Waddell & Reed Financial, Inc. (NYSE: WDR) today reported
third quarter 2019 net income1 of $33.1 million, or $0.46 per
diluted share, compared to net income of $33.9 million, or $0.45
per diluted share, during the prior quarter and net income of $46.3
million, or $0.58 per diluted share, during the third quarter of
2018.
Revenues of $270.7 million increased slightly compared to the
prior quarter and decreased $24.4 million compared to the third
quarter of 2018. Operating expenses of $230.7 million increased
$1.8 million compared to the prior quarter and declined $5.0
million compared to the same quarter of 2018. The operating margin
was 14.8% during the current quarter, compared to 15.3% during the
prior quarter and 20.2% during the third quarter of 2018.
Assets under management ended the quarter at $68.8 billion, a
decrease of 4% compared to the prior quarter and a decrease of 14%
compared to the third quarter of 2018. Average assets under
management were $70.5 billion during the current quarter, compared
to $71.4 billion during the prior quarter and $79.5 billion during
the third quarter of 2018. Net outflows of $2.7 billion during the
current quarter were slightly higher compared to net outflows of
$2.4 billion in the second quarter of 2019 and were higher compared
to net outflows of $2.0 billion in the third quarter of 2018. Sales
of $1.8 billion during the current quarter declined 16% and 30%
compared to the prior quarter and the third quarter of 2018,
respectively. Equity markets during the quarter continued to
experience volatility leading to lower sales in key products as
investors preferred lower-risk fixed income and money market funds.
Redemptions improved slightly compared to the prior quarter and
improved 3% compared to the third quarter of 2018.
Wealth management assets under administration ended the quarter
at $57.1 billion, a slight decrease compared to the second quarter
of 2019, and a 2% decrease compared to the same quarter in 2018.
For both comparative periods, assets under administration decreased
primarily due to outflows in non-advisory assets.
Philip J. Sanders, Chief Executive Officer of Waddell & Reed
Financial, Inc. shared, “the quarter remained challenging from a
flow perspective, especially within the unaffiliated channel of our
asset management business. However, strong expense control,
progress in our wealth management business and the continued
strength of our balance sheet provides opportunities to add to and
enhance our capabilities as a diversified financial services
organization.”
____________________
1 Net income represents net income attributable to Waddell &
Reed Financial, Inc.
Revenues Analysis
Investment management fees decreased $1.1 million, or 1%,
compared to the second quarter of 2019 due to a 1% decrease in
average assets under management and a lower effective management
fee rate, partially offset by one additional day in the quarter.
The effective management fee rate was 62.9 basis points and
decreased compared to the prior quarter’s rate entirely due to a
true-up in fund fee waiver expenses. Adjusting for the true-up
amount, the effective fee rate was consistent with the second
quarter’s rate. Compared to the third quarter of 2018, investment
management fees declined $17.5 million, or 14%, due to lower
average assets under management and a lower effective management
fee rate, which was approximately two basis points lower due to fee
reductions in selected mutual funds implemented in July 2018.
Underwriting and distribution fees increased $2.3 million, or
2%, compared to the prior quarter, primarily due to an increase in
advisory assets under administration. Compared to the same quarter
in 2018, fees decreased $4.5 million, or 3%, due to lower service
and distribution fees and lower commissionable sales, partially
offset by an increase in advisory fees.
Shareholder service fees decreased $0.7 million, or 3%, compared
to the second quarter of 2019 due to a decrease in accounts and a
nonrecurring decrease in revenue related to the outsourcing of our
transfer agent transaction processing. Compared to the third
quarter of 2018, shareholder service fees declined $2.4 million, or
9%, primarily due to fewer accounts and a decrease in average
assets.
Operating Expenses Analysis
Distribution expenses increased $1.0 million, or 1%, compared to
the prior quarter, as a result of the increase in underwriting and
distribution revenue. Compared to the third quarter of 2018,
expenses increased $0.8 million, or 1%. Rule 12b-1 commissions paid
to third parties decreased consistent with the revenue decrease due
to lower average mutual fund assets, however, this decrease was
more than offset by an increase in the compensation grid for
associated independent financial advisors starting in 2019.
