Menu

Waddell & Reed Financial, Inc. Reports Fourth Quarter Results

Company Release - 2/4/2020 6:45 AM ET

OVERLAND PARK, Kan.--(BUSINESS WIRE)-- Waddell & Reed Financial, Inc. (NYSE: WDR) today reported fourth quarter 2019 net income1 of $15.9 million, or $0.23 per diluted share, compared to net income of $33.1 million, or $0.46 per diluted share, during the prior quarter and net income of $46.5 million, or $0.60 per diluted share, during the fourth quarter of 2018. The fourth quarter of 2019 included non-cash asset impairment charges of $12.8 million in connection with certain assets held for sale, including real property related to our corporate headquarters move and the elimination of our internal aviation operations, an $11.2 million non-cash charge related to the annual revaluation of the pension plan liability and $2.3 million in severance expense related to the outsourcing of our transfer agency transactional processing operations. Excluding the non-cash charges and severance expense, adjusted net income2 for the fourth quarter of 2019 was $36.0 million and adjusted net income per diluted share2 was $0.51.

Revenues of $270.1 million decreased slightly compared to the prior quarter and decreased $2.2 million compared to the fourth quarter of 2018. Operating expenses as reported of $241.2 million increased $10.6 million compared to the prior quarter and increased $13.4 million compared to the same quarter of 2018. Adjusted operating expenses2 decreased $1.5 million, or less than 1%, compared to the third quarter of 2019 and increased $1.4 million, or less than 1%, compared to fourth quarter of 2018. The reported operating margin was 10.7% and the adjusted operating margin2 was 16.3% during the current quarter, compared to 15.9% during the prior quarter and 17.5% during the fourth quarter of 2018.

Assets under management ended the quarter at $70.0 billion, an increase of 2% compared to the prior quarter and an increase of 6% compared to the fourth quarter of 2018. Average assets under management were $69.1 billion during the current quarter, compared to $70.5 billion during the prior quarter and $71.6 billion during the fourth quarter of 2018. Net outflows of $3.4 billion during the current quarter were higher compared to net outflows of $2.7 billion in the third quarter of 2019 and were lower compared to net outflows of $3.8 billion in the fourth quarter of 2018. Sales of $1.5 billion during the current quarter declined 14% and 43% compared to the prior quarter and the fourth quarter of 2018, respectively. Industry-wide flows continued toward fixed income and money market strategies while equity flows remained challenged. Redemptions increased 10% compared to the prior quarter and improved 24% compared to the fourth quarter of 2018.

Wealth management assets under administration ended the quarter at $60.1 billion, an increase of 5% compared to the third quarter of 2019, and a 17% increase compared to prior year-end. For both comparative periods, assets under administration increased primarily due to strong market gains and growth in net new advisory assets, partially offset by brokerage redemptions.

Philip J. Sanders, Chief Executive Officer of Waddell & Reed Financial, Inc. shared, “While both the quarter and year remained challenging from a flow perspective within our asset management business, we continued to make steady progress in the transformation of our wealth management business.” Mr. Sanders continued, “On balance, the repositioning of our overall business model, combined with operational improvements across the enterprise and our strong balance sheet, has us well positioned to focus on renewed growth opportunities as we look ahead to 2020 and beyond.”

_____________________________

1 Net income represents net income attributable to Waddell & Reed Financial, Inc.

2 See Non-GAAP Financial Measures section and Reconciliation of GAAP to Non-GAAP Financial Measures table

Revenues Analysis

Investment management fees decreased $1.1 million, or 1%, compared to the third quarter of 2019 due to a 2% decrease in average assets under management, partially offset by a higher effective management fee rate. The effective management fee rate was 63.6 basis points and increased compared to the prior quarter’s rate due to higher fund fee waivers in the prior quarter. Compared to the fourth quarter of 2018, investment management fees declined $3.8 million, or 3%, primarily due to lower average assets under management.

Underwriting and distribution fees increased slightly compared to the prior quarter and increased $2.5 million, or 2%, compared to the same quarter in 2018. For both comparative periods, the increases were primarily driven by increased fee-based asset allocation product revenues, partially offset by lower commissionable sales and lower service and distribution fees.

Shareholder service fees decreased slightly compared to the third quarter of 2019 due to lower average assets. Compared to the fourth quarter of 2018, shareholder service fees declined $0.9 million, or 4%, primarily due to fewer accounts and a decrease in average assets.

Operating Expenses Analysis

Distribution expenses decreased slightly compared to the prior quarter and increased $5.8 million, or 5% compared to the fourth quarter of 2018 as a result of the increase in underwriting and distribution revenue. Compared to the fourth quarter of 2018, the expense increase is larger than the revenue increase primarily due to an increase in the compensation grid for associated independent financial advisors implemented at the beginning of 2019.

