Waddell & Reed Financial — Investor Presentation (March 2018)
22 slides from Waddell & Reed Financial's investor presentation, Mar 1, 2018
Slide 1: Forward-looking statements
This presentation 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 regardi
Slide 2: Overview: distinct business model of manufacturing and distribution
Our distinct business model, refined across more than 80 years in the industry, is built upon a unique combination of manufacturing and distribution: Overview
Slide 3: Where we are; where we're going
The industry and Waddell & Reed are navigating an era of change and transformation. We understand that: Where we are; where we’re going Our industry is changing at an unprecedented rate As we evolve, our focus is on establishing the framework for long-term success and increasing operational efficien
Slide 4: Our strategy
Our strategy Strengthen investment management resources, processes and results Reinvigorate product line and sales Evolve broker-dealer to self-sustaining, competitive, profitable entity Focus investment on support of business model, improving operating efficiency Key to growth is continued executio
Slide 5: Strengthen investment resources, results strategy
Strengthen investment resources, results strategy Aligning investment management resources toward strongest growth opportunities and products Identifying processes and technologies to drive information sharing Ensuring performance-based compensation that aligns with philosophy and industry standards
Slide 6: Reinvigorate product line and sales strategy
Reinvigorate product line and sales strategy Directing sales to best opportunities across product, channel, distributor and advisor Strengthening our ability to aggregate and analyze industry, product and sales data Focus on asset retention, as well as new sales Evaluating expansion through inorgani
Slide 7: Evolve broker-dealer strategy
Evolve broker-dealer strategy Enhancing data management and simplifying business processes to allow financial advisors to improve the way they do business with their clients Reviewing advisory service programs; evaluating the launch of new fee-based planning models that span the range from model thr
Slide 8: Current business metrics inform our strategy for tomorrow
Current business metrics inform our strategy for tomorrow. Business review Asset levels and flows Diversification Broker-dealer measurements Financial summary Capital return policy Four pillars of our strategic plan
Slide 9: Assets under management
Assets under management Asset Manager $48 $81 $ in Billions $ in Billions $0 $40 $80 $120 $160 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Thousands Retail Unaffiliated Broker-Dealer Institutional $0 $50 $100 1Q16 2Q 3Q 4Q 1Q17 2Q 3Q 4Q17 Retail Unaffiliated Broker-Dealer Institutional CLOSER
Slide 10: Net flows
Net flows Asset Manager $ in Billions $ in Billions ($30) ($20) ($10) $0 $10 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Retail Unaffiliated Broker-Dealer Institutional ($10) ($8) ($6) ($4) ($2) $0 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Retail Unaffiliated Broker-Dealer Institutional CLOSER L
Slide 11: Evolving our broker-dealer into a profitable self-sustaining entity
We are making a series of changes aimed at evolving our broker-dealer into a profitable self-sustaining entity. Broker-Dealer Focus on growing assets under administration (AUA) Providing advisors with access to an attractive span of fee-based advisory programs Continuing our development of efficient
Slide 12: Assets under administration
Assets under administration Broker-dealer $ in Billions
Slide 13: Advisory programs
Advisory programs Broker-dealer Adapting to industry trends toward preference for fee-based advisory programs. Two-thirds of sales today in advisory programs Introduced broader selection of fee-based programs MAP Navigator offers a mix of affiliated and unaffiliated mutual funds in advisor-managed m
Slide 14: Growth in advisory program assets
Growth in advisory program assets Broker-dealer
Slide 15: Revenue and productivity
Revenue and productivity Broker-dealer Ongoing model shift focuses on increasing revenue and productivity: Moving toward a more open architecture model Improving the way advisors do business with their clients Raising minimum productivity standards to meet profitability goals
Slide 16: Revenue and productivity
Revenue and productivity Broker-dealer $ in Thousands $ in Millions
Slide 17: Revenue and productivity
Revenue and productivity Broker-dealer
Slide 18: Advisor teams
Advisor teams Broker-dealer Less productive advisors moving to teams with more productive advisors.
Slide 19: Financial summary
Financial summary $ in Thousands $ in Thousands $ in Thousands $1,370 $1,598 $1,517 $1,239 $1,157 0 300 600 900 1,200 1,500 $1,800 2013 2014 2015 2016 2017 $3.28 $3.38 $2.85 $1.90 $1.69 0.00 1.00 2.00 3.00 $4.00 2013 2014 2015 2016 2017 $403 $440 $484 $252 $241 0 200 400 $600 2013 2014 2015 2016 201
Slide 20: Cash and investments
Cash and investments $269 $908 $ in Millions During 2017, we launched a laddered fixed income portfolio strategy to increase investment return on our cash. Investments in the portfolio are highly liquid and include primarily investment grade corporate bonds. $0 $100 $200 $300 $400 $500 $600 $700 $80
Slide 21: Increased flexibility: return of capital to investors
INCREASED FLEXIBILITY Return of capital to investors $300 $200 ; \ fj ' so 2013014015 OIG OTB. «2019 Sin Milions ‘Dividend = Share Buyback “Mustrative In October 2017, the Board of Directors announced a reduction in the quarterly dividend rate to $0.25 per diluted share and a plan to repurchase up t
Slide 22: Waddell & Reed
WADDELL ae
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