Ameriprise Recruiting Skips a Beat in Second Quarter
Ameriprise Financial’s broker recruiting efforts hit a speedbump in the last three months as the company said it added 42 experienced advisors, or around half of what it typically adds in a quarter.
By contrast, the Minneapolis-based company added 93 experienced brokers across its independent and employee brokerage channels in the first quarter and 75 in the year-ago quarter even after it had suspended in-person meetings.
The dip reflects a slowdown that has hit some regional competitors as recruiters have said a boom in advisors switching firms during the upheaval and remote-work era of the pandemic has shown some signs of subsiding. Stifel Financial and Raymond James Financial both earlier this year reported fewer recruits than typical, although they are not scheduled to report their most recent earnings until later this week.
Ameriprise, which has been an aggressive recruiter with high-end deals of over 300% to top producers for the past three years, did not specify whether the slowdown was tied more closely to its employee or franchisee channel. Its employee headcount fell 1% year-over-year to 2,116, while the independent count was up 2% to 7,943 brokers. Total headcount of 10,047 was up 2% year-over-year.
Cracchiolo acknowledged that the recruiting environment was “absolutely” competitive, but reassured analysts that the slowdown was not for lack of interest and that the “confluence” of factors, including reopening and some market volatility, is only temporary. The firm has also restarted in-person meetings with candidates and expects to see roughly 80 per quarter again, he said.
“Right now our pipeline looks really good, and we feel like we’ll get back to those numbers and maybe a little more favorable,” Cracchiolo said in response to an analyst question on recruiting.
The hiccup did not slow the firm’s overall financial results as the company posted a 56% jump in earnings to $423 million from the pandemic-afflicted $271 million in the year-ago quarter. Strong net new assets added to fee-based accounts among veteran Ameriprise advisors, market improvement and higher transaction volumes boosted revenue 27% to $1.982 billion and also raised advisor productivity.
The average broker generated $731,000 in annual revenue, up from $669,000 one year ago. Total net new assets of $9.5 billion, which came largely from “legacy” advisors rather than new recruits, marked the third consecutive quarter of $9 billion-plus in new money.
Total assets of $807 billion were up 28% from $630 billion a year ago.
Ameriprise’s Advice & Wealth Management segment margin also rose to 21.4%, a jump from 17.6% a year ago as the firm slashed expenses, although still below the mid-to-high 20% of some of its larger wirehouse competitors, including Morgan Stanley and Bank of America’s Global Wealth business.