Despite facing macroeconomic headwinds and the lingering effects of interest rate cuts, Ameriprise Financial reported solid financial results for the first quarter of 2025, underscoring the strength of its wealth management business and the resilience of its diversified operations.
The Minneapolis-based financial services firm posted adjusted operating earnings of $950 million, or $9.50 per diluted share, a 13 percent year-over-year increase. The earnings handily surpassed analysts’ expectations of $9.08 per share, even as GAAP earnings declined from the previous year, affected by non-recurring items.
Ameriprise's revenue climbed 5 percent to $4.35 billion, supported by an uptick in client activity and a firm-wide focus on operational efficiency. Margins improved notably, with the company reporting a 27 percent adjusted operating margin and a reduction in general and administrative expenses.
The firm’s wealth management division once again proved to be the linchpin of performance. With client assets rising to $1.02 trillion, revenue in the segment grew 9 percent to $2.78 billion. Pre-tax earnings from wealth management rose 4 percent, contributing a healthy 29 percent margin.
CEO Jim Cracchiolo attributed the results to Ameriprise’s “advice-based value proposition and the enduring strength of our client relationships,” as households continue to seek personalized financial guidance amid economic uncertainty.
Investor demand remained particularly strong in managed advisory accounts, with wrap flows increasing 34 percent year-over-year to $8.7 billion. Revenue per advisor climbed 12 percent on a trailing 12-month basis, reaching $1.06 million.
While the wealth arm thrived, Ameriprise’s asset management business experienced mixed fortunes. Revenues in that segment slipped 1 percent to $846 million, primarily due to net outflows and a shift by a major institutional client into passive products. However, cost reductions helped boost pre-tax earnings by 17 percent, with operating margins expanding to 43 percent.
Assets under management and advisement for the unit declined to $657 billion, impacted by the exit of Lionstone and changes in client strategy.
The Retirement and Protection Solutions business posted an 8 percent increase in pre-tax earnings, benefiting from higher interest income and stronger equity markets. Sales rose to $1.2 billion, driven by ongoing demand for variable annuities and life insurance products.
Ameriprise maintained a strong capital position, with an estimated RBC ratio of 615 percent and hedge effectiveness near 99 percent, underscoring the firm's disciplined approach to risk.
Ameriprise returned $765 million to shareholders in the first quarter alone, including $2.3 billion in share buybacks over the past 12 months. The company also unveiled a new $4.5 billion repurchase program, effective through mid-2027, and announced an 8 percent dividend increase.
As of March 31, Ameriprise reported $2.5 billion in holding company liquidity and an excess capital buffer of $2.4 billion. Executives reaffirmed their confidence in the firm’s long-term strategy, pointing to a consistent five-year track record of double-digit EPS growth and a return on equity that has expanded by 13 percentage points since 2020.
“The strength of our diversified business model positions us well for continued success, even as markets remain volatile,” Cracchiolo said.
Shares of Ameriprise have declined 11.4 percent year-to-date, trailing the broader S&P 500, which is down 8.6 percent.
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