Good afternoon, ladies and gentlemen, and welcome to the Ameriprise Financial Third Quarter 2007 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note this conference is being recorded. I would now like to turn the call over to Ms. Laura Gagnon. Ms. Gagnon, please go ahead.

Thank you and welcome to the Ameriprise Financial third quarter earnings call. With me on the call today are Jim Cracchiolo, Chairman and CEO, and Walter Berman, Chief Financial Officer. After their remarks, we would be happy to take your questions. During the call you will hear references to various non-GAAP financial measures like adjusted earnings which we believe will provide inside into underlying performance of the Companyís operation. Reconciliation of the non-GAAP numbers to the respective GAAP numbers can be found in todayís materials available on our website. Some of the statements that we make on this call maybe forward-looking statements, reflecting management's expectations about future events and operating plans and performance. These forward-looking statements speak only as of today's date and involve a number of risks and uncertainties. A sample list of factors and risks that could cause actual results to be materially different from forward-looking statements can be found in todayís earnings release, our 2006 Annual Report to shareholders, and our 2006 10-K report. We undertake no obligation to update publicly or revise these forward-looking statements. With that, I'd like to turn the call over to Jim.

Thanks for joining us this afternoon. I would like to start off by saying that the Company performed well in the third quarter, despite the turbulence in the credit and equity markets. And you will aware it was a challenging summer for the financial services industry. But our operating results continue to demonstrate the strength and diversity of our business. I feel very good about the position we are in and the momentum we are generating. In short, we have the right strategy and we are executing in it well. For the quarter revenues grew 11% to $2.2 billion, adjusted earnings per diluted share was up 5%, and adjust ROE for the trailing 12 months increased to 12.4%. We continue to focus on the mass affluent and affluent market and this group of clients has grown significantly, up 11% over the last year. This clearly demonstrates that our client acquisition strategy is working, which is centered on our commitment to serving clients through financial planning relations. Our planning clients bring us more assets and they stay with us longer. With the market leader in financial planning and we intend to build on this position. In regards to advice the productivity, despite the market volatility, and the historically slower summer months, our growth trend continued with GDC 14% over a year ago. Our productivity gains are the result of our advisors focus on acquiring more affluent and mass affluent clients and deepening existing relationships. It also reflects improved advisor support and technology tools in our innovative and board product offering. Our advisors continue to be very satisfied with the Company, the progress we are making and the support we are giving them. In fact, our franchise advisory retention rate remains very strong at 93%, and as you know, this is the…

Thanks, Jim. As you heard from Jim, our business continues to perform well, even with the ongoing market volatility we have been experiencing. We believe this is because of our consistent approach to and the diversity of our business. Now, here some additional color to what you have heard from Jim, I am going to spend time on three key areas. Our overall financial performance, a review of items we disclosed during the quarter and their associated impacts, and the continued strength of our balance sheet. The items we disclosed in the third quarter as well as in the third quarter of last year are detail in the C-pages of the supplement. Overall, these items did contribute to an increase in both revenues and expenses and I will detail them for you in a moment. So, beginning with our overall performance. Revenues grew 11%, however, when you exclude disclosed items, revenues grew 7%. More importantly, we really drove revenue growth with where the strong business increases we saw in our fee based businesses and solid flows into core products such as Wrap, proprietary funds, and variable annuities. These increases more than offset the impact of fixed annuity outflows. As Jim indicated, in the quarter, our expenses were well managed. Controllable expenses were basically flat to last year. This strong expense management reflects our folks on reengineering, and continuing investment in the business. Consolidated expenses before separation course increase 15%. Excluding disclosed items, expenses grew 6%. This includes a 22% increase in field compensation. This is higher than our GDC growth rate of 14% due primarily to a lower percentage of these course being deferred as we continue to shift away from insurance and annuity product sales. Adjusted earnings grew 3% to $237 million. However, embedded in these results are disclosableÖ…

Okay. We are open for questions. Question and Answer

Thank you. We will now begin the question-and-answer session [Operator Instructions]. Our first question comes from Suneet Kamath from Sanford Bernstein. Please go ahead.

