阿默普萊斯金融 (AMP) 2011 Q1 法說會逐字稿

Welcome to the first-quarter 2011 earnings call.

My name is Sandra and I will be your operator for today's call.

At this time all participants are in a listen only mode.

Later we will conduct a question and answer session.

Please note that this conference is being recorded.

I will now turn the call over to Mr.

Chad Sanner.

Mr.

Sanner, you may begin.

Thank you and welcome to the Ameriprise Financial first-quarter earnings call.

With me on the call today are Jim Cracchiolo, Chairman and CEO, and Walter Berman, Chief Financial Officer.

After their remarks we will take your questions.

During the call you will hear references to various non-GAAP financial measures, which we believe provide insight into the underlying performance of the Company's operations.

Reconciliations of non-GAAP numbers to their respective GAAP numbers can be found in today's materials available on our website.

Some of the statements that we make on this call may be forward-looking statements, reflecting management's expectations about future events and operating plans and performance.

These forward-looking statements speak only as of today's date and involve a number of risks and uncertainties.

A sample list of factors and risks that could cause actual results to be materially different from forward-looking statements can be found in today's earnings release and related presentation slides, our 2010 annual report to shareholders, and our 2010 10-K report.

We undertake no obligation to update publicly or revise these forward-looking statements.

With that I would like to turn the call over to Jim.

Good morning.

Thanks for joining us for our first-quarter earnings discussion.

This morning Walter and I will update you on our performance and then we will take your questions.

This was another strong quarter for Ameriprise Financial.

We continue to make good progress in growing our high return Advice & Wealth Management and Asset Management businesses, highlighted by record advisor productivity and client assets and by strong investment performance in fund sales.

At the same time our insurance and annuity businesses continue to generate solid returns.

For the quarter on an operating basis, and excluding the Securities America legal expenses, we reported earnings of $347 million, an increase of 54% over a year ago.

Revenues increased by 22% to $2.6 billion.

And our return on equity increased to an all-time high of 13.6% for the trailing 12 months.

Our strong financial foundation continues to contribute to our growth.

Our balance sheet and capital are among the strongest in the industry and we have the ability to return significant capital to shareholders.

In fact, during the quarter we repurchased 6.5 million shares for $395 million.

Since starting our buyback program last May we have repurchased nearly $1 billion of our stock.

Today we also announced the largest dividend increase we have ever made.

The quarterly dividend will increase 28% to $0.23 per share.

While we are focused on growing the business, we are maintaining our long-term commitment to expense control and reengineering.

We are on a run rate to achieve our reengineering targets for the year, and we will continue to use the proceeds to fund our growth and to improve the bottom line.

Overall we feel very good about the trajectory of our results and the position we're in.

Before I discuss our performance by business, I would like to give you some detail on our decisions regarding Securities America.

As you are probably aware, Securities America has been involved in a legal process related to sales of private placement securities issued by Medical Capital and Provident Shale.

Both of those companies have been accused of fraud by the SEC and are in receivership.

After careful consideration, we determined that a reasonable and expeditious solution to this unfortunate situation was in the best interest of all constituents.

The $150 million comprehensive settlement includes the $40 million previously reserved.

The net after-tax charge as we reported in the earnings release, was $77 million, which includes the settlement and related legal fees.

Our value proposition is centered on our Ameriprise branded advisor force, and that is where we will continue to focus our energy.

As a result, we intend to identify an appropriate buyer for Securities America.

Just to be clear, the sale process will not affect our commitment to complete the settlement on its current terms.

I should also note that this move will have a de minimis impact on our results.

Now I would like to talk about our segment performance.

First, Advice & Wealth Management delivered another strong quarter with operating pretax income increasing by 94% over a year ago to $99 million.

We continue to make progress in improving margins.

For the quarter the segment's pretax operating margin reached 10.8%, which is approximately 4 percentage points higher than last year.

We remain focused on improving advisor productivity and we reached our highest advisor productivity ever.

Several factors are contributing to the improvements.

First, client activity has continued its steady recovery.

Given the depth of the financial crisis, it is no surprise to us that retail clients have been reluctant to take on risk.

Now risk appetites are gradually returning as clients recognize the need to generate returns.

As a result transactional activity increased and our branded retail client assets reached an all-time high of $315 billion, highlighted by strong growth in wrap products.

We recorded wrap net inflows of $2.8 billion for the quarter, and total wrap assets reached $103 billion.

Second, the long-term work we have done to strengthen the economics of our advisor force is paying off.

We surpassed 1,000 experienced advisor recruits since we cranked up that effort the end of 2008, and those advisers are highly productive.

Many of them have joined our employee channel, which has had led to much stronger profitability in that part of the business.

Now that we have substantially reengineered the advisor force our total advisor count has stabilized.

While we will continue to experience attrition of lower producing advisers, we will also continue to bring in better producers.

Advisory retention is very strong across the force, with retention of our franchisees increasing to 94%, and with employee advisory retention reaching 87%.

The employee number represents a very large improvement.

It is up 14 percentage points in just one year.

We are also acquiring valuable clients at a better rate, both from experienced advisor recruits bringing over their clients and from client acquisition work by our advisers.

Finally, we continue to make investments in the business.

Our brand building and training efforts continue and so does our work to rollout a new industry standard brokerage platform.

The Asset Management segment also delivered a strong quarter with pretax operating income of $136 million.

Compared to a year ago revenues essentially doubled to $737 million, and the segment's adjusted pretax operating margin was 33.6%.

Next week will mark one year since we closed the Columbia transaction.

The integration remains on track and the combined business is performing very well.

Our strong performing fund lineup is generating increasing sales and we further built out the lineup during the quarter, with new absolute return funds and by acquiring active ETF capabilities.

Overall, assets under management increased to $465 billion.

Moving to flows.

We continue to experience net outflows with $2 billion in net outflows at Columbia and $3 billion at Threadneedle.

As we look into these numbers some of the trends are improving significantly.

I would like to give you some detail.

Columbia retail net outflows of $0.5 billion reflect a significant improvement over the past quarter since the acquisition.

While we still saw redemptions in fixed income, particularly in tax-exempt, we drove strong retail sales growth mainly in equities.

We distribute Columbia products in many advisor channels and we identified a number of firms that we want to provide with a strong focus.

Sales to our focus firms are especially promising.

In fact, for the quarter sales of long-term retail mutual funds were at the highest level since before we announced the acquisition.

In our domestic/institutional business net outflows in the quarter continued to come mostly from the loss of low-margin assets.

In fact, the higher-margin institutional mandates sold recently will offset revenues lost from the higher institutional outflows.

The pipeline of institutional sales continue to look promising.