Compensation and benefits expense increased $3.1 million, or 5%,
compared to the prior quarter due to $3.0 million of severance
expense, primarily related to the outsourcing of our transfer
agency transactional processing operations. Compared to the third
quarter of 2018, compensation and benefits expense increased $0.4
million, or 1%, as severance in the current quarter was partially
offset by lower costs from reduced headcount as well as a $1.3
million decrease in share-based compensation due to
previously-issued awards vesting fully, as well as forfeitures.
General and administrative expenses increased $0.6 million, or
4%, in the current quarter primarily due to increases in recruiting
costs, state business tax and insurance costs compared to the
second quarter. Compared to the third quarter of 2018, expenses
improved $0.9 million, or 5%, due to lower legal and consulting
costs.
Technology costs decreased $1.4 million and $0.4 million
compared to the prior quarter and third quarter of 2018,
respectively. The decrease in both periods was primarily related to
a non-recurring benefit from the outsourcing of our transfer agent
transactional processing operations. Compared to the third quarter
of 2018, the benefit was partially offset by costs from the
centralized advisor desktop platform which was rolled out during
the second quarter of 2019.
Occupancy and Marketing and advertising expenses decreased a
combined $1.3 million, or 14%, compared to the prior quarter.
Compared to the third quarter of 2018, these expenses declined $1.8
million, or 19%. For both comparative periods, occupancy costs
decreased as we realized cost savings from the closure of field
offices, and marketing expenses decreased as prior period fund
mergers have reduced fund-related marketing expenses.
Depreciation expense declined $0.4 million, or 8%, compared to
the prior quarter and declined $3.3 million, or 41%, compared to
the third quarter of 2018 primarily due to certain fixed assets
reaching the end of their useful lives.
Investment and Other Income
Investment and other income declined $3.8 million compared to
the prior quarter primarily due to lower unrealized gains on seed
and corporate investment portfolios. Compared to the third quarter
of 2018, investment and other income increased $3.5 million
primarily due to unrealized gains on the seed and corporate
investment portfolios and increased interest income from our
corporate investment portfolio.
Assets Under Management
(in millions)
Three Months Ended
Sep. 30,
Jun. 30,
Sep. 30,
Prior Qtr.
Year-over-Year Qtr.
2019
2019
2018
Change
%
Change
%
Unaffiliated 1
Beginning assets
$
27,545
$
27,506
$
30,782
$
39
0
%
$
(3,237
)
(11
)
%
Sales 2
999
1,291
1,589
(292
)
(23
)
%
(590
)
(37
)
%
Redemptions
(2,684
)
(2,441
)
(2,425
)
(243
)
(10
)
%
(259
)
(11
)
%
Net exchanges
334
303
360
31
10
%
(26
)
(7
)
%
Net Flows
(1,351
)
(847
)
(476
)
(504
)
(60
)
%
(875
)
(184
)
%
Market action
(337
)
886
866
(1,223
)
(138
)
%
(1,203
)
(139
)
%
Ending assets
$
25,857
$
27,545
$
31,172
$
(1,688
)
(6
)
%
$
(5,315
)
(17
)
%
Annualized organic growth rate
(19.6
)
%
(12.3
)
%
(6.2
)
%
Annualized redemption rate 3
40.9
%
36.7
%
31.8
%
Institutional
Beginning assets
$
3,887
$
4,053
$
5,250
$
(166
)
(4
)
%
$
(1,363
)
(26
)
%
Sales 2
49
