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Annual Report 2018

2017 Annual Report

2018 Ameriprise Financial Consolidated Highlights

(In millions, except per share amounts and as noted)

 

1 This Annual Report to Shareholders contains certain non-GAAP financial measures that management believes best reflect the underlying performance of our operations. Reconciliations of non-GAAP measures to the most directly comparable GAAP measure can be found at the bottom of this page.

2 Results include the non-cash impact of unlocking, which reflects the company’s annual review of market-related inputs and model changes related to our living benefit valuation, insurance and annuity valuation assumptions relative to current experience and management expectations, and premium deficiency testing. To the extent that expectations change as a result of this review, the company updates its assumptions and models and the impact is reflected as part of annual unlocking.

3 Results exclude a one-time, primarily non-cash, negative estimated impact of $320 million in 2017, primarily related to a reduction in future tax benefits associated with the enactment of the Tax Cuts and Jobs Act.

 


Dear fellow shareholders,

Today, Ameriprise stands tall as one of the strongest financial services firms in the business — a Fortune 500 company with more than a decade of independence and a proud 120+ year legacy. We manage and administer more than $820 billion for individuals, institutions and small businesses in the United States and globally. Over the years, we have invested significantly to develop and deliver products, services and capabilities to enable highly satisfied clients and lasting relationships. We have built one of the leading advisor networks in the country and currently help more than 2 million households achieve their near- and long-term goals through economic cycles and market shifts.

2018 proved to be a more challenging year from geopolitical, economic and regulatory standpoints. Despite stronger economic growth in the U.S., investors’ early optimism eroded as concerns about rising short-term interest rates, slowing global growth, Brexit and trade tensions dominated the headlines. Each of these factors affect markets, consumers, the industry and our business.

As always, we maintain a long-term perspective and focus on serving clients’ needs comprehensively with personalized financial advice and quality investment, protection and annuities solutions. Last year, thanks to our dedicated teams, we attracted more clients and assets in our wealth management business and navigated significant industry change in asset management.

Our commitment to clients translates into excellent client satisfaction and a strong reputation in the marketplace. I’m proud to share that Ameriprise continues to be recognized with top industry credentials for the value we provide and the way our employees and financial advisors work with clients every day, which I highlight in this letter.

JAMES M. CRACCHIOLO
CHAIRMAN AND CHIEF EXECUTIVE OFFICER

“Today, Ameriprise stands tall as one of the strongest financial services firms in the business — a Fortune 500 company with more than a decade of independence and a proud 120+ year legacy.”

In addition to the value we provide clients, we also work diligently to deliver value to Ameriprise shareholders

Since our debut as a public company 13 years ago, Ameriprise common stock has been a top performer. After a strong 2017, however, our total return declined in 2018, reflecting significant equity market declines and pressure across the industry. Importantly, we were opportunistic and accelerated our share repurchase rate, given we believe Ameriprise stock is undervalued. In fact, our stock has responded well early in 2019, reflecting the resiliency of our business and further reinforcing our consistent record of delivering long-term value, investing for growth and returning capital to shareholders at attractive levels.

At Ameriprise, we take pride in our management and fiscal discipline. We operate the business prudently. Our approach is similar to how our advisors work with clients to serve and manage clients’ financial needs — with a focused plan, for the long term — managing risk and positioning ourselves to capture opportunities.

Maintaining a strong financial foundation is central to our approach. It underpins our business and includes a large excess capital position, substantial liquidity and a high-quality invested asset portfolio. Our financial position and credit ratings are strong, and we’ve never been downgraded.

Strong financial performance

In 2018, Ameriprise delivered another good year even with considerable equity market headwinds in the fourth quarter. In terms of adjusted operating results excluding the one-time, largely non-cash $320 million negative impact of tax law changes in 2017:

  • Net revenues increased 5 percent to $12.7 billion

  • Earnings grew 11 percent to $2.1 billion

  • Earnings per diluted share increased 18 percent to $14.45

  • Return on equity, excluding AOCI, remained among the highest in financial services at 36.6 percent, up from 32.3 percent a year ago

 

 

 

*Excludes Tax Act impact.

