Welcome to the Q1 2017 Earnings Call. My name is Paulette, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Alicia Charity.

Thank you and good morning. Welcome to Ameriprise Financial's first quarter earnings call. On the call with me today are Jim Cracchiolo, Chairman and CEO; and Walter Berman, our Chief Financial Officer. Following their remarks, we'll be happy to take your questions. On slide 2 of the earnings presentation materials that are available on our website, you will see a discussion of forward-looking statements. Specifically, during the call, you will hear reference to various non-GAAP financial measures which we believe provide insight into the company's operations. Reconciliations of non-GAAP numbers to their respective GAAP numbers can be found in today's materials. Some statements that we make on this call may be forward-looking, reflecting management's expectations about future events and overall 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 today's earnings release, our 2016 Annual Report to Shareholders, our 2016 10-K Report. We make no obligation to update publicly or revise these forward-looking statements. Turning to slides 3, you see our GAAP financial results at the top of the page for the first quarter. Below you see our operating results, which management believes enhances the understanding of our business by reflecting the underlying performance of our core operations and facilitates a more beautiful trend analysis. The comments that management makes on our call today will focus on operating financial results. I'd also like to point out that we've added some disclosure this quarter in our Protection segment. Now you can see the P&L drivers of our Life and Health business and for our Auto and Home business. In addition, we moved the closed block of long-term care business from the Protection segment to the Corporate and Other segment. And with that, I'll turn it over to Jim.

Good morning, and thank you for joining today's earnings call. I'll provide my perspective on the business, Walter will discuss the numbers in more detail, and then we'll take your questions. Let's get started. Ameriprise had a good first quarter. I'm pleased with our start to the year. The operating and market environment has been more stable. Equity markets have settled down after the post election spike, and investment sentiment has improved. However, markets are still in a wait-and-see mode for further policy decisions and clarification. And the U.S. Federal Reserve has started to increase short-term rates from near-record lows. That said, the regulatory and geopolitical environment remains quite fluid. Across the firm, we remained sharply focused on serving our clients and advisors, as we execute our strategy for growth and long-term value creation. We posted new records for assets under management and administration at $818 billion and Ameriprise retail client assets at almost $500 billion. Our growth in assets and increased client activity were reflected in our first quarter financial results. We delivered significant growth in operating EPS of 24% and an operating return on equity that's consistently among the best in the industry at nearly 24% and over 26% before unlocking. In fact, it was one of the strongest quarters in Wealth Management, the primary growth engine of Ameriprise, which represents over 70% of the company's activities. There was a significant need for financial advice. The opportunity has never been greater. Ameriprise is well situated as the leader in financial advice. Key to our strategy is growing our retail client base and serving one mass affluent and affluent investors. We're particularly focused on attracting those investors with $500,000 to $5 million in investable assets. Ameriprise retail client assets were up 11%, as we focused on serving them in…

Thank you, Jim. Ameriprise continues to execute on the strategy Jim outlined to transform our business mix. We continue to generate strong free cash flow and return capital to shareholders, while delivering growth in EPS and higher returns on equity. Advice and Wealth Management continues to be our primary growth driver, now representing 45% of total revenue. We continue to manage expenses tightly across the firm, while making target investments that will support future growth. Finally, our balance sheet remains strong. In the quarter, we returned 111% of operating earnings to shareholders, which included the repurchase of 2.9 million shares. We also announced yesterday an 11% increase to our quarterly dividend to $0.83 per share as well as an additional share repurchase authorization of $2.5 billion through June 30, 2019, which is similar to our prior authorization established in December of 2015. Turning to slide 6, Ameriprise delivered very strong operating earnings per share of $2.70, which included the tax benefit from a share-based compensation accounting change of $0.17 per share. We delivered good top line performance at Ameriprise, with Advice and Wealth Management revenue up 8% on an operating basis. In addition, we demonstrated strong expense discipline. G&A increased 3%, reflecting elevated Corporate segment expenses relating to DOL and a few unusual items. We returned a substantial amount to shareholders through dividends and share repurchases with $478 million returned in the quarter, which represents 111% of operating earnings. Let's turn to slide 7. The Advice and Wealth Management business continues to perform very well, delivering strong business metrics and financial results. Operating net revenue was $1.3 billion, up $97 million in the quarter from solid wrap net inflows, increased fee-based revenue and higher earnings of brokerage cash. Adjusting for one fewer fee day and the impact from changes to…

