Ameriprise Financial, Inc. (AMP) Earnings Call Transcript & Summary

Welcome to the Q1 2025 earnings call. My name is Desiree, and I will be your operator for today's call. [Operator Instructions] As a reminder, the conference is being recorded. I will now turn the call over to Stephanie Rabe. Stephanie, you may begin.

[Audio Gap] quarter earnings call. On the call with me today are Jim Cracchiolo, Chairman and CEO; and Walter Berman, Chief Financial Officer. Following their remarks, we'd be happy to take your questions. Turning to our earnings presentation materials that are available on our website, on Slide 2, you will see a discussion of forward-looking statements. Specifically, during the call, you will hear references to various non-GAAP financial measures, which we believe provide insight into the company's operations. Reconciliation of non-GAAP numbers to their respective GAAP numbers can be found in today's materials and on our website at www.ir.ameriprise.com. Some statements that we make on this call may be forward-looking, reflecting management's expectations about future events and overall 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 our first quarter 2025 earnings release, our 2024 annual report to shareholders and our 2024 10-K report. We make no obligation to publicly update or revise these forward-looking statements. On Slide 3, you see our GAAP financial results at the top of the page for the first quarter. Below that, you see our adjusted operating results, which management believes enhances the understanding of our business by reflecting the underlying performance of our core operations and facilitates a more meaningful trend analysis. Many of the comments that management makes on the call today will focus on adjusted operating results. And with that, I'll turn it over to Jim.

