Ameriprise makes headway in bank broker market, Cracchiolo says

Ameriprise Financial Inc. is gaining traction in the competitive market of working with brokers and financial advisers employed by banks and credit unions. Ameriprise entered the bank broker business four years ago when it bought Investment Professionals Inc., an independent broker-dealer based in San Antonio with 200 registered reps and advisers.

Banks often seek to mitigate their exposure to risks associated with securities transactions and investment advice by arranging for an outside broker-dealer like Ameriprise to supervise that business. Raymond James Financial Inc., LPL Financial and Cetera Financial Group have had established bank and credit union broker businesses for years.

The broker-dealer handles brokerage and securities sales, while the bank or credit union deals with the client-facing part of the business.

Ameriprise has dubbed its new unit the Ameriprise Financial Institutions Group.

The company has seen external recruitment pick up again as it moves from virtual meetings back to to face-to-face meetings, said CEO James Cracchiolo. Recruiting at large broker-dealers was difficult last year as a result of the limitations on travel and meetings caused by Covid-19.

Ameriprise reported a total of 10,073 financial advisers at the end of September, an increase of 168, or 1.7%, compared to the same period last year. However, it added a net total of 26 advisers during the third quarter, which can be a slow time for recruiting due to the summer months.

But the new financial institutions group is gaining traction, Cracchiolo said, speaking to analysts Wednesday about third-quarter earnings.

"It took us a little while to integrate [Ameriprise Financial Institutions Group] into our platforms and capabilities, and now we’re adding new bank partners and advisers to those partners," he said. "It’s actually taking shape kind of nicely for us and we think there’s a good growth path forward on that."

It's not clear how many of the new Ameriprise advisers were bank brokers, as the company did not provide that information. But there has been some movement. In September, Ameriprise said it had recruited four financial advisers in Texas managing more than $800 million in combined assets to its bank group; the advisers came from a variety of firms and were affiliated with Third Coast Bank SSB.

Meanwhile, Ameriprise's advice and wealth management business, like those of its competitors, saw strong results for the third quarter as the broad stock market continued to hit new highs. The company's wealth management business Tuesday reported third-quarter pretax adjusted operating earnings of $459 million, an increase of 43%.

That jump was driven "by robust client net flows, higher transactional activity, market appreciation and disciplined expense management," according to Ameriprise.