54
83
(5
)
(9
)
%
(34
)
(41
)
%
Redemptions
(230
)
(440
)
(535
)
210
48
%
305
57
%
Net exchanges
—
25
—
(25
)
NM
—
NM
%
Net Flows
(181
)
(361
)
(452
)
180
50
%
271
60
%
Market action
(29
)
195
389
(224
)
(115
)
%
(418
)
(107
)
%
Ending assets
$
3,677
$
3,887
$
5,187
$
(210
)
(5
)
%
$
(1,510
)
(29
)
%
Annualized organic growth rate
(18.6
)
%
(35.6
)
%
(34.4
)
%
Annualized redemption rate 3
23.9
%
46.1
%
40.8
%
Wealth Management
Beginning assets
$
40,444
$
40,095
$
42,619
$
349
1
%
$
(2,175
)
(5
)
%
Sales 2
744
789
874
(45
)
(6
)
%
(130
)
(15
)
%
Redemptions
(1,542
)
(1,609
)
(1,612
)
67
4
%
70
4
%
Net exchanges
(334
)
(328
)
(360
)
(6
)
(2
)
%
26
7
%
Net Flows
(1,132
)
(1,148
)
(1,098
)
16
1
%
(34
)
(3
)
%
Market action
(64
)
1,497
1,662
(1,561
)
(104
)
%
(1,726
)
(104
)
%
Ending assets
$
39,248
$
40,444
$
43,183
$
(1,196
)
(3
)
%
$
(3,935
)
(9
)
%
Annualized organic growth rate
(11.2
)
%
(11.5
)
%
(10.3
)
%
Annualized redemption rate 3
13.4
%
13.8
%
12.8
%
Consolidated Total
Beginning assets
$
71,876
$
71,654
$
78,651
$
222
0
%
$
(6,775
)
(9
)
%
Sales 2
1,792
2,134
2,546
(342
)
(16
)
%
(754
)
(30
)
%
Redemptions
(4,456
)
(4,490
)
(4,572
)
34
1
%
116
3
%
Net exchanges
—
—
—
—
—
—
—
Net Flows
(2,664
)
(2,356
)
(2,026
)
(308
)
(13
)
%
(638
)
(31
)
%
Market action
(430
)
2,578
2,917
(3,008
)
(117
)
%
(3,347
)
(115
)
%
Ending assets
$
68,782
$
71,876
$
79,542
$
(3,094
)
(4
)
%
$
(10,760
)
(14
)
%
Annualized organic growth rate
(14.8
)
%
(13.2
)
%
(10.3
)
%
Annualized redemption rate 3
24.3
%
24.3
%
22.1
%
_________________________
(1)
Unaffiliated includes National channel
(home office and wholesale), Defined Contribution Investment Only
“DCIO”, Registered Investment Advisor “RIA” and Variable Annuity
“VA”.
(2)
Sales is primarily gross sales (net of
sales commissions). This amount also includes net reinvested
dividends and capital gains, and investment income.
(3)
Excludes Money Market.
MorningStar Fund Rankings 1
1 Year
3 Years
5 Years
Funds ranked in top half
54
%
42
%
29
%
Assets ranked in top half
63
%
63
%
40
%
MorningStar Ratings 1
Overall
3 Years
5 Years
Funds with 4/5 stars
29
%
29
%
23
%
Assets with 4/5 stars
45
%
42
%
36
%
______________________
(1)
Based on class I share, which reflects the
largest concentration of sales and assets.
Three Months Ended
Wealth Management
Sep. 30,
Jun. 30,
Sep. 30,
Prior Qtr.
Year-over-Year Qtr.
(in millions)
2019
2019
2018
Change
%
Change
%
Assets under administration (AUA)
Advisory assets
$
25,107
$
24,789
$
23,653
$
318
1
%
$
1,454
6
%
Non-advisory assets
32,006
32,641
34,468
(635
)
(2
)
%
(2,462
)
(7
)
%
Total assets under administration
57,113
57,430
58,121
(317
)
(1
)
%
(1,008
)
(2
)
%
Net new advisory assets 1
$
236
$
253
$
(87
)
$
(17
)
(7
)
%
$
323
371
%
Net new non-advisory assets 1, 2
(769
)
(885
)
(931
)
116
13
%
162
17
%
Total net new AUA 1, 2
(533
)
(632
)
(1,018
)
99
16
%
485
48
%
Annualized advisory AUA growth 3
3.8
%
4.3
%
(1.5
)
%
Annualized AUA growth 3
(3.7
)
%
(4.5
)
%
(7.1
)
%
Advisors and advisor associates
1,344
1,347
1,425
(3
)
NM
(81
)
(6
)
%
Avg. trailing 12-month revenue per advisor
4 (in thousands)
$
422
$
408
$
351
$
14
3
%
$
71
20
%
_____________________________
(1)
Net new assets are calculated as total
client deposits and net transfers less client withdrawals.
