Ameriprise Financial Inc. is moving closer to launching a retail bank, which would add to the suite of products its close to 10,000 financial advisers can sell and recommend to clients.
Among those products are likely to be mortgages, according to one Ameriprise adviser, who asked not to be named. He added that discussions inside the firm indicate that Ameriprise will soon make its entrance into retail banking, perhaps as early as this summer.
Banking is becoming increasingly important in the wealth management and financial advice industries. In 2017, Ameriprise said it was buying an independent broker-dealer, Investment Professionals Inc., that focused on the market for independent reps operating in banks and credit unions. Large firms, including Merrill Lynch, have put incentives in place for advisers to sell banking products.
One industry observer noted that it was clearly a positive move for Ameriprise.
"It strikes me that Ameriprise is addressing a hole in what they offer, and advisers are talking to management about it," said Danny Sarch, an industry recruiter. "Ameriprise needs to offer lending as a wealth management firm. Clients want their advisers to address both sides of the balance sheet."
An Ameriprise spokesperson, Kathleen McClung, said that Ameriprise has no intentions to open physical bank branches. She also pointed to several recent earnings calls in which the firm's CEO and chairman, James Cracchiolo, gave some outline of the bank plans.
Ameriprise recently applied to convert its national trust bank, which does not offer retail products, to a federal savings bank. Mr. Cracchiolo said in January that Ameriprise was waiting for approvals from regulators and could be up and running in the second quarter.
"We think the banking business will generate a very good margin that could be complementary," he said, according to a transcript of an earnings call posted on investor website Seeking Alpha.
On earlier calls, Mr. Cracchiolo said that the bank offering will focus on wealth management products and cited secured lending, home equity lines and mortgages as the types of loans the firm could offer.