Welcome to the Q3 2023 Earnings Call. My name is Chris and I will be your operator for today’s call. As a reminder, this conference is being recorded. I will now turn the call over to Alicia Charity. Alicia, you may begin.

Thank you and good morning. Welcome to Ameriprise Financial’s third 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’d be happy to take your questions. Turning to our earnings presentation materials that are available on our website on Slide 2, you see a discussion of forward-looking statements. Specifically, 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 their respective GAAP numbers can be found in today’s materials and on our website. Some statements that we make on this call may be forward-looking, reflecting management’s expectations about future events and overall 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 our third quarter 2023 earnings release, our 2022 annual report to shareholders and our 2022 10-K. We make no obligation to publicly update or revise these forward-looking statements. On Slide 3, you see our GAAP financial results at the top of the page for the third quarter. Below that, you will see our adjusted operating results, followed by operating results excluding unlocking, which management believes enhances the understanding of our business, by reflecting the underlying performance of our core operations and facilitates a more meaningful trend analysis. We completed our annual unlocking in the third quarter. Many of the comments that management makes on the call today will focus on adjusted operating results. And with that, I will turn it over to Jim.

Good morning and thanks for joining our call. Yesterday afternoon, Ameriprise reported strong third quarter earnings. The business continues to perform very well in a fluid and uncertain operating environment. Across the firm, we are helping clients navigate external pressures with our high-quality advice solutions and service. As you can see in our results, Ameriprise continues to benefit from the complementary strength and flexibility of our business and our talented team. Regarding the economic landscape, while inflation has come down a bit, it remains elevated, so it’s likely we will see higher interest rates for longer. Economic growth in the United States continues to hold up well even with increased rates. However, consumer sentiment in the United States is declining and we may see soft economic growth in the future. Additionally, the geopolitical climate is causing further volatility. Equity markets have been resilient and were up year-over-year but down slightly in the quarter. At the same time, many investors are holding greater levels of cash and feel comfortable earning competitive yields in cash products. Our assets under management and administration reached $1.2 trillion, up 12% and financials were also strong. We delivered record operating results in the quarter. Excluding unlocking and a regulatory accrual, total adjusted operating net revenue grew nicely, up 10% to $3.9 billion, and earnings were also quite strong, up 18% with EPS up considerably, an increase of 24%. Additionally, our return on equity was 49.9% compared to 48% a year ago. Very few firms in our industry achieved nearly a 50% ROE on an ongoing basis. Our complementary businesses consistently generate strong financial results. Let’s start with wealth management. Our advice value proposition is built for the current environment. Advisers are focused on ensuring clients are highly engaged and deepening relationships with them. Importantly, client satisfaction remains at an excellent 4.9 out of 5 stars. Total client assets increased 15% to $816 billion with good client net flows of $8.9 billion in market appreciation. We continue to attract more new clients and move up market as we grow our client base. And we know from industry research that more investors need guidance. In fact, among affluent households, many investors in the marketplace still don’t have a formal plan to manage assets, income and expenses for retirement. As we highlighted previously, our advisers continue to hold a higher level of cash for their clients with the highest short-term yields they’re able to attain amid market uncertainty. Therefore, we continue to see a lower percentage of our assets moving into wrap with $5.4 billion in the quarter. As markets settle, we expect that money will ultimately be redeployed into wrap and other solutions. Our re-entry back into the banking business came at the right time and is very beneficial for the firm. Assets in the bank and certificate company continued to increase substantially up 37% to $35 billion. With interest rates at this level, we’re able to gain meaningful spread revenues that are sustainable when the Fed does start to cut rates. We will also be launching new products in the bank that will bring over additional client cash that they’re holding at other banking institutions. And overall, after a bit of a slowdown last year, we saw a nice increase in transactional activity up 11%. As you know, we continue to invest to put great capabilities in advisers’ hands to drive high satisfaction and growth and deliver an exceptional experience. We’re using advanced analytics to deliver an even better client and adviser experience. This includes a complete practice dashboard to enhance practice management, prepare for client meetings more efficiently, identify opportunities to grow their business and deepen their client relationships. In the quarter, we were back in the market with our successful Ameriprise brand advertising across TV, digital and social channels. We