

	Three Months Ended September 30, 2019
	Advice & Wealth Management		Asset Management			Annuities		Protection		Corporate & Other			Total Segments		Non-operating Revenue		Total
	(in millions)
Management and financial advice fees:
Asset management fees:
Retail	$	—	$	448		$	—	$	—	$	—		$	448	$	—	$	448
Institutional	—		135			—		—		—			135		—		135
Advisory fees	813		—			—		—		—			813		—		813
Financial planning fees	80		—			—		—		—			80		—		80
Transaction and other fees	91		48			14		2		—			155		—		155
Total management and financial advice fees	984		631			14		2		—			1,631		—		1,631

Distribution fees:
Mutual funds	183		59			—		—		—			242		—		242
Insurance and annuity	226		43			84		7		1			361		—		361
Other products	169		—			—		—		—			169		—		169
Total distribution fees	578		102			84		7		1			772		—		772

Other revenues	40		—			—		—		—			40		—		40
Total revenue from contracts with customers	1,602		733			98		9		1			2,443		—		2,443

Revenue from other sources ⁽¹⁾	115		8			519		256		356			1,254		19		1,273
Total segment gross revenues	1,717		741			617		265		357			3,697		19		3,716
Less: Banking and deposit interest expense	35		(1		)	—		—		1			35		—		35
Total segment net revenues	1,682		742			617		265		356			3,662		19		3,681
Less: Intersegment revenues	240		13			94		16		(1		)	362		2		364
Total net revenues	$	1,442	$	729		$	523	$	249	$	357		$	3,300	$	17	$	3,317



	Three Months Ended September 30, 2018
	Advice & Wealth Management		Asset Management		Annuities		Protection		Corporate & Other			Total Segments		Non-operating Revenue		Total
	(in millions)
Management and financial advice fees:
Asset management fees:
Retail	$	—	$	479	$	—	$	—	$	—		$	479	$	—	$	479
Institutional	—		125		—		—		—			125		—		125
Advisory fees	740		—		—		—		—			740		—		740
Financial planning fees	75		—		—		—		—			75		—		75
Transaction and other fees	87		48		15		2		—			152		—		152
Total management and financial advice fees	902		652		15		2		—			1,571		—		1,571

Distribution fees:
Mutual funds	182		64		—		—		—			246		—		246
Insurance and annuity	220		44		85		8		1			358		—		358
Other products	156		—		—		—		—			156		—		156
Total distribution fees	558		108		85		8		1			760		—		760

Other revenues	43		—		—		—		—			43		—		43
Total revenue from contracts with customers	1,503		760		100		10		1			2,374		—		2,374

Revenue from other sources ⁽¹⁾	85		12		528		318		331			1,274		26		1,300
Total segment gross revenues	1,588		772		628		328		332			3,648		26		3,674
Less: Banking and deposit interest expense	24		—		—		—		2			26		—		26
Total segment net revenues	1,564		772		628		328		330			3,622		26		3,648
Less: Intersegment revenues	235		13		91		17		(2		)	354		2		356
Total net revenues	$	1,329	$	759	$	537	$	311	$	332		$	3,268	$	24	$	3,292



	Nine Months Ended September 30, 2019
	Advice & Wealth Management		Asset Management		Annuities		Protection		Corporate & Other			Total Segments		Non-operating Revenue		Total
	(in millions)
Management and financial advice fees:
Asset management fees:
Retail	$	—	$	1,319	$	—	$	—	$	—		$	1,319	$	—	$	1,319
Institutional	—		350		—		—		—			350		—		350
Advisory fees	2,317		—		—		—		—			2,317		—		2,317
Financial planning fees	233		—		—		—		—			233		—		233
Transaction and other fees	266		141		41		6		—			454		—		454
Total management and financial advice fees	2,816		1,810		41		6		—			4,673		—		4,673

Distribution fees:
Mutual funds	536		176		—		—		—			712		—		712
Insurance and annuity	649		127		244		21		5			1,046		—		1,046
Other products	534		—		—		—		—			534		—		534
Total distribution fees	1,719		303		244		21		5			2,292		—		2,292

Other revenues	134		4		—		—		—			138		—		138
Total revenue from contracts with customers	4,669		2,117		285		27		5			7,103		—		7,103

Revenue from other sources ⁽¹⁾	326		26		1,556		759		1,050			3,717		21		3,738
Total segment gross revenues	4,995		2,143		1,841		786		1,055			10,820		21		10,841
Less: Banking and deposit interest expense	106		—		—		—		5			111		—		111
Total segment net revenues	4,889		2,143		1,841		786		1,050			10,709		21		10,730
Less: intersegment revenues	689		40		273		46		(4		)	1,044		6		1,050
Total net revenues	$	4,200	$	2,103	$	1,568	$	740	$	1,054		$	9,665	$	15	$	9,680