Thanks. One quick one and then one little bit more strategic. First, Walter, did you say that if you kind of net out all of the one-timerÖ the disclosed items, if you call them. It wouldÖ they kind of added $5 million after tax to the quarterís results, is that what you said earlier, first point? And then second, Jim, can you just give us an update on the third party sales of mutual funds, I think you mentioned a couple of quarters ago that we had a wholesales in place, you are giving them some time to gain traction, we are closing in now and the end of the year, I just wanted to get a sense of if that has kicked in yet, or are you still expecting that to be more of an í08 issue? Thanks.

Yes, itís in schedule C. For 2007, it adds $5 million and for 2006, it added $38 million. And itís in the schedule C.

And regard to the second question we are starting to see some fundÖ enclosed in our funds for third party distribution of our mutual funds. Again, I think itís small and growing. But we are getting some positive signs that our products are now hitting the shells and we have some wholesalers on the ground and that will further develop as teams getÖ all set within their distribution networks.

Our next question comes from Eric Berg with Lehman. Please go ahead.

Thanks very much. My one question has to do with the special item you reportedÖ the disclose item you reported with respect to your variable annuity business. If IÖ Walter, if I heard you correctly, you were saying that there were changes in assumptions with respect to persistency in variable annuity. And yet when I look on page C-1 where you detailed your third quarter 2007 disclosed items, I think itís showing that the largest portion of this change in the DAC amortization schedule took place in the protection segment. Variable annuity results are recorded in your AA&I segment. So, I am trying to reconcile your comments that there were most of theÖ a good chunk of the DAC unlocking related to variable annuities when it appears to be have been in the protection segment? Thank you.

Eric, what I wasÖ my statements about persistency cross the product line, while we did have a persistency in the variable annuities in an older block that was offset and we did have a small persistency change in variable universal life.

Thank you.

Our next question comes from Tom Gallagher from Credit Suisse. Please go ahead.

Hi. Just wanted to focus on your comments about the variable annuity hedge. Your loss may little bit there, if you can just maybe go back through thatÖ part of it I understood was youÖ I guess added to the size of the hedge when market variability spiked, you are using a delta hedging, you expended it to a more robust program and that resulted in an incremental cost. Can you crack that again?

Yes, sure. Let me break itÖ on the GMWB, we had our hedges in place and it was the fullÖ long gated static hedges. And those perform within our tolerances. As I indicated on the GMAB, we wereÖ we had dealt hedges on those. We were in the process of putting three Greek on those when the volatility spike hit. And that resulted in the $7 million hit on and thatís 14% of the total portfolio. Itís $2 billion out of $14 billion account A and now we've implemented the program where we have 50% of the program already hedged. So, thatís what happened.

Is that clear?

That is, yes Thank you. And then also I guess just back on the DAC question for a minute. The comment about higher exit rates or higher surrenders I guess. If I look at the disclosure in your life insurance business, it looks like your laps rates are actually getting better, at least, based on the lapse rate, statistic of 5.7% for the quarter versus 6.1% a year ago. Is there some specific block within it or something like that, or can you just I guess square that.

Basically the assumption was acrossÖ it was across the block. It was a small movement across the block. It wasnít anyÖ specifically it was just a small movement across the block.

This is Laura. Iíd like to point out that the DAC unlocking exercise is looking at our old assumptions versus our new assumptions based and informed that all the trends that weíve seen, but it doesnít necessarily reflect the actual change in trends that you all have seen from last quarter to this quarter.

Okay.

Very long-term assumption thatís builtÖ

Yes, becauseÖ basically we want to make sure you have the trend line and thatís why it goes over, that limits.

Okay. So, I shouldnít just be looking at the current period lapse rate necessarily.

Absolutely no.

And then--?

Itís affective, but it goes overÖ you have to get the trend line.