Compensation and benefits expense totaled $62.8 million and included $2.3 million of severance expense compared to $3.1 million of severance expense in the prior quarter. In addition to lower severance costs, the decrease of $2.2 million, or 3%, compared to the prior quarter is primarily due to lower headcount and lower share-based compensation due to mark-to-market adjustments of cash-settled restricted stock unit awards. Compared to the fourth quarter of 2018, compensation and benefits expense decreased $1.3 million, or 2%, due to lower incentive compensation costs, lower severance costs and lower headcount. The decreases were partially offset by an increase in share-based compensation costs due to higher forfeitures in the prior year.

General and administrative expenses increased $13.4 million compared to the third quarter of 2019, due to a $12.8 million non-cash asset impairment charge and increased project spend during the quarter. Compared to the same quarter in 2018, general and administrative expenses increased $12.7 million due to the non-cash impairment charge.

Technology costs increased $0.9 million, or 6% compared to the prior quarter, primarily due to increased technology consulting expense. Compared to the fourth quarter of 2018, technology costs decreased slightly, as lower shareholder servicing expense resulting from fewer accounts was partially offset by increased software costs for new technologies.

Occupancy expenses decreased $0.5 million, or 10%, compared to the prior quarter and decreased $1.0 million, or 16%, compared to the fourth quarter of 2018. For both comparative periods, occupancy costs decreased as a result of the planned closure of field offices.

Marketing and advertising expenses increased $0.3 million, or 16%, compared to the prior quarter due to the timing of sponsorship fees. Compared to the fourth quarter of 2018, these expenses declined $0.2 million, or 8%, due to reduced fund-related marketing expenses from prior year fund mergers.

Depreciation expense declined $1.1 million, or 22%, compared to the prior quarter and declined $2.6 million, or 41%, compared to the fourth quarter of 2018, primarily due to fully depreciated capitalized development assets.

Investment and Other Income

Investment and other income declined $10.0 million and $22.2 million compared to the prior quarter and the fourth quarter of 2018, respectively. For both comparative periods, the decline is primarily due to a non-cash charge related to the annual revaluation of the pension plan liability, partially offset by unrealized gains on the seed and corporate investment portfolios.

The effective tax rate was 28.3% for the quarter compared to 23.3% in the prior quarter and 23.5% last year. The higher effective rate was due to $1.1 million of discrete items related to an increase in state taxes and stock compensation vestings in the current quarter.

Assets Under Management

(in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dec. 31,

 

Sep. 30,

 

Dec. 31,

 

 

 

Prior Qtr.

 

 

 

Year-over Year Qtr.

 

 

 

2019

 

2019

 

2018

 

 

 

Change

 

%

 

 

 

Change

 

%

 

Unaffiliated 1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning assets

 

$

 

 

25,857

 

 

$

 

 

27,545

 

 

$

 

 

31,172

 

 

 

$

(1,688

)

 

(6

)

%

 

$

(5,315

)

 

(17

)

%

Sales 2

 

 

854

 

 

 

999

 

 

 

1,673

 

 

 

 

(145

)

 

(15

)

%

 

 

(819

)

 

(49

)

%

Redemptions

 

 

(2,502

)

 

 

(2,684

)

 

 

(3,637

)

 

 

 

182

 

 

7

 

%

 

 

1,135

 

 

31

 

%

Net exchanges

 

 

278

 

 

 

334

 

 

 

(131

)

 

 

 

(56

)

 

(17

)

%

 

 

409

 

 

312

 

%

Net Flows

 

 

(1,370

)

 

 

(1,351

)

 

 

(2,095

)

 

 

 

(19

)

 

(1

)

%

 

 

725

 

 

35

 

%

Market action

 

 

1,777

 

 

 

(337

)

 

 

(4,100

)

 

 

 

2,114

 

 

627

 

%

 

 

5,877

 

 

143

 

%

Ending assets

 

$

 

 

26,264

 

 

$

 

 

25,857

 

 

$

 

 

24,977

 

 

 

$

407

 

 

2

 

%

 

$

1,287

 

 

5

 

%

Annualized organic growth rate

 

 

(21.2

)

%

 

(19.6

)

%

 

(26.9

)

%

 

 

 

 

 

 

 

 

 

 

 

 

Annualized redemption rate 3

 

 

39.3

 

%

 

40.9

 

%

 

53.8

 

%

 

 

 

 

 

 

 

 

 

 

 

 

Institutional

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning assets

 