	Nine Months Ended September 30, 2018
	Advice & Wealth Management		Asset Management		Annuities		Protection		Corporate & Other			Total Segments		Non-operating Revenue		Total
	(in millions)
Management and financial advice fees:
Asset management fees:
Retail	$	—	$	1,431	$	—	$	—	$	—		$	1,431	$	—	$	1,431
Institutional	—		345		—		—		—			345		—		345
Advisory fees	2,137		—		—		—		—			2,137		—		2,137
Financial planning fees	223		—		—		—		—			223		—		223
Transaction and other fees	268		144		44		5		1			462		—		462
Total management and financial advice fees	2,628		1,920		44		5		1			4,598		—		4,598

Distribution fees:
Mutual funds	556		201		—		—		—			757		—		757
Insurance and annuity	673		131		253		22		5			1,084		—		1,084
Other products	448		—		—		—		—			448		—		448
Total distribution fees	1,677		332		253		22		5			2,289		—		2,289

Other revenues	131		2		—		—		—			133		—		133
Total revenue from contracts with customers	4,436		2,254		297		27		6			7,020		—		7,020

Revenue from other sources ⁽¹⁾	232		51		1,566		809		985			3,643		142		3,785
Total segment gross revenues	4,668		2,305		1,863		836		991			10,663		142		10,805
Less: Banking and deposit interest expense	60		—		—		—		4			64		—		64
Total segment net revenues	4,608		2,305		1,863		836		987			10,599		142		10,741
Less: intersegment revenues	722		37		271		46		(3		)	1,073		12		1,085
Total net revenues	$	3,886	$	2,268	$	1,592	$	790	$	990		$	9,526	$	130	$	9,656

The Company earns revenue for performing asset management services for retail and institutional clients. The revenue is earned based on a fixed or tiered rate applied, as a percentage, to assets under management. Assets under management vary with market fluctuations and client behavior. The asset management performance obligation is considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. Asset management fees are accrued, invoiced and collected on a monthly or quarterly basis.

The Company’s asset management contracts for Open Ended Investment Companies (“OEICs”) in the UK and Société d'Investissement à Capital Variable (“SICAVs”) in Europe include performance obligations for asset management and fund distribution services. The amounts received for these services are reported as management and financial advice fees. The revenue recognition pattern is the same for both performance obligations as the fund distribution services revenue is variably constrained due

The Company may also earn performance-based management fees on institutional accounts, hedge funds, collateralized loan obligations (“CLOs”), OEICs, SICAVs and property funds based on a percentage of account returns in excess of either a benchmark index or a contractually specified level. This revenue is variable and impacted primarily by the performance of the assets being managed compared to the benchmark index or contractually specified level. The revenue is not recognized until it is probable that a significant reversal will not occur. Performance-based management fees are invoiced on a quarterly or annual basis.

The Company earns revenue for performing investment advisory services for certain brokerage customer’s discretionary and non-discretionary managed accounts. The revenue is earned based on a contractual fixed rate applied, as a percentage, to the market value of assets held in the account. The investment advisory performance obligation is considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. Advisory fees are accrued daily and invoiced or charged on a monthly or quarterly basis.

The Company earns revenue for providing financial plans to its clients. The revenue earned for each financial plan is either a fixed fee (received monthly, quarterly or annually) or a variable fee (received monthly or quarterly) based on a contractual fixed rate applied, as a percentage, to assets held in a client’s investment advisory account. The financial planning fee is based on the complexity of a client’s financial and life situation and his or her advisor’s experience. The performance obligation is satisfied at the time the financial plan is delivered to the customer. The Company records a contract liability for the unearned revenue when cash is received before the plan is delivered. The financial plan contracts with clients are annual contracts. Amounts recorded as a contract liability are recognized as revenue when the financial plan is delivered, which occurs within the annual contract period.

For variable fee arrangements, revenue is recognized for cash that has been received when the financial plan is delivered. The amount received after the plan is delivered is variably constrained due to factors outside the Company’s control including market volatility and client behavior. The revenue is recognized when it is probable that a significant reversal will not occur that is generally each month or quarter end as the advisory account balance uncertainty is resolved.

The Company pays sales commissions to advisors when a new financial planning contract is obtained or when an existing contract is renewed. The sales commissions paid to the advisors prior to financial plan delivery are considered costs to obtain a contract with a customer and are initially capitalized. When the performance obligation to deliver the financial plan is satisfied, the commission is recognized as distribution expense. Capitalized costs to obtain these contracts are reported in other assets in the Consolidated Balance Sheets, and were $106 million and $112 million as of September 30, 2019 and December 31, 2018, respectively.

