Waddell & Reed Financial (WDR) 10-K 23 Feb 18 2017 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Feb. 09, 2018	Jun. 30, 2017
Document and Entity Information
Entity Registrant Name	WADDELL & REED FINANCIAL INC
Entity Central Index Key	1,052,100
Document Type	10-K
Document Period End Date	Dec. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 1,520
Entity Common Stock, Shares Outstanding		83,361,517
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	FY

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Assets:
Cash and cash equivalents	$ 207,829	$ 555,102
Cash and cash equivalents - restricted	28,156	31,137
Investment securities	700,492	328,750
Receivables:
Funds and separate accounts	25,664	27,181
Customers and other	131,108	128,095
Prepaid expenses and other current assets	25,593	21,574
Total current assets	1,118,842	1,091,839
Property and equipment, net	87,667	102,449
Goodwill and identifiable intangible assets	147,069	148,569
Deferred income taxes	13,308	31,430
Other non-current assets	17,476	31,985
Total assets	1,384,362	1,406,272
Liabilities:
Accounts payable	38,998	28,023
Payable to investment companies for securities	43,422	53,691
Payable to third party brokers	25,153	31,735
Payable to customers	66,830	82,918
Short-term notes payable	94,996
Accrued compensation	47,643	41,670
Other current liabilities	44,797	58,941
Total current liabilities	361,839	296,978
Long-term debt	94,783	189,605
Accrued pension and postretirement costs	15,137	38,379
Other non-current liabilities	25,210	26,655
Total liabilities	496,969	551,617
Commitments and contingencies
Redeemable noncontrolling interests	14,509	10,653
Stockholders' equity:
Preferred stock-$1.00 par value: 5,000 shares authorized; none issued
Class A Common stock—$0.01 par value: 250,000 shares authorized; 99,701 shares issued; 82,687 shares outstanding (83,118 at December 31, 2016)	997	997
Additional paid-in capital	301,410	291,908
Retained earnings	1,092,394	1,089,122
Cost of 17,014 common shares in treasury (16,583 at December 31, 2016)	(522,441)	(531,268)
Accumulated other comprehensive income (loss)	524	(6,757)
Total stockholders' equity	872,884	844,002
Total liabilities, redeemable noncontrolling interests and stockholders' equity	$ 1,384,362	$ 1,406,272

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Dec. 31, 2017	Dec. 31, 2016
Consolidated Balance Sheets
Preferred stock-par value (in dollars per share)	$ 1	$ 1
Preferred stock-shares authorized	5,000	5,000
Preferred stock-shares issued	0	0
Class A Common stock-par value (in dollars per share)	$ 0.01	$ 0.01
Class A Common stock-shares authorized	250,000	250,000
Class A Common stock-shares issued	99,701	99,701
Class A Common stock-shares outstanding	82,687	83,118
Common shares in treasury	17,014	16,583

Consolidated Statements of Inco

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Revenues:
Investment management fees	$ 531,850	$ 557,112	$ 709,562
Underwriting and distribution fees	518,699	561,670	663,998
Shareholder service fees	106,595	120,241	143,071
Total	1,157,144	1,239,023	1,516,631
Operating expenses:
Underwriting and distribution	593,424	664,648	774,428
Compensation and related costs (including share-based compensation of $57,716, $51,514 and $47,518, respectively)	181,376	200,822	208,841
General and administrative	105,520	83,995	105,066
Depreciation	20,983	18,359	16,046
Subadvisory fees	13,174	9,572	9,134
Intangible asset impairment	1,500	9,749
Total	915,977	987,145	1,113,515
Operating income	241,167	251,878	403,116
Investment and other income (loss)	15,689	(763)	(5,244)
Interest expense	(11,279)	(11,122)	(11,068)
Income before provision for income taxes	245,577	239,993	386,804
Provision for income taxes	101,368	81,884	149,226
Net income	144,209	158,109	237,578
Net income attributable to redeemable noncontrolling interests	2,930	1,414
Net income attributable to Waddell & Reed Financial, Inc.	$ 141,279	$ 156,695	$ 237,578
Net income per share attributable to Waddell and Reed Financial, Inc. common shareholders, basic and diluted (in dollars per share)	$ 1.69	$ 1.90	$ 2.85
Weighted average shares outstanding, basic and diluted (in shares)	83,573	82,668	83,499

Consolidated Statements of Inc5

Consolidated Statements of Income (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Consolidated Statements of Income
Compensation and related costs, share-based compensation	$ 57,716	$ 51,514	$ 47,518

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Consolidated Statements of Comprehensive Income
Net income	$ 144,209	$ 158,109	$ 237,578
Other comprehensive income:
Unrealized appreciation (depreciation) of available for sale investment securities during the period, net of income tax expense (benefit) of $(956), $(2), and $2, respectively	7,505	(391)	(4,771)
Postretirement benefit, net of income tax expense (benefit) of $(99), $(718), and $983, respectively	(224)	(1,220)	1,667
Comprehensive income	151,490	156,498	234,474
Comprehensive income attributable to redeemable noncontrolling interests	2,930	1,414
Comprehensive income attributable to Waddell and Reed Financial, Inc.	$ 148,560	$ 155,084	$ 234,474

Consolidated Statements of Com7

Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Consolidated Statements of Comprehensive Income
Unrealized appreciation of available for sale investment securities during the period, income tax expense (benefit)	$ (956)	$ (2)	$ 2
Postretirement benefits, income tax expense	$ (99)	$ (718)	$ 983

Consolidated Statement of Stock

Consolidated Statement of Stockholders’ Equity - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-in Capital	Retained Earnings	Treasury Stock	Accumulated Other Comprehensive Income(Loss)	Total
Balance at the beginning of the period at Dec. 31, 2014	$ 997	$ 318,636	$ 993,507	$ (525,015)	$ (2,041)	$ 786,084
Balance (in shares) at Dec. 31, 2014	99,701
Increase (Decrease) in Stockholders' Equity
Net income			237,578			237,578
Recognition of equity compensation		47,256	262			47,518
Net issuance/forfeiture of nonvested shares		(39,094)		39,094
Dividends accrued			(146,099)			(146,099)
Excess tax benefits from share-based payment arrangements		4,813				4,813
Repurchase of common stock				(80,335)		(80,335)
Other comprehensive income (loss)					(3,104)	(3,104)
Balance at the end of the period at Dec. 31, 2015	$ 997	331,611	1,085,248	(566,256)	(5,145)	846,455
Balance (in shares) at Dec. 31, 2015	99,701
Increase (Decrease) in Stockholders' Equity
Net income			156,695			156,695
Recognition of equity compensation		51,382	132			51,514
Net issuance/forfeiture of nonvested shares		(84,741)		84,741
Dividends accrued			(152,953)			(152,953)
Tax impact of share-based payment arrangements		(6,344)				(6,344)
Repurchase of common stock				(49,753)		(49,753)
Other comprehensive income (loss)					(1,612)	(1,612)
Balance at the end of the period at Dec. 31, 2016	$ 997	291,908	1,089,122	(531,268)	(6,757)	844,002
Balance (in shares) at Dec. 31, 2016	99,701
Increase (Decrease) in Redeemable Noncontrolling Interest
Adoption of consolidation guidance on January 1, 2016 - redeemable noncontrolling interests in sponsored funds						14,330
Net income						1,414
Net redemption of redeemable noncontrolling interests in sponsored funds						(5,091)
Balance at the end of the period at Dec. 31, 2016						10,653
Increase (Decrease) in Stockholders' Equity
Adoption of share-based compensation guidance on January 1, 2017		3,504	(2,200)			1,304
Net income			141,279			141,279
Recognition of equity compensation		50,593	690			51,283
Net issuance/forfeiture of nonvested shares		(44,595)		44,595
Dividends accrued			(136,497)			(136,497)
Repurchase of common stock				(35,768)		(35,768)
Other comprehensive income (loss)					7,281	7,281
Balance at the end of the period at Dec. 31, 2017	$ 997	$ 301,410	$ 1,092,394	$ (522,441)	$ 524	872,884
Balance (in shares) at Dec. 31, 2017	99,701
Increase (Decrease) in Redeemable Noncontrolling Interest
Net income						2,930
Net subscription of redeemable noncontrolling interests in sponsored funds						926
Balance at the end of the period at Dec. 31, 2017						$ 14,509

Consolidated Statement of Stoc9

Consolidated Statement of Stockholders’ Equity (Parenthetical) - $ / shares	1 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Consolidated Statement of Stockholders’ Equity
Dividends accrued, per share (in dollars per share)	$ 0.25	$ 1.63	$ 1.84	$ 1.75

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities:
Net income	$ 144,209	$ 158,109	$ 237,578
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	20,983	18,359	16,050
Write-down of impaired assets	1,500	9,749
Amortization of deferred sales commissions	4,855	23,601	43,074
Share-based compensation	51,283	51,514	47,518
Investments (gain) loss, net	(17,104)	(12,075)	12,412
Net purchases of trading securities	(43,714)	(24,352)	(75,160)
Deferred income taxes	20,481	1,982	(6,188)
Pension and postretirement plan benefits	(17,714)	3,166	18,390
Net change in trading securities held by consolidated sponsored funds	(101,457)	(79,065)
Other	3,276	(2,523)	(4,133)
Changes in assets and liabilities:
Cash and cash equivalents - restricted	2,981	35,743	9,715
Customer and other receivables	(3,013)	92,565	(3,817)
Payable to investment companies for securities and payable to customers	(26,357)	(97,459)	(5,964)
Receivables from funds and separate accounts	1,517	7,218	4,711
Other assets	10,134	2,255	(25,111)
Accounts payable and payable to third party brokers	4,395	(22,948)	(17,510)
Other liabilities	(2,423)	(42,192)	(17,615)
Net cash provided by operating activities	53,832	123,647	233,950
Cash flows from investing activities:
Purchases of available for sale and equity method securities	(365,770)	(72,096)	(27,388)
Proceeds from sales of available for sale and equity method securities	160,158	156,965	36,657
Additions to property and equipment	(6,783)	(15,691)	(29,610)
Net cash of sponsored funds on consolidation		6,887
Other		(194)	(2,254)
Net cash (used in) provided by investing activities	(212,395)	75,871	(22,595)
Cash flows from financing activities:
Dividends paid	(154,042)	(152,830)	(143,959)
Repurchase of common stock	(35,768)	(49,753)	(80,335)
Net subscriptions, (redemptions, distributions and deconsolidations) of redeemable noncontrolling interests in sponsored funds	926	(3,473)
Other	174	3,145	4,813
Net cash used in financing activities	(188,710)	(202,911)	(219,481)
Net decrease in cash and cash equivalents	(347,273)	(3,393)	(8,126)
Cash and cash equivalents at beginning of period	555,102	558,495	566,621
Cash and cash equivalents at end of period	207,829	555,102	558,495
Cash paid for:
Income taxes, net	85,299	76,982	152,262
Interest	$ 10,299	$ 10,289	$ 10,297