(2)
Excludes activity related to products held
outside of our wealth management platform. These assets represent
less than 10% of total AUA.
(3)
Annualized growth is calculated as
annualized quarterly net new assets divided by beginning AUA.
(4)
Production per Advisor is calculated as
trailing 12- month Total underwriting and distribution fees less
“other” underwriting and distribution fees divided by the average
number of Advisors. “Other” underwriting and distribution fees
predominantly includes fees paid by Advisors for programs and
services.
Unaudited Consolidated Statements of
Income
(in thousands, except per share data and
margin)
Three Months Ended
Sep. 30,
Jun. 30,
Sep. 30,
Prior Qtr.
Year-over-Year Qtr.
2019
2019
2018
Change
%
Change
%
Revenues:
Investment management fees
$
111,806
$
112,870
$
129,302
$
(1,064
)
(1
)
%
$
(17,496
)
(14
)
%
Underwriting and distribution fees
135,787
133,495
140,308
2,292
2
%
(4,521
)
(3
)
%
Shareholder service fees
23,087
23,789
25,508
(702
)
(3
)
%
(2,421
)
(9
)
%
Total
270,680
270,154
295,118
526
0
%
(24,438
)
(8
)
%
Operating expenses:
Distribution
117,425
116,477
116,591
948
1
%
834
1
%
Compensation and benefits (including
share-based compensation of $11,580, $11,199 and $12,856,
respectively)
64,999
61,876
64,561
3,123
5
%
438
1
%
General and administrative
16,680
16,037
17,559
643
4
%
(879
)
(5
)
%
Technology
15,019
16,442
15,414
(1,423
)
(9
)
%
(395
)
(3
)
%
Occupancy
5,684
6,701
7,148
(1,017
)
(15
)
%
(1,464
)
(20
)
%
Marketing and advertising
2,134
2,399
2,461
(265
)
(11
)
%
(327
)
(13
)
%
Depreciation
4,833
5,228
8,141
(395
)
(8
)
%
(3,308
)
(41
)
%
Subadvisory fees
3,882
3,715
3,767
167
4
%
115
3
%
Total
230,656
228,875
235,642
1,781
1
%
(4,986
)
(2
)
%
Operating income
40,024
41,279
59,476
(1,255
)
(3
)
%
(19,452
)
(33
)
%
Investment and other income
5,212
9,025
1,697
(3,813
)
(42
)
%
3,515
207
%
Interest expense
(1,562
)
(1,552
)
(1,555
)
(10
)
(1
)
%
(7
)
(0
)
%
Income before provision for income
taxes
43,674
48,752
59,618
(5,078
)
(10
)
%
(15,944
)
(27
)
%
Provision for income taxes
10,175
14,190
13,105
(4,015
)
(28
)
%
(2,930
)
(22
)
%
Net income
33,499
34,562
46,513
(1,063
)
(3
)
%
(13,014
)
(28
)
%
Net income (loss) attributable to
redeemable noncontrolling interests
445
614
208
(169
)
(28
)
%
237
114
%
Net income attributable to Waddell
& Reed Financial, Inc.