Good morning, everyone. Thanks for joining our first quarter earnings call. Overall, Ameriprise had a good start to the year. We're actively engaging our clients and delivering strong financial performance with contributions from across the business. I know that the current operating environment is top of mind for everyone. Clearly, we've seen elevated and ongoing market volatility due to lack of clarity around the tariffs and general economic uncertainty. And we heard from Fed Chair Powell last week that the Fed is still trying to navigate what it all means for the economy, inflation and interest rates. With that in mind, Ameriprise remains very well positioned. We know that we can navigate what's ahead because of our diversified business, strong client value proposition and excellent record for managing economic uncertainty and market volatility. Our financial strength is another important differentiator. With the business growth and positive markets overall in the quarter, assets under management, administration and advisement grew nicely to $1.5 trillion. Our first quarter adjusted operating results were also good. Total revenues increased 5% from positive asset growth and flows and higher transactional activity. Earnings were up 8% from strong business growth and our ongoing expense discipline with EPS up 13%. And our return on equity ex AOCI remains best-in-class at 52%. In terms of the business highlights, in Wealth Management, our advice value proposition and the way we engage clients is very effective in helping them remain on track to achieve their goals and feel confident and even more so during increased dislocation. Our clients have been strongly engaged in the quarter with assets up 7% to $1 trillion. We also had good inflows of $10.3 billion across our platform. Money has gone to work in a number of product categories. Wrap activity was strong. Flows grew 34% to $8.7 billion, representing a 6% annualized flow rate in the quarter. And total wrap assets grew to $573 billion, up 10%. Transactional activity was also robust, up 6% year-over-year, particularly in retail brokerage and financial planning. And client cash levels remain high overall at $86 billion, which represents a nice opportunity for money to be put back to work. We're working closely with advisers and directly with clients to provide highly relevant investment and market insights as well as important context for maintaining a long-term perspective. We had great client engagement, including record levels on our highly rated mobile app and secured site during the recent volatility. And we continue to invest in our advice value proposition and practice support. We have one of the best adviser platforms in the business in the way we engage and support advisers with our entirely integrated ecosystem. This includes our significant investment in our goal-based and investment advisory solutions. We're adding an even more comprehensive way for clients and advisers to manage investments. It's a powerful new UMA called Signature Wealth that offers the best features of our advisory platform in a streamlined and innovative way. We're currently testing it and plan to launch it more broadly later this quarter. The tech environment that we've built has helped us achieve excellent availability. Important at any time, but particularly during volatility, our proprietary client advisory systems have performed extremely well with increased traffic. And we continue to innovate and use emerging technology to further enhance how we do business. In fact, Ameriprise just earned the 2025 Technology Innovation Award from the Bank Insurance and Securities Association for our adviser PracticeTech platform. PracticeTech streamlines key practice actions into one integrated platform that makes operations much more efficient and effective. With the quality of our advisers and our consistent investments, adviser practices continue to grow nicely. Productivity increased 12% in the quarter to approximately $1.1 million per adviser, reflecting our best-in-class capabilities and strong asset growth. We also had another good quarter for recruiting with 82 experienced productive advisers joining Ameriprise based on our adviser value proposition, strong support and financial strength. I'm pleased to share that we continue to earn strong client satisfaction and adviser recognition. The Ameriprise client experience helped drive leading client engagement, and our clients continue to rate us 4.9 out of 5 for satisfaction. And Ameriprise recently earned Hearts & Wallets Top Performer recognition in the client categories of "Understands me and shares my values" and "Unbiased, puts my interests first." And a large number of our advisers were recognized in the quarter in rankings like Forbes Top 1,200 Wealth Advisors, the Best-In-State Women Wealth Advisors as well as the Top 100 Women Wealth Advisors list. We also launched the next phase of our advertising in the quarter to further promote our highly effective advice value proposition and excellent client satisfaction. Our bank is another important capability for Ameriprise. In just the past few years, assets have grown to more than $24 billion. The bank is generating attractive earnings as we focus on deepening client relationships and bringing in assets held elsewhere. The team has just launched our CDs. And coming later this year, we'll add HELOCs and checking accounts to our offering. The bank made important contributions during the quarter, minimizing the carryover impact from rate cuts. With the bank and our investment portfolio, we're able to generate sustained interest earnings even if the Fed decides to change rates. Overall margin for Wealth Management remains strong at 29%. Turning to Retirement & Protection Solutions. The business continues to drive transactional activity within Wealth Management and generate strong earnings. In annuities, we had significant growth in our traditional VA without living benefits, up 28%, and had good sales in our structured product. And we continue to see strong sales in our Life business where we're focused on VUL, which is up 22%, and disability products. I also reinforce that RPS consistently delivers strong earnings, profitability and free cash flow as part of our diversified business. We consistently generate one of the highest returns on equity in the industry. And RPS also provides important stability, which is particularly meaningful during periods of volatility. And in Asset Management, we continue to generate good earnings that reflect the actions we've taken, but it was a more challenging quarter for flows. For the quarter, assets under management and advisement were $657 billion. Overall, investment performance remains quite good even in a volatile environment. We delivered good performance across 1-, 3- and 10-year periods. In total, we have 101 Columbia Threadneedle 4- and 5-star Morningstar-rated funds. And we were just rated in the latest Barron's Best Fund Family rankings. Columbia Threadneedle was in the top 15 for all 3 time frames: 1, 5 and 10 years. Regarding flows, we had higher outflows of $18.3 billion in the quarter. Retail outflows were $5.8 billion, driven by higher redemptions. And institutional outflows of $11.5 billion were impacted by a large client repositioning into passive as well as the exit of the Lionstone business. In this climate, active management is even more important, and we believe in the benefits it can provide. In terms of priorities, we're focused on ensuring that we're positioning strategies that are appropriate for the environment and help us garner flows. We're also looking to build momentum in key product capabilities, including active ETFs, SMAs and model delivery. And the team has made excellent progress over the past 2 years, significantly transforming and improving our cost base while maintaining our fee rate. They've driven important operational efficiencies that combined have helped us expand margins. In fact, the margin in the quarter was extremely strong at 43%. And for Ameriprise overall, we continue to both invest in the business and manage expenses very well. As you saw, expenses across the firm were down 5% due to our transformation efforts. And in a difficult environment, like we've seen so far in the second quarter, I'd like to reinforce some important themes from the company's perspective. Our diversified business generates substantial free cash flow across market cycles. We maintain excellent liquidity. With our cash flow, we're able to invest and return to shareholders at attractive levels. We have a strong excess capital position that also gives us the flexibility to be opportunistic. And our disciplined and proven risk management is highly effective even during periods of increased volatility. In terms of our capital return for the quarter, we continue to return strongly to shareholders, another $765 million to shareholders through our dividend and share repurchase program. In fact, today, we announced an 8% increase in our dividend. This is the 21st dividend increase since our spin-off 20 years ago. And with that, our Board just approved a new sizable $4.5 billion share repurchase authorization, given we are completing our current authorization early. For the firm overall, it was a good start to the year. The high level of results that we consistently achieve is driven by the totality and strength of Ameriprise. And while it's a more volatile environment, we remain well positioned. Finally, the team and I are always proud of the accolades we earn in the marketplace. In addition to the awards I referenced, Ameriprise has just been recognized by Fortune as one of America's Most Innovative Companies 2025. Now Walter will provide more detail on the quarter, and then we'll take your questions. Walter?