Okay. Thanks. And just one other quick one on the tax rate. The benefit you're describing is the $21 million benefit. If I just apply, I guess at a normalized tax rate of 26% to the pretax revenue I get closer to a $30 million benefit versus the 14.4% tax rate. Am I not using the right kind of normalized tax rate or can you help me think about that?

Yes, you should get to $21 million because, it is a $21 million benefit offer and I can't really pickup on your math on that, but I can not more come back and take you through that. Because the calculation is on $14.4 million and itís generating a $21 million benefit to give us theÖ now, you are using which rate?

Iím using 26% as a normalized tax rate. And Iím applying that to pretax income of 277.

If you wouldnít mind Iíll have Laura, will get back to you and take you through the calculations because there are more moving parts in that.

Okay. Thanks

Our next question comes from Colin Devine from Citi. Please go ahead.

Good evening. Walter, I was wondering if you can just walk us through the changes to your variable annuity DAC assumptions again The $55 million swing as you pointed out year-over-year, I guess, just kind of caught me by surprise, given what we've seen the relative strength in the markets I would have thought that over the past year market performance had been in line with your pricing assumptions. The lapse rates on older fixed annuity and variable annuity blocks within the industry is nothing new. So, what really changed from your end? And then also tied to that was the new hedge program or expanded hedge program, I suppose if you like that way of putting it. How is that going to impact profitability and will that also make you have to go back and relocate your DAC assumptions?

If you are talking about in the, on the UL, Colin?

Well, you referred to the variable annuity block of $55 million swing, unless I misunderstood you year-over-year.

What we were referring to that was the total swing.

That was if you look in 2006, it was $25 million positive and if you look in 2007 thatís a $30 million thatís the swing.

But on variable annuities.

Over that. itís on DAC relating to ourÖ all of our product line.

A large part of that swing has to do with the VUL products and the insurance as well. So, itís not just on the variable annuities.

So you're having accelerated lapses on your VUL block are you saying? I mean it just has been confusing here is youíre talking about stuff being replaced and staying in the system. Is it UL policies that are being replaced and staying with Ameriprise? Is it VAís that are being replaced?

What has happened, so let me take it piece by piece and weíll go through. What is happening, if you look at the VUL thereís been a small change in persistency. From the last, when we last did this in 2006, the trend line has been a minor change in persistency, which resulted in basically the impact to the universal lock increase, in DAC unlocking, okay? That has been a change that we evaluate based upon the way we look at the trend lines that have come in and yes there has been small change in persisting PAM on the joint variable universal life, of life block. In the variable annuity block, there was an older block that had an impact and there was also our I think in the line with the industry, fixed annuities is also having a persistency. So, from that standpoint the net of the fixed and the variable actually went to the older block like I said in the variable annuities it was offset by improvements in basic fees and so the net affect of the variable annuity was a positive and it is a negative in the fixed annuities which basically offset. So the variable universal life, a small change generated the $30 million.

Okay. So just to be clear, we had a positive unlocking actually on the variable annuities block.

Yes.

That added to earnings, the biggest DAC and negative earnings impact came on the VUL-piece, for the UL base.

Yes.

And you also wrote-down some DAC on your fixed annuity piece.

Yes.

Okay.

And Colin, we do give you the DAC by segment in the C pages.

Right. I just wanted to be clear as to variable annuities piece because my impressions was thatís where hit had cameÖ itÖif that seemed to be in contrast to industry expense. So, thank you for clarifying that.

Do you have another question?

And then what you didnít get to yet was the impact of this new and expanded hedge program, what is that going to do toÖ will it have any impact on variable annuity profitability and will that also make you rethink you DAC as well into the year block?

No, the answer to the question is no. Actually the hedges for variable GMWB and GMW life product are actually performing different tolerance, and giving us the appropriate risk return targets that we have assessed. So, the answer is no. we are just enhancing it.

So, the extra cost of this enhancing in loan impact earnings.

