Ameriprise Financial Inc. spent $7 million during the third quarter to prepare for the Department of Labor's new fiduciary standard rule for retirement accounts, pushing this year's total spending on the regulation to nearly $19 million.
In its earnings release Tuesday afternoon, Ameriprise reported that its results for the quarter “included $7 million in incremental expenses related to the planning and implementation of the Department of Labor's fiduciary standard.”
It was the second consecutive quarter Ameriprise has reported a $7 million expense resulting from the DOL's new rule. During a first-quarter earnings call, the firm's chief financial officer, Walter Berman, indicated Ameriprise spent an additional $4 million to $5 million on DOL-related items.
That means Ameriprise has spent in the neighborhood of $18 million to $19 million so far this year on the new rule.
Jim Cracchiolo, Ameriprise CEO and chairman, will have a conference call Wednesday morning to discuss the company's results.
The company's net income for the three months ended in September was $215 million, down 46% from the same period in 2015, on net revenue of $3 billion, which represented a 4% increase from last year's third quarter.
The company reported an operating loss of $97 million from variable annuities, reflecting an unfavorable $220 million impact from the company's “unlocking,” or its annual review of insurance and annuity valuations assumptions. The impact of the unlocking was primarily driven by continued low interest rates and policy holder behavior, the company stated.
In wealth management, retail client assets increased 10% from the third quarter of 2015, reaching $476 billion at the end of September. The total number of Ameriprise advisers was 9,747, with 80 experienced advisers moving their practices to the company during the quarter, according to Ameriprise.
“With good inflows in investment advisory accounts, retail client assets grew to a record high,” Mr. Cracchiolo said in the earning's announcement. “Experienced advisers continue to move their practices to Ameriprise as our advice value proposition, level of support and capital strength are attractive in this environment.”
