3) $ (4.6) (1) Amounts represent local currency to U.S. dollar translation for reporting purposes.
The following table presents the changes in global assets under management and advisement: Years Ended December 31, 2024 2023 (in billions) Global Retail Funds Beginning managed assets $ 334.9 $ 309.3 Inflows 54.9 47.9 Outflows (68.5) (65.2) Net VP/VIT fund flows (6.6) (5.0) Net new flows (20.2) (22.3) Reinvested dividends 14.3 8.1 Net flows (5.9) (14.2) Distributions (16.2) (9.4) Market appreciation (depreciation) and other 41.2 45.1 Foreign currency translation (1) (1.3) 4.1 Total ending managed assets 352.7 334.9 Global Institutional Beginning managed assets 302.0 274.7 Inflows (2) 35.8 42.7 Outflows (2) (50.3) (45.7) Net flows (14.5) (3.0) Market appreciation (depreciation) and other (3) 7.4 21.9 Foreign currency translation (1) (2.7) 8.4 Total ending managed assets 292.2 302.0 Total managed assets 644.9 636.9 Total assets under advisement (4) 35.6 26.2 Total assets under management and advisement $ 680.5 $ 663.1 Total assets under management net flows $ (20.4) $ (17.2) Model delivery assets under advisement flows (5) 2.8 0.7 Total assets under management and advisement flows (5) $ (17.6) $ (16.5) Legacy insurance partners net flows (6) $ (11.7) $ (4.3) (1) Amounts represent local currency to U.S. dollar translation for reporting purposes.
This estimate includes a spread over the U.S. Treasury curve as of the balance sheet date. As our estimate of this spread over the U.S. Treasury curve widens or tightens, the liability will decrease or increase. The change in fair value due to changes in our nonperformance risk is recorded in other comprehensive income.
As our estimate of this spread widens or tightens, the liability will decrease or increase, respectively. The change in fair value due to changes in our nonperformance risk is recorded in other comprehensive income.
Management reviews, and where appropriate, adjusts its assumptions each quarter. Unless management identifies a material deviation over the course of quarterly monitoring, management reviews and updates these assumptions annually in the third quarter of each year. In addition, the valuation of market risk benefits is impacted by an estimate of our nonperformance risk adjustment.
Unless management identifies a material deviation over the course of quarterly monitoring, management reviews and updates these assumptions annually in the third quarter of each year. In addition, the valuation of market risk benefits is impacted by an estimate of our nonperformance risk adjustment. This estimate includes a spread over the U.S. Treasury curve as of the balance sheet date.
General and administrative expense increased $112 million, or 7%, for 2023 compared to the prior year primarily reflecting a $50 million accrual for a regulatory matter relating to electronic communication recordkeeping requirements, higher volume related expenses and investments for business growth.
General and administrative expense increased $34 million, or 2%, for 2024 compared to the prior year primarily reflecting higher volume related expenses and investments for business growth, partially offset by a $50 million accrual for a regulatory matter relating to electronic communication recordkeeping requirements in the prior year. 44 Index Ameriprise Financial, Inc.
The following table presents the total pretax impacts on our revenues and expenses attributable to our annual assumption updates, referred to as unlocking, for the years ended December 31: Pretax Increase (Decrease) 2023 2022 (in millions) Premiums, policy and contract charges $ 1 $ (1) Total revenues 1 (1) Benefits, claims, losses and settlement expenses (17) 7 Remeasurement (gains) losses of future policy benefit reserves: LTC unlocking (5) (6) Unlocking impact, excluding LTC (6) 6 Total remeasurement (gains) losses of future policy benefit reserves (11) — Change in fair value of market risk benefits 128 (139) Amortization of DAC — (2) Total benefits and expenses 100 (134) Pretax income (loss) (1) $ (99) $ 133 (1) Includes a $2 million net expense related to the market impact on IUL benefits for 2022, which is excluded from adjusted operating earnings.
The following table presents the total pretax impacts on our revenues and expenses attributable to unlocking, for the years ended December 31: Pretax Increase (Decrease) 2024 2023 (in millions) Premiums, policy and contract charges $ (4) $ 1 Total revenues (4) 1 Interest credited to fixed accounts (10) — Benefits, claims, losses and settlement expenses (4) (17) Remeasurement (gains) losses of future policy benefit reserves: LTC unlocking 4 (5) Unlocking impact, excluding LTC (24) (6) Total remeasurement (gains) losses of future policy benefit reserves (20) (11) Change in fair value of market risk benefits 107 128 Total benefits and expenses 73 100 Pretax income (loss) (1) $ (77) $ (99) (1) Includes a $17 million net benefit related to model changes associated with the market impact on IUL and SVA embedded derivatives for 2024, which is excluded from adjusted operating earnings.
