The State Of Affairs At Ameriprise Financial

Why the Semi-Independent 1099 Model Is Fading — and Why Full, Multi-Custodial Independence Is Becoming the Preferred Path Forward

Executive Overview

For decades, semi-independent platforms such as Ameriprise Financial’s 1099 model offered advisors a credible bridge away from the traditional wirehouse environment. These platforms provided increased autonomy, improved economics, and a degree of brand ownership—while still benefiting from the infrastructure, product access, and perceived stability of a large financial institution.

However, the definition of independence has fundamentally changed.

Open-architecture custody, modern RIA technology, scalable operating models, and unprecedented levels of private-equity investment have reshaped the competitive landscape.

To be sure, Ameriprise is still a solid firm with roots dating back to 1894. But there are signs that the business model is beginning to crack. Today, fully independent, multi-custodial RIAs deliver superior economics, more advanced technology, higher enterprise valuations, and materially greater control than any semi-independent model embedded within a bank or insurance-driven ecosystem.

This article examines the structural limitations facing Ameriprise’s 1099 advisors, with particular focus on how competitive pressures—both external and internal—are accelerating the shift toward full independence with true custodian optionality.

The Context Matters: Ameriprise’s W-2 Core and Its Impact on the 1099 Channel

Any discussion of Ameriprise’s 1099 platform must be viewed in the context of the firm’s core business. Ameriprise has 10,000 brokers, but its W-2 financial advisors remain the more profitable of its two channels. The independent 1099 channel, while comprising 75% of its sales force, runs with much thinner margins that depend on scale.

At the same time, Ameriprise, like many large firms, is navigating several converging industry pressures:

• A large cohort of advisors retiring or exiting the sales force to full independence
• A shrinking pipeline of traditional W-2 recruits, historically sourced through firms such as Morgan Stanley, Raymond James and Wells Fargo
• A material rise in the cost of doing business, driven by regulatory expansion, compliance oversight, technology investment, and supervisory infrastructure

These challenges are not unique to Ameriprise. However, the firm’s responses to them have important second-order consequences—particularly for advisors operating within the 1099 channel.

Ameriprise is increasingly passing through cost increases to its advisors, and ultimately their clients, clients with additional platform fees. As a percentage of revenue, these increases disproportionately impact 1099 advisors, compressing margins and narrowing the economic gap between semi-independence and true independence.

In parallel, the firm has implemented policies that add friction to advisor mobility and enterprise value, including greater reliance on proprietary platforms and retirement or succession structures that can materially complicate an advisor’s ability to exit cleanly—even after satisfying traditional financial obligations.

There was no stronger signal of the firm’s defensiveness than the multiple lawsuits it filed last year against LPL and individual advisors who left. Those cases demonstrated how Ameriprise has sought to limit Protocol protections at the 1099 channel with overbearing inherited account agreements that block any future solicitation of the acquired clients.

There are more subtle changes as well, including the launch of the Signature Wealth program in March. Advisors should be aware that those accounts not only come with higher fees but also clauses that prevent those assets from easily transferring out of the program and away from the firm.

This approach does not reflect the ethos of ownership or independence and has prompted questions about whether the firm will ultimately remain in the Broker Protocol. Against this backdrop, the competitive positioning of the 1099 model becomes increasingly difficult to defend.

1. The Legacy Appeal of Ameriprise’s 1099 Model

Once a Compelling Gateway to Independence

Historically, Ameriprise’s 1099 platform served as an attractive middle ground for advisors seeking greater control without fully leaving a national brand. The model offered:

• Personal brand creation (within firm guidelines)
• Business ownership via a 1099 structure
• Access to Ameriprise’s investment, insurance, and banking platform
• Centralized operations, compliance, and support
• Improved headline economics relative to W-2 employment

For many advisors, this represented a meaningful step forward from the wirehouse model—a balance between autonomy and institutional support.

And while Ameriprise still offers all of those benefits, the economic balance has become increasingly fragile.

2. The Structural Limitation: The Semi-Independent Illusion

Ameriprise’s 1099 Platform Is Built on a W-2 Chassis

Despite its independent branding, Ameriprise’s 1099 model operates on the same foundational infrastructure as its W-2 advisor force.

