Ameriprise Financial is the fourth largest financial advisory firm in the United States. The company has over 12,000 financial advisors and 2.8 million clients, although less than a million are using financial advisors. The company specializes in meeting the retirement-related financial needs of the mass affluent. Ameriprise Financial ranked sixth out of ten in overall client satisfaction in a 2007 J.D. Power & Associates survey of full-service financial advisory firms. In a 2006 survey of over 37,000 US companies, BusinessWeek ranked Ameriprise Financial as the 19th best place to launch a career. As of 6/26/2007.
In 2005, Ameriprise agreed to pay a $12.3 million to settle NASD charges relating to favorable treatment allegedly given to some mutual funds in exchange for brokerage business.
In mid-2005, the State of New Hampshire reached a $7.4 million settlement with American Express Financial Advisors, at the time the largest securities enforcement action in the state's history. The state alleged the company had violated the law by rewarding their financial advisers for recommending underperforming in-house mutual funds to clients.
Also in 2005, Ameriprise Financial entered into a $15 million settlement with the SEC for charges of market timing. The settlement addressed practices between January 2002 and August 2003. The SEC accused the company of failing to prevent market-timing— even after amending its prospectus to include explicit prohibitions against the practice. The SEC alleged that after January 2002, when American Express Financial Corporation banned market-timing, the funds still allowed shareholders to rapidly trade the funds, and that some employees rapidly traded through their 401(k) plans. The Minnesota Department of Commerce levied $2 million in fines for similar market timing violations. The National Association of Securities Dealers fined Ameriprise an additional $12.3 million for unsuitable share sales.
Ameriprise did not disclose this incident to the shareholders of its funds, marketed under the name RiverSource since being spun off from American Express. American Express made a disclosure in its regulatory filings, but these were seen only by American Express stockholders. Ameriprise, having become a separate company, had also not revealed which funds were timed, or the names of the people involved and the exact nature of the disciplinary action taken. Morningstar temporarily reduced the stewardship grade for Ameriprise's funds, although it did not impact the fund's overall star ratings from that firm.
In 2006, the NASD threatened to suspend the company for failing to pay an arbitration award to a former broker.
In September, 2006, Securities America, the brokerage unit of Ameriprise, reached a $16.3 million settlement with a group of Exxon Mobil Corp. retirees for failing to supervise an associated broker.
On July 11, 2007, in the first case of its kind, the NASD fined Securities America $375,000 for improperly sharing directed brokerage commissions from a mutual fund company with a former Securities America broker in the Los Angeles area. The NASD action was a first in the area of directed brokerage commissions; Securities America directed brokerage specifically for the benefit of an individual broker.
Another NASD arbitration panel awarded $9.3 million to three retired American Airlines pilots against Securities America and a formerly associated broker for allegedly mishandling their savings. Other airline pilots have arbitration claims pending.
Securities America was also fined $5.4 million in 2003 for letting a broker work under a false name in its Orlando office and allegedly make bogus investments.