The Company earns revenue for providing customer support, shareholder and administrative services (including transfer agent services) for affiliated mutual funds and networking, sub-accounting and administrative services for unaffiliated mutual funds. The Company also receives revenue for providing custodial services and account maintenance services on brokerage and retirement accounts that are not included in an advisory relationship. Transfer agent and administrative revenue is earned based on either a fixed rate applied, as a percentage, to assets under management or an annual fixed fee for each fund position. Networking and sub-accounting revenue is earned based on either an annual fixed fee for each account or an annual fixed fee for each fund position. Custodial and account maintenance revenue is generally earned based on a quarterly or annual fixed fee for each account. Each of the customer support and administrative services performance obligations are considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. Transaction and other fees (other than custodial service fees) are invoiced or charged to brokerage accounts on a monthly or quarterly basis. Custodial service fees are invoiced or charged to brokerage accounts on an annual basis. Contract liabilities for custodial service fees, which are included in other liabilities in the Consolidated Balance Sheets, were $16 million and nil as of September 30, 2019 and December 31, 2018, respectively.

The Company earns revenue for selling affiliated and unaffiliated mutual funds, fixed and variable annuities and insurance products. The performance obligation is satisfied at the time of each individual sale. A portion of the revenue is based on a fixed rate applied, as a percentage, to amounts invested at the time of sale. The remaining revenue is recognized over the time the client owns the investment or holds the contract and is generally earned based on a fixed rate applied, as a percentage, to the net asset value of the fund, or the value of the insurance policy or annuity contract. The ongoing revenue is not recognized at the time of sale because it is variably constrained due to factors outside the Company’s control including market volatility and client behavior (such as how long clients hold their investment, insurance policy or annuity contract). This ongoing revenue may be recognized for many years after the initial sale. The revenue will not be recognized until it is probable that a significant reversal will not occur.

The Company earns revenue for providing unaffiliated partners an opportunity to educate the Company’s advisors or to support availability and distribution of their products on the Company’s platforms. These payments allow the outside parties to train and support the advisors, explain the features of their products and distribute marketing and educational materials, and support trading and operational systems necessary to enable the Company’s client servicing and production distribution efforts. The Company earns revenue for placing and maintaining unaffiliated fund partners and insurance companies’ products on the Company’s sales platform (subject to the Company’s due diligence standards). The revenue is primarily earned based on a fixed fee or a fixed rate applied, as a percentage, to the market value of assets invested. These performance obligations are considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. These fees are invoiced and collected on monthly basis.

The Company earns revenue for selling unaffiliated alternative products. The performance obligation is satisfied at the time of each individual sale. A portion of the revenue is based on a fixed rate applied, as a percentage, to amounts invested at the time of sale. The remaining revenue is recognized over the time the client owns the investment and is earned generally based on a fixed rate applied, as a percentage, to the market value of the investment. The ongoing revenue is not recognized at the time of sale because it is variably constrained due to factors outside the Company’s control including market volatility and client behavior (such as how long clients hold their investment). The revenue will not be recognized until it is probable that a significant reversal will not occur.

The Company earns revenue from brokerage clients for the execution of requested trades. The performance obligation is satisfied at the time of trade execution and amounts are received on the settlement date. The revenue varies for each trade based on various factors that include the type of investment, dollar amount of the trade and how the trade is executed (online or broker assisted).

The Company earns revenue for placing clients’ deposits in its brokerage sweep program with third-party banks. The amount received from the third-party banks is impacted by short-term interest rates. The performance obligation with the financial institutions that participate in the sweep program is considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. The revenue is earned daily and settled monthly based on a rate applied, as a percentage, to the deposits placed.

The Company earns revenue from fees charged to franchise advisors for providing various services the advisors need to manage and grow their practices. The primary services include: licensing of intellectual property and software, compliance supervision, insurance coverage, technology services and support, consulting and other services. The services are either provided by the Company or third- party providers. The Company controls the services provided by third parties as it has the right to direct the third parties to perform the services, is primarily responsible for performing the services and sets the prices the advisors are charged. The Company recognizes revenue for the gross amount of the fees received from the advisors. The fees are primarily collected monthly as a reduction of commission payments.

Intellectual property and software licenses, along with compliance supervision, insurance coverage, and technology services and support are primarily earned based on a monthly fixed fee. These services are considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. The consulting and other services performance obligations are satisfied as the services are delivered and revenue is earned based upon the level of service requested.

Receivables for revenue from contracts with customers are recognized when the performance obligation is satisfied and the Company has an unconditional right to the revenue. Receivables related to revenues from contracts with customers were $587 million and $644 million as of September 30, 2019 and December 31, 2018, respectively.