also redesigned our client website to be even more engaging, highlighting the unique benefits of working with an Ameriprise adviser. Adviser productivity increased another 10% to a new high of $901,000 per adviser in the quarter. Our adviser retention and growth are both consistently among the best in the industry. Regarding recruiting, we brought in another 64 experienced productive advisers. We had a bit of a seasonal slowdown of activity to begin the quarter but saw a nice pickup in September and we believe that we’ll return to more normal levels as we move through the rest of the year. Our reputation is an important differentiator. We recently learned that Ameriprise is being recognized for both a high level of customer trust and service. We received one of the highest customer trust index scores among financial services firms in Forester's 2023 U.S. Customer Trust Index. And for the fifth consecutive year, J.D. Power has recognized Ameriprise for providing an outstanding customer service experience for phone support for advisers. These awards build on the external recognition we have received over the years and are a testament to the dedication and expertise of our team. Finally, in terms of profitability, Wealth Management continues to generate strong pre-tax adjusted operating margins of more than 30% and earnings growth of 23%. Now let’s move to Retirement and Protection which is part of our wealth management solutions offering. We’re driving good sales in targeted focused areas that serve our clients’ comprehensive needs and generate good risk-adjusted returns. In our life business, we focused on variable universal life and disability products that are appropriate for this environment. Life and health sales were up nicely, increasing 22%, with the majority of sales in higher-margin accumulation VUL products. We’re also seeing positive initial results from our accelerated underwriting modeling, which is highly automated and will drive further efficiencies as we roll it out more fully. In variable annuities, our structured product continues to attract good interest. Combined with our variable annuities without living benefits, sales were up 18% from a year ago. In the quarter, our RiverSource Retirement interactive tool which helps advisers create customized client presentations was recognized with several industry awards for innovation and ease of use. With the increase in rates, we’re able to garner improved yield in our high-quality investment portfolio. Excluding unlocking, pre-tax adjusted operating earnings were more than $200 million. Our RPS business has been highlighted as one of the most profitable in the industry. Let’s turn to Asset Management. As you saw in the quarter, assets under management were $587 billion, up 7%. It remains a challenging time, both in asset management and the active space in particular. Our flows were largely consistent with the industry. In retail, as we know, people are still hesitant to put money to work, so gross sales were a bit weaker. However, redemptions have improved and our overall flow rates in the U.S. are in line with active managers for the product disciplines we compete in. And in Europe, our flows have improved a bit from a year ago. Institutional mandates can be lumpy, but we were in net flows, excluding legacy insurance partners. We’re earning mandates in a number of areas, though LDI flows in total were down compared to a robust quarter a year ago. In regard to our investment performance, we have strong short- and long-term performance across equities, fixed income and asset allocation, with a nice pickup in the short-term fixed income. And now about 70% of our asset-weighted funds were above the median for 3- and 5-year periods and more than 85% for the 10-year period. This is a positive and will help our ability to garner flows in the future. Also in the quarter, we completed one of the largest aspects of the EMEA integration, the transition to our global order management system. With that, we have now completed all of the large integration activities. We are now focused on adjusting our global operating model and expenses so we can continue to generate good margins in a tough climate. For Asset Management, adjusted operating margin was 36% and above our targeted range. G&A was down 3% adjusted for foreign exchange. We also have taken action to tightly manage expenses and we’re looking more fully across the business to continue to reduce expenses and leverage more operating efficiencies for the rest of this year and into 2024. I’d like to now come back to set the stage in the total firm. Our complementary businesses continue to give us the ability to deliver for our clients and generate very strong financial results over the years. Our capital strength and flexibility remain excellent. Our capital return to shareholders is among the highest in the industry and we have consistently generated strong financial returns over the years, including with our best-in-class ROE of approximately 50%. Ameriprise is situated very well, including with the complementary addition of the bank, which allows us to sustain the benefit from higher rates. We’re not standing still. We’re focused on areas of opportunity for growth and at the same time, we’re examining the entire expense base across the firm to further prepare, if the economic environment slows as we move into and through 2024. In closing, it’s the totality of our complementary business and the benefits that it provides back to our excellent team that enables us to consistently achieve this level of results. Now Walter will elaborate on our financials.

