Full Description

Ameriprise Financial, Inc. is engaged in providing financial planning, products and services that are designed to be utilized as solutions for its clients cash and liquidity, asset accumulation, income, protection, and estate and wealth transfer needs. As of December 31, 2008, the Company had a network of more than 12,400 financial advisors and registered representatives (affiliated financial advisors). Its asset management, annuity and auto and home protection products are also distributed outside of its affiliated financial advisors, through third party advisors and affinity relationships. The Company operates in five business segments: Advice & Wealth Management; Asset Management; Annuities; Protection and Corporate & Other. Ameriprise Financial, Inc. uses two brand names for its businesses: Ameriprise Financial and RiverSource. In November 2008, the Company announced the acquisition of H&R Block Financial Advisors (HRBFA) from H&R Block, Inc. In November 2008, it completed the acquisition of J. & W. Seligman & Co.

Advice & Wealth Management

Ameriprise Financial, Inc.’s Advice & Wealth Management segment provides financial planning and advice, as well as full service brokerage and banking services, primarily to retail clients, through its affiliated financial advisors. The affiliated financial advisors utilize a diversified selection of both products to help clients meet their financial needs. It also earns net investment income on owned assets primarily from certificate and banking products. This segment earns revenues (distribution fees) for distributing products and earns intersegment revenues (distribution fees) for distributing its products and services to its retail clients. Intersegment expenses for this segment include expenses for investment management services provided by the Asset Management segment. During the year ended December 31, 2008, 34% of the Company’s revenues from external clients were attributable to its Advice & Wealth Management business. It provides its clients financial planning and brokerage services through the nationwide network of more than 12,400 affiliated financial advisors. Its network includes more than 10,500 branded advisors.

Ameriprise Financial, Inc. offers its retail and institutional clients a variety of brokerage and other investment products and services. The Ameriprise ONE Financial Account is a single integrated financial management account that combines a client's investment, banking and lending relationships. The Ameriprise ONE Financial Account enables clients to access a single cash account to fund a variety of financial transactions, including investments in mutual funds, individual securities, cash products and margin lending. Additional features of the Ameriprise ONE Financial Account include unlimited check writing with overdraft protection, credit cards, online bill payments, automated teller machine (ATM) access and a savings account.

In addition to the RiverSource Family of Funds, it offers mutual funds from more than 260 other mutual fund families on a stand-alone basis and as part of its wrap accounts to provide its clients a choice of investment products. It also provides consumer lending and Federal Deposit Insurance Corporation (FDIC) insured deposit products to its retail clients through its banking subsidiary, Ameriprise Bank. Its consumer lending products include first mortgages, home equity loans, home equity lines of credit, investment secured loans and lines of credit and unsecured loans and lines of credit. The majority of bank deposits are in the Ameriprise Personal Savings Account, which is offered in connection with the Ameriprise ONE Financial Account.

The Company provides workplace financial planning and educational programs to employees of major corporations and small businesses through its Business Alliances group. The Ameriprise Advisor Center (AAC) is a call center for remote-based sales and service. It provides support for retail customers who do not have access to or do not want a face-to-face relationship with a financial advisor. Financial consultants in the AAC provide personal service and guidance through phone-based interactions and may provide product choices in the context of the client's needs and objectives.

Asset Management

The Asset Management segment provides investment advice and investment products to retail and institutional clients. RiverSource Investments predominantly provides United States domestic products and services, and Threadneedle Investments predominantly provides international investment products and services. United States domestic retail products are primarily distributed through its Advice & Wealth Management segment and also through unaffiliated advisors. International retail products are primarily distributed through third parties. Retail products include mutual funds, variable product funds underlying insurance and annuity separate accounts, separately managed accounts and collective funds. Asset Management products are also distributed directly to institutions through an institutional sales force. Institutional asset management products include traditional asset classes separate accounts, collateralized loan obligations, hedge funds and property funds. This segment earns intersegment revenue for investment management services.