No, it will not if anything it put us within the tolerance that we thought it would be. And like I indicated it was the GMAB which was basically from our standpoint we were in the midst of putting the full hedge program in and thatís when the volatility hit. Thatís where we took one-third of the impact.

Okay.

It should basically allow us, especially as we go to the plain vanilla, reduce our cost and transaction cost associated with that as we move away from more customized hedging.

Okay, thank you.

Our next question comes from John Hall from Wachovia. Please go ahead.

Hi, I have a quick numbers question and a broader one. Were there any legal or regulatory cost of note that popped up in the quarter?

Not of any appreciable nature, no.

Okay, great. And Walter, you talked about the excess capital, the rate of repurchase being prudent. You got $1 billion of excess capital, you got all this cash that you pulled up to the holding capitalÖ of the holding company now, real low leverage. I just wonder why the pace of repurchases, what it is? Walter S. Berman ñ Executive Vice President & Chief Financial Officer: Well, I thin weíre actually onÖ is prudent, but if you know me, Iím prudent. And from that standpoint, we are on track and weíve been actually targeting as I mentioned in my talk points, we did $171 million, $665 through year-to-date and I think weíre on track and we have $700 million left through another year. So, I think we have actually redeploying the capital in an effective way and I think we are evaluating the landscape certainly as we see the volatility take place, we take a pause, we look and we feel quite confident with the positioning of the way we strengthen our balance sheet and liquidity position. But again, we are just cognizant of our environments.

And we also want to maintain a strong capital position both as well the simple environments and also if certain opportunities may arise.

You want to clarify what the certain opportunities are.

There might be an opportunity for particular firms that might be a good fit with Ameriprise strategically. So, we want to have some options available, so that we will be able to execute if an opportunity came along.

Great, thank you.

Our next question comes from Andrew Kligerman from UBS. Please go ahead.

Hi, good evening. First just a clarification on that loan provision adjustment, Walter, I just canít I missed the number you were saying on the call. Was that the $23 million thatís provided on the other page?

Yes, Andrew.

Okay, great. And then with prospect to some flows, maybe you could give a little color around the Threadneedle $3.1 million net outflows and I think you said $0.1 million on mutual fund net outflows at Threadneedle as well. I think I heard Zurich is a large piece of it, but maybe you could give a little color around those two pieces.

Yes this is Jim. What I would say is the Threadneedle continues to experience what we have seen in the last few quarters. A large part of those outflows are in the Zurich assets which were low fee assets and they continued in the books as they have some closed books there. And we have suffered some of the outflows in some of the institutional business where we had recently underperformed particularly in the U.K market. Now, performance is coming back, and we are really optimistic that, that will start to turnaround there. But they are receiving good inflows in some of their alternative product and some of their higher margin retail products. So, from a revenue prospective, it is still net positive even after the outflows on a net basis if we look at it from a fee basis, but we also feel that their performance is really strengthened this year and their track records are still quite strong. And we thing that will start turning around over time. Zurich assets will continue to be outflows, but as I have said previously, they are lower fee assets and thatís consistent with Zurichís decision on their various books.

Got it. AND then just shifting over to the Wrap net flows a very solid $2 billion up from $1.2 billion last year. I mean how big can that get do you think in the next two to three years?

Well, this is a continuing shift as appearing both in the industry advisors and with our clients. Weíre actually quite excited that not only is the core program growing, but as we introduce the new discretionary wrap program, thatís seen some nearly good, strong asset flows, then a lot of management of those assets are also from our Cambridge groups. So, weíre quite excited that we are putting in new solution sets in this fee base business that will continue the increase in the flows, and over the last year my total assets in wrap have increased by 33%. So, we feel good about the continuation of the growth of that business.

And then the last item, variable annuities. The sales were about $2.5 billion versus $2.4 million. So, you had a lot of steam in that area for a while. Could you talk about why itís kind of flattening and where you think youíre going in terms of variable annuity sales?