Summary of Significant Accounti

Summary of Significant Accounting Policies	12 Months Ended
	Dec. 31, 2017
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	WADDELL & REED FINANCIAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017, 2016 and 2015 1. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Amounts in the accompanying financial statements and notes are rounded to the nearest thousand unless otherwise stated. Certain amounts in the prior years’ financial statements have been reclassified for consistent presentation. Also, refer to the “Pension Plan” section below regarding a change in accounting. The Company operates in one business segment as the Company’s management utilizes a consolidated approach to assess performance and allocate resources. Effective January 1, 2017, the Company adopted Accounting Standards Update (“ASU”) 2016-09, “ Improvements to Employee Share-Based Payment Accounting .” This ASU requires excess tax benefits and tax shortfalls to be recognized as income tax benefit or expense in the income statement on a prospective basis. Additionally, excess tax benefits or shortfalls recognized on share-based compensation are classified as an operating activity in the statement of cash flows. The Company has applied this provision prospectively, and thus, the prior period presented in the income statements and statement of cash flows has not been adjusted. This ASU allows entities to withhold shares issued during the settlement of a stock award or option, as means of meeting minimum tax withholding due by the employee, in an amount up to the employees’ maximum individual tax rate in the relevant jurisdiction without resulting in a liability classification of the award (versus an equity classification). The value of the withheld shares is then remitted by the Company in cash to the taxing authorities on the employees’ behalf. The Company’s historical policy to withhold shares equivalent to the minimum individual tax rate is consistent with the thresholds meeting the classification of an equity award and, therefore, a retrospective classification adjustment was not required. This ASU requires that all cash payments made to taxing authorities on the employees’ behalf for withheld shares be presented as financing activities on the statement of cash flows. As this requirement is consistent with the Company’s historical accounting policy, a retrospective adjustment to presentation of the statement of cash flows was not required. This ASU also allows for the option to account for forfeitures as they occur when determining the amount of share-based compensation expense to be recognized, rather than estimating expected forfeitures over the course of a vesting period. The Company elected to account for forfeitures as they occur. The net cumulative effect to the Company from the adoption of this ASU was an increase to additional paid-in capital of $3.5 million, a reduction to retained earnings of $2.2 million and an increase to the non-current deferred tax asset of $1.3 million as of January 1, 2017. Pension Plan During the fourth quarter of 2017, the Company retrospectively changed its method of accounting for net periodic pension cost. Historically, net actuarial gains or losses in excess of 10% of the greater of the market-related value of plan assets or the plan’s projected benefit obligation (the corridor) were amortized into operating expenses over the remaining working life of active plan participants. Unrecognized actuarial gains or losses were reflected as a component of stockholders’ equity in our consolidated balance sheets. Under the Company’s new method of accounting, the Company elected to immediately recognize all actuarial gains and losses in net periodic pension cost in the year in which the gains and losses occur noting that it is generally preferable to accelerate the recognition of gains and losses into income rather than to delay such recognition. This change is intended to improve the transparency of the Company’s underlying financial performance by recognizing the effects of current economic and interest rate trends on assumptions used to measure plan obligations and assets. These gains and losses are generally only measured annually as of December 31 and accordingly will be recorded in the fourth quarter, unless a remeasurement event occurs during an earlier interim period. Financial data for all periods presented has been adjusted to reflect the effect of this accounting change. The cumulative effect of the change on retained earnings as of January 1, 2015 was a decrease of $48.4 million, with the corresponding adjustment to accumulated other comprehensive loss. The effects of the change in accounting on our consolidated statements of income and consolidated balance sheets for the periods presented were as follows: Years ended December 31, 2017 2016 2015 Historical Adjusted As Reported Adjusted As Reported Adjusted (dollars in thousands, except per share amounts) Income Statement Information: Underwriting and distribution expenses $ 600,067 593,424 671,105 664,648 769,781 774,428 Compensation and related costs 196,209 181,376 209,850 200,822 200,752 208,841 Income before provision for income taxes 224,101 245,577 224,508 239,993 399,540 386,804 Provision for income taxes 92,592 101,368 76,188 81,884 154,004 149,226 Net income 131,509 144,209 148,321 158,109 245,536 237,578 Net income attributable to Waddell & Reed Financial, Inc. 128,579 141,279 146,906 156,695 245,536 237,578 Net income per share attributable to Waddell & Reed Financial, Inc. common shareholders, basic and diluted 1.54 1.69 1.78 1.90 2.94 2.85 Statement of Comprehensive Income Information Pension and postretirement benefit, net of income tax expense (benefit) $ 12,476 (224) 8,569 (1,220) (6,291) 1,667 Statement of Cash Flows Information: Net income $ 131,509 144,209 148,321 158,109 245,536 237,578 Adjustments to reconcile net income to net cash provided by operating activities: Deferred income taxes 11,705 20,481 (3,714) 1,982 (1,410) (6,188) Pension and postretirement plan benefits $ 3,762 (17,714) 18,651 3,166 5,654 18,390 As of December 31 2017 2016 Historical Adjusted As Reported Adjusted Balance Sheet Information Retained earnings $ 1,126,263 1,092,394 1,135,694 1,089,122 Accumulated other comprehensive income (loss) $ (33,345) 524 (53,329) (6,757) Consolidation In the normal course of our business, we sponsor and manage various types of investment products. These investment products include open-end mutual funds, a closed-end mutual fund, privately offered funds, exchange-traded managed funds, and a Luxembourg SICAV. When creating and launching a new investment product, we typically fund the initial cash investment, commonly referred to as “seeding,” to allow the investment product the ability to generate an investment performance track record so that it is able to attract third party investors. Our initial investment in a new product typically represents 100% of the ownership in that product. We generally redeem our investment in seeded products when the related product establishes a sufficient track record, when third party investments in the related product are sufficient to sustain the strategy, or when a decision is made to no longer pursue the strategy. The length of time we hold a majority interest in a product varies based on a number of factors, including market demand, market conditions and investment performance. Our exposure to risk in these investment products is generally limited to any equity investment we have in the product and any earned but uncollected management or other fund-related service fees. In accordance with financial accounting standards, we consolidate certain sponsored investment products in which we have a controlling interest or the investment product meets the criteria of a variable interest entity (“VIE”) and we are deemed to be the primary beneficiary. In order to make this determination, an analysis is performed to determine if the investment product is a VIE or a voting interest entity (“VOE”). Assessing if an entity is a VIE or VOE involves judgment and analysis on an entity by entity basis. Factors included in this assessment include the legal organization of the entity, the Company’s contractual involvement with the entity and any implications resulting from or associated with related parties’ involvement with the entity. A VIE is an entity which does not have adequate equity to finance its activities without subordinated financial support, the equity investors do not have the normal characteristics of equity investors for a potential controlling financial interest as a group, or the voting rights are not proportional to their obligations to absorb the expected losses or their rights to receive the expected residual returns of the entity. The Company is deemed to be the primary beneficiary if it absorbs a majority of the VIE’s expected losses, expected residual returns, or both. If the Company is the primary beneficiary of a VIE, we are required to consolidate the assets, liabilities, results of operations and cash flows of the VIE into our consolidated financial statements. If an entity does not meet the criteria and is not considered a VIE, it is treated as a VOE, which is subject to traditional consolidation concepts based on ownership rights. Sponsored investment products that are considered VOEs are consolidated if we have a controlling financial interest in the entity absent substantive investor rights to replace the investment manager of the entity (kick-out rights). Use of Estimates GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses in the consolidated financial statements and accompanying notes, and related disclosures of commitments and contingencies. Estimates are used for, but are not limited to, depreciation and amortization, income taxes, valuation of assets, pension and postretirement obligations, and contingencies. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Actual results could differ from our estimates. Cash and Cash Equivalents Cash and cash equivalents include cash on hand and short‑term investments. We consider all highly liquid investments with maturities upon acquisition of 90 days or less to be cash equivalents. Cash and cash equivalents – restricted represents cash held for the benefit of customers and non-customers segregated in compliance with federal and other regulations. Disclosures About Fair Value of Financial Instruments Fair value of cash and cash equivalents, receivables and payables approximates carrying value. Fair values for investment securities are based on quoted market prices, where available. Otherwise, fair values for investment securities are based on Level 2 or Level 3 inputs detailed in Note 3. Fair value of long‑term debt is disclosed in Note 7. Investment Securities and Investments in Sponsored Funds Our investments are comprised of debt and equity securities, investments in sponsored funds and sponsored privately offered funds. Sponsored funds, which include the Funds, IVH and the IGI Funds, are investments we have made to provide seed capital for new investment products. The Company has classified its investments in certain sponsored funds as either equity method investments (when the Company owns between 20% and 50% of the fund) or as available for sale investments (when the Company owns less than 20% of the fund). Investments held by our broker-dealer entities or certain investments that are anticipated to be purchased and sold on a more frequent basis are classified as trading. Unrealized gains and losses on securities classified as available for sale, net of related tax effects, are excluded from earnings until realized and are reported as a separate component of comprehensive income. For trading securities, unrealized gains and losses are included in earnings. Realized gains and losses are computed using the specific identification method for all investment securities, other than sponsored funds. For sponsored funds, realized gains and losses are computed using the average cost method. Substantially all of the Company’s equity method investees are investment companies that record their underlying investments at fair value. Therefore, under the equity method of accounting, our share of the investee's underlying net income or loss is predominantly representative of fair value adjustments in the investments held by the equity method investee. Our share of the investee's net income or loss is based on the most current information available and is recorded as a net gain or loss on investments within investment and other income (loss). Our available for sale investments are reviewed each quarter and adjusted for other than temporary declines in value. We consider factors affecting the issuer and the industry in which the issuer operates, general market trends including interest rates, and our ability and intent to hold an investment until it has recovered. Consideration is given to the length of time an investment’s market value has been below carrying value as well as prospects for recovery to carrying value. When a decline in the fair value of equity securities is determined to be other than temporary, the unrealized loss recorded net of tax in other comprehensive income is realized as a charge to net income, and a new cost basis is established. When a decline in the fair value of debt securities is determined to be other than temporary, the amount of the impairment recognized in earnings depends on whether the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current‑period credit loss. If so, the other than temporary impairment recognized in earnings is equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If not, the portion of the impairment related to the credit loss is recognized in earnings while the portion of the impairment related to other factors is recognized in other comprehensive income, net of tax. Property and Equipment Property and equipment are carried at cost. The costs of improvements that extend the life of a fixed asset are capitalized, while the costs of repairs and maintenance are expensed as incurred. Depreciation and amortization are calculated and recorded using the straight‑line method over the estimated useful life of the related asset (or lease term if shorter), generally three to 10 years for furniture and fixtures; one to 10 years for computer software; one to five years for data processing equipment; one to 30 years for buildings; two to 26 years for other equipment; and up to 15 years for leasehold improvements, determined by the lesser of the lease term or expected life. Software Developed for Internal Use Certain internal costs incurred in connection with developing or obtaining software for internal use are capitalized in accordance with ASC 350, “Intangibles – Goodwill and Other Topic.” Internal costs capitalized are included in property and equipment, net in the consolidated balance sheets, and were $10.5 million and $13.3 million as of December 31, 2017 and 2016, respectively. Amortization begins when the software project is complete and ready for its intended use and continues over the estimated useful life, generally one to 10 years. Goodwill and Identifiable Intangible Assets Goodwill represents the excess of cost over fair value of the identifiable net assets of acquired companies. Indefinite-lived intangible assets represent advisory and subadvisory management contracts for managed assets obtained in acquisitions. The Company considers these contracts to be indefinite-lived intangible assets as they are expected to be renewed without significant cost or modification of terms. Goodwill and indefinite-lived intangible assets are tested for impairment annually or more frequently if events or circumstances indicate that the carrying value may not be recoverable. Goodwill and intangible assets require significant management estimates and judgment, including the valuation determination in connection with the initial purchase price allocation and the ongoing evaluation for impairment. Additional information related to the indefinite-lived intangible assets is included in Note 6. Revenue Recognition Investment Management and Advisory Fees We recognize investment management fees as earned over the period in which services are rendered. We calculate investment management fees from the Funds daily based upon average daily net assets under management in accordance with investment management agreements between the Funds and the Company. The majority of investment and/or advisory fees earned from the IGI Funds and from institutional and separate accounts are calculated either monthly or quarterly based upon an average of net assets under management in accordance with such investment management agreements. The Company may waive certain fees for investment management services at its discretion, or in accordance with contractual expense limitations, and these waivers are reflected as a reduction to investment management fees on the consolidated statements of income. Our investment advisory business receives research products and services from broker-dealers through “soft dollar” arrangements. Consistent with the “soft dollar” safe harbor established by Section 28(e) of the Securities Exchange Act of 1934, as amended, the investment advisory business does not have any contractual obligation requiring it to pay for research products and services obtained through soft dollar arrangements with brokers. As a result, we present “soft dollar” arrangements on a net basis. The Company has contractual arrangements with third parties to provide subadvisory services. Investment advisory fees are recorded gross of any subadvisory payments and are included in investment management fees based on management’s determination that the Company is acting in the capacity of principal service provider with respect to its relationship with the Funds. Any corresponding fees paid to subadvisors are included in operating expenses. Distribution, Underwriter and Shareholder Service Fees Underwriting and distribution commission revenues resulting from the sale of investment products are recognized on the trade date. When a client purchases Class A or Class E shares (front-end load), the client pays an initial sales charge of up to 5.75% of the amount invested. The sales charge for Class A or Class E shares typically declines as the investment amount increases. In addition, investors may combine their purchases of all fund shares to qualify for a reduced sales charge. When a client invests in a fee-based asset allocation product, Class I or Y shares are purchased at net asset value, and we do not charge an initial sales charge. Under a Rule 12b-1 service plan, the Funds may charge a maximum fee of 0.25% of the average daily net assets under management for Class B, C, E and Ivy Funds Y shares for expenses paid to broker-dealers and other sales professionals in connection with providing ongoing services to the Funds’ shareholders and/or maintaining the Funds’ shareholder accounts, with the exception of the Funds’ Class R shares, for which the maximum fee is 0.50% and for the Class I, N and Advisors Funds Y shares, which do not charge a service fee. The Funds’ Class B and Class C shares may charge a maximum of 0.75% of the average daily net assets under management under a Rule 12b-1 distribution plan to broker-dealers and other sales professionals for their services in connection with distributing shares of that class. The Funds’ Class A shares may charge a maximum fee of 0.25% of the average daily net assets under management under a Rule 12b-1 service and distribution plan for expenses detailed previously. The Rule 12b-1 plans are subject to annual approval by the Funds’ board of trustees, including a majority of the disinterested members, by votes cast in person at a meeting called for the purpose of voting on such approval. All Funds may terminate the service and distribution plans at any time with approval of fund trustees or portfolio shareholders (a majority of either) without penalty. Fee‑based asset allocation revenues are calculated monthly based upon average daily net assets under management. For certain types of investment products, primarily variable annuities, distribution revenues are generally calculated based upon average daily net assets under management. Fees collected from financial advisors for various services are recorded in underwriting and distribution fees on a gross basis, as the Company is the primary obligor in these arrangements. Shareholder service fees are recognized monthly and are calculated based on the number of accounts or assets under management as applicable. Other administrative service fee revenues are recognized when contractual obligations are fulfilled or as services are provided. Advertising and Promotion We expense all advertising and promotion costs as the advertising or event takes place. Advertising expense was $9.7 million, $9.4 million and $15.7 million for the years ended December 31, 2017, 2016 and 2015, respectively, and is classified in both underwriting and distribution expense and general and administrative expense in the consolidated statements of income. Leases The Company leases office space under various leasing arrangements. Most lease agreements contain renewal options, rent escalation clauses and/or other inducements provided by the landlord. Rent expense is recorded on a straight-line basis, including escalations and inducements, over the term of the lease. Share‑Based Compensation We account for share‑based compensation expense using the fair value method. Under the fair value method, share‑based compensation expense reflects the fair value of share‑based awards measured at grant date, and is recognized over the service period. The Company also issues share‑based awards to our financial advisors, who are independent contractors, and to our Board of Directors. Changes in the Company’s share price result in variable compensation expense over the vesting period of awards granted to our financial advisors and Board of Directors. During the fourth quarter of 2016, the Company established a Cash Settled RSU Plan (the “RSU Plan”), which allows the Company to grant cash-settled restricted stock units (“RSUs”) Unvested RSUs have no purchase price and vest in 25% increments over four years, beginning on the first anniversary of the grant date. On the vesting date, RSU holders receive a lump sum cash payment equal to the fair market value of one share of the Company’s common stock, par value $0.01, for each RSU that has vested, subject to applicable tax withholdings. We treat RSUs as liability-classified awards and, therefore, account for them at fair value based on the closing price of our common stock on the reporting date, which results in variable compensation expense over the vesting period. Accounting for Income Taxes Income tax expense is based on pre-tax income, including adjustments made for the recognition or derecognition related to uncertain tax positions. The recognition or derecognition of income tax expense related to uncertain tax positions is determined under the guidance as prescribed by ASC 740, “ Income Taxes Topic. ” Deferred tax assets and liabilities are recognized for the future tax attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. A valuation allowance is recognized to reduce deferred tax assets if, based on available evidence, it is more likely than not that all or some portion of the asset will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates that will be in effect when they are expected to be realized or settled. The effect on the measurement of deferred tax assets and liabilities of a change in income tax law is recognized in earnings in the period that includes the enactment date. On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Reform Act”) was enacted, which significantly revised the U.S. corporate income tax system by, among other things, permanently reducing the federal statutory tax rate from 35% to 21% effective January 1, 2018. The Company recorded a one-time charge of $5.4 million in the fourth quarter of 2017 to measure our net deferred tax assets at the reduced federal statutory rate. The SEC staff issued Staff Accounting Bulletin No. 118 to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act. The Company has recognized the provisional tax impact related to the revaluation of deferred tax assets and liabilities and included these amounts in its consolidated financial statements for the year ended December 31, 2017. The ultimate impact may differ from these provisional amounts, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of the Tax Reform Act. The impact of the Tax Reform Act is expected to be complete when the Company’s 2017 U.S. corporate income tax return is filed in 2018.

New Accounting Guidance

New Accounting Guidance	12 Months Ended
	Dec. 31, 2017
New Accounting Guidance
New Accounting Guidance	2. New Accounting Guidance Accounting Guidance Adopted During Fiscal Year 2017 On January 1, 2017 the Company adopted ASU 2016-07, “ Investments-Equity Method and Joint Ventures .” This ASU eliminates the requirement that when an investment qualifies for the use of equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively as if the equity method had been in effect during all previous periods that the investment had been held. This ASU also requires that when an entity has an available for sale equity security that becomes qualified for the equity method, it must recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. The adoption of this ASU has an immaterial impact on our consolidated financial statements and related disclosures. On January 1, 2017, the Company adopted ASU 2016-09. See Note 1 – Summary of Significant Accounting Policies – Basis of Presentation for a description of this ASU and the financial statement impact of adopting this ASU. New Accounting Guidance Not Yet Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, “ Revenue from Contracts with Customers,” which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This standard also specifies the accounting for certain costs to obtain or fulfill a contract with a customer. This ASU will supersede much of the existing revenue recognition guidance in GAAP and is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period; early application is permitted for the first interim period within annual reporting periods beginning after December 15, 2016. ASU 2014-09 permits the use of either the retrospective or cumulative effect transition method. Upon adoption, the Company will utilize the cumulative effect approach. We have evaluated our population of contracts and did not identify any material changes in our current revenue recognition practices and concluded that the adoption of this ASU will have an immaterial impact on our consolidated financial statements. Upon adoption of the amendments in this ASU, the Company will add qualitative and quantitative information to the notes to its consolidated financial statements related to contracts with customers, including revenue and impairments recognized, disaggregation of revenue, information about contract balances and performance obligations; significant judgments and changes in judgments about determining the timing of satisfaction of performance obligations and determining the transaction price and amounts allocated to performance obligations; and assets recognized from the costs to obtain or fulfill a contract. In February 2016, FASB issued ASU 2016-02, “ Leases,” which increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This ASU will be presented using a modified retrospective approach, which includes a number of optional practical expedients that entities may elect to apply. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. Although we are currently evaluating the estimated impact the adoption of this ASU will have on our consolidated financial statements and related disclosures, we currently believe the most significant changes will be related to the recognition of new right-of-use assets and lease liabilities on our consolidated balance sheet for real estate operating leases. In August 2016, FASB issued ASU 2016-15, “ Classification of Certain Cash Receipts and Cash Payments.” This ASU eliminates the diversity in practice related to the classification of certain cash receipts and payments for debt prepayment or extinguishment costs, the maturing of a zero coupon bond, the settlement of contingent liabilities arising from a business combination, proceeds from insurance settlements, distributions from certain equity method investees and beneficial interests obtained in a financial asset securitization. This ASU designates the appropriate cash flow classification, including requirements to allocate certain components of these cash receipts and payments among operating, investing and financing activities. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. We have concluded that the adoption of this ASU will have an immaterial impact on our consolidated financial statements and related disclosures. In November 2016, FASB issued ASU 2016-18, “ Statement of Cash Flows: Restricted Cash.” This ASU is intended to reduce diversity in practice by adding or clarifying guidance on classification and presentation of changes in restricted cash on the statement of cash flows. The amendments in this ASU require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The amendments in this ASU should be applied retrospectively to all periods presented. Upon adoption of this ASU on January 1, 2018, we will include cash and cash equivalents – restricted as a component of cash and cash equivalents on our consolidated statements of cash flows for all periods presented, and will remove the change in cash and cash equivalents-restricted as a component of net cash provided by operating activities. In March 2017, FASB issued ASU 2017-07, “ Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” This ASU changes the income statement presentation of defined benefit plan expense by requiring separation between operating expense (service cost component) and non-operating expense (all other components, including interest cost, amortization of prior service cost, curtailments and settlements, etc.). The operating expense component is reported with similar compensation costs while the non-operating components are reported in a separate line item outside of operating items. In addition, only the service cost component is eligible for capitalization as part of an asset. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. We have concluded that the adoption of this ASU will have no effect on our net income because it only impacts the classification of certain information on the consolidated statement of income. The service cost component of net periodic benefit cost was recognized in underwriting and distribution, and compensation and related costs through September 30, 2017. An amendment to freeze our noncontributory retirement plan that covers substantially all employees and certain vested employees of our former parent company (the “Pension Plan”) was approved effective September 30, 2017; therefore, after September 30, 2017, we no longer incurred service cost. The other components of net periodic cost will be reclassified to investment and other income (loss) on a retrospective basis. In May 2017, FASB issued ASU 2017-09, “ Compensation-Stock Compensation: Scope of Modification Accounting.” This ASU provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718, Compensation – Stock Compensation Topic. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. We have concluded that the adoption of this ASU will have an immaterial impact on our consolidated financial statements and related disclosures.