Clients may hold non-advisory investments in their wrap accounts that do not incur an advisory fee. (2) Average ending balances are calculated using an average of the prior period’s ending balance and all months in the current period excluding the most recent month for the twelve months ended December 31, 2023 and 2022, which is reflective of our billing cycle.
(2) Average advisory wrap account assets are calculated using an average of the prior period’s ending balance and all months in the current period excluding the most recent month for the twelve months ended December 31, 2024 and 2023, which is reflective of our billing cycle.
At December 31, 2023 and 2022, we had $7.5 billion and $7.0 billion, respectively, in cash and cash equivalents excluding CIEs and other restricted cash on a consolidated basis. At December 31, 2023 and 2022, the parent company had $544 million and $389 million, respectively, in cash, cash equivalents, and unencumbered liquid securities.
At December 31, 2024 and 2023, we had $8.1 billion and $7.5 billion, respectively, in cash and cash equivalents excluding CIEs and other restricted cash on a consolidated basis. At December 31, 2024 and 2023, Ameriprise Financial, Inc. had $856 million and $544 million, respectively, in cash, cash equivalents, and unencumbered liquid securities.
Corporate & Other The following table presents the results of operations of our Corporate & Other segment on an adjusted operating basis: Years Ended December 31, Change 2023 2022 (in millions) Revenues Distribution fees $ 1 $ — $ 1 — % Net investment income 247 155 92 59 % Premiums, policy and contract charges 96 99 (3) (3) Other revenues 209 230 (21) (9) Total revenues 553 484 69 14 Banking and deposit interest expense 20 5 15 NM Total net revenues 533 479 54 11 Expenses Distribution expenses (10) (10) — — Interest credited to fixed accounts 234 242 (8) (3) Benefits, claims, losses and settlement expenses 236 247 (11) (4) Remeasurement (gains) losses of future policy benefit reserves (1) — (1) — Amortization of deferred acquisition costs 11 10 1 10 Interest and debt expense 97 70 27 39 General and administrative expense 286 226 60 27 Total expenses 853 785 68 9 Adjusted operating loss $ (320) $ (306) $ (14) (5) % NM Not Meaningful - variance equal to or greater than 100%.
Corporate & Other The following table presents the results of operations of our Corporate & Other segment on an adjusted operating basis: Years Ended December 31, Change 2024 2023 (in millions) Revenues Distribution fees $ 1 $ 1 $ — — % Net investment income 203 247 (44) (18) Premiums, policy and contract charges 94 96 (2) (2) Other revenues 186 209 (23) (11) Total revenues 484 553 (69) (12) Banking and deposit interest expense 30 20 10 50 Total net revenues 454 533 (79) (15) Expenses Distribution expenses (10) (10) — — Interest credited to fixed accounts 216 234 (18) (8) Benefits, claims, losses and settlement expenses 217 236 (19) (8) Remeasurement (gains) losses of future policy benefit reserves (8) (1) (7) NM Amortization of deferred acquisition costs 8 11 (3) (27) Interest and debt expense 108 97 11 11 General and administrative expense 366 286 80 28 Total expenses 897 853 44 5 Adjusted operating loss $ (443) $ (320) $ (123) (38) % NM Not Meaningful - variance equal to or greater than 100%.
We believe cash flows from operating activities, available cash balances, our availability of internal and external borrowings, access to debt markets and dividends from our subsidiaries will be sufficient to fund our short-term and long-term operating liquidity needs and stress requirements. On August 16, 2022, federal legislation commonly referred to as the Inflation Reduction Act of 2022 (“IRA”) was enacted.
We believe cash flows from operating activities, available cash balances, our availability of internal and external borrowings, access to debt markets, and dividends from our subsidiaries will be sufficient to fund our short-term and long-term operating liquidity needs and stress requirements.
Net investment income increased $491 million for 2022 compared to the prior year primarily due to higher average invested assets due to increased bank deposits and higher investment yields on the investment portfolio supporting the bank and certificate products.
