Good morning. Thank you for joining us today, and welcome to the Ameriprise Financial Annual Meeting of Shareholders. I'm Jim Cracchiolo, Chairman and Chief Executive Officer, and with me today is Tom Moore, our Corporate Secretary and Chief Governance Officer. Let's begin. Tom?
Thank you, Jim. The board of directors has appointed The Carideo Group, Incorporated as inspector of elections for this meeting. Mr. Tony Carideo, the representative of The Carideo Group, has subscribed his oath of office and filed it with me. The board of directors has fixed February 28th, 2018, as the record date for determining shareholders entitled to notice of and to vote at this annual meeting. Mr. Chairman, I present the following documents. A certified list of the holders of common stock of the company at the close of business on February 28th, 2018. This list has been prepared by Computershare Trust Company, National Association, the company stock transfer agent, and registrar.
An affidavit of Mr. Daniel Zenny, an employee of Broadridge Financial Solutions as to the distribution beginning on March 16th, 2018, to our shareholders of record as of February 28th, 2018, of a notice regarding the availability of proxy materials for the shareholder meeting to be held on April 25th, 2018, or paper copies of the proxy materials. The notice informed our registered shareholders of the availability online of the notice of meeting, the proxy statement for this meeting, and the 2017 annual report to shareholders. Shareholders were also informed how to obtain these proxy materials in paper form or by email at no charge. The notice disclosed the date, time, and location of this meeting, as well as the items to be voted on. Copies of the proxy materials have been posted on the internet and provided in paper form to those shareholders who requested them.
I will file these materials with the minutes of the meeting. Jim?
We'll proceed with this meeting, which I'll now call to order. I'd like to introduce my colleagues on the board of directors. We're a strong company because of their commitment and stewardship. Before I introduce the directors who are nominated along with me for election today, I'd like to recognize Siri Marshall and Jay Sarles, who are retiring from our board, each after 13 years of distinguished service. Siri and Jay have been directors since we became a public company and are deeply dedicated to the best interests of our constituents. My colleagues and I greatly appreciate their perspective and counsel. Siri and Jay, please stand so we may recognize you. Thank you both very much. Next, I'd like to introduce Ed Walter, who is standing for election for the first time today.
We are pleased to have a candidate with Ed's experience and knowledge. Ed, please rise and stand while I introduce the other nominees. I'd like to recognize our directors who are seeking re-election. Please remain standing as I introduce all of you. Dianne Neal Blixt, Amy DiGeso, Lon R. Greenberg, Jeffrey Noddle, Robert F. Sharpe Jr., and Christopher J. Williams. Please help me recognize our board with a round of applause. Next, will the Ameriprise Executive Leadership Team please stand. The board and I rely on your leadership, experience, and commitment to all of our stakeholders. Please join the board and me in a round of applause for their contributions. I'll turn things back to Tom for the statement of order of business and the opening of the polls. Tom?
Thanks, Jim. To ensure the orderly conduct of the business of this meeting, the board of directors has adopted the order of business set forth in the agenda provided to each person as he or she entered the meeting room. Accompanying the agenda are the meeting procedures approved by the board of directors. We ask that, in fairness to all shareholders attending the meeting, you please honor these rules. In a moment, I'll explain the four matters on the agenda for consideration during today's voting. The company has not received from any of its shareholders, as required under its bylaws, of any matter to be considered at today's meeting, therefore, no other proposal or nomination may be properly introduced by a shareholder at this meeting. On behalf of the chairman, I now declare the polls open for voting at this annual meeting.
If you wish to vote at the meeting and have not yet done so, you may deliver your ballot to the inspector of elections. Inspector, please stand to identify yourself. Thank you. If you need a ballot, the inspector will give you one. The polls will remain open until immediately after any discussion on today's proposals. To promote the efficient conduct of the meeting, the chairman has waived the formalities of requesting motions and seconds from the audience and has declared the order of business as stated in the agenda to be accepted by those present in the meeting room. Each of the following four proposals is described in the company's proxy statement dated March 16th, 2018. Three proposals are presented at this meeting by the board of directors, and one proposal is being presented by a shareholder.
