Exhibit 99.1

 

 

News Release

 

Waddell & Reed Financial, Inc. Reports Third Quarter Results

 

Overland Park, KS, October 29, 2019

— 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.”

 

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.

 

 

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

 


The following information was filed by Waddell Reed Financial Inc (WDR) on Tuesday, October 29, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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