Net investment income increased $239 million, or 12%, for 2024 compared to the prior year primarily due to higher average invested assets and the favorable impact of higher average investment yields on the investment portfolios supporting the bank and certificate products.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe following tables present our estimate of the impact on pretax income from the above defined hypothetical market movements as of December 31, 2023 and 2022: December 31, 2023 Equity Price Decline 10% Equity Price Exposure to Pretax Income Before Hedge Impact Hedge Impact Net Impact (in millions) Asset-based management and distribution fees (1) $ (321) $ 2 $ (319) Variable annuity and structured variable annuity benefits: Market risk benefits (1,049) 756 (293) Indexing feature for structured variable annuities 793 (513) 280 Total variable annuity and structured variable annuity benefits (256) 243 (13) IUL insurance 52 (52) — Total $ (525) $ 193 $ (332) (2) Interest Rate Increase 100 Basis Points Interest Rate Exposure to Pretax Income Before Hedge Impact Hedge Impact Net Impact (in millions) Asset-based management and distribution fees (1) $ (60) $ — $ (60) Variable annuity and structured variable annuity benefits: Market risk benefits 1,404 (1,056) 348 Indexing feature for structured variable annuities 6 127 133 Total variable annuity and structured variable annuity benefits 1,410 (929) 481 Fixed annuities, fixed insurance and fixed portion of variable annuities and variable insurance products 43 — 43 Banking deposits 27 — 27 Brokerage client cash balances 53 — 53 Certificates 2 — 2 IUL insurance 14 1 15 Total $ 1,489 $ (928) $ 561 December 31, 2022 Equity Price Decline 10% Equity Price Exposure to Pretax Income Before Hedge Impact Hedge Impact Net Impact (in millions) Asset-based management and distribution fees (1) $ (285) $ 2 $ (283) Variable annuity and structured variable annuity benefits: Market risk benefits (870) 648 (222) Indexing feature for structured variable annuities 494 (291) 203 Total variable annuity and structured variable annuity benefits (376) 357 (19) Certificates 1 (1) — IUL insurance 39 (21) 18 Total $ (621) $ 337 $ (284) (2) 66 Index Ameriprise Financial, Inc.
Biggest changeThe following tables present our estimate of the impact on pretax income from the above defined hypothetical market movements as of December 31, 2024: Equity Price Decline 10% Equity Price Exposure to Pretax Income Before Hedge Impact Hedge Impact Net Impact (in millions) Asset-based management and distribution fees (1) $ (348) $ 2 $ (346) Variable annuity and structured variable annuity benefits: Market risk benefits (845) 702 (143) Indexing feature for structured variable annuities 1,022 (1,043) (21) Total variable annuity and structured variable annuity benefits 177 (341) (164) IUL insurance 60 (59) 1 Total $ (111) $ (398) $ (509) (2) 56 Index Ameriprise Financial, Inc.
The core derivative instruments with which we hedge the equity price risk of these benefits are longer dated put and call options; these core instruments are supplemented with equity futures and total return swaps. See Note 18 to our Consolidated Financial Statements for further information on our derivative instruments. 67 Index Ameriprise Financial, Inc.
The core derivative instruments with which we hedge the equity price risk of these benefits are longer dated put and call options; these core instruments are supplemented with equity futures and total return swaps. See Note 18 to our Consolidated Financial Statements 57 Index Ameriprise Financial, Inc. for further information on our derivative instruments.
In this volatile rate environment, we assess reinvestment risk in our investment portfolio and monitor this risk in accordance with our asset/liability management framework. In addition, we may update the crediting rates on our fixed products when warranted, subject to guaranteed minimums. 68 Index Ameriprise Financial, Inc.
In this volatile rate environment, we assess reinvestment risk in our investment portfolio and monitor this risk in accordance with our asset/liability management framework. In addition, we may update the crediting rates on our fixed products when warranted, subject to guaranteed minimums. 58 Index Ameriprise Financial, Inc.
In addition, we regularly evaluate their financial strength during the terms of the treaties. As of December 31, 2023, our largest reinsurance credit risks are related to coinsurance treaties with Global Atlantic Financial Group’s subsidiary Commonwealth Annuity and Life Insurance Company and with life insurance subsidiaries of Genworth Financial, Inc.