Thank you, Jim. Ameriprise delivered continued solid performance with exceptional balance sheet strength, providing us flexibility to be opportunistic. Ameriprise had strong underlying performance across our diversified businesses, particularly in light of the slowing equity market appreciation and the full impact of the Fed funds rate reduction since September, with adjusted operating EPS increasing 13% to $9.50 in the quarter. This result reflects positive flows and activity levels in Wealth Management, the initial impact of proactive changes made to the bank's investment portfolio, including the reduction in floating rate exposure and the benefit to expenses from our transformation initiatives. As we exit the quarter, our balance sheet fundamentals remain very strong, and we are well positioned to navigate potential volatility going forward. We have an excellent excess capital position of $2.4 billion with $2.5 billion of available liquidity. The investment portfolio is diversified and highly rated. Our hedge programs continue to perform extremely well, and we have strong and consistent free cash flow generation across all segments. We have a successful track record of navigating market cycles. Looking ahead at the potential for continued elevated volatility levels, we continue to be well positioned to navigate these scenarios with the flexibility to be opportunistic based on the diversity of our businesses, the quality of our earnings and margins and underlying balance sheet strength. On Slide 6, you will see the strong EPS growth demonstrates the strength and leverage points within our business model. Assets under management, administration and advisement increased to $1.5 trillion, benefiting from strong net client flows over the past year and equity market appreciation, which more than offset the impact of outflows in asset management. We delivered strong profitability with consolidated margins of 27%. Revenues grew 5%, reflecting slower equity market appreciation and impacts from lower Fed funds rates since September. At the same time, G&A expenses were down 5%. G&A expenses continue to be well managed and demonstrate our focus on operating efficiency and effectiveness while still making the right investments in areas that will drive future business growth. Our stable 90% free cash flow generation across our segments, combined with strong balance sheet fundamentals, enabled us to return $765 million or 81% of operating earnings to shareholders in the quarter. We remain committed to returning capital to shareholders at a differentiated pace and announced an 8% dividend increase and a new share repurchase authorization of $4.5 billion through June 30, 2027. On Slide 7, you see the strong metrics results from Wealth Management. Revenue per adviser grew 12% to a new high of $1.1 million. This resulted from a 7% increase in client assets to $1 trillion with strong client flows of $10.3 billion. Wrap assets were up 10% to $573 billion from $8.7 billion of wrap flows in the quarter and $35.3 billion over the past year. In addition, transactional activity levels continue to improve. AWM cash balances declined 8% year-over-year to $40 billion. Bank balances increased in the quarter, while certificates and off-balance sheet cash declined. We continue to take actions to build the bank investment portfolio in a way that supports stable earnings contributions going forward. The overall bank portfolio has a yield of 4.6% and a 3.6-year duration. We reduced cash levels at the bank and further reduced our floating rate securities to only 15% of the securities portfolio, both of which have reduced our exposure to lower rates. We also brought an additional $500 million of balances on to the bank's balance sheet. Those balances as well as portfolio maturities and prepayments were invested at a 5.5% yield and 4-year duration. And you're aware of the crediting rates changes on cash sweeps that were made early in the quarter. These factors all helped to offset the carryover impact from the Fed funds reduction since September and will support net investment income in the bank going forward. On Slide 8, you see the strong financial results from Wealth Management. Pretax adjusted operating earnings increased 4% to $792 million with strong contribution from both core and cash activities. Core contributions continued a double-digit increase, driven by good business fundamentals and equity market appreciation. Cash experienced a single-digit decrease, primarily driven by Fed funds effective rate reductions since September. Adjusted operating net revenues increased 9% to $2.8 billion even with fewer fee and trading days. Revenue growth from higher client assets and increased transactional activity driven by adviser productivity more than offset lower spread revenues. Adjusted operating expenses in the quarter increased 11%, with distribution expenses up 14%, reflecting our business mix and higher transactional activity. G&A expenses increased only 1% to $424 million in the quarter, reflecting strong expense discipline with continued growth investments and volume-related expenses due to business growth. Margins remained solid at 29%. The business is well positioned to navigate potential volatility going forward based upon continued strong adviser productivity, the high-quality investment portfolio that will benefit from actions we've taken and continued disciplined expense management. Turning to Asset Management on Slide 9. Financial results were solid in the quarter. Operating earnings increased 17% to $241 million. This strong quarter reflected equity market appreciation and the positive impact from expense management actions, partially offset by the cumulative impact of net outflows. Total assets under management and advisement decreased to $657 billion. Net outflows were elevated at $18.3 billion, reflecting institutional outflows from a large client repositioning into passive and the exit of Lionstone. Revenues were at $846 million, down 1%, reflecting slower market appreciation, net outflows and fewer fee days. The fee rate was stable in the quarter. Adjusted operating expenses decreased 7%. G&A expenses improved 12% from a year ago, primarily driven by proactive transformation initiatives as well as lower performance fee compensation. These transformational initiatives will continue to benefit results and help to offset the impact of net outflows. Margins reached 43% in the quarter. Let's turn to Slide 10. Retirement & Protection Solutions continued to deliver strong earnings and free cash flow generation, reflecting the high quality of the business that was built over a long period of time. Pretax adjusted operating earnings in the quarter increased 8% to $215 million. The strong and consistent performance of the business reflects the benefit from stronger interest earnings and higher equity markets. These high-quality books of business continue to generate strong free cash flow with excellent risk-adjusted returns and continue to be an important contributor to the diversified business model. Overall, Retirement & Protection sales were strong at $1.2 billion, fueled by client demand for structured variable annuities and variable universal life products. In the Corporate segment, I want to mention Long Term Care pretax adjusted operating earnings was $14 million. Turning to the balance sheet on Slide 11. Balance sheet fundamentals and free cash flow generation remained strong with $2.4 billion of excess capital, $2.5 billion of available liquidity and a diversified high-quality investment portfolio. We have diversified sources of dividends from all of our businesses, enabled by strong underlying fundamentals. This supports our ability to consistently return capital to shareholders and invest for future business growth. Ameriprise's consistent capital return strategy drives long-term shareholder value. In summary, on Slide 12, Ameriprise delivered excellent growth in this first quarter, which is a continuation of a long track record of outperforming our stated financial targets. Ameriprise has a proven track record of navigating through challenging market environments over the longer term. Over the last 12 months, revenues grew 10%, adjusted EPS increased 16%, return on equity grew 280 basis points and we returned $2.9 billion of capital to shareholders. We had similar growth trends over the past 5 years with 8% compounded annual revenue growth, 15% compounded annual EPS growth, return on equity improving 13 percentage points and we returned over $12 billion of capital to shareholders. These trends are consistent over the long term as well. This differentiated performance across multiple cycles speaks to the complementary nature of our business mix as well as our focus on profitable growth. With that, we will take your questions.

