Client assets in cash products ended 2023 at twice the normal level: Ameriprise
The stock market has been surging this year, but investors had started out 2024 with a lot of money in cash products, Ameriprise executives said during the firm’s earnings call Thursday.
Cash-related holdings totaled $81.5 billion among the clients of Ameriprise advisors at the end of 2023, representing about 9 percent of the total client assets of $901 billion reported by the firm.
“It is sort of the double the amount clients are holding compared to where they used to be,” CFO Walter Berman said. “They’re getting a 5-plus [percentage] yield on it just to sit tight, unsure about the market moves … It’s not an uncomfortable thing for clients of our advisors to keep cash there.”
Of the $81.5 billion in cash-related products, more than half was in third-party money market products or brokered CDs, according to the firm. As it develops more bank products, there will be an opportunity to capture a bigger share of those client assets, Berman said.
But Ameriprise also expects that a considerable portion of the assets currently in cash will go to wrap accounts and asset allocation products as advisors and their clients seek higher returns through stock exposure.
The wealth management business has been the biggest contributor to Amerprise’s recent growth, with the $901 billion in client assets at the end of last year a record figure for the firm, up 19 percent from the $758 billion it saw in the fourth quarter of 2022. Client flows represented $53.3 billion during the full year, up 25 percent from $42.5 billion in 2022. Part of that was due to its partnership with Comerica Bank, with $15 billion among about 100 advisors from that company.
But a big part of the story is advisor productivity, or the revenue generated per advisor,
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