In addition, we regularly evaluate their financial strength during the terms of the treaties. As of December 31, 2024, our largest reinsurance credit risks are related to coinsurance treaties with Global Atlantic Financial Group’s subsidiary Commonwealth Annuity and Life Insurance Company and with life insurance subsidiaries of Genworth Financial, Inc.
Impacts of larger or smaller changes in interest rates or equity prices may not be proportional to those shown for a 100 basis point increase in interest rates or a 10% decline in equity prices. Asset-Based Management and Distribution Fees We earn asset-based management fees and distribution fees on our assets under management.
Impacts of larger or smaller changes in interest rates or equity prices will not be proportional to those shown for a 100 basis point increase in interest rates or a 10% decline in equity prices. Asset-Based Management and Distribution Fees We earn asset-based management fees and distribution fees on our assets under management.
Foreign Currency Risk We have foreign currency risk through our net investment in foreign subsidiaries and our operations in foreign countries. We are primarily exposed to changes in British Pounds related to our net investment in Threadneedle, which was approximately £1.3 billion as of December 31, 2023.
Foreign Currency Risk We have foreign currency risk through our net investment in foreign subsidiaries and our operations in foreign countries. We are primarily exposed to changes in British Pounds related to our net investment in Threadneedle, which was approximately £1.3 billion as of December 31, 2024.
As of December 31, 2023, the value of our assets under management was $1.1 trillion. These sources of revenue are subject to both interest rate and equity price risk since the value of these assets and the fees they earn fluctuate inversely with interest rates and directly with equity prices.
As of December 31, 2024, the value of our assets under management was $1.2 trillion. These sources of revenue are subject to both interest rate and equity price risk since the value of these assets and the fees they earn fluctuate inversely with interest rates and directly with equity prices.
These guidelines and oversight of credit risk are managed through a comprehensive enterprise risk management program that includes members of senior management. 69 Index Ameriprise Financial, Inc.
These guidelines and oversight of credit risk are managed through a comprehensive enterprise risk management program that includes members of senior management. 59 Index Ameriprise Financial, Inc.
The policyholder may allocate all or a portion of the policy value to a fixed or any available indexed account. As of December 31, 2023, we had $2.7 billion in liabilities related to the indexed accounts of IUL. Equity Price Risk The equity-linked return to investors creates equity price risk as the amount credited depends on changes in equity prices.
The policyholder may allocate all or a portion of the policy value to a fixed or any available indexed account. As of December 31, 2024, we had $2.9 billion in liabilities related to the indexed accounts of IUL. Equity Price Risk The equity-linked return to investors creates equity price risk as the amount credited depends on changes in equity prices.
See Note 7 and Note 8 to our Consolidated Financial Statements for additional information on reinsurance. 70 Index Ameriprise Financial, Inc.
See Note 7 and Note 8 to our Consolidated Financial Statements for additional information on reinsurance. 60 Index Ameriprise Financial, Inc.
See Note 11 for more information on the account values of fixed deferred annuities, fixed insurance, and the fixed portion of variable annuities and variable insurance contracts by range of GMIRs and the range of the difference between rates credited to policyholders and contractholders as of December 31, 2023 and 2022 and the respective guaranteed minimums, as well as the percentage of account values subject to rate reset in the time period indicated.
See Note 11 to our Consolidated Financial Statements for more information on the account values of fixed deferred annuities, fixed insurance, and the fixed portion of variable annuities and variable insurance contracts by range of GMIRs and the range of the difference between rates credited to policyholders and contractholders as of December 31, 2024 and 2023 and the respective guaranteed minimums, as well as the percentage of account values subject to rate reset in the time period indicated.
This dynamic would result in widening spreads under a modestly rising rate scenario given the current relationship between the current level of interest rates and the underlying GMIRs on the business. Of the $37.5 billion in Policyholder account balances, future policy benefits and claims as of December 31, 2023, $16.9 billion is related to liabilities created by these products.
This dynamic would result in widening spreads under a modestly rising rate scenario given the current relationship between the current level of interest rates and the underlying GMIRs on the business. Of the $41.9 billion in Policyholder account balances, future policy benefits and claims as of December 31, 2024, $15.9 billion is related to liabilities created by these products.
We currently only hedge certain equity price risk for this exposure, primarily using futures and swaps. We currently do not hedge any of the interest rate risk for this exposure. Market Risk Benefits The total contract value of all variable annuities as of December 31, 2023 was $80.8 billion.