The board of directors is recommending that shareholders vote for each director nominee listed in the proxy statement and for the second and third proposals, but against the fourth proposal being presented by a shareholder. The first proposal is the election of eight directors. As Jim noted, and as we will explain in our proxy statement, Mr. Walter is standing for election for the first time. All of our other director candidates are standing for re-election for a one-year term. Mr. Cracchiolo and each of the other seven nominees named in the proxy statement, and whom Mr. Cracchiolo introduced you to earlier in the meeting, are standing for election, each to serve until our 2019 annual meeting. The second proposal is a non-binding advisory vote to approve the compensation of the named executive officers.
The named executive officers are those officers identified in the compensation disclosure tables included in the proxy statement for this meeting. This vote, commonly called a say-on-pay, is required by federal law for large public companies. The third proposal seeks ratification of the audit committee's selection of PricewaterhouseCoopers LLP as the company's independent auditors for the fiscal year ending December 31, 2018. The fourth and final proposal has been submitted by a shareholder and relates to the disclosure of corporate political contributions and expenditures. With us today is Michelle Drake, Esquire, to present this proposal, which is opposed by the board of directors. Ms. Drake, would you please stand? Thank you for being with us here today. We'll provide a microphone for you. Thank you.
Thank you. Good morning. My name is Michelle Drake, and I'm here today on behalf of the New York State Common Retirement Fund to present the fund's resolution calling on Ameriprise Financial to fully report on its political spending and its process and procedures for making political contributions with corporate funds. As long-term shareholders of Ameriprise Financial, the fund supports policies that apply transparency and accountability to corporate political giving. In our view, such disclosure is fully consistent with public policy in regard to public company disclosures. Company executives exercise wide discretion over the use of corporate resources for political purposes, and relying only on the limited data available from the Federal Election Commission and the Internal Revenue Service can give shareholders an incomplete picture of the company's political spending.
The New York State Fund believes that a complete disclosure by the company is necessary for shareholders to be able to fully evaluate the political use of corporate assets. On behalf of the New York State Common Retirement Fund, a holder of 341,200 shares of Ameriprise Financial, I submit the resolution on political disclosure found in your proxy materials. Thank you.
Thank you very much, Ms. Drake. We appreciate your presentation. Are there any questions or comments for Ms. Drake? Thank you. We will proceed with voting on each of the proposals I've described. The votes required for each proposal to be approved are described in the chart provided on page three of our 2018 proxy statement. We will close the polls immediately after any discussion on these proposals. If you wish to vote and have not yet done so, now is the time to return your proxy card or ballot to the Inspector of Elections. If you previously returned a proxy card or voted by means of the internet or telephone and do not wish to change your vote, you do not need to vote at this meeting.
If you have not yet turned in a proxy card or if you're a shareholder of record and you wish to vote your shares in a manner different than you have previously indicated, please raise your hand so that you can be given a ballot. We will provide an opportunity following the chairman's remarks for shareholders to raise questions not related to the proposals being voted on today. As we detail in our proxy statement, the audit committee of the board of directors approved the engagement of PricewaterhouseCoopers for the 2018 fiscal year, subject to ratification by our shareholders. I would ask Ms. Butler at PricewaterhouseCoopers to please stand and be recognized. Before I declare the polls closed, are there any questions for Ms. Butler? We have Yes, sir.
My name is Jim Southard. I came from Denver. This is my first shareholder meeting.
Welcome.
I'm curious about the objection to the fourth proposal. The board seems to think that's not a good idea to vote in the affirmative. Why?
Sure. I'll be happy to take that, Jim, if you like. I assume you had no questions for Ms. Butler, and no one else does. I appreciate the question, and it's a very fair one. As we detail in our proxy statement, since 2011, the board has adopted a statement of principles for corporate political spending, and we put in on our website disclosure of any contributions that we have made. We have made none since probably six or seven years. A couple of key points here. Under the Federal Election Campaign Act, we, just as any other corporation in the U.S., are prohibited from making political contributions in any federal election. The rules vary by state and locality, but we are subject to very stringent rules under the SEC's investment advisor rule on pay-to-play.
