Amp P2
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Thanks for the perspective. Maks, looks like your RIA is rewarding.
It's always interesting to try to fathom the future course of the industry and the company. It seems that AMP's strengths include leaving the little P2 alone and offering easy affiliation with a solid brand. That's not cheap for franchisees, but in a changing regulatory environment and with regard to AUM accumulation and referrals/branding , the cost-benefit analysis of affiliation gets harder.Great thread. I have not worked with AMP long so some of this is KoolAid still. I am intersted in the good and the bad. I think the aquisitions AMP has made will benefit all of us P1 and P2 (maybe not so much P3s, I actually don't know of any personally). So it will be interesting who AMP will target the new resources torwards. I am sure it will be more profitable for AMP to target P1 offices. As I have heard that AMP would like to duplicate the P2 office model in a P1 atmosphere.
What a great time to be an advisor, when looking back a couple of decades. Now clients, advisors, and custodians want the same thing, to pay or charge a flat fee for AUM.
Even the AMP aquisition of Seligman must be about two things, AUM, and bringing a more efficient cost structure to that management ( margin compression). But clients don't mind paying one or more percent for the perceived value of having you waiting at the other end of the phone. That puts advisors in a very good position. So AMP's strengths would necessarily come from a "marketing mix" of profit centers, obviously a self sustaining P2 would contribute, but the resources (profits) would go toward higher margin investments (P1), aquisitions (to help pay fixed costs and create economy of scale) - and basically the proprietary products would pay cost of capital incentives (management and shareholders). What would be enjoyed by all is branding. Since the market place is "confused", that value may increase. Figuring out how to leverage that (expensive) comparative advantage is a little harder. In the spirit of (IDS) the company, no one will do it for you.[quote=DeBolt]
Great thread. I have not worked with AMP long so some of this is KoolAid still. I am intersted in the good and the bad. I think the aquisitions AMP has made will benefit all of us P1 and P2 (maybe not so much P3s, I actually don't know of any personally). So it will be interesting who AMP will target the new resources torwards. I am sure it will be more profitable for AMP to target P1 offices. As I have heard that AMP would like to duplicate the P2 office model in a P1 atmosphere.
[/quote] I think over the next few years the huge majority of available resources will go to the P1 program. Not because they are trying to force any P2 advisors back into P1, but just because P1 was such an absolute failure over the past few years that they need to build it back up from scratch. There's not really a whole lot of fixing up that needs to be done on the P2 side. For example, in 2007 there were about 60 advisors in my P1 office. I left last year, and today there are about 14 advisors still in my old P1 office. Thats over 75% that either left the company or left to go P2 in less than a 2 year time span and our office was in the top 10 in total GDC for P1 in the country in 2007.But here is the thing... the p2 offices are just happy to be staying the same. Most of them are not growing. The reason why there were so many who went p2 after p1 is because they could not keep up with the increased requirements at P1.
While there were no major issues with p2 from the advisor's standpoint, there were from corporate. They are no growth in production, and they make a lot less from P2 than P1's on a percentage basis. If the market can support a p1 office in the area, they would gladly throw that up instead of a p2 contract. Now if the area does not have demographics to support a 50 person p1 office, they will rather get little of something, than alot of nothing. Hence why alot of areas have p2 only.
The issues ameriprise had with p1, is solely based on who they tried to hire before becoming ameriprise and shortly after. I was an advisor coach at amp, and the vast majority of folks I worked with, were straight out of college kids. Many lived with their parents. So 100k in gdc, or 50k in income was alot to them. They never believed the fact that 400k is really where you need to be.
So you were one of the guys that smelled like booze and cigars, cherry picking the business cards out of the fish bowls and sucking up the left overs when a kid got canned?
Thanks for the reputation!!
Mak, maybe the question is, is AMP just muddling along, or do they have some sort of strategy? My impression is that the question never really changes. If p2 had a future, they would probably put more resources to it. ( To leverage the large percentage of CFPs, and demographics of independent offices, and so on. )
A lot of work was apparently done to standardize quality (financial plannning), I guess you'd have to ask if the strategy is market-driven or top down. Maybe this is a metaphor for corporate America, there's always the question of how efficient can you be when you're big, and also, what's best for the shareholders? How could the work bees know for sure? After all, with regards to the whole wirehouse and b/d world, and even with regard to small RIAS, who knows what the big boys have planned in terms of changing regulation. The uncertainty is killing me. ( Not really, time to go back to sleep.)Here is what Ameriprise thinks of P2, straight from their site.