We currently only hedge certain equity price risk for this exposure, primarily using futures and swaps. We currently do not hedge any of the interest rate risk for this exposure. Market Risk Benefits The total contract value of all variable annuities as of December 31, 2024 was $85.7 billion.
As of December 31, 2023, the notional value of outstanding contracts and our remaining foreign currency risk related to operations in foreign countries were not material. Interest Rate Risk on External Debt The stated interest rates on our $3.4 billion of senior unsecured notes are fixed.
As of December 31, 2024, the notional value of outstanding contracts and our remaining foreign currency risk related to operations in foreign countries were not material. Interest Rate Risk on External Debt The stated interest rates on our $2.9 billion of senior unsecured notes are fixed.
Our earnings are based upon the spread between investment income earned and the credits made to the fixed account and benefits reflected in an indexed account of the structured variable annuities. As of December 31, 2023, we had $10.7 billion in liabilities related to structured variable annuities.
Our earnings are based upon the spread between investment income earned and the credits made to the fixed account and benefits reflected in an indexed account of the structured variable annuities. As of December 31, 2024, we had $16.3 billion in liabilities related to structured variable annuities.
The carrying value and weighted average yield of non-structured fixed maturity securities and commercial mortgage loans that may generate proceeds to reinvest through 2025 due to prepayment, maturity or call activity at the option of the issuer, excluding securities with a make-whole provision, were $5.6 billion and 4.9%, respectively, as of December 31, 2023.
The carrying value and weighted average yield of non-structured fixed maturity securities and commercial mortgage loans that may generate proceeds to reinvest through 2026 due to prepayment, maturity or call activity at the option of the issuer, excluding securities with a make-whole provision, were $4.1 billion and 4.7%, respectively, as of December 31, 2024.
See Note 13 for details of the reserves associated with market risk benefits. The changes in fair value of variable annuity market risk benefits are recorded through earnings, with the exception of the portion of the change in fair value due to a change in our nonperformance risk, which is recognized in other comprehensive income (loss).
The changes in fair value of variable annuity market risk benefits are recorded through earnings, with the exception of the portion of the change in fair value due to a change in our nonperformance risk, which is recognized in other comprehensive income (loss).
In addition, residential mortgage backed securities, which can be subject to prepayment risk under a low interest rate environment, totaled $21.1 billion and had a weighted average yield of 4.4% as of December 31, 2023.
In addition, residential mortgage backed securities, which can be subject to prepayment risk under a low interest rate environment, totaled $23.3 billion and had a weighted average yield of 4.6% as of December 31, 2024.
In estimating the values of variable annuities, indexed annuities, stock market certificates, indexed universal life (“IUL”) insurance and the associated hedging instruments, we assume no change in implied market volatility despite the 10% drop in equity prices. 65 Index Ameriprise Financial, Inc.
In estimating the values of variable annuities, indexed annuities, indexed universal life (“IUL”) insurance and the associated hedging instruments, we assume no change in implied market volatility despite the 10% drop in equity prices.
Rates credited to clients generally reset at shorter intervals than the yield on underlying investments. This exposure is not currently hedged although we monitor our investment strategy and make modifications based on our changing liabilities and the expected interest rate environment.
Client liabilities and investment assets generally differ as it relates to basis, repricing or maturity characteristics. Rates credited to clients generally reset at shorter intervals than the yield on underlying investments. This exposure is not currently hedged although we monitor our investment strategy and make modifications based on our changing liabilities and the expected interest rate environment.
The average yield for investment purchases during the year ended December 31, 2023 was approximately 5.8%. The reinvestment of proceeds from maturities, calls and prepayments at rates near the current portfolio yield will have a limited impact to future operating results.
The average yield for investment purchases during the year ended December 31, 2024 was approximately 5.4%. The reinvestment of proceeds from maturities, calls and prepayments at rates above the current portfolio yields will create potential upside impact to future operating results.
For example, the illustration above includes assuming that implied market volatility does not change when equity prices fall by 10% and that the 100 basis point increase in interest rates is a parallel shift of the yield curve.
Actual results could and likely will differ materially from those illustrated above as fair values have a number of estimates and assumptions. For example, the illustration above includes assuming that implied market volatility does not change when equity prices fall by 10% and that the 100 basis point increase in interest rates is a parallel shift of the yield curve.
