The year began with regulatory and geopolitical uncertainty. However, better economies globally and the pro-growth agenda in Washington boosted both financial markets and investor sentiment. U.S. equity markets increased nicely, and in anticipation of stronger economic growth, the U.S. Federal Reserve increased short-term interest rates. In addition, in late December, the Tax Cuts and Jobs Act became law, reducing corporate tax rates to enhance U.S. competitiveness globally.

With this backdrop, Ameriprise generated record results that reflect our consistent growth investments, our disciplined management approach and an improved operating environment. Assets under management and administration reached an all-time high of $897 billion, up 14% from the prior year.

Client net inflows into fee-based, investment advisory “wrap” accounts nearly doubled to $19.5 billion, and we continued our longstanding trend of generating leading advisor productivity.

On an adjusted operating basis (excludes a one-time, primarily non-cash $320 million charge resulting from the Tax Cuts and Jobs Act and includes the result of our annual review of insurance and annuity valuation assumptions “unlocking”):

• Net revenues increased 4% to $11.9 billion, or 5% reflecting the net impact of our 12b-1 fee change

• Earnings increased 35% to $1.9 billion with operating earnings per diluted share up 45% to $12.27 and

• Return on equity, excluding accumulated other comprehensive income, grew 1,010 basis points to 32.3%

“Ameriprise generated record results that reflect our consistent growth investments, our disciplined management approach and the improved operating environment.”

We remain focused on both near- and long-term value creation. Working closely with the Ameriprise Board of Directors, we work to ensure that our strategic plan is balanced, takes the dynamic operating environment into account and enables us to invest for long-term growth.

In fact, if you are a long-term shareholder and have owned Ameriprise common stock since 2005, your total return was 504% at the end of 2017. This is about 10 times the return of the S&P 500 Financials Index over the same time and the second-best return in the index overall.

We’re proud of our consistent record of delivering value for our clients, advisors, employees and shareholders and the leading positions we’ve built in U.S. wealth management and global asset management. And we’re positioned well to build on our momentum.

Our Advice & Wealth Management business is one of the largest in the nation. Ameriprise is the leader in financial planning in the U.S. with more Certified Financial Planner^TM professionals than any other firm, a position we’ve proudly earned and maintained for years. Our clients look to us for financial advice and guidance on one of the most important aspects of their lives — their financial security. We help address their financial needs across market cycles and their lifetimes. The personal connection between clients and their advisors, and our long-term focus on serving client needs, differentiates Ameriprise in the marketplace.

We know from our extensive consumer research that people at all life stages are seeking peace of mind, to know their assets are protected and they’re on track to achieve their financial goals. Key to our strategy is growing our retail assets and client base by serving more investors, including those with investable assets in the $500,000 to $5 million range who are a strong fit for our advice value proposition. This is a significant growth opportunity for Ameriprise.

With strong markets and engaged, productive advisors, Ameriprise client assets grew significantly in 2017 — up 17% to $560 billion, an all-time high. We’re also attracting new clients and experiencing good growth in clients with assets above $1 million.

Our advice value proposition delivered through our comprehensive Confident Retirement® approach is key to our clients’ success. We know this approach makes a meaningful difference for the clients who receive it, works well across all life stages and helps our advisors deliver distinct value for an appropriate fee. In fact, of those who experience it, 94% percent feel that the advice they received addressed their needs.

“Our clients look to us for financial advice and guidance on one of the most important aspects of their lives — their financial security. We help address their financial needs across market cycles and their lifetimes.”

To complement our personal approach and meet the evolving needs of multiple generations, we continue to invest and advance our digital, mobile and online capabilities. This includes further digitally enabling our advice experience and enhancing goal and performance tracking for clients and their advisors to understand their progress.

Importantly, information security remains a top priority and we continually invest in the people, processes and tools to safeguard our clients’ information and the firm through a multi-layered approach.

