Ameriprise Financial
A durable advice franchise compounding cash at elite returns
Ameriprise combines a high‑touch, advisor‑led wealth platform with a focused active asset manager and a disciplined insurance block. The firm exited Q2 2025 at a record 1.6 trillion dollars of client assets, a 27 percent adjusted operating margin, and roughly 52 percent adjusted ROE excluding AOCI on a trailing twelve‑month basis.
Management highlights a consistent 90 percent free cash flow conversion, robust excess capital and liquidity, and continued mix shift to fee‑based wrap accounts.
Financially, the company’s engine is Advice & Wealth Management, which generated best‑in‑class 29 percent pretax operating margins in Q2 2025 with client assets up 11 percent year over year to 1.1 trillion dollars.
Asset Management ran at a 39 percent margin but saw modest net outflows, while Retirement & Protection produced steady earnings with an estimated RBC ratio of 567 percent and 99 percent hedge effectiveness.
Ameriprise returned 3.0 billion dollars to owners over the last twelve months to June 30, 2025, including 2.4 billion dollars of buybacks and 0.6 billion dollars of dividends. Credit ratings remain investment grade (A‑/A3), and parent liquidity and excess capital are strong.
Risks revolve around market sensitivity, fee compression, advisor recruiting costs, episodic asset management outflows and regulation. Still, Ameriprise’s sticky advisor‑client relationships, scaled advice platform, and owner‑oriented capital return create a durable model with attractive free cash flow economics.
On our preferred TTM free cash flow lens, we estimate about 33 dollars per share of FCF and set a fair multiple of 14 times, implying a fair value near 460 dollars per share. We would seek a margin‑of‑safety entry below roughly 12 to 13 times FCF.
Does Ameriprise Financial have a strong competitive moat?
Ameriprise’s moat is primarily switching costs and brand/trust embedded in advisor‑client relationships, reinforced by a scaled, tech‑enabled advice platform and integrated product shelf (banking, annuities, active funds).
The firm’s 10,000+ advisor network and rising wrap penetration create persistency and cross‑sell that are hard for smaller RIAs to replicate at similar unit economics. Efficient scale in U.S. mass‑affluent advice, plus recognized service quality (J.D. Power certifications), underpin durability.
Offsets: fee compression from low‑cost platforms, advisor recruiting competition, and secular challenges in active asset management (periodic outflows). Net, we view an above‑average but not impregnable moat, with the advice franchise strengthening over time via technology and data.
Does Ameriprise Financial have pricing power in its industry?
Ameriprise benefits from perceived value in holistic planning and advice rather than pure price.
Advice fees and asset‑based economics have held up, evidenced by a 27 percent consolidated adjusted operating margin and 29 percent pretax margin in Advice & Wealth for Q2 2025. Still, headline fee rates face industry pressure from passive/robo options, custodial pricing, and scrutiny of advisor payouts.
Asset Management fee rates (~46 bps) are stable but net flows can fluctuate. We see moderate pricing power sustained by service quality and outcomes, more so than by product scarcity.
How predictable is Ameriprise Financial's business?
Revenue and earnings are anchored by recurring, asset‑based fees on 1.6 trillion dollars of client assets, but are still market‑sensitive. The business mix is diversified across advice, asset management and protection, which dampens but does not eliminate cyclicality.
TTM adjusted operating EPS growth and strong ROE illustrate steady compounding, while Wealth Management wrap flows and advisor productivity add visibility. Asset Management had net outflows in Q2 2025 and interest‑rate resets reduced cash earnings, highlighting external dependencies.
Overall predictability is good for a market‑exposed financial, supported by scale and retention.
Is Ameriprise Financial financially strong?
Balance sheet quality is strong: investment‑grade ratings (S&P A‑, Moody’s A3), substantial parent liquidity and excess capital, and disciplined debt levels. Insurance capital is robust with an estimated 567 percent RBC and hedge effectiveness near 99 percent.
At Dec. 31, 2024, long‑term parent debt was approximately 2.85 billion dollars (ex‑CIE), and total long‑term debt including CIEs was 5.27 billion dollars; Q2 2025 parent long‑term debt was about 3.08 billion dollars with total long‑term debt 5.81 billion dollars.
Management reports 2.1 billion dollars holding‑company liquidity and 2.3 billion dollars excess capital. These metrics support resilience through downturns.
How effective is Ameriprise Financial's capital allocation strategy?
Ameriprise has an exemplary record of returning capital while investing for growth. TTM capital returned through June 30, 2025 was 3.0 billion dollars (2.4 billion dollars buybacks, 0.6 billion dollars dividends), and share count fell 22 percent over five years as the dividend was raised regularly.
Management targets ~80 percent+ of earnings returned over time, supported by ~90 percent free cash flow conversion. Opportunistic M&A has been disciplined (e.g., BMO EMEA asset management integration) and internal reinvestment is focused on advisor tech, AI and client experience.
A new 4.5 billion dollars repurchase authorization through June 2027 adds visibility.
Does Ameriprise Financial have high-quality management?
Chairman and CEO Jim Cracchiolo has led the company since the 2005 spinout, compounding intrinsic value with consistent execution, expense discipline and astute capital returns.
The team communicates clear financial targets, emphasizes ROE and FCF, and has navigated multiple cycles while improving mix toward fee‑based advice and high‑margin asset management. Operating rigor shows in steady margins and high returns, with credible investor materials and transparent non‑GAAP reconciliations.
Recognition for client and advisor service further evidences cultural strength.
Is Ameriprise Financial a quality company?
Ameriprise Financial is a good quality company with a quality score of 86/100
- Advice & Wealth is the compounding core: 29 percent pretax margin, rising wrap assets and double‑digit advisor productivity with record client assets.
- Consistent 90 percent+ free cash flow conversion and heavy, well‑timed repurchases reduced share count 22 percent over five years; 3.0 billion dollars returned in the last twelve months.
- High ROE with conservative balance sheet: adjusted ROE ~52 percent, A‑/A3 ratings, strong parent liquidity and 2.3 billion dollars excess capital; RiverSource RBC ~567 percent.
- Asset Management profitability remains strong but faces net outflow headwinds; watch fee pressure and flows as secular passive adoption persists.
- Fair value anchored on TTM FCF per share ~33 and a 14x fair multiple, targeting an FCF yield ~7 percent versus a ~4.1 percent 10‑year risk‑free rate.
What is the fair value of Ameriprise Financial stock?
Is Ameriprise Financial a good investment at $510?
The following analysis is provided for informational and educational purposes only. It does not constitute financial advice, investment advice, or a recommendation to buy or sell any security. The opinions expressed are based on publicly available information and historical data. Beanvest and its contributors may hold positions in the securities mentioned. Investors should conduct their own due diligence or consult a licensed financial advisor before making any investment decision.