Thank you. We will now begin the question-and-answer session. And our first question comes from Ryan Krueger from KBW. Please go ahead. Ryan Krueger - Keefe, Bruyette & Woods, Inc.: Hi, thanks. Good morning. G&A costs have been flat to down in Advice and Wealth Management for several years now. Is the 3.5% increase that we saw this quarter more typical of what we should expect going forward or do you view it as somewhat elevated in the quarter?

It's Walter. I view it as somewhat elevated. I think the expenses will be managed as we've managed in previous years. Obviously, it's situational, but we certainly anticipate to have marginal increase in expense. Ryan Krueger - Keefe, Bruyette & Woods, Inc.: Okay, thanks. And then on the move to a more global from regional platform, (28:45) you expect to spend your current Asset Management margins in the 35% range or should we expect it to provide upside?

Well, we're moving to new global platforms to a front, middle and back office. And when we complete that in mid-2018, we feel that it will give us some efficiencies and reduce some of our operating cost there, but it'll also give us better servicing capabilities and better abilities to leverage our capabilities globally that will also give us some leverage. So we think that it will give us some efficiencies from a cost perspective as well as some opportunity for us to grow the revenue side even more fully. Ryan Krueger - Keefe, Bruyette & Woods, Inc.: Okay. Thanks a lot.

Our next question comes from Yaron Kinar from Deutsche Bank. Please go ahead.

Good morning, everybody. I actually have Brian Bedell on the line with me as well. Before I turn it over to him, just had a question more on the balance sheet side. Can you maybe talk about your retail exposure in the CML portfolio and the CMBS portfolio, and how you manage it, how you think about it, just given the stress that we see in that space?

Well, our exposure actually is quite manageable. As we look at it both from the standpoint of direct investment in real estates and other aspects of that, we have been managing that portfolio down. Our loan to book ratios are quite good and quite strong, and our concentration levels are quite low. So we feel very confident in the portfolio.

Can you talk maybe about your exposure to Class B and C malls, how you think about that?

Okay. We do not have any large – exposure to large box situations, and our mall exposure – again, it is small from the standpoint and it is – that's where we've concentrated keeping the loan to book value quite aligned and at an appropriate level. So we feel really good about it. It's an older book that's been working its way down.

Okay. I'll turn it over to Brian.

Great. Thanks very much, Yaron. Just a couple quick questions if I may. I appreciate you taking my questions. One, maybe on the – you mentioned obviously the 12b-1 changes across the complex. Can you talk a little bit more about the advisory shares, what type of fee arrangements in general that they have? And then what type of impact that may have caused the advisors to switch, if at all, to different fund families, either between active and passive or to ones that had different fee structures?

So, what we did is we eliminated the 12b-1 on the portfolios that the advisors are already managing. And to the extent that some of those fund share classes did not have the one without the 12b-1, we're rebating it back to the client in those instances. In that regard, the advisors are still able to maintain the portfolios as constructed with no change there. The advisors themselves, based on the charges that they make to the client, first of all, are very competitive against the industry. We look at that. We benchmark that. And in fact, based on our asset levels, they're actually below wirehouse levels of charges as well as independents in most all categories. So, what advisors then look at is the services they render. They'll see if there's any adjustments that they want there or other planning services that they'll render on their behalf. But in most cases, the portfolios are as constructed, have stayed the way they are. Advisors always adjust their portfolios. They have ETFs and passes as part of those portfolios as well. And they'll continue to monitor those activities and rebalance them as appropriate based on market conditions. So, that has gone very smoothly. As Walter said, half of the revenue was reduced in the first quarter. All of that has now changed, and so this is the second quarter, the rest of that will be removed from the P&Ls, but also from the advisors.