Yes, I mean first the net inflows are still quite strong compared to what you might see in the industry on a net basis. When we first introduced some of the new products particularly in our channel, youíre always going to get some initial extra wind. Some of the activity recently has moved to even some of these products we put in the marketplace like our Active Portfolios. So, we are still seeing good flows, but I think it has sort of come off a little bit of both in the inside and outside channel. AndÖ but we still consider that we will get good flows in, but I think itís come of its high mark.

Thanks a lot.

Our next question comes from Andrew Brill from Goldman Sachs, please go ahead. Andrew Brill ñ Goldman Sachs: Thank. Can you guys just give a sense of how much you plan to repatriate from Threadneedle in the quarters ahead? And I guess just actually what do you expected usage of proceeds are going to be?

Okay, what we doÖ I assume the question was how much do we repatriate? Andrew Brill ñ Goldman Sachs: Well, I think you mentioned your plan of repatriating from Threadneedle in the quarters ahead. And my question was just how much do you plan to repatriate?

His question is how much are we planning to repatriate going forward fromÖ

Okay. The way we do that is we basically takeÖ like we do in all the businesses, understand the required amount of capital that is needed and then our strategy is based upon looking at that required amount, looking at that total capital generation, the capital we have and they are planning on any acquisition or non-organic growth aspect. We then establish a target range to repatriate DAC back to the parent. But we do that pretty much with all the subs now using our economic capital, the required capital and ADHS [ph] capital model. So, that will be a continue flow coming back. Andrew Brill ñ Goldman Sachs: And justÖ and so, whatís the reasonable number do you think about in terms of Threadneedle?

We basically repatriated in this quarter about £30 million. Andrew Brill ñ Goldman Sachs: I guess, just a second question, some of the follow-upÖ this is some of the follow-ups of the prior questions. Just in terms of things from the new hedges in place on the living benefits plan. Given the recent life volatility, are you seeing any material change in the costs on putting on some of those new hedges?

Actually, we have seenÖ we are introducing the newÖ really that we are using less customized hedges. We substantially reduced our cost even with increase volatile. Andrew Brill ñ Goldman Sachs: Okay. Thank you.

Our next question comes from Sam Hoffman from ADAR. Please go ahead.

Hi. Can you comment on general business conditions for your business in terms of how much might deferred to you in the quarter, if at all and how much did it helped you going forward?

How muchÖ what will hurt us or help us.

The general business conditions.

Meaning in the consumer market? As you would imagine the greater market volatility would always affect a clientís interest to invest. Having said that, we didnít see much of that during the quarter. We have more of the seasonality of that. That volatility came in and was short durations so to speak. I think if the markets continue depress for a longer period of time and that will have an affect on the retail consumer and investor. Having said that, one of the things we do like about our model and that we are actually deploying even more fully is our advisors that actually chose a financial planning and have a more consistent method for client investment and management in a diversified passion. So, I think if the market slow and go down actually, it will always have an affect. Having said that, we didnít see much of that affect yet and an impact to our clients.

Okay. Because you mentioned seasonality and if you look at year-over-year distribution fees grew very significantly. I think itís about 20% that sequentially they are down significantly. And my other question is on the page nine of the supplement, the benefit trends and losses in settlement expenses were $150 million in the asset accumulation segment. And that number isÖ itís must higher than itís been historically. And I was wondering how we should project that going forward whether they are offsetting item elsewhere in the income statement and kind of what we should think about that number?

Hey, Sam. This is Laura. I think if you go back, further that in a supplement to the C page, the C-1 page, it gives you the detail of where VA writerÖ the volatility impact of VA writers. So the big negative there was a benefit line, you see it also impacted the DAC and the net investment income, and all of those lien items are detailed on that page.

And it should be broken number that I talked about.

Okay. And just following up on the other questions, would you say that what was described as a one-time item in the quarter, is that an item that we should expect to continue going forward? This variable annuity writer heads impact if volatility remains the size itís been.