$
33,054
$
33,948
$
46,305
$
(894
)
(3
)
%
$
(13,251
)
(29
)
%
Net income per share, basic and
diluted:
$
0.46
$
0.45
$
0.58
Weighted average shares outstanding -
basic and diluted
72,387
74,694
79,595
Operating margin
14.8
%
15.3
%
20.2
%
(1) Distribution expense
Unaffiliated
23,323
24,501
28,116
Wealth Management
94,102
91,976
88,475
$
117,425
$
116,477
$
116,591
Unaudited Consolidated Statements of
Income
(in thousands, except per share data and
margin)
Nine Months Ended
Sep. 30,
Sep. 30,
2019
2018
Change
%
Revenues:
Investment management fees
$
334,438
$
393,385
$
(58,947
)
(15
)
%
Underwriting and distribution fees
395,527
416,222
(20,695
)
(5
)
%
Shareholder service fees
70,279
78,464
(8,185
)
(10
)
%
Total
800,244
888,071
(87,827
)
(10
)
%
Operating expenses:
Distribution
343,696
345,376
(1,680
)
(0
)
%
Compensation and benefits (including
share-based compensation of $35,471 and $42,526, respectively)
191,718
199,174
(7,456
)
(4
)
%
General and administrative
47,421
56,240
(8,819
)
(16
)
%
Technology
47,769
49,293
(1,524
)
(3
)
%
Occupancy
19,100
21,081
(1,981
)
(9
)
%
Marketing and advertising
6,497
7,638
(1,141
)
(15
)
%
Depreciation
16,062
19,262
(3,200
)
(17
)
%
Subadvisory fees
11,154
11,158
(4
)
(0
)
%
Intangible asset impairment
—
1,200
(1,200
)
(100
)
%
Total
683,417
710,422
(27,005
)
(4
)
%
Operating income
116,827
177,649
(60,822
)
(34
)
%
Investment and other income
23,690
5,354
18,336
342
%
Interest expense
(4,662
)
(4,908
)
246
5
%
Income before provision for income
taxes
135,855
178,095
(42,240
)
(24
)
%
Provision for income taxes
35,036
41,355
(6,319
)
(15
)
%
Net income
100,819
136,740
(35,921
)
(26
)
%
Net income (loss) attributable to
redeemable noncontrolling interests
1,763
(380
)
2,143
564
%
Net income attributable to Waddell
& Reed Financial, Inc.
$
99,056
$
137,120
$
(38,064
)
(28
)
%
Net income per share, basic and
diluted:
$
1.33
$
1.69
Weighted average shares outstanding -
basic and diluted
74,446
81,372
Operating margin
14.6
%
20.0
%
(1) Distribution expense
Unaffiliated
71,124
87,155
Wealth Management
272,572
258,221
$
343,696
$
345,376
Underwriting and distribution
fees
(in thousands)
For the three months ended
Sep. 30, 2019
Unaffiliated
Wealth Management
Total
Fee-based asset allocation product
revenues
$
—
$
73,356
$
73,356
Rule 12b-1 service and distribution
fees
16,003
16,426
32,429
Sales commissions on front-end load mutual
funds and variable annuity products
361
12,523
12,884
Sales commissions on other products
—
8,024
8,024
Other revenues
67
9,027
9,094
Total underwriting and distribution
fees
$
16,431
$
119,356
$
135,787
For the three months ended
Jun. 30, 2019
Unaffiliated
Wealth Management
Total
Fee-based asset allocation product
revenues
$
—
$
70,220
$
70,220
Rule 12b-1 service and distribution
fees
16,329
16,327
32,656
Sales commissions on front-end load mutual
funds and variable annuity products
488
12,302
12,790
Sales commissions on other products
—
8,497
8,497
Other revenues
83
9,249
9,332
Total underwriting and distribution
fees
$
16,900
$
116,595
$
133,495
For the three months ended
Sep. 30, 2018
Unaffiliated
Wealth Management
Total
Fee-based asset allocation product
revenues
$
—
$
69,468
$
69,468
Rule 12b-1 service and distribution
fees
19,707
18,106
37,813
Sales commissions on front-end load mutual
funds and variable annuity products
441
13,651
14,092
Sales commissions on other products
—
9,111
9,111
Other revenues
126
9,698
9,824
Total underwriting and distribution
fees
$
20,274
$
120,034
$
140,308
For the nine months ended Sep.