We have a whole compliance program that requires people to pre-clear their contributions, and the corporation itself doesn't make those contributions. The crux of our issue with the proposal is this. The proposal equates the membership in and payments to dues to trade associations with corporate political spending. This is an issue that arose in 2014 when a very similar proposal was presented by a different shareholder. We spent, the Nominating and Governance Committee, that is, spent an entire meeting in 2011 discussing this as well as other issues. We don't equate payment of trade association dues with political spending as that term is commonly understood. That is, if you ask people what is political spending, well, that's to support the election of or ensure the defeat of a specific candidate.
We belong to trade associations in order to better understand the issues facing our clients, to promote the best interest of the company and its shareholders. We don't control any trade association, this is the key point, we receive information from trade associations related to their non-deductible lobbying and political expenditures. That does not represent any use of our dues for any of those purposes. It's just an aggregate number. More to the point, this proposal explicitly excludes lobbying from its scope. We were concerned, this continues to be our position after careful consideration of this proposal, that to give people, I admit some companies do it, the number that represents non-deductible portion of our trade association dues would give a distorted view of the corporation's involvement in political spending and how much money is being spent.
We completely agree that we should be as transparent as possible with respect to any sort of corporate political spending. The report's on our website. The Nominating and Governance Committee has oversight of this, I present an annual report to them confirming we've made no contributions. We agree completely with the disclosure and oversight of political spending as it is commonly known. We simply disagree on the point that trade association dues should be equated with political spending, as most of our shareholders understand that term. Sure. Ms. Drake, I'd be happy to give you a chance to comment.
Sure. I think the details of the proposal are set forth in the statement. I think that you've outlined the issues and the areas of disagreement well. Our perspective is that much of what determines the outcome in any political campaign has to do with the activity of trade associations. To not disclose that also risks presenting an incomplete picture of how corporate dollars are ultimately used to potentially impact political campaigns. We would prefer to have more disclosure and to understand which trade associations the corporation is supporting and participating in so that shareholders can be informed about what those trade associations are doing in the political realm.
Thank you. We appreciate that. I should note that we did engage with the proponent, the director of corporate governance at the state controller's office, had a very good conversation. Essentially, we agreed to disagree. We respect your position, and we took it into account and conveyed it to the Nominating and Governance Committee before the board adopted its statement in opposition that's printed in the proxy statement. Are there any other questions? Okay. Thanks for the question. Good discussion. There being no further discussion of the proposals, we will now prepare to close the polls. Please return your ballots if you've not already done so. On behalf of the chairman, I now declare the polls closed. While we're waiting for the inspector's voting report, I'll turn it back to our chairman for his report on the state of the business. Jim?
Thanks, Tom. Today, I'll discuss our results for 2017. We had an excellent year for Ameriprise, and our continued good progress as we serve our clients' needs and generate strong shareholder value. At the end of my remarks, I'll share highlights from our first quarter 2018 earnings that we announced on Monday. 2017 marked another year of significant growth for Ameriprise. Our strategy is consistent, and we executed it well. We delivered record results in assets under management and administration, in advisor productivity, as well as in client inflows into investment advisory accounts. Our results demonstrate our consistent client focus, growth investments, disciplined expense management, as well as Operating environment. Global equity market appreciation and rising short-term interest rates were clear positives, while low level of long-term interest rates remain a headwind.
We effectively handled pressure from the ongoing regulatory change in the U.S. and the U.K., as well as geopolitical uncertainty. At the end of 2017, the Tax Cuts and Jobs Act was signed into law, which we believe will further help the U.S. compete globally. Though the new law caused us to take a one-time charge, the tax changes will be a long-term benefit for the economy, as well as for Ameriprise and our constituents. We expect to earn back the charge within two years. Regarding our 2017 financial results, on an adjusted operating basis, excluding the tax charge, net revenues increased 5% to $11.9 billion, excluding the net impact of our 12b-1 fee change. Earnings increased a strong 35% to $1.9 billion. Earnings per diluted share grew 45% to $12.27, and return on equity, excluding AOCI, increased over 1,000 basis points to 32.3%.