Threadneedle reported retail net outflows of $0.6 billion, which was largely from increased volatility due to geopolitical events.

The Japan crises and the unrest in the Middle East have raised investors' desire for safety and caution.

As a result, redemptions increased during the period.

Sales remained consistent.

Threadneedle also had $2.4 billion in institutional net outflows, with more than half coming from expected and low-margin Zurich outflows.

The international institutional flows picture looks considerably better so far in the second quarter, with sizable mandates coming from international markets outside the UK.

Threadneedle's financial performance was impacted by higher expenses from an industrywide regulatory levy, as well as the annual enterprise valuation adjustment expense that we recognize in the first quarter of each year.

Assets under management at Threadneedle increased to $107 billion.

In general our investment performance remained strong.

Columbia has 52 four- and five-star funds out of a total of 120 that are rated by Morningstar.

The trend in domestic performance remained solid across asset classes.

At Threadneedle performance has returned to its historically strong levels.

In annuities we reported pretax operating earnings of $174 million, up 30% compared to it last year.

The business continues to perform well with continuing strong sales of new variable annuity products we introduced last year.

For the quarter we drove $347 million in net variable annuity inflows from the Ameriprise channel.

Overall net flows in this business were $104 million, reflecting expected outflows from the outside distribution channels where we have stopped sales.

Outflows from contracts sold outside the Ameriprise channel will continue.

Overall our decision to exit outside distribution of variable annuities positions us to generate better returns on capital with lower risk.

Fixed annuities continue in net outflows, which will continue as long as the interest rate environment remains unfavorable for new contracts.

The book we have continues to generate good spread earnings and good returns and asset persistency remains high.

The Protection segment produced pretax operating earnings of $106 million, which was down 10% compared with a year ago.

While industrywide sales of insurance products remain challenging, we continue to feel very comfortable with the condition of our insurance business.

Our underwriting performance has been strong, and our $192 billion book of life insurance in-force continues to provide solid recurring returns.

We have a number of initiatives underway to turn around the sales trends in life insurance products.

As our advisor force has changed through acquisition and recruiting, we brought in a lot of advisers who were not previously focused on selling insurance.

We are working with them to help them understand the products and to train them to have insurance-related conversations with their clients.

At the same time we have worked to simplify product descriptions and the process for entering into a contract.

The Auto & Home business continue to grow policy counts and premiums, driven in part by continuing strong sales through our partnership with Progressive.

Auto & Home losses and loss frequency improved sequentially and in the quarter returned to more normal levels.

However we continue to reserve for an 85% loss level in the quarter.

If losses continue to more normal levels we will be able to adjust reserves downward.

To summarize, we continue to make solid steady progress with driving higher margins for our less capital demanding businesses, and the four businesses are working in complement each other to drive growing consolidated earnings and returns.

We continue to believe we have further room to expand our returns.

At the same time can we continue to manage our financial foundation prudently.

Our balance sheet and capital positions are exceptionally strong, and we are staying true to our expense and risk management philosophies.

We are returning significant amounts of capital to shareholders, both through our share repurchase program and through our $0.05 per share increasing dividend.

Overall, this was a very good start to the year and we feel good about our ability to continue making progress.

Now I will turn it over to Walter and later we will take your questions.

Thank you, Jim.

We generated strong earnings across all measures, with reported EPS up 16% from last year, operating up 24%, and operating excluding Securities America legal expense of 59%.

The SAI legal charge was $77 million after-tax or $0.30 per share.

In addition to the legal charge we took during the quarter, as Jim said, we have made the decision to pursue a sale of SAI.

As a result, we have moved SAI results from the Advice & Wealth Management segment to the Corporate and Other segment.

Beginning in the second quarter we intend to present SAI as discontinued operations for all prior periods.

Our low-capital businesses, Advice & Wealth Management and Asset Management continue to drive our growth and earnings mix shift.

That shift, combined with prudent capital management, resulted in an operating ROE of 12.8% or 13.6% when excluding the SAI charge.

In addition, our balance sheet fundamentals remained strong in all areas.

We have substantial liquidity, a strong excess capital position, and our debt to capital ratio remains conservative.

I will go into more detail shortly.

On the next slide I will provide some detail on the quarter.

As you likely saw, we enhanced our operating earnings definition to now exclude the market impact on variable annuity guaranteed living benefits.

Operating net revenues grew 22% to $2.6 billion in the quarter, while net operating earnings, excluding the SAI expense, were $347 million, up 54%.

Operating earnings per share, excluding the SAI legal charge, increased 59% to $1.35, reflecting growth and improved margins in Advice & Wealth Management and Asset Management.

Our results were impacted by both positive and negative items, but we believe the EPS of $1.35 is a good measure that reflects the strong underlying fundamentals of our business.

We did have a tax time benefit this quarter, which brought our effective tax rate to 23.2% versus our targeted 2011 range of 26% to 28%.

We also were impacted by a regulatory levy at Threadneedle, as well as the higher G&A expense as a result of the annual Threadneedle valuation.

In addition, the first quarter had two fewer business days than in the fourth quarter of 2010, which lowered earnings by $10 million after-tax.

We continue to make progress in shifting our earnings mix to greater contributions from our low-capital businesses.

In the first quarter of 2011 these businesses generated 59% of our operating net revenues, up from 51% in the first quarter last year, and 56% from the full year 2010.

Management distribution fees in AWM and Asset Management increased 49%, driven by the Columbia acquisition, positive markets and increased client activity.

Continued strong revenue growth, combined with margin expansion in AWM and Asset Management, resulted in 46% of our operating earnings from our low-capital businesses, up 22% a year ago and 41% for the full year of 2010.

We feel good about the progress we are making, and the actions we are taking to continue this trend.

Now I will move on to our segment performance.

In Advice & Wealth Management, which no longer reflects SAI results, you can see that our PTI nearly doubled year-over-year, with net revenues increasing 19% and operating margins improving to 10.8%.

Ameriprise advisor productivity was up 23% over last year as client activity improved and assets under management increased due to market appreciation and client net inflows.

Branded client wrap assets exceeded $103 billion, with net inflows of $2.8 billion for the quarter.

This activity is in-line with precrisis levels and reflects clients shifting back to equity-based products.

Interest rates continue to negatively impact our earnings in this segment, with our brokerage cash spreads still at a low level of 46 basis points.

On a sequential basis operating earnings were also impacted by approximately $6 million due to two fewer business days than the fourth quarter of 2010.

Expenses continue to be well managed.

As we invest in the advisor business we are also realizing the benefits of our reengineering in prior periods.

On the next slide I will discuss Asset Management.

The Asset Management segment had another strong quarter, with operating net revenues doubling year-over-year and very strong PTI improvement.

