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Ameriprise Financial, Inc. (AMP)
Goldman Sachs US Financial Services Conference 2011
December 07, 2011 10:50 a.m. ET
James Cracchiolo - Chairman and CEO
Walter Berman - EVP and CFO
Alexander Blostein - Goldman Sachs & Co.
Alexander Blostein - Goldman Sachs & Co.
Previous Statements by AMP
» Ameriprise Financial's Analyst Day Call Transcript
» Ameriprise Financial's CEO Discusses Q3 2011 Results - Earnings Call Transcript
» Ameriprise Financial's CEO Discusses Q2 2011 Results - Earnings Call Transcript
Ameriprise continues to be a bit of a unique company in our coverage universe. The firm has successfully transitioned itself from pretty much an insurance company into a better balanced business with financial advisory, asset management, annuities and insurance now comprising about a quarter of the business each.
That said, it still feels like the stock hasn’t found its home from investor coverage perspective which we continue to think creates an opportunity for investors.
Meanwhile the business mix continues to enable Ameriprise to pursue a significant return of capital. I think we saw some of that today with the company increasing its dividend by 22%. If you look on a year-to-date basis, Ameriprise is able to return 12% of its daily average market cap this year and this is probably going to be one of the largest among financial services. And if we’re looking out into next year, the significant free cash flow and the capital generation will probably enable Ameriprise to do something similar looking out into next year.
So, with that, I want to turn over to Jim for a few opening remarks. But we’ll try to keep the presentation more on a fireside format. So plenty of room for questions.
Thank you, Alex. What I’d like to do is, Alex would like me to spend little more time on (indiscernible) Q&A. We just held our financial community meeting and there is a documents that you will find on the web, if you weren’t at the meeting. What we try to do is put a little condensed version just to introduce some people that might not have seen it, to give you a little better overview so that we can actually talk to some of the things that you might be interested in once you have a little more context for it.
So let me begin, and let me just say you can read our disclosure statements. I really want to introduce that there are a few things that we’re thinking about as we move forward. And it’s really based on the strategy we put in place when we became a public company.
We executed, as Alex said, a major transformation from how our company generated our earnings to where we are today. And it’s pretty significant, and I’ll talk to that in a few moments. But very important as we move forward, we think we can continue to build upon that foundation and very critically, there are a few number of significant things occurring beyond what we see today. So we have a very difficult political climate, very difficult market climate and understanding that we might be in a slow growth environment today.
But if you look past that, you can see some very significant secular growth trends occurring that we are right at the center of that we can actually capitalize on. And our model is, I think, much more valuable than people are thinking at this point. Because if we look at some of the segments and I think we’re unvalued from that perspective. But if you look at this, the totality of the company as a significant retail player in this particular center of space, I think there is a lot of opportunity for the company to be revalued.
With that, I think there is an opportunity for us to continue to create the type of value that we created since we became public. So if you look at the company today, we are a diversified retail financial services player. We really focus on the mass affluent population that continues to grow.
We have established a brand out there in the marketplace that is trusted today and going through the financial crisis, the growing awareness of our company and the way we actually navigated that crisis, and how we’re actually appealing to the consumer today is very strong and one that can continue to take ground.
We also have a very strong growing wealth management business. And I will give you some of the stats but as a public company really focused on this business, we’re one of the few players out there that have the ability to continue to take ground and actually as an independent company should be looked at as a key asset for someone to invest in.
We also have transformed ourselves now into a large global asset manager, very different than the past through the combination of acquisitions and re-establishing us as a more integrated company today. And our annuity and protection business, unlike other players in this market, we only sell and develop that product for our retail client that has very good consumer behaviour, very good planning for retirement type of behaviour. So our assets stay with us longer. We have a better risk profile and the behaviour of the clients is much stronger and so we can generate very strong returns there.
And overall the company is stronger than ever before. As Alex mentioned to you, we’ve been able to return a good amount of capital to our shareholders, raise our dividend. We have a good free cash flow that’s continuing to grow. And we have the ability and flexibility both to navigate as well as further invest.