30, 2019
Unaffiliated
Wealth Management
Total
Fee-based asset allocation product
revenues
$
—
$
208,806
$
208,806
Rule 12b-1 service and distribution
fees
48,514
48,441
96,955
Sales commissions on front-end load mutual
funds and variable annuity products
1,287
36,845
38,132
Sales commissions on other products
—
24,127
24,127
Other revenues
242
27,265
27,507
Total underwriting and distribution
fees
$
50,043
$
345,484
$
395,527
For the nine months ended Sep.
30, 2018
Unaffiliated
Wealth Management
Total
Fee-based asset allocation product
revenues
$
—
$
201,565
$
201,565
Rule 12b-1 service and distribution
fees
60,734
54,591
115,325
Sales commissions on front-end load mutual
funds and variable annuity products
1,418
41,900
43,318
Sales commissions on other products
—
26,632
26,632
Other revenues
459
28,923
29,382
Total underwriting and distribution
fees
$
62,611
$
353,611
$
416,222
Unaudited Condensed Balance
Sheet
(in thousands)
Sep. 30,
Dec. 31,
2019
2018
Assets
Cash & cash equivalents
(unrestricted)
$
162,567
$
231,997
Investment securities
691,616
617,135
Other assets
205,269
285,649
Property and equipment, net
49,785
63,429
Goodwill and intangible assets
145,869
145,869
Total assets
$
1,255,106
$
1,344,079
Liabilities, redeemable noncontrolling
interests and equity
Long-term debt
94,908
94,854
Other liabilities
303,755
354,312
Redeemable noncontrolling interests
16,913
11,463
Total stockholders’ equity
839,530
883,450
Liabilities, redeemable noncontrolling
interests and equity
$
1,255,106
$
1,344,079
Shares outstanding
71,211
76,790
Unaudited Condensed Cash Flow
(in thousands)
Three Months Ended
Nine Months Ended
Sep. 30,
Jun. 30,
Sep. 30,
Sep. 30,
Sep. 30,
2019
2019
2018
2019
2018
Cash provided by (used in):
Operating activities
$
61,084
$
40,644
$
90,652
$
84,231
$
263,733
Investing activities
(14,173
)
9,946
(7,160
)
(18,160
)
42,571
Financing activities
(58,591
)
(53,605
)
(50,131
)
(171,709
)
(242,636
)
Net change during period
$
(11,680
)
$
(3,015
)
$
33,361
$
(105,638
)
$
63,668
Three Months Ended
Nine Months Ended
Sep. 30,
Jun. 30,
Sep. 30,
Sep. 30,
Sep. 30,
(in thousands, except number of
shares)
2019
2019
2018
2019
2018
Shares repurchased
Number of shares
2,480,019
2,142,894
1,424,612
6,849,238
4,519,546
Total cost
$
40,715
$
36,824
$
28,369
$
116,677
$
89,018
Dividend paid
Rate per share
$
0.25
$
0.25
$
0.25
$
0.25
$
0.25
Total paid
$
18,372
$
18,840
$
20,050
$
56,560
$
61,531
Capital returned to stockholders
$
59,087
$
55,664
$
48,419
$
173,237
$
150,549
Earnings Conference Call
Stockholders, members of the investment community and the
general public are invited to listen to a live Web cast of our
earnings release conference call today at 10:00 a.m. Eastern.
During this call, Philip J. Sanders, CEO, will review our quarterly
results. Live access to the teleconference will be available on the
“Investor Relations” section of our Web site at ir.waddell.com. A
Web cast replay will be made available shortly after the conclusion
of the call and accessible for seven days.
Web Site Resources
We invite you to visit the Investor Relations section of our Web
site at ir.waddell.com. Under the “Investor Information” tab you
will find a link to presentations as well as to data tables, which
include supplemental information schedules.
Past performance is no guarantee of future results. Please
invest carefully.