[Operator Instructions] And our first question comes from the line of Suneet Kamath with Jefferies.

Walter, could you talk a little bit about your outlook for A&WM NII as well as for the bank in terms of sort of cash levels and earnings? Just some high-level commentary on how you feel the year would play out would be helpful.

Sure, Suneet. I see it right now, based on what we've done, that it should actually be improving as we look at basically what actions we've taken first from shifting fixed floating to fixed and shifting the portfolio mix and also adding more liabilities onto the balance sheet. So from that standpoint, obviously, from the bank, if you just joined the bank, it's a small portion of floating. I can't control what the Fed is going to do, but I feel with the action we've taken, we should be able to certainly manage the net interest income.

Got it. And then I guess for Jim, can you just talk about Signature Wealth in a little bit of detail? What sort of impact do you expect? And my understanding is that there could be some benefits in the Asset Management business as well. So if you could just provide some color on that, that would be helpful.

Yes. The Signature Wealth is a very comprehensive UMA-type platform that has a lot of flexibility. We have a lot of advisory platforms that our advisers use for their different models and capabilities depending on whether they're using discretion, whether the client has discretion, whether the company has discretion. This gives them the ability to put everything sort of together. And over time, they'll have flexibility with different sleeves of how they want to manage those assets from individual stock portfolios to institutional portfolios, et cetera, and rebalance it more comprehensively and as a household or in total of the account. So -- and it really does present it in a way to both the client and the adviser so that they fully have an understanding of what's happening, how to relay that and report it and adjust it. So we think it will be very good. It does allow for different models to be incorporated that allows for Columbia to have models in there just like other providers. So we think it will be a state-of-the-art type of UMA platform in the industry.