Overall we saw improved net flows sequentially.

Columbia had improving retail sales and net flows, along with better institutional flows.

Threadneedle net flows were negatively impacted by the dislocation in the Middle East and Japan, as European investors took a more defensive posture with their investments, while the majority of institutional outflows continue to be from low-margin, including Zurich, accounts.

Asset Management operating earnings were also negatively impacted by $10 million sequentially due to two fewer days than in the fourth quarter of 2010.

Adjusting for this impact, as well as the Threadneedle expense items, adjusted net operating margins were 37.1% and operating margins were 20.8% compared to 33.6% and 19.7%, respectively, in the fourth quarter of 2010, excluding hedge fund performance fees.

Columbia Management integration is proceeding according to plan, and we feel very good about the business synergies we are realizing.

We realized savings of approximately $106 million since the acquisition closed, and we are on an annualized run rate of $124 million.

Integration expenses remain on track as well.

In Q1 we expensed $29 million, and since the announcement we have expensed $136 million.

Let's move to annuities.

Operating pretax income increased by 30% year-over-year.

In the quarter we modified our operating earnings definition to exclude the market impact on variable annuities guaranteed living benefits.

Our treatment is now consistent with the majority of our peers.

The guaranteed living benefit expense was $17 million in the first quarter, the same as last year.

Included in our operating results is the market impact on separate account balances or mean reversion, which was a benefit of $16 million this quarter versus $7 million last year.

The Ameriprise channel continued to generate strong sales of our new variable annuity product RAVA 5.

Net flows in this channel were $347 million.

Redemptions in the outside distribution channel were consistent with prior trends, but since we stopped sales we had net flows of approximately $250 million.

The fixed annuity book continues to experience net outflows, reflecting low client demand in the current interest rate environment.

We feel good about the business we booked, and the spread is strong at 2.6%.

Now I will discuss the Protection segment.

The life and health business continued to generate consistent results.

DI and long-term care claims are in-line with expectations, and we continue to reserve at higher levels for our UL products with secondary guarantees.

Auto & Home continued to grow with premiums increasing 5% over last year.

The aggregate loss ratio was 85.6% in the quarter, which included $8 million in higher auto liability reserves.

However, in the first quarter our reported losses and frequency have improved to the levels prior to the increase in the latter part of 2010.

We will continue to monitor our claims and re-examine our reserve levels in the second quarter.

Expenses remain well-controlled with the expense ratio at 15% for the quarter.

Aside from those items, the insurance businesses continued to generate good results.

Please turn to the next slide.

We continue to manage our financial foundation well, which has enabled us to return capital to shareholders.

During the quarter we repurchased 6.5 million shares for $395 million.

At the end of the quarter we had approximately $531 million remaining on our current authorization.

As Jim said, we also increased our dividend $.05 per share or 28% to $0.23.

We continue to hold more than $1.5 billion in excess capital, and our cash flows remained strong at $2.5 billion, with $1.5 billion of free cash.

The quality of our balance sheet also remained strong.

Our preliminary estimates of RiverSource risk-based capital ratio is above 585%, and our unrealized gain position is $1.4 billion.

Our balance sheet ratios continue to remain conservative, both in terms of leverage and coverage ratios.

Finally, our variable annuity hedge programs continued to be quite effective.

So, to summarize, we generated strong earnings in the quarter as a result of solid underlying business performance.

We continue to drive our mix toward lower capital businesses, managing our excess capital effectively and driving our operating returns to the higher end of our on average over time targets.

Our balance sheet remains strong, including our capital and liquidity positions.

We are managing our risk exposures prudently, positioning the Company for continued growth.

Now we will take your questions.

We will now begin the question-and-answer session.

(Operator Instructions).

Nigel Dally, Morgan Stanley.

The first question is just with buybacks, a substantial step-up in the level of buybacks this quarter.

Is it possible to provide some color as to whether we should expect this level of buybacks this quarter to be a good run rate as we look out over the course of the year?

I guess we can start there, then I have a follow-up.

This is Jim Cracchiolo.

We actually stepped up, as you said, the buybacks in the quarter.

We thought that was appropriate based upon the cash generation we had, the excess capital position, and what we wanted to achieve overall, including with the dividend increase.

So I think we are going to continue to be proactive in this area.

I can't say exactly that we will trendline it exactly as you saw in the first quarter, based on current economic or business circumstances on the market, but I would say that we will be at a bit higher level.

We achieved roughly about $1 billion since we announced the buyback.

And we will be going to our Board to talk about an increase to our buyback program at the end of the second quarter.

And that would be earlier than we would have normally when we asked for the original buyback approval, which was extended over two years.

All right, that is helpful.

The second question is with advisor productivity -- clearly very solid improvements this quarter.

I think you have talked in the past about when you hire veteran agents it takes time for their productivity to improve, and that has certainly been evident in the results.

But has most of that now been realized?

And if so, are we reaching a level where productivity gains are slightly being somewhat leveling off?

I would say for two reasons we would expect that we would be looking for increased productivity gains as we continue in the future for probably two or three reasons.

One is the one you just mentioned.

As people come into the network it does take some time to transfer the book to become fully productive again.

And we are still going through that maturation process.

So people who were added last year need to ramp up.

People who were two years ago are ramping up, but they have still got a little ways to grow go.

So probably when you look at hitting sort of a 2, 2.5 year cycle, they probably get closer to what their total prior production was.

So we will see ramp up for people that we previously brought on, including those that we are bringing on or brought on in the first quarter.

I would also say that we ourselves have always driven productivity improvements based upon our channel helping our advisors grow their practices.

So we are continuing to do that.

In fact, this quarter we will be conducting comprehensive training programs again throughout our network.

And helping our advisors to concentrate on areas to improve their practice management, to how to grow their book, how to acquire higher level clients, etc.

So we will continue to focus on productivity improvements.

We don't just look at, as others do particularly in the independent channel, just bringing people onboard.

We have probably the highest productivity increases against our core network of advisors on an annual basis, and that is what we will continue to focus.

Then Walter mentioned again retail activity has come back a bit more as people by continuing to get more settled and to reinvest, and so some cash has moved back from the sidelines back into products such as wrap and now annuity products, etc.

That's great.

Thanks a lot.

Jay Gelb, Barclays Capital.

I wanted to touch base on the net flow activity.

First, on Columbia -- well, I have two questions.

First on Columbia, do you anticipate that net flows could turn positive this year overall for Columbia?

Then for the Threadneedle, I think, Jim, you talked about in the opening remarks how institutional flows in the second quarter for Threadneedle could be better than the first.

Could you give us a sense of magnitude there?

First on the Columbia, I can't predict moving into a net inflow, particularly on an annual basis, but maybe on a quarterly basis.