Our return on equity is consistently one of the strongest in financial services. Investors took notice. The total return of Ameriprise common stock was 56% in 2017. This is the fifth best return of the 66 firms in the S&P 500 index. For shareholders who had held Ameriprise stocks since our spinoff in 2005, your total return was 504%, nearly 10 times the return of the S&P 500 financials index. I'm pleased to share that Ameriprise had the second best return in the index overall since 2005. Now I'll discuss some themes that are key to our success and important to you, our shareholders. First, Ameriprise is a client-centric financial services leader. Our strategy is to advise, manage, and protect our clients' assets and income. We serve clients with comprehensive advice, products, and solutions that help achieve their desired outcomes.
Second, all of our stakeholders benefit from the strength of our client relationships and the breadth of our diversified business and capabilities, as well as our excellent financial foundation. This enables us to continue to manage market and economic cycles effectively, invest for business growth, and return capital shareholders at a very attractive rate. Third, our people are key to our success. Ameriprise, our employees and advisors continue to earn important accolades across the investment industry. Last year alone, we were recognized as number one in customer service, number one most loyal, number one in client forgiveness, number two in likely to recommend the firm, and number two most trusted. This is across the investment industry. We are proud to receive this recognition and will continue to work diligently to earn it.
Our mission is to help people feel confident about their financial future. We serve more clients and deepen existing relationships, our assets under management administration have progressively grown. In fact, we reached a new record of $897 billion last year, up 14% in one of our strongest years. Ameriprise is a diversified firm. Our advice in wealth management, asset management, annuity, and protection businesses are complementary. Our expertise and advice, plus the wide array of solutions and services we offer, help introduce Ameriprise client relationships and help satisfy their needs for the long term. One of our strategic areas of opportunity is to serve a greater share of the larger wealth needs in the U.S. We know from our research that people across life stages seek peace of mind, to know their assets are protected and that they are on track to achieve their financial goals.
Our priority is to grow our retail assets and client base by serving more investors, especially those with investable assets in the $500-$5 million range. These investors represent the sizable growth opportunity for Ameriprise. With better markets and engaged, productive advisors, Ameriprise client assets grew substantially in 2017, up 17% to $560 billion, an all-time high. Proudly, Ameriprise has long held the position as the leading financial planning company in the U.S. We have more certified financial planners than any other company. We deliver our advice value proposition through our Confident Retirement approach. We know clients engage with Confident Retirement with a high level of satisfaction in the 90s. It also helps our advisors deliver distinct value for an appropriate fee. It's a winning proposition and we continue to serve more clients this way. I'm very proud of our exceptional advisor group.
Our advisors care about their clients. They have experience, they are successful. We have some of the highest satisfaction in the industry because of the strength of what Ameriprise offers and our relationships. Ameriprise advisors have increased productivity at a higher rate than our wealth management peers for many years. In 2017, our advisors reached a new record for productivity of $558,000 per advisor, an increase of 13% when adjusted for 12b-1 net impact. 2017 was one of our best advisor recruiting years for both quantity and productivity. Ameriprise is an attractive destination for high-quality advisors who want to serve clients with financial advice and grow their practices. We acquired Investment Professionals, an independent broker-dealer specializing in the delivery of investment programs for banks, credit unions, and other financial institutions.
Importantly, we consistently invest to deliver an excellent client experience, grow assets, increase brand awareness, and enhance our technology infrastructure. Ameriprise brand awareness reached an all-time high in 2017. Our brand is trusted, our Be Brilliant advertising continues to tell the Ameriprise story through national TV, digital channels, and social media. To complement our personal approach and meet the evolving needs of multiple generations, we continue to invest to advance our leading digital, mobile, and online capabilities. This includes further digitally enabling our advice value proposition and introducing easier goal and performance tracking for clients. We delivered strong revenue and profitability and growth in the advice and wealth management business as a result of significant growth in client assets and flows and our effective expense management. This business leads our growth and is responsible for creating approximately 75% of the total Ameriprise net revenues.