$

 

 

3,677

 

 

$

 

 

3,887

 

 

$

 

 

5,187

 

 

 

$

(210

)

 

(5

)

%

 

$

(1,510

)

 

(29

)

%

Sales 2

 

 

32

 

 

 

49

 

 

 

85

 

 

 

 

(17

)

 

(35

)

%

 

 

(53

)

 

(62

)

%

Redemptions

 

 

(874

)

 

 

(230

)

 

 

(1,316

)

 

 

 

(644

)

 

(280

)

%

 

 

442

 

 

34

 

%

Net exchanges

 

 

 

 

 

 

 

 

511

 

 

 

 

 

 

NM

 

 

 

 

(511

)

 

100

 

%

Net Flows

 

 

(842

)

 

 

(181

)

 

 

(720

)

 

 

 

(661

)

 

(365

)

%

 

 

(122

)

 

(17

)

%

Market action

 

 

261

 

 

 

(29

)

 

 

(812

)

 

 

 

290

 

 

1,000

 

%

 

 

1,073

 

 

132

 

%

Ending assets

 

$

 

 

3,096

 

 

$

 

 

3,677

 

 

$

 

 

3,655

 

 

 

$

(581

)

 

(16

)

%

 

$

(559

)

 

(15

)

%

Annualized organic growth rate

 

 

(91.6

)

%

 

(18.6

)

%

 

(55.5

)

%

 

 

 

 

 

 

 

 

 

 

 

 

Annualized redemption rate 3

 

 

104.1

 

%

 

23.9

 

%

 

117.3

 

%

 

 

 

 

 

 

 

 

 

 

 

 

Wealth Management

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning assets

 

$

 

 

39,248

 

 

$

 

 

40,444

 

 

$

 

 

43,183

 

 

 

$

(1,196

)

 

(3

)

%

 

$

(3,935

)

 

(9

)

%

Sales 2

 

 

662

 

 

 

744

 

 

 

958

 

 

 

 

(82

)

 

(11

)

%

 

 

(296

)

 

(31

)

%

Redemptions

 

 

(1,535

)

 

 

(1,542

)

 

 

(1,547

)

 

 

 

7

 

 

0

 

%

 

 

12

 

 

1

 

%

Net exchanges

 

 

(278

)

 

 

(334

)

 

 

(380

)

 

 

 

56

 

 

17

 

%

 

 

102

 

 

27

 

%

Net Flows

 

 

(1,151

)

 

 

(1,132

)

 

 

(969

)

 

 

 

(19

)

 

(2

)

%

 

 

(182

)

 

(19

)

%

Market action

 

 

2,501

 

 

 

(64

)

 

 

(5,037

)

 

 

 

2,565

 

 

4,008

 

%

 

 

7,538

 

 

150

 

%

Ending assets

 

$

 

 

40,598

 

 

$

 

 

39,248

 

 

$

 

 

37,177

 

 

 

$

1,350

 

 

3

 

%

 

$

3,421

 

 

9

 

%

Annualized organic growth rate

 

 

(11.7

)

%

 

(11.2

)

%

 

(9.0

)

%

 

 

 

 

 

 

 

 

 

 

 

 

Annualized redemption rate 3

 

 

13.6

 

%

 

13.4

 

%

 

13.1

 

%

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning assets

 

$

 

 

68,782

 

 

$

 

 

71,876

 

 

$

 

 

79,542

 

 

 

$

(3,094

)

 

(4

)

%

 

$

(10,760

)

 

(14

)

%

Sales 2

 

 

1,548

 

 

 

1,792

 

 

 

2,716

 

 

 

 

(244

)

 

(14

)

%

 

 

(1,168

)

 

(43

)

%

Redemptions

 

 

(4,911

)

 

 

(4,456

)

 

 

(6,500

)

 

 

 

(455

)

 

(10

)

%

 

 

1,589

 

 

24

 

%

Net exchanges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Flows

 

 

(3,363

)

 

 

(2,664

)

 

 

(3,784

)

 

 

 

(699

)

 

(26

)

%

 

 

421

 

 

11

 

%

Market action

 

 

4,539

 

 

 

(430

)

 

 

(9,949

)

 

 

 

4,969

 

 

1,156

 

%

 

 

14,488

 

 

146

 

%

Ending assets

 

$

 

 

69,958

 

 

$

 

 

68,782

 

 

$

 

 

65,809

 

 

 

$

1,176

 

 

2

 

%

 

$

4,149

 

 

6

 

%

Annualized organic growth rate

 

 

(19.6

)

%

 

(14.8

)

%

 

(19.0

)

%

 

