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Waddell & Reed Financial (WDR)

Participants
Mike Daley Vice President-Investor Relations
Phil Sanders Chief Executive Officer
Ben Clouse Chief Financial Officer
Shawn Mihal President-Retail Wealth Management Business, Waddell & Reed, Inc.
Amy Scupham President-Ivy Distributors, Inc.
Dan Fannon Jefferies
Bill Katz Citi
John Dunn Evercore ISI
Kenneth Lee RBC Capital Markets
Jeff Drezner KBW
Sameer Murukutla Bank of America Merrill Lynch
Mac Sykes Gabelli
Call transcript
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Operator

Good morning, and welcome to the Waddell & Reed Financial Incorporated Third Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Mike Daley, Vice President-Investor Relations. ahead. go Please

Mike Daley

behalf to On call. management I team, Thank you of to like welcome conference our would you. our quarterly earnings

Joining Business Brent of today Ben me Mihal, Scupham, President Hanson, call President Sanders, Retail Shawn Reed on CEO; Wealth Inc.; our our Amy Management our are CIO; Inc. Clouse, & our Ivy Bloss, Phil CFO; Distributors, of COO; Waddell Dan our our and

may of I begin, remind like forward-looking our comments would responses some we Before you and to include statements. that

duty While to information we results reasonable relevant that reference statements. no those section copy to Investor be any is differ with we our actual of schedules that due including expressed and in materially a these the website us We to a to public the call, believe been at the statements Materials factors based number press release have Relations our or of supplemental implied currently on available assume forward-looking could of today's on from to filings update posted SEC. ir.waddell.com.

Phil. now to the like turn call to over would I

Phil Sanders

Thanks, Mike. thanks Good joining. morning and for

of our During long-term toward continued quarter, push part forward the growth the progress, performance, in we pursuing as consistent third strategy, transformational improvement productivity and working to are in we our profitability.

on quarter a million at prior share $X.XX share net of quarter. significant per or returning income on long-term and growth its details, to shareholders. during capabilities, per Our financial reported $XX enhancing while our capitalize to but third the operational $XX our to strengthening efficiency management the high a $X.XX remains our the investment Ben positioning potential we focus manager level distribution operations wealth discuss or for and million capital maintaining will all compared

change past over Despite the substantially months. the did usual backdrop three the and flows, not investment ebbs

in to year-to-date markets over far way. the best XXXX, returns continued lead XX% start over For X-month U.S. represent large-cap have the financial of in the two XXX decades. equities thus S&P

mixed In For small-cap returns to volatility restrictions, fears globally. for for and domestic global muted geopolitical returns tensions to story including and the large-cap muted slightly be the quarter, negative were quarter, returns third trade with so stocks with contrast dominating issues recession far the positive continued political has level the continued and stocks global slightly headlines. year index

yields Continuing backdrop remain economic nearly generally concerns the manifested around of long-term XX-year were lows the on a provide bond as market for in and bond record the Corporate growth positive XXXX. investors. reached earnings healthy

CEO of However, particularly, issues. remain confidence the light and forecast continuing in trade cautious,

environment focus well active businesses their environment. a models the research-driven evaluating prospects long-term fundamental value suited manager, business investment clients as add to approach growth. in of is investment today's our for our believe fundamental Regardless researching We identifying remains for that in on distinct

during the asset cover will Ben challenged remain flows, quarter. details which the on

While to sales continued remained trend complex. multiyear have redemptions have a slow XXXX, positive and improved our compared across

has income at uncertainties Given industry been global products of the the This equity active to the a geopolitical and money be growth throughout across market expense outlook, fixed weighted towards the flows products. case XXXX. weakening and continue

As the and number market capture overall to market impacted as you product sales of distributions' ability performance, be a such can investment share by know environment. relevance, factors

base. investment can are to sales of couple control. worked end, our to realigned infrastructure our past resources client focused those align that years closely efforts distribution the our unique things on we management needs hard have the more We our over To we of and with that fortify

our significant investments asset management Investments an business Ivy made across to as reinforce have institutional platform. We caliber

we of to are asset of at our need. address product and flow need Recent the highlight mix ways relevance that a also industry terms patterns looking broaden actively to in number

in to are our appreciate of that While progress committed pace those position are us to be hard long-term confident approach for visible the success. and we can the in actions short-term,

investment Turning performance. to

trailing are universes. improved by the On percentage weighted measured performance basis, three-year an five-year modestly. five-year the equal and of by Morningstar in assets and of as the one-year, top three-year, improvements performance respective half We their encouraged ranked in

