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Fee pressure, compliance costs could uncover M&A targets: Ameriprise CEO
SNL; Wednesday, June 14, 2017 4:17 PM ET
Lower fee revenues and greater regulatory demands stand to make advisers and smaller asset managers inviting acquisition targets for Ameriprise Financial Inc., according to Chairman and CEO James Cracchiolo.
Wealth managers will be pressured if they do not have the infrastructure to adhere to things like the new best-interest standard for retirement savings, Cracchiolo said during remarks at the Morgan Stanley Financials Conference.
"There is an opportunity for us to pick up small firms or even advisers that feel they need to be supported in a better and a different way," he said.
Consolidation will probably need to occur in the asset management sector, where fees have been pressured from the migration of investment capital from active to passive strategies, Cracchiolo said. In both areas, Ameriprise could see buyout possibilities in companies that fit its suite of financial services offerings. The company will look at operations, culture and value toward possibly using an estimated $2 billion in excess capital for purchases, he said.
DOL fiduciary rule: When advisers actively seek to use BICE
InvestmentNews; Jun 14, 2017 @ 2:15 pm
To opponents of the Department of Labor's fiduciary rule, the best-interest contract exemption is something akin to the spawn of Satan.
This provision of the rule, which raised investment advice standards in retirement accounts, allows broker-dealers to continue providing investment advice deemed conflicted by the DOL, but under certain conditions.
It inspires such ire and consternation primarily due to the fact that it exposes broker-dealers to class-action lawsuits from investors. BICE also comes with several different disclosure requirements that stakeholders are none too fond of.
Yet these very same naysayers are wholeheartedly and voluntarily embracing BICE for annuity sales through January, when the full force of the fiduciary rule is set to kick in, even though another exemption is available.