Investing.com -- Ameriprise Financial Inc (NYSE: AMP) shares slipped 3.6% on Monday after BofA Securities double-downgraded the wealth management firm, warning that an accelerating exodus of high-value financial advisors threatens to weigh on earnings and squeeze profit margins. Analyst Craig Siegenthaler slashed his rating on the stock to Underperform from Buy while trimming his price target to $445 from $570, projecting a potential 10% total negative return for investors.

The double downgrade highlights growing structural headwinds for Ameriprise as prominent advisor practices, including Rise, Fathom, and StackStone, defect to rival platforms such as Charles Schwab. Siegenthaler noted that the economics of registered investment advisor (RIA) ownership are proving increasingly attractive, while aggressive wirehouse recruiting has simultaneously slowed the flow of prospective breakaways entering independent broker-dealers.

To stem the tide, Ameriprise has resorted to defensive measures, including cash retention bonuses structured as forgivable loans alongside selective platform fee reductions. These elevated retention expenses, coupled with a 25% surge in transition assistance loans disclosed in the company's latest annual filing, are expected to compress wealth management margins in the near term, according to the analyst.

The departure of key advisor groups is poised to pull total advisor headcount growth into negative territory for 2026, barring temporary inflows from institution-level bank transitions. The analyst noted that although the pending onboarding of Huntington Bank's $28 billion in assets under administration will offset the third-quarter exit of Comerica, Ameriprise's organic growth trajectory continues to lag behind peers like LPL Financial and Raymond James.

Compounding these operational pressures, Siegenthaler added that Ameriprise faces long-term earnings vulnerability from its cash sweep pricing strategy, where low yield yields on uninvested cash continue to incentivize client sorting into higher-yielding money market funds and CDs. As investor adoption of financial technology tools accelerates, the firm may eventually be forced to raise sweep payout rates to maintain client assets, directly curtailing a historically lucrative revenue stream.

In response to these headwinds, BofA reduced its earnings-per-share estimates through 2028 and compressed its valuation multiple to 8x from 10x to reflect slower projected expansion across wealth and asset management. Management commentary during the upcoming third-quarter earnings call will serve as a critical catalyst, with investors seeking clarity on retention costs, net new asset trends, and margin stability heading into 2027.

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