I think it has more to do with some of the lumpiness that we may experience, again, on some of these parent sort of relationships or ex-parent relationships that we and Columbia had that may drive some lumpy outflows.

But what I could say to you is this, our trendline, particularly in retail, that are our higher margin products is trending very nicely with a significant increase in the first quarter in sales activity.

Again, we are still in a net outflow, and that is mainly due to the redemptions particularly in some of the fixed income product, but that seems to be improving, particularly as people have moved more back to equities, which is sort of one of our strong suits here.

So that could be a positive that can turn.

I can't predict the exact quarter for it.

The next thing I would say is on the institutional side, even if the outflow doesn't turn -- and again, I would say there will be some lumpiness on that and there may be some other larger contracts they do not renew -- I would say that on a revenue basis, as we said for the first quarter, that could be positive, because we are winning mandates in higher fee products in areas that we are really concentrating on.

So on a dollar volume, maybe not, but on a revenue, yes.

I think that could be a possibility as we continue to move forward.

But, again, we are building the pipeline, we are executing, we are very focused, and this will come, we think, in time.

Threadneedle, yes, Threadneedle was a bit lumpy in the quarter.

If you go back to second quarter of last year when there is the volatility in Europe, we experienced a similar thing.

Retail flows changed very quickly, and institutional mandates didn't come in immediately.

Because of it we are put on hold.

But then it ramped up later on with that pent-up demand and we got positive in the third or fourth quarter.

So I would just say that I think we experienced some of that in the first quarter.

We are seeing more mandates come in on the institutional side, as we started April.

I can't dictate what will be outflows.

Zurich, for instance, was $1.4 billion roughly of the $2 billion we mentioned.

There was also another low-margin mandate that we lost during the quarter for -- it was on a pension scheme.

So it wasn't a lot of revenue, but the dollar amounts are higher.

But we are seeing more mandates as things have settled in Japan, and people are seeing how the Middle East sort of works out.

So we will see how that goes.

Thanks, Jim.

Then quick one for Walter on the tax rate.

23% operating in 1Q.

Your guidance for the full year is 26% or 28%.

Could that guidance end up being conservative?

Well, I think it is appropriate, because we are seeing that we are anticipating a lift in PTI as it relates to the way we started the quarter.

So that is why I raised it from the 25% to 27%.

Again, we had the discrete items that took place.

We told you that we have them.

They took place in this quarter.

So I think when you do the math of it and you do on the run rate whatever way you want that you should probably anticipate that is pretty reasonable estimate.

Again, I can't narrow it any better than the 26% to 28%.

Thank you.

Andrew Kligerman, UBS Securities.

Just quickly following up on Jay's question.

And so if the tax rate was 23% and the guidance is 26% to 28%, you're staying with that, Walter, that implies that I should be modeling for at least 27% for each of the next three quarters, correct?

That is at probably the low end.

Again, if you go to the upper end of the guidance you will get into a higher -- again, it is all driven by the marginal tax rate as the profitability increases.

And then we could get some other anticipated discrete items coming through, but again, I can't tell you which quarters they are coming in.

Got it.

Now back to -- now to Securities America.

I was a little surprised that you announced publicly that it is for sale.

So just a little background data.

Can you remind me of what you originally paid for it, number one?

Number two, what is the reaction of the advisors at Securities America?

Are you having any issues with departures or anything in light of the announcement?

And thirdly, what is the interest level in acquiring that business?

Then I have a follow-up question.

I will handle a little more on the announcement side.

Walter can talk to your first question regarding what we paid or exactly what the book value.

From our perspective we think overall this would be appropriate for Securities America so they can continue to build their model.

They actually have a quite strong network of over 1,800 advisors.

Their actual advisor count went up in the first quarter from recruitment.

But they have been under attack because of this legal issue.

And with the settlement, which we think will be appropriate to resolve this issue, it should settle things down there.

This does present an opportunity for Securities America and their advisers, because I think the independents space, as you know, has attracted interest.

Some people -- one company recently went public with it.

Others are trying to put together various networks appropriate.

So this could end up being appropriate for them to continue to build what they stand for in the independent space.

So I think -- they just made the announcement.

The reason we went public with this is because we are putting together a sales process for it, and over the next week or two it will be out public, or in one sense or another through the public channel.

So we think it was appropriate for us to announce it for Securities America to actually talk to their people and their advisers.

We are looking to do this in an appropriate fashion that would be both positive for Ameriprise, as well as potentially in the way this is orchestrated for them to come out in a strong way.

So we think it could be a positive on both counts.

Walter?

Yes, on the latter one, rather than the price we [pay up] on the books right now is approximately the goodwill and intangible of approximately $60 million.

Got it.

Then just following up on the inflow/outflow question, you mentioned the lower-margin products are going out the door and higher-margin products are going in the door at both Columbia and Threadneedle.

Could you provide a little detail around what those margins are?

I think you had talked about potentially providing that down the road -- some detail on the margins.

And what products are you selling that are higher margin -- what specifically around the products that are getting those margins up?

Well, I think what I would say is, first of all, listen, we always try to keep as much business as we can, and we also try to win as much business as we can.

So even when we have redemptions it is not that we don't loose some contracts that have some higher fees, but when you look at the size of the assets that we are talking about on a net flow negative basis, they are being driven by higher asset levels for some of the lower-margin products.

Now those margins range anywhere from roughly 4, 5 BPs to 11 BPs or roughly on the low end.

And then on the high-end you are talking in the high 20s to the 40s.

The ones that we have been concentrating on, as you would imagine, would be more of areas such as some of the equity areas, particularly small mid-cap, some of the large-cap, areas such as certain debt vehicles like high yield, etc., floating rate.

So there is a number of places that you have higher margins in the particular mandates that you get based on the type of assets that you managing.

That both goes for Columbia as well as Threadneedle.

So that is where we have put a stronger focus, and that are some of the focus areas that we are marketing out there.

Does that helpful, Andrew?

Yes, it is.

Just lastly, and I will let you go to the next question, what was -- what were the sales at Threadneedle in retail?

I know you said they were constant Q over Q, so I was just curious on a breakout of that number.

Hold on one second.

Retail sales.

We don't break it out, so I don't know -- Chad, is there anything he could look at or --?

I don't think we have anything available right now.

We will follow up.

Come back to it.

Excellent.

Thanks a lot.

John Nadel, Sterne Agee.

I have a couple of quick ones on the Asset Management division.

First, Walter, you gave us an update on where you guys are to date on run rate savings, as well as expenses.

Can you just give us a sense for how much incremental savings was there in 1Q versus 4Q?

I guess I am just a little bit lost on where exactly you are.