Investment Securities

Investment Securities	12 Months Ended
	Dec. 31, 2017
Investment Securities
Investment Securities	3. Investment Securities Investment securities at December 31, 2017 and 2016 are as follows: December 31, December 31, 2017 2016 (in thousands) Available for sale securities: Certificates of deposit $ 12,999 — Commercial paper 34,978 — Corporate bonds 197,442 — U.S. Treasury bills 19,779 — Sponsored funds 124,016 122,806 Sponsored privately offered funds — 570 Total available for sale securities 389,214 123,376 Trading securities: Certificates of deposit 1,999 — Corporate bonds 55,414 — U.S. Treasury bills 4,929 — Mortgage-backed securities 10 13 Common stock 116 101 Consolidated sponsored funds 139,086 145,710 Sponsored funds 13,841 29,541 Sponsored privately offered funds 695 — Total trading securities 216,090 175,365 Equity method securities: Sponsored funds 95,188 26,775 Sponsored privately offered funds — 3,234 Total equity method securities 95,188 30,009 Total securities $ 700,492 328,750 Certificates of deposit, commercial paper, corporate bonds and U.S. Treasury bills accounted for as available for sale and held as of December 31, 2017 mature as follows: Amortized cost Fair value (in thousands) Within one year $ 98,323 98,390 After one year but within five years 167,936 166,808 $ 266,259 265,198 Certificates of deposit, U.S. Treasury bills, corporate bonds and mortgage-backed securities accounted for as trading and held as of December 31, 2017 mature as follows: Fair value (in thousands) Within one year $ 12,064 After one year but within five years 45,288 After 10 years 5,000 $ 62,352 The following is a summary of the gross unrealized gains (losses) related to securities classified as available for sale at December 31, 2017: Amortized Unrealized Unrealized cost gains losses Fair value (in thousands) Available for sale securities: Certificates of deposit $ 13,000 1 (2) 12,999 Commercial paper 34,836 142 — 34,978 Corporate bonds 198,404 33 (995) 197,442 U.S. Treasury bills 20,019 — (240) 19,779 Sponsored funds 122,722 2,576 (1,282) 124,016 $ 388,981 2,752 (2,519) 389,214 The following is a summary of the gross unrealized gains (losses) related to securities classified as available for sale at December 31, 2016: Amortized Unrealized Unrealized cost gains losses Fair value (in thousands) Available for sale securities: Sponsored funds $ 129,427 828 (7,449) Sponsored privately offered funds 265 305 — 570 $ 129,692 1,133 (7,449) 123,376 Investment securities with fair values of $237.2 million, $234.4 million and $102.2 million were sold during 2017, 2016 and 2015, respectively. During 2017, net realized gains of $0.9 million, $6.9 million and $1.5 million were recognized from the sale of $86.9 million in available for sale securities, the sale of $73.2 million in equity method securities, and the sale of $57.1 million in consolidated traded securities, respectively, and net realized losses of $0.5 million were recognized from the sale of $19.8 million in trading securities. During 2016, net realized gains of $3.6 million were recognized from the sale of $98.2 million in available for sale securities and net realized losses of $2.3 million were recognized from the sale of $58.7 million in equity method securities. During 2015, net realized gains of $3.0 million and $0.6 million were recognized from the sale of $31.6 million in available for sale securities and the sale of $65.9 million in trading securities, respectively, and net realized losses of $0.5 million were recognized from the sale of $5.3 million in equity method securities. A summary of available for sale sponsored funds with fair values below carrying values at December 31, 2017 is as follows: Less than 12 months 12 months or longer Total Unrealized Unrealized Unrealized December 31, 2017 Fair value losses Fair value losses Fair value losses (in thousands) Certificates of deposit $ 2,998 (2) — — 2,998 (2) Corporate bonds 192,409 (995) — — 192,409 (995) U.S. Treasury bills 19,779 (240) — — 19,779 (240) Sponsored funds 49,641 (600) 23,707 (682) 73,348 (1,282) $ 264,827 (1,837) 23,707 (682) 288,534 (2,519) During 2017, we recorded a pre-tax charge of $1.3 million to reflect the “other than temporary” decline in value of certain of the Company’s investments in sponsored funds as the fair value of these investments had been below cost for an extended period of time. This charge is recorded in investment and other income in the consolidated statement of operations for 2017. Sponsored Privately Offered Funds The Company holds voting interests in certain sponsored privately offered funds that are structured as investment companies in the legal form of LLCs. The Company held investments in these funds totaling $0.7 million and $3.8 million as of December 31, 2017 and December 31, 2016, respectively, which is our maximum loss exposure. Consolidated Sponsored and Sponsored Privately Offered Funds The following table details the balances related to consolidated sponsored and sponsored privately offered funds at December 31, 2017 and 2016, as well as the Company’s net interest in these funds: December 31, December 31, 2017 2016 (in thousands) Cash $ 8,472 6,885 Investments 139,086 145,710 Other assets 1,588 763 Other liabilities (1,040) (390) Redeemable noncontrolling interests (14,509) (10,653) Net interest in consolidated sponsored funds $ 133,597 142,315 During the year ended December 31, 2017, we consolidated certain of the sponsored privately offered funds, Ivy Funds, Ivy NextShares and Ivy ProShares in which we provided initial seed capital at the time of the funds’ formation. When we no longer have a controlling financial interest in a sponsored fund, it is deconsolidated from our consolidated financial statements. During 2017, we closed and redeemed our investment in three IGI Funds. Additionally, we deconsolidated the Ivy Proshares funds and two Ivy funds, as we no longer have a controlling interest in those funds. Accordingly, we deconsolidated $2.6 million from cash and cash equivalents, $53.6 million from investments and $56.2 million from redeemable controlling interests. Four IGI funds, one Ivy Fund, one sponsored privately offered fund and the Ivy Nextshares funds remain consolidated as of December 31, 2017. There was no impact to the consolidated statement of income as a result of the closures and deconsolidations, as the funds were carried at fair value. Fair Value Accounting standards establish a framework for measuring fair value and a three‑level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of the asset. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset. An individual investment’s fair value measurement is assigned a level based upon the observability of the inputs that are significant to the overall valuation. The three‑level hierarchy of inputs is summarized as follows: · Level 1 – Investments are valued using quoted prices in active markets for identical securities. · Level 2 – Investments are valued using other significant observable inputs, including quoted prices in active markets for similar securities. · Level 3 – Investments are valued using significant unobservable inputs, including the Company’s own assumptions in determining the fair value of investments. Assets classified as Level 2 can have a variety of observable inputs. These observable inputs are collected and utilized, primarily by an independent pricing service, in different evaluated pricing approaches depending upon the specific asset to determine a value. The carrying amounts of certificates of deposit and commercial paper are measured at amortized cost, which approximates fair value due to the short-time between purchase and expected maturity of the investments. Depending on the nature of the inputs, these investments are generally classified as Level 1 or 2 within the fair value hierarchy. U.S. Treasury bills are valued upon quoted market prices for similar assets in active markets, quoted prices for identical or similar assets that are not active and inputs other than quoted prices that are observable or corroborated by observable market data. The fair value of municipal bonds is measured based on pricing models that take into account, among other factors, information received from market makers and broker-dealers, current trades, bid‑wants lists, offerings, market movements, the callability of the bond, state of issuance and benchmark yield curves. The fair value of corporate bonds is measured using various techniques, which consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads and fundamental data relating to the issuer. The fair value of equity derivatives is measured based on active market broker quotes, evaluated broker quotes and evaluated prices from vendors. The following tables summarize our investment securities as of December 31, 2017 and 2016 that are recognized in our consolidated balance sheets using fair value measurements based on the differing levels of inputs. There were no transfers between levels for the years ended December 31, 2017 or 2016. December 31, 2017 Level 1 Level 2 Level 3 Other Assets Held at Net Asset Value Total (in thousands) Cash equivalents: (1) Money market funds $ 145,785 — — — 145,785 Commercial paper — 11,064 — — 11,064 Total cash equivalents $ 145,785 11,064 — — 156,849 Available for sale securities: Certificates of deposit $ — 12,999 — — 12,999 Commercial paper — 34,978 — — 34,978 Corporate bonds — 197,442 — — 197,442 U.S. Treasury bills — 19,779 — — 19,779 Sponsored funds 124,016 — — — 124,016 Trading securities: Certificates of deposit — 1,999 — — 1,999 Corporate bonds — 55,414 — 55,414 U.S. Treasury bills — 4,929 — — 4,929 Mortgage-backed securities — 10 — — 10 Common stock 116 — — — 116 Consolidated sponsored funds 77,128 61,958 — — 139,086 Sponsored funds 13,841 — — — 13,841 Sponsored privately offered funds measured at net asset value (2) — — — 695 695 Equity method securities: (3) Sponsored funds 95,188 — — — 95,188 Total $ 310,289 389,508 — 695 700,492 December 31, 2016 Level 1 Level 2 Level 3 Other Assets Held at Net Asset Value Total (in thousands) Cash equivalents: (1) Total cash equivalents $ 71,758 — — — 71,758 Available for sale securities: Sponsored funds $ 122,806 — — — 122,806 Sponsored privately offered funds measured at net asset value (2) — — — 570 570 Trading securities: Mortgage-backed securities — 13 — — 13 Common stock 101 — — — 101 Consolidated sponsored funds 100,847 44,863 — — 145,710 Sponsored funds 29,541 — — — 29,541 Equity method securities: (3) Sponsored funds 26,775 — — — 26,775 Sponsored privately offered funds measured at net asset value (2) — — — 3,234 3,234 Total $ 280,070 44,876 — 3,804 328,750 (1) Cash equivalents include highly liquid investments with original maturities of 90 days or less. Cash investments in actively traded money market funds are measured at NAV and are classified as Level 1. Cash investments in commercial paper are measured at cost, which approximates fair value because of the short time between purchase of the instrument and its expected realization, and are classified as Level 2. (2) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets. (3) Substantially all of the Company’s equity method investments are investment companies that record their underlying investments at fair value.

Derivative Financial Instrument

Derivative Financial Instruments	12 Months Ended
	Dec. 31, 2017
Derivative Financial Instruments
Derivative Financial Instruments	4. Derivative Financial Instruments In 2016, the Company implemented an economic hedge program that uses total return swap contracts to hedge market risk with its investments in certain sponsored funds. Certain of the consolidated sponsored funds may utilize derivative financial instruments within their portfolios in pursuit of their stated investment objectives. We do not hedge for speculative purposes. Excluding derivative financial instruments held in certain consolidated sponsored funds, the Company was party to six total return swap contracts with a combined notional value of $213.9 million and three total return swap contracts with a combined notional value of $160.2 million as of December 31, 2017 and 2016, respectively. These derivative instruments are not designated as hedges for accounting purposes. Changes in fair value of the total return swap contracts are recognized in investment and other income (loss), net on the Company’s consolidated statement of income. The Company posted $9.7 million and $7.1 million in cash collateral with the counterparties of the total return swap contracts as of December 31, 2017 and 2016, respectively. The cash collateral is included in customers and other receivables on the Company’s consolidated balance sheet. The Company does not record its fair value in derivative transactions against the posted collateral. The following table presents the fair value of the derivative financial instruments, excluding derivative financial instruments held in certain consolidated sponsored funds as of December 31, 2017 and 2016 calculated based on Level 2 inputs: December 31, December 31, 2017 2016 Balance sheet location Fair value Fair value (in thousands) Total return swap contracts Other current liabilities $ 1,093 475 The following is a summary of net losses recognized in income for the years ended December 31, 2017 and 2016: Year ended Income statement December 31, location 2017 2016 (in thousands) Total return swap contracts Investment and other (loss) $ (36,368) (31,974)

Property and Equipment

Property and Equipment	12 Months Ended
	Dec. 31, 2017
Property and Equipment
Property and Equipment	5. Property and Equipment A summary of property and equipment at December 31, 2017 and 2016 is as follows: Estimated 2017 2016 useful lives (in thousands) Leasehold improvements $ 22,106 22,426 1 - 15 years Furniture and fixtures 30,529 30,501 3 - 10 years Equipment 20,802 20,616 2 - 26 years Computer software 99,644 100,941 1 - 10 years Data processing equipment 18,678 19,458 1 - 5 years Buildings 11,759 11,699 1 - 30 years Land 2,843 2,843 Property and equipment, at cost 206,361 208,484 Accumulated depreciation (118,694) (106,035) Property and equipment, net $ 87,667 102,449 Depreciation expense was $21.0 million, $18.4 million and $16.0 million during the years ended December 31, 2017, 2016 and 2015, respectively. At December 31, 2017, we had property and equipment under capital leases with a cost of $1.9 million and accumulated depreciation of $1.0 million. At December 31, 2016, we had property and equipment under capital leases with a cost of $1.8 million and accumulated depreciation of $0.8 million.

Goodwill and Identifiable Intan

Goodwill and Identifiable Intangible Assets	12 Months Ended
	Dec. 31, 2017
Goodwill and Identifiable Intangible Assets
Goodwill and Identifiable Intangible Assets	6. Goodwill and Identifiable Intangible Assets Goodwill and identifiable intangible assets (all considered indefinite-lived) at December 31, 2017 and 2016 are as follows: December 31, December 31, 2017 2016 (in thousands) Goodwill $ 106,970 106,970 Mutual fund management advisory contracts 38,699 38,699 Mutual fund management subadvisory contract 1,200 2,700 Other 200 200 Total identifiable intangible assets 40,099 41,599 Total $ 147,069 148,569

Indebtedness

Indebtedness	12 Months Ended
	Dec. 31, 2017
Indebtedness
Indebtedness	7. Indebtedness On August 31, 2010, the Company entered into a note purchase agreement to complete a $190.0 million private placement of the Senior Notes. Interest is payable semi‑annually in January and July of each year. The agreement requires the Company to maintain a consolidated leverage ratio not to exceed 3.0 to 1.0 for four consecutive quarters and a consolidated interest coverage ratio of not less than 4.0 to 1.0 for four consecutive quarters. The Company was in compliance with these covenants for all periods presented. As of December 31, 2017, the Company’s consolidated leverage ratio was 0.6 to 1.0, and the consolidated interest coverage ratio was 29.2 to 1.0. Debt is reported at its carrying amount in the consolidated balance sheet. The fair value of the Company’s Series A Senior Notes maturing January 13, 2018 was $95.1 million at December 31, 2017 compared to the carrying value net of debt issuance costs of $95.0 million, which is listed under short-term notes payable in the consolidated balance sheet and was repaid upon maturity. The fair value of the Company’s Series B Senior Notes maturing January 13, 2021 was $101.7 million at December 31, 2017 compared to the carrying value net of debt issuance costs of $94.8 million, which is listed under long-term debt in the consolidated balance sheet. Fair value is calculated based on Level 2 inputs. On October 20, 2017, we entered into a three-year unsecured revolving credit facility (the “New Credit Facility”) with various lenders, which initially provides for borrowings of up to $100.0 million and may be expanded to $200.0 million. The New Credit Facility replaced the prior credit facility, which was set to terminate in June 2018. At December 31, 2017 and 2016, there were no borrowings outstanding under the New Credit Facility or the prior credit facility. Borrowings under the Credit Facility bear interest at various rates including adjusted LIBOR or an alternative base rate plus, in each case, an incremental margin based on the Company’s credit rating. The Credit Facility also imposes a facility fee on the aggregate amount of commitments under the revolving facility (whether or not utilized). The facility fee is also based on the Company’s credit rating level. The covenants in the New Credit Facility are consistent with the covenants in the prior credit facility, including the required consolidated leverage ratio and the consolidated interest coverage ratio, which match those outlined above for the Senior Notes.