 

 

 

 

 

 

 

 

 

 

 

Annualized redemption rate 3

 

 

27.7

 

%

 

24.3

 

%

 

35.4

 

%

 

 

 

 

 

 

 

 

 

 

 

 

____________________

(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

 

43

%

42

%

33

%

Assets ranked in top half

 

52

%

62

%

41

%

 

 

 

 

 

 

 

 

MorningStar Ratings 1

 

Overall

 

3 Years

 

5 Years

 

Funds with 4/5 stars

 

34

%

31

%

23

%

Assets with 4/5 stars

 

51

%

42

%

34

%

_____________________

(1)

 

Based on class I share, which reflects the largest concentration of sales and assets.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

Wealth Management

 

Dec. 31,

 

Sep. 30,

 

Dec. 31,

 

 

Prior Qtr.

 

 

 

Year-over-Year Qtr.

 

(in millions)

 

2019

 

2019

 

2018

 

 

Change

 

%

 

 

 

Change

 

%

 

Assets under administration (AUA)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advisory assets

 

$

 

26,947

 

 

$

 

25,107

 

 

$

 

21,207

 

 

$

 

1,840

 

 

7

 

%

 

$

 

5,740

 

 

27

 

%

Non-advisory assets

 

 

33,148

 

 

 

32,006

 

 

 

30,059

 

 

 

1,142

 

 

4

 

%

 

 

3,089

 

 

10

 

%

Total assets under administration

 

 

60,095

 

 

 

57,113

 

 

 

51,266

 

 

 

2,982

 

 

5

 

%

 

 

8,829

 

 

17

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net new advisory assets 1

 

$

 

261

 

 

$

 

236

 

 

$

 

(45

)

 

$

 

25

 

 

11

 

%

 

$

 

306

 

 

680

 

%

Net new non-advisory assets 1, 2

 

 

(859

)

 

 

(769

)

 

 

(840

)

 

 

(90

)

 

(12

)

%

 

 

(19

)

 

(2

)

%

Total net new AUA 1, 2

 

 

(598

)

 

 

(533

)

 

 

(885

)

 

 

(65

)

 

(12

)

%

 

 

287

 

 

32

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized advisory AUA growth 3

 

 

4.2

 

%

 

3.8

 

%

 

(0.8

)

%

 

 

 

 

 

 

 

 

 

 

 

Annualized AUA growth 3

 

 

(4.2

)

%

 

(3.7

)

%

 

(6.1

)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advisors and advisor associates

 

 

1,327

 

 

 

1,344

 

 

 

1,403

 

 

 

(17

)

 

(1

)

%

 

 

(76

)

 

(5

)

%

Avg. trailing 12-month revenue per advisor 4 (in thousands)

 

$

 

438

 

 

$

 

422

 

 

$

 

343

 

 

$

 

16

 

 

4

 

%

 

$

 

95

 

 

28

 

%

__________________________

(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

 

 

 

 

 

 

 

 

 

 

 

 

Dec. 31,

 

Sep. 30,

 

Dec. 31,

 

Prior Qtr.

 

Year-over-Year Qtr.

 

 

2019

 

2019

 

2018

 

Change

 

%

 

Change

 

%

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment management fees

$

 

110,706

 

 

$

 

111,806

 

 

$

 

114,521

 

 

$

 

(1,100

)

 

(1

)

%

$

 

(3,815

)

 

(3

)

%

Underwriting and distribution fees

 

136,309

 

 

 

135,787

 

 

 

133,788

 

 

 

522

 

 

0

 

%

 

2,521

 

 

2

 

%

Shareholder service fees

 

23,056

 

 

 

23,087

 

 

 

23,921

 

 

 

(31

)

 

(0

)

%

 

(865

)

 

(4

)

%

Total

 

270,071

 

 

 

270,680

 

 

 

272,230

 

 

 

(609

)

 

(0

)

%

 

(2,159

)

 

(1

)

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution1

 

117,225

 

 

 

117,425

 

 

 

111,456

 

 

 

(200

)

 

(0

)

%

 

5,769

 

 

5

 

%

Compensation and benefits (including share-based compensation of $11,142, $11,580 and $9,039, respectively)

 

62,816

 

 

 

64,999

 

 

 

64,155

 

 

 

(2,183

)

 

(3

)

%

 

(1,339

)

 

(2

)

%

General and administrative

 

30,061

 

 

 

16,680

 

 

 

17,403

 

 

 

13,381

 

 

80

 

%

 

12,658

 

 

73

 

%

Technology

 

15,950

 

 

 

15,019

 

 

 

15,982

 

 

 

931

 