However, one year declined. performance slightly

noted we made in and last staff, enhance capabilities lead sustained we to As and management our recent in believe years we quarter, will research ultimately investments performance. long-term to the intermediate technology management portfolio teams, have improvements risk

believe to remains our Next, diversified financial yet key the have of in made component part wealth of services which business, in progress the we I company an as transformation a highlight company want a our management future. more underappreciated our into we

our to the technology build of wealth of and broadening model. is fee-based advisors a A business advisory offering, service leading products, to through tenet financial proposition the product transformation management value on products. continue We our enhancements specifically to core

universe mutual different three we Today, from more strategists. products, products to those funds & ETFs offer Waddell and These wide the advisors advisor nine products which known Across now launched within in both those and addition securities. use of over years. X,XXX that general last families advisory third-party different have of a access programs to Financial two include than Reed as XXX what's other managed

fund program strategies, guided institutional models. investment models called various offers strategist money managers, ETF over portfolio including The and different XX from mutual

programs by stocks advisor options a well architecture and screened managed advisors from as third-party investment between been as of variety that and individual open an of securities, offering such independent ranging the programs, mutual consultant. have composed funds as ETFs ETFs Within full choices have

technology the advisor mentioned across to strong, facilitating quarter, financial WaddellONE, information. key firm's connectivity has centralized the and access direct force partners. the platform advisors available of we efficiencies Last Adoption and increasing several been associates, providing all the to advisor existing launch desktop to of

the other launched our WaddellONE also processing enhanced Anywhere, the web-based including business Progress on we desktop of of program, data quarter, version third WaddellONE and administration the business reporting, a components During analytics model. the improved platform. continues simplified key

model within are today, our opening wealth You'll management wealth to architecture leading over delivery years management two to the the recall, and products it we positioned has technology, now began as process business, a where we transforming well been our service compete firm. since of

business. We in enablers on focused this are growth keenly within recruiting other

notably is a its without trends our advisory its on of process Ivy, most revenues while inside flows challenges, for not have transformation initial have asset flow expectations, overall stabilization remained and assets the While in continuing redemptions of seen and we grow. impact to

have and We a proposition excited for wealth for advisors with successfully and positioned the management future business to I'm expansion, our real future. value clients,

and further model our financial an position closer a a franchise. our in to reestablish and stabilizing move we our assets management exert in to favorable services expect under As as of more wealth advisor this diversified business terms we influence company in metrics growth administration, point inflection and overall operating count

the Finally, of future sustainably we are bringing and our new Missouri. new innovative, distinctive location progress to corporate an in have considerable made and focused facility Downtown City, identifying on headquarters now designed a Kansas possibility for

of is environment sharing us top the needs look the progress growth forward strategy. continue and accelerate workforce tomorrow a workplace attract Our meets to process. more in and as retain we to We of to that goal foremost enables talent to our this

Ben will I to turn to now it discuss the results. quarterly over

Ben Clouse

everyone. good Phil, and you, morning, Thank

the or on benefited the income noted, $XX.X reported Phil more or then million for start well quarter gains share net investment prior from compared our as and and from per share, during share to by As count. of per I $X.XX corporate $XX.X unrealized million flows will per operating our in Earnings $X.XX quarter. asset seed share a of the lower per for detail results covering portfolios as about quarter. share review $X.XX we

of assets and the At while $XX.X net be elevated impact same given from preference Assets sales the at activity average outflows channel quarter under most an two the results. in down prior continued the were slow our total, redemption products billion X% in unaffiliated management had market down were ended quarterly under our X%. billion $X.X the billion, the where for of and lower in $XX.X quarter, money quarter management market larger notably to fixed of risk, funds. environment time, investors' outsized income on In