Our next question comes from the line of Steven Chubak with Wolfe Research.

So I wanted to start off with a question on AWM flows, which were quite resilient in a tough tape. I was hoping you could speak to what you're seeing in the marketplace as press reports have indicated more competitive TA and compensation packages and also what prompted the decision to remove the adviser count and retention disclosures and whether you could speak to what you're seeing in terms of net new adviser adds.

Well, it's a pretty comprehensive question. So overall, we've seen good client activity and engagement with the advisers regarding client portfolios and keeping them on track to their goals, rebalancing occurring, et cetera. We saw new assets being added. Of course, a little more in cash as well, but we saw money going back to work, both in the transactional activity as well as in the portfolios and wrap that was very good. So both client flows coming in was strong, new clients being added as well as the idea of some money going back to work. So that looks good. Now of course, there's volatility out there every day and depending on what happens with the market or the outlook will affect some of that, but we feel good about what that flow rate was. From a perspective of new advisers we're adding, it was pretty good for the first quarter. We have a good pipeline that has continued to be there in the second quarter. We feel very good about what our value proposition, particularly our technology capabilities. A lot of people were having issues and problems in the first quarter with handling trade activities and the system availability and other things like that. All of our systems that are proprietary systems were all available. You always have some issues with an external vendor per se. But other than that, you're in good shape, particularly how we've set up our core functioning, our capabilities, the underlying infrastructure that we have. And we actually have a great adviser tech platform with integrated capabilities. And that's one of the things really attracting a lot of advisers to us with the strength of the firm. So that, we feel good about. I don't know if there was something else in your question that I missed.

No, that largely covers it. I mean...

Oh, why we removed the disclosure on the number. None of our competitors really report that anymore. We looked at the wire houses, some of the independents, they don't really put number of advisers or number of retention. And in the retention numbers, we were constantly trying to explain where people were retiring and other things like that or transferring their books, and that was all rolled into the numbers. So we figured it would be easier just to do what the competitors are doing right now and not disclose that.

Fair enough. And for my follow-up, just a bit of a ticky-tacky question just on April trends. Given the recent volatility, I was hoping you could speak to what you're seeing so far in terms of cash build as well as NNA and recruitment, just given the market volatility can be disruptive to adviser movement.

Yes. So from a cash perspective, outside of some tax polls, et cetera, it's been relatively flat. We feel pretty good about where that is right now and what's happening. From a perspective of -- the pipeline is still very good. I mean sometimes even in volatility, people do want to go to a firm that has strength, particularly around the balance sheet, the consistency, having great technology and being consistent from a good, strong cultural perspective. And so that's the type of people we're attracting.

Next question comes from the line of Alex Blostein with Goldman Sachs.

You mentioned a couple of times in the call sort of like Ameriprise's capital position, liquidity position obviously being very strong. That's not new. But you mentioned that, that gives you an opportunity perhaps to be a little more proactive, a little more opportunistic in this environment. And I just wanted to dig in a little more what the messaging here really is when it comes to potential acquisitions, whether it's in AWM or asset management. Was that a broadly generic comment? Or is there something in particular you guys are looking a little closer at?

Alex, I think it was a more general statement telling you very clearly, like in market volatility where markets are having some impact, others may feel the pain much more than we do. And we have flexibility that we can respond in those situations against opportunities that may arise. Also from a perspective, the Board just approved a much bigger buyback program for us that gives us flexibility in the market environment. So a combination of things, that's all we were addressing, is that we have flexibility and it's good to have, especially in these type of environments.

Yes. Okay. Super clear. I just want to make sure. And then my follow-up is related to one of the early questions, but just kind of related to cash revenues broadly. I know, Walter, you talked about NII at the bank specifically. But as you look at all the sources of cash revenues between the certs, the off-balance sheet stuff and obviously, the bank, how do you guys think that is likely to evolve here through 2025 relative to last year? And maybe just double-clicking on one of the new products that you launched sort of related to my question, but when you think about the CD offering, how will that interact with the certs business? Is that -- do you see that as sort of incremental in addition to? Or is there a risk that this could just kind of cannibalize some of the certificate balances?