"This option provides outstanding income potential and gives you the freedom to build equity in your own practice. As a franchisee, you pay an association fee and cover the expenses of running your business. The association fee allows you limited use of our trademark and access to the recognition and goodwill associated with our strong national brand."
thats it. You still pay your own expenses, E&O, compliance, office expenses, technology, etc.
so essentially, you are paying all of the expenses of the RIA's, plus, you are paying Ameriprise fees and restricting yourself to being a captive insurance agent, using one VA carrier, and taking a haircut..... just so you can use Ameriprise, the branding and name. and oh yeah... for all your hard work, they let you buy ameriprise stock as the equity of your practice.
http://www.joinameriprise.com/careers/experienced-financial-advisors/our-business-models/compensation-framework.asp
Starting in April:
Ameriprise Financial announces expanded variable annuity offeringsDate : 12-11-2009
This communication is intended for advisors on the SunGard brokerage platform. Ameriprise Financial has entered into distribution agreements with three additional variable annuity providers. In second quarter 2010, advisors will be able to offer products from four variable annuity product carriers: RiverSource, AXA Equitable, Lincoln National and MetLife. At least 90 days prior to the effective date, Ameriprise will distribute communications with more details about the annuity offerings.
Note: this communication is meant for advisors on the SunGard brokerage platform.
As part of our company's strategy to help you grow your practice and expand our set of products and services to be a leading wealth management firm, Ameriprise Financial Services, Inc. (Ameriprise Financial) is pleased to announce the expansion of our variable annuity offering.
After thorough analysis and due diligence, Ameriprise Financial has identified three new carriers who best met our key criteria of sales success, financial soundness and competitive product offering. The products offered from these firms, along with those from RiverSource, provide a competitive and well-rounded variable annuity offering.
In the coming weeks we will work through the details for the introduction of these carriers into our system and further communicate more specific information related to when they will be available for sale.
In second quarter 2010 advisors will have access to variable annuity products from the following carriers:
Carrier*
A.M. Best Rating**
Highlights
RiverSource
A+
Eighth in VA sales for Q2 2009 (VARDS) Fourth in overall annuity sales for Q2 2009 (VARDS and LIMRA) Dalbar award-winning advisor and client service every year since 2003 RAVA 4 Advantage has the most VA subaccounts rated four and five stars from Morningstar*** The only carrier providing up to 6% guaranteed income as early as age 65 from a GMWBAXA Equitable
A+
Fourth in industry VA sales for Q2 2009 (VARDS) Third in industry VA sales in 2008 (VARDS) First in 2008 total industry Guaranteed Minimum Income Benefit (GMIB) sales, representing 43% of total GMIB sales (LIMRA)Lincoln National
A+
Seventh in industry VA sales for Q2 2009 (VARDS) Fifth in industry VA sales in 2008 Fourth in Guaranteed Lifetime Withdrawal Benefit (GLWB) industry sales 2008 (LIMRA)MetLife
A+
First in industry VA sales for Q2 2009 Second in industry VA sales in 2008 Second in 2008 total industry GMIB sales, representing 33% of total GMIB sales (LIMRA) * Not all products or features offered by these carriers are available in all states.
** As of Dec. 1, 2009
*** RiverSource Product Research, compared to Top 10-selling VA contracts as of November 2009. The Morningstar ratings for subaccounts, commonly called the star rating, is a measure of a subaccount's risk-adjusted return, relative to similar subaccounts. Subaccounts are rated from one to five stars, with the best performers receiving five stars and the worst performers receiving one.
See the Variable Annuity Carrier Overview posted under Related Materials for detailed information about the current products offered by each carrier. The variable annuity compensation schedules can be found on the AdvisorCompass® site (see Related Links).
Training required to sell the new carriers
Advisors who would like to sell products from the new carriers will be required to complete training to familiarize themselves with the carriers and their product features and benefits.
The course will be available via Ameriprise University in mid-March 2010.
Servicing clients' existing annuities
Concurrent with the launch of the new carriers, advisors will also be able to service clients' existing annuities from the carriers listed below. This service provides advisors the opportunity to capture new assets from existing clients and to acquire advisor practices with substantial annuity business.
Advisors may accept additional contract payments and receive time of sale compensation and trail commissions as paid by the following carriers:
Allianz Life Allmerica Financial/Commonwealth Allstate Life Insurance Aviva Life and Annuity AXA Equitable Genworth Financial The Hartford ING Integrity North America Jackson National Life John Hanc*** USA Kemper Investors Lincoln Benefit Life Lincoln National MassMutual MetLife Nationwide Life Ohio National OneAmerica Financial Pacific Life Insurance Phoenix Life Insurance Principal Financial Protective Life Insurance Prudential Life Insurance RBC Life Insurance RiverSource Life Insurance Co. Security Benefit Life Sun Life Assurance Co. of Canada (U.S.) SunAmerica Annuity and Life (formerly AIG) Transamerica Life Western National Life(formerly AIG) Western Reserve Life Assurance
How many other businesses give you the opportunity to build an empire out of a license and a phone? For that, I will forever be grateful to the principles studied in the dark days of winter at " Daybreak with Doug " in Chasska, MN at the old IDS training center.
If you click “Post Options” you can edit your post to fix typos. I do it all the time.