The benefits of our diversified business and integrated approach

Ameriprise is well positioned to seize a large and growing opportunity in the marketplace. With more than $44 trillion in investable assets in the U.S. alone, investors are looking for personalized advice, strong solutions and a reputable firm to help them achieve their goals. This need is large, growing and global.

“Ameriprise is well positioned to seize a large and growing opportunity in the marketplace.”

We approach this opportunity with our wealth management business as the core of our firm, complemented by well-managed asset management and insurance and annuities businesses. The extensive capabilities of our integrated model ensure we can offer a broad product suite and excellent experience to meet clients’ evolving needs and market dynamics. Unlike other firms that only manufacture or distribute products, we do both. By serving clients comprehensively, we benefit from multiple revenue streams — fee-based, spread-based, transactional and other. This allows us to leverage our intellect and resources more fully given how these businesses complement each other and help us retain client assets for the long term.

As we continue to grow Ameriprise overall, we are deepening client relationships, effectively managing risk and extending our distribution globally through Asset Management.

A powerful and growing wealth manager pursuing a large opportunity in the U.S.

Ameriprise is one of the strongest wealth managers in the industry, with a long track record of delivering high client satisfaction and steady advisor productivity growth. We’re a longstanding leader in financial planning and advice, and we have a proud history of standing by our clients.

Ameriprise is built on personal, long-term relationships. We begin by listening to our clients to gain a complete understanding of their individual goals. Then we design personalized financial plans and shape solutions to help clients benefit from our informed perspective and navigate the inevitable market changes to achieve their financial goals. As conditions change and life events occur, our advisors work closely with clients to assess their needs and adjust plans accordingly. It’s a winning formula and it’s never been more important.

Ameriprise continues to be recognized for how we work with clients and for the value we deliver. We’re a top performer for consumer trust, customer service and loyalty, as shown above. And we are a leader in the industry in terms of employee and advisor engagement — integrity, respect and client focus consistently rank as our greatest strengths.


 

The Ameriprise advice value proposition is more relevant than ever

Today, we are well positioned to serve more clients in our growing target market — investors with between $500,000 and $5 million in investable assets who value an advice relationship and have a responsible mindset.

During the year, we continued to invest significantly to deliver outstanding service and support for our clients and to help advisors grow their practices.

Our investments included:

  • Enhancing our digital and financial planning capabilities to make it even easier for clients and advisors to address their goals when, where and how they want

  • Elevating our Customer Relationship Management platform to be delivered in 2019

  • Further developing our fee-based investment advisory business in a more streamlined and customized way for clients and advisors to manage client investments

  • Taking steps to expand our banking products and services and applying to convert our national trust bank to a federal savings bank, which is proceeding as planned for a 2019 launch

 

We’re working closely with our advisors and their staff to leverage these new capabilities, including providing robust training to help them seamlessly integrate these important capabilities into their practices.

Importantly, we’re continuing to raise awareness of Ameriprise in the marketplace, telling our story of how we work with clients and the confidence we instill. The Ameriprise brand is strong and resonates with clients and consumers — brand awareness reached record levels in 2018. And we continue to build upon and extend our successful Be Brilliant.® brand platform. As part of our campaign, we launched new television advertising in 2018 and we’re introducing additional ads in 2019 that highlight the personalized, differentiated experience we deliver to clients.

 

 

We’re serving more clients in our target market than ever before, which is translating into strong retail client flows and solid growth in client activity

2018 was an excellent year for client net inflows and transactional activity:

  • Clients added more than $21 billion into our investment advisory “wrap” platforms, bringing total wrap assets to $251 billion — one of the largest fee-based platforms in the industry

  • With the spike in volatility in the fourth quarter, client cash balances grew to $28 billion, money that can be redirected to other investments

  • Advisor productivity hit an all-time high of $624,000 per advisor on a trailing 12-month basis

  • Our advisor count remained strong at more than 9,900

  • 335 experienced advisors moved their practices to Ameriprise in 2018, given the breadth of our capabilities, strong reputation and the values that underpin our firm.

 

Wealth Management delivers a record year

Our Advice & Wealth Management business had a record year in 2018. On an adjusted operating basis, revenues were up 10 percent, earnings increased 19 percent and we delivered a pretax margin of 22.4 percent — one of the top returns in the industry. Ultimately, our wealth management clients drove more than 70 percent of firm-wide revenue.