Yes, this is incremental. We don't believe it will materially cannibalize the certs. Okay? As it relates to looking out, obviously, as you -- it's going to be subject to, again, what is going on in the external market with the Fed and other things of that nature. But as we -- the bank is, as I indicated, the earnings that we see coming out is really -- I think we balance that and it's going to be quite stable, and we will be increasing the liabilities, and we're well positioned from that standpoint. On certs, if rates go up, you basically -- it shifts with that, but the impact factor is manageable as it relates -- and then the floating, which we've reduced overall, but certainly from the standpoint on the sweep count, it's going to be -- it will be impacted by rates going down, but less impactful. So we feel quite good and confident of the stability of the earnings. And so that's what we're looking at. We can navigate on any of the changes because I think, as Jim said, it's -- you have a high volatility on the upside, downside, and I think we positioned the books to basically navigate that.

Next question comes from the line of Wilma Burdis with Raymond James.

First, could you talk about the adviser recruiting environment? Is now a good time to grow? And are you seeing any changing trends in adviser transition assistance packages?

So as we said, we had a good number of recruits in the first quarter. Pipeline looks good as we're into the second quarter. And we have the capacity and the capability to continue to work closely across the channels as well as with different institutions for advisers to come over. We have a great ability to onboard them quicker and from an industry perspective that they ramp up quicker when they do come over here. So we feel good about that. Again, markets change, environments change, but advisers will still look for a good home during that change, and that's what we are really focused on. From a perspective of the packages out there, I would probably say they've gotten a bit more competitive. But I think what we feel very good about is our ability to put together appropriate packages and get appropriate advisers over that we can help really grow and build their books as well as get a return from that.

And I think you touched on this earlier, but I just want to be a little bit more specific. Is now a good time to lean in on the share repurchases?

The -- from our perspective, as we mentioned to you at the -- in the end of the year and into January, that we had initially targeted our roughly 80% on a consistency fashion. But as we just approved and we're finishing our previous buyback early again, we have flexibility to take that up and adjust as we see the -- both the environment and the opportunity based on the share price. So it gives us good flexibility, and we will be looking at that as we proceed through the year.

Next question comes from the line of Tom Gallagher with Evercore ISI.

Jim, just wanted to come back to the AWM adviser retention. The -- and I know -- I heard your comment about the peers aren't disclosing those total numbers. Are you seeing a slippage in headcount? Any time I see someone removing disclosure, usually, I think there's going to be some suspicion that there's something in the numbers that caused the company to remove it. I just want to be clear, like are those numbers under some pressure for some reason? Maybe just any color you can give on the retention side.

No, there's no change on the retention side. In fact, the retention is quite good. As I said, the highest amount of our retention is more of people retiring and transitioning practices for the people that remain here. The other piece of our retention that's a little lower is just the newer people that come in that turn over. But again, those books and activities stay. So no, there's nothing. Headcount is actually up if we did provide it. So that's not in any way a change. But all the wire houses removed it. I think you saw a few of the other players remove it. I won't mention their names, but you could look at all of them. So we just -- we follow the disclosures. And so we figured that was appropriate.

That's great. The other question I had is just -- I know there was some lumpy outflows in asset management this quarter. Can you talk about visibility for the balance of 2025? Any other like chunky or lumpy outflows to flag? Or do you think we're through the worst of those?

Yes. I think from a large -- I think there's another piece of Lionstone to go out, and that will be continue -- but that was what we disclosed at the end of the year or last year when we sort of exited the business. From the other institutional stuff, no, there'll be ins and outs just based on people reallocating. A lot of -- there's a lot of change out there right now just about repositioning portfolios, et cetera. The large one we had in the first quarter was a move to passive. It was in an international firm that they needed to do that for other reasons they had. And so we feel comfortable that, again, we're navigating like everyone else is. Retail is actually -- the sales were up year-over-year in retail. It's just more redemptions picked up as you would have saw in the first quarter and the flow picture, but I think you saw that out in the industry. We're probably not picking up as much on the fixed side that we would like to increase that. We're just in certain categories there that we haven't gotten much in the flow on, but our equities are actually a bit better than the industry. So it depends on -- when you put it all together, that's where we had some of the negative come from the redemptions.

Next question comes from the line of Craig Siegenthaler of Bank of America.

