James M. Cracchiolo
Chairman and Chief Executive Officer at Ameriprise Financial
Good morning, and welcome to our third quarter earnings call. What I'd like to do is give you my perspective on the environment and how Ameriprise is performing, then Walter will cover the financials. In terms of the market environment, both equity and fixed income markets continued to decline in the third quarter, both here and in Europe. Inflation remains high and sticky, and geopolitical risk is elevated. This is causing a high level of volatility, keeping investors on the sidelines a bit more.
With that, short-term interest rates were up 300 basis points so far this year with 150 basis points raised just in the third quarter. I believe that the Fed and other central banks have been playing catch-up, and that they will have to continue in increasing rates to get inflation under control. Having said that, it will lead to a slowing of the U.S. and European economies and at this juncture, it looks more like we're heading for a mild recession.
Therefore, I expect there will be more volatility ahead. So for Ameriprise, the diversity and strength of our business allows us to deliver good outcomes even in challenging times, and you certainly saw that in our results this quarter. We continue to remain in strong client inflows and wealth management. And the rise in interest rates, the growth of the bank and the stability of the retirement protection businesses helped to more than offset the effect of depreciating markets and foreign exchange that impacted our asset management business.
The investments we made in our business over the years in our technology, client service, product solutions and advice value proposition are paying dividends as we continue our strong focus on our clients and helping our advisers navigate a difficult environment. Now I'd like to discuss our third quarter results in more detail. Total assets under management administration were $1.1 trillion, which is down 9% from a year ago. Assets were impacted by the steep decline in both equity and fixed income markets and the strength of the dollar, which affected the foreign exchange rate in our European business.
In terms of adjusted operating financials, excluding unlocking, revenues were $3.5 billion, up 1%. With that, earnings per share were up 9% to $6.43, and the return on equity was strong at 47.9%, which is consistent with this time last year. Now let's talk a bit more about our businesses. I'll start with Advice & Wealth Management, where we continue to deliver strong results. Despite the environment, we had good client flows as clients remained engaged.
Total client flows were up 11% in the quarter to more than $11 billion. The mix of our flows reflect the environment we're in. We saw strong growth in brokerage, cash, certificates and other products. As we expected, cash balances continue to be up sharply to more than $46 billion compared to more than $40 billion just a year ago. We're seeing good growth across our cash offerings. Very importantly, our adviser productivity remains strong as we continue to reinforce our personal relationships and the value of advice. It was up 7% to $819,000 per adviser.
We recently met with our top advisers to recognize their success and discuss growth opportunities at Ameriprise. Engagement was terrific. Advisers are highly satisfied with the firm and the support we provide, and they like the technology and the capabilities we've added, which is helping them grow. Which brings me to recruiting. We had another very good quarter adding 89 highly productive advisers. Advisers consistently tell us they recognize the strength of our value proposition, our brand and the stability of the firm. It's a competitive marketplace, and I feel good about our pipeline.
In the third quarter, as we have all year, we continue to invest steadily in the business. We continue to release additional tools, capabilities and enhancements that help our advisers engage and meet with clients, deliver actionable advice and improve efficiency of their practices. As part of our investment agenda, we've been very much focused on expanding our cash offering and growing our bank. The bank provides important flexibility in this rising interest rate environment and will continue to be a good opportunity for us to further engage and deepen our relationships with clients.
We continue to move cash to the bank, adding $3.1 billion in the third quarter. And with that, we've been able to invest appropriately to garner additional spread. Today, our bank has grown to nearly $19 billion. We also continue to see good growth in our pledge loan business, and we'll be launching more products in the bank as we move forward. Overall, the Advice & Wealth Management business continues to generate strong profitable growth and margins reached 27.8%, up 540 basis points. Now let's turn to Retirement & Protection Solutions.
Starting with variable annuities, we have narrowed our focus to concentrate on products that are good for clients in this environment and for the firm. And with that strategy in place, we have continued to generate solid sales in variable annuities without living benefits as well as our structured products as we have shifted away from annuities with guarantees. Therefore, our sales are down but in line with the industry. We also made a shift in protection away from fixed insurance to focus on VUL and DI products.
Life sales were also down given the climate, but again, results were in line with the industry. Based on what we've done to appropriately risk adjust these businesses, they continue to generate good earnings, stability and solid returns and cash flow as a complement to our other businesses. Now I'll cover asset management. As you've seen across the industry, markets have impacted asset levels from an equity and fixed income perspective.
As a global asset manager with sizable presence in Europe, we were also affected by the depreciation of the sterling and the euro versus the dollar. Assets under management were down 6% to $546 billion given the equity and fixed income markets and the FX impact I've mentioned, more than offsetting the BMO acquisition. Consistent with what you've seen in the industry, investors have more of a risk-off perspective and you have a level of tax loss harvesting taking place based on market depreciation.
Very critically in this environment, we are maintaining good investment performance, and we're continuing to maintain good three, five and 10-year track records. While there's been a lot of volatility over the course of the year, over 70% of our funds are above meeting on an asset-weighted basis. Our short-term performance has been impacted in some of our fixed income strategies based on the spike in interest rates. And in Europe, some of our equity strategies were impacted because of our quality growth positioning. Let's turn to flows.
In the quarter, we had outflows of $2.4 billion that included $1 billion of legacy insurance partner outflows. Positive flows in institutional were more than offset by the ongoing pressure we've seen in retail. In retail overall, we're in net outflows, but it improved a bit from a tougher second quarter for us in the industry. We ended the third quarter with lower gross sales and higher redemptions than a year ago, given the markets.
This resulted in $5.3 billion of net outflows driven by weak conditions. In U.S. retail, equity outflows remain generally in line with the industry, and fixed income results were behind given our product mix. In EMEA, though retail flows remained under pressure, we did see some improvements in Continental Europe and overall flows were a bit better than the industry for the quarter. Turning to Global Institutional. Excluding legacy insurance partners, net inflows were $3.9 billion, and we're seeing fundings get extended given the markets and some asset allocation calls.
In Asset Management, we expect the environment will remain challenging. However, we think there will be opportunities as markets settle down over time and interest rates stabilize. At the same time, we've been very much focused on integrating our BMO EMEA business, and that's going well. We continue to make good investments in the business overall, ensuring that we have the right focus to move forward in distribution as well as servicing and platform capabilities.
But we also have a very strong eye towards managing expenses in this market. And adjusted for the BMO EMEA acquisition, we brought G&A expenses down by 7%, and we'll continue to be very focused there. As I look ahead for Ameriprise, I believe we will continue to be operating in these markets for a while. So as you expect from us, we're very much focused on what we can control. That includes continuing our strong engagement with clients and advisers as well as leveraging our investments as we continue to manage our expenses tightly moving forward.
Importantly, I feel like the strength of our businesses and the growth of the bank will allow us to navigate these markets very well and generate a consistent level of free cash flow and good returns for our shareholders. And what's very important and critical for the firm and what we deliver is the engagement of our people and advisers, I feel very good about the team.
We just conducted our employee and adviser surveys, and we continue to see high levels of engagement and satisfaction industry-leading, and we know how important this is going through a challenging environment to keep our focus on our clients. In total, I feel really good about the mix of our business, the flexibility we have and how we're positioned for both the challenges and the opportunities ahead.
Now I'll turn it over to Walter, and then I'll take your questions.
