Ameriprise Financial

            My day began with a very excitable morning; I was given the keys to the car Lisa Clark has kindly lent me for this six-week period. I was to master the US highway system single handily in order to get to Fall River, MA where my first day at Ameriprise Financial was to begin. Arriving at the office in one piece, I was greeted by Mr. Thomas Pippitt who will be my financial advisor mentor over my senior project time with the company.

           

            I was first given an overview of the company’s operational systems and the types of information that the database can provide from either the in house archives at Fall River or from the headquarters in Minneapolis. Before our first client meeting I was to learn the fundamentals between a traditional IRA (Individual Retirement Arrangement) and a Roth IRA. A traditional IRA is tax-deductible, all transactions and earnings within the IRA have no tax impact, and withdrawals at retirement are taxed as income. Roth IRA however are contributions made with after-tax assets, all transactions within the IRA have no tax impact and withdrawals are usually tax-free. A holder for an IRA can take out their investment after the aged of 59 and a ½, if it the capital is to be taken out before this age then there is a 10 % penalty on the amount withdrawn. I also learnt that if you were to be considering a long-term health plan and wanted to be considered for Medicate, you would only be allowed up to $2,000 of assets in your name while your spouse is allowed up to $109,000.

            Our first client arrived; I was to sit in, listen and take notes to later write up for their file. We reviewed their current investment portfolio and spoke about future investment opportunities and planned for their next visit. It is normal practice for clients to come into the office every six months in order to review their investment plans. Listening to Mr Pippitt converse with his client taught me that is good to reminisce positive stories about previous beneficial investments in order boast their confidence and gain creditably.

            I learnt that age is used as a basis to decide the division between how much of the clients capital should invested into Equity and Bonds. The maximum aged used for this is 100 years, assuming the majority of the population would have already passes away by then. If the client was 60 years old, the amount of capital invested in equity would be at 40% while bonds at 60%, this is because as the client matures in age, reaching closer to retirement age they should seek low risk investments, which Bonds provide over Equity options. REIT’s are Real Estate Investment Trust’s, there is a 10% allowance of Bonds value that is allowed to be invest in REIT’s.

REIT’s come in three types:

1)    Industrial

2)    Retail

3)    Commercial

Of these there are two things seeking:

A)   Yield

B)   Capital Appreciation

Yields tend to fluctuate around the 6.5% rate of return, which would certainly be a worthwhile investment! Capital Appreciation on the other hand, has a fixed price of $10 per share. There is first an 'Offer Period' on the first 1-4 investments, after that comes the 'Management Period'; this is where the IPO (initial public offering) might go up to $12-$13, providing more capital gains than before.

           

            Before I finished for the day Mr Pippitt showed me “Morningstar report”. This system gives ratings of the benefits certain bonds can give to clients under its percentage rank category. It can also show whether any current investments are below the Standard and Poor’s base rate on statistical graphs, this enables those stocks to be sold and reinvested into more profitable 4 or 5 star rating ones.

          Today was certainly invaluable for me. It’s marvelous the amount of knowledge I have picked up from just my first day in the office, I am certainly looking forward to Monday when I’m next at Ameriprise learning the tricks of the trade.