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. 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’s approximately 10,000 W-2 financial advisors remain the economic engine of the organization. The independent 1099 channel, while meaningful, represents only a fraction of the overall advisor population.

What is occurring within the W-2 core directly affects the 1099 model—and not always to the benefit of semi-independent advisors.

Like many large firms, Ameriprise is navigating several converging industry pressures:

• A large cohort of advisors retiring or exiting the sales force
• A sustained outflow of advisors to full independence
• A shrinking pipeline of traditional W-2 recruits, historically sourced through W-2-to-W-2 competition with 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.

As costs increase, they are increasingly passed through to advisors. 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.

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.

But that 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 designed to support its W-2 advisor force.

The reality is straightforward:

• The vast majority of Ameriprise advisors remain W-2
• The 1099 channel is a minority segment
• 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
• 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.

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.

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.

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.