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Ameriprise Financial, Inc.

Type	Public (NYSE: AMP)
Founded	1894
Founder(s)	John Tappan
Headquarters	Minneapolis, Minnesota, USA
Key people	James Cracchiolo, Chairman & CEO
Industry	Financial services
Products	Investments
Website	www.ameriprise.com

Ameriprise Financial, Inc. (NYSE: AMP) is a company that offers financial advice and products. It is the successor to American Express Financial Advisors (AEFA), a former subsidiary of the American Express Company.

In 2005, American Express spun off of AEFA as an independent company. Its new name came into effect August 1, 2005, and the transaction closed on September 30, 2005.

James Cracchiolo is the current chairman and chief executive officer. The company's headquarters are in Minneapolis, Minnesota.

Contents 1 History 2 Ameriprise Advisors 3 Fee structure 4 Criticism & controversy 5 Competitors 6 See also 7 Notes 8 External links

[edit] History

Ameriprise Financial began life as Investors' Syndicate in 1894. Here are a few of the company's key milestones:

• 1894 - John Tappan founds Investors' Syndicate
• 1937 - Company assets reach $100 million
• 1940 - Investors' Syndicate enters the Mutual Fund market in partnership with Investors Mutual
• 1949 - Investors' Syndicate changes its name to Investors Diversified Services, Inc. (IDS)
• 1958 - IDS Life Insurance is created
• 1974 - the IDS Centre (now IDS Center) is opened in downtown Minneapolis, Minnesota as the company's headquarters
• 1984 - American Express completes acquisition of IDS Financial Services
• 1986 - IDS acquires Wisconsin Employers Casualty Company of Green Bay and renames it IDS Property Casualty Insurance Company
• 1994 - IDS reaches $100 billion in assets and conducts business under the American Express brand
• 2003 - American Express Financial Corporation acquires London-based Threadneedle Asset Management
• 2005 - American Express announces plans to spin off American Express Financial Corporation into an independent company
• 2005 - American Express Financial Advisors is renamed to Ameriprise Financial, Inc.
• 2006 - Ameriprise launches Ameriprise Bank, FSB
• 2008 - Ameriprise acquires H&R Block Financial Advisors for $315 Million and asset management firm J&W Seligman for $400 Million
• 2009 - Ameriprise acquires Columbia Management for $1.2 Billion from Bank of America

Ameriprise Financial is the fourth largest financial advisory firm in the United States. The company has over 12,000 financial advisors and 2.8 million clients, although less than a million are using financial advisors.^{[citation needed]} The company specializes in meeting the retirement-related financial needs of the mass affluent. Ameriprise Financial ranked sixth out of ten in overall client satisfaction in a 2007 J.D. Power & Associates survey of full-service financial advisory firms.^[1] In a 2006 survey of over 37,000 US companies, BusinessWeek ranked Ameriprise Financial as the 19th best place to launch a career.^[2] As of 6/26/2007.

[edit] Ameriprise Advisors

Ameriprise financial advisors charge clients for financial advice and selling products. There are four ways Ameriprise financial advisors can affiliate with Ameriprise Financial, Inc.

• Approximately 60% of Ameriprise financial advisors are independent contractor franchisees — they are not employed by Ameriprise Financial, Inc. They are licensed registered representatives of Ameriprise Financial and do not receive a salary from the parent company.
• About one quarter of financial advisors are employed by Ameriprise Financial ("employee financial advisors"). Ameriprise Financial Services, Inc. has the largest number of these professionals among any retail advisory force. The majority of the employee advisors work in local offices like their franchisee counterparts.
• Over 110 of the employee advisors work within the corporate office in Minneapolis as part of the Ameriprise Advisor Center (AAC). These Advisors are fully licensed Securities and Insurance professionals that have received additional training which allows them to assist clients exclusively by telephone. They are required to hold the Series 7 and Series 63 FINRA licenses, along with insurance licenses in all states they serve, and are encouraged to acquire their Chartered Retirement Planning Counselor (CRPC) professional designation from the College of Financial Planning, and are reimbursed for the cost.
• Many Ameriprise advisors are Certified Financial Planners, and the company actively encourages attaining this designation. The company also has associate Financial Advisors, employed by the independent contractor franchisees. ^[3].

[edit] Fee structure

Ameriprise Financial charges clients a flat annual fee for an on-going planning relationship.^{[citation needed]} This fee varies based on advisor experience, certifications, and the complexity of the given client's service needs.