Okay. Great. That's helpful. Thank you. And then just maybe a longer term broader industry question. Maybe if you could just talk about your appetite within Asset Management for doing more acquisitions in the active space. And then just also if you can talk about the Columbia and Threadneedle integration, what's going well and the timeline of that, and maybe just some challenges that you – if you're having any challenges there, things that are perceived to be a little bit more difficult than you thought originally.

So from an M&A, listen, we continue to scout, but we're looking for things that might fit in neatly that would add or complement their activities for some of the products such that we're trying to build and grow. And so if things come about, we're interested. On the other side, we're not running out to do acquisitions at this point in time. If some can't be good for us that's of appropriate value, that we can get synergistic opportunities. But as I said, we're very much focused on improving our core organic business, making investments when necessary. And as I said, if something comes along that complements, that we'll look for it. From a perspective of the globalization, organizationally, now that has been bedded down well. The teams are working together. In fact, we're getting some very good opportunities between the international investments side and the U.S. Research is now done and shared globally. There are certain of our product portfolios that have done in a complementary fashion. We're leveraging some of the learnings as well as, as I said even operationally, how we'll go, putting the front, the middle, back office together. So, that has to come along nicely. It always takes a little longer than you want at the beginning, but then the synergies and the starts of the conversations actually grow nicely. And so we feel very comfortable and that should proceed nicely as we move forward.

You see that as improving your ability to do future acquisitions in terms of getting through this integration with success?

Yes, because once we move the global platforms, again, if we were to add some other asset managers, either internationally, domestically, we'll have a consistent platform to put them on rather than two separate ones. And the platforms that we're putting in place will be up to the greatest of what's out there in the level of capabilities that are currently in the marketplace.

Right. Great. Great, thanks for taking my questions.

Our next question comes from Alex Blostein from Goldman Sachs. Please go ahead. Alexander Blostein - Goldman Sachs & Co.: Hey. Thanks, guys. Jim, first question just around the strategy for you guys. So given obviously your better rate backdrop and potentially a lighter regulation, what are your latest thoughts on potentially reentering the banking landscape? You obviously had to drop the bank charter because of very different regulatory backdrop a couple of years ago. So just wondering as you're thinking about monetizing the cash balances, does that at all change with the current kind of administrative setup?

Well, yeah, as you said, we did once have a bank that was mainly servicing against our advisor base, not as a separate institution. So we're continuing to look at opportunities to add other services back to our advisor network. And based on a regulatory regime and some other things that may occur, we might look at opportunities that would be complementary or partnerships that we would grab. So it's one of the things we constantly review, but things haven't necessarily changed dramatically yet. So we'll stay tuned and see what may make sense down the road. Alexander Blostein - Goldman Sachs & Co.: Got you. Thanks. And then just a separate question around the VA business. So obviously, sales has come down, but also withdrawals picked up quite significantly. It sounds like a good chunk of the book may be entered the surrender period. So maybe it just makes it easier for clients to move the cash. So any sense you could give us on how much of the book is through the surrender charge period, what could that kind of percentage look like by the end of the year, and ultimately how much of your wrap account flows was effectively funded by withdrawals from the VA business.

I'd just say we saw a slowdown in our sales a bit like around 11% or so. I think the industry is still running a bit more than that, almost double. I would also say that, yeah, there was a little bit of where things were out of surrender (38:08). The people and advisors probably moved more to the wrap business right now based on the regulatory of what was still unclear with the DOL as we moved through the first quarter. So we'll see how that unfolds, but that's still not a negative for us. It goes into the wrap business versus into a new entity. So we're very comfortable with that, but Walter, I don't know...