Our client experience is essential to our strong reputation. It sets us apart in the industry. In 2017, Ameriprise earned the following important awards:

• #1 in customer service

• #1 in customer loyalty

• #2 in likelihood to recommend the firm

• #1 in consumer forgiveness (likelihood of a client to forgive a firm if the firm made an error)

• #2 most trusted

We continue to invest in our advice value proposition and the Ameriprise Financial brand. Ameriprise is highly trusted and relevant, and awareness of the Ameriprise brand reached an all-time high in 2017. Our Be Brilliant.® advertising platform continues to tell the Ameriprise story in the marketplace through national TV, digital channels and social media.

Our advisor force is powerful and productive. We consistently earn high advisor satisfaction, and Ameriprise advisors have increased productivity at a higher rate than our wealth management peers for many years. In 2017, our advisors reached a new high in productivity with operating net revenue per advisor increasing 13%, excluding the net impact of our 12b-1 change.

With the strength of our advisor value proposition, Ameriprise is an attractive destination for high-quality advisors who want to serve clients with financial advice and grow their practices. 2017 was one of our best advisor recruiting years in terms of both quantity and productivity: We welcomed another 366 advisors to Ameriprise.

During the year, we also acquired Investment Professionals, Inc., an independent broker-dealer specializing in the on-site delivery of investment programs for banks, credit unions and other financial institutions. This is a new channel for Ameriprise to reach more consumers and complements our wealth management strength.

With significant growth in client assets and flows and effective expense management, we delivered very strong financial results in Advice & Wealth Management that represented 41% of our pretax operating earnings* in 2017.

Segment revenues grew 14%, adjusting for the net impact of the 12b-1 change. In addition, pretax operating margin grew substantially, up 300 basis points, ending the year at a very competitive 21.1%.

“With significant growth in client assets and flows and effective expense management, we delivered very strong financial results in Advice & Wealth Management that represented 41% of our pretax operating earnings in 2017.”

* Excludes Corporate & Other segment

As clients build wealth and enter retirement, two priorities become paramount: protecting their hard-earned assets and creating income streams throughout retirement. We’ve built our annuity and insurance businesses over decades to help clients generate lifetime retirement income, while protecting their assets and income. In this persistently low interest rate environment, the businesses are performing within expectations, and we’re benefiting from both the quality of our solutions and disciplined risk management.

Our focus in Insurance and Annuities remains on prudent growth over time as part of our diversified business. These solutions help deepen relationships with clients and contribute to our high client satisfaction and retention. We value the benefits these businesses provide and have strategically limited distribution to Ameriprise clients. As such, we devote considerable time to making it easier for our advisors and clients to incorporate RiverSource insurance and annuity solutions into their comprehensive financial plans, as appropriate. In 2017, that included enhancing our digital capabilities and accelerating insurance underwriting with robust data and risk metrics.

Given that many of our products have fee-based components, we had solid asset growth from equity market gains in 2017. In terms of sales, while we’re seeing good sales of variable annuities without living benefits, total variable annuity sales declined as they have with other providers, given advisors’ increased use of fee-based platforms. We also introduced our first fixed index annuity late in the year to further build out our product line. And in insurance, we had solid sales growth in variable universal life and universal life products.

Additionally, we continue to make progress in our direct property-casualty insurance business. Ameriprise Auto & Home is an affinity-based business recognized for its excellence in customer satisfaction. In recent years, we have significantly improved the underlying financial performance of the business. While record weather-related losses in 2017 impacted our results along with the rest of the industry, the actions we’re taking are making a difference. We continued to increase rates as well as the sophistication of our pricing, tightened underwriting standards, improved claims handling and streamlined the affinity partners we serve. We are seeing solid results and focused on maintaining our momentum.

There is a sizable long-term opportunity for Ameriprise in asset management. The industry is growing and expected to expand significantly over the next several years. Through our consistent investment and strategic initiatives, we’ve grown our asset management business — Columbia Threadneedle Investments — into a top global firm with high-performing product lines and a growing global reach.

In 2017, Asset Management assets under management grew 9% to $495 billion as equity market appreciation offset net outflows. With solid asset growth and good expense management, we delivered strong, competitive financial results while managing a significant regulatory-driven change agenda. At the same time, we continued to invest in the critical capabilities to drive future growth — including our people, capabilities, reputation and infrastructure.

Key to our success is generating consistent, competitive investment performance to individual investors and sophisticated institutions, including firms with whom we have established important strategic relationships.

