Ameriprise to open bank with up to $2.5 billion in client deposits

The company will join other broker-dealers cross-selling banking products such as mortgages and home equity loans through its adviser workforce.

Ameriprise Financial Inc.’s plans for its new retail bank are rounding into shape, with executives telling analysts in a conference call Thursday that the company intends to launch the bank with up to $2.5 billion in client deposits.

Ameriprise this month gained final approval from the Federal Reserve to convert its national trust bank into a federal savings bank, allowing the company to further expand its product suite, said CEO James Cracchiolo. The company plans to launch the bank in the latter part of the second quarter.

“This is a long-term growth opportunity for Ameriprise,” Mr. Cracchiolo said.

Banking is becoming increasingly important in the wealth management and financial advice industries. In 2017, Ameriprise said it was buying an independent broker-dealer, Investment Professionals Inc., that focused on the market for independent reps operating in banks and credit unions.

Large firms, including Merrill Lynch, have put incentives in place for advisers to sell banking products.

Ameriprise is likely to offer mortgages, secured loans and home equity loans through its 10,000-adviser workforce, sources said.

Ameriprise will move client cash from sweep accounts, common at a broker-dealer, to the bank, said Walter Berman, executive vice president and chief financial officer.

“We will be transferring about $2 billion-$2.5 billion worth of sweep accounts … and that would be the primary focus,” Mr. Berman said. “And the next activity would be our credit card transfer. And then there will be a series of other products that we will be working on, but that’s where the focus is going to be.”

Meanwhile, Ameriprise is spending money to build out its various platforms for advisers and their clients, Mr. Cracchiolo said.

“We continue to invest in our digital capabilities,” he said. “We are digitally enabling our goal-based advice capabilities to make it even easier for advisers to fully engage clients and deliver the value and service they are seeking. We have just begun to roll out this training in the field and are pleased with the initial results.”

“And we’re implementing a new customer relationship management platform, and we are on track to deliver it this year,” he said, adding that the firm is also developing its investment advisory platform “to provide a streamlined and customized experience for clients and advisers.”