Ameriprise Financial and its advisors receive commissions when they sell their clients mutual funds, annuities, insurance, and various other investment products. Financial planning services and investment products purchased through 'managed accounts' are not assessed a commission but rather are fee-based.

[edit] Criticism & controversy

Securities America was fined $5.4 million in 2003 for letting a broker work under a false name in its Orlando office and allegedly make bogus investments.^[4] In 2005, Ameriprise agreed to pay a $12.3 million to settle NASD charges relating to favorable treatment allegedly given to some mutual funds in exchange for brokerage business.^[5]

In mid-2005, the State of New Hampshire reached a $7.4 million settlement with American Express Financial Advisors, alleging the company had violated the law by rewarding their financial advisers for recommending underperforming in-house mutual funds to clients.^[6]

Also in 2005, Ameriprise Financial entered into a $15 million settlement with the SEC for charges of market timing. The SEC alleged that after January 2002, when American Express Financial Corporation banned market-timing, the funds still allowed shareholders to rapidly trade the funds, and that some employees rapidly traded through their 401(k) plans. The Minnesota Department of Commerce levied $2 million in fines for similar market timing violations. The National Association of Securities Dealers fined Ameriprise an additional $12.3 million for unsuitable share sales.^[7][8]

Ameriprise did not disclose this incident to the shareholders of its funds, marketed under the name RiverSource since being spun off from American Express. American Express made a disclosure in its regulatory filings, but these were seen only by American Express stockholders. Ameriprise, having become a separate company, had also not revealed which funds were timed, or the names of the people involved and the exact nature of the disciplinary action taken. Morningstar temporarily reduced the stewardship grade for Ameriprise's funds, although it did not impact the fund's overall star ratings from that firm.^[9]

In 2006, the NASD threatened to suspend the company for failing to pay an arbitration award to a former broker.^[10]

In September, 2006, Securities America, one of the brokerage units of Ameriprise, reached a $16.3 million settlement with a group of Exxon Mobil Corp. retirees for failing to supervise an associated broker.^[11][12]

On July 11, 2007, in the first case of its kind, the NASD fined Securities America $375,000 for improperly sharing directed brokerage commissions from a mutual fund company with a former Securities America broker in the Los Angeles area. The NASD action was a first in the area of directed brokerage commissions; Securities America directed brokerage specifically for the benefit of an individual broker.^[13]

Another NASD arbitration panel awarded $9.3 million to three retired American Airlines pilots against Securities America and a formerly associated broker for allegedly mishandling their savings. Other airline pilots have arbitration claims pending.^[14]

Between April and August 2009, the company website was compromised because of bugs exploited using simple well-known XSS techniques. ^[15]

[edit] Competitors

• John Hancock Financial Services
• Edward Jones Investments
• T. Rowe Price
• The Charles Schwab Corporation
• Merrill Lynch
• Morgan Stanley
• Linsco/Private Ledger (LPL)
• The Vanguard Group
• American Century Investments
• E*TRADE
• Scottrade
• Fidelity Investments

[edit] See also

• American Express
• RiverSource

[edit] Notes

[edit] External links

• Ameriprise Financial - Official Site
• Ameriprise Investor Relations
• A small group of historical corporate records of IDS are available for research use at the Minnesota Historical Society.

• FINRA Brokercheck Page
• JD Power ranking of online brokers
• "Financial fact sheet and history". Ameriprise. http://www.ameriprise.com/amp/global/about-ameriprise/key-facts.asp. 
• Ameriprise Financial (October 3, 2006). "2006 Ameriprise Financial Completes First Year as an Independent, Public Company". Press release. http://www.ameriprise.com/amp/global/press-center/press-release-84.asp. 
• NASD (October 26, 2005). "NASD Fines Ameriprise Financial Services, Inc. $500,000 for Supervisory Violations in 529 College Savings Plan Sales". Press release. http://www.nasd.com/PressRoom/NewsReleases/2005NewsReleases/NASDW_015319. 
• Ameriprise Financial (May 25, 2005). "Ameriprise Financial Chosen as New Name for American Express Financial Advisors". Press release. http://www.ameriprise.com/amp/global/press-center/press-release-1.asp. 
• Ameriprise Financial (February 1, 2005). "American Express to Spin Off Financial Advisors Business to Shareholders". Press release. http://www.ameriprise.com/amp/global/press-center/press-release-8.asp. 

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