We did want to follow up to Tom's question with Advice & Wealth Management organic growth and also echo a comment like one of the reasons that many of your comps don't report that data is because the organic growth has slowed. So if your data is strong, our advice would be to disclose it. But with that, I did hear a lot of good, strong and ups, so high-level qualitative color. Do you have any data you can share for 1Q '25 behind recruiting, financial adviser headcount and adviser retention? And if not, I can ask another.

Yes. So we did mention that we brought in 80 advisers in the first quarter. So that's pretty consistent with our recruiting over the quarters. And the quality was very good. And as I said, that pipeline is holding up nicely through the second quarter, and we feel good about it. I don't know what else I can say. We don't give much more information on that. From a perspective of our own, both retention but also client activity is quite strong. And we're bringing in nice new clients. And I know a lot of people rely on just new recruits to increase their flow picture. Ours is mainly from the increase in productivity of our adviser base, which I feel good about. And the underlying margins and capability of our core business, production underlying, we mentioned 9% revenue, but the production was higher. That tied to the distribution fees of 14%. It was -- there's like 13-something-plus percent on production, which is quite good. And our underlying margins on a production business is quite strong compared to many others in the industry. I would think it's probably one of the best.

Got it. And then just for my follow-up, heading into 2Q, given that most of April is behind us, so you're seeing some data there. How do you see recruiting, adviser headcount retention tracking 2Q '25, especially given a lot has changed since April 2?

From our perspective, it's a continuation of what we've just reported in the first quarter.

Next question comes from the line of John Barnidge with Piper Sandler.

My question is on Retirement & Protection Solutions earnings. They've been coming in better than the $200 million quarterly number in the last few quarters. In light of current macro distribution in the rate environment, do you have any updated views? Or does it seem to be earning above that now?

The earnings are solid and they're predictable. Even though we've had a higher transactional, which you know on the time of sale, it would impact the P&L, basically, the investment strategy and other elements is basically prevailing. So we feel comfortable if the book is there, as we said, good risk-adjusted returns. So we feel we -- it's working quite well.

And my follow-up question on retail within asset management, is there something the typical retail investor needs to see from maybe a cost of living perspective or macro to reengage? Or to your comments about having the flexibility to take advantage of other companies, maybe dislocation, is there additional products that need to be added inorganically?

So what we are doing is we are rolling out more active ETFs. You've seen that pick up a bit more in the industry. I think it gives advisers a little more flexible in their activities and trading and how they build their portfolios. We also are continuing a move to our SMA model delivery, which is taking up a bit more space in the industry, which is good for us as well. We are coming out with an interval fund with the public and private market soon that we'll be launching just in the market later this year. We'll be looking at other opportunities like that as we proceed. We've launched another hedge fund that's starting to gain traction. So there are things like that, that we're doing. As you would imagine, I would say the gross sales were up year-over-year on the gross side, just redemptions picked up, and you saw that across the industry as people, they got a little more conservative or they put cash on the sidelines or they wanted to adjust in the period. So that's what we saw a bit more in the Asset Management business. Now remember, it's not an asset management just for our business -- I mean it's across international, domestic, et cetera.

Next question from Ryan Krueger with KBW.

My first question was on G&A expenses. They were down 5% in the quarter. Can you give some commentary on how you're thinking about G&A for the rest of the year?

So obviously, a lot of things affect G&A, both from our standpoint, activity growth, the investment we make and certainly the transformation efforts we did. So I think looking at the -- those elements together, we see the total expense being flattish, G&A expense.

Okay. Okay, great. So consolidated G&A roughly flat for the year?

Yes.

And then just one other question on April. I think you've addressed cash and recruiting trends. But can you give any commentary on just how clients are behaving? Are they pulling back at all from transactional activity or putting new money to work? Or can you give any commentary there?

No, I think what you've seen in April is an increased level of volatility. So I think, again, I can't sit here with a crystal ball of what comes next. But I see it maintaining at a certain level, consistent. I haven't seen a dramatic shift or change yet, but it depends on what continues in the marketplace. Some days, really people get a little more concerned. Some days, they see it as an opportunity. So I think the -- we keep them focused on the long term and to keep money invested. So I would probably say no change in our picture at this point.

And we have no further questions at this time. This concludes today's conference. Thank you for participating, and you may now disconnect.