Right. Alex, (38:31) question. About 50% is within surrender and really was elevated. Again, it's within ranges from our actuarial standpoint. So we're just observing, and I think we are in line with the industry on this. Alexander Blostein - Goldman Sachs & Co.: Got it. Thanks for that. And then just the last cleanup question on AWM guys for you. The 12b-1 fees, the $34 million this quarter, any way to break it down how much of that is coming out of the franchisee channel versus the employee channel, and on the remaining piece, should we think about the mix being obviously the same as what we saw in the first quarter?

Yes, so I would say you're probably talking about three-quarters – two-thirds to three-quarters coming out of the franchisee versus the employee. From a margin perspective, in the first quarter, about three-quarters, it's sort of worked out, of the margin came out in the first quarter that hit the company, and there is about a quarter or a third left, something like that, from a PTI margin impact that will come out in the second quarter, just based on the way things would build and the accruals, et cetera. So we feel very comfortable in managing that. All that was converted already. So it started in February and moved through March. And some things have built at the beginning, end of the quarter. So we think that it's already done perspective and the rest will translate through the P&L. So there will be a bit more about an equal revenue impact in the second quarter, but actually a bit less from a margin perspective because we took most of that in the first quarter. Alexander Blostein - Goldman Sachs & Co.: Got it. All right. Thank you very much.

Our next question comes from John Nadel from Credit Suisse. Please go ahead. John M. Nadel - Credit Suisse Securities (USA) LLC: Hey, good morning, everybody. I have a question about the acquired financial advisor firm. I am just wondering if you could give us some metrics. I know you don't want to talk about terms of the transaction, but maybe average productivity per advisor or average client assets or something along those lines, maybe a few metrics that would help us understand what its impact is going to be on the Advice and Wealth Management segment once you bring it in?

Okay. So it was approximately 200 advisors, about $8 billion of assets. I don't know whether we disclosed anything. I would probably say the average productivity is in the 300 range or thereabouts. And they really focus really on the financial institutional channel, which is banks, credit unions, et cetera. It's something that we never really – I mean some of our advisors do that, but not as a concerted effort in a coordinated way. And so we saw the opportunity that would some of our value proposition, some of our capabilities, some of our solutions that that will help them ramp up. That's what they saw as an opportunity that Ameriprise would be very complementary to help them scale further and make the investments necessary for that to be a very strong channel for us down the road. So we look at it as another opportunity to branch out or to further expand. It adds a nice firm that developed over the last two decades or so. And so we think it will be a complementary acquisition for us. John M. Nadel - Credit Suisse Securities (USA) LLC: Is it big enough, Jim, that – it sounds like the margin there is maybe a little bit lighter. I'm guessing at that, though. But is it big enough to actually move the needle on your overall margin?

No. No, it isn't. And as you said, yeah, it would be a little less since the way it's managed as more an independent, but we think that that's something that we could add value to with what we're doing and why we're doing. So over time, I think it will add to our margins and will improve what it has there, but actually help them grow even more, which would even expand the revenue and the asset base. So we think it will be nice over time, but it's not going to be, in the near term, something that will move the needle in any way. John M. Nadel - Credit Suisse Securities (USA) LLC: Got it. And then just two more quick ones. One, about $10 million in DOL-related transition costs this quarter. How do we think about that for the remainder of the year?

It's Walter. It will be decreasing again. We see it decreasing slightly in the second quarter and then trailing up. Again, it's dependent on as the situation evolves with the government and with the DOL where it's going to go. But, certainly, a lot of – we're winding down certain aspects and other aspects that we feel that we brought it to a logical point and then just we're going to wait and see. John M. Nadel - Credit Suisse Securities (USA) LLC: And then lastly – thank you. Lastly, on the Auto and Home business. I'm just curious, particularly, in light of the commentary about the new catastrophe reinsurance program. I'm wondering if you could give us a sense or characterize maybe what you think is a normal level of catastrophe losses for the business either over a full year, something along those lines, whether in dollars or in points on the combined ratio. Someway for us to get a sense for what you guys considering your pricing formula to be a normal level of cats?