“2018 was an excellent year for client net inflows and transactional activity.”

 

 

 

 

 

RiverSource: our Insurance and Annuity businesses serve clients’ comprehensive needs

The protection and retirement income solutions we offer through RiverSource have long provided important capabilities and earnings contributions to Ameriprise. We have built these books of business over many decades, and they continue to perform well during an extended period of extremely low interest rates. Revenue and earnings results met our expectations in 2018, and we remain focused on managing these businesses prudently.

“RiverSource solutions help deepen relationships with clients and contribute to our high client satisfaction and long-term relationships.”

Our priority is to help clients understand the critical role RiverSource insurance and annuity products can play within a diversified plan — protecting what matters most and providing a reliable income stream in retirement. As advisors continued to focus on addressing clients’ needs, variable annuity sales increased year-over-year. Life insurance sales remained stable, with life insurance in force remaining relatively flat at $195 billion.

These solutions are key to our Confident Retirement approach and excellent client experience. We’re further investing in our online capabilities, strengthening our underwriting and training our advisors to appropriately consider insurance and annuity solutions for their clients.

Global Asset Management Assets Under Management

$ in billions

Data as of Dec. 31, 2018

 

Columbia Threadneedle Investments: key contributions as part of Ameriprise

Asset Management has been an important part of our diversified firm for decades. Through Columbia Threadneedle Investments, we’re a global asset manager with more than $430 billion across equities, fixed income, asset allocation and multi-asset solutions, as well as U.S. real estate and UK property.

We offer individual and institutional investors access to our capabilities through mutual funds, separate accounts, model portfolios, ETFs/strategic beta and alternative strategies. And through acquisitions, we’ve established important strategic relationships with leading wealth managers and insurers where we manage legacy assets, large insurance pools and model portfolios that complement our established third-party retail and institutional businesses.

Ultimately, we are a large player operating in a rapidly evolving industry and managing quite a bit of change. 2018 was a challenging year in terms of outflows for active managers. The market downturn in the fourth quarter, high volatility and tax-related selling accelerated outflows across asset classes and overshadowed improvements in our gross sales.

While the year presented challenges, we’re focused on executing our strategic priorities to further strengthen our products and distribution to drive profitable asset growth and improved flows across our key channels, both internationally and domestically. At the same time, we’ve managed our expense base well. We’ve kept expenses relatively flat for several years and have allocated investments to those initiatives that will help us transform the business and deliver value for investors and the firm.

 

This includes advancing key strategic priorities, including:

  • Delivering consistent, competitive investment performance to clients — our longer-term performance remains quite strong overall, but we did experience a tougher year in 2018. Currently, we’re seeing an improvement in 2019 as we expected

  • Enhancing and further developing our data capabilities both in terms of distribution and within Investments

  • Strengthening our global operating platform

  • Successfully navigating Brexit and preparing for various outcomes

  • Building on our strength in the UK and expanding in Europe with a focus on Germany, Italy and Spain

  • Growing Columbia Threadneedle brand awareness and consideration

 

“Columbia Threadneedle Investments — a global asset manager with competitive profitability.”

 

 

 

101 4-/5-star
Morningstar-rated funds globally*



90+ awards globally*

2017-2018

 

*See appendix for additional information
Thomson Reuters Lipper Awards – 2018

US/UK/Germany/Austria/
France/Netherlands/
Nordics/Hong Kong

European Investment Awards – 2018

Innovation Award for the Threadneedle European Social Bond Fund

Professional Pensions Investment Awards – 2018

Multi-Asset Manager of the Year

We’re focused on the right initiatives and earned greater market share at many of our top intermediary firms

We’re further developing our product lines, including expanding our SMA capabilities in the U.S., and strengthening relationships with key gatekeepers and earning important model wins. Within EMEA, we managed a significant change agenda that led to higher expenses in the year, including extending our fund range in Europe and the transfer of EU client assets from our OEIC funds into Luxembourgdomiciled SICAV products; evolving our research capability under MiFID II; and complying with the General Data Protection Regulation.