Thank you. As Jim said, strong results this quarter continue to demonstrate the leverage of our diversified business model, with adjusted EPS, excluding unlocking and regulatory accrual up 24% to $7.87. Growth in fee-based and spread-based revenues, coupled with disciplined expense management drove excellent financial results which is a continuation of our strong and sustainable trend across this market cycle. Assets under management and administration ended the quarter at $1.2 trillion, up 12%. AUMA benefited from strong client flows and market appreciation. Across the firm, we continue to manage expenses tightly relative to the revenue opportunity within each segment. While we continue to make investments in the bank and other growth initiatives, particularly in wealth management, we are taking a disciplined approach on discretionary expenses to manage margins across our businesses given the uncertainty in the macro environment. G&A expenses were well managed in the quarter, up 4%. Excluding the regulatory accrual, General and Administrative expenses grew 2% from higher business volumes and growth investments. Our G&A expenses remain on track with our expectations for the year. Our consolidated margin reached a record high of 27.5%, excluding unlocking and regulatory accruals. Balance sheet fundamentals remain strong. Our portfolio is well positioned, and we have strong capital and liquidity positions. This allowed us to return $663 million of capital to shareholders, a strong return of 81% of our operating earnings, excluding unlocking and a continuation of our differentiated track record. Turning to Slide 6. Revenue growth was strong at 10% from higher interest earnings and the cumulative benefit of client net inflows with average equity markets up 11%. Excluding unlocking and the regulatory accrual, pretax operating earnings increased 20% from last year, with meaningful benefits from strong client flows, higher interest earnings and well-managed expenses. Let’s turn to individual segment performance, beginning with Wealth Management on Slide 7. Wealth Management client assets increased 15% to $816 billion driven by strong organic growth and client flows, along with higher equity markets. We’ve had $43 billion of net inflows over the past year, with $9 billion coming in this quarter from new clients joining the firm, the deepening of existing relationships and adding experienced advisers. Clients remain defensively positioned with a lower level of flows into wrap than we have seen historically. Our flexible model and broader offerings allow advisers and clients to pivot as markets and client preferences shift, while the money stays within the system. Revenue per adviser reached $901,000 in the quarter, up 10% from the prior year from higher spread revenue, enhanced productivity and business growth. Turning to Slide 8. I’d like to provide an update on client cash levels. Our total cash balances reached a new high this quarter at $72.5 billion as we continue to see new money flowing into money market funds and brokered CDs, as well as into certificates. This creates a significant redeployment opportunity as markets normalize for clients to put money back to work in wrap and other products on our platform. Cash sweep is launching working cash for our client accounts. While there is some seasonality with cash levels, cash remains an important component of the client’s asset allocation. Cash sweep and certificate balance ended the third quarter at $40.5 billion, down $5.8 billion from a year ago and down $1.5 billion sequentially. Since the end of August, cash levels have been essentially flat. Our sweep cash has an average size of $6,000 per account and 67% of the aggregate cash is now in accounts under $100,000, and we have seen very limited movement out of these accounts. The financial benefit from cash remains strong. This will be an important and sustainable source of earnings going forward. We continue to manage our investment portfolios prudently. Our bank portfolio is AAA rated with a 3.6-year duration. The overall yield on the investments in the portfolio is 4.7% and rising with the new money yield on investments in the second quarter of 6.5%. Our certificate portfolio is highly liquid with over half of the portfolio in cash, governments, and agencies. It is AA rated on average with a 1-year duration. In total, specific company portfolio is now yielding 5.6%, with new purchases in the quarter at 6%. On Slide 9, we delivered extremely