So, obviously, John, it's going to be tough for me to forecast something that's not forecastable, but... John M. Nadel - Credit Suisse Securities (USA) LLC: No, I'm not asking (44:05) I am asking you what's in the model, yeah.

Let me answer this question in the way, I think, is where you're trying to get to. Listen, we thought in the first quarter the cat were going to be lower, and obviously when we spread our plan for that, it was the same level as last year, which was – those two years now elevated. So we're seeing hopefully that they will drop as it goes into third quarter because it was a timing issue. The thing that we'd done, that we do control, is really the ability to mitigate it. And that's what we've done with these two reinsurance – additional reinsurance arrangements, which will allow us to at least try and reduce the expense implications as it moves forward as it relates to progressive element, as it relates to the cumulated aspects of this. So we're feeling comfortable that we have an ability to mitigate it, but obviously we can't forecast exactly where the levels are going to be.

The only thing I would add to what Walter said at the very beginning, again, you can look at of an industry is actually cats were running nicely below in the first quarter until the very end of March. And you saw there is a number of storms that picked up around the U.S., particularly in the Central sites. And so, listen, so far, April has been a little quieter. But you never know, knock wood, but it could have been some of that move from the normal period of the second quarter at the very end of the first. But again, we don't know, but what we've done is put these other agreements in place that if it does come in heavier, we'll take some of the load off and we think that was appropriate thing to do. And to your point, we'll get a better sense after we go through a few more quarters of what that may look like, but we've made adjustments in our business, some policy adjustments, some reinsurance adjustments even where we are writing business or not writing business, and some of the containment that we made in some of the partners that we're working with that should reduce cat losses over time. So very much, we have our eye on and we think that this could be an improving situation for us. John M. Nadel - Credit Suisse Securities (USA) LLC: Yeah, I appreciate all of that. I don't think it's that big area of focus. I was just more curious not in terms of forecasting the weather, but just what you think would be a more normal kind of the year. That's all.

Listen, I wish I knew at this point, but your question is very valid. Having said that, we were a little – it was running nicely consistent back to old periods. But listen, it reared its little head so hopefully, it'll be a little better as we go forward. But thank you for the question. John M. Nadel - Credit Suisse Securities (USA) LLC: Understood. Thanks.

John, I usually get that question from Jim. So, that's why (46:45)

I asked that question to Walter too.

Our next question comes from Humphrey Lee from Dowling & Partners. Please go ahead. Humphrey Hung Fai Lee - Dowling & Partners Securities LLC: Good morning and thank you for taking my question. Just looking at Asset Management's adjusted pre-tax operating margin, so the 35% is definitely resilient given you have one less fee day and given some of the outflow challenges. But it's still at the lower end of your target. So I guess, my question is, what will need to happen in order, for you, to hit the upper end of your 35% to 39% target for the segment?

The key thing we control there is managing the expenses, obviously, and we are doing it. And as we get higher revenue weighted inflows, that will improve in that certainly the markets, but this quarter, you are correct that there was a lower fee day, certainly impacted the revenue. And certainly, we had lower performance fees. So as we look at it, it's a range. And we believe with the markets where they are and the way we're managing the business and looking at the flows, that we will stay in that range. I can't really predict if we're going to be moving up and down the range because it is dependent on markets and it is dependent on, again, the elements of what the flows that are coming in and when they're coming in. But we feel that we're in a good range and we are – the 35% to 40% was again different circumstances, different situations, but the business is operating, I think, at a pretty effective level at this stage. Humphrey Hung Fai Lee - Dowling & Partners Securities LLC: Okay. And then looking at the $1.1 billion of institutional redemptions from a sovereign wealth fund, can you maybe remind us what percentage of your institutional AUM right now is from sovereign wealth fund from clients?

I believe, right now, it's somewhere in the $3 billion to $4 billion range, or something in that range.

Well, that's only that one. Humphrey Hung Fai Lee - Dowling & Partners Securities LLC: That one sovereign, yeah.