affiliated and as encouraging $X.X with was Ivy it's within XXXX. Phil experienced of see billion, outflows quarters the the of And business business wealth net of within our to outflows pace management stabilizing. Investments' second mentioned, first wealth which management the consistent both AUM

are six move we brokerage advisory results is clients to from our the those business. as consistent fact, in continue and asset long-term In which growth relatively advisory, past management have across to been momentum continuing wealth focus quarters the in

were net institutional outflows quarter. channel, million $XXX for Within the the

in the channel disclosed October. the While redemptions redeemed this of have year the outflows net in continued improve balance known to $XXX now earlier have this of modestly, we million

management small well our to believe and opportunities long remain caliber current as a pipeline. overall history delivering institutional rebuild serve focused continue on institutional capabilities we the of assets, business will portion of represents While future our us we investment our

advisors attrition quarter the under as compared billion and $XX.X We ability the count Wealth reduction administration. to and management a under pace to with in advisor second the retain and The of quarter been slightly our has administration to reduction assets X,XXX the assets in to advisor we expectations ended three with line last have only quarter. quarter at our associates, ended decreased compared been advisor of slow. pleased continues with

advisors who will the support, product enhancements our As our are towards full with competitive out you market advisor and our technology advisors redesigned know approach experienced we our higher benefit grid, our completely actively recruiting in producing we've now approach engaging to and from suite.

we're to up encouraged the pipeline the teams activity as recruiting look thus building are our full we with advisor While to is and getting far speed, growth. drive still

assets lower and with quarterly was true-up for assets Turning Investment second a point increased shareholder partially U&D advisory fee fees quarter to lower basis effective was were than was administration service to effective X.X rate. average waiver as to Total the revenues Adjusting to effective rate our the basis fees the lower lower fee points investment entirely now higher due due stronger million and in to rate. management that management increased and rate revenue U&D fee slightly fee true-up manager. fund The investment results. quarter prior $XXX in management were the prior compared primarily lower quarter offset due wealth by expenses. financial management consistent a the was slightly under under fees. amount, XX.X and revenues

an were a distribution of operations, related million as fees to increase shareholder due amount. which increased low $X.X the increase in $XXX,XXX well, an processing the the in transfer transactional than expenses expense non-recurring to to categories lower cost second Operating decrease agency reduced fees service service outsourcing and the $XXX,XXX to due controllable by $X Shareholder of primarily related higher revenues in million revenues quarter quarter. from a

decrease Controllable technology, related line from the to the marketing compensation, transfer approximately occupancy totaled non-recurring million are million $X compared $X million. technology the line of outsourcing last severance outsourcing, compensation to agency agency quarter. G&A, and expense benefited $XXX.X of transfer included expenses The comprised of which $XXX.X from million actually a while

Additionally, estate $X office due million line plans. field occupancy decreased with cost to our real closures in

XX.X% $XXX in outsourcing. was the quarter, expenses we tax continue we the the be of quarter million remaining line will to the in For range items. and transfer fourth rate any for of of a run be million non-recurring XX% the inclusive $XXX expectations to to of XX% with restructuring expect impact expect the agency charges controllable discrete income the related excluding in additional to effective tax or to The rate range

balances again were the with prior and investment relatively quarter. Cash consistent

continued last we the call, buyback we prior into active completed target repurchase on and program the As quarter. our third highlighted our

to what inorganic we return keeping options repurchased investing organic growth at during X% focused outstanding program, attractive continue growth targeted quarter, prices. an while be Given over for We active our available executing we the capital volatility of the believe remain in opportunities. and shares to on enablers our

the call questions. we for open Operator, like would now to

Operator

question from [Operator first Dan ahead. comes with Instructions] go Please The Jefferies. Fannon

Dan Fannon

outlook, about question Thanks. building. is My kind of of advisor. first you recruitment In a backlog on the that's talked

that XX, is to the guess business in those of in onboarding XX then of is get coming how about a think reasonable advisors advisors to that for sense just what the I as you expectation So process? next average make-up a trying of terms and the about on? like What think momentum And months size?