About the Company
Through its subsidiaries, Waddell & Reed Financial, Inc. has
provided investment management and wealth management services to
clients throughout the United States since 1937. Today, we
distribute our investment products through the unaffiliated channel
under the IVY INVESTMENTS® brand (encompassing broker/dealer,
retirement, and registered investment advisors), our wealth
management channel (through independent financial advisors
associated with WADDELL & REED, INC.), and our institutional
channel (including defined benefit plans, pension plans, endowments
and subadvisory relationships). For more information, visit
ir.waddell.com.
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which reflect the current views and assumptions of
management with respect to future events regarding our business and
industry in general. These forward-looking statements include all
statements, other than statements of historical fact, regarding our
financial position, business strategy and other plans and
objectives for future operations, including statements with respect
to revenues and earnings, the amount and composition of assets
under management, distribution sources, expense levels, redemption
rates, stock repurchases and the financial markets and other
conditions. These statements are generally identified by the use of
such words as “may,” “could,” “should,” “would,” “believe,”
“anticipate,” “forecast,” “estimate,” “expect,” “intend,” “plan,”
“project,” “outlook,” “will,” “potential” and similar statements of
a future or forward-looking nature. Readers are cautioned that any
forward-looking information provided by us or on our behalf is not
a guarantee of future performance. Actual results may differ
materially from those contained in these forward-looking statements
as a result of various factors, including but not limited to those
discussed below. If one or more events related to these or other
risks, contingencies or uncertainties materialize, or if our
underlying assumptions prove to be incorrect, actual results may
differ materially from those forecasted or expected. Certain
important factors that could cause actual results to differ
materially from our expectations are disclosed in the “Risk
Factors” section of our Annual Report on Form 10-K for the year
ended December 31, 2018, which include, without limitation:
- The loss of existing distribution relationships or inability to
access new distribution relationships;
- A reduction in assets under our management on short notice,
through increased redemptions in our distribution channels or our
Funds, particularly those Funds with a high concentration of
assets, or investors terminating their relationship with us or
shifting their funds to other types of accounts with different rate
structures;
- The adverse ruling or resolution of any litigation, regulatory
investigations and proceedings, or securities arbitrations by a
federal or state court or regulatory body;
- Changes in our business model, operations and procedures,
including our methods of distributing our proprietary products, as
a result of evolving fiduciary standards;
- The introduction of legislative or regulatory proposals or
judicial rulings that change the independent contractor
classification of our financial advisors at the federal or state
level for employment tax or other employee benefit purposes;
- A decline in the securities markets or in the relative
investment performance of our Funds and other investment portfolios
and products as compared to competing funds;
- Our inability to reduce expenses rapidly enough to align with
declines in our revenues due to various factors, including fee
pressure, the level of our assets under management or our business
environment;
- Non-compliance with applicable laws or regulations and changes
in current legal, regulatory, accounting, tax or compliance
requirements or governmental policies;
- Our inability to attract and retain senior executive management
and other key personnel to conduct our broker-dealer, fund
management and investment advisory business;
- A failure in, or breach of, our operational or security systems
or our technology infrastructure, or those of third parties on
which we rely; and
- Our inability to implement new information technology and
systems, or our inability to complete such implementation in a
timely or cost effective manner.
The foregoing factors should not be construed as exhaustive and
should be read together with other cautionary statements included
in this and other reports and filings we make with the Securities
and Exchange Commission, including the information in Item 1
“Business” and Item 1A “Risk Factors” of Part I and Item 7
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” of Part II to our Annual Report on Form 10-K
for the year ended December 31, 2018 and as updated in our
quarterly reports on Form 10-Q for the year ending December 31,
2019. All forward-looking statements speak only as of the date on
which they are made and we undertake no duty to update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise, except to the extent
required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191029005309/en/
Investor Contact: Mike Daley, Vice
President, Chief Accounting Officer & Investor Relations, (913)
236-1795, mdaley1@waddell.com
Mutual Fund Investor Contact: Call
(888) WADDELL, or visit www.waddell.com or
www.ivyinvestments.com.
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