TOP BDs In Conversation (w/Pat O'Connell, EVP at Ameriprise)

Yeah, so first of all, Jeff, thanks so much for having me. I greatly appreciate it, and it's really nice to see you. To you individually, congratulations on all your success and the great work that you and the 3x Equity team do. Related to what we call the Ameriprise Advisor Group channel, which is our employee business with about 2,000 financial advisors across 170 offices, you're absolutely right that it has transformed and changed dramatically from what it was back in the 2008-2010 time frame when I started leading it across the country. The biggest transition was that I wouldn't say at all that it was a failing platform; it was just a completely different model from what was American Express Financial Advisors 15 years ago. We used to hire people into branches, train them, and then after a period of time, whether they wanted to or not, off they went into our independent channel. We realized a few years after we spun off from American Express that we had an opportunity to build out a very established, tenured employee business based on our financial strength, value proposition, and how we operate. So we changed the direction of the business from hiring lots of novice people to still doing a little of that but really bringing in very talented people from other organizations. We did some acquisitions along the way as well, and that has helped transform this business to look very different than it did 10, 11, 12 years ago. It has been a lot of fun doing it. My job is really to get great people in place, put systems, processes, and people in place, develop people, invest in the business, and believe in people. That has allowed us to transform this business over the last 10 to 12 years.

Yeah, I think the simplest answer is, we're just having a candid conversation. I simply tell people the truth, and I tell my leaders to do that every single day. The reality is, all the things you just said were to a certain extent part of what our business was. I started as an advisor in 1992, and we did a lot of really good things. We were a good company. When we spun off from American Express 15 years ago, Jeff, it was the sixth largest spin-off in U.S. business history. We left with a lot of capital and a lot of real drive to build something very different in the marketplace. But we also knew we had to change certain things: invest in technology, build out our platforms, and aggressively invest in our wealth management capabilities. So when people ask me those questions, I say, 'Some of the things you might point to about novice hiring or product platform, some of that is true, but let me tell you what this firm is today.' I always say to people, think of Ameriprise as this 15-year-old incredibly well-funded startup, not this 125-year-old business, because it's truly been transformed over the 15 years. What I always highlight is the technology we've invested in, the wealth management capabilities, all the things that an independent advisor or a wirehouse advisor needs to run their business. That's been the journey we've been on. The good news is that all of that work always has to be upgraded and made better, but the heavy lifting to be industry standard and best in class is the vast majority behind us.

It's not as simple as that, but I would put it pretty simply. We're looking for people that, to their core, have this deep-down belief that they want to help people and make a difference. It's not just about sales, revenue, and profitability. Sure, I'd love to have clients with more money rather than less, who are more advice-receptive, and I'd love to have more advisors who want to grow. But whether someone's doing $500,000 in production or $5 million, you look for people with stable backgrounds who run a really good model and, to their core, really want to take care of people. Over the last 10 years, we've had people come into our platform from wirehouses, regionals, independents, RIAs, from all different walks of life. Growing is a choice, just like anything else in life. If you want to grow your business, that's a choice you have to make every day. It's more about whether somebody is committed to the client. If they are, it's less about their business mix or aspirations of doubling or tripling their business. We've built the business with really good people who care and want to make a difference. That's what we look for.

First of all, thanks for the kind words on some of my personal accomplishments. We all have our challenges in life, and things happen that throw you curveballs. I face them, you face them. By the way, I know enough about you to know that any of my accomplishments in racing Ironman, you've done many more beyond that, so congratulations to you as well, Jeff. When I think about leadership, I'm so proud of what we do every day, but I'll take very little credit for it. Here's what I know about leadership: when you look at businesses that perform well, it's because of leadership. When you look at businesses that struggle, it's leadership. I don't care if it's financial services, hospitals, retail businesses, or sports teams. You can look at the employees or the players, but it's leadership. I boil it down to that simple fact. My whole career has been spent working on fixing businesses that needed to be taken in a different direction. Leadership is simply the ability to make a difference day in and day out through a series of small decisions that add up. When we left American Express 15 years ago, we put a very flat leadership structure in place with not a lot of bureaucracy. Culture doesn't mean a whole lot when things are stable and it's blue skies and sunshine. But when there's an issue, challenge, or opportunity, that's where leadership makes a difference. I focus every day on putting the right people in place to drive the business. Even though my commitment is high, it comes to life through the team I put out there. I'm one person with thousands of people, but if I get the right people running branches, operations, and regions, that makes a difference. It's not one big thing; it's the quality of decisions made every day that add up. When you look at businesses that perform versus those that don't, look no further than the leadership.