Shawn Mihal

morning, We're to the staffing line the continuing is focusing out building advisors focusing take go our Yeah. department progress we've question. are recruiting recruiting about steady been this and been or higher-producing been that to consistent our full few the as the in with up been type productivity Hi, months over and advisors. regard on Shawn. capabilities. average the current building. Dan higher-performing last good advisors talking has of pipeline ahead and we've I'll as see And we're on more we've the that more With our

X-year a having as So industry look tending to that's as in have with well those current more line advisors. or at as our average we inside the productivity

hitting see continues and progress perspective to that the tent point forward grow. we're we XXXX an to as move we as into So from to on growth inflection as a expand continue continuing pipeline

Dan Fannon

when of the I advisors mean -- And say to point, prepared do -- in that number of term your in inflection and And where guess the from should mean was starting that should remarks grow? say I see when in we you you guess we you well expect? used what that what that does definition? as it terms

Shawn Mihal

and Yes. get of to advisors. That's positive for looking headcount us growth rates to

Dan Fannon

we think quarter this follow-up thinking what guess to Got think the I just cut quarter XXXX on if My back is said more a in maybe the becomes little constructive what and additional XXXX for parts you markets less then the kind fourth you controllable and I are came a guidance. it. guidance I how update some kind bit and component last expenses, areas revenue other to moving gave difficult? on of had get environment you're below, about around any of in if potentially

Ben Clouse

Ben. is Good This Dan. Sure morning.

due bit As of couple third compensation were a lower quarter, to cost primary drivers savings some particular. our you mentioned in there open a positions for in

that voluntary of of drove seen we're know TA remarks made And and some related I as you a on the mentioned announcement. the little think transition the aggressive, hiring. -- a little I quarter turnover bit We've our we're to we've As forecast also DST for a lower. midst in our the things in other there we then that outsourcing couple bit my

we'll In sense better the you imagine, a and regard to we're midst budgeting can XXXX as the much you next in for have process of on our call.

before underway technology right going year guidepost, indicated into ongoing expect project now. I've have as we talked next work that some have the some some inflation to as that's well As as of for headwind we through

efficiently able to least a we of ways part as and to However, we can. control that possibly as broad finding be expect continued with offset operate at cost to

Dan Fannon

Okay. Thank you.

Operator

Katz The next Citi. Bill from question is with

Bill Katz

question. Okay. the much very Thanks taking for

the bit migrate see think focus little the So just the rate of management talk or as overall the could a where as about wealth to you third-party may of ratio is, client to migration you fee you fee-based platform you the be how you more about advisors? sort to expense and financial

Shawn Mihal

fee Yes primary Bill, retail mind morning rate continuing at Good client accounts points is Hi. we're in see XXX remaining basis the is the this keeping about Shawn. to which we and in serve. market those that's which on

expect remain that. We the to programs that relatively in advisory-based consistent

some more we to There the could newer MAPDirect new the guided of that into as in remain introduced in programs which level brokerage in that to are migration that been movement can continue But fee as see and consistent. strategies some alternatives investment relatively such time with we have from adoption be lower expect fee seeing we the and some some to for levels. sometime now general, advisory that we've programs

Bill Katz

perhaps as -- but the appreciate you out the about -- you I segment by Phil either greater pretty flows look class, equation, of negatively. to yourselves firms migration numbers stout your the wealth then at And when management by side manufacturing think or Okay. are asset the of

opportunity months at sales? over see months, you to the product XX level best next the look As where gross enhance the do you XX maybe

Amy Scupham

is want You to take this that? Amy. me Bill

continue mid say interest months is, both would strong cap months our small to to we're performance franchises. I today in the it and next pipeline So strong of opportunities see in and over starting some have XX XX and to course the we

growth we continued would there. anticipate So seeing

growth large-cap the interest a really of I would state in up has product pick lot to started our pipeline. also that

that's where, to an opportunity And while capture go and classes so we some and the area asset outflow have share. the market

asset growth that our environment the believe certainly to strong there against today, equity nice is addition behind In is but secular it a that that general. market we emerging in that class working

were we in the get asset to start replaced of able I some quarter, of we large income distributor will could that the that have on to platform. And pickup. see products course couple third we strategy a say fixed

direction So conversations continued the step strategy right that's as that well. product on nice that around for a in go and will