It actually might be a little less than that right now. But again, listen, I think the situation there is one that could change over time as they're making adjustments in what they need. Having said that, I think it's something we feel very comfortable what we're managing for them and the performance of it, but those are decisions that they make periodically, as we know, and I think other providers are having that same dialog. Humphrey Hung Fai Lee - Dowling & Partners Securities LLC: Okay. And then just on a broader terms for the institutional side, so adjusting for that $1.1 billion redemption and the former parent stuff, it looks like third-party institutional net flows were a positive $800 million. Is that a good representation of your current pipeline for the institutional business?

Yes. So the third-party institutional as the pipeline still remains pretty good. And as we said, there's always – it's lumpy when you get the fundings, et cetera, but the pipeline still looks good. And yeah, it should be that. It could be a bit more positive. It depends on when things come in. As I said, it would have been more positive in first quarter without that negative redemption that we weren't expecting. But having said that, yeah, we should see some positives coming from third-party is what we're expecting. Humphrey Hung Fai Lee - Dowling & Partners Securities LLC: Okay. Thank you.

Our next question comes from John Barnidge from Sandler O'Neill. Please go ahead. John Bakewell Barnidge - Sandler O'Neill & Partners LP: Thank you. Just a couple questions. The expense ratio on protection for Auto and Home was 20%. Should we think of that as a run rate or a one-off level?

Okay, it's Walter, again. It's a bit high. You should see that we're anticipating that would be in the mid-18%, out to maybe 18.7% or 18.8% range for the year. John Bakewell Barnidge - Sandler O'Neill & Partners LP: Okay, great. And then at what point do we start talking about the DOL rule uncertainty in some ways being more disruptive than the actual rule itself?

So, listen, I think there is the delay to June. With that, they said they still want to move – have a best interest level, but that the delay is to 2018 now. So I think there's the comment letters that went into department. I think, as we know, there isn't a new head there yet. Hopefully, that will be approved soon. And so I would probably say we still are hoping that that goes through the type of review that the administration has asked for and that that would be done in a more comprehensive fashion. And so, I guess, we just have to stay tuned. But we're preparing ourselves, and we'll continue to make adjustments where appropriate and necessary, but we'll wait to see. And again, I think it's something that should be looked at. I think you heard from the SEC yesterday that said, hey, this is something that we might want to take up as well. And I think having one consistent regulatory type of regime would be great in regard to non-qual (52:27). So we'll see. We'll probably know more over the next number of weeks. John Bakewell Barnidge - Sandler O'Neill & Partners LP: Thank you for your time.

Our next question comes from Erik Bass from Autonomous Research. Please go ahead.

Hi. Thank you. Walter, I was hoping you could talk about the geography of your excess capital and how much resides in the life company versus with the holding company or in Advice and Wealth and Asset Management at this point.

Okay. The geography is basically, it is across the spectrum. The majority of it is generated from the life company, but we generate very strong returns. As you can see, we're over 500% – we're right at 500% in our RBC, and looking at our ratios of regional portion, I'd say about around 50% comes from the Life and then the balance comes from Asset Management and Advice and Wealth Management.

Got it. That's helpful. And then on the Life piece, I mean the 500% RBC ratio is obviously still pretty strong. It's come down a lot over the last year. So should we think of that as that's where some of the sort of, I guess, decline in excess capital has come from or are there other factors that have moved the RBC ratio around?

Well, there's other factors, but as we talked about, it was our intention to always keep the RBC ratio in the 500% range and obviously there are other factors that take it up and we're constantly evaluating that, so we feel comfortable with that range and of course that is above the minimum standards from the rating agency.

Got it. Thank you.

Our next question comes from Tom Gallagher from Evercore ISI. Please go ahead.

Good morning. Walter, first, if I could start on your comment on cash balances in terms of the margin that you should keep, I think you mentioned – the 80% had been your prior guidance and it sounds like you're still sticking with that through the increase we've had so far. What was the comment you made about going forward? Was that from this point forward or do you still expect to keep 80% for a while here before we get to the point where you're saying you're going to determine how much you need to pass back to clients based on competitive conditions? Can you provide a little more clarity on that?