strong financial results and wealth management. Profitability, excluding the regulatory accrual increased 26% in the quarter with strong organic growth, the benefit of higher interest rates, and continued client net inflows. The pretax operating margin was very strong at 31.1%, excluding the regulatory accrual. Adjusted operating expenses increased 9% with distribution expenses up 9%, reflecting higher asset balances. Excluding the regulatory group, G&A grew only 2%, which was in line with expectations, reflecting investments for growth and higher volume-related activity. We continue to expect full year 2023 G&A growth to be in the mid-single-digit range. We remain on track to close the Comerica investment program partnership in November, which will bring approximately 100 advisers and $18 billion of client assets. Let’s turn to Asset Management on Slide 10. Financial results were very strong in the quarter, and we are managing the business well through a challenging environment that is impacting the industry. Total AUM increased 7% to $587 billion, primarily from higher equity markets and foreign exchange translation, partially offset by net outflows. Asset management, like other active managers, was in outflows in the quarter. Like others, we experienced pressure from global market volatility and a risk-off investor sentiment. Investment performance has been another critical area of focus, and we are seeing improvement, including in fixed income strategies. Overall, long-term performance remains very strong, and we had improvement in 1-year fixed income numbers. On Slide 11, in the quarter, asset management earnings increased to $199 million as a result of equity market appreciation, discipline and expense management, higher performance fees and $7 million of favorable timing-related items, which more than offset the cumulative impact of net outflows. The margin was 36% in the quarter. Importantly, we continue to manage the areas we can control. Expenses remain well managed, total expenses declined 1% with G&A decreasing $1 million. However, excluding the impact from foreign exchange translation, G&A was down 3%, reflecting early benefits from expense management initiatives. As Jim said, given the environment, we are taking a very focused look at our course of business globally to further reduce expenses. Let’s turn to Slide 12. Retirement & Protection solutions continues to deliver good earnings and free cash flow generation, reflecting the high quality of the business. In the quarter, pretax adjusted operating earnings excluding unlocking were $204 million, up 4% from the prior year, primarily as a result of the higher investment yields from the portfolio repositioning we executed last year. We continue to view normalized annual earnings of $800 million as a reasonable expectation for this business. We completed our annual actuarial assumption update in the quarter resulting in an unfavorable pretax impact of $104 million, primarily related to updates to persistency assumptions for variable annuities. Overall, Retirement & Protection Solutions improved in the quarter, with protection sales up 22% to $79 million, primarily in higher-margin UL products. Variable annuity sales grew 18% to $1.1 billion, with the majority of the sales in structured variable annuities. Our long-term care business continues to perform very well. The business is gradually running off as clients age. Our claims experience continues to perform very well and remain in line with our expectations. Additionally, both rate increases and benefit reduction strategies have exceeded our expectations. You can see additional detail of this block in the appendix of this presentation. Now let’s move to the balance sheet on Slide 13. Our balance sheet fundamentals remain strong, and our diversified high-quality investment portfolio remains well-positioned. In total, the average credit rating of the portfolio is AA with less than 1% of the portfolio in below investment-grade securities. VA hedge effectiveness remained very strong at 94%. Our diversified business model benefits from significant and stable 90% free cash flow contributions across all business segments. This supports the consistent and differentiated level of capital return to shareholders. During the quarter, we returned $663 million to shareholders and still ended the quarter with $1.4 billion of excess capital and $1.9 billion of holding company available liquidity. With that, we will take your questions.