Bill Katz

hop in you. I Thank Okay. back queue. the

Operator

is question ISI. from Evercore with go Glenn Schorr next ahead. The Please

John Dunn

Kind guys. is off on morning, Glenn. piggybacking last the Good Dunn This for on question side. reduction of actually John that fee

we're sales seen -- a effect that it -- on and cuts, to Now a be other further could fee little the you've little funds? away little more maybe gross just there on a maybe extended maybe

Amy Scupham

effect gross the on take about I'll sales. the part

a of of fee on. so series comes July of in of response So, we're last reduction. think do from that a on our late and Sales focused positive we different did very number was year the in generally that reductions a I the some it products places,

we We've that in year-to-date timeframe. positive the seen couple when you of the three-year a where are out lowered flow, products to and look that both the fees

an I asset So, seeing negative, think there. in flow are environment good the we're where traction classes positive some

looked we really knowing as category evaluate to forward, active as making that sure we and to stance to right in fees have Really, at we're fees the continue earn at the going compete. a that we our competitive looking within managers stay the

Phil Sanders

year was is Or ago fairly reductions point Amy and that follow-up were little took one the place referencing broad-based. additional over meaningful maybe that a

targeted be be the but I product two. throughout a they'll as more little review random of rolling nature be kind across and bit of in think incremental kind points and the selective across would forward, the wouldn't line, more process. or -- it maybe year a we go -- also It ongoing

Amy Scupham

of our level approximately or sits across complex, assets fees our average. that XX% at we below an Yeah. fee When you fund look our average at have

area. making good we're progress So, in that

John Dunn

if might BI just just could maybe maybe new in a now adjustments comment we're on you making Reg then, about environment? think you. be Got for that and that world, how you you that any And

Shawn Mihal

Yeah.

DOL We're our forward fiduciary that the in take that vacating our things Shawn. the and efforts prior with material that. light aspects aspect with is projects progress and although rule the in of significant of So, continuing of remained This we We've efforts, vacated. rule did initiatives even I'll of through number progress is moving A rule. in that BI. made Reg the effect implementation the establishing our rule of the with

of conflicts business, elimination other and came implemented mitigation aspects conflicts types assessments. kept things of all that wealth relationships client So doing interest arrangements, of or we type of rule interest we of that those out account of things management compensation disclosure our levelization of also in in our that respect from enhancements of to with effect account --

we really SEC. good was the like the introduced BI by were Reg So, in we felt as position

However, registrant of at that look we're associated to since our investment Form dual continuing broker/dealer advisor. are we disclosure and completion with a CRS requirements

We we'll page document our draft have in that be workflow a we four into format that incorporating processes. have operational

also are and fees aspect of aspects We're our a of inside firm. and that through an transactional to just BI, initiatives overall processes Reg clearing other number related disclosure requirements with of be that we'll other from operating working of related

progress made that implementation June good work as the date. So, we in regard towards is being

John Dunn

Thank you. it. Got

Operator

with RBC ahead. Please The Kenneth next question is Lee Capital go from Markets.

Kenneth Lee

taking question. Hi. my Thanks for

the flow of Just what within in the wondering fund RIA Thanks. distribution net client you're and one accounts and the just if the within trends, specifically DCIO unaffiliated terms markets? could seeing national comment you channel, demand on

Amy Scupham

Sure.

channel. client of I'll start to channel RIA the are delivery model really interesting the new with where Kenneth market. a the portfolios That our inside base So is

relates as seeing mid-growth the delivery small across franchises, have we new portfolios we're out. and conversation the model So large, it to

a a in that contract contract side We're on right the negotiations for or model. in now partner with large-cap actually business growth right potential of now

there's there market lot emerging of great as So equity traction a franchise. as conversation and well been our with

the box DC more DC space space, style In to the tends be oriented.