Income Taxes

Income Taxes	12 Months Ended
	Dec. 31, 2017
Income Taxes
Income Taxes	8. Income Taxes The provision for income taxes from continuing operations for the years ended December 31, 2017, 2016 and 2015 consists of the following: 2017 2016 2015 (in thousands) Current taxes: Federal $ 73,167 72,711 142,576 State 7,720 7,174 12,800 Foreign — 17 38 80,887 79,902 155,414 Deferred taxes 20,481 1,982 (6,188) Provision for income taxes $ 101,368 81,884 149,226 The following table reconciles the statutory federal income tax rate with our effective income tax rate from continuing operations for the years ended December 31, 2017, 2016 and 2015: 2017 2016 2015 Statutory federal income tax rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal tax benefits 2.5 2.2 2.0 Share-based compensation 3.4 — — Charges related to decrease in U.S. tax rate 2.2 — — State tax incentives (0.2) (0.3) (0.2) Valuation allowance on losses capital in nature (1.0) (3.2) 1.0 Other items (0.6) 0.4 0.8 Effective income tax rate 41.3 % 34.1 % 38.6 % The tax effect of temporary differences that give rise to significant portions of deferred tax liabilities and deferred tax assets at December 31, 2017 and 2016 are as follows: 2017 2016 (in thousands) Deferred tax liabilities: Deferred sales commissions $ (331) (484) Property and equipment (7,301) (13,906) Identifiable intangible assets (7,419) (11,118) Unrealized gains on investments securities and partnerships (3,554) — Prepaid expenses (1,679) (1,968) Additional postretirement liability (150) (356) Total gross deferred liabilities (20,434) (27,832) Deferred tax assets: Benefit plans 3,381 15,425 Accrued compensation 5,558 10,678 Other accrued expenses 4,094 7,058 Unrealized losses on investment securities and partnerships — 1,834 Capital loss carryforwards 57 3,920 Share-based compensation 15,047 20,516 Unused state tax credits 2,788 2,115 State net operating loss carryforwards 7,235 5,716 Other 2,817 3,428 Total gross deferred assets 40,977 70,690 Valuation allowance (7,235) (11,428) Net deferred tax asset $ 13,308 31,430 The Company has a deferred tax asset for a capital loss carryforward that is available to offset current and future capital gains. As of December 31, 2017 and 2016, the deferred tax asset, net of federal tax effect, related to this capital loss carryforward is $0.1 million and $3.9 million, respectively. During 2017, realized capital gains on investment securities and capital gain dividend distributions exceeded the federal capital loss carryforward and therefore, the related deferred tax asset was eliminated. As of December 31, 2017, $0.1 million deferred tax assets remains related to a state capital loss carryforward. Due to the character of the losses and the limited carryforward period permitted by law upon realization, the Company had a valuation allowance recorded against this deferred tax asset as of December 31, 2016 in the amount of $5.8 million. Management believes it is more likely than not that the Company will realize the full benefit of the state capital loss carryforward prior to its expiration in 2018. As a result, no valuation allowance remains on the balance sheet as of December 31, 2017. Certain subsidiaries of the Company have net operating loss carryforwards in certain states in which these companies file on a separate company basis. The deferred tax asset, net of federal tax effect, relating to these carryforwards as of December 31, 2017 and 2016 is approximately $7.2 million and $5.7 million, respectively. The carryforwards, if not utilized, will expire between 2018 and 2037. Management believes it is not more likely than not that these subsidiaries will generate sufficient future taxable income in these states to realize the benefit of the net operating loss carryforwards and, accordingly, a valuation allowance in the amount of $7.2 million and $5.6 million has been recorded at December 31, 2017 and 2016, respectively. The Company has state tax credit carryforwards of $2.8 million and $2.1 million as of December 31, 2017 and 2016, respectively. Of these state tax credit carryforwards, $2.6 million will expire between 2024 and 2033 if not utilized and $0.2 million will expire in 2026 if not utilized. The Company anticipates these credits will be fully utilized prior to their expiration date. As of January 1, 2017, the Company had unrecognized tax benefits, including penalties and interest, of $11.5 million ($8.4 million net of federal benefit) that, if recognized, would impact the Company’s effective tax rate. As of December 31, 2017, the Company had unrecognized tax benefits, including penalties and interest, of $10.9 million ($8.9 million net of federal benefit) that, if recognized, would impact the Company’s effective tax rate. The unrecognized tax benefits that are not expected to be settled within the next 12 months are included in other liabilities in the accompanying consolidated balance sheets; unrecognized tax benefits that are expected to be settled within the next 12 months are included in income taxes payable; and unrecognized tax benefits that reduce a net operating loss, similar tax loss, or tax credit carryforward are presented as a reduction to noncurrent deferred income taxes. The Company’s accounting policy with respect to interest and penalties related to income tax uncertainties is to classify these amounts as income taxes. As of January 1, 2017, the total amount of accrued interest and penalties related to uncertain tax positions recognized in the consolidated balance sheet was $3.8 million ($3.1 million net of federal benefit). The total amount of penalties and interest, net of federal benefit, related to tax uncertainties recognized in the statement of income for the period ended December 31, 2017 was $0.5 million. As of December 31, 2017, the Company had total accrued penalties and interest related to uncertain tax positions of $4.0 million ($3.5 million net of federal benefit) in the consolidated balance sheet, which is included in the total unrecognized tax benefits described above. The following table summarizes the Company's reconciliation of unrecognized tax benefits, excluding penalties and interest, for the years ended December 31, 2017, 2016 and 2015: 2017 2016 2015 (in thousands) Balance at January 1 $ 7,734 8,448 8,105 Increases during the year: Gross increases - tax positions in prior period 244 465 1,401 Gross increases - current-period tax positions 97 494 700 Decreases during the year: Gross decreases - tax positions in prior period (56) (167) (308) Decreases due to settlements with taxing authorities (178) (21) (486) Decreases due to lapse of statute of limitations (998) (1,485) (964) Balance at December 31 $ 6,843 7,734 8,448 In the ordinary course of business, many transactions occur for which the ultimate tax outcome is uncertain. In addition, respective tax authorities periodically audit our income tax returns. These audits examine our significant tax filing positions, including the timing and amounts of deductions and the allocation of income among tax jurisdictions. During 2017, the Company closed an Internal Revenue Service audit of the 2014 tax year. This audit was settled with no significant adjustments. During 2016, the Company settled two open tax years that were undergoing audit by a state jurisdiction in which the Company operates. During 2015, the Company settled three open tax years that were undergoing audit by state jurisdictions in which the Company operates. The Company is currently under one audit in one state jurisdiction in which the Company operates. The 2014, 2015, 2016 and 2017 federal income tax returns are open tax years that remain subject to potential future audit. State income tax returns for all years after 2013 and, in certain states, income tax returns for 2013, are subject to potential future audit by tax authorities in the Company’s major state tax jurisdictions.

Pension Plan and Postretirement

Pension Plan and Postretirement Benefits Other Than Pension	12 Months Ended
	Dec. 31, 2017
Pension Plan and Postretirement Benefits Other Than Pension
Pension Plan and Postretirement Benefits Other Than Pension	9. Pension Plan and Postretirement Benefits Other Than Pension Benefits payable under the Pension Plan are based on employees’ years of service and compensation during the final 10 years of employment. On July 26, 2017, the Compensation Committee of the Company’s Board of Directors approved an amendment to freeze the Pension Plan effective September 30, 2017. After September 30, 2017, participants in the Pension Plan will not accrue additional benefits for future service or compensation. Participants will retain benefits accumulated as of September 30, 2017 in accordance with the terms of the Pension Plan. In accordance with applicable accounting standards, the Pension Plan’s assets and liabilities were remeasured as of July 31, 2017, the date participants were notified of the freeze. This resulted in a reduction of the accrued pension liability of approximately $30.0 million and a curtailment gain of $31.6 million. During 2016, the Company offered eligible terminated, vested pension plan participants an option to elect a one-time voluntary lump sum window distribution equal to the present value of the participant’s pension benefit, in settlement of all future pension benefits to which they would otherwise have been entitled. This offer was made in an effort to reduce pension obligations and ongoing annual pension expense. Payments were distributed to participants who accepted the lump sum offer in 2016 from the assets of the Pension Plan. The Company recognized a non-cash settlement charge of $20.7 million in 2016 related to this event. We also sponsor an unfunded defined benefit postretirement medical plan that previously covered substantially all employees, as well as independent financial advisors associated with W&R. The medical plan is contributory with participant contributions adjusted annually. The medical plan does not provide for benefits after age 65 with the exception of a small group of employees that were grandfathered when such plan was established. During 2016, the Company amended this plan to discontinue the availability of coverage for any individuals who retire after December 31, 2016. The plan amendment resulted in an $8.5 million curtailment gain, recorded in 2016 as part of net other postretirement benefit costs. A reconciliation of the funded status of these plans and the assumptions related to the obligations at December 31, 2017, 2016 and 2015 are as follows: Other Pension Benefits Postretirement Benefits 2017 2016 2015 2017 2016 2015 (in thousands) Change in projected benefit obligation: Net benefit obligation at beginning of year $ 180,921 210,783 208,085 2,446 8,421 9,902 Service cost 8,367 12,199 12,080 — 555 910 Interest cost 6,248 9,432 8,420 58 297 397 Benefits paid (8,511) (52,288) (10,184) (954) (674) (505) Actuarial (gain) loss 28,841 (19,886) (7,618) 139 1,790 (2,632) Retiree contributions — — — 506 532 349 Curtailment gain (31,621) — — — (8,475) — Settlement loss — 20,681 — — — — Net benefit obligation at end of year $ 184,245 180,921 210,783 2,195 2,446 8,421 The accumulated benefit obligation for the Pension Plan was $150.1 million at December 31, 2016. Other Pension Benefits Postretirement Benefits 2017 2016 2015 2017 2016 2015 (in thousands) Change in plan assets: Fair value of plan assets at beginning of year $ 144,529 173,885 175,548 — — — Actual return on plan assets 24,863 2,932 (11,479) — — — Employer contributions 10,000 20,000 20,000 448 142 156 Retiree contributions — — — 506 532 349 Benefits paid (8,511) (52,288) (10,184) (954) (674) (505) Fair value of plan assets at end of year $ 170,881 144,529 173,885 — — — Funded status at end of year $ (13,364) (36,392) (36,898) (2,195) (2,446) (8,421) Other Pension Benefits Postretirement Benefits 2017 2016 2015 2017 2016 2015 (in thousands, except percentage data) Amounts recognized in the statement of financial position: Current liabilities $ — — — (422) (458) (316) Noncurrent liabilities (13,364) (36,392) (36,898) (1,773) (1,988) (8,105) Net amount recognized at end of year $ (13,364) (36,392) (36,898) (2,195) (2,446) (8,421) Weighted average assumptions used to determine benefit obligation at December 31: Discount rate 3.76 % 4.39 % 4.60 % 3.28 % 3.46 % 4.44 % Rate of compensation increase Not applicable 5.12 % 5.12 % Not applicable The discount rate assumption used to determine the pension and other postretirement benefits obligations was based on the Aon Hewitt AA Only Above Median Yield Curve. This discount rate was determined separately for each plan by plotting the expected benefit payments from each plan against a yield curve of high quality, zero coupon bonds and calculating the single rate that would produce the same present value of liabilities as the yield curve. Our Pension Plan asset allocation at December 31, 2017 and 2016 is as follows: Percentage of Percentage of Plan Assets at Plan Assets at Plan assets by category December 31, 2017 December 31, 2016 Cash 40 % 18 % Equity securities: Domestic 29 % 49 % International 18 % 17 % Fixed income securities 8 % 10 % Gold bullion 5 % 6 % Total 100 % 100 % Historically, the primary investment objective has been to maximize growth of the Pension Plan assets to meet the projected obligations to the beneficiaries over a long period of time and to do so in a manner that is consistent with the Company’s earnings strength and risk tolerance. Asset allocation is the most important decision in managing the assets and is reviewed regularly. The asset allocation policy considers the Company’s financial strength and long‑term asset class risk/return expectations since the obligations are long‑term in nature. Prior to the Pension Plan freeze in 2017, assets were invested in our Asset Strategy investment style, managed by our in‑house investment professionals. Subsequent to the freeze, the Company adjusted the Pension Plan’s asset allocation to decrease the exposure to equity securities. In 2018, the Company started the implementation of a new pension de-risking strategy designed to more closely match assets to the pension obligations by shifting exposure from return-seeking assets to liability-hedging assets as the funded status of the Pension Plan increases. We determine the fair value of our Pension Plan assets using broad levels of inputs as defined by related accounting standards and categorized as Level 1, Level 2 or Level 3, as described in Note 3. The following tables summarize our Pension Plan assets as of December 31, 2017 and 2016. As of December 31, 2017 a portion of the international equity securities were valued utilizing Level 2 inputs, in accordance with company policy based on market movement greater than or equal to 0.50% on the final trading day of the year. 2017 Level 1 Level 2 Level 3 Total (in thousands) Equity securities: Domestic $ 49,540 — — 49,540 International 4,889 26,542 — 31,431 Fixed income securities: U.S. Treasuries — 6,455 — 6,455 Corporate bond — 587 — 587 Foreign bonds — 6,591 — 6,591 Gold bullion 8,369 — — 8,369 Total investment securities 62,798 40,175 — 102,973 Cash and cash equivalents 67,908 Total $ 170,881 2016 Level 1 Level 2 Level 3 Total (in thousands) Equity securities: Domestic $ 71,159 — — 71,159 International 24,622 — — 24,622 Equity derivatives — 12 — 12 Fixed income securities: Mortgage-backed securities — 10 — 10 U.S. Treasuries — 4,801 — 4,801 Corporate bond — 526 — 526 Foreign Bonds — 8,897 — 8,897 Gold bullion 8,420 — — 8,420 Total investment securities 104,201 14,246 — 118,447 Cash and cash equivalents 26,082 Total $ 144,529 The 6.00% expected long‑term rate of return utilized after the plan freeze in 2017 reflected management’s expectations of long‑term average rates of return on funds invested to provide for benefits included in the projected benefit obligations. The expected return is based on the outlook for inflation, fixed income returns and equity returns, while also considering historical returns, asset allocation and investment strategy. In 2018, we will adjust the expected long-term rate of return to 5.00% to reflect a further decrease to the Plan’s equity securities’ holdings. The components of net periodic pension and other postretirement costs consisted of the following for the years ended December 31, 2017, 2016 and 2015: Other Pension Benefits Postretirement Benefits 2017 2016 2015 2017 2016 2015 (in thousands) Components of net periodic benefit cost: Service cost $ 8,367 12,199 12,080 — 555 910 Interest cost 6,248 9,432 8,420 58 297 397 Expected return on plan assets (10,113) (13,927) (14,510) — — — Actuarial gain (loss) 14,091 (8,891) 18,371 — — — Actuarial gain amortization — — — (180) (153) — Prior service cost amortization — — — (4) 4 19 Curtailment gain (31,621) — — — (8,475) — Settlement loss — 20,681 — — — — Total (1) $ (13,028) 19,494 24,361 (126) (7,772) 1,326 (1) For the year ended December 31, 2017, $9.7 million of net periodic pension and other postretirement benefit credits were included in compensation and related costs and $3.5 million included in underwriting and distribution expense. The estimated net actuarial gain and prior service credit for the postretirement medical plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost in 2018 are $120 thousand and $2 thousand, respectively. The weighted average assumptions used to determine net periodic benefit cost for the years ended December 31, 2017, 2016 and 2015 are as follows: Other Pension Benefits Postretirement Benefits 2017 2016 2015 2017 2016 2015 Discount rate 4.39% / 3.96 1 % 4.60 % 4.13 % 3.46 % 4.44 % 4.07 % Expected return on plan assets 7.00% / 6.00 1 % 7.50 % 7.75 % Not applicable Rate of compensation increase 5.12 % 5.12 % 5.12 % Not applicable (1) Due to the plan freeze and associated remeasurement as of July 31, 2017, the discount rate changed from 4.39% to 3.96% and the expected return on assets changed from 7.00% to 6.00%. We expect the following benefit payments to be paid: Other Pension Postretirement Benefits Benefits (in thousands) 2018 $ 10,895 421 2019 8,667 421 2020 8,642 315 2021 9,659 241 2022 9,406 199 2023 through 2027 50,906 484 $ 98,175 2,081 Our policy with respect to funding the Pension Plan is to fund at least the minimum required by the Employee Retirement Income Security Act of 1974, as amended, and not more than the maximum amount deductible for tax purposes. All contributions made to the Pension Plan for 2017, 2016 and 2015 were voluntary. All Company contributions to other postretirement medical benefits are voluntary, as the postretirement medical plan is not funded and is not subject to any minimum regulatory funding requirements. The contributions for each year represent claims paid for medical expenses, and we anticipate making the 2018 expected contribution with cash generated from operations. Contributions by participants to the postretirement plan were $506 thousand, $532 thousand and $349 thousand for the years ended December 31, 2017, 2016 and 2015, respectively. For measurement purposes, the initial health care cost trend rate was 7.02% (prior to age 65) and 8.47% (subsequent to age 65) for 2017, 6.82% for 2016 and 7.55% for 2015. The health care cost trend rate reflects anticipated increases in health care costs. The initial growth rates for 2017 are assumed to gradually decline over the next 8 years to a rate of 4.5%. The effect of a 1% annual increase in assumed cost trend rates would increase the December 31, 2017 accumulated postretirement benefit obligation by approximately $102 thousand, and the aggregate of the service and interest cost components of net periodic postretirement benefit cost by approximately $108 thousand. The effect of a 1% annual decrease in assumed cost trend rates would decrease the December 31, 2017 accumulated postretirement benefit obligation by approximately $91 thousand, and the aggregate of the service and interest cost components of net periodic postretirement benefit cost by approximately $97 thousand. We also sponsored the Waddell & Reed Financial, Inc. Supplemental Executive Retirement Plan, as amended and restated (the “SERP”), a non-qualified deferred compensation plan covering eligible employees. The SERP was adopted to supplement the annual pension benefit for certain senior executive officers that the Pension Plan was prevented from providing because of compensation and benefit limits in the Internal Revenue Code (the “IRC”). Each calendar year, the Compensation Committee of the Board of Directors (the “Compensation Committee”) credited participants’ SERP accounts with (i) an amount equal to 4% of the participant’s base salary, less the amount of the maximum employer matching contribution available under our 401(k) plan, and (ii) a non formula award, if any, as determined by the Compensation Committee in its discretion. There were no discretionary awards made to participants during 2017, 2016 or 2015. Additionally, each calendar year, participants’ accounts were credited (or charged) with an amount equal to the performance of certain hypothetical investment vehicles since the last preceding year. Upon a participant’s separation, or at such other time based on a pre-existing election by a participant, benefits accumulated under the SERP are payable in installments or in a lump sum. As of December 31, 2016, the aggregate liability to participants was $3.8 million. Following a lump sum payment of $3.8 million in February 2017 to the sole remaining participant in the SERP, the Board of Directors terminated the SERP. At December 31, 2017, the accrued pension and postretirement liability recorded in the consolidated balance sheet was comprised of accrued pension costs of $13.4 million and a liability for postretirement benefits in the amount of $1.8 million. The current portion of postretirement liability of $0.4 million is included in other current liabilities on the consolidated balance sheet. At December 31, 2016, the accrued pension and postretirement liability recorded in the consolidated balance sheet was comprised of accrued pension costs of $36.4 million and a liability for postretirement benefits in the amount of $2.0 million. The accrued liability for SERP benefits of $3.8 million and the current portion of postretirement liability of $0.4 million is included in other current liabilities on the consolidated balance sheet.