We are an active manager, and our investment teams in the U.S., London and Singapore continue to be recognized. We earned more than 50 awards in 2017, including Multi-Asset Manager of the Year at the Professional Pensions Investment Awards in London. At year-end, about 70% of our funds — equities, fixed income and asset allocation — were above Lipper® medians or benchmarks for the 1-, 3- and 5-year timeframes. This strong performance is reflected in the 114 four- and five-star Morningstar-rated Columbia and Threadneedle funds® we offer globally.*

In addition to delivering consistently competitive investment performance, we advanced our multi-year project to move our operating platform to a single global model. We also focused on meeting regulatory requirements of MiFID II and the U.S. Department of Labor (DOL) fiduciary rule, while preparing for the ongoing uncertainty of the Brexit transition. We are managing regulatory change well while competing to serve more clients globally.

As we compete globally, we’re focused on gaining a greater share of retail markets in the U.S., UK, Continental Europe and Asia Pacific, as well as transitioning our global institutional business to become a Tier 1 player.

In retail, though we experienced overall net outflows in the U.S., we improved net sales of our mutual funds at our top firms. As advisors serve more clients in advisory relationships, we’re focused on providing our intermediary clients with model portfolios, multi-asset solutions and adaptive risk strategies. Importantly, we returned to retail net inflows in EMEA, a key region for us, driven by increased net sales of multi-asset and other solutions in the UK.

In the institutional business, given the large size of mandates, annual results can vary significantly, and we experienced outflows from a large sovereign client, as well as low fee insurance and other fixed income mandates. That said, we continue to see good interest in fixed income, multi-asset and risk-aware strategies, and we are working to finalize our won-not-funded business and convert our overall pipeline.

To serve more clients, we are investing to strengthen awareness of the Columbia Threadneedle Investments brand and our digital and business intelligence capabilities, as well as expanding product offerings in strategic beta in the U.S. and responsible investment globally.

In addition, we continue to acquire businesses with complementary capabilities, consistent with our strategy. In 2016, we added Emerging Global Advisors, which enhanced our ETF and strategic beta capabilities. And in 2017, we acquired Lionstone Investments, a leading U.S. real estate investment firm that broadens our offerings in alternatives, complementing our strength in UK property. Lionstone further enhances our multi-asset capabilities and added $5.4 billion in AUM. We will continue to look at complementary capabilities both in terms of investment acumen and distribution.

Overall in Asset Management, we’re taking a thoughtful approach to ensure we deliver for investors today and position ourselves for growth in the future.

Throughout the year, I speak to investors about our firm and the progress we are making. When I speak about Ameriprise as an investment opportunity, I’m speaking about our people and the strength of the Ameriprise team.

We have terrific people who care deeply about our clients, our communities and each other. We’re guided by our values — client-focused, integrity, excellence and respect — and by our long-term perspective. Ameriprise continues to be recognized for the way we do business. We also consistently earn recognition for Ameriprise as a Best Place to Work and as a military-friendly employer.

In closing, I feel very good about Ameriprise. Our diversified business is centered on our clients with complementary capabilities that benefit our clients and generate meaningful shareholder value across market cycles. We have built high-performing businesses and continue to invest to grow.

What we do for clients is unique and sought-after. We can help more individuals, small businesses and institutional investors navigate these uncertain times and maintain appropriate perspective. We have the right strategy and the right team to be successful, and we will continue to focus on executing with excellence and serving our clients’ needs.

It’s important for me to express my gratitude to all the people associated with Ameriprise Financial.

• To our clients, thank you for entrusting your goals and assets to Ameriprise. We greatly value your business and will continue to work diligently to deliver value to you and help you achieve your goals.

• To our more than 20,000 employees and advisors, thank you for your commitment, energy and enthusiasm. I appreciate all you do for our clients every day.

• To my fellow members of the Ameriprise Financial Board of Directors, thank you for your counsel and support. We all benefit from your perspective.

• And finally, to our shareholders, thank you for your trust and confidence in Ameriprise. We will continue to do all we can to reward it.

Kind regards,

James M. Cracchiolo
Chairman and Chief Executive Officer