At the end of 2018, Columbia Threadneedle brand awareness reached record levels in the U.S. and remained strong in EMEA as our consistency advertising campaign continues to drive improved results. And, we’ve made significant progress in enhancing our operating platform to capture efficiencies, improve the client experience and support the long-term growth of our solutions approach to help individual and institutional clients achieve specific outcomes.

Given our breadth of capabilities, we see opportunity to capture market share in our core markets in strategies like large value, fixed income, international, strategic beta, risk-parity strategies and other solutions, as well as in our real asset capability.

Overall, in Asset Management, we’re managing headwinds as part of Ameriprise and we’re competing for share in a very competitive marketplace.

 

 

For our company overall, generating shareholder value with effective capital and risk management

Through our diversified business, we generate substantial free cash flow that we reinvest for growth and return to shareholders. In 2018, we returned more than $2 billion to shareholders. We increased our regular quarterly dividend 8 percent — the eleventh increase in nine years — and we increased our share repurchase rate given the decline in our share price. This level of return represented 98 percent of our 2018 adjusted operating earnings, which was the eighth consecutive year returning capital to shareholders at this level or more while maintaining more than $1 billion of excess capital.

“Our diversified business generates substantial free cash flow that we reinvest for growth and return to shareholders.”

Our capital strength reflects the ongoing, strategic mix shift we are orchestrating to have more of our earnings driven by our less-capital demanding, higher P/E businesses: Advice & Wealth Management and Asset Management. In 2018, these businesses drove 75 percent of our pretax adjusted operating earnings, compared to 64 percent in 2014. And it is reinforced by our rigorous process to identify, quantify and mitigate risk to help in our decision-making process across our businesses. As we’ve grown, we’ve continued to reinforce our strategic, proactive, integrated risk management approach, which has resulted in sustained strong balance sheet fundamentals throughout market cycles.

 

A strategic mix shift

Pretax adjusted operating earnings*

 

*Excludes Corporate & Other segment.

 

Our people and culture — the strength of Ameriprise

Throughout the year, I speak to investors about Ameriprise, our strong position and the large opportunity before us. I reinforce the strength of our people and culture as key drivers of our success and essential in delivering shareholder value. I am extremely proud to lead such a talented group of employees and advisors who work diligently to help our clients achieve their goals. Our client-centric, values-based culture guides our actions and we consistently achieve some of the highest levels of employee and advisor engagement in the industry.

Core to that engagement is the role we play in helping to advance the communities where our people live and work. Giving back is part of our culture and values, and our employees and advisors consistently demonstrate their steadfast commitment to volunteerism and giving, supporting more than 7,500 nonprofit organizations across the U.S. and internationally. Our people give generously and their participation in our annual giving campaign far exceeds national averages.

 

A values-based firm with leading engagement

Looking ahead — confident in our vision and our future

Ultimately, our vision for growth is to do more of what we do best — offering our clients comprehensive, personal advice; focused active asset management; and well-managed annuity and protection choices. Our wealth and asset management businesses are important long-term earnings drivers for the company. They complement the stability and asset-gathering capabilities of our insurance and annuity businesses, which help to deepen relationships, increase client satisfaction and support asset persistency.

Building upon and continuing to enhance the client and advisor experiences are central to our priorities. Financial services is a dynamic industry and consumers have multiple choices for their provider. For those who value advice and a personal approach, we believe Ameriprise represents a compelling choice. And for investors looking for an attractive investment opportunity, we believe Ameriprise is undervalued and we are energized about the opportunity to consistently demonstrate why.

For perspective, 2018 marked the 10-year anniversary of the global financial crisis. We’re as proud today as we were then about our ability to successfully navigate the intense market pressure while delivering for all our stakeholders — clients, advisors, employees and you, our shareholders. I raise this because the perspective is important. It’s what we do for our clients every day.

Today, U.S. and global economies, as well as company balance sheets, are in stronger positions. The need for personal advice and informed perspective continues to expand. Ameriprise is well positioned and committed to grow as a diversified firm and serve even more clients and advisors for the long term.

Thank you

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

To our clients, thank you for entrusting us with your goals and wealth. 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 to our clients, and for your tremendous energy and enthusiasm.