Employee Savings Plan

Employee Savings Plan	12 Months Ended
	Dec. 31, 2017
Employee Savings Plan
Employee Savings Plan	10. Employee Savings Plan We sponsor a defined contribution plan that qualifies under Section 401(k) of the IRC to provide retirement benefits to substantially all of our employees. As allowed under Section 401(k), the plan provides tax‑deferred salary deductions for eligible employees. Our matching contributions to the plan for the years ended December 31, 2017, 2016 and 2015 were $6.0 million, $6.8 million and $6.6 million, respectively. In 2017, in connection with the Pension Plan freeze, the Company amended its 401(k) plan to permit employer discretionary nonelective contributions to eligible participants. For the 2017 plan year, the Company approved a discretionary nonelective contribution in an amount equal to 4% of such participant’s eligible compensation. These contributions, which were expensed over the service period in 2017, totaled $5.5 million and are expected to be funded and allocated to participant accounts during the first quarter of 2018.

Stockholders' Equity

Stockholders' Equity	12 Months Ended
	Dec. 31, 2017
Stockholders' Equity
Stockholders' Equity	11. Stockholders’ Equity Earnings per Share For the years ended December 31, 2017, 2016 and 2015, earnings per share were computed as follows: 2017 2016 2015 Net income attributable to Waddell & Reed Financial, Inc. $ 141,279 156,695 237,578 Weighted average shares outstanding, basic and diluted 83,573 82,668 83,499 Earnings per share, basic and diluted $ 1.69 1.90 2.85 Dividends The Board of Directors declared dividends on our common stock of $1.63 per share, $1.84 per share and $1.75 per share for the years ended December 31, 2017, 2016 and 2015, respectively. In December 2017, the Board of Directors approved a quarterly dividend on our common stock of $0.25 per share payable on February 1, 2018 to stockholders of record as of January 11, 2018. As of December 31, 2017 and 2016, other current liabilities included $20.7 million and $38.2 million, respectively, for dividends payable to stockholders. Common Stock Repurchases The Board of Directors has authorized the repurchase of our common stock in the open market and/or private purchases. The acquired shares may be used for corporate purposes, including as shares issued to employees in our stock‑based compensation programs. There were 1,842,337 shares, 2,320,726 shares and 1,955,509 shares repurchased in the open market or privately during the years ended December 31, 2017, 2016 and 2015, respectively. The repurchased shares include; 402,337 shares, 423,726 shares and 432,353 shares repurchased from employees who elected to tender shares to cover their minimum tax withholdings with respect to vesting of stock awards during the years ended December 31, 2017, 2016 and 2015, respectively. Accumulated Other Comprehensive Loss The following table summarizes other comprehensive income (loss) activity for the years ended December 31, 2017 and 2016. Change in valuation allowance for unrealized Total Unrealized gains Postretirement accumulated gains (losses) (losses) on benefits other on investment investment unrealized comprehensive Year ended December 31, 2017 securities securities gains (losses) income (loss) (in thousands) Balance at December 31, 2016 $ (3,972) (3,388) 603 (6,757) Other comprehensive income (loss) before reclassification 4,039 3,743 (106) 7,676 Amount reclassified from accumulated other comprehensive income (loss) 78 (355) (118) (395) Net current period other comprehensive income (loss) 4,117 3,388 (224) 7,281 Balance at December 31, 2017 $ 145 $ — 379 524 Change in valuation allowance for unrealized Total Unrealized gains Postretirement accumulated gains (losses) (losses) on benefits other on investment investment unrealized comprehensive Year ended December 31, 2016 securities securities gains (losses) income (loss) (in thousands) Balance at December 31, 2015 $ (3,729) (3,240) 1,824 (5,145) Other comprehensive income (loss) before reclassification 1,948 1,195 (1,125) 2,018 Amount reclassified from accumulated other comprehensive loss (2,191) (1,343) (96) (3,630) Net current period other comprehensive loss (243) (148) (1,221) (1,612) Balance at December 31, 2016 $ (3,972) $ (3,388) 603 (6,757) Reclassifications from accumulated other comprehensive income and included in net income are summarized in the table that follows for the years ended December 31, 2017 and 2016: For the year ended December 31, 2017 Tax (expense) Pre-tax benefit Net of tax Statement of income line item (in thousands) Reclassifications included in net income: Sponsored funds investment losses $ (124) 46 (78) Investment and other income (loss) Valuation allowance — 355 355 Provision for income taxes Amortization of postretirement benefits 184 (66) 118 Underwriting and distribution expense and Compensation and related costs Total $ 60 335 395 For the year ended December 31, 2016 Tax (expense) Pre-tax benefit Net of tax Statement of income line item (in thousands) Reclassifications included in net income: Sponsored funds investment gains $ 3,489 (1,298) 2,191 Investment and other income (loss) Valuation allowance — 1,343 1,343 Provision for income taxes Amortization of postretirement benefits 149 (53) 96 Underwriting and distribution expense and Compensation and related costs Total $ 3,638 (8) 3,630

Share-Based Compensation

Share-Based Compensation	12 Months Ended
	Dec. 31, 2017
Share-Based Compensation
Share-Based Compensation	12. Share‑Based Compensation During 2017 the Company utilized one stock based compensation plan: the Company 1998 Stock Incentive Plan, as amended and restated (the “SI Plan”). Two other plans, the Company 1998 Executive Stock Award Plan, as amended and restated, and the Company 1998 Non Employee Director Stock Award Plan, as amended and restated, had no outstanding awards, and, effective February 2016, the Board of Directors terminated both plans. The SI Plan allows us to grant equity compensation awards, including, among other awards, and nonvested stock as part of our overall compensation program to attract and retain key personnel and encourage a greater personal financial investment in the Company, thereby promoting the long-term growth of the Company. In April 2016, our stockholders approved amendments to the SI Plan to, among other things, increase by 5.6 million the number of shares available for awards. Following those amendments, a maximum of 35.6 million shares of common stock are authorized for issuance under the SI Plan and as of December 31, 2017, 2,458,263 shares of common stock were available for issuance under the SI Plan. In addition, we may make incentive payments under the Company 2003 Executive Incentive Plan, as amended and restated (the “EIP”) in the form of cash, stock options, nonvested stock or a combination thereof. Incentive awards paid under the EIP in the form of stock options or nonvested stock are issued out of shares reserved for issuance under the SI Plan. Generally, shares of common stock covered by terminated, surrendered or cancelled options, by forfeited nonvested stock, or by the forfeiture of other awards that do not result in issuance of shares of common stock are again available for awards under the plan from which they were terminated, surrendered, cancelled or forfeited. Nonvested stock awards are valued on the date of grant and have no purchase price. These awards have historically vested over four years in 33 1/3% increments on the second, third and fourth anniversaries of the grant date; however, awards granted on or after December 31, 2016 vest in 25% increments on the first anniversary of the grant date. The Company has issued nonvested stock awards to financial advisors associated with W&R who are independent contractors. These awards have the same terms as awards issued to employees; however, changes in the Company’s share price result in variable compensation expense over the vesting period. Beginning in 2017, the Company established a Cash Settled RSU Plan (the “RSU Plan”), which allows the Company to grant RSUs to attract and retain key personnel and enable them to participate in the long-term growth of the Company. Unvested RSUs have no purchase price and vest in 25% increments over four years, beginning on the first anniversary of the grant date. On the vesting date, RSU holders receive a lump sum cash payment equal to the fair market value of one share of the Company’s common stock, par value $0.01, for each RSU that has vested, subject to applicable tax withholdings. We treat RSUs as liability-classified awards and, therefore, account for them at fair value based on the closing price of our common stock on the reporting date, which results in variable compensation expense over the vesting period. Nonvested shares and nonvested RSU’s are forfeited upon the termination of employment with or service to the Company, as applicable, or service on the Board of Directors, dependent upon the circumstances of termination. Except for restrictions placed on the transferability of nonvested stock, holders of nonvested stock have full stockholders’ rights during the term of restriction, including voting rights and the rights to receive cash dividends. Since nonvested RSUs are not shares of Company stock, holders of nonvested RSUs are not entitled to voting rights but are entitled to dividend equivalent payments for each RSU equal to the dividend paid on one share of our common stock. A summary of nonvested share activity and related fair value for the year ended December 31, 2017 follows: Weighted Average Nonvested Grant Date Stock Shares Fair Value Nonvested at December 31, 2016 4,786,103 $ 34.74 Granted 1,717,333 19.77 Vested (1,109,002) 48.22 Forfeited (305,794) 26.31 Nonvested at December 31, 2017 5,088,640 $ 27.26 A summary of nonvested cash-settled unit activity for the year ended December 31, 2017 follows: Nonvested Cash-Settled Units Nonvested at December 31, 2016 — Granted 1,284,459 Vested (522) Forfeited (70,908) Nonvested at December 31, 2017 1,213,029 For the years ended December 31, 2017, 2016 and 2015 compensation expense related to nonvested stock totaled $57.7 million, $51.5 million and $47.5 million, respectively. The income tax benefit from the compensation expense related to nonvested stock was $12.2 million, $19.2 million and $17.6 million for the years ended December 31, 2017, 2016 and 2015, respectively. These benefits will be recognized upon vesting and may increase or decrease depending on the fair value of the shares on the date of vesting. As of December 31, 2017, the remaining unamortized expense of $83.7 million is expected to be recognized over a weighted average period of 2.4 years. The total fair value of shares vested (at vest date) during the years ended December 31, 2017, 2016 and 2015, was $20.8 million, $26.7 million and $53.9 million, respectively. The Company withholds a portion of each employee’s vested shares to satisfy the minimum tax withholding obligations of the Company with respect to vesting of the shares.

Uniform Net Capital Rule Requir

Uniform Net Capital Rule Requirements	12 Months Ended
	Dec. 31, 2017
Uniform Net Capital Rule Requirements
Uniform Net Capital Rule Requirements	13. Uniform Net Capital Rule Requirements Two of our subsidiaries, W&R and IDI are registered broker-dealers and members of FINRA. Broker-dealers are subject to the SEC’s Uniform Net Capital Rule (Rule 15c3‑1), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15.0 to 1.0. The primary difference between net capital and stockholders’ equity is the non‑allowable assets that are excluded from net capital. A broker-dealer may elect not to be subject to the Aggregate Indebtedness Standard of paragraph (a)(1)(i) of Rule 15c3‑1, in which case net capital must exceed the greater of $250 thousand or 2% of aggregate debit items computed in accordance with the Formula for Determination of Reserve Requirements for broker-dealers. W&R made this election and thus is not subject to the aggregate indebtedness ratio as of December 31, 2017 or 2016. Net capital and aggregated indebtedness information for our broker-dealer subsidiaries is presented in the following table as of December 31, 2017 and 2016: 2017 2016 (in thousands) W&R IDI W&R IDI Net capital $ 28,024 21,167 52,639 12,894 Required capital 250 1,757 250 2,152 Excess of required capital $ 27,774 19,410 52,389 10,742 Ratio of aggregate indebtedness to net capital Not Not applicable 1.25 to 1.0 applicable 2.50 to 1.0

Rental Expense and Lease Commit

Rental Expense and Lease Commitments	12 Months Ended
	Dec. 31, 2017
Rental Expense and Lease Commitments
Rental Expense and Lease Commitments	14. Rental Expense and Lease Commitments We lease certain home office buildings, certain sales and other office space and equipment under operating leases. Rent expense was $24.5 million, $24.3 million and $23.7 million, for the years ended December 31, 2017, 2016 and 2015, respectively. Future minimum rental commitments under non‑cancelable operating leases are as follows: Year Commitments (in thousands) 2018 $ 19,921 2019 14,181 2020 9,050 2021 5,340 2022 2,746 Thereafter 7,489 $ 58,727

Related Party Transactions

Related Party Transactions	12 Months Ended
	Dec. 31, 2017
Related Party Transactions
Related Party Transactions	15. Related Party Transactions We earn investment management fee revenues from the Funds and IGI Funds for which we act as an investment adviser, pursuant to an investment management agreement with each Fund. In addition, we have agreements with the Funds pursuant to Rule 12b‑1 under the ICA for which distribution and service fees are collected from the Funds for distribution of mutual fund shares, for costs such as advertising and commissions paid to broker-dealers, and for providing ongoing services to shareholders of the Funds and/or maintaining shareholder accounts. We also earn service fee revenues by providing various services to the Funds and their shareholders pursuant to a shareholder servicing agreement with each Fund (except Ivy VIP) and an accounting service agreement with each Fund. Certain of our officers and directors are also officers and/or trustees for the various Funds for which we act as an investment adviser. These agreements are approved or renewed on an annual basis by each Fund’s board of trustees, including a majority of the disinterested members. Revenues for services provided or related to the Funds and IGI Funds for the years ended December 31, 2017, 2016 and 2015 are as follows: 2017 2016 2015 (in thousands) Investment management fees $ 508,035 523,304 654,727 Rule 12b-1 service and distribution fees 159,873 208,901 303,046 Shareholder service fees 106,595 120,241 143,071 Total revenues $ 774,503 852,446 1,100,844 Included in Funds and separate accounts receivable at December 31, 2017 and 2016 are receivables due from the Funds of $20.6 and $21.6 million, respectively.

