Welcome to the Fourth Quarter 2015 Earnings Call. My name is Hilda and I will be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Ms. Alicia Charity. Ms. Charity, you may begin.

Thank you, and good morning. Welcome to Ameriprise Financial’s fourth 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 will be happy to take your questions. 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 the respective GAAP numbers can be found in today’s materials available on our website. Some statements that we make on this call may be forward-looking, reflecting management’s expectations about future events and 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 today’s earnings release, our 2014 annual report to shareholders and our 2014 10-K report. We take no obligation to update publicly or revise these forward-looking statements. And with that, I will turn it over to Jim.

Hello, everyone, and thanks for joining us for our earnings call. This morning, I’ll provide my perspective on the business and Walter will discuss our financials. Ameriprise, like the industry, was impacted by a more volatile market environment during second half of 2015. Overall, our fourth quarter results were solid. We are executing our strategy and have work to continue to do in certain areas that I’ll discuss. For the quarter, operating net revenues and operating earnings were largely flat with operating EPS up 7%. And for the full year, operating net revenues were up 1%, operating earnings grew 3% and operating EPS increased 9%. In terms of operating return on equity, Ameriprise continues to deliver at a differentiated level. We generated a new record return of 24.3% up a 130 basis points, which is one of the best in the industry. Ameriprise continues to demonstrate strength in our ability to return capital to shareholders, returning another $569 million in the quarter. In fact, 2015 represented the fifth consecutive year, we return more than 100% of operating earnings to shareholders through dividends and share repurchases while investing for growth and maintaining our capital strength and flexibility. Very clearly our financial foundation remains in excellent shape. In total, assets under management and administration were $777 billion as solid Ameriprise retail client flows were dampened by asset management outflows, market depreciation and an unfavorable foreign exchange impact. Let’s move to the business results in the quarter. In Advice & Wealth Management we have a strong business and I feel good about our ability to continue to help advisors build productive practices. The strength of our Advice value proposition is even more attractive in this environment. Ameriprise is well positioned to help clients and prospects in every stage of their lives and to…

Thank you, Jim. I’d like to build on what Jim shared with you, as we review the financial results. As context, markets were volatile and on a downward trend in the second half of 2015, which impacted revenues for our growth businesses. However, the results we delivered in the quarter were strong. The one exception is Auto & Home business where we were disappointed with the results, which I’ll cover in more detail when I review the segments. We remained opportunistic in repurchasing our stock at an elevated level in the quarter given the pull back in the valuation and still believe our stock is undervalued. Our capacity to buyback stock remains strong given our balance sheet fundamentals and the business mix generates strong free cash. We are committed to maintaining a differentiated level of capital return. Let’s turn to Slide 4. Macro conditions impact revenue in a few ways. We had limited equity appreciation which impacted asset under management. Volatility also suppress client activity and contributed to asset management outflows. Low interest rates remained a headwind for our insurance and annuity businesses and foreign exchange translation impacted asset levels and earnings. These impacts were felt across all financial services companies and we are not unique in this regard. As you can see total revenue growth was not at the level we had seen in the past. All the markets and lower interest rates which decreased AUM and client activity, slowed. This muted the impact of areas where we successfully built the wealth management business through increased wrap flows, growth in insurance and annuity sales and building cash sweep levels as clients wait for a less volatile environment to make investment decisions. Let’s turn to Slide 5. Ameriprise delivered solid growth in EPS and return on equity, demonstrating the multiple…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] We have a question from Ryan Krueger from KBW.

Hey, thanks good morning. First question is can you give us a rough sense of the fee rate differential between the former parent related outflow that you’ve referenced at the low fee and new sales at this point?

If you’re looking for the differential from the – the differential that we had on from a basis point on fee that’s what you’re talking about?

Yeah, or even distressed roughly…

Okay roughly approximately again for the inflows and outflows again looking at that as we talk about the low base point it was about nine point differential between the inflows were about nine points higher than the outflows. And obviously the U.S. Trust element was substantially lower than – at the lower end of flow basis points revenue.

Okay, got it, that’s helpful. And then secondly have you seen any improvement in the M&A environment given lower property valuation in the asset management sector?

I would say that there seems to be a bit more activity going on I think the stuff that was out there a little over the course of this year was still at a bit more elevated price but I would probably see if we continue in this environment that things would probably either come forth more or be in a better valuation basis.

