James Cracchiolo has a unique, dual perspective on today s financial crisis part titan of finance, part everyman. Two weeks out of the month he s a typical Manhattan CEO, viewing the carnage on Wall Street from his 39th-floor corner office at Ameriprise (AMP) location in 7 World Trade Center. The other two weeks of the month, Cracchiolo works from the firm s Minneapolis headquarters, where he sees the current meltdown through a much more man-on-the-street lens and the view is even worse. Home prices in Minnesota are down 14 percent; unemployment claims are up 26 percent.

Manhattan to Minneapolis is a long slog, but Cracchiolo s commute is crucial to Ameriprise s mission: persuading millions of Americans far removed from Wall Street to trust the same financial systems and products that just delivered a crushing blow to their savings. With more than 12,000 advisers nationwide, the $3.7 billion firm is one of the biggest purveyors of financial advice. It manages $372 billion for 2.8 million clients and provided more financial-planning services than any other brokerage firm last year.

Providing financial services is hardly an easy business to be in these days. Ameriprise stock is down 44 percent over the past year, and no wonder it has been hit with a double whammy. Not only is it hard to sell financial advice and investments when the markets are destroying wealth daily, but Ameriprise s revenue is also directly tied to market performance. The firm s advisers typically charge clients a percentage of their assets. As the client loses money, so does the firm. Almost 75 percent of Ameriprise s revenue comes from client fees and its own investments in the markets; last year that revenue stream dropped 25 percent. And while a similar fate has been suffered across the industry, there s still no end in sight, says Sterne Agee & Leach analyst John Nadel: It would be extremely difficult to hold earnings even close to flat.

Carpe diem, says Cracchiolo, a longtime American Express executive who was chosen to lead the spin-off of Ameriprise and take it public in 2005. Now is the time when Americans need financial advice the most, he says, and Ameriprise is positioned to give it to them as long as it keeps its own boat afloat. Cracchiolo took some time in the midst of the financial crisis to talk about the fate of the economy, why the company s mutual funds have underperformed and how the company keeps thousands of advisers in line.

Let s start with the obvious. Fun times?

This is unprecedented. Having said that, I still feel pretty good about our ability to navigate these markets and to continue to focus on financial advice, our clients and the products and services we offer them. You don t feel great about being in an environment like this, but you feel good about running a company that you feel can come out strong in the end.

It s taken its toll on revenue. What s the plan?

We re focused on expenses. We reduced our expenses by 10 percent last year, with a target to reduce further by another 10 percent next year. And the other thing we re focused on is the fixed-interest-rate market coming back, so we should see some additional revenue in our certificate [of deposit] business and the fixed-annuity business. Yes, our income has been reduced, but if we can control our expenses, we ll be in great shape for when clients want to come back.

Every time we have a crisis whether it s the tech bubble, the savings-and-loan crisis, the oil crisis in the 70s people always say it s unprecedented. When we look back on this, will today s crisis truly seem like something new?

This current crisis is so far-reaching that it feels a bit deeper and more difficult. The things we re dealing with are on a global basis now. And it s affecting the entire financial system much more than any crisis in the past. So it s not that we ve never faced these challenges before; it s that we ve never faced them at this size and scope.

If you spin forward a year or five years, how will financial services look different?

There will be much greater emphasis on managing systemic risk. The key will hopefully be to remember this more than a year or two, because there seems to be an issue like this every seven years. Hopefully, we ll remember this in four years, before we get to the next cycle.

With more than 12,000 advisers, how do you control for the quality of the advice, especially at a time like this?

We communicate. We just did a webcast for advisers and clients, and we tell them the same things: We know there s stress; people are scared. But this is a market cycle, and it s going to get better.

There s no alarm that goes off at headquarters if an adviser starts pulling clients money out of the market?

No. Ultimately, the client has to make that decision. The adviser might try to encourage them to be patient, but at the end of the day, the client gets to choose. If they want to hold money in cash, that s their choice.

There s been a big effort to get people to think about Ameriprise and advice, but insurance is still more than half the company. Would you like to see that ratio come down?

We like the businesses we re in. Insurance and annuities are products clients need to accumulate assets and protect them over time. Our core value proposition is through our financial advisers and the advice we offer retail clients. But years ago we were one of the largest mutual fund companies in the industry, so we re now reinvesting in the asset-management business as well.

Let s talk about the mutual funds Ameriprise manages. Historically, they haven t done particularly well. What are you doing to make those competitive?

We ve brought in new talent to manage the funds that we have; we ve launched new products; we ve expanded our distribution capability. Overall, we started to get some really good performance deep value and international have been excellent. On the other side, our growth area hasn t performed as well, and fixed income has been mixed. We re very focused on that. But I think we ve put in place a lot of the core capabilities we need to really grow the business.

Growing a business isn t the same as improving performance, though they re certainly linked. What will it take to improve performance?

You rely on good people, and you make the right investment decisions. We just purchased J. & W. Seligman; that will provide capability in areas we ve been weak. It s been a mixed bag, and we ve reallocated assets to portfolio managers that we think will perform better.

You applied for government bailout money. Did you get any?

No. The government didn t extend funding beyond the Wall Street firms and banks. But we have a strong capital position and good liquidity we applied as a strong company, and the government said it wanted to fund strong companies.

If the government changes its mind, will you take the cash? There are more strings attached now.

If we could use it to invest in growth, we d consider it. But based on where the world is today, it may not be appropriate.

In the industry, everyone accepts that this is a sales business- advice and financial products. But when a consumer is talking to an adviser, he thinks he s paying for service.

We re looking to develop a long-term relationship with our clients. And if we can identify the needs you really have, then I m going to provide you with excellent service in trying to address those needs, because I d like you to stay with me for 20, 30 and 40 years.

So is it sales, or is it service?

It s service. But the advice is implemented through sales.