Contingencies

Contingencies	12 Months Ended
	Dec. 31, 2017
Contingencies
Contingencies	16. Contingencies The Company is involved from time to time in various legal proceedings, regulatory investigations and claims incident to the normal conduct of business, which may include proceedings that are specific to us and others generally applicable to business practices within the industries in which we operate. A substantial legal liability or a significant regulatory action against us could have an adverse effect on our business, financial condition and on the results of operations in a particular quarter or year. The Company establishes reserves for litigation and similar matters when those matters present material loss contingencies that management determines to be both probable and reasonably estimable in accordance with ASC 450, “Contingencies Topic.” These amounts are not reduced by amounts that may be recovered under insurance or claims against third parties, but undiscounted receivables from insurers or other third parties may be accrued separately. The Company regularly revises such accruals in light of new information. The Company discloses the nature of the contingency when management believes it is reasonably possible the outcome may be significant to the Company’s consolidated financial statements and, where feasible, an estimate of the possible loss. For purposes of our litigation contingency disclosures, “significant” includes material matters as well as other items that management believes must be disclosed. Management’s judgment is required related to contingent liabilities because the outcomes are difficult to predict. Shareholder Derivative Litigation As previously disclosed, in an action filed on April 18, 2016 in the District Court of Johnson County, Kansas, Hieu Phan v. Ivy Investment Management Company, et al (Case No. I6CV02338 Div. 4), plaintiff filed a putative derivative action on behalf of the nominal defendant, a mutual fund trust affiliated with the Company, alleging breach of fiduciary duty and breach of contract claims relating to investments held in the affiliated mutual fund by the Company's registered investment adviser subsidiary, the nominal defendant trust, and the current and retired trustees of the trust. On behalf of the nominal defendant trust, plaintiff sought monetary damages and demanded a jury trial. On May 2, 2017, the nominal defendant trust filed a motion to stay the litigation pending the investigation and recommendation of a special litigation committee formed by the nominal defendant trust. On June 13, 2017, the court granted a 60-day stay until August 12, 2017, after which formal discovery commenced. While the Company denies that any of its subsidiaries breached their fiduciary duties to, or committed a breach of the investment management agreement with, the nominal defendant trust, on January 8, 2018 the parties to the litigation reached a settlement in principle. On February 22, 2018, the parties filed a joint motion for preliminary approval of the settlement and other associated pleadings with the court. The settlement contemplates the payment of $19.9 million, recoverable to the Company through insurance, to the affiliated mutual fund for the benefit of its shareholders. The settlement is subject to final approval by the court. The Company has recorded a liability and offsetting receivable from insurance, which are reflected in the Company's 2017 consolidated balance sheets. 401(k) Plan Class Action Litigation In an action filed on June 23, 2017 and amended on June 26, 2017 in the U.S. District Court for the District of Kansas, Schapker v. Waddell & Reed Financial, Inc., et al, (Case No. 17-2365 D. Kan.), Stacy Schapker, a participant in the Company’s 401(k) and Thrift Plan, as amended and restated (the “401(k) Plan”), filed a lawsuit against the Company, the Company’s Board of Directors, the Administrative Committee of the 401(k) Plan, and unnamed Jane and John Doe Defendants 1-25. The amended complaint, which is filed on behalf of the 401(k) Plan and a proposed class of 401(k) Plan participants, purports to assert claims for breach of fiduciary duty and prohibited transactions under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) based on the 401(k) Plan’s offering of investments managed by the Company or its affiliates from June 23, 2011 to present. The amended complaint seeks, among other things, an order compelling the disgorgement of fees paid to the Company and its affiliates by the 401 (k) Plan and the restoration of losses to the 401(k) Plan arising from defendants alleged ERISA violations, attorneys’ fees and other injunctive and equitable relief. The Company believes the allegations are without merit and intends to vigorously defend this matter. On October 6, 2017, the defendants filed a motion to dismiss the amended complaint, and on February 22, 2018, the court denied the motion to dismiss. In the opinion of management, the ultimate resolution and outcome of this matter is uncertain. Given the preliminary nature of the proceedings and the Company’s dispute over the merits of the claims, the Company is unable to estimate a range of reasonably possible loss, if any, that such matter may represent. While the ultimate resolution of this matter is uncertain, an adverse determination against the Company could have a material adverse impact on our business, financial condition and results of operations.

Concentrations of Risk

Concentrations of Risk	12 Months Ended
	Dec. 31, 2017
Concentrations of Risk
Concentrations of Risk	17. Concentrations of Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents held. The Company maintains cash and cash equivalents with various financial institutions. Cash deposits maintained at financial institutions may exceed the federally insured limit. Our investments in sponsored funds and investments held as trading expose us to market risk. The underlying holdings of our assets under management are also subject to market risk, which may arise from changes in equity prices, credit ratings, foreign currency exchange rates, and interest rates.

Selected Quarterly Information

Selected Quarterly Information (Unaudited)	12 Months Ended
	Dec. 31, 2017
Selected Quarterly Information (Unaudited)
Selected Quarterly Information (Unaudited)	18. Selected Quarterly Information (Unaudited) Quarter First Second Third Fourth (in thousands) 2017 Total revenues $ 286,564 286,657 289,447 294,476 Net income attributable to Waddell & Reed Financial, Inc. $ 33,871 24,061 53,582 29,765 Net income per share, basic and diluted $ 0.40 0.29 0.64 0.36 Quarter First Second Third Fourth (in thousands) 2016 Total revenues $ 323,816 319,208 303,086 292,913 Net income attributable to Waddell & Reed Financial, Inc. $ 38,069 34,678 54,908 29,040 Net income per share, basic and diluted $ 0.46 0.42 0.66 0.35

Summary of Significant Accoun29

Summary of Significant Accounting Policies (Policies)	12 Months Ended
	Dec. 31, 2017
Summary of Significant Accounting Policies.
Basis of Presentation	Basis of Presentation The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Amounts in the accompanying financial statements and notes are rounded to the nearest thousand unless otherwise stated. Certain amounts in the prior years’ financial statements have been reclassified for consistent presentation. Also, refer to the “Pension Plan” section below regarding a change in accounting. The Company operates in one business segment as the Company’s management utilizes a consolidated approach to assess performance and allocate resources. Effective January 1, 2017, the Company adopted Accounting Standards Update (“ASU”) 2016-09, “ Improvements to Employee Share-Based Payment Accounting .” This ASU requires excess tax benefits and tax shortfalls to be recognized as income tax benefit or expense in the income statement on a prospective basis. Additionally, excess tax benefits or shortfalls recognized on share-based compensation are classified as an operating activity in the statement of cash flows. The Company has applied this provision prospectively, and thus, the prior period presented in the income statements and statement of cash flows has not been adjusted. This ASU allows entities to withhold shares issued during the settlement of a stock award or option, as means of meeting minimum tax withholding due by the employee, in an amount up to the employees’ maximum individual tax rate in the relevant jurisdiction without resulting in a liability classification of the award (versus an equity classification). The value of the withheld shares is then remitted by the Company in cash to the taxing authorities on the employees’ behalf. The Company’s historical policy to withhold shares equivalent to the minimum individual tax rate is consistent with the thresholds meeting the classification of an equity award and, therefore, a retrospective classification adjustment was not required. This ASU requires that all cash payments made to taxing authorities on the employees’ behalf for withheld shares be presented as financing activities on the statement of cash flows. As this requirement is consistent with the Company’s historical accounting policy, a retrospective adjustment to presentation of the statement of cash flows was not required. This ASU also allows for the option to account for forfeitures as they occur when determining the amount of share-based compensation expense to be recognized, rather than estimating expected forfeitures over the course of a vesting period. The Company elected to account for forfeitures as they occur. The net cumulative effect to the Company from the adoption of this ASU was an increase to additional paid-in capital of $3.5 million, a reduction to retained earnings of $2.2 million and an increase to the non-current deferred tax asset of $1.3 million as of January 1, 2017.
Pension Plan	Pension Plan During the fourth quarter of 2017, the Company retrospectively changed its method of accounting for net periodic pension cost. Historically, net actuarial gains or losses in excess of 10% of the greater of the market-related value of plan assets or the plan’s projected benefit obligation (the corridor) were amortized into operating expenses over the remaining working life of active plan participants. Unrecognized actuarial gains or losses were reflected as a component of stockholders’ equity in our consolidated balance sheets. Under the Company’s new method of accounting, the Company elected to immediately recognize all actuarial gains and losses in net periodic pension cost in the year in which the gains and losses occur noting that it is generally preferable to accelerate the recognition of gains and losses into income rather than to delay such recognition. This change is intended to improve the transparency of the Company’s underlying financial performance by recognizing the effects of current economic and interest rate trends on assumptions used to measure plan obligations and assets. These gains and losses are generally only measured annually as of December 31 and accordingly will be recorded in the fourth quarter, unless a remeasurement event occurs during an earlier interim period. Financial data for all periods presented has been adjusted to reflect the effect of this accounting change. The cumulative effect of the change on retained earnings as of January 1, 2015 was a decrease of $48.4 million, with the corresponding adjustment to accumulated other comprehensive loss. The effects of the change in accounting on our consolidated statements of income and consolidated balance sheets for the periods presented were as follows: Years ended December 31, 2017 2016 2015 Historical Adjusted As Reported Adjusted As Reported Adjusted (dollars in thousands, except per share amounts) Income Statement Information: Underwriting and distribution expenses $ 600,067 593,424 671,105 664,648 769,781 774,428 Compensation and related costs 196,209 181,376 209,850 200,822 200,752 208,841 Income before provision for income taxes 224,101 245,577 224,508 239,993 399,540 386,804 Provision for income taxes 92,592 101,368 76,188 81,884 154,004 149,226 Net income 131,509 144,209 148,321 158,109 245,536 237,578 Net income attributable to Waddell & Reed Financial, Inc. 128,579 141,279 146,906 156,695 245,536 237,578 Net income per share attributable to Waddell & Reed Financial, Inc. common shareholders, basic and diluted 1.54 1.69 1.78 1.90 2.94 2.85 Statement of Comprehensive Income Information Pension and postretirement benefit, net of income tax expense (benefit) $ 12,476 (224) 8,569 (1,220) (6,291) 1,667 Statement of Cash Flows Information: Net income $ 131,509 144,209 148,321 158,109 245,536 237,578 Adjustments to reconcile net income to net cash provided by operating activities: Deferred income taxes 11,705 20,481 (3,714) 1,982 (1,410) (6,188) Pension and postretirement plan benefits $ 3,762 (17,714) 18,651 3,166 5,654 18,390 As of December 31 2017 2016 Historical Adjusted As Reported Adjusted Balance Sheet Information Retained earnings $ 1,126,263 1,092,394 1,135,694 1,089,122 Accumulated other comprehensive income (loss) $ (33,345) 524 (53,329) (6,757)
Consolidation	Consolidation In the normal course of our business, we sponsor and manage various types of investment products. These investment products include open-end mutual funds, a closed-end mutual fund, privately offered funds, exchange-traded managed funds, and a Luxembourg SICAV. When creating and launching a new investment product, we typically fund the initial cash investment, commonly referred to as “seeding,” to allow the investment product the ability to generate an investment performance track record so that it is able to attract third party investors. Our initial investment in a new product typically represents 100% of the ownership in that product. We generally redeem our investment in seeded products when the related product establishes a sufficient track record, when third party investments in the related product are sufficient to sustain the strategy, or when a decision is made to no longer pursue the strategy. The length of time we hold a majority interest in a product varies based on a number of factors, including market demand, market conditions and investment performance. Our exposure to risk in these investment products is generally limited to any equity investment we have in the product and any earned but uncollected management or other fund-related service fees. In accordance with financial accounting standards, we consolidate certain sponsored investment products in which we have a controlling interest or the investment product meets the criteria of a variable interest entity (“VIE”) and we are deemed to be the primary beneficiary. In order to make this determination, an analysis is performed to determine if the investment product is a VIE or a voting interest entity (“VOE”). Assessing if an entity is a VIE or VOE involves judgment and analysis on an entity by entity basis. Factors included in this assessment include the legal organization of the entity, the Company’s contractual involvement with the entity and any implications resulting from or associated with related parties’ involvement with the entity. A VIE is an entity which does not have adequate equity to finance its activities without subordinated financial support, the equity investors do not have the normal characteristics of equity investors for a potential controlling financial interest as a group, or the voting rights are not proportional to their obligations to absorb the expected losses or their rights to receive the expected residual returns of the entity. The Company is deemed to be the primary beneficiary if it absorbs a majority of the VIE’s expected losses, expected residual returns, or both. If the Company is the primary beneficiary of a VIE, we are required to consolidate the assets, liabilities, results of operations and cash flows of the VIE into our consolidated financial statements. If an entity does not meet the criteria and is not considered a VIE, it is treated as a VOE, which is subject to traditional consolidation concepts based on ownership rights. Sponsored investment products that are considered VOEs are consolidated if we have a controlling financial interest in the entity absent substantive investor rights to replace the investment manager of the entity (kick-out rights).
Use of Estimates	Use of Estimates GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses in the consolidated financial statements and accompanying notes, and related disclosures of commitments and contingencies. Estimates are used for, but are not limited to, depreciation and amortization, income taxes, valuation of assets, pension and postretirement obligations, and contingencies. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Actual results could differ from our estimates.
Cash and Cash Equivalents	Cash and Cash Equivalents Cash and cash equivalents include cash on hand and short‑term investments. We consider all highly liquid investments with maturities upon acquisition of 90 days or less to be cash equivalents. Cash and cash equivalents – restricted represents cash held for the benefit of customers and non-customers segregated in compliance with federal and other regulations.
Disclosures About Fair Value of Financial Instruments	Disclosures About Fair Value of Financial Instruments Fair value of cash and cash equivalents, receivables and payables approximates carrying value. Fair values for investment securities are based on quoted market prices, where available. Otherwise, fair values for investment securities are based on Level 2 or Level 3 inputs detailed in Note 3. Fair value of long‑term debt is disclosed in Note 7.
Investment Securities and Investments in Sponsored Funds	Investment Securities and Investments in Sponsored Funds Our investments are comprised of debt and equity securities, investments in sponsored funds and sponsored privately offered funds. Sponsored funds, which include the Funds, IVH and the IGI Funds, are investments we have made to provide seed capital for new investment products. The Company has classified its investments in certain sponsored funds as either equity method investments (when the Company owns between 20% and 50% of the fund) or as available for sale investments (when the Company owns less than 20% of the fund). Investments held by our broker-dealer entities or certain investments that are anticipated to be purchased and sold on a more frequent basis are classified as trading. Unrealized gains and losses on securities classified as available for sale, net of related tax effects, are excluded from earnings until realized and are reported as a separate component of comprehensive income. For trading securities, unrealized gains and losses are included in earnings. Realized gains and losses are computed using the specific identification method for all investment securities, other than sponsored funds. For sponsored funds, realized gains and losses are computed using the average cost method. Substantially all of the Company’s equity method investees are investment companies that record their underlying investments at fair value. Therefore, under the equity method of accounting, our share of the investee's underlying net income or loss is predominantly representative of fair value adjustments in the investments held by the equity method investee. Our share of the investee's net income or loss is based on the most current information available and is recorded as a net gain or loss on investments within investment and other income (loss). Our available for sale investments are reviewed each quarter and adjusted for other than temporary declines in value. We consider factors affecting the issuer and the industry in which the issuer operates, general market trends including interest rates, and our ability and intent to hold an investment until it has recovered. Consideration is given to the length of time an investment’s market value has been below carrying value as well as prospects for recovery to carrying value. When a decline in the fair value of equity securities is determined to be other than temporary, the unrealized loss recorded net of tax in other comprehensive income is realized as a charge to net income, and a new cost basis is established. When a decline in the fair value of debt securities is determined to be other than temporary, the amount of the impairment recognized in earnings depends on whether the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current‑period credit loss. If so, the other than temporary impairment recognized in earnings is equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If not, the portion of the impairment related to the credit loss is recognized in earnings while the portion of the impairment related to other factors is recognized in other comprehensive income, net of tax.
Property and Equipment	Property and Equipment Property and equipment are carried at cost. The costs of improvements that extend the life of a fixed asset are capitalized, while the costs of repairs and maintenance are expensed as incurred. Depreciation and amortization are calculated and recorded using the straight‑line method over the estimated useful life of the related asset (or lease term if shorter), generally three to 10 years for furniture and fixtures; one to 10 years for computer software; one to five years for data processing equipment; one to 30 years for buildings; two to 26 years for other equipment; and up to 15 years for leasehold improvements, determined by the lesser of the lease term or expected life.
Software Developed for Internal Use	Software Developed for Internal Use Certain internal costs incurred in connection with developing or obtaining software for internal use are capitalized in accordance with ASC 350, “Intangibles – Goodwill and Other Topic.” Internal costs capitalized are included in property and equipment, net in the consolidated balance sheets, and were $10.5 million and $13.3 million as of December 31, 2017 and 2016, respectively. Amortization begins when the software project is complete and ready for its intended use and continues over the estimated useful life, generally one to 10 years.
Goodwill and Identifiable Intangible Assets	Goodwill and Identifiable Intangible Assets Goodwill represents the excess of cost over fair value of the identifiable net assets of acquired companies. Indefinite-lived intangible assets represent advisory and subadvisory management contracts for managed assets obtained in acquisitions. The Company considers these contracts to be indefinite-lived intangible assets as they are expected to be renewed without significant cost or modification of terms. Goodwill and indefinite-lived intangible assets are tested for impairment annually or more frequently if events or circumstances indicate that the carrying value may not be recoverable. Goodwill and intangible assets require significant management estimates and judgment, including the valuation determination in connection with the initial purchase price allocation and the ongoing evaluation for impairment. Additional information related to the indefinite-lived intangible assets is included in Note 6.
Revenue Recognition	Revenue Recognition Investment Management and Advisory Fees We recognize investment management fees as earned over the period in which services are rendered. We calculate investment management fees from the Funds daily based upon average daily net assets under management in accordance with investment management agreements between the Funds and the Company. The majority of investment and/or advisory fees earned from the IGI Funds and from institutional and separate accounts are calculated either monthly or quarterly based upon an average of net assets under management in accordance with such investment management agreements. The Company may waive certain fees for investment management services at its discretion, or in accordance with contractual expense limitations, and these waivers are reflected as a reduction to investment management fees on the consolidated statements of income. Our investment advisory business receives research products and services from broker-dealers through “soft dollar” arrangements. Consistent with the “soft dollar” safe harbor established by Section 28(e) of the Securities Exchange Act of 1934, as amended, the investment advisory business does not have any contractual obligation requiring it to pay for research products and services obtained through soft dollar arrangements with brokers. As a result, we present “soft dollar” arrangements on a net basis. The Company has contractual arrangements with third parties to provide subadvisory services. Investment advisory fees are recorded gross of any subadvisory payments and are included in investment management fees based on management’s determination that the Company is acting in the capacity of principal service provider with respect to its relationship with the Funds. Any corresponding fees paid to subadvisors are included in operating expenses. Distribution, Underwriter and Shareholder Service Fees Underwriting and distribution commission revenues resulting from the sale of investment products are recognized on the trade date. When a client purchases Class A or Class E shares (front-end load), the client pays an initial sales charge of up to 5.75% of the amount invested. The sales charge for Class A or Class E shares typically declines as the investment amount increases. In addition, investors may combine their purchases of all fund shares to qualify for a reduced sales charge. When a client invests in a fee-based asset allocation product, Class I or Y shares are purchased at net asset value, and we do not charge an initial sales charge. Under a Rule 12b-1 service plan, the Funds may charge a maximum fee of 0.25% of the average daily net assets under management for Class B, C, E and Ivy Funds Y shares for expenses paid to broker-dealers and other sales professionals in connection with providing ongoing services to the Funds’ shareholders and/or maintaining the Funds’ shareholder accounts, with the exception of the Funds’ Class R shares, for which the maximum fee is 0.50% and for the Class I, N and Advisors Funds Y shares, which do not charge a service fee. The Funds’ Class B and Class C shares may charge a maximum of 0.75% of the average daily net assets under management under a Rule 12b-1 distribution plan to broker-dealers and other sales professionals for their services in connection with distributing shares of that class. The Funds’ Class A shares may charge a maximum fee of 0.25% of the average daily net assets under management under a Rule 12b-1 service and distribution plan for expenses detailed previously. The Rule 12b-1 plans are subject to annual approval by the Funds’ board of trustees, including a majority of the disinterested members, by votes cast in person at a meeting called for the purpose of voting on such approval. All Funds may terminate the service and distribution plans at any time with approval of fund trustees or portfolio shareholders (a majority of either) without penalty. Fee‑based asset allocation revenues are calculated monthly based upon average daily net assets under management. For certain types of investment products, primarily variable annuities, distribution revenues are generally calculated based upon average daily net assets under management. Fees collected from financial advisors for various services are recorded in underwriting and distribution fees on a gross basis, as the Company is the primary obligor in these arrangements. Shareholder service fees are recognized monthly and are calculated based on the number of accounts or assets under management as applicable. Other administrative service fee revenues are recognized when contractual obligations are fulfilled or as services are provided.
Advertising and Promotion	Advertising and Promotion We expense all advertising and promotion costs as the advertising or event takes place. Advertising expense was $9.7 million, $9.4 million and $15.7 million for the years ended December 31, 2017, 2016 and 2015, respectively, and is classified in both underwriting and distribution expense and general and administrative expense in the consolidated statements of income.
Leases	Leases The Company leases office space under various leasing arrangements. Most lease agreements contain renewal options, rent escalation clauses and/or other inducements provided by the landlord. Rent expense is recorded on a straight-line basis, including escalations and inducements, over the term of the lease.
Share-Based Compensation	Share‑Based Compensation We account for share‑based compensation expense using the fair value method. Under the fair value method, share‑based compensation expense reflects the fair value of share‑based awards measured at grant date, and is recognized over the service period. The Company also issues share‑based awards to our financial advisors, who are independent contractors, and to our Board of Directors. Changes in the Company’s share price result in variable compensation expense over the vesting period of awards granted to our financial advisors and Board of Directors. During the fourth quarter of 2016, the Company established a Cash Settled RSU Plan (the “RSU Plan”), which allows the Company to grant cash-settled restricted stock units (“RSUs”) Unvested RSUs have no purchase price and vest in 25% increments over four years, beginning on the first anniversary of the grant date. On the vesting date, RSU holders receive a lump sum cash payment equal to the fair market value of one share of the Company’s common stock, par value $0.01, for each RSU that has vested, subject to applicable tax withholdings. We treat RSUs as liability-classified awards and, therefore, account for them at fair value based on the closing price of our common stock on the reporting date, which results in variable compensation expense over the vesting period.
Accounting for Income Taxes	Accounting for Income Taxes Income tax expense is based on pre-tax income, including adjustments made for the recognition or derecognition related to uncertain tax positions. The recognition or derecognition of income tax expense related to uncertain tax positions is determined under the guidance as prescribed by ASC 740, “ Income Taxes Topic. ” Deferred tax assets and liabilities are recognized for the future tax attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. A valuation allowance is recognized to reduce deferred tax assets if, based on available evidence, it is more likely than not that all or some portion of the asset will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates that will be in effect when they are expected to be realized or settled. The effect on the measurement of deferred tax assets and liabilities of a change in income tax law is recognized in earnings in the period that includes the enactment date. On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Reform Act”) was enacted, which significantly revised the U.S. corporate income tax system by, among other things, permanently reducing the federal statutory tax rate from 35% to 21% effective January 1, 2018. The Company recorded a one-time charge of $5.4 million in the fourth quarter of 2017 to measure our net deferred tax assets at the reduced federal statutory rate. The SEC staff issued Staff Accounting Bulletin No. 118 to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act. The Company has recognized the provisional tax impact related to the revaluation of deferred tax assets and liabilities and included these amounts in its consolidated financial statements for the year ended December 31, 2017. The ultimate impact may differ from these provisional amounts, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of the Tax Reform Act. The impact of the Tax Reform Act is expected to be complete when the Company’s 2017 U.S. corporate income tax return is filed in 2018.