Okay. And then just last quickly. Do you have a tax rate expectation for 2016?

Yes. Right now we – it should in the range of 24% to 26%.

Okay. Great, thank you.

We have question from Yaron Kinar from Deutsche Bank.

Good morning everybody. So I realize, we ended the year with a pretty challenging environment with deteriorating and volatile markets, but it seems like this is continuing this year. Can you give us any sense of how the first month of the year is looking for you?

What I would probably say is, with the increase volatility at the beginning of the year we’ll probably going to see client activity slow a bit, as people sort of get to a better perspective of where the markets are balancing out to put more money to work. I think, as you saw in the fourth quarter even though we had good client inflows, we did build cash balances, usually what you find is, you begin the year those cash balances will go to work a lot quicker in the first quarter. We’re probably seeing and being held more now until the volatility sort of calms down, there’s a little more direction to the markets.

Okay. And then, if we turn to the Auto & Home business. I understand it was a little disappointing on year end as well. Do you still expect it to be profitable in 2016 as you had indicated earlier?

Certainly from the standpoint, the action we’ve taken in and certainly looking at the 2014, we – our expectations are that it should, but it’s going to be at the real low-end of that profitability.

Okay. And I guess, I am surprised a little bit to see the continued – the continued prior-year reserve developments and now I guess going back to 2014 as well. I haven’t really seen that coming from other auto players in the industry. And I’m just curious what is it that, that really makes this business so difficult to get the reserves right for, particularly in Ameriprise’s case?

Well, okay. Let me try to answer it. Again, I can only take you through what we see in the industry statistics and other things like. But when you’re looking as long date as you look at BI under-insured and fiscal damage, what you’re seeing there is, we had claims on the books looking at this and this is typical I think for the industry and as I go through their aging cycle, the environment has become a lot more litigious and I think that’s not just exclusively for us, I think that is an overall situation. And the – basically assessing as we looked it, we added the staff and certainly started looking at the claims performance and aspects, it realized and this was more and more our case reserves were we need to be bolstered as it relates to the 2014 and prior. And again if you look at up to 2014 you are looking at probably more severity and in 2014 combination of severity and frequency. So we therefore how do we increase our case reserves to do that we are now believe certainly assessing the situation that we have – we’re more confident that these reserves will be adequate and certainly that the amount of staff. But I think, the reason why I don’t see some of it even though – again we talk about claims on liability have deteriorated I think there are other firms probably have high reserve capabilities basically or whether that situation and we did not as we were building. Last year when we built reserves we would built in more – we went into 2014 we were caught that what we reserving in that year as we indicated was – when we assessed it at the end of day it was not adequate and that’s were the majority of that money went. We’ve seen for every deterioration like I said in BI and UAM and UM.

Great, thank you very much.

We have a question from Erik Bass from Citigroup.

Hi. Thank you. I just had a couple questions about Advice & Wealth Management expenses. First, how much of your G&A expenses variable cost? So if you do see revenue pressure from market conditions, how should we think about the impact on margins?

Again, as you look the – as a rough rule of thumb, again, it’s three category fixed – semi-variable and variable, I would say variable in that case would be about its third and again from that standpoint and certainly we’ve demonstrated in the past our ability to approximately assessed the situation see what expenditures provide this sort of return and we do so, we have flexibility.

Got it. And can you help us think about the level of expenses you may need to incurred to comply with the DOL rules and as this something you maybe able to offset to reengineering or should we expect some net impact in 2016 once kind of the final rules are out?

No right now we are assessing obviously from the standpoint the rules have not been distributed but certainly we realized that if we reread it – depending on, there will be development expense and there will be some on going operational expense. We hope to then certainly we’ve been in a plan for mode, at this stage trying to be proactive. But again, not having the full elements of that is difficult to put a number on. But it will – we will then look to what reengineering and basically repositioning we would have to do. And I think that is something as this comes out, we’ll be more direct about it. And again, it’s something that we are focusing on and be part of the development, I don’t know if Jim wants…