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

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


General Information


Executive Offices

Ameriprise Financial Center
707 2nd Avenue South
Minneapolis, MN 55474
612.671.3131

7 World Trade Center
250 Greenwich Street, Suite 3900
New York, NY 10007

Information Available to Shareholders

Copies of our company’s Annual Report on Form 10-K, proxy statement, press releases and other documents, as well as information on financial results and products and services, are available through the Ameriprise Financial website at ameriprise.com. Written copies of these materials are available without charge upon written request to the corporate secretary’s office.

Stock Exchange Listing

New York Stock Exchange
Symbol: AMP

Independent Registered Public Accounting Firm

PricewaterhouseCoopers LLP
45 South 7th Street, Suite #3400
Minneapolis, MN 55402

Transfer Agent

Broadridge Corporate Issuer
Solutions, Inc.
P.O. Box 1342
Brentwood, NY 11717
Phone: 866.337.4999
International/Toll free: 303.974.3777

Email:
shareholder@broadridge.com
Website:
shareholder.broadridge.com/amp

Annual Meeting

The 2019 Annual Meeting of Shareholders of Ameriprise Financial will be held at our Minneapolis headquarters at 707 2nd Avenue South, Minneapolis, MN 55474, on Wednesday, April 24, 2019, at 11 a.m. Central time. A written or audio transcript of the meeting will be available upon written request to the corporate secretary’s office. There will be a modest charge to defray production and mailing costs.

Shareholders

As of Feb. 15, 2019, there were 13,547 shareholders of record. Copies of the Ameriprise Financial Corporate Governance Guidelines, as well as the charters of the four standing committees of the Board of Directors and the Ameriprise Financial Global Code of Conduct, are available on the company’s website at ir.ameriprise.com. Our website also provides important information about how and when we grant share-based compensation such as stock options and restricted stock, including the schedule of grant dates for 2019. We provide a copy of our Long-Term Incentive Awards Policy on our website and explain our policy for the approval of grants on a date when the Compensation and Benefits Committee of the Board of Directors or our chairman and chief executive officer is aware of material, nonpublic information about our company or its securities. Copies of these materials are available without charge upon written request to the corporate secretary’s office.

We filed the Certifications of our chief executive officer and chief financial officer with the Securities and Exchange Commission pursuant to section 302 of the Sarbanes-Oxley Act of 2002 as exhibits 31.1 and 31.2, respectively, to our Annual Report on Form 10-K for the year ended Dec. 31, 2018.

Shareholder and Investor Inquiries

Written shareholder inquiries may be sent to:

Broadridge Corporate Issuer
Solutions, Inc.
P.O. Box 1342
Brentwood, NY 11717

or to:
Corporate Secretary’s Office
1098 Ameriprise Financial Center
Minneapolis, MN 55474

Written inquiries from the investment community should be sent to:

Investor Relations
243 Ameriprise Financial Center
Minneapolis, MN 55474

Trademarks

The following service marks of Ameriprise Financial, Inc. and its affiliates appear in this report:

Ameriprise Financial®

Be Brilliant®

Columbia Threadneedle Investments®

Confident Retirement®

RiverSource®

All other trademarks are property of their respective owners, and their use does not constitute an endorsement of Ameriprise Financial, Inc., its affiliates or subsidiaries, or its or their products or services.

 

Executive Leadership Team

James M. Cracchiolo
Chairman and Chief Executive Officer

Walter S. Berman
Executive Vice President and Chief Financial Officer

Randy C. Kupper
Executive Vice President and Chief Information Officer

Kelli Hunter Petruzillo
Executive Vice President, Human Resources

Karen Wilson Thissen
Executive Vice President and General Counsel

Deirdre D. McGraw
Executive Vice President, Marketing and Corporate Affairs

John R. Woerner
President, Insurance & Annuities and Chief Strategy Officer

Joseph E. Sweeney
President, Advice & Wealth Management
Products and Service Delivery

Neal Maglaque
President, Advice & Wealth Management
Business Development and Chief Operating Officer

William J. (Bill) Williams
Executive Vice President, Ameriprise Franchise Group

Patrick H. O’Connell
Executive Vice President, Ameriprise Advisor and Institutions Group

William F. (Ted) Truscott
Chief Executive Officer, Global Asset Management

Colin Moore
Executive Vice President, Global Chief Investment Officer

Michelle Scrimgeour
Chief Executive Officer, EMEA, Global Asset Management

Scott E. Couto
Executive Vice President, North America, Global Asset Management

Board of Directors

James M. Cracchiolo
Chairman and
Chief Executive Officer
Ameriprise Financial, Inc.

