Three Things to Know from Ameriprise's Asset Management Plans for 2013
Reported by Tommy Fernandez
Executives at Ameriprise Financial, owner of asset manager Columbia outlined an aggressive plan for asset management growth this year during the 2013 Credit Suisse Financial Services Forum.
If you look at the SeekingAlpha transcript of the forum, you'll find at least three powerful takeaways about these plans.
POINT #1: Ameriprise is Keeping the Faith With Regards to Active Management POINT #2: It's All About Advisers, Advisers, Advisers POINT #3: The Key to Growth is Going Global
Now, to elaborate on these points.
POINT #1: Ameriprise is Keeping the Faith With Regards to Active Management
At one point during the forum, Credit Suisse analyst Thomas Gallagher asked Ameriprise chairman and chief executive James Cracchiolo on whether Ameriprise needed to expand its product line beyond active equities, Cracchiolo had this to say:
I think there are a few things occurring across the industry that we're cognizant of and we'd be to looking to try to focus our resources to capitalize on. Number one is I do believe there is a greater focus on solutions, and I don't just mean an alternative per se or a hedge fund per se. I think those have grown, and will continue to have good space. But I believe institutions and even retail consumers, as our advisers are looking, they're looking for what can I generate as a return to satisfy a certain need or objective I have. I think Columbia and Threadneedle are well outfitted for that. Our managed portfolios at Threadneedle have always performed exceptionally well. Our ability to deliver solutions, as we have with our retail clientele for Columbia, is very strong. We believe that we have a complement of skills that we can build upon to increase our presence in the solution-providing area rather than just provide a mutual fund with a certain level of performance against a benchmark, so things like asset allocation, things like how do you manage credit, things like -- I think Columbia is well known and could be better known, based on its capabilities, for credit management, both for income generation and risk management. So those are capabilities that we'll be looking to bring to life. I think things like ETFs, yes, have grown and passes, but I think you're also seeing that broaden out to active ETFs, because people somewhat like the format, not just the idea that it's a passive. And so this is something that we'll invest time and energy in over time, over the number of years, as a complement. As markets more normalize, I think you may -- I always have passes as a part of that. But again, if you go back to indexing, actives always took a certain role based on more normalized market conditions, and I think part of that will come back.
POINT #2: It's All About Advisers, Advisers, Advisers
Cracchiolo had this to say about Ameriprise's interest in advisers:
Our focus for the year will be very much continuing to focus on growing the productivity of our Advice & Wealth Management business. So you see a new advertising in the market that we just launched in January with Tommy Lee Jones. You'll see a greater push and focus that we're bring to our adviser force around what we call confident retirement is really the focus of how do you deal with the baby boomers moving to retirement and give them comfort around how do you actually manage their financial future. And we're training our adviser force even in a more intricate and focused way to take advantage of that opportunity. We'll continue to recruit out there, and we'll continue to manage our expense base appropriately to deliver the margin improvements. Columbia, we have a very strong focus in twofold. One is we're looking to turn around those flows, make greater progress in the third-party distribution channels, ensure that we have the right product lineup to distribute, particularly through places like the intermediary platform with the capabilities we have, and then as important, we're starting to build more of the global capabilities. So we're putting together a combination of Threadneedle and Columbia to take advantage of what we'd see as institutional activity in the global marketplace that we think that we can get a share of. Recently, as an example, we just brought on a new Head of our Global Asset Allocation, Jeff Knight, who joined us, who has years of experience in this area and a very good reputation, and he's going to help build that business out for us.
POINT #3: The Key to Growth is Going Global
Global growth is very important to Ameriprise. Cracchiolo had this to say on the subject:
And in our Asset Management business, very clearly, we do have a global platform today that we're continuing to make more global, with the combination of Threadneedle that we have in the U.K. and Columbia here in the United States. Now over the years, we've transformed this business from a proprietary asset management, now to more of a global asset management. But we still have work to do to complete that transition and to more formally establish ourselves in the marketplace.
But here again, I believe the asset management space will continue to grow globally. I believe there is a level of consolidation that will continue to occur. I believe that there is space there for good quality companies that have good performance and good products and good distribution and can invest appropriately to take advantage of that space.
Over the years, since we acquired Columbia, we've made tremendous change to what we have and what we can deliver. We do have a good product platform today. We do have good performance. We do have a global reach with Threadneedle that has also excellent performance. But we have to bring that to life to establish ourselves in the broader distribution channels, which was third-party institutional, third-party retail, and also to have more of a global product positioning for where flows have gone.
For more information, look to SeekingAlpha transcript of the forum.