Yes. I think what I would say right now is we do – we have mobilized our resources. We’re looking at all aspects from the compliance to the technology, to training necessary for the advisor force. And we will go into the deployment of that as soon as we know exactly what the rule looks like. We’re doing some work already to prep for that and get a various activities under way that we think based on some of the directions that we are in the previous proposal, and that’s already in the functional requirements and stuff from a tech perspective. Depending on how significant that is and what the changes we think we do have the capabilities to accommodate that or adjust for it. There will be impacts and expense from it, we will offset some of that based on what we will tighten the range, and for some other things we might have underway as this takes a priority. So there will be some offset there. Having said that, I couldn’t tell you, in the short-term depending on how aggressive the timetable for implementation is, what we would have to do to heavy up on some of the resourcing necessary, but as I said I think Ameriprise will be one of the companies that would have the ability to deal with this more effectively. We do have the resource capability and can move things around to try to accommodate that. And we will set up so that in the end hopefully we will be a place that would be a better able to serve.

Okay, that’s helpful. Thank you.

Our next question comes from John Nadel from Piper Jaffray.

Good morning, everybody. First question is, related to Advice & Wealth Management, I’m curious, Jim, market volatility and maybe client activity slowing certainly make some sense. And it’s sort of a continuation from what we saw in the third quarter. I’m just curious whether you’re seeing, or you believe you’re seeing, any impact just yet in the results from the proposal – from the DOL proposal or are advisors already starting to adjust?

No. I would say as advisors are as curious as you all are, to what exactly this will mean et cetera. And we’re starting to give them a little better sense and communication on that. What I would just say is I think what you’re seeing more near-term is more of the volatility picked up in the market. And you have some – in our case, we run a lot of assets in the Management fee-based business and so you have that depreciation at the end of the third quarter. But as you saw, we still got $2 billion into our outflows, our cash balances increased by a few billion. So I think at the end of the day, activities still going on. I think people are just like you and I probably looking and saying is there another leg down, what is it? What’s the level of volatility? I think on the other side, we are not seeing wholesale changes to client activity or people pulling money or anything like that, but I think people are more stayed in tune. There’s still money going to work and some people are using this as an opportunity. But I think at the end of day, I think the increased volatility always gives people a little pause.

And then related to that Jim, most of – I think at this point most of your competitors who have some sort of an advice base business have really tried to quantify at least provide some sensitivity around where they might expect to see some of the impacts from the DOL proposal. Assuming it goes through as it’s currently written in it and it seems more, more likely that there won’t be any significant changes to it. I’m just wondering now – many months to evaluate the proposal whether you can help us with some sensitivities on where you might see some impacts on your revenues and margins?

What I would say is this – I think one of the things people have identified is the idea that if they’re unable to sell rates et cetera or some of the type of broker transactions into the qualified accounts and what would that do to revenue. I would just say over the course of this year based on changes in regulations and other things and where the market was, our advisors pulled back from that. So I think that pullback from that’s going to be less significant because it was already occurred in on numbers in 2015 in a large way, because you know there are a level of changes happening there already. I think in regard to the business overall it really depends on where the DOL comes out with their best interest contract exemption. And if they truly are giving you the ability to do commission-based business within that and to satisfy your obligations there, that’s one method. If they’re saying, no, we don’t like that and we want to move more to fee-based. Yes, we can accommodate that as well. We’re trying to figure out which way that – as far as the actual final rule. You would imagine that there’s going to be some increase in compliance and cost disclosure and various things like that, but over time, we will get everything adjusted for it. It’s hard to really say, we probably see some adjustments that would happen in the idea of the commission type business for these accounts. We do see that – a lot of our annuity business. I know that was one of the things that people mentioned, but a lot of our annuity business today very, very little almost none of it is done without the extra debt benefits or living guarantees or something that. Again, the administration has said that’s still important. So we are still under the impression that under the best interest contract you can still actually do those things as long as you satisfy the requirements of the value provided and what that is and how you disclose it, et cetera. So that’s why I’m saying it’s kind of hard to give you an adjustment. But we have all the what if’s depending on where we go, what we’re planning on doing is as soon as we get that information, we’ll come out in a more informed way and let you know what that is. We already know that there are a number of offsets that we can do by adjusting things, including what fees we charge and don’t charge and where we do it. On the other side of it, it’s hard to tell exactly what is permissible at this point. I hope that – I wish – but I don’t want to get ahead of my skis on this.

No, I understand. And if I can just ask one more question on the asset management side. Just curious whether you could help us with what the underlying either the fee rate or the operating margin, what that looked like in the segment in the quarter if you adjusted out the performance fees in the CLO again?