I think, listen I forecastingÖ it was a change I think that was the factor from that standpoint. Clearly, let me say I think we have actually gone long way by putting ourÖ the hedging on to GMAB, so that certainly should insulate us. And we do believe that we have actually made some tweaks to our model, both from as I indicated on core standpoint, but also effects came a little bit. I think we will be performing at levels within our tolerances. Again, markets as you are seeing can jump and I think we feel we are well positioned and we are certainly well positioned as appears against our peers.

Okay. And then, one more question. Corporate expenses, the other expense was again a bid high this quarter relative to history. And so, maybe you could comment on that the bid $44 million in the quarter?

I think itís inline and I think it is affecting just the interest core and just basicÖ we didnít see anything usually in the quarter.

Yes, in total, other is relatively flat. In the corporate.

I am looking at the other, yes, in corporate. The last two quarters itís been significantly higher than previous history?

Well, actually if you go back, if itís 36 versus 44 and again itís pretty much ranged. So, we didnít seeÖ we have to dip in certainly in the second quarter which we spoke about. But if you back through it, 31, 36 range and 44. So, well, I will take a look but I donít think there is any unusual factors in it.

I recalled that on the last quarter of the conference call we indicated, we thought it would be about an average between first quarter which is low and the second quarter which was high I think that about what we came out.

Okay. Thank you.

Well. But, again Laura will take a look

Okay, our next question comes from Jeff Schuman from KBW. Please go ahead.

Good evening. Couple of items, first of all we're coming up on the fourth quarter and I am wondering how hedge fund performance looks and whether we should think about significant year-over-year change, incentive fees there, and then Iíll follow up with a couple of other things?

On hedge funds right now as you know we went to the end the year and thatís the reason we wait for the end of the year is because of one actually see the realization of it. They are tracking in reasonable range thatís all I can say at this stage. We just donít forecast on that number.

Okay and in terms of holding company liquidity you talk about the 550 dividend and 172 what is sort of the grand total holding company liquidity position at this point?

I do not haveÖat the current level I believe we are sitting I have a more check this we were over a billion dollars.

Over a billion Okay. And post the subsidiary dividends, dividend what kind of RBC are you targeting in the insurance subs at this point.

Right now, itís five, itís still over five I think, its

Yes

Its over five right now even with the dividend.

And sir what can you, whatís you tolerate to get from the downside how much?

It, the tolerance obviously I think in various stages depends, I guess because you have RBC you have different factors but, certainly in exception to moody week a 350 range is what theyíve said but again it has a multitude of factors that come in and on a B-car factors its in the 150-160 range so again we review through a multiple of factors. But we, certainly at this level that we are certainly above that.

And in terms of how the RBC is moving this shillings, last year you essentially released a lot of required capital of the fixed annuities ran off, fixed annuities have continued to run off this year so that, that also a pretty big factor and how much you able to dividend.

Thatís certainly a factor.

Okay. Thanks a lot.

Youíre welcome:

Our next question comes from Eric Berg from Lehman. Please go ahead.

Thanks very much, if I could just hit one more time the issue of profitability on variable annuities. I still donít I just donít understand how it could happen on GMAB that you're adding these other hedges I guess would be Vega and Rowe for volatility in interest rates respectively and its not, its, somehow its not affecting profitability I heard your point about moving within tolerances maybe you could elaborate on what that means and but, but how do you set up a hedging program and nothing happens to profitability I just donít understand why how that could be free.

I think theÖ Walter just mentioned was that, because we moving to more plain vanilla hedges on some of GMW B that we have cost saving even though we're adding some additional hedges on the GWAB

So, you I certainly follow what Jim said were you going to add something Walter

Just want to make sure youíre clear.

Very clear.

Sorry I thought it wasnít clear.

All clear now. Thank you.

Youíre welcome:

Our next question comes from Broad Artamevano from Green light Capital. Please go ahead.