Okay, if you look at the gross savings, on the gross savings and we had a run rate as we exited 4Q of $112 million.

In the first quarter (multiple speakers).

Exiting 4Q at $112 million.

And the first quarter went to $124 million.

That is on the run rate.

Okay, so -- okay.

And the target there was $170 million to $180 million, if I recall?

The target for the gross is $150 million to $190 million.

$150 million to $190 million, okay.

So got it.

Okay.

Then a question on the -- when distribution expenses in Asset Management this quarter, they seemed higher this quarter, if I look at it both on a percentage of average assets or even just relative to distribution fees.

Was there something that changed there that we should be aware of or was there something one-time in nature in the distribution expenses in the Asset Management division?

That was really a big delta relative to what I have been expecting.

Yes, it did go up.

And that related to when we were evaluating how Columbia handled their transfered agents.

They were netting, and we had a different approach on RiverSource so we researched it and we went to grossing up.

So what you saw now we increased revenue, increased the expense associated with that.

That was around $27 million, I think, which basically raised it.

And, again, it doesn't affect obviously the profitability.

It did affect the margin, and that would be ongoing as we go forward.

That $27 million, that is $27 million in the distribution expense line?

Yes.

How much in the revenue line?

It is basically -- it pretty much neutralizes.

It knocks (inaudible) as an average expense line that is impacted a small amount.

But the P&L impact is zero.

And we have a little offset in [every] line, but the majority is on the amount I told you.

Okay, okay, so no real bottom-line impact, but we had a mechanism to put it on the same basis.

Okay.

Right, (multiple speakers) you're going through we just evaluate it and we made that change.

Then just a quick one on Advice & Wealth Management, with Securities America now moved out of that division, it was clearly a drag on the margin.

It looks to me like it was about 100 basis points.

I guess for Jim or for Walter, should we expect that your targeted margin for that segment, that 12% target by 2012, should we expect that is now 100 basis points higher?

Well, what I would say is I think the margin on Securities America, you are 100% correct, is at a lower run a margin.

So if you take out legal fees, etc., it would be at a lower margin than what we were looking for and striving for on our branded channel.

So that would have reduced the weighted average by an amount, but Securities America is much smaller than Ameriprise's branded.

Having said that, I think the question is the 12%, yes, we would be looking for it to go up, but not necessarily -- I can't say for 2012, only because the interest rate environment, as you know, hasn't recovered yet, and people are projecting that is going to take a bit longer before rates go up.

But on the margin I would say, yes, as a targeted number.

(multiple speakers).

I understand the short end of the curve pressure.

Yes, I got it.

It is Walter.

The only thing I will add to that is when we did the calculations on the 12, obviously, Securities American margin is lower as a general rule, but it certainly has generated higher margins than you have seen.

It has been absorbing a lot of legal expense.

So its profitability is reasonably good, and so it was impactful, but it will not be that large.

As Jim said, its proportion is not that great relative to the overall AWM segment.

That is great.

That is helpful.

Just a real quick one to sneak in.

The 5 million shares that have been issued for compensation, in the last two quarters is it fair to assume that is a seasonal thing and we shouldn't be expecting that kind of issuance again until at least the fourth quarter?

The issuance, yes, but obviously when people are exchanging shares you would get an impact on that, which that happens, and that is what you saw in the fourth quarter on the options.

That was the fourth quarter.

Okay.

Part of it was also the issuance we also do on the franchisee channel for the deferred comp, that also occurs at the beginning of the year.

But the majority of it clearly is a first-quarter event.

Thank you very much, guys.

Suneet Kamath, Sanford Bernstein.

A couple of questions on the Advice & Wealth Management, if I could.

First, I acknowledge the improvements in productivity per adviser, but if I look at the branded financial plan cash sales, which you provide in your supplement, it looks like that statistic has been relatively flat, I guess, for the past couple of quarters, which suggests to me that a lot of the productivity improvement you're getting is market-based fees, as well as reducing the advisor count.

So in your prepared remarks you talked about wrap accounts.

You talked about a shift to more equity products.

I guess I'm trying to understand what the disconnect is between that activity and what we are seeing in terms of branded financial plan net cash sales, and then kind of what is your outlook for that statistic?

And when do you think that might start to show some progress?

I think there is probably a few other dynamics that are occurring that drives a little detachment in those trendlines from the past.

One is we did shift, as you guess we spoke about, from bringing in our own sort of novices and training them on planning and requiring them to do planning as every part of their new client acquisition, that drives up our level of plan count and fees.

As we transform the employee network now and brought in over 1,000 recruits, it takes us a bit longer to get them to really understand the aspects of the planning, to actually start to do financial planning as part of their business curriculum, so to speak, and their practice management.

So that is what we have been focused on, but that will be more of a gradual build.

They are interested in it.

That is the reason -- part of the reason they came over, but it is also not natural for them to all of a sudden start the relationship, or take a relationship they already have and make it a financial planning-based relationship versus adding a financial plan to it, and then under a fee structure that they feel comfortable with, based on how they actually sell today and how they charge today.

So part of the disconnect you are seeing is in the past we required a lot more and got a lot more financial planning from our novice channel on the employee side and that has changed.

But in the franchisee channel, actually, financial planning has picked up and continues to grow a bit in penetration.

Now from a fee basis, I think our advisors are also a little bit sensitive on the fee basis so far based on the market cycle, so they haven't been raising their fees.

In some cases they are, but not across necessarily across the entire channel.

So it is a combination of those factors.

But to the point you referenced, our retail activity was actually slowed down even though we actually charged financial fees through -- in the crisis, the activity under those financial plans actually slowed, and now that activity is picking up again.

So that is part of probably what you are seeing if you just look at a straight trendline.

Is that helpful?

Yes, that is helpful.

I guess I didn't appreciate the new advisors coming on, not doing as much financial planning, so I would imagine that is a considerable point of leverage, given your comments in the past about the revenue per adviser -- sorry, revenue per client being significantly higher for those that do financial planning versus those that don't.

Yes, and we are showing that to our new recruits, and also trying to help them to actually change a bit of what they do.

Now I think, again, it is slow, as you know, to change behavior and it takes a long time, but we are getting some good results for those people who did it, such that will show others what that would look like.

Got it.

Okay.

Then my second question on Advice & Wealth has to do with the products that you offer.

Clearly in the past couple of quarters you have started to roll out third-party variable annuity product.

Given this new fiduciary standard that we are learning about more and more every day, do you think that you're going to have to open up the channel a little bit more to third-party product in terms of, say, the protection side of the business where you don't currently offer third-party products or whole life insurance, as well as fixed annuities?

How should we think about that going forward?

So what I would say is, first of all, we will continue to look and explore other areas and products to put onto the network.