Okay. Yes, on that basis it would be pretty similar to what you’ve seen before in the 53% range.

Okay, thank you.

Our next question comes from Jay Gelb from Barclays.

Thanks and good morning. On the capital management perspective, I know you’re sticking with your baseline of around 100% return of capital in terms of dividends and buybacks, it is 125% last year, given the drop in the share price, which I think is largely due to macro conditions. Is there a hard stop in terms of what percentage of annual earnings the company would return to shareholders buybacks and dividends?

I don’t believe we have a hard stop, we certainly evaluated and look to see our assessment of the shares on the value in the environment and we certainly understand the fundamentals of the business. So we have the capacity and capability. So there is no hard stop on it, but as we’ve seen in different years we moved to 120% 125%. So we will assess that based upon the circumstances of the – how we feel about the environment and obviously the excess position that we have. But we do believe the shares are undervalued right now and opportunistically we will certainly assess that and what like we did in the last quarter and certainly with the price being down, certainly you have more bang for your buck with the money being spent.

Okay. My next question is on Advice & Wealth. The margin in the fourth quarter did not increase for the first time for any quarter, I think over three years. I’m just wondering what that means on an ongoing basis? Do you feel in this environment especially given what’s happened in the first quarter with equity markets that there’s any chance of margin improving versus the 17.1% in 2015.

What I would say is this, if you look at the fourth quarter, actually the fourth quarter margin is pretty good. I mean our overall revenue stayed, it didn’t go down or anything like that. But we had an impact because the lower markets at the end of the third quarter and as our wrap fee business builds at the beginning of that quarter – through the quarter. You sure of that it would be impacted because assets are depreciated by – it was 8% or 10% whatever it was from the beginning at the end of the third quarter. So did have some impact in the revenue based on the billings for low – from the depreciation that occurred. The transaction activity was pretty much consistent with previous quarters it didn’t necessarily go down in the fourth quarter. We usually see a little more activity that happening at the end of the year, the way our expenses sort of a crew particularly as we do our advertising because that’s really a fall campaign as an example advertising expenses picked up in the quarter but that’s consistent with the prior year and the year before that et cetera. So expenses always go up a little in the quarter. On a full-year basis, we’re still only relatively flat in G&A and year-over-year in G&A is consistent because of the quarterly accruals. So I would just say what happens is you always have that little extra expense coming in the fourth quarter because our advertising campaign, there was an extra payroll week et cetera, pay period and things like that, but we didn’t increase expenses at all. And what happened was we didn’t get the lift of revenue needed from all the wrap balances coming in previous quarters, because the market depreciated. So that’s why the margin compressed. Now going forward, I think if you’d say, the markets up 10% from where we were in the equity, it’s going to impact our fees, I mean we run a very large fee-based business. So I would say margins were compressive, the markets don’t bounce back only because that’s going to take a chunk out of your revenue. Now we’ll adjust and think about expenses, but again you can only adjust expenses going out not necessary for what’s there today.

Yes, that makes sense. Jim, for the overall company…

On the other side, interest maybe a little more of a benefit, because the short rate was up 25 basis points. So that will help us in the first quarter. I don’t know the actual numbers one versus the other depends on where the markets are.

Right. Jim, for the overall company in 2016 included there’s a benefit on EPS from the share buyback, but directionally would it be pretty reasonable to expect kind of a flat EPS in 2016 given pressures especially from equity markets?

I haven’t done the calculations in my head yet, because I’m trying to figure out the markets but I let Walter to go over that.

I think, listen the markets as Jim said, are certainly effect us. And the thing that we then have to assess is the impact it has on the client behavioral aspects and then the actions that we think are prudent to sustained growth and everything’s in that and how you adjusted. So there’s a lot of elements there but it certainly a challenging…

About buyback and the EPS…

But the buyback, again, you will have an impact on it, but again is it going to be able to negate, I can’t say at that stage as we assess the – those other variables.

All right. Thank you for the insight.

We have a question from Suneet Kamath from UBS.

Hi, good morning. Just I wanted to go back to Auto & Home for a second. Is there anything structural about that business, whether the distribution relationship you have with Costco or anything like that that would preclude your ability to either exit it or use reinsurance to free capital?

