Ameriprise Financial Services, LLC
With about $313.3 billion in assets under management, Ameriprise Financial Services, LLC is not the largest wealth management firm in the U.S. (the two largest have more than $1 trillion in assets under management). But it is certainly one of the most well known. This is, of course, thanks to all of its TV ads over the years. Prior to being spun off as its own publicly owned company (ticker: AMP) in 2005, the company was American Express Financial Advisors.
The firm is both an investment advisor and broker-dealer. It has headquarters in Minneapolis and other corporate offices across the country. Most of its nearly 13,000 advisors are also brokers and insurance agents. So in addition to providing financial advice, they sell investment and insurance products.
Ameriprise Financial Services Background
Ameriprise’s history goes back to 1894, when it went by Investors Syndicate. It has since changed ownership and names a couple of times - and acquired other companies, including H&R Block Financial Advisors, J. & W. Seligman, Columbia Management, quantitative platform Dynamic Ideas and British investment firm Threadneedle.
According to Investment News, the only broker-dealer to bring in more revenue than Ameriprise is LPL Financial. The latter had almost $5.2 billion in revenue in 2018, while Ameriprise had more than $4.8 billion. Of that $4.8 billion, $1.25 billion was in commissions and $2.6 billon was in fees.
Ameriprise Financial Services Client Types and Minimum Account Sizes
The firm’s minimum account sizes vary, depending on the investment program. The range runs from $25,000 (for Ameriprise Strategic Portfolio Service Advantage and Active Portfolios) to up to $500,000 (for a select separate account). That said, Ameriprise may waive its minimum at its discretion.
As a result of its relatively low minimum, the vast majority of Ameriprise’s clients do not have a high net worth. The 2019 numbers, to be exact, are 62,780 high-net-worthers to 905,608 individuals who are not as wealthy. Ameriprise also works with trusts, estates, pension and profit-sharing plans, charitable organizations, state and municipal entities, corporations and other business entities.
Services Offered by Ameriprise Financial Services
Ameriprise offers an array of financial services, including asset allocation, ongoing portfolio management services and financial planning. As noted earlier, advisors are also able to sell financial and insurance products, for which they receive a commission from the vendor. Portfolio management can be on a discretionary or non-discretionary basis, depending on the investment program. It can also be through a wrap fee program.
The investment programs, which the company calls “Advisory Solutions” are:
- Strategic Portfolio Service (SPS) Advantage
- SPS Advisor
- Active Portfolios®
- Select Separate Account
- Investor Unified Account (offered through Envestnet Asset Management’s web-based platform)
- Vista Separate Account (offered through Envestnet)
- Access Account (offered through Envestnet)
SPS Advantage is the only non-discretionary program. Active Portfolios and Access Accounts solely invest in mutual funds and exchange-traded funds (ETFs). Alternately or additionally, clients can open brokerage accounts.
Ameriprise Financial Services Investing Philosophy
Ameriprise advisors generally use an asset allocation strategy for diversifying assets across various asset classes. The idea is that investing in non-correlating sectors will lower the volatility in your overall portfolio. Your asset allocation will depend on a number of factors, including risk tolerance, time horizon and goals.
With Select Separate Accounts, the strategy depends on the investment managers, of course. Broadly speaking though, they apply fundamental analysis when considering investments. Managers of model portfolios may also utilize computer-based quantitative analysis. Technical analysis may also be applied.
Fees Under Ameriprise Financial Services
For all managed account programs, the annual wrap fee is generally 2% of managed assets. For Select Separate Account, Vista Separate Account, Investor Unified Account and Access Account programs, there is a manager fee, which ranges from 0.10% to 0.80%, and a platform fee of 0.17%. Additionally, the SPS Advisor Program has an investments and infrastructure support fee of 0.03%.
For financial planning services, fees depend on a number of factors, including your advisor’s years of experience, professional credentials, the complexity of your needs and how often you meet. The minimum annual fee is $500, though your advisor may charge more. Also, this fee is negotiable. Additionally, there is a minimum $50/month fee, which may also be higher.
What to Watch Out For
In its most recent SEC filings, Ameriprise had a total 152 disclosures. Of them, 114 involved affiliated individuals, four involved affiliated firms and 34 involved the company itself. Of the latter 34, the fines or penalities ranged from $100 to $8.5 million dollars and concerned regulatory and civil violations. You can look up an advisor on FINRA's Brokercheck.
Also worth noting: s mentioned earlier, most Ameriprise advisors are also insurance agents and brokers who receive commissions or transaction-based fees. This presents potential conflicts of interest. That said, the firm is legally bound to work in clients’ best interests.
All information was accurate as of the writing of this article.
Tips for Finding the Right Financial Advisor
- Ask how prospective advisors get paid. When they receive only fees from clients, they have less conflicts of interest than advisors who also receive commissions.
- Also ask about the advisor’s clientele profile. If you have a high net worth, you don’t want an advisor who has only a handful of clients like you. Same goes if you are on the other end of the scale. You want someone who has the experience and know-how to help people at your level - and considers you important, regardless of your asset level.
- Use SmartAsset’s free financial advisor matching tool. Simply answer a handful of questions, and the program will match you with up to three advisors in your area.