The overhaul of an 80-year-old mutual fund company’s independent broker-dealer is winning support from its smaller but much more productive force of 1,060 advisors, Waddell & Reed Financial’s CEO says.
Executives visited most of the firm’s markets in December and felt “the overwhelming sense” that advisors “understand and are enthusiastic about the direction we are taking the business,” Philip Sanders said Feb. 5 after the Overland Park, Kansas-based firm
The No. 13 IBD’s headcount fell by 22% in 2018 amid new productivity requirements and
Advisors received
The firm is “focused on the areas of highest priority to advisors,” Sanders said on a call with analysts, according to
Waddell & Reed earned net income of $46.5 million on revenue of $272.2 million in the fourth quarter, or $0.60 per share, outpacing analysts’ consensus by $0.11. The stock value of the IBD’s parent remained stable at about $17.20 per share the day after earnings, amid lower assets under management.
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President Shawn Mihal unveiled a series of changes to the firm’s compensation grid, field structure and advisory programs.
November 14 -
A multi-year reorganization of the firm has lowered head count by more than a quarter but boosted productivity by nearly a half.
November 2 -
The firm remains in transformational flux, but the results of its "Project E" evolution are beginning to show.
August 1
Macroeconomic trends and matters of convenience will move advisors, assets and markets next year in the ever-changing wealth management space.
Sanders cited better home-office support, tech and targeted services for higher producers as the IBD’s major areas of focus. The expansion of advisory products — including a new third-party strategist program with multiple ETF portfolios — also came “in response to growing advisor and investor needs,” he said.
The advisor desktop, which Refinitiv says
Waddell & Reed will announce more integrations later this year. Thomson ONE will enable the firm “to scale better in support of our advisors by consolidating things down into one platform,” IBD President Shawn Mihal told analysts. The company will also add data aggregation and reporting tools.
“Our core technology packages will allow us to further enhance that advisory experience and allow us to further deliver new innovative solutions to advisors as we continue to grow out the broker-dealer business,” Mihal says.
Equity volatility in the fourth quarter led to an outflow of $885 million in client assets under administration at the IBD, which dropped by 10% year-over-year to $51.3 billion. At $21.2 billion, advisory AUM now represents 41% of the IBD’s client assets, compared to 38% at the beginning of 2018.
Advisor attrition tapered off toward the end of the year, largely due to the “strategic departure of lower-producing advisors,” according to Sanders. The firm expects more low producers to leave in 2019 and Mihal says the firm aims to recruit advisors with $200,000 or more in annual production.
In a “substantive overhaul” of its recruiting, the IBD is hiring for open positions with an eye toward putting “a national recruiting model in place,” Mihal said. The target advisor has shifted to the higher producers from the new or “very inexperienced advisors” the firm trained up in the past, he added.
Waddell & Reed is also