Sure, so, Tom, the 80% was basically a guideline as we talked about the first 100%. And so far, there has been 75 basis points. We've kept the majority of it. I think going forward, it is really going to be a situational element. As we assess it, we still believe that. As we look at what's happening in the industry, a large portion of that should certainly be retained, but we will again gauge is what competition and looking at the client elements of it. So the 80% was strictly just to give you guideline on first 100%. And like I said, with the 75 basis points we have, we've kept the majority of it. So going forward, I think we're just going to gauge it as we look at and what's competitive.

Remember, the first 100 basis points is coming off of very bottom, so it's very different than the past where you really had rates of 1% and 2% already. So I think that's why the industry pretty much is keeping all that the banking institutions, et cetera, because you'll have very low rates. So I think as you get into the second 100 basis points is probably where the sharing will begin.

And just from your comments, it sounds like you still think you can keep 50% or maybe a little more, but clearly not the 80%. Is that a fair way to think about it?

I'll probably say on the next two or something, we're probably closer to the very high keeping. As you get more in between the 1% and the 2% that you range up your sharing as you go up. So I think, again, for the next initial raises, it's still going to be probably keeping majority, and then you start shifting it over time. But again, I think we're all monitoring what's happening in general out there, but as I said, we are off a very, very low basis, why it's a little different than in the past.

Got you. And then just a question on the outsized flows in Advice and Wealth and the wrap rapid accounts, is what we're seeing here really the shift more heavily into fee-based structures and away from commission-oriented sales? I assume that we're seeing – the DOL kind of knock-on effect is probably partly what's driving the outsized flows, but I just wanted to confirm if that's what you're thinking. And then, related question is, if that's what happening, do you think – are your, call it, earnings contribution on those flows a net positive over the lost revenues on commission-type sales? If you get my question. I'm just trying to understand where are we in that (57:46)?

Yeah, so let me give you our perspective. So number one, I would say is this, there has been a continued shift to fee-based in the industry, whether DOL or not DOL. I mean, as we look at our business, as you said, we are probably one of the highest fee-based already and that continuation continues to occur with advisors based on serving their clients in that fashion. So I think, if anything, for some other parties, the DOL may have accelerated that for others that they are making a firm commitment that's the way they want to do business. So in our case, yeah, I think it did contribute to some of the step up in activity. I think that as I would say on commissions, we're still up 4% on commissions year-over-year, it wasn't as though we dropped in commissions and all that when we did the fee-based. So I think it's still maintaining a level of commission-based business. I think what's unclear now is because the DOL didn't get firmed up, that people are still – okay, is commission something that we want to continue to think about and how. So I think as that gets firmed up in some way, you might see again a settling. It doesn't mean that there won't be a shift back from fee-based. I think that shift was occurring anyway. But I think at the same time, commission-based could maintain as a reasonable part of people's activities because it makes sense for a number of clients. It's even more efficient for them. And there are certain products that are sold that way that is easy to be sold that way. So for those reasons, that's the way I would think about it. I don't know if I answered all your questions, or did I miss a piece of it?

No. I think – so the fact of the matter is, you're still up 4% year-over-year on commission revenue. So this would be additive. When I think about growth, the outsized flows in wrap accounts should be additive, not just replacing loss. Can you (59:50).

Yeah, I think, as I said, if it was where the DOL was firmly moving there, you probably see even that continued shift more dramatic probably. Having said that, because it's not, or because it's unclear of what that is, then you'll still get a level of both as you go forward. The difference between commission and a wrap fee over time, as you get the fee over time versus you get more of that upfront. So, that impacts your time of period, not necessarily economically, it's worse off or better off, I think it's more of a time of period.

Got you. And then just one final one. The $60 million or so variable annuity net income negative adjustment, that is market impact from guaranteed benefits. Walter, can you explain what that was exactly? I guess, it was (01:00:44) negative.