From the standpoint of exiting free capital, there is no restrictions from that standpoint. And the other thing I would say, Suneet, the basic business fundamentals of this, and certainly looking at it – we’ve looked at it, and we’ve had outside consultants look at it, the basic fundamentals is quite solid. But in the contractual elements, I think we can certainly manage the balance sheet.

Yes, but Suneet, I mean, we do run a direct affinity business, and our partnerships are very critical to that business. And so very important is this is why our business is something we want to get back to a really good state. And we want to then ensure that we’re continuing to deliver. And we are and have been, and that really has reinforced the idea of our growth over the last number of years. Now with that as I said, the most appropriate for us, for a shareholders, from a relationship, from a partnership and the longevity of the business is to get this back to a good strong state. And then that gives us a lot more ability to think of and how to continue to force the good partnerships or good arrangements for the future.

Okay. But I guess we’re looking at a difficult 2015, very low profitability in 2016. It doesn’t sound like there’s anything structural that would prevent you from exiting. We’ve run the math that suggests if you free capital from it, it would be more EPS accretive than turning it around. And that was when the stock price was, I think, I don’t know, $105 and now we’re looking at $20 lower than that. So why is that math wrong?

I can’t – our math and when we look at it, it is – we – as Jim has said the business, we believe is fundamentally a sound business. We believe it’s in the best interest from the shareholder perspective to take the approach that we are. And so I know certainly it’s taking this reserve increase certainly is impactful. We do believe the structural elements moving forward for us are good as we talked about them. And we do – we have a view that from a shareholder basis, fixing it and assessing is the best approach. You know it takes time to get these price increases, these price to risk elements adjusted through, and we certainly focus on the infrastructure, the investment we’ve made in people and capabilities will pay dividends for us. And relationships are unique and very valuable and certainly provide the capability to have good returns forward. And we certainly are trying to fix – we think we have addressed the old, now we are moving forward and putting in place, but it does take time to get there. And we did miss on the basis of how much impact we could have with the 2014 prior. That’s our view of it.

And Suneet, we do evaluate we’re not looking and we do evaluate all various options and ability. I would just tell you that based on everything would including other people looking et cetera that this is the way to create the best shareholder value and to maintain the strength of that business for the future for whatever it may come than what we’re doing right now. So I know looking at it from just a mechanic and what you think, but I would probably say being a bit more in understanding it. Now that’s where we come out and we will get this back to where it’s in good shape and in some way creating a future shareholder value of greater means.

Okay. I guess we will revisit that. Then in terms of the excess capital and the buyback, maybe to follow up on Jay Gelb’s question, it just seems to me that you have – there’s $2.5 billion of excess capital. It’s a pretty sizable component of your total equity. Market doesn’t seem to giving you any credit for that excess capital. So I know you want to be opportunistic but can you flush out a little bit more, just maybe the pace of buyback just so we get a sense of how aggressive you’re thinking about being?

Again, I think we’ve been – as we look to 2015 certainly looked at the latter half of 2015, we certainly accelerated the base and certainly from the dollar standpoint and certainly in the number of shares, as the elements there. So we do believe – as we assess that sort of positioning is the right one to continue with. But we look at it each quarter and assess the impact. So I think it’s a good gauge maybe – from our standpoint being optimistic about it that what we did in the latter half of the year is something that is a barometer to start that we would continue with where the price is. And but again, we get into assessing the excess, the environment, we feel very comfortable about that. So I think it’s a pretty good barometer if you use the latter half of the year.

All right. So filled in 425 for quarter and maybe there’s some opportunistic upside to that?

It seems like that’s latter half of the year.

Okay. Thanks.

We have our question from Tom Gallagher from Credit Suisse.

Good morning. So first just a follow-up on that last question, can you talk about priorities right now? Obviously you’re – you’ve upsized the buyback a little bit in the latter half of the year. But I know you’ve also discussed contemplating M&A. Can you talk about, just given where your stock is, whether M&A opportunities are still on the table? Or is your money to better put to work just through buybacks right now? That’s my first question.