I think it's pretty simple, Jeff. You're right, your examples play out on a daily basis. It goes back to your question about leadership. I should have said this earlier: if you think about what you do in your practice every day, or what all the advisors watching this do, in my opinion, clients are coming to you for leadership. That's what they're paying for. You can call it advice or counsel, but I don't think they're coming for fee-based accounts, brokerage accounts, annuities, insurance, or UITs. They're coming for leadership. So developing your leadership skills is incredibly important. Regarding the difference between channels, I think there are many more similarities than differences. Simply put, in a branch business, we provide real estate, technology, benefits, computers, and operational support. An advisor chooses to offload that to Ameriprise. Otherwise, they are just as entrepreneurial and independent in our world. They have every opportunity to move between channels. I've had advisors come from the branch business to the independent business and vice versa. It's not as simple as one is W-2 and one is 1099. They are just as entrepreneurial in both channels, but it depends on what they want to do every day. Some are good at managing all the real estate, tech, staffing, and retirement plans that come with running an independent business. Others say, 'I'll offload that and focus on serving clients.' Actually, hold on, I'm going to call fake news for a second. Is it all right if I call out fake news? Okay, yes. In what you're talking about, I read some stuff where Ameriprise said that the advisor is growing two and a half times more than its competitor. Is that true?

Jeff, there are a lot of reasons, so there's no fake news to that. There's a lot of reasons that's awesome. What I would tell you is, the example you used earlier about an independent advisor sharing best practices and formally coaching goes both ways. One of the things we have as an organization is we don't have a culture where all the best ideas are locked down and people don't share them. I've been here 28 years, and I had four years as a 1099 independent advisor. Culturally, there's an abundance mentality where people share their best ideas because they know that when you share best practices back and forth, everybody grows. Over time, as much as we've had to change this firm a lot over the last 15 years, the culture and DNA of this business are built over decades. It's an environment where if you want to grow and pick up ideas and best practices, you can do that across channels. I think those are some reasons why advisors consistently grow at a really good clip. I would also tell you there are a few really important things an advisor's practice needs to focus on. There are a hundred things that have to get done, but you were asking me specifically about growth. I'll leave it up to you if you want to go here at some point. I think there are a few things. Oh yes, like three things. Go ahead.

I find it interesting how you reference that there's a collaboration of support and best ideas. I can't imagine that's not a big reason for the growth among the advisors, like you suggested. The advisors aren't afraid to say, 'I'm doing this well,' and you guys have a platform where that information can be spun out to the rest of the field. So Pat, you've done it, but what have you done for me lately? Where is Ameriprise going to go? Advisors have grown. Why would someone, how could someone get on the train to be part of that growth going forward? Where do you want to see Ameriprise grow, and how can the advisor work with Ameriprise to go forward? So what have you done for me lately, lately being the next three years looking forward? Yeah, I think Jeff, the one thing we have done that will help us now and over the next three to five years for sure is we know the businesses we're in really well. Let me be really clear: 75% plus of our revenue and profitability are our advisor businesses. It's what drives this entire firm. We left American Express as a $7 billion market cap firm; we're a $25 billion market cap firm. It's a big business with a trillion dollars of assets. But if you break it down, it's a pretty simple, very concentrated focus. So if you're an advisor, whether you're part of Ameriprise now or interested in coming to this firm, I'd want to be with a firm where the biggest thing that drives the business is what the advisor is doing every single day. Whether it's tools, platforms, technology investments to help people grow their business, organic growth, or buying practices, we have focused relentlessly on the businesses we know well: wealth management with our advisor businesses and asset management with Columbia Threadneedle Investments. For an advisor, you'd want to make sure the firm you're with is pouring resources into the type of business you're operating every day. Under the heading 'what have you done for me lately,' it's a constant process of improvement. For advisors operating a business today, having an organization behind them that's big and strong but very focused on the advisor serving clients is key. We don't do any other business; we go to market through our 10,000 financial advisors. I report right to our CEO and chairman, who has been chairman and CEO for 20-plus years. There's a relentless focus on how to support advisors and help them grow their businesses by serving clients really well. That matters during good times, but especially during the very challenging environments we occasionally operate in.