Thank you. Our first question is from Steven Chubak with Wolfe Research. Your line is open.

Hi, good morning. So wanted to start with a two-part question on organic growth within wealth. You had another solid quarter of flows, but the pace did moderate slightly for you and frankly, some of your wealth peers as well. Just given the challenging operating backdrop, I was hoping first that you could speak to your confidence level in sustaining that mid-single-digit flow rate and then second, with the onboarding of Comerica, any color you can share on the growth outlook or backlog for new mandates within the bank channel?

Okay. I’ll start. When we look at the flow rate from a client perspective, we still feel very good about the ability to bring in client flows and how we’re approaching the market, particularly as we move a bit more upmarket. As you would imagine, there are some fluctuations based on where you are in the season. I think during the summertime, things slowed a bit, but we don’t see that as a trend line down. We see it as more sustainable based on what we’re doing, how advisers are engaged and how they are attracting clients and activity in the marketplace. So we still feel very good about our ability to continue the client flow rate. As far as Comerica, you want to mention...

Yes, obviously, we’re on target for closure by the beginning of November. And yes, we do have a very active pipeline at this stage. So yes, we feel that there is opportunity.

That’s great. And just for my follow-up on the Asset Management margins. As you noted, the business is facing secular headwinds and given some of the pressures, I was pleasantly surprised by the margin strength, the resiliency that we saw in the quarter. I was hoping you could just speak to your margin outlook if flow headwinds persist and whether there is additional expense flexibility to defend those margins and stay within your targeted range of 31% to 35%.

So as you saw, first on the fee level, it’s been very stable, which is very positive. Again, you’re going to always have some adjustments based on where the assets and the type of assets, institutional retail. But from an outlook perspective, we’re just beginning our expense tightening there. You saw a reduction in expense around 3% on a foreign exchange adjusted basis. But we feel there is a good opportunity for us as we look at our global operating environment now that we’ve fully integrated the BMO acquisition onto our global platforms. And now we’re looking at how we tighten those processes, improve efficiency, operating effectiveness, and where resources are located, etc. So, we’re taking a very close look at that and we’re at the beginning stages of that, not the end.

Really helpful color. Thanks very much for taking my questions.

The next question is from Alex Blostein with Goldman Sachs. Your line is open.

Hey, guys. Good morning. Thanks for the questions as well. So first, maybe around cash in Advice & Wealth Management. It sounds like the trends in sorting continue to stabilize over the course of the quarter. So maybe just a quick update on where the balances stand relative to the $28 billion that you reported at the end of September. And I guess, more importantly, as you think about the mix, I think you have about $4 billion of balance sheet sweep deposits. Does that leave you much room to move more into the bank or should the growth of the bank from this point on really just be a function of reinvestment of securities and picking up some of that incremental yield that you spoke to earlier?

Okay. I think the question is we ended the quarter at $28 billion on sweep. And as of October, it’s still $28 billion. It has totally stabilized from that standpoint. Yes, we do have certainly a buffer to move into the bank. We are just being very measured and cautious at this stage as we evaluate the environment, but we do have a buffer to move additional liquidity.

Great. And zooming out a little bit on – given your comments around expenses and you’re early in stages of maybe doing more on the asset management side, but also managing G&A tightly across the firm. Any early thoughts on 2024 G&A growth firm-wide relative to what you’re likely to do in 2023?

So Alex, we’re definitely in that review now. What I would say is to start, the G&A would be flat at best, meaning it works in a sense that it’s not going up.

And that’s a ‘24 over ‘23, correct?

Yes.

Okay, thank you.

Yes, and remember, you got merit and other things that occur, but we are going to absorb all of that and we are looking for it not to be higher than flat.

Got it. Appreciate it. Thanks.

The next question is from Craig Siegenthaler with Bank of America. Your line is open.

Thanks. Good morning everyone. Thanks for taking the question. So, I was looking for an update on the recruiting front. Financial advisor headcount was down in the quarter. Franchise retention was lower. And the 64 new recruit count was also below the prior run rate. So, I was just wondering if you can give us an update for your expectation both recruiting and FA headcount growth over the next 12 months.

Yes. So, as we mentioned, recruiting was a bit slower in the third quarter, but it started to bounce back towards the latter part of the quarter. July started a bit slower. I think people had vacations and other things as you probably saw around the country. But we saw that bounce back in September. The pipeline is quite strong, and we think we will get back to our consistent rate. And then you mentioned a little bit of an uptick in attrition. The attrition really in that channel was mainly due to assistant financial advisors, where turnover is a bit higher. All the franchisees, their retention rate is still at all-time highs, and that book of business stays. So, it’s more of some assistance in their practices making some changes. So, we don’t see any change in where we were.

Thanks, Jim. And then on the client cash balances, I was wondering if you could just share what the ROEs look like on the certificates business compared to your core cash balances and products, and just update us on your plans to grow this space further. I think you have to hold about 5% capital against the asset base and also, I think there is probably some value in extending CDs to third-parties. It helps to expand your brand, etcetera.