Last year, advice and wealth management revenues grew by 9%, we generated a pre-tax operating margin of 21%. Let's move to our RiverSource business. Our protection annuity solutions are important to our wealth management business. These solutions serve Ameriprise clients, they serve their needs for both retirement and asset accumulation. We offer our products to Ameriprise clients when it represents the right solution for their needs and has an appropriate risk-return profile. We also provide our advisors access to annuity insurance solutions manufactured by other providers. Protection annuities are attractive books of business with competitive products and favorable risk characteristics. They generate a good return on capital, our overall business performance was in line with expectations, given the extended period of low interest rates. These solutions are important to serving clients' comprehensive financial needs.
While we had good sales of variable annuities without living benefits, total variable annuity sales declined as they have with other providers. In insurance, we had solid sales in variable universal life and universal life products. Additionally, we continue to make progress in our direct property and casualty business. Ameriprise Auto and Home is an affinity-based business recognized for its excellent customer satisfaction. In recent years, we have implemented a number of enhancements and we're seeing improved underlying financial performance. Like the industry, record hurricanes and other weather-related losses in 2017 impacted our results. That said, the actions we're taking in Auto and Home are helping to further strengthen the business. Let's move to asset management. With Columbia Threadneedle Investments, we built a global asset manager that delivers competitive financial results. Asset management is a long-term growth opportunity for Ameriprise that complements our AWM business.
We have established broad and high-performing product capabilities that align with client needs. With strong equity markets, we grew assets under management to nearly $500 billion and delivered competitive financial results. At the same time, we successfully navigate an extensive regulatory agenda. This includes changes driven by MiFID II regulation in Europe and the ongoing uncertainty of Brexit. As an active manager, consistent competitive investment performance is key to our success. Our investment teams in the U.S., London, and Singapore generated one, three, and five-year performance that was above the benchmarks. In fact, 70% of our funds in equities, fixed income, and asset allocation were above the Lipper peer groups or benchmarks. As we work to expand globally, we're focused on serving more individual investors and earning greater market share in the U.S., U.K., Europe, and Asia.
In addition, we're transitioning our global institutional business to be a tier 1 player. Like other active managers, we experience a level of outflows that reflect the rise of passive strategies. We also have ongoing outflows in low-fee former parent portfolios that we acquired years ago. Overall, in global retail, we were in net outflows in the U.S. and net inflows in the U.K. and Europe. We also had outflows in institutional. We're working hard to address this flow pressure. In U.S. retail, we're focused on getting more of our strategies on platforms, enhancing our segmentation strategy, and ensuring our wholesalers are engaging their advisors about their clients' investment needs. We're further expanding in key markets in Europe to complement our U.K. strength. In the institutional business, we're working to have more of our strategies approved with consultants and deepen relationships with current clients.
We're also making progress on key initiatives and other investments to support future growth. This includes a multi-year project to move from multiple regional operating platforms to a single global platform. This will allow us to both increase efficiency and offer more customized products on a global scale. We're also positioning our products better and launching new products in asset classes that are attracting flows, as well as our strengthening of capabilities in strategic beta, responsible investing, and multi-asset solutions. As part of our growth strategy, we continue to make complementary acquisitions. This included the acquisition of Lionstone Investments in 2017, a leading U.S. retail investment and real estate firm that broadens our offerings in alternatives and complements our strength in U.K. property. Lionstone also further enhances our multi-asset capabilities, and it added $5.4 billion of assets under management. Overall, in asset management, there's more work to do.