The Company offers international investment management products and services through Threadneedle Investments. Threadneedle group of companies provides investment management products and services independently from its other affiliates. The Threadneedle Investments offers a range of asset management products and services, including segregated asset management, mutual funds and hedge funds, to institutional clients, as well as to retail clients through intermediaries, banks and fund platforms in Continental Europe, the United Kingdom and the Asia-Pacific region. These services comprise most asset classes, including equities, fixed income, cash and real estate. Threadneedle also offers investment management products and services to United States investment companies and other United States institutional clients, including certain RiverSource Funds.

The Company provides investment advisory, distribution and other services to three families of mutual funds: the RiverSource, Seligman and Threadneedle mutual fund families. It provides investment management services to pension, profit-sharing, employee savings and endowment funds, accounts of large- and medium-sized businesses and governmental clients, as well as the accounts of high-net-worth individuals and smaller institutional clients, including tax-exempt and not-for-profit organizations. It also offers various fixed income and equity investment strategies for our institutional separately managed accounts clients and provides investment advice and related services to private, pooled investment vehicles organized as limited partnerships, limited liability corporations or foreign (non-United States) entities.

Annuities

The Annuities segment provides RiverSource Life variable and fixed annuity products to retail clients primarily distributed through its affiliated financial advisors and to the retail clients of unaffiliated advisors through third-party distribution. Revenues for its variable annuity products are primarily earned as fees based on underlying account balances. Revenues for its fixed annuity products are primarily earned as net investment income on assets supporting fixed account balances. It also earns net investment income on owned assets supporting reserves for immediate annuities and for certain guaranteed benefits offered with variable annuities and on capital supporting the business. Intersegment revenues for this segment reflect fees paid by the Asset Management segment for marketing support and other services provided in connection with the availability of RiverSource Funds under the variable annuity contracts. In 2008, 21% of the Company’s revenues from external clients were attributable to its Annuities business.

A variable annuity provides a contractholder with investment returns linked to underlying investment accounts of the contractholder's choice. These underlying investment options may include the RiverSource VP Funds discussed above, as well as variable portfolio funds of other companies. RiverSource variable annuity products inforce offer a fixed account investment option with guaranteed minimum interest crediting rates ranging up to 4% at December 31, 2008. RiverSource fixed annuity products provide a contractholder with cash value that increases by a fixed or indexed interest rate. RiverSource fixed annuity contracts inforce provide guaranteed minimum interest crediting rates ranging from 1.5% to 5.0% at December 31, 2008.

Protection

Ameriprise Financial, Inc. provides a variety of protection products, including life, disability income and property-casualty insurance, to address the identified protection and risk management needs of its retail clients. Life and disability income products are primarily distributed through its branded advisors. The property-casualty products are sold direct, primarily through affinity relationships. It issues insurance policies through its life insurance subsidiaries and the Property Casualty companies. In 2008, 27% of its revenues from external clients were attributable to its Protection business.

The sales of RiverSource individual life insurance in 2008, as measured by scheduled annual premiums, lump sum and excess premiums, consisted of 71% variable universal life, 22% fixed universal life and 7% traditional life. RiverSource life insurance products are variable universal life insurance policies. Variable universal life provides life insurance coverage along with investment returns linked to underlying investment accounts of the policyholder's choice, options may include RiverSource VP Funds discussed above as well as variable portfolio funds of other companies. RiverSource fixed universal life insurance products provide life insurance coverage and cash value that increases by a fixed interest rate. Term life insurance only provides a death benefit, does not build up cash value. Disability income insurance provides monthly benefits to individuals who are unable to earn income at either their occupation at time of disability (own occupation) or at any suitable occupation (any occupation) for premium payments that are guaranteed not to change. The Company offers personal auto, home and excess personal liability insurance products through IDS Property Casualty and its subsidiary, Ameriprise Insurance Company (the Property Casualty companies). Its Property Casualty companies provide personal auto, home and liability coverage to clients in 42 states and the District of Columbia.

Corporate & Other

Ameriprise Financial, Inc’s Corporate & Other segment consists of net investment income on corporate level assets, including excess capital held in RiverSource Life and other unallocated equity and other revenues from various investments, as well as unallocated corporate expenses. This segment also included non-recurring costs in 2007, associated with its separation from American Express, which were expensed in 2007.

The Company competes with Hartford, MetLife, Prudential, Lincoln Financial, Principal Financial, Nationwide, Allstate, State Farm, Fidelity, American Funds and Oppenheimer.