Hi, guys actually its Vinit Sethi. Three question one is can you comment in aggregate on your current excess capital position. Second can you explain again why the field comp was up 22% as compared to 14% growth in the DDC in the quarter and third can you address one more time whether based upon what you know today about market volatility, whether the catch-up in the quarter represents an expense that would recur or not recur in the current quarter there is some kind of its nothing else changes for today with respect to market volatility.

All right, got it no its okay. Can you just repeat the first one?

Your estimates on the at least in terms of range on the current excess capital.

Excess capital positions are basically remain in access of billion dollars with paying us and certainly buying back the shares and with the capital needed to support the business it remains over a billion dollars. On the field comp you have this really the fact that it is twenty-two versus the fourteen is the fact that since there is a lower insurance and annuity as proportion there is less deferred in that basically creates that situation because less is being deferred to DAC. Okay. Thatís clear.

More is being kind of paid out currently

Thatís correct right

More is being reflected in period choice. Let me put it that way. More have been expressed

Yes but now you have also do get offset because west in the revenue side is also being taken up taxes its not just one side [inaudible] thatís just specific answer to you question is more is coming through under period.

Right How much you would be DAC offset just to get it to like the apples to apples.

We just donít break that out. The market volatileÖ we actually believe we are well positioned now and if markets stay where we are right now as I indicated by switching over to the hedge program we have actually neutralized a lot of the impact from a core standpoint of the volatility by lowering our transaction force so we actually feel we are in a good position

So just one more coming back in terms of the income statement related to the growth in the field comp, are you showing margin leverage or operating leverage on the underlying business?

Actually, we feel on our pretext margin when we haveÖ what disclosed we actually feel that we areÖ versus last year we have improved the PTI margin, and we are certainly evaluating and track that because you are getting a shift.

Right, but is there at all a lag in impact between incurring the field comp expense and then getting the benefit of the business that was generated that kind of created the compensation.

As you sayingÖ the answer is since we are not differing eventually, you donít amortize that we are going eventually yes to some degree yes.

Okay. Got it. Thank you.

Our next question comes from Sam Hoffman with ADAR. Please go ahead.

Yes I just had the same question of field comp. so you just answered it.

Thank you.

And our next question comes from Tom Gallagher from Credit Suisse. Please go ahead.

Yes hi, just one question on the contribution margin in AA&I I know the report number was 47 9. Can you talk about what kind of that normalized number because I know there was some one-timers in there.

The non-life is pretty much tracked here, you are talking about contribution margin, right.

Exactly.

Pretty much tracked at 53%.

Okay, so itís running at 53%

So to give youÖ the second quarter of ë07 53 8 compared to third quarter í06 52.8 and for the third quarter 53. So itís tracking in that range and then of course you get the mix shift.

Right. And the question I had is as we see the employee advisors base decline I presume thatís a positive from a expense leverage stand point where do you think we might see that contribution margin go to assuming you are anticipating a continual decline what I would view to be an extents drag.

Well, we are re engineering it and what we are doing is improving the recruitment aspects that I actually from that stand point over time if it was successful increase so but it would have a lot more effect on higher retention and on an improved P1 situation so we really havenít forecasted it that way but certainly we are getting the expense benefit as we re engineer that and we are very much focused on the over all pre text margin and want to control our expense tightly even though we want to focus on growing the e base revenue business so thatís what we are taking into account we are going to experience some mixtures we are going to experience some changes and because of product flow with what is that and whatís not that. But overall we are looking for overall PCI margin improvement that is how we are managing the business.

Okay thanks.

[Operator Instructions]. We have no further questions.

Well, I will be in my office all evening. Thank you, once again for calling. My number is 612-671-2080 and I also hope to see you at our financial community meeting coming up in November.

Yes, thank you everyone for the participation on the call and as Laura said hopefully if there is anything you need, please let us know. Thank you very much. Have a great day. Bye-bye.

Thank you, ladies and gentlemen, this concludes todayís conference. Thank you for participating. You may all disconnect.