We're focused on serving our clients well and managing an evolving industry, and we continue to make changes that will strengthen our position and are benefiting from our expense discipline. Our asset management business generated competitive margin last year of over 38%, and we continue to invest in long-term growth initiatives. As I mentioned at the start, our diversified business and our excellent financial foundation represents two key differentiators for Ameriprise. Over the years, we have transitioned our business mix to be driven by less capital-intensive businesses of advice and wealth management and asset management. In total, our diversified business generates approximately 90% of earnings as free cash flow. Our capital strength allows us to continue to make significant investments for growth, and our return on capital is an attractive rate to shareholders. We've consistently grown our dividend, repurchased our shares, and devoted more to repurchases when opportunities arise.
At the same time, we've allocated capital to make multiple complementary acquisitions. We've done this while maintaining strong excess capital position with ample liquidity and a high-quality investment portfolio. On Monday, we announced another increase in our regular quarterly dividend, increasing it 8%, the 13th increase since our spinoff in 2005. Since 2012, we doubled our dividend. As I mentioned, last year, we delivered a differentiated return on equity above 32%, which is one of the top returns in financial services. Ultimately, Ameriprise is about people and strong relationships, our clients, employees, and advisors working together to achieve the goals and outcomes our clients are seeking. We care deeply about clients and each other and are guided by our values. Ameriprise is proud to consistently earn excellent client, employee, and advisor satisfaction. Last year, we were rated a best place to work for the eighth time.
In fact, our employee engagement results far exceed financial service norms and compared favorably to some of the best companies across industries in the U.S. I'm especially proud of the positive impact our employees' advisors have in their communities. Last year, our people volunteered 77,000 hours of their time to organizations and causes they care about deeply. Ameriprise awarded 192 grants to nonprofits. Before I close, I'd like to comment on a strong start to 2018 in terms of our financial first quarter results. Assets under management and administration were up 9%, and we have one of the strongest quarters for client net inflows. In advice and wealth management business, we continue to build on the excellent results we delivered last year, and you can see that in our results.
For Ameriprise overall, revenues are up 9% year-over-year, excluding the 12b-1 net impact, and we delivered very strong growth in adjusted operating earnings and EPS up 30% and 37% respectively. In addition, return on equity remains very strong at nearly 30%. We also continue to demonstrate the strength of our financial foundation through ongoing investments, repurchases, and another increase in the dividend. In closing, Ameriprise is in a strong position. We have a great foundation to build upon to sustain shareholder value, for that both in the short term and the long term. Very few financial services firms are generating the high level and consistency of performance as we have here. I feel very good about our people, position, and ability to serve our clients very well as we continue to build for the future.
On behalf of all of us, I'd like to thank our shareholders for your continued support of Ameriprise. Tom?
Mr. Chairman, the Inspector of Elections has handed me a preliminary report showing that the management proposals presented at today's meeting, including the election of each of the eight director candidates standing for election to serve until the 2019 annual meeting of shareholders, have received the required number of votes to pass, [except for the say-on-pay proposal]. With respect to the shareholder proposal, a majority of the votes cast were against it. The chairman will now welcome any comments or questions from our shareholders. We ask that you please observe the meeting procedures in the agenda, including the time limit for questions. Please raise your hand, and we will bring a microphone to you. Please state your name and city of residence and indicate whether you are a shareholder or a proxy for a shareholder.
You may ask a question or offer a comment only if you are a shareholder or a proxy for a shareholder. If you have a question or concern that is not relevant to the interest of all shareholders, please see one of the attendants at the table at the back of the room, and he or she will be happy to help you. With that, I'll turn it over to our chairman, who will open up the meeting for shareholder questions and comments. Jim?
Thanks, Tom. Any questions or comments? Yes.
Thank you again for a comprehensive report, and congratulations on a very successful year. I'm happy to see our investment in growth, particularly international growth. I don't mean to be judgmental, but do we advertise on Facebook?
Deirdre, do you want to?
We utilize Facebook as one of our channels, but in a very targeted way. Yeah.
Any other questions or comments? Okay. Since there are no further questions and no further business to consider, I hereby declare the meeting adjourned. On behalf of Ameriprise Financial Board of Directors and its offices and employees, thank you again for attending the annual meeting and for your support of your company. We look forward to seeing you again next year. Thank you.