Let me take the first part of the question on the certificates. Yes, certificates as a regulatory item has a 5% capital element associated with that. But when we evaluate it, we obviously assess it. So, that’s the regulatory portion of it. And so we feel very comfortable with that. The growth potential there is certainly, we have adequate enough capital and cash to support that. So, that is the range in which we operate on. And then certainly, it’s been growing, and we have been supporting it.

The second part you mentioned is the opportunity to bring in more external cash if I understood that correctly. And yes, we are very much focused. As we said, we initially put a savings product. We are looking at more of a preferred type of offering to bring clients in from other outside banking activities. We are going to be putting in place a full checking account and then some various lending products as well. So, we will look to establish a more full-fledged banking activity, with the ability to attract more assets externally into the bank that would also help bring more assets onboard in total for the client activities for the advisers.

The only thing I would add to that is that obviously, we have more than enough out to support that sort of growth that Jim was just referring to.

Thank you.

The next question is from Suneet Kamath with Jefferies. Your line is open.

Thanks. Good morning. I wanted to go to that slide that talked about the $32 billion of third-party cash. I guess that piece has grown substantially. And I guess the question is, what do you think needs to happen in order for that to get deployed? Because it sounds like you are thinking some of it may go into wrap, but then you are offering these newer bank products that might move some of that third-party cash to our own products. So, maybe just give us a sense of how you think that will develop as we move forward here? Thanks.

Yes. So Suneet, I think that’s really the larger question, right. And that depends on how people feel about the market and where rates are going forward. If you saw the market over the last several quarters, it increased tremendously with a lot of volatility and people were concerned. A few stocks drove that up. Now, you see a pullback occurring. I think if the market starts to feel like it’s on a better, more solid footing, I think people will start to deploy back. I also think that as rates stabilize at their long-term levels rather than continuing to rise, you will see money move from the short to the long-term to lock it in, and get that appreciation and the spread. I don’t have a crystal ball, but I think we are holding extra cash because we feel a little uncertain about the environment and where the markets are. But that will go back eventually. People don’t hold that amount of cash at that percentage that we are seeing right now. I think that’s across the industry, not just in our channel. So – but it’s good. It stays with us for now. When it’s ready to deploy, our advisors will definitely do it. They look – we are investing for the long-term, not just to take advantage of the market in the short-term.

And can you just provide some timing on when you plan on rolling out some of those other banking products that you mentioned in response to an earlier question?

Yes. We are looking to do that over the course of the New Year. So, we are looking to phase that in. Right now, we are just observing the climate and looking at the operating activities for that. We feel good about getting things up and running in the bank in a more full-fledged fashion. So, it will be periodic. We will alert you as we go about.

It makes sense. And then maybe if I could sneak one more in on expenses for Walter. So, I think you said flat in 2024 relative to ‘23. When you think about the segment level, should we assume a little bit of a decline in asset management offset by some growth in Advice & Wealth Management just in terms of the moving pieces there?

Yes, I think that’s a reasonable assumption. And obviously, we are focusing on controlling costs and looking to preserve margins while certainly continuing to take advantage of growth opportunities in AWM, but still prudently managing the expenses.

Yes. And Suneet, I mean across the firm, we are going to look to manage expenses tightly. I don’t have a firm number at this point in time, but as I’ve said, I feel good to start with about G&A flat.

Got it. Okay. Thank you.

And the next question is from Tom Gallagher with Evercore. Your line is open.

Good morning. First question, just a follow-up on the $32 billion of third-party client cash. Do you currently earn any fee on that money at all from an administration perspective or would that all be revenue upside if that gets deployed into your wrap account?

Current math suggests it’s marginal. I would say it’s around 4 basis points or 5 basis points, but the real opportunity of redeployment will provide us certainly margin and profitability potential.

Got it. Let’s see, the other question I had was on variable annuity reserve charge. I know when some other companies have taken reserve strengthening under the new accounting, there has been an ongoing earnings drag in addition to the reserve charge. Is there anything like that to consider for the variable annuity charge? Walter, I think I heard you say the $200 million a quarter was still intact on the guide. So, I would presume that means probably not much, but just curious if there is any impact there.