No. M&A is definitely on the table and if we see things that come along that are appropriate for us, we have the means to do it. I think having the capital position, we do have gives us the flexibility. We won’t have to go out and leverage ourselves to do something bigger. We wouldn’t have to go raise equity in a difficult market, which doesn’t make a lot of sense. And over time, we also can return back in a more, what I would call stronger way, so that you always have something there in addition to whether you’re in a weak market requirement to buy back more. So that’s the way we thought about it. I mean, I remember before the financial crisis a number of investors asked us to, and analyst why aren’t we returning more? Why don’t we go out in the risk curve? Why don’t we get more higher-yielding instruments et cetera, et cetera? And I think they thanked me afterward in a sense that we kept the company on a consistent path, we did appropriately having the flexibility in the means to navigate and we did have the opportunity than to do a bigger deal even though we had to do, because it was a little bigger deal because the environment was still unsettled. We actually just did some equity at the same time. So I would just say Ameriprise is very well situated. And if this market gets even more difficult, I think we’re actually one of the stronger players to actually be able to capitalize on it. If it doesn’t, we’ll be able to continue to buy back our stock at good numbers and still be able to keep the company strong not knowing what the next step for the turn of the environment or an M&A comes along. So I actually think were situated well and this is actually kind of a good environment for Ameriprise in that sense.

Got you. And, Walter, just a question on Advice & Wealth margin. So, and I realize you may not have the precise answer this time but I just want to know if you can answer this directionally. A little better than 16.5% margins in Advice & Wealth in 4Q was lower than where it’s been trending lately. But if I consider the benefit you’re going to get from higher short-term rates, plus the seasonal expense reduction that you typically get from 4Q to 1Q, and then I consider the offset of the weaker revenues, assuming we don’t change a lot from current market levels, would you still expect margins to be lower than the 4Q level? Or I should just ask it this way, would you expect margins to come in below the level of 4Q or can you give us a sense directionally?

Directionally, certainly as Jim has indicated, the market reduction and the deterioration impacts it, but again you’re talking about margin. So the question is really getting to base profitability and then of course remember revenues going to be moving and also profitability and the actions we then take. I think the elements – the moving parts of the market both interest and with equity certainly compounds a little, but then the actions we will be taking as we look at that in the interest lift. Underlying direction of the business is solid, so I think and then – but the question is client behavior, so it is a difficult question. The fundamentals are there, but we do get impacted by these variables that we just can’t control. That’s the non-controllable side then we get to the action that we take to manage the business. So margins are tough one because you got moving – a lot of moving parts on it, but profitability certainly will be impacted by the drop in the equity marks offset by the interest lift. And then it’s a matter of how it affects the client activity both from the level and then the shifting, right. So that’s why it’s a tough one, really is. But the fundamentals where we’re going is solid certainly from that standpoint. As Jim has said, we’re attracting advisors, we’re certainly feel comfortable about the fundamentals of business. And so there’s no change from that standpoint.

Got you.

Yes, please. I’m sorry…

Just one last follow-up, if I could, on the asset management business. The spike in the U.S. Trust net outflows, can you comment a bit about the pool of assets that remain that you believe are at risk, the level of outflows that you expect going forward? I presume we are going to keep getting leakage. But this one was obviously kind of a jumbo redemption quarter on that end. But can you give a little color in terms of where you see that trending?

Yes. So let me just say a few things on that, and I know that was a bit of a sizable number. And as you saw it, it came out of the institutional section. So this is very, very low-fee type of assets. We were doing the business, it was part of an in-house operation et cetera that we had as part of Columbia, we were supporting the U.S. Trust business. And it’s unfortunate that they are taking it back in-house actually to manage it and it’s all fixed income assets. Having said that, even though we don’t like to lose it, it’s a very different on a fee basis than the business that we are riding and continue to do. I think, so it will be another few billion we understand, we don’t know exactly. I mean, we’re not sitting here and saying, we taking these accounts and different clients et cetera, but we can say, it could be another few billion. Having said that, I will be very clear, our stronger business with U.S. Trust is a funds business, and an equity products and all those various things, and those continue on. It would be nice if I was able to just – not just report flows, as the flown number in total, but again, this is part of when you do deal that has a proprietary business and you’ve taken it over. You are going to have some of those things. We still have our Zurich and we still have a good account, good relationship, good overall fee basis. So what I would say in looking through this, and I’ll just give you some numbers. And as you know the fourth quarter wasn’t a great quarter for the industry and outflows because of what’s happening. But I…

Okay, thanks.

And our last question comes from Eric Berg from RBC Capital Markets.