Dianne Neal Blixt
Former Executive Vice President
and Chief Financial Officer
Reynolds American, Inc.

Amy DiGeso
Former Executive Vice President
Global Human Resources
The Estée Lauder Companies Inc.

Lon R. Greenberg
Chairman Emeritus and Former
Chairman and Chief Executive Officer
UGI Corporation

Jeffrey Noddle
Former Chairman
SUPERVALU INC.

Robert F. Sharpe, Jr.
Former President
Commercial Foods and
Chief Administrative Officer
ConAgra Foods, Inc.

W. Edward Walter
Global Chief Executive Officer and Director
Urban Land Institute

Christopher J. Williams
Chief Executive Officer and Founder
The Williams Capital Group, L.P.

Performance Graph


The graphs below match Ameriprise Financial, Inc.’s cumulative total shareholder return on common stock with the cumulative total returns of the S&P 500 Index and the S&P 500 Financials Index for two time periods: five years and since Ameriprise Financial became an independent, public company in 2005. The graphs track the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) to Dec. 31, 2018.

 

Comparison of a five-year cumulative total return*
Ameriprise Financial, Inc., the S&P 500 Index and the S&P 500 Financials Index

Comparison of cumulative shareholder return since becoming an independent, public company*
Ameriprise Financial, Inc., the S&P 500 Index and the S&P 500 Financials Index


Performace Graph
Performace Graph

 

Ameriprise Financial, Inc.

S&P 500 Index

S&P 500 Financials Index


*$100 invested in stock or index, including reinvestment of dividends on Dec. 31, 2013 and Oct. 1, 2005.

Fiscal year ending Dec. 31.

The Standard & Poor's 500 Index (S&P 500® Index), an unmanaged index of common stocks, is frequently used as a general measure of market performance. The Index reflects reinvestment of all distributions and changes in market prices, but excludes brokerage commissions or other fees. The S&P 500 Financials Index measures the performance of financial components of the S&P 500 Index.

Past performance does not guarantee future results. It is not possible to invest directly in an index.

Copyright © 2019 Standard & Poor’s, a division of S&P Global. All rights reserved.

 


Appendix

This report is not a solicitation for any of the products or services mentioned. Investment products are not FDIC or otherwise federally insured, are not deposits or obligations, or guaranteed by any financial institution, and involve investment risks, including possible loss of principal and fluctuation in value.

Past performance does not guarantee future results. Actual results may vary materially from our plans, estimates and beliefs. Please review carefully the discussion captioned “Forward-Looking Statements” contained in Part II, Item 7 in our Annual Report on Form 10-K for the year ended Dec. 31, 2018.

Morningstar: Past performance does not guarantee future results. Morningstar as of 12/31/18. Columbia funds are available for purchase by U.S. customers. Out of 104 Columbia funds (Inst. shares) rated, 9 received a 5-star Overall Rating and 43 received a 4-star Overall Rating. Out of 85 Threadneedle funds (highest rated share class) rated, 11 received a 5-star Overall Rating and 38 received a 4-star Overall Rating. The Overall Morningstar Rating is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) Morningstar Rating metrics. Not all funds are available in all jurisdictions, to all investors or through all firms. For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating™ used to rank the fund against other funds in the same category. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly excess performance, without any adjustments for loads (front-end, deferred, or redemption fees), placing more emphasis on downward variations and rewarding consistent performance. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.) The Morningstar Rating™ is for class Institutional shares only; other classes may have different performance characteristics and may have different ratings.