You are correct; it’s probably not much. The answer is no, really.

And should there be a similar 4Q charge on a statutory basis for the same assumption changes, or is that still TBD?

I think that’s still TBD.

And then if I could sneak in a final one. Long-term care, I saw your updated disclosures, which I thought were helpful. I guess considering that this block continues to shrink, it looks like the risk is well managed. Is risk transfer still a consideration here, or is the bid-ask spread still too wide? Should we really think about you most likely continuing to own it considering the risk continues to shrink?

So, over the years, we have certainly been able to demonstrate that we are managing the risk very effectively. Any risk transfer would have to consider that and really evaluate the balance of bid-ask, because the portfolio is performing quite well, as indicated in your observations. So, yes, we feel very comfortable in retaining it. But if somebody comes along with something that is certainly in the best interest of shareholders, it will be considered.

Over the last several years, it has performed better than we expected in many instances and improved in that sense. We haven’t factored in some of the other aspects that affected it pre-COVID in a positive manner yet.

Thanks.

The next question is from Brennan Hawken with UBS. Your line is open.

Hi. Good morning. Thanks for taking my questions. Thanks for all the color on the cash dynamics here intra-quarter and quarter-to-date. It certainly sounds encouraging. I guess does that mean that we could get back to a period where we are looking at how to grow the sweep balances? Does it just become a function of net new assets, or is that sort of more organic growth trajectory still hindered by balance remixing? And when do you think we could get to that period? Thanks.

So obviously, as you can see, it truly has stabilized. And yes, as we bring new years in, that certainly is growth. And certainly, as we have organic growth, that is an opportunity. Right now, I can’t predict environments and factors, but we feel very good because of the stability of the sweep count, as we said. A substantial portion of that is close to 70%, 67% in account balances that are under $100,000. The average being around $6,000 per account, so it’s very stable cash that’s deployed. Yes, we certainly anticipate that growing as we continue to grow. But again, there are a lot of variables here.

Yes. And again, I think if you start to see a change in the rate environment and the markets stabilize, there is money being held out, and we can see using that when they mature potentially being redeployed. When money is more active in investing, then they keep more in the sweep and balance to deploy. So, there are a number of different variables. We can’t really predict that, but our cash rate that’s on sweep is pretty low. So, if anything, we think that if activity picks up, that could increase again.

Got it. And so do you think that now that we have had stability in the sweep, likewise, we can think about maybe there is a little bit of a lag or whatnot, but there is some stability in NII when we sum up both the on balance sheet and off balance sheet, which has been a quarterly kind of slide and a little bit here year-to-date? Are we at a period where maybe that’s going to begin to flatline and return to the algorithm of growing with cash balances – rates, all else equal, of course?

Yes, we do. There is opportunity there, and we do see that we have the opportunity to grow that. For the reasons that you mentioned, and certainly, as we have the maturities coming in because of short duration and other aspects, we feel comfortable with that response.

Outstanding. Thank you.

Certainly, for the reasons you mentioned, and we certainly look forward to those maturities coming in, being short-duration and the elements that are building upon those factors, we feel comfortable in saying yes to that point.

Thanks. Good morning. First question was, can you give a sense of how much bank assets will mature next year to reinvest at potentially higher rates?

You are saying on buyback or...

No, maturing bank assets that would be reinvested.

I believe it is in the area of about $2 billion, but we will confirm that with you.

Okay. Thanks. And then I guess I had one more question on the $32 billion of third-party cash. Do you view the opportunity primarily just as clients get – move more money back into the market to capture some of that through wrap, or do you think there is some opportunity to capture some of the $32 billion with the bank products that you are rolling out?

Well, I would probably say, first and foremost would be, as I’ve said, with the markets, I would think that more would go back to work in solutions like wrap that would have a balance of equities, fixed income, and alternative investments. I also feel that as we do roll out some of these other products, it will be beneficial for some of the capital that remains on the sidelines. But I would probably say that the larger opportunity would still be to move more back into solutions like the wrap business.

Understood. Thank you.

We have no further questions at this time. And this concludes today’s conference. Thank you for participating. You may now disconnect.