According to the announcement, the addition of Ameriprise’s 225 retirement plans with nearly 700,000 participants and $28 billion in assets (See American Express Retirement Services ) will bring Wachovia Retirement Services’ business (See Wachovia Retirement Services ) to more than two million participants and over $100 billion in assets.
Joe Ready, Senior Vice President at Wachovia Retirement Services, said the firm is committed to providing continuity to Ameriprise clients. “Ameriprise already leverages Wachovia’s recordkeeping platform, and we share a strong commitment to client service. We are committed to providing a smooth transition and enhanced services for clients,” he said in the announcement.
Wachovia previously said that its ambitious acquisition strategy centers around the marketing of its WySTAR recordkeeping platform (See Wachovia: BoNY RK Acquisition Part of Long-Term Strategy ). Over the past three years Wachovia has picked the Bank of New York defined contribution daily recordkeeping business (See Wachovia Picks Up BoNY’s DC Recordkeeping, Trustee Offerings) and PFPC’s retirement services business (See Wachovia Brings PFPC Recordkeeping and TPA Business On Board ).
“This transaction is representative of our strategy to strengthen our focus on our core capabilities of personal financial advisory, asset accumulation, income and protection,” said Jim Cracchiolo, chairman and chief executive officer of Ameriprise Financial, in a statement. “With this sale, we enhance our margins, return on equity and shareholder value, while exiting the scale-driven, recordkeeping portion of this business and assuring that our client needs are addressed.”
Ameriprise said that it will continue to provide investment management products and services, workplace financial education and IRA rollover services to defined contribution plans and participants after the deal. Also, Ameriprise’s Financial Education and Planning Services will continue to provide workplace financial education to its more than 600 corporate clients, some of which are recordkeeping clients, Ameriprise said. In addition, plan participants who are part of this transaction will continue to have access to Ameriprise’s IRA rollover capabilities.
The Ameriprise acquisition is expected to close late in the second quarter of 2006.
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