Summary of Significant Accoun30

Summary of Significant Accounting Policies (Tables)	12 Months Ended
	Dec. 31, 2017
Summary of Significant Accounting Policies
Schedule of effects of the change in accounting on the consolidated statements of income and consolidated balance sheets	The effects of the change in accounting on our consolidated statements of income and consolidated balance sheets for the periods presented were as follows: Years ended December 31, 2017 2016 2015 Historical Adjusted As Reported Adjusted As Reported Adjusted (dollars in thousands, except per share amounts) Income Statement Information: Underwriting and distribution expenses $ 600,067 593,424 671,105 664,648 769,781 774,428 Compensation and related costs 196,209 181,376 209,850 200,822 200,752 208,841 Income before provision for income taxes 224,101 245,577 224,508 239,993 399,540 386,804 Provision for income taxes 92,592 101,368 76,188 81,884 154,004 149,226 Net income 131,509 144,209 148,321 158,109 245,536 237,578 Net income attributable to Waddell & Reed Financial, Inc. 128,579 141,279 146,906 156,695 245,536 237,578 Net income per share attributable to Waddell & Reed Financial, Inc. common shareholders, basic and diluted 1.54 1.69 1.78 1.90 2.94 2.85 Statement of Comprehensive Income Information Pension and postretirement benefit, net of income tax expense (benefit) $ 12,476 (224) 8,569 (1,220) (6,291) 1,667 Statement of Cash Flows Information: Net income $ 131,509 144,209 148,321 158,109 245,536 237,578 Adjustments to reconcile net income to net cash provided by operating activities: Deferred income taxes 11,705 20,481 (3,714) 1,982 (1,410) (6,188) Pension and postretirement plan benefits $ 3,762 (17,714) 18,651 3,166 5,654 18,390 As of December 31 2017 2016 Historical Adjusted As Reported Adjusted Balance Sheet Information Retained earnings $ 1,126,263 1,092,394 1,135,694 1,089,122 Accumulated other comprehensive income (loss) $ (33,345) 524 (53,329) (6,757)

Investment Securities (Tables)

Investment Securities (Tables)	12 Months Ended
	Dec. 31, 2017
Investment Securities
Schedule of investment securities	Investment securities at December 31, 2017 and 2016 are as follows: December 31, December 31, 2017 2016 (in thousands) Available for sale securities: Certificates of deposit $ 12,999 — Commercial paper 34,978 — Corporate bonds 197,442 — U.S. Treasury bills 19,779 — Sponsored funds 124,016 122,806 Sponsored privately offered funds — 570 Total available for sale securities 389,214 123,376 Trading securities: Certificates of deposit 1,999 — Corporate bonds 55,414 — U.S. Treasury bills 4,929 — Mortgage-backed securities 10 13 Common stock 116 101 Consolidated sponsored funds 139,086 145,710 Sponsored funds 13,841 29,541 Sponsored privately offered funds 695 — Total trading securities 216,090 175,365 Equity method securities: Sponsored funds 95,188 26,775 Sponsored privately offered funds — 3,234 Total equity method securities 95,188 30,009 Total securities $ 700,492 328,750
Summary of maturities of securities held	Certificates of deposit, commercial paper, corporate bonds and U.S. Treasury bills accounted for as available for sale and held as of December 31, 2017 mature as follows: Amortized cost Fair value (in thousands) Within one year $ 98,323 98,390 After one year but within five years 167,936 166,808 $ 266,259 265,198 Certificates of deposit, U.S. Treasury bills, corporate bonds and mortgage-backed securities accounted for as trading and held as of December 31, 2017 mature as follows: Fair value (in thousands) Within one year $ 12,064 After one year but within five years 45,288 After 10 years 5,000 $ 62,352
Summary of the gains (losses) related to securities	The following is a summary of the gross unrealized gains (losses) related to securities classified as available for sale at December 31, 2017: Amortized Unrealized Unrealized cost gains losses Fair value (in thousands) Available for sale securities: Certificates of deposit $ 13,000 1 (2) 12,999 Commercial paper 34,836 142 — 34,978 Corporate bonds 198,404 33 (995) 197,442 U.S. Treasury bills 20,019 — (240) 19,779 Sponsored funds 122,722 2,576 (1,282) 124,016 $ 388,981 2,752 (2,519) 389,214 The following is a summary of the gross unrealized gains (losses) related to securities classified as available for sale at December 31, 2016: Amortized Unrealized Unrealized cost gains losses Fair value (in thousands) Available for sale securities: Sponsored funds $ 129,427 828 (7,449) Sponsored privately offered funds 265 305 — 570 $ 129,692 1,133 (7,449) 123,376
Summary of available for sale sponsored funds with fair values below carrying values	A summary of available for sale sponsored funds with fair values below carrying values at December 31, 2017 is as follows: Less than 12 months 12 months or longer Total Unrealized Unrealized Unrealized December 31, 2017 Fair value losses Fair value losses Fair value losses (in thousands) Certificates of deposit $ 2,998 (2) — — 2,998 (2) Corporate bonds 192,409 (995) — — 192,409 (995) U.S. Treasury bills 19,779 (240) — — 19,779 (240) Sponsored funds 49,641 (600) 23,707 (682) 73,348 (1,282) $ 264,827 (1,837) 23,707 (682) 288,534 (2,519)
Summary of balances related to consolidated sponsored funds as well the company’s net interest in these funds	The following table details the balances related to consolidated sponsored and sponsored privately offered funds at December 31, 2017 and 2016, as well as the Company’s net interest in these funds: December 31, December 31, 2017 2016 (in thousands) Cash $ 8,472 6,885 Investments 139,086 145,710 Other assets 1,588 763 Other liabilities (1,040) (390) Redeemable noncontrolling interests (14,509) (10,653) Net interest in consolidated sponsored funds $ 133,597 142,315
Schedule of fair value of investment securities	The following tables summarize our investment securities as of December 31, 2017 and 2016 that are recognized in our consolidated balance sheets using fair value measurements based on the differing levels of inputs. There were no transfers between levels for the years ended December 31, 2017 or 2016. December 31, 2017 Level 1 Level 2 Level 3 Other Assets Held at Net Asset Value Total (in thousands) Cash equivalents: (1) Money market funds $ 145,785 — — — 145,785 Commercial paper — 11,064 — — 11,064 Total cash equivalents $ 145,785 11,064 — — 156,849 Available for sale securities: Certificates of deposit $ — 12,999 — — 12,999 Commercial paper — 34,978 — — 34,978 Corporate bonds — 197,442 — — 197,442 U.S. Treasury bills — 19,779 — — 19,779 Sponsored funds 124,016 — — — 124,016 Trading securities: Certificates of deposit — 1,999 — — 1,999 Corporate bonds — 55,414 — 55,414 U.S. Treasury bills — 4,929 — — 4,929 Mortgage-backed securities — 10 — — 10 Common stock 116 — — — 116 Consolidated sponsored funds 77,128 61,958 — — 139,086 Sponsored funds 13,841 — — — 13,841 Sponsored privately offered funds measured at net asset value (2) — — — 695 695 Equity method securities: (3) Sponsored funds 95,188 — — — 95,188 Total $ 310,289 389,508 — 695 700,492 December 31, 2016 Level 1 Level 2 Level 3 Other Assets Held at Net Asset Value Total (in thousands) Cash equivalents: (1) Total cash equivalents $ 71,758 — — — 71,758 Available for sale securities: Sponsored funds $ 122,806 — — — 122,806 Sponsored privately offered funds measured at net asset value (2) — — — 570 570 Trading securities: Mortgage-backed securities — 13 — — 13 Common stock 101 — — — 101 Consolidated sponsored funds 100,847 44,863 — — 145,710 Sponsored funds 29,541 — — — 29,541 Equity method securities: (3) Sponsored funds 26,775 — — — 26,775 Sponsored privately offered funds measured at net asset value (2) — — — 3,234 3,234 Total $ 280,070 44,876 — 3,804 328,750 (1) Cash equivalents include highly liquid investments with original maturities of 90 days or less. Cash investments in actively traded money market funds are measured at NAV and are classified as Level 1. Cash investments in commercial paper are measured at cost, which approximates fair value because of the short time between purchase of the instrument and its expected realization, and are classified as Level 2. (2) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets. Substantially all of the Company’s equity method investments are investment companies that record their underlying investments at fair value.