The following describes the principal subsidiaries that conduct the financial planning, asset accumulation and income, and protection businesses of Ameriprise Financial, Inc. Columbia Mutual Funds are distributed by Columbia Management Investment Distributors, Inc., member FINRA, and managed by Columbia Management Investment Advisers, LLC. Threadneedle International Limited is an FCA- and an SEC-registered investment adviser and an affiliate of Columbia Management Investment Advisers, LLC, based in the U.K. RiverSource insurance and annuity products are issued by RiverSource Life Insurance Company and, in New York, by RiverSource Life Insurance Co. of New York, Albany, NY, and distributed by RiverSource Distributors, Inc. Auto and home insurance is underwritten by IDS Property Casualty Insurance Company, or in certain states, Ameriprise Insurance Company. Personal trust services are offered through Ameriprise National Trust Bank. Ameriprise Financial Services, Inc. Member FINRA and SIPC. Investment advisory services and products are made available through Ameriprise Financial Services, Inc., a registered investment adviser.

The Confident Retirement® approach is not a guarantee of future financial results.

Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies.

Sources: Customer ratings based on responses to a consumer survey as part of the 2018 Temkin Trust Ratings, 2018 Temkin Forgiveness Ratings, 2017 Temkin Customer Service Ratings and 2017 Temkin Group Customer Loyalty Index. See www.temkinratings.com and www.temkingroup.com for more information. With regard to our client satisfaction scores, clients can rate an advisor or practice, based on their overall satisfaction with the team or practice, on a scale of 1 to 5 (1= extremely dissatisfied to 5= extremely satisfied). Client experiences may vary and working with any Ameriprise Financial practice is not a guarantee of future financial results. Investors should not consider this rating a substitute for their own research and evaluation of a financial practice’s qualifications. Not all clients may respond to these questions, and only clients with access to the Ameriprise Secure Client Site may submit a rating. Ratings reflect an average of all client responses received between Mar. 13, 2018 and Sept. 30, 2018.

Ameriprise Financial Confident Retirement Client survey results from May 2012 through May 2018. All results are reflective of top-two box responses (strongly/somewhat agree). The Confident Retirement approach is not a guarantee of future financial results.

The Standard & Poor’s 500 Index (S&P 500® Index), an unmanaged index of common stocks, is frequently used as a general measure of market performance. The Index reflects reinvestment of all distributions and changes in market prices, but excludes brokerage commissions or other fees. The S&P 500 Financials Index measures the performance of financial components of the S&P 500 Index.

(1) Adjustments reflect the trailing twelve months’ sum of after-tax net realized investment gains/losses, net of deferred sales inducement costs (“DSIC”) and deferred acquisition costs (“DAC”) amortization, unearned revenue amortization and the reinsurance accrual; the market impact on variable annuity guaranteed benefits, net of hedges and the related DSIC and DAC amortization; the market impact on indexed universal life benefits, net of hedges and the related DAC amortization, unearned revenue amortization, and the reinsurance accrual; the market impact on fixed index annuity benefits, net of hedges and the related DAC amortization; the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments; integration/restructuring charges; and the impact of consolidating certain investment entities. After-tax is calculated using the statutory tax rate of 21% in 2018 and 35% in prior years.

(2) Amounts represent the five-point average of quarter-end balances.

(3) Adjusted operating return on equity excluding accumulated other comprehensive income/loss (AOCI) is calculated using the trailing twelve months of earnings excluding the after-tax net realized investment gains/losses, net of DSIC and DAC amortization, unearned revenue amortization and the reinsurance accrual; market impact on variable annuity guaranteed benefits, net of hedges and related DSIC and DAC amortization; the market impact on indexed universal life benefits, net of hedges and related DAC amortization, unearned revenue amortization, and the reinsurance accrual; the market impact on fixed index annuity benefits, net of hedges and the related DAC amortization; the market impact of hedges to offset interest rate changes on unrealized gains or losses for certain investments; integration/restructuring charges; the impact of consolidating certain investment entities; and discontinued operations in the numerator, and Ameriprise Financial shareholders’ equity excluding AOCI and the impact of consolidating investment entities using a five-point average of quarter-end equity in the denominator. After-tax is calculated using the statutory tax rate of 21% in 2018 and 35% in prior years.

(1) Pretax operating adjustment.

(2) Calculated using the statutory tax rate of 21% in 2018 and 35% in prior years.

(3) Amounts represent the impact of the Tax Act including remeasurement of net deferred tax assets using the lowered corporate tax rate, repatriation
tax and the tax effect of low income housing assets.