Interest Rate Increase 100 Basis Points Interest Rate Exposure to Pretax Income Before Hedge Impact Hedge Impact Net Impact (in millions) Asset-based management and distribution fees (1) $ (53) $ — $ (53) Variable annuity and structured variable annuity benefits: Market risk benefits 1,484 (1,028) 456 Indexing feature for structured variable annuities (29) 82 53 Total variable annuity and structured variable annuity benefits 1,455 (946) 509 Fixed annuities, fixed insurance and fixed portion of variable annuities and variable insurance products 25 — 25 Banking deposits 28 — 28 Brokerage client cash balances 146 — 146 Certificates (9) — (9) IUL insurance 12 1 13 Total $ 1,604 $ (945) $ 659 (1) Excludes incentive income which is impacted by market and fund performance during the period and cannot be readily estimated.
Interest Rate Increase 100 Basis Points Interest Rate Exposure to Pretax Income Before Hedge Impact Hedge Impact Net Impact (in millions) Asset-based management and distribution fees (1) $ (62) $ — $ (62) Variable annuity and structured variable annuity benefits: Market risk benefits 1,044 (776) 268 Indexing feature for structured variable annuities (12) 174 162 Total variable annuity and structured variable annuity benefits 1,032 (602) 430 Fixed annuities, fixed insurance and fixed portion of variable annuities and variable insurance products 41 — 41 Banking deposits 49 — 49 Brokerage client cash balances 52 — 52 Certificates 1 — 1 IUL insurance 15 3 18 Total $ 1,128 $ (599) $ 529 (1) Excludes incentive income which is impacted by market and fund performance during the period and cannot be readily estimated.
Certificate Products Fixed Rate Certificates We have interest rate risk from our investment certificates generally ranging in amounts from $1 thousand to $2 million with interest crediting rate terms ranging from 3 to 36 months. We guarantee an interest rate to the holders of these products.
As of December 31, 2024 we had $22.3 billion of bank deposits and $2.3 billion of brokerage deposits. Certificate Products Fixed Rate Certificates We have interest rate risk from our investment certificates generally ranging in amounts from $1 thousand to $2 million with interest crediting rate terms ranging from 3 months to 36 months.
We do not hedge this exposure. As a result of the current market environment, reinvestment yields are becoming more aligned with the current portfolio yield. We would expect the recent decline in our portfolio income yields to slow and begin to stabilize in future periods under the current environment.
We do not hedge this exposure. As a result of the current market environment, reinvestment yields are becoming more aligned with the current portfolio yield.
Liabilities are valued using fair value accounting principles, with risk margins incorporated in contractholder behavior assumptions. Our hedging is based on our determination of economic risk, which excludes certain items in the liability valuation. Actual results could and likely will differ materially from those illustrated above as fair values have a number of estimates and assumptions.
Net impacts shown in the above tables from market risk benefits result largely from differences between the liability valuation basis and the hedging basis. Liabilities are valued using fair value accounting principles, with risk margins incorporated in contractholder behavior assumptions. Our hedging is based on our determination of economic risk, which excludes certain items in the liability valuation.
Payments collected from clients are primarily invested in fixed income securities to fund the client credited rate with the spread between the rate earned from investments and the rate credited to clients recorded as earned income. Client liabilities and investment assets generally differ as it relates to basis, repricing or maturity characteristics.
We guarantee an interest rate to the holders of these products. Payments collected from clients are primarily invested in fixed income securities to fund the client credited rate with the spread between the rate earned from investments and the rate credited to clients recorded as earned income.
Of the $37.3 billion in customer deposits as of December 31, 2023, $13.3 billion related to reserves for our fixed rate certificate products.
As of December 31, 2024 we had $11.1 billion related to reserves for our fixed rate certificate products.
(2) Represents the net impact to pretax income. The estimated net impact to pretax adjusted operating income is $(319) million as of December 31, 2023 and $(283) million as of December 31, 2022, respectively. Net impacts shown in the above tables from market risk benefits result largely from differences between the liability valuation basis and the hedging basis.
(2) Represents the net impact to pretax income. The estimated net impact to pretax adjusted operating income is $(346) million as of December 31, 2024.
Added
The above results compare to an estimated negative net impact to pretax income of $332 million related to a 10% equity price decline and an estimated positive net impact to pretax income of $561 million related to a 100 basis point increase in interest rates as of December 31, 2023 .
Added
See Note 13 to our Consolidated Financial Statements for details of the reserves associated with market risk benefits.

Other AMP 10-K year-over-year comparisons