Jeff, I had somebody a couple of years ago who I respect a lot say something to me, and I'll share it with you and the rest of the audience. That is, if you've built something that you're incredibly proud of, you should be willing to tweak it, adjust it, even break it to make it better. I think for Ameriprise and for every advisor watching this, if you're watching this, you've built a successful practice. All of us at Ameriprise are incredibly proud of what we've done the last 15 years. So we're all thinking the same thing: how do you go forward? If you're successful and we've been successful, and we are proud, then it's how do you refine it, how do you tweak the business, and at times even break it in spots to make it better? Too many times people can get complacent and comfortable and just want the status quo, and that's not how life works. For advisors, it's the same mindset: be really proud of what you have and what you've built, but be willing to keep tweaking it. You mentioned things like banking products. Our client base has changed a lot in the last 15 years, with many more affluent, high-net-worth clients. Something like pledge loans, we're not trying to build a big bank. We're not a bank that has an advisor business; we're a massive advisor business that realized we needed some banking capabilities in-house. Pledge loans help wealthy clients with liquidity needs. You have to constantly look at your business and ask what else you need to add or change. Some of my corporate colleagues would probably at times say, 'Can we just take a break, can we take a pause?' But that hasn't been the mindset here. We're constantly looking at the business, feeling really good about what we have and what we've built, but then working on how to keep fine-tuning it to make it even better. For advisors, it's got to be the same mindset. If you're doing a million dollars, be proud of that, but then think about how to tweak it, adjust it, break it if necessary, because what got you to this level could actually prevent you from going to the next level. Sometimes people forget that. That mindset is in our organization in a really big way. My boss leads from the front with that, constantly pushing, just like I am with my team: 'Let's feel good about where we are, and what do we do differently to move it forward in a better way?' For advisors, it's got to be the same approach.

Yeah, I mean, Jeff, I think listen, as you were sharing your mindset, you said it: you're a Barron's advisor, you run a phenomenal business, you have an awesome team. But what you were describing about helping the next generation, maybe there's a little bit of money to be made in doing that right now, but you make plenty of money and the team's successful. It's about how do you add value, how do you make a difference, and how do you truly show that you care. The byproduct of doing those things is more business comes from it. So I think what you said there is brilliant. But it does come back to what's in your DNA, what's in your soul to make a difference. When you do that, other good things happen. You just have to believe that, and in fact, that's how it plays out usually.

Well, you're ending this discussion, Jeff, with one relatively easy question and one very difficult question. My next race is I'm racing down in Florida in April at a half Ironman. But I've got a big one planned in October in Hawaii, which I'm very excited about. That's the Hawaiian Ironman, right? That's the Hawaiian Ironman. Yeah, champion. Okay, awesome. Yes, yep. So I'm looking forward to October. Hopefully this pandemic is behind us and the world opens back up again, and we'll be there. I'm hoping that you'll be there as well. Here, yeah, I wanted a senior leader for corporate America doing Ironman: 2.4-mile swim, 112-mile bike, marathon, and still running a business. Outstanding. You know how to get it done. Okay. Yeah, yeah, yeah. About the Eagles, I'm more optimistic about the outcome of my races than I am about the Eagles making the playoffs next year. So I am. You've done your homework, Jeff. You know I'm a die-hard Philadelphia sports fan. Please, people watching this, don't hold it against me. But I think the Eagles might have a little bit of a hard journey in front of them short term. I'm sorry. I'm hopeful. Okay, I'm hopeful.

Jeff, thanks so much for having me. I greatly appreciate it. And everybody, whether we get a chance to do business or not, make a difference in people's lives every day. When you do that, it's good for everybody. You do well, but most importantly, you help people. So thanks for watching, and Jeff, thanks again for having me. Outstanding.