Ameriprise Financial, Inc. provides financial planning, asset management, and insurance services to individuals, businesses, and institutions. It operates through two segments, Asset Accumulation and Income, and Protection. The Asset Accumulation and Income segment offers own and other companies' mutual funds, as well as own annuities and other asset accumulation and income management products and services to retail clients through financial advisor network. It also offers annuity products through outside channels, such as banks and broker-dealer networks. This segment also serves institutional clients in the separately managed account, subadvisory, and 401(k) markets. The Protection segment offers various life insurance, disability income, and brokered insurance products through financial advisor network. It also offers personal auto and home insurance products on a direct basis to retail clients principally through strategic marketing alliances. The company also operates Ameriprise Bank, FSB in Minneapolis and Phoenix, which offers a suite of products to meet clients' borrowing, cash management, and personal trust needs. The bank offers home lending program, including mortgages, home equity loans, and lines of credit through financial advisor network. The company was founded in 1894 under the name Investors Syndicate and changed its name to Investors Diversified Services, Inc. in 1949. It further changed its name to American Express Financial Corporation in 1994 and to Ameriprise Financial, Inc. in 2005. Ameriprise Financial is headquartered in Minneapolis, Minnesota.

Financial Industry Analysis

WikiWealth.com Industry Description: The finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are banks, credit card companies, insurance companies, consumer finance companies, stock brokerages, investment funds and some government sponsored enterprises… Read More. Also see the Industry Analysis Home Page.

WikiWealth.com Industry Analysis: During economic recessions, consumers and businesses tend to cut back on expenses and investments to save money during tough economic times. This includes bank loans, raise equity or debt, general spending and many other financial activities. Less spending decreases business revenue and eventually decreases the stock prices of financial services companies. During economic recoveries, consumers have a greater desire to spend money and make business investments. Higher spending increases business revenue and eventually increases stock prices. During longer economic expansions, financial services may actually increase faster than the general market due to large investments by companies and mergers and acquisitions between companies. Consumers have more confidence in the stock market and increase stock investments and private business investments. Over-investment leads to higher inflation and higher interest rates, which make it harder to obtain money.

Financial services companies are also affected by interest rates. The return on money lent minus the expense of borrowing money equals the profits for many financial services companies. When interest rates increase, this raises the expense of borrowing money. Generally, interest rates increase near the end of the expansion phase of the business cycle to slow the potential for inflation. Interest rates are generally lowest during recessions, because inflation risk is lowest and the government wants to encourage business investments by making money relatively cheap to obtain.

¹ Investment potential (margin of safety) is a weighted average of the discounted cash flow analysis (DCF), the enterprise value (EV) market multiple analysis, and the Warren Buffett investment analysis. WikiWealth obtains 80% of their quantitative investment potential from fundamental investment analysis.
² The weighted average cost of capital (WACC) analysis for the industry is a broad representation of the WACC for each individual company. A sub-industry WACC analysis offers both stability and accuracy for each individual company.

WikiWealth.com Profit Analysis: The best way to profit from financial service stock investments is to find the most undervalued investments (Wall Street and Main Street buy ratings) during economic recessions. Those investments should be undervalued (see Wall Street Analysis on left side), and have high Main Street Common Sense investment ratings (see Main Street Analysis on right side). Interest rates are also lowest during this time period, which decreases the cost of borrowing money for financial service companies.

When an economic recovery occurs, financial stocks tend to outperform the general stock market, because consumers and businesses quickly resume spending on items such as cars or business loans they wanted, but resisted obtaining during tougher economic times. Eventually financial stocks become overvalued, because profits and stock prices increase past their fair values. During the last stages of an economic business cycle, just before a recession, it is best to sell financial stocks, because they are likely to decrease in price. Interest rates are highest at the end of recessions to fight inflation by making money for banks more expensive. Expensive (overvalued) stocks with low Main Street Common Sense ratings should be sold at any time to invest in better stocks. Two buys ratings are the best and two sell ratings are the worst possible stock investments. For more information on stock research ratings click here.

Investment Moats

Investment Moats are fundamental investing theories developed by Warren Buffett and adapted to the SWOT analysis. Investment moats are general characteristics that separate great investments from average stock investments. The wider the investment moat the better. Read more: Investment Moats. For company-specific investment moats: SWOT Analysis.

SWOT Strengths Increase Investor Moats: Below is a list of relevant industry investment characteristics, if any exist

SWOT Weaknesses Decrease Investor Moats: Below is a list of relevant industry investment characteristics, if any exist

Stock Price Triggers

Triggers were developed by WikiWealth.com to predict changes in stock price direction, which depend on events outside of the control of the company. In general, if SWOT opportunities are greater than SWOT threats, the stock price should raise; the opposite is also true. For more precise measures, examine each SWOT opportunity and threat, then rank them according to importance and timing. The more important the investment characteristic, the greater the impact on stock direction. The sooner a investment trigger may occur, the more influence it will have on stock price direction. Read more: Stock Price Triggers. For company-specific stock price triggers: SWOT Analysis.

SWOT Opportunities are Positive Stock Price Triggers: Below is a list of relevant industry investment characteristics, if any exist.

SWOT Threats are Negative Stock Price Triggers: Below is a list of relevant industry investment characteristics, if any exist.

Long Company Description (help)

Ameriprise Financial, Inc. (NYSE: AMP) is a company that offers financial advice and products. It is the successor to American Express Financial Advisors (AEFA), which was a subsidiary of the American Express Company. In 2005, American Express launched the spin-off of AEFA as an independent company. The new name came into effect August 1, 2005, and the transaction closed on September 30, 2005. James Cracchiolo is the chairman and chief executive officer of Ameriprise. The company's headquarters are in Minneapolis, Minnesota.

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 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

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.

Ameriprise Advisors

Many Ameriprise advisors are Certified Financial Planners. Ameriprise Financial Services, Inc. has the largest number of these professionals among any retail advisory force.

An Ameriprise financial advisor earns a living by charging clients for financial advice and selling products. There are three ways Ameriprise financial advisors can affiliate with Ameriprise Financial. Approximately 60% of Ameriprise financial advisors are independent contractor franchisees — they are not employed by Ameriprise Financial. They are licensed registered representatives of Ameriprise Financial and do not receive a salary from the company. About one-quarter of financial advisors are employed by Ameriprise Financial ("employee financial advisors"). The company also has associate financial advisors. These financial advisors are employed by the independent contractor franchisees.

SWOT Analysis

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