 

6

 

%

 

(32

)

 

(0

)

%

Occupancy

 

5,143

 

 

 

5,684

 

 

 

6,116

 

 

 

(541

)

 

(10

)

%

 

(973

)

 

(16

)

%

Marketing and advertising

 

2,467

 

 

 

2,134

 

 

 

2,685

 

 

 

333

 

 

16

 

%

 

(218

)

 

(8

)

%

Depreciation

 

3,767

 

 

 

4,833

 

 

 

6,387

 

 

 

(1,066

)

 

(22

)

%

 

(2,620

)

 

(41

)

%

Subadvisory fees

 

3,777

 

 

 

3,882

 

 

 

3,647

 

 

 

(105

)

 

(3

)

%

 

130

 

 

4

 

%

Total

 

241,206

 

 

 

230,656

 

 

 

227,831

 

 

 

10,550

 

 

5

 

%

 

13,375

 

 

6

 

%

Operating income

 

28,865

 

 

 

40,024

 

 

 

44,399

 

 

 

(11,159

)

 

(28

)

%

 

(15,534

)

 

(35

)

%

Investment and other income

 

(4,804

)

 

 

5,212

 

 

 

17,351

 

 

 

(10,016

)

 

(192

)

%

 

(22,155

)

 

(128

)

%

Interest expense

 

(1,533

)

 

 

(1,562

)

 

 

(1,553

)

 

 

29

 

 

2

 

%

 

20

 

 

1

 

%

Income before provision for income taxes

 

22,528

 

 

 

43,674

 

 

 

60,197

 

 

 

(21,146

)

 

(48

)

%

 

(37,669

)

 

(63

)

%

Provision for income taxes

 

6,382

 

 

 

10,175

 

 

 

14,125

 

 

 

(3,793

)

 

(37

)

%

 

(7,743

)

 

(55

)

%

Net income

 

16,146

 

 

 

33,499

 

 

 

46,072

 

 

 

(17,353

)

 

(52

)

%

 

(29,926

)

 

(65

)

%

Net income (loss) attributable to redeemable noncontrolling interests

 

210

 

 

 

445

 

 

 

(396

)

 

 

(235

)

 

(53

)

%

 

606

 

 

153

 

%

Net income attributable to Waddell & Reed Financial, Inc.

$

 

15,936

 

 

$

 

33,054

 

 

$

 

46,468

 

 

$

 

(17,118

)

 

(52

)

%

$

 

(30,532

)

 

(66

)

%

Net income per share, basic and diluted:

$

 

0.23

 

 

$

 

0.46

 

 

$

 

0.60

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding - basic and diluted

 

69,896

 

 

 

72,387

 

 

 

77,786

 

 

 

 

 

 

 

 

 

 

 

 

Operating margin

 

10.7

 

%

 

14.8

 

%

 

16.3

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1Distribution expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaffiliated

 

23,392

 

 

 

24,068

 

 

 

25,406

 

 

 

 

 

 

 

 

 

 

 

 

Wealth Management

 

93,833

 

 

 

93,357

 

 

 

86,050

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

117,225

 

 

$

 

117,425

 

 

$

 

111,456

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited Consolidated Statements of Income

(in thousands, except per share data and margin)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

 

 

 

 

 

 

Dec. 31,

 

Dec. 31,

 

 

 

 

 

2019

 

2018

 

Change

 

%

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Investment management fees

 

$

 

445,144

 

 

$

 

507,906

 

 

$

 

(62,762

)

 

(12

)

%

Underwriting and distribution fees

 

 

531,836

 

 

 

550,010

 

 

 

(18,174

)

 

(3

)

%

Shareholder service fees

 

 

93,335

 

 

 

102,385

 

 

 

(9,050

)

 

(9

)

%

Total

 

 

1,070,315

 

 

 

1,160,301

 

 

 

(89,986

)

 

(8

)

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Distribution1

 

 

460,921

 

 

 

456,832

 

 

 

4,089

 

 

1

 

%

Compensation and benefits (including share-based compensation of $46,613 and $51,565, respectively)

 

 

254,534

 

 

 

263,329

 

 

 

(8,795

)

 

(3

)

%

General and administrative

 

 

77,482

 

 

 

73,643

 

 

 

3,839

 

 

5

 

%

Technology

 

 

63,719

 

 

 

65,275

 

 

 

(1,556

)

 

(2

)

%

Occupancy

 

 

24,243

 

 

 

27,197

 

 

 

(2,954

)

 

(11

)

%

Marketing and advertising

 

 

8,964

 

 

 

10,323

 

 

 

(1,359

)

 

(13

)