series up DC of outside small And as franchises So a trusts. space then traction. the investment of large, mid, really our we we picking have the well, there have funds, collective growth

strong development management product So capability that a we to might the need. you continue only -- investment we be from what that address also make we is standpoint to an to from client sure not able base know, where as appropriate to but have try vehicle a

our nice tech the and that market And a in then so, equity the we're franchises in equity as trust domestic partners in investment collective and the would in space from and space science emerging pick again, seeing and well. DCIO be up interest across

strategy And then replaced we our from of national one did asset account like I standpoint, said, partner platforms. a just have on

we So was a really progress. like good felt that

mid-cap mid-cap relates it We income our both our and growth continue potential mid-cap around with opportunities opportunities some to to have conversations models. and portfolios as

channels. So in across it's of all kind same area the

Kenneth Lee

thoughts talked just in the for looking to one past about Got the expand business you. of any management on expand either updated in follow-up, helpful. know M&A? wealth Very product terms further then And potential or mix. for you've opportunities I the

thoughts Thanks. Just wanted to now? latest get right your

Ben Clouse

This Ken. Ben. is Sure, I'll start.

now I both think as that our execute we progress given before, our to on feel have fit those and would with we've either management platforms investment or businesses. well in attractive we're transaction business, of made to the strengthening wealth a were and surface something said we of positioned management

We're that perspective, a to lot activity you we can on active. will market looking and acquisition imagine are you we opportunities. there going studying the of a of is can certainly our is Transactions that tell are are makes lot financial course, factors from predict, consider. of hard for rationale as There strategic with sense. I an and

Kenneth Lee

much. Great. very Thank you

Operator

Lee from go Robert comes KBW. with question next Please ahead. The

Jeff Drezner

Hi. This Lee. on for Jeff Drezner is Rob

investments and you share ran on know that? year the one you quick next you about for of to would much how Just be think cash through the do program, dip and willing the kind how question into repurchases. I

Ben Clouse

commitment pattern third the particular, here course prices similar think, the very made the continued we Jeff, of attractive. and quite as in were rest really of we've quarter a we because through with completed that I a

from cash for differentiator necessarily balance to a cash the significant we Our flow strength sheet we'll is our and not balance us continue think key growing work free and toward liquidity we have to acquisition dry to our have, if, dividend arises. buybacks opportunity of shareholders some and you if through will, that and balance and an there, but course when powder returning continuing

Jeff Drezner

Great.

prices fair it at to assume repurchase is manner? the So in perhaps, continue would these this that

Phil Sanders

Jeff. be on activity comment pricing. unnecessarily It'd or Hi, current what

from and of type been think see experience we've I past that you active the pretty can in thing, marketplace.

letting grow. not being cash significant we've We also cash it's Ben in in balance As lot like interested of of incremental generate terms that flow. don't share sheet in things. acquisitions. doing really that got and active We've balance type our We exclusive feel a said of repurchase mutually strength liquidity and

So, I think and to the strong itself for program. committed return we're record really speaks a capital

Jeff Drezner

Got then follow-up. products quick your it. management, going Thank are otherwise accounts in sales what In percentage you. just And products? are to versus a -- the wealth fee-based third-party of

Phil Sanders

ahead. Go

Shawn Mihal

Yes, new in opening platforms overall of is continuing with the towards coming so Shawn. expansion sales see the architecture sales to this regard with unaffiliated the going and products. We're to of other

so. is and management In the affiliate about at of are business general, our XX% ratios wealth products or the occurring own within overall the that side running that concentration

to with We're going has been of continue with to the unaffiliated to mentioned see to opening respect product that continue opening new those course availability lines platforms, we've associated products newer them. have platform sales remarks coming product advisory over nine and as Phil months your opened launched different on the the product likely the many programs, the years going and with to of shift of the as

sales programs products the we've is type into funds towards that fund other of affiliated are we But with XXX X,XXX over than that to of sales our new different some some through regard from our products. in indicated going brokerage additional seeing other sales, programs. see we'll families, unaffiliated had expectation with to the legacy continue as go migration more more still advisory Obviously,

Jeff Drezner

Got it.

Okay.

-- is I'm was So, XX% in your products, you sorry said that right?

Shawn Mihal

Yes, concentration correct. is right affiliated products. the around ratio XX.X% That's today currently

Jeff Drezner

much. very Thanks

Operator

Michael with Merrill The from of ahead. go Please Lynch. Carrier Bank America next question comes

Sameer Murukutla

Sameer good on for is Hey, morning actually Murukutla This Michael. guys.

some waivers. Just just clarify impacted Or any there fee Is we on that similar get similar? a going to to into XQ? the was assume of it over quick rate we by the should bump-up that's I one. -- spill that want makes just XQ assuming a just that

Ben Clouse

the Q can assume quarter. I consistent think with be you -- prior to a bump-up

Sameer Murukutla

Thank Okay. you.