But in the insurance protection area we actually have a full range of competitive products on our network.

They are not wholesaled into the channel, but they are there.

Our advisors use them.

They have ability to actually pick and choose what they want from a whole bunch of different carriers.

We will look and to continue even in the annuity area to possibly down the road expand that.

Right now it is actually having an impact in a sense that people have the additional choice.

We still have very good product there with very good pricing, and so for the client end it still makes sense for them to evaluate our product against that.

But we will continue to expand that choice as we go down the line.

But we are doing this in a gradual way because we think that is appropriate.

Okay.

Then my last question is on the Columbia retail side.

I think, Jim, in your comments, and correct me if I'm wrong, I think you said 52 out of 120 funds are four- and five-star funds by Morningstar.

So my first question is that accurate?

And then second, if it is accurate, does that reflect the fund mergers that you're currently pursuing or what will that sort of 52 number, if that is the right number, look like once you're done consolidating the funds that you are in the process of merging?

Thanks.

The 52 is the correct number today of the 120 that we -- or Morningstar rated.

I don't have an exact of what -- in front of me right now, but we can get it to you, of what it would be after the mergers.

So I don't have it right in front of me, so I don't want to give you something inaccurate.

But I don't think it will materially change, but we will try to get a better number for you.

Okay, I appreciate that.

Thank you.

Thomas Gallagher, Credit Suisse.

Just one follow-up on the fund mergers.

Can you give us the approximate AUM on the funds that you're going to be closing, and talk about timing on those again?

Are those largely going to be done by June of this year?

And then also, Walter, are there -- you have talked about the overall synergy benefits.

Can you talk about are there any dissynergy costs that you are modeling in and the timing?

I will start with the dissynergies.

Yes, as we do the mergers, and which they will go through the beginning, I believe, the third quarter, you will then realize the dissynergies that we said that would occur from that standard of $20 million to $40 million, because those will be when we start realizing the majority of that.

But we are still tracking to be within the number -- actually improving on the number a little.

So that will start occurring.

And so from our standpoint we will see that through the third quarter.

But as we go to the amount that we said between the $130 million and $150 million on net synergies we will be at the upper end of the benefit on that.

Just on the AUM on the funds that are closing.

I don't have that.

Maybe we will get back to you on that, okay?

The stock mergers will be completed by the end of June.

By the end of June, okay.

Yes, mostly.

I think there may be a few (multiple speakers), but mostly by the end of June.

So I just want to understand what this practically means -- $20 million to $40 million of dissynergies costs.

I understand the gross savings side that you gave before, $150 million to $190 million.

And so are there just lost revenues of $20 million to $40 million when you shut down certain funds -- or sorry, when you merge the funds?

What exactly is coming out the $20 million to $40 million, is that a recurring lost revenue stream, is that the way to think about it?

Yes, because we get the compression impression on the revenue.

You get the lower -- with consolidating some of the funds, some of the funds we are consolidating to have lower fees.

And then also based on the scale of the funds there are some break points -- so what it is.

Now the $20 million to $40 million was all of the revenue, which included some institutional, that we would lose in the thing.

So the $20 million to $40 million is not solely due to fund mergers.

So we will try to identify that a little clearer for you.

Got it.

So if I roll forward today, Walter, you said there is $124 million of cost saves that are now run rated into 1Q.

So as we think about going forward the net impact is probably going to be modest, if I consider the upper end of the dissynergies expense of $40 million, and then I true up to the midpoint of the $150 million to $190 million, which is $170 million, which would get me to another $40 million to $50 million.

So it looks -- is it fair to say that we are not -- when you net all this out we are not going to see -- we kind of have the full benefit in this quarter that we are likely to see going forward, or am I not doing that math correctly?

No, I think we -- you are being a little conservative on that.

We anticipate that as we look -- let me start with the net.

On a net basis today the equivalent on the net of the gross $124 million is $120 million.

Therefore, as we run rate out of 2011, that number will appreciate and head towards the upper end of the $130 million to $150 million.

So there is room for additional benefits as we exit 2011 on a run rate basis.

Got it.

So you have some pickup left, but I guess the numbers I'm looking at would suggest maybe it is $10 million to $20 million, but the vast bulk of it is behind us.

I will leave it at that (multiple speakers).

Is that directionally correct?

Yes, that is a good number.

I would concentrate probably at the upper end.

Okay, if I could sneak one more in on capital.

I just want to understand the $1.5 billion plus of excess capital, can you talk about where that resides?

Is most of that in the insurance company or can you just explain where the pieces are?

Just one thing, when you say $10 million to $20 million up and Walter said the high end, Walter was giving you that the $124 million today is run rate, not that it was realized in the P&L fully yet.

Okay, I just wanted to qualify --.

(multiple speakers) you're aware of that, right (inaudible).

So, Jim, that is by the end of the quarter, but we shouldn't assume we saw that all in the quarter?

Yes.

That is correct.

That is why it is run rate.

Actually realized exception to date is 102 on that number.

Got it.

Then just on capital?

On the capital, capital is distributed throughout.

Obviously, as we reported, we have an excess of 585 RBC, so obviously this is an amount sitting in the insurance and annuities.

There is an amount sitting throughout all these subsidiaries and certainly in corporate.

So we have it, and certainly readily available as we talk about it from that standpoint.

So it is spread throughout.

But the insurance company is sitting in good position, and so is the parent, and several of the Asset Management and Advice & Wealth Management.

So well-represented across, but certainly insurance annuity has its share of excess.

Walter, do you have a variable annuity captive set up that is backing your life insurance business?

And if so, how much of a benefit is that?

No, we do not.

You do not.

Okay, thanks a lot.

John Hall, Wells Fargo.

For quite some time now we have seen assets go out of Threadneedle.

A lot of them have been a function of Zurich.

You mentioned 1.5 billion -- $1.4 billion this quarter.

How many assets are actually left with Zurich, just guess just to give us what the runway is?

We have roughly $49 billion or thereabouts -- I don't know exact, but that is probably in the vicinity of total assets.

Now the components of Zurich are broken down by what are retail contracts and things like property that are long tenured or based on as part of their individual account holdings, and then there is the owned asset part of Zurich, which is really similar to ours -- our insurance book.

And those are the ones that have the lower fees, and that you see the larger volume of outflows as they have closed books and drawn down contracts, etc.

So that is the two components.

And we know that -- we are working with Zurich to continue to keep a strong focus on their business.

But we also knew that when we purchased this there would be continued sort of outflow.

And that what we have been using is then reusing that capacity to win these other mandates.

Part of the whole reason was to diversified Threadneedle and win a lot more of intermediary, retail and institutional mandates rather than just manage the Zurich book.

