Top 4 Ameriprise Financial Interview Questions
While Ameriprise Financial is not a household name - at least not in the same way that JP Morgan, Morgan Stanley or Merrill Lynch are - when it comes to wealth management some of the top teams in the United States come from Ameriprise and have billions of dollars in assets under management.
With that said, compared to the traditional investment banks, the interviews for junior roles at Ameriprise (i.e. as a financial advisor or associate) tend to be relatively more broad-based, behavioral, and generalist.
This can be both a good and a bad thing. It's good because you won't be asked some of the harder private wealth management interview questions, but it's bad in that it makes it a little bit harder to stand out by showing your technical knowledge.
Given this, it's best to try to always integrate in some technical details into your answers wherever it feels natural. In other words, you should try to make sure that you're getting across your general markets knowledge whenever possible while also demonstrating that you understand what the role of a wealth manager or planner entails.
Ameriprise Financial Interview Questions
Below are some of the most common wealth management style interview questions at Ameriprise. Keep in mind that while these are less technical, you should be actively trying to put in some key market / technical details where possible.
- How do you try to handle rejection?
- What's a market you're following closely?
- How has a classic 60/40 portfolio done to start the year?
- If inflation continues to persist, what equities sector will likely perform the worst?
Rejection is a part of nearly every role related to wealth management; whether that's trying to source new clients or pitch new ideas to existing clients. Even in wealth management roles that are relatively detached from clients - such as some junior analysis roles within major investment banks - those roles will invariably morph into ones that are more client-focused within a few years.
As a result, an individual needs to be able to not only handle rejection well, but to be willing to face rejection multiple times a day, ever day.
This is partly why a candidate being heavily involved in sports has always been viewed favorably in the world of wealth management. Because at least then you know that an individual is used to trying, failing, and then trying again.
The best answer to this question will start with acknowledging that you understand that rejection is simply a part of wealth management for everyone and that you fully understand that reality. Further, you should say that you try to focus on the process you're following, not the outcomes, wherever possible.
As a result, any rejection that occurs you don't take personally, but rather you try to reevaluate your process in light of the rejection and see if there are any improvements that can be made (while understanding that rejections will be inevitable no matter how well refined one's process or approach is).
This latter point is essential to bring up - although you can phrase it in a different way - because many people who enter into a relatively client-facing role take the rejection that inevitably arises very hard and that causes them to flame out early. Those who tend to succeed through the tough early years are those that have been able to be resilient and not to get too downcast about any rejection or failure that's come their way.
This is a great question to ask because it's deceptively simple, but allows you to show off your knowledge a little more (a common theme we wrote about in the wealth management interview guide).
The vast majority of interviewees when asked this question will simply reference an equity market (normally the S&P 500). There's nothing wrong with that necessarily, but it's so broad and so generic that you better have something good to say as an explanation for why you're following it!
Especially in the current climate, a much more unique answer would be to talk about either a certain sector within the equity markets (i.e., commodity equities since they're doing well given the geo-political volatility of late) or something like the rates markets.
For example, when answering this question you can talk about how you think what's driving most markets right now are rates and the volatility inherent in equity markets, for example, is being driven heavily by rate expectations. You can reference how quickly the 2-year and the 10-year treasury have risen, and also reference that the 2-10 curve has inverted (which is frequently talked about as a recession indicator).
You can then say that a continuing move up in rates will have especially out-sized impact on growth stocks (i.e. technology stocks) given that they have most of their cash flows coming in the far future and so when rates rise these future cash flows are discounted at an even higher rate.
As you perhaps know, the most famous type of portfolio composition involves a 60/40 split between stocks and bonds. Historically, this has returned significant returns while providing lower risk because of the negative correlation normally seen between stocks and bonds.
However, given the incredibly low rate environment through 2020 and 2021 - combined with the inflationary dynamics that have occurred over the past year - both stocks and bonds have actually moved in the same direction.
Indeed, as of this writing a classic 60/40 portfolio is down about 15% to start the year. While this is better than if one had just been entirely invested in an equities index, it isn't too far off from that due to the massive sell off in fixed income that has occurred this year. In fact, the 60/40 portfolio hasn't performed this poorly to start a year since 2008.
Remember that when the yields of bonds go up, the prices of bonds go down. Given that the Fed - along with most other central banks - has embarked on the fastest rate hike cycle of the past forty years, this has resulted in large losses across both treasuries and corporate bonds.
This is indicative of the kind of broad markets-question you could get in an interview. Obviously there's no perfectly right answer as no one has a crystal ball, but all your interviewer is looking for is a reasonable and plausible answer.
However, the first thought you should have is that continued inflation, especially accelerating inflation, will mean that central banks will need to continue to raise rates to a greater extent than what the market is currently pricing in (most are pricing in around 1-1.5% of additional hikes moving forward in the US).
The sectors that will be most impacted by higher than anticipated rates will be those sectors that have a large number of growth companies in them who derive their valuation from cash flows far into the future, but that don't have significant cash flow now. This is because these future cash flows are going to become less valued by the market, as they'll be discounted back to the present at a higher discount rate.
Given this, the specific sector that would likely demonstrate weakness if inflation persists or accelerates would be the "technology" sector. This sector is historically very rates sensitive, which is why many high growth technology stocks that don't have overly large current cash flows have had large declines in their valuations over the past six to twelve months as rates have risen.
It's always important to keep in mind that open-ended questions are an opportunity for you to show off not only how much you know about markets, but also how much you understand about what the most important attributes of the role you're applying to are.
Hopefully these questions have helped break things down a little bit and have given you some insight into how to approach your answers. There are plenty more posts we've done covering other kinds of questions if you're looking for more practice; this includes a long post on asset management interview questions if you're looking for some tougher and more technical questions. You can also check out Ameriprise's own market research, which would be very thoughtful and impressive to reference in some of your answers.