The reality is straightforward; products, compliance, legal oversight, technology, and supervision are largely identical across both models. There is no meaningful distinction in the underlying platform.

This is why the model is best described as semi-independent. Advisors may own their practices economically, but remain captive to:

• A single custodian
• A single technology stack
• Firm-centric compliance and legal oversight
• A proprietary, insurance-driven product architecture

The only true differentiator is the tax treatment of income—and even that advantage continues to erode as operating costs rise.

3. The Competitive Crisis Facing Ameriprise 1099 Advisors

The advisory marketplace has evolved rapidly. Today, Ameriprise’s semi-independent advisors face mounting competitive disadvantages when compared to fully independent peers.

3.1 Custody: The Absence of Open Architecture

Fully independent RIAs can choose among best-in-class custodians such as Schwab, Fidelity, Pershing and Goldman Sachs.

This flexibility enables broader investment choice, more competitive pricing, superior lending solutions, and institutional-grade reporting.

Ameriprise 1099 advisors, by contrast, remain locked into a single custodial ecosystem, limiting optionality and customization.

3.2 Compliance Built for the Lowest Common Denominator

Ameriprise’s compliance framework is designed to manage risk across a large, heterogeneous advisor population. As a result, even sophisticated advisory teams encounter:

• Marketing and branding constraints
• Product and allocation limitations
• Lengthy approval cycles
• Legal conservatism
• Reduced flexibility around alternatives and private investments

In fully independent RIAs, compliance is structured to enable enterprise-level practices, not constrain them.

3.3 Economics: Rising Costs and Margin Compression

As regulatory, technology, and administrative costs increase, those expenses are increasingly passed through to advisors. The result is:

• Margin compression
• Reduced reinvestment capacity
• Less flexibility to differentiate the client experience

By contrast, fully independent RIAs typically operate at 10–12% all-in cost structures, preserving substantially more operating leverage.

3.4 Technology Designed for Scale, Not Excellence

Ameriprise’s technology ecosystem remains optimized for uniformity rather than performance. This manifests as:

• Aging CRM systems
• Clunky reporting tools
• Limited client-facing customization
• No true multi-custodian integration
• Slow data workflows
• Limited support for complex planning and alternatives

Modern RIAs deploy best-in-class, fully integrated technology stacks that cannot be replicated inside large captive institutions.

3.5 Valuation: The Structural Discount

Perhaps the most consequential issue is enterprise value.

Advisory businesses operating on captive, single-custodian platforms with restricted technology and governance trade at meaningfully lower multiples than fully independent RIAs. Value is also lower as Ameriprise seeks to more closely tie advisors’ clients to the firm and limit departures in court.

Enterprise value expands when advisors:

• Control custodians
• Control technology
• Control compliance frameworks
• Control brand and governance
• Can engage in M&A, equity sales, and capital partnerships

Private-equity capital is flowing aggressively into the independent RIA space—yet semi-independent advisors inside large institutions are largely excluded from this value creation.

4. The Competitive Alternative: Fully Independent, Multi-Custodial RIAs

The optimal model for elite advisory teams is now clear:

Full Independence + Open Multi-Custody

This structure delivers:

• True autonomy and control
• Leading-edge technology
• Seamless integration across CRM, trading, billing, reporting, and custodians
• Sophisticated, advisor-centric compliance
• Low operating cost structures
• Access to private equity and strategic capital
• Superior enterprise valuations
• Scalable M&A and recruiting capabilities

This is independence without compromise—and it is where the market is moving. Supported independence platforms offer the best of both worlds for many that appreciated the backing of a large institution.

5. Conclusion: Independence Has Evolved — and Advisors Are Responding

Semi-independent platforms once represented the future.

Today, they represent a transitional phase that many advisors are moving beyond.

Advisor movement data confirms the trend. See: Finding True Independence: Ameriprise Lifers Managing $2.5 Billion Open an RIA

The winning model for 2025 and beyond is:

Full Independence + Multi-Custody + Modern Technology + Scalable Support + Enterprise Value Creation

Advisors no longer need to choose between autonomy and infrastructure. The most advanced independent platforms now deliver both—while unlocking levels of valuation, flexibility, and growth that captive models cannot match.

True independence is no longer aspirational.
It is now the competitive standard.