Derivative Financial Instrume32

Derivative Financial Instruments (Tables)	12 Months Ended
	Dec. 31, 2017
Derivative Financial Instruments
Schedule of fair value of derivative financial instruments, excluding derivative financial instruments held in certain consolidated sponsored funds	The following table presents the fair value of the derivative financial instruments, excluding derivative financial instruments held in certain consolidated sponsored funds as of December 31, 2017 and 2016 calculated based on Level 2 inputs: December 31, December 31, 2017 2016 Balance sheet location Fair value Fair value (in thousands) Total return swap contracts Other current liabilities $ 1,093 475
Schedule of net losses recognized in income of derivative financial instrument	The following is a summary of net losses recognized in income for the years ended December 31, 2017 and 2016: Year ended Income statement December 31, location 2017 2016 (in thousands) Total return swap contracts Investment and other (loss) $ (36,368) (31,974)

Property and Equipment (Tables)

Property and Equipment (Tables)	12 Months Ended
	Dec. 31, 2017
Property and Equipment
Schedule of property and equipment, net	Estimated 2017 2016 useful lives (in thousands) Leasehold improvements $ 22,106 22,426 1 - 15 years Furniture and fixtures 30,529 30,501 3 - 10 years Equipment 20,802 20,616 2 - 26 years Computer software 99,644 100,941 1 - 10 years Data processing equipment 18,678 19,458 1 - 5 years Buildings 11,759 11,699 1 - 30 years Land 2,843 2,843 Property and equipment, at cost 206,361 208,484 Accumulated depreciation (118,694) (106,035) Property and equipment, net $ 87,667 102,449

Goodwill and Identifiable Int34

Goodwill and Identifiable Intangible Assets (Tables)	12 Months Ended
	Dec. 31, 2017
Goodwill and Identifiable Intangible Assets
Schedule of goodwill and identifiable intangible assets	December 31, December 31, 2017 2016 (in thousands) Goodwill $ 106,970 106,970 Mutual fund management advisory contracts 38,699 38,699 Mutual fund management subadvisory contract 1,200 2,700 Other 200 200 Total identifiable intangible assets 40,099 41,599 Total $ 147,069 148,569

Income Taxes (Tables)

Income Taxes (Tables)	12 Months Ended
	Dec. 31, 2017
Income Taxes
Schedule of provision for income taxes	2017 2016 2015 (in thousands) Current taxes: Federal $ 73,167 72,711 142,576 State 7,720 7,174 12,800 Foreign — 17 38 80,887 79,902 155,414 Deferred taxes 20,481 1,982 (6,188) Provision for income taxes $ 101,368 81,884 149,226
Schedule of reconciliation of statutory federal income tax rate with effective income tax rate	2017 2016 2015 Statutory federal income tax rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal tax benefits 2.5 2.2 2.0 Share-based compensation 3.4 — — Charges related to decrease in U.S. tax rate 2.2 — — State tax incentives (0.2) (0.3) (0.2) Valuation allowance on losses capital in nature (1.0) (3.2) 1.0 Other items (0.6) 0.4 0.8 Effective income tax rate 41.3 % 34.1 % 38.6 %
Schedule of deferred tax liabilities and deferred tax assets	2017 2016 (in thousands) Deferred tax liabilities: Deferred sales commissions $ (331) (484) Property and equipment (7,301) (13,906) Identifiable intangible assets (7,419) (11,118) Unrealized gains on investments securities and partnerships (3,554) — Prepaid expenses (1,679) (1,968) Additional postretirement liability (150) (356) Total gross deferred liabilities (20,434) (27,832) Deferred tax assets: Benefit plans 3,381 15,425 Accrued compensation 5,558 10,678 Other accrued expenses 4,094 7,058 Unrealized losses on investment securities and partnerships — 1,834 Capital loss carryforwards 57 3,920 Share-based compensation 15,047 20,516 Unused state tax credits 2,788 2,115 State net operating loss carryforwards 7,235 5,716 Other 2,817 3,428 Total gross deferred assets 40,977 70,690 Valuation allowance (7,235) (11,428) Net deferred tax asset $ 13,308 31,430
Summary of the Company's reconciliation of unrecognized tax benefits, excluding penalties and interest	The following table summarizes the Company's reconciliation of unrecognized tax benefits, excluding penalties and interest, for the years ended December 31, 2017, 2016 and 2015: 2017 2016 2015 (in thousands) Balance at January 1 $ 7,734 8,448 8,105 Increases during the year: Gross increases - tax positions in prior period 244 465 1,401 Gross increases - current-period tax positions 97 494 700 Decreases during the year: Gross decreases - tax positions in prior period (56) (167) (308) Decreases due to settlements with taxing authorities (178) (21) (486) Decreases due to lapse of statute of limitations (998) (1,485) (964) Balance at December 31 $ 6,843 7,734 8,448

Pension Plan and Postretireme36

Pension Plan and Postretirement Benefits Other Than Pension (Tables)	12 Months Ended
	Dec. 31, 2017
Pension Plan and Postretirement Benefits Other Than Pension
Schedule of changes in net funded status, disclosure of amounts recognized in the balance sheet, and the assumptions used to determine the benefit obligation	A reconciliation of the funded status of these plans and the assumptions related to the obligations at December 31, 2017, 2016 and 2015 are as follows: Other Pension Benefits Postretirement Benefits 2017 2016 2015 2017 2016 2015 (in thousands) Change in projected benefit obligation: Net benefit obligation at beginning of year $ 180,921 210,783 208,085 2,446 8,421 9,902 Service cost 8,367 12,199 12,080 — 555 910 Interest cost 6,248 9,432 8,420 58 297 397 Benefits paid (8,511) (52,288) (10,184) (954) (674) (505) Actuarial (gain) loss 28,841 (19,886) (7,618) 139 1,790 (2,632) Retiree contributions — — — 506 532 349 Curtailment gain (31,621) — — — (8,475) — Settlement loss — 20,681 — — — — Net benefit obligation at end of year $ 184,245 180,921 210,783 2,195 2,446 8,421 The accumulated benefit obligation for the Pension Plan was $150.1 million at December 31, 2016. Other Pension Benefits Postretirement Benefits 2017 2016 2015 2017 2016 2015 (in thousands) Change in plan assets: Fair value of plan assets at beginning of year $ 144,529 173,885 175,548 — — — Actual return on plan assets 24,863 2,932 (11,479) — — — Employer contributions 10,000 20,000 20,000 448 142 156 Retiree contributions — — — 506 532 349 Benefits paid (8,511) (52,288) (10,184) (954) (674) (505) Fair value of plan assets at end of year $ 170,881 144,529 173,885 — — — Funded status at end of year $ (13,364) (36,392) (36,898) (2,195) (2,446) (8,421) Other Pension Benefits Postretirement Benefits 2017 2016 2015 2017 2016 2015 (in thousands, except percentage data) Amounts recognized in the statement of financial position: Current liabilities $ — — — (422) (458) (316) Noncurrent liabilities (13,364) (36,392) (36,898) (1,773) (1,988) (8,105) Net amount recognized at end of year $ (13,364) (36,392) (36,898) (2,195) (2,446) (8,421) Weighted average assumptions used to determine benefit obligation at December 31: Discount rate 3.76 % 4.39 % 4.60 % 3.28 % 3.46 % 4.44 % Rate of compensation increase Not applicable 5.12 % 5.12 % Not applicable
Schedule of pension plan asset allocation	Our Pension Plan asset allocation at December 31, 2017 and 2016 is as follows: Percentage of Percentage of Plan Assets at Plan Assets at Plan assets by category December 31, 2017 December 31, 2016 Cash 40 % 18 % Equity securities: Domestic 29 % 49 % International 18 % 17 % Fixed income securities 8 % 10 % Gold bullion 5 % 6 % Total 100 % 100 %
Summary of entity's pension plan assets fair value	2017 Level 1 Level 2 Level 3 Total (in thousands) Equity securities: Domestic $ 49,540 — — 49,540 International 4,889 26,542 — 31,431 Fixed income securities: U.S. Treasuries — 6,455 — 6,455 Corporate bond — 587 — 587 Foreign bonds — 6,591 — 6,591 Gold bullion 8,369 — — 8,369 Total investment securities 62,798 40,175 — 102,973 Cash and cash equivalents 67,908 Total $ 170,881 2016 Level 1 Level 2 Level 3 Total (in thousands) Equity securities: Domestic $ 71,159 — — 71,159 International 24,622 — — 24,622 Equity derivatives — 12 — 12 Fixed income securities: Mortgage-backed securities — 10 — 10 U.S. Treasuries — 4,801 — 4,801 Corporate bond — 526 — 526 Foreign Bonds — 8,897 — 8,897 Gold bullion 8,420 — — 8,420 Total investment securities 104,201 14,246 — 118,447 Cash and cash equivalents 26,082 Total $ 144,529
Schedule of components of net periodic pension and other postretirement costs	The components of net periodic pension and other postretirement costs consisted of the following for the years ended December 31, 2017, 2016 and 2015: Other Pension Benefits Postretirement Benefits 2017 2016 2015 2017 2016 2015 (in thousands) Components of net periodic benefit cost: Service cost $ 8,367 12,199 12,080 — 555 910 Interest cost 6,248 9,432 8,420 58 297 397 Expected return on plan assets (10,113) (13,927) (14,510) — — — Actuarial gain (loss) 14,091 (8,891) 18,371 — — — Actuarial gain amortization — — — (180) (153) — Prior service cost amortization — — — (4) 4 19 Curtailment gain (31,621) — — — (8,475) — Settlement loss — 20,681 — — — — Total (1) $ (13,028) 19,494 24,361 (126) (7,772) 1,326 (1) For the year ended December 31, 2017, $9.7 million of net periodic pension and other postretirement benefit credits were included in compensation and related costs and $3.5 million included in underwriting and distribution expense.
Schedule of weighted average assumptions used to determine net periodic cost and benefit obligation	The weighted average assumptions used to determine net periodic benefit cost for the years ended December 31, 2017, 2016 and 2015 are as follows: Other Pension Benefits Postretirement Benefits 2017 2016 2015 2017 2016 2015 Discount rate 4.39% / 3.96 1 % 4.60 % 4.13 % 3.46 % 4.44 % 4.07 % Expected return on plan assets 7.00% / 6.00 1 % 7.50 % 7.75 % Not applicable Rate of compensation increase 5.12 % 5.12 % 5.12 % Not applicable (1) Due to the plan freeze and associated remeasurement as of July 31, 2017, the discount rate changed from 4.39% to 3.96% and the expected return on assets changed from 7.00% to 6.00%.
Schedule of expected benefit payments to be paid	We expect the following benefit payments to be paid: Other Pension Postretirement Benefits Benefits (in thousands) 2018 $ 10,895 421 2019 8,667 421 2020 8,642 315 2021 9,659 241 2022 9,406 199 2023 through 2027 50,906 484 $ 98,175 2,081

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	12 Months Ended
	Dec. 31, 2017
Stockholders' Equity
Components of basic and diluted earnings per share	For the years ended December 31, 2017, 2016 and 2015, earnings per share were computed as follows: 2017 2016 2015 Net income attributable to Waddell & Reed Financial, Inc. $ 141,279 156,695 237,578 Weighted average shares outstanding, basic and diluted 83,573 82,668 83,499 Earnings per share, basic and diluted $ 1.69 1.90 2.85
Summary of other comprehensive income (loss) activity	The following table summarizes other comprehensive income (loss) activity for the years ended December 31, 2017 and 2016. Change in valuation allowance for unrealized Total Unrealized gains Postretirement accumulated gains (losses) (losses) on benefits other on investment investment unrealized comprehensive Year ended December 31, 2017 securities securities gains (losses) income (loss) (in thousands) Balance at December 31, 2016 $ (3,972) (3,388) 603 (6,757) Other comprehensive income (loss) before reclassification 4,039 3,743 (106) 7,676 Amount reclassified from accumulated other comprehensive income (loss) 78 (355) (118) (395) Net current period other comprehensive income (loss) 4,117 3,388 (224) 7,281 Balance at December 31, 2017 $ 145 $ — 379 524 Change in valuation allowance for unrealized Total Unrealized gains Postretirement accumulated gains (losses) (losses) on benefits other on investment investment unrealized comprehensive Year ended December 31, 2016 securities securities gains (losses) income (loss) (in thousands) Balance at December 31, 2015 $ (3,729) (3,240) 1,824 (5,145) Other comprehensive income (loss) before reclassification 1,948 1,195 (1,125) 2,018 Amount reclassified from accumulated other comprehensive loss (2,191) (1,343) (96) (3,630) Net current period other comprehensive loss (243) (148) (1,221) (1,612) Balance at December 31, 2016 $ (3,972) $ (3,388) 603 (6,757)
Summary of reclassifications from accumulated other comprehensive income (loss) and included in net income	Reclassifications from accumulated other comprehensive income and included in net income are summarized in the table that follows for the years ended December 31, 2017 and 2016: For the year ended December 31, 2017 Tax (expense) Pre-tax benefit Net of tax Statement of income line item (in thousands) Reclassifications included in net income: Sponsored funds investment losses $ (124) 46 (78) Investment and other income (loss) Valuation allowance — 355 355 Provision for income taxes Amortization of postretirement benefits 184 (66) 118 Underwriting and distribution expense and Compensation and related costs Total $ 60 335 395 For the year ended December 31, 2016 Tax (expense) Pre-tax benefit Net of tax Statement of income line item (in thousands) Reclassifications included in net income: Sponsored funds investment gains $ 3,489 (1,298) 2,191 Investment and other income (loss) Valuation allowance — 1,343 1,343 Provision for income taxes Amortization of postretirement benefits 149 (53) 96 Underwriting and distribution expense and Compensation and related costs Total $ 3,638 (8) 3,630

Share-Based Compensation (Table

Share-Based Compensation (Tables)	12 Months Ended
	Dec. 31, 2017
Share-Based Compensation
Summary of nonvested share activity and related fair value	A summary of nonvested share activity and related fair value for the year ended December 31, 2017 follows: Weighted Average Nonvested Grant Date Stock Shares Fair Value Nonvested at December 31, 2016 4,786,103 $ 34.74 Granted 1,717,333 19.77 Vested (1,109,002) 48.22 Forfeited (305,794) 26.31 Nonvested at December 31, 2017 5,088,640 $ 27.26
Schedule of nonvested cash settled unit activity	A summary of nonvested cash-settled unit activity for the year ended December 31, 2017 follows: Nonvested Cash-Settled Units Nonvested at December 31, 2016 — Granted 1,284,459 Vested (522) Forfeited (70,908) Nonvested at December 31, 2017 1,213,029

Uniform Net Capital Rule Requ39

Uniform Net Capital Rule Requirements (Tables)	12 Months Ended
	Dec. 31, 2017
Uniform Net Capital Rule Requirements
Schedule of net capital and aggregated indebtedness information for broker/dealer subsidiaries	Net capital and aggregated indebtedness information for our broker-dealer subsidiaries is presented in the following table as of December 31, 2017 and 2016: 2017 2016 (in thousands) W&R IDI W&R IDI Net capital $ 28,024 21,167 52,639 12,894 Required capital 250 1,757 250 2,152 Excess of required capital $ 27,774 19,410 52,389 10,742 Ratio of aggregate indebtedness to net capital Not Not applicable 1.25 to 1.0 applicable 2.50 to 1.0

Rental Expense and Lease Comm40

Rental Expense and Lease Commitments (Tables)	12 Months Ended
	Dec. 31, 2017
Rental Expense and Lease Commitments
Schedule of future minimum rental commitments under non-cancelable operating leases	Future minimum rental commitments under non‑cancelable operating leases are as follows: Year Commitments (in thousands) 2018 $ 19,921 2019 14,181 2020 9,050 2021 5,340 2022 2,746 Thereafter 7,489 $ 58,727

Related Party Transactions (Tab

Related Party Transactions (Tables)	12 Months Ended
	Dec. 31, 2017
Related Party Transactions
Schedule of revenues for services provided or related to the Funds and IGI	Revenues for services provided or related to the Funds and IGI Funds for the years ended December 31, 2017, 2016 and 2015 are as follows: 2017 2016 2015 (in thousands) Investment management fees $ 508,035 523,304 654,727 Rule 12b-1 service and distribution fees 159,873 208,901 303,046 Shareholder service fees 106,595 120,241 143,071 Total revenues $ 774,503 852,446 1,100,844

Selected Quarterly Informatio42

Selected Quarterly Information (Unaudited) (Tables)	12 Months Ended
	Dec. 31, 2017
Selected Quarterly Information (Unaudited)
Schedule of selected quarterly Information	Quarter First Second Third Fourth (in thousands) 2017 Total revenues $ 286,564 286,657 289,447 294,476 Net income attributable to Waddell & Reed Financial, Inc. $ 33,871 24,061 53,582 29,765 Net income per share, basic and diluted $ 0.40 0.29 0.64 0.36 Quarter First Second Third Fourth (in thousands) 2016 Total revenues $ 323,816 