Operator

The from Please next question with Bill is ahead. a Citi. Katz go follow-up

Bill Katz

for the added Okay, thanks taking questions.

things headquarter frame some that potential just move. sort from of of savings Phil opportunity commentary Anyway may any current and to out a type the bunch about the off particular articles came migrate the location? of you there's been the Just just forth. few arise to from sort the of of for that a back new as

Phil Sanders

let Well, I'm going to that, Bill. address Ben

Ben Clouse

Sure. to of assess the rate impacts that the through share headquarters regard to once have share anticipate near-term to and working I any we to And any in in we're Phil in coming you Bill, happy a hope up currently add. the to options financial free impacts to I'll the be at run position those all be process tell to quarter carefully. our change. we firm specific very everything. moment. We don't don't would I today

Bill Katz

happened? quantify a outflows larger Which had that's that mentioned the products of do products. kind couple that October the by you'd I'd extent have them? Okay, any highlight maybe then then you be sort Could were been you helpful. of what's you And trends to somewhat when of to curious amplified just of view the your in And look see happening like? what

Amy Scupham

is Yes, Bill this Amy.

certainly we've flow. our product large -- equity has international of seen where our core one international been amount a So,

of you you of from of as XQ big a went As Really you substantially change our a period. last in know increased that into XXXX category larger course the saw really year. the over outflow characteristic amount flow

as it's roll class. And three a positive. as quarters quarters three look was an the XXXX, So, asset it you net asset net of through negative as the you XXXX, class, a first first through of

that performance So, going a as we a dynamic well the interruption. little suffered bit product have that on just of as

we're And struggles hard so, we've have. working there, had to that dollars but we retain the some

the And then a performance picked a course really this was Again, science the product there years. and last the has like interruption out-flowing and tech last though performance the up. of really XX months, over year has few there been that's been for

to we hope and see So expect that flow. would

Bill Katz

October to comment sort how we're been you Do given end month of has want that this the point? at the on of

Amy Scupham

Yes.

Sorry September, July, a like August so more October looks of than that. lot about the a same. lot

continue Our slow. redemptions do to

numbers So, getting certainly muted. are the net gross though are our better numbers

So, same. the I of would say more

Bill Katz

you much All right. taking Thank the very for questions. added Okay.

Operator

question Please our [Operator Mac from And Gabelli. Instructions] ahead. comes with next Sykes go

Mac Sykes

important good talk new everyone. bit Hi, a about in the of advisors? first year? rest recruitment for quarter of Can bringing the the versus How morning on fourth is of terms assets seasonality you little for that quarter, period

Shawn Mihal

XXXX. the from we out moving experiencing the is this Mac, Shawn. XXXX Certainly, focusing recruiting another and been roll as been are of recruits year into of ramping additional of into with a rolling preparatory is goes work, that as year have we this pipeline really advisors, hi have generate advisors, following what we with conclusion our it's one And off that migration a into up times to building bit starts expectations year. as and rounding that we a that experienced other Yes, more has to of the then lot into we making engaging typically quite roll and efforts the been firm

QX. of So, strong into number recruits, activity as move are indications a as increased we've we for with been working

requirements minimum of that With will bit that being just quarter, typically, of reduction of experience nature. having to do we production things little said, fourth with and a the rolling

production net to but numbers, are requirements. typically that due firm not have been performing that's minimum what the type that advisors impacts some on the exiting have So, lower may hitting

Mac Sykes

Great. you. Thank

Operator

your possibly The Sanders this further Stephanie over line is our questions, next the to no would concludes yours. on session. turn end. Please Showing Morgan Stanley. go to on our question question-and-answer ahead. Ms. like any open is with back Ma conference I Ma, It for closing remarks. muted from is Phil

Phil Sanders

you. up Okay. Thank Thanks we few a morning. appreciate to and joining everybody you. I this attention, focus, months. Thank forward look time with and in for you your us catching

Operator

for Thank has The conference you today's attending concluded. now presentation.

You may now disconnect.