That's from market – strictly from market and the hedges. That's the market and the impact on the hedges.

Got it.

Okay.

So, that was the difference between the hedge performance relative to the mark in the liability. Is that the way to think (01:00:59)?

And it's the statutory liability. That's right.

Okay. Thank you.

And our last question comes from Suneet Kamath from Citi. Please go ahead.

Thanks. Just on Advice and Wealth Management, I saw that the PTI was down sequentially despite the strong markets and the strong flows, et cetera. So I just wanted to get a sense of is that 12b-1 impact, is that being fully offset in the quarter in terms of lower expenses or is there a little bit of a mismatch there in terms of timing?

Well, it's not a perfect match. So remember, the 12b-1 would impact on almost an equal margin basis based on our sharing versus the total that we pass on to the advisors. So we got impacted in the quarter roughly about $9 million from a contribution margin. And it was a little bit higher versus the total of it, as I've said, to the total of the revenue and the 12b-1 just based on how the accruals and the billings and things went. What I would say then is we were able to, based on some of the expense reductions we did going through the fourth quarter and some of the fee adjustments we've made, to offset that and maintain our margin levels, et cetera, but I can't tell you whether it was a perfect timing one there. But we feel very comfortable and the other third you (01:02:31) come out will be about a $3 million margin hit to us in the second quarter, but again, based on some of the other adjustments, we should offset that. So I think it's pretty much margin neutral from a 12b-1 perspective. Remember, those are other reengineering, other activities that we've done separate and apart from that to try to offset it.

When you say margin neutral, I mean is it – should we also think about that as being PTI neutral because that was kind of the question that we were down sequentially in PTI, not the margin?

Yeah. So I would say sequentially again, your fourth quarter was a little stronger. You also had the 12b-1s ones in there. So I think there is a number of different things. You got expenses and compensation up higher in the first quarter because of all your payroll stuff, even our accruals that you make in the first quarter. So it's not an apples-to-apples quarter sequentially. Walter probably can give you more information there, but we had a strong quarter, but you also have increased, because of compensation, other things that all hit in the first quarter. And so you can't look at that sequentially.

Okay. Got it.

And I think that pattern on the sequentially is actually consistent in the way you do it and you do get a different situation with the first quarter on the VAs and a number of elements with that. So I think from our standpoint, it is tracking sequentially and certainly where we anticipate it will be, Suneet.

Yeah. I would say, Suneet, we feel very good about how the quarter came out, the margins in the quarter, what that does on a consistent trend line for what we're looking for. So we feel quite good about it. I know it's hard because you've got a lot of moving parts, but we feel good about what we did book there.

That's fair. Just a quick follow-up on the performance fees in Asset Management. I saw they were zero in the quarter versus, I think, $6 million in the year ago. Is there a timing element there or is your expectation that 2017 will be lighter than 2016 in terms of overall performance fees?

It's tough to estimate, Suneet, but it's certainly – really at this stage, it's something that is tough to estimate from that standpoint because you've property funds, different funds coming in and all that. So it is we're just looking at quarter-to-quarter.

Okay. And then maybe just one last one. Just on the 98 new advisors that you added in the quarter, I mean that seems to be a little bit higher than where you have been running in recent quarters. I just want to get a sense of, is that coming from wirehouses, independents? Just any color on that would be helpful.

Yes, so we've actually brought in a very good class of advisors, as I said, with strong productivity. We continue to attract them from wirehouses, but we're also seeing some pickup from independents as well. But I would probably say more so on the wirehouse front at this point in time.

Is that are those guys going into the employee channel?

It's been a mix, but the wirehouse, yeah, a bit more into the employee from there and the franchisee. We attract a bit more from the independent space there, but there's a few that go from wirehouse to the franchisee as well. But what I would say the overall was a very strong quarter for us in that regard.

Got it. Okay. Thanks very much.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating, and you may now disconnect.