Ameriprise Financial (AMP) released its Q1'26 Earnings late last week (see call transcript here, where CEO Jim Cracchiolo comments, "Our cash business remained stable with nearly $30 billion in sweep balances. As you saw, our advisers again generated meaningful productivity and revenue growth with productivity increasing another 10% in the quarter to a record $1.2 million per adviser. Our strategy remains grounded in organic growth, built, not bought. Advisers consistently value Ameriprise for the depth of our value proposition and the strength of our partnership."
CFO Walter Berman explains, "Let's turn to Wealth Management financials.... Adjusted operating net revenues increased 14% to $3.2 billion. The core distribution business is performing well given the value of our planning model and the multiple touch points we have with the client to meet their needs holistically. Our fee-based and transaction revenues remained quite strong, increasing 17%, benefiting from growth in client assets and higher activity levels. In addition, our bank revenues increased 6% from business growth, including the expansion of our lending products, while revenues from cash sweep and certificates declined."
He continues, "Pretax adjusted operating earnings increased 20% to $951 million with continued strong contribution from core distribution and core cash earnings.... Bank earnings grew 6% in the quarter, while certificate earnings declined. In total, core cash earnings were essentially flat from a year ago. We continue to take actions to build the bank portfolio in a way that supports stable earnings contributions going forward. The overall bank has a yield of 4.6% with a 4-year duration with now only 7% of portfolio on the floating rate securities. In the quarter, new purchases at the bank were $1.9 billion at a yield of 5% with a 4.1 year duration. Last, our aggregate margins remained excellent at 30%, up from 28% a year ago. Underlying that, our core distribution margin is over 20%, with a solid contribution from cash."
Berman says, "Total client cash of $86 billion was essentially flat year-over-year and sequentially. Bank assets increased 6% year-over-year to $25.5 billion, with the bank representing a stable source of earnings going forward. Cash sweep balances decreased slightly to $29.4 billion compared to $29.9 billion in the prior quarter, which is consistent with the seasonal tax pattern we would expect to see."
He adds, "Certificate balances declined to $7.6 billion from $8.2 billion in the prior quarter, given the interest rate environment. We continue to have elevated cash balances in third-party money market funds at nearly $48 billion. We have seen that decline for the first time in January and February. But with the volatility later in the quarter, we saw cash levels build modestly again. This remains an important opportunity when rates decline to see these cash balances deployed into other products on the platform."
During the Question-and-Answer Session, Brennan Hawken of BMO Capital Markets asks, "There's a lot of focus within the wealth space on the cash and whether or not these AI tools are going to allow for optimization of cash. It's not a huge central feature for you guys in your business model. But how are you thinking about that as you move forward? I know you've got the bank as part of the strategy now. But have you considered looking at some of these tools within your own network? And how are you considering that development that's likely to come down the pike?"
Cracchiolo responds, "Good question. So first and foremost, and I think Walter tried to give you some further information of the cash contribution as we looked at it for this quarter as we reported. And you can see, cash adds a certain amount to our margin, but the bulk of our earnings and profitability is from the real wealth management part of that component with the fees and the transactions and things that we conduct on behalf of the clients. Our transaction revenue from the sweep, as we said, is a very, very small part. It's only a few percent. So from our perspective, it's not the bulk of our earnings, number one. And honestly, I don't know why that people wouldn't look at the core margin and give it even more valuation than where people are making all of their earnings from cash."
He states, "Now in our case, what we tried to do is then develop the bank in a way that we can add value added from both lending activities and savings programs that we'll be ramping up with even on checking and activities. But the amount of cash that will still be in transaction, whether AI assisted or not, is so low that money will be moving in and out to do that, just like a basic checking account to some extent. From -- looking at it, we already provide so much in capability and ease for our advisers to do that on behalf of their clients and with their clients, but that's why our cash levels that we maintain is, on average, $100. So we're not as concerned with it. And if there are other capabilities that come about that makes sense, we will look at them. But we're not looking at that as a major change to what's being held there."
Berman adds, "So just let me emphasize again as we -- our average balance now is $6,000. We -- as Jim said, very active. And certainly, it's at transactional levels that meet that minimum standard in the account. So again, we are constantly evaluating it, but I think we're at a very good level. And the percentage of our earnings that come from cash is certainly at the level that is probably lower than most of our peers. And therefore, certainly manageable because we've had that balance."
Finally, Berman says on "certificate" balances, "That's strictly a spread, play, really as it relates to it. And so I think we're going to see it candidly probably stabilize and stay in this range or increase a little go up. Again, but it's strictly spread depending on where rates are going from that standpoint."
For more on AI and cash sweeps, see our recent Crane Data News stories: "Raymond James Call Responds to 'Agentic AI Cash Sweep Optimization'" (4/24/26), "Barron's on Schwab AI Sweeps Worries" (4/21/26), "Earnings: JP Morgan Talks AI Cash Allocation Tool; BNY on Tokenization" (4/20/26), "Schwab Says AI a Tailwind, Not a Threat to Cash Sweeps on Q1 Update" (4/17) and "Morgan Stanley Q1 Call: AI & Sweeps" (4/16).