Thanks so much for working in here at the end. Jim, my questions really involve asking you to build on some of your earlier responses. First, with respect to the margin in the brokerage business and the Advice & Wealth Management. I thought, I heard you say that activity levels, while depressed from where they were at their peak, were roughly in line – did not change much from the activity levels in the September quarter. So my question is, is activity levels were in fact unchanged, if expenses were well controlled and if the stock market – I’m looking at the average level of the S&P and I believe I have it right, when I say that it was actually up modestly compared to the average in 2014 fourth quarter – if the stock – if you got a little bit of a lift from the stock market, good expense control and stable client activity, why did that combination not lead to a further improvement in profit margins?

So, Eric I think what it is, is what we’ve said is if you look at the numbers in the fourth quarter, I mean revenue quarter-to-quarter was actually relatively the same little slightly up.

Yes.

There are two things one is, the revenue would have been higher, if at the end of the third quarter the markets that didn’t pullback. You remember the markets went into 1,800 in August, September. And so what happened is you have all your wrap assets under management that you bill fees starting in October, beginning of October through the quarter. And so, some of those fees being billed were at lower absolute production because the fee level was based on the assets level and that just climb back towards the quarter to the end of the quarter. So you don’t just build at the end of the quarter. So that’s was really what took out some of the production that happens on the asset side of the equation, right? And so that’s part. The second part of it very clearly is and we’ve had it in the fourth quarter is we do have some other G&A expense even though we managed the G&A expense flat over the year, when we put our advertising campaigns, we usually go on the air at the end of September with the bulk of that being October and November beginning of December. And so, we accrue for that expense when we are actually on the air and that’s millions of dollars to run that campaign, which is not in the third and second quarter. Now over the course of the year, since we didn’t increase our advertising year-over-year, it’s the same fourth quarter to fourth quarter, if you look at the expenses and the supplemental you’ll see that expenses did not go up and for the full year were pretty flat on G&A.

Eric, it’s Walter. So let me just – one point because he was talking about rates and certainly if you look at and I can understand from your perspective – that looking at the S&P and looking you would see it’s up marginally, but what we do is run a weighted index related to the assets that we hold. And if you actually look at that on both on average and on ending its down. So it’s not just the S&P again, we actually do the earning rate assets that we have and it’s down. So that is what Jim was explaining, that is certainly – it impacts the fee base.

And, Jim, if I could wrap up just by asking about the – further about the fiduciary matter, are you saying that there will be – should I take away from your comment that there will be an impact on revenue but that the impact will be muted by the fact that there is already been a pullback in some activity?

No, Eric. What I – and so let me clarify if I wasn’t clear. Okay.

Thank you.

What I said is – I think when some people have come out publicly earlier in 2015, and said oh, it will only be X or it is X because of REITs et cetera and this is the percentage over the business I do in that, what I said is a lot of that business actually reduced tremendously for us in 2015. And so I don’t have the exact number may be Alicia has it, but I think we did not do a lot of production and REITs and it wasn’t necessarily in that production we did a lot in the qualified area. But she can give you the numbers on it, so what I said is, they were identifying a little more of that if that went away. We say looking and reading the DOL’s proposal before all the commentary, there are number of things that are going to be affected. The question is, they also said that they would allow for certain business to be done under a best interest exemption standard that you would apply for and you would actually adhere to and you would disclose on et cetera. Depending on what they finalized, there will depend on whether you can continue to do a lot of the business you’re currently doing today under greater disclosure in a contract and et cetera, et cetera or that, that would have to be addressed to more of a fee-based type of basis in which case you would have to figure out with those clients whether it’s appropriate to move. So I can’t give you what the – what that would look like yet until I know it. What I’m saying is there are different ways that we think that we can manage and leave the business through if those exemptions are there and if you were able to execute appropriately against them and if not, there are some alternatives. Part of the activity would be do you serve some of the smaller accounts against smaller accounts are a little more costly. So part of that is you’ve got to look at your business model appropriately in that regard. So I don’t have a perfect answer to that’s all I said is it will have an effect on the industry, it will increase some cost the question is what do you do over time and can you offset some of that. And on the revenue side again, I think there are some alternatives but I don’t know until the final rule and if it as the final rules as you can to certain business so certain business have to be done at a certain rate. Then there will be some adjustments their part coming from the advisor, apart from the firm.

Very helpful addition. Thank you, Jim

Thank you. And with this ladies and gentlemen we conclude today’s conference. We like to thank you for participating. You may now disconnect.