So, therefore, Zurich has become less than 20%, I think, thereabouts -- 19% of the revenue today versus 49% of the assets.

Part of that revenue will continue, which is the larger part, which has to do with the retail contracts of the Zurich book.

Got it.

Of that $49 billion that you reference, what is the amount that is vulnerable low-margin assets that keeps moving off the books?

I don't have that in front of me.

But I think on the dollars it is still probably more of the majority in dollars, but not on the revenue side.

On the revenue side it becomes much smaller again.

Remember when we purchased Threadneedle the book was almost 80% in assets and more than 50% in revenues.

So now the revenues down to 19% and the assets are down to 49%.

So as we have actually grown the overall asset base of Threadneedle, it has really been now in the diversified retail assets and the other higher margin institutional mandates.

But if you look at the total of the assets, you say, well it hasn't grown that much, but the diversification and the fee basis has grown nicely.

Great, Jim.

You have done a fine job there.

On the VAs, how many variable annuities in dollars did you sell through third parties that, I guess, are now subject to withdrawal over time?

I think last year -- do you have that number of what we sold?

I think it was a little over $1 billion or so -- does that sound -- or a little less than $1 billion.

I think we will pull that out for you.

So what you see is right now you have about $230 million of outflows, so roughly [we are] slight inflows with that business on a net basis.

So slight marginal based on the market has slowed down over the last two years, etc.,

So as we actually moved to outflows we put more concentration on our channel again, so that is in nice inflows.

The margins on our business are much higher than on the outside distribution business, because the retention of those assets are longer.

The selling cost is lower, because we can sell more per wholesaler, etc., and then the return is actually much higher.

So on a net income basis we are not losing a lot on a PTI basis, but we will be picking it up nicely on return as well as less capital deployed.

Finally, the two days that we lost this quarter, can we get them back?

Sales was $760 million, just as a basis for you.

What happens is in the second quarter it will be 91 days, and then in the third and fourth quarter it will be 92 days -- 92 days.

So on a year-to-year it is the same, but it is the sequential we gave you, because in the fourth quarter it was 92 days last year.

Got it, thanks very much.

Eric Berg, RBC Capital Markets.

A couple of questions on flows and one on recruiting.

First, Jim or Walter, is it your sense from talking to the advisers that the public's anxiety about municipal bonds continues?

Is this anxiety getting worse and we are seeing this in increasing outflows in tax-exempt funds or stable or getting better?

Just what is your anecdotal sense of the level of the public's anxiety about municipal bonds?

So I would say that I don't think it is getting worse.

I think it is starting to temper a bit and improve.

I know we feel strongly that there isn't as larger issue in the muni bond.

Again, it depends on what part of the market you are playing in, there is always risk in subsets of the market.

But we're feeling pretty good about the overall muni market and its positioning.

The flows have not increased, but when you look at the first quarter, remember, this mainly occurred starting as a ramp up.

They underperformed in the fourth quarter.

Then you got some of the scary messages coming out, mainly in December timeframe that really impacts January and February, because retail, unlike institutional, don't react immediately that moment.

So that is what we saw flow through the first quarter.

I don't think it is increasing.

I think it is starting to slow.

And it hasn't been as strong a strong focus now as equities again.

So that is really, I think, where the mindset has shifted a bit.

But hopefully the muni things will settle, and maybe turn around a little bit, because there are some improved sort of spreads in that business versus currently in some of the other fixed income areas.

Second, could you offer a view, just conjecture, I guess it would be, informed conjecture, as to why these geopolitical factors that you referenced, the crisis in Japan and the crisis in the Middle East, had a more profound effect in Europe and didn't seem to affect flows nearly to the same extent, at least based on your prepared comments, in the US?

Again, this would be my opinion more than anything.

(multiple speakers).

Yes, yes.

I am just asking you to --

Just like last year, with the European issue on the debt side, it is closer to home there.

The Middle East is closer to home in Europe and the impacts that it could have in disruption to those markets.

You also had mandates coming out of the Middle East itself that was slowed in the first quarter because of some stuff.

To be very honest, Japan is -- maybe it is a more important mix to the international weighting than it is here where the US has been negative on Japan for a while.

So I think there is a combination of factors.

It seems that particularly in institutional as they move a bit quicker based on some adjustments in the international market than we see necessarily in the US, because again, the US international in the US is not as significant in the weighting of assets as it is internationally.

Finally, my question on recruiting is as follows.

I think in the past you have taken a sort of a spigot approach -- turn it on and then occasionally turn it off -- with respect to recruiting of high-priced teams and very, very senior experienced, highly productive, but expensive to acquire producers.

Where do you stand now in terms of your willingness to make such acquisitions of these higher-priced teams?

I would say that prior to 2008 we brought over a few experienced people, never high-priced teams at all.

It was more that people want to associate because they heard about us, we never proactively went out and market ourselves.

We never had a recruitment area in place that would actually be proactive in that regard, because we really concentrated on novices.

So beginning in 2008 we said we are shifting that.

We are slowing down because of how we want to drive productivity and make the employee channel more of a permanent channel.

So we did that first with the block acquisition and then we went and did it to add recruits into these offices that would become more productive offices rather than training offices.

We still today are playing more in what I would call the average production of around $300,000, not necessarily in $1 million plus [plan].

But we are finding that a number of people in the $1 million, or teams above that, are interested in who we are, and so, yes, we welcome them.

We would like them onboard, and we bring them onboard.

But I would also say that we haven't really started and then stopped it.

We started to ramp this up.

We got a bigger influx in 2009 because of the disruption that occurred before we were actually ramped up in our own recruiting.

We slowed that down only because we had to actually transfer the employees system onto a new system, and so we couldn't do both at the same time.

But now we are building the pipeline last year again.

We are concentrated on bringing people in in a consistent fashion.

We're getting good traction and good results for the levels that we are focused on.

The market has heated up a bit compared to when you're talking about 2009.

But I would also say that we are concentrated more in the probably $300,000 to range.

And then we still attract people at the $1 million, but that is not our focus as the primary.

Very helpful.

Thank you.

Alex Blostein, Goldman Sachs.

A couple more questions on flows, if that is even possible still, I guess.

On your -- on Columbia's readouts, it looks like gross inflows were probably the best ever at about $11 billion.

Jim, can you talk a little bit about the source of those inflows, how much now is coming in through your Ameriprise channel versus third party?

Then as a follow-up to that, it seemed like you guys talked in the past about the fact that some of financial advisors are not actively promoting the funds, partially because the mergers haven't been completed yet.

Is that still the case?

And do you think we should still see a little bit of a pickup in demand on the gross sales once the mergers are done?

So today I Ameriprise, when you look in the $11 billion in sales for a quarter, Ameriprise is not any longer -- when we just had RiverSource and we primarily that was our main channel of 85% -- so Ameriprise is a very important client of Columbia, one of its largest, but it is not a majority or a substantial part of that make-up today.

It is an important part as one of the key clients and one of the largest ones, but the majority of activity does come from a combination of third-party and BankAmerica's channels like U.S.

Trust.

But now third-party is becoming larger and larger as in more important.

The recovery in sales is occurring in Ameriprise, as you have seen, the pickup in sales.

So that is recovering nicely and it is starting to pick up to get back to the levels that we previously really would want from Ameriprise.

But there is still more work to do, because I think even our advisors going through this change are reacclimating to what are the funds, what are the performance, what is the mergers coming through.

So we are seeing an activity pick-up there.

And as it has refocused more to equity again, we are seeing the interest increase based on the performance of a number of those funds and factors there.

So I am hoping that while focused efforts in a number of these key businesses will continue -- we saw a nice improvement in the first quarter, we want that to continue.

So overall I would like the sales to continue to grow, and at least be -- at least strongly consistent to what I saw in the first quarter.

And I am hoping that some of the redemptions will continue to slow as things like the munis, etc., hopefully get to play out a little more.

Got you.

Then a couple for Walter.

If we go back a year, you guys talked about -- and this is going to be on the old metric, but the 25% pretax margin in Asset Management and your assumptions, I believe, you assumed 8% equity markets.

It seems like you're at the higher end of your net savings from the merger.

Equity markets are up 20% from that.

So can you tell me why we wouldn't see an upside to that 25% margin target?

Well, as you said, there are -- we are tracking.

If you look at the number, which I normalized on the GAAP basis it is almost 21% -- it is 20.8% -- so I think we are making progress.

From that standpoint the combination than would be the four factors were the market, which is certainly ahead, the synergies, which are certainly tracking; the Columbia base, and now it is a net flow, and that will be the change.

So I would say that we are on trajectory to get there.

At this stage the forecast would be over it.

I think it's premature to sit there and say.

But certainly if it continues, it should give us the capability.

Again, when we said that we put out for the timeframe, so as we extend the timeframe then the answer is, yes, it could be higher.

So we will go back and re-look at those various components, but one was also based on hitting within a certain timeframe.

Got it, and that timeframe was first quarter 2012 you guys being (multiple speakers).

Actually it was a full year --.

Full-year 2012.

We exited -- right, full year.

Got it.

Then just the last one for me.

If you look at the rate pressure across all your businesses, I think we have a decent understanding on the [book of] your cash spreads, but is there anything else being compressed due to the low rate environment?

I know maybe either in money market fee waivers or some of the cost that you're sharing with money market funds that are being distributed through your channel, or is it really just the cash spreads in the broker-dealer channel?

It is the cash, but also I think we are holding a lot more assets in a very shorter term, rather than investing them out further because of where the market is right today, Walter, that is probably having some compression on earnings.

Yes, we are having compression now on our yield that we are having, because obviously our investment rates are lower.

And so that is the other area that we are being impacted.

And I would say, obviously, it impacts the hedging to some degree because there of the lower interest rate, but the prime one is on the sweep accounts.

Okay, thanks.

Colin Devine, Citigroup.

Thanks for keeping the call going, guys.

A couple of quick questions.

With the tax benefit this quarter, the dividends received deductions is the first one.

Secondly, given, I guess, the changing focus in the securities industry and regulators on this, can you just let us know what percentage of the advisors fund sales and VA deposits were proprietary?

Lastly, because as you mentioned the BofA channel is such an important part of Columbia, how have sales been tracking through the BofA post the merger versus before?

Can you repeat the question on the taxes.

I am sorry.

This is Walter.

Okay, but your tax benefit, just the dividends received deduction that came to this quarter.

What happened was it was a discrete item was a settlement with the IRS.

That was what was the main thing -- of a prior order situation.

Okay.

It happened to do with DRD, but it was that -- referring to that, an older item that came through.

Under the DA I would say that I think there is a bit over 90% that is still RiverSource versus external.

Again, that has asked -- since we have launched that in the end of the summer, that has creeped up, but it is still over 90% that is RiverSource-based.

Then I think your last was around the Bank America.

As we mentioned to you over the last quarter, we have seen some lumpier outflows from the Bank America where their institutional client -- the bank clients that we have gotten mandates as part the relationship of the Bank America.

We saw some of those things.

We saw as Merrill Lynch was telling Balboa that contract went in December, so that was on the institutional side, so we will see those.

On the retail side, we are actually seeing a pickup again in sales in the Merrill Lynch channel, but we are seeing continued weakness in the U.S.

Trust, particularly in the muni area, because that is where there was a heavy focus for those type of clients.

I think overall, I think the U.S.

Trust channel some of the sales have not come back.

But I think sales are a bit lower in U.S.

Trust to begin with, I think, based on some changes going on there.

So it is a combination of those things.

So that is really maybe to give you a little color.

Did we answer every (multiple speakers)?

Was that it, Colin?

Okay, we are going to close then the call.

What I would like to end just with is I appreciate your continued attention to Ameriprise.

What you see and we are trying to do is give you more detail and color underlying some of the flows and some of the activity in the business of what we are seeing today.

Again, we are dealing with our business mix.

We are dealing with the environment.

We are dealing with some adjustments that will always occur, but what I would say is as you look through those last quarter, this quarter, etc., you will see a consistent focus that we have.

You can see a continued strength of our business and continued changes that we are continuing to make in that business that would drive higher returns, better margins, better sales activity, better net flows.

So that is where we are going to continue to concentrate.

We can't say every quarter based on the complexity of the businesses, all the models that you run, that everything will be exactly as you think about it going the quarter before.

But I think if you look through those adjustments you would say, hey, what we are doing, including whether it is overall tax rate, overall revenue, overall margin, profitability, the cash flow, our total cash that we generate continues to improve because it requires less to reinvest in the business.

That is why we can return more to you as shareholders and raise dividends and still have good flexibility in our capital base.

So that is what we are continuing to focus on.

We feel good about the first quarter.

We felt good about how we ended the year.

We think we are on track to what we had told you that we were looking to achieve for 2012.

I think if we can continue along this way with the environment, there will be continued improvements beyond that that we are hoping, based on re-energizing our channel with our remix of businesses, that we will give a better return to shareholders overall.

So we appreciate your time and attention.

If there is any other questions, please call Chad.

And we will try to follow up with some of the ones that you had asked for if we didn't complete the information to you.

Thank you and have a great day.

Thank you, ladies and gentlemen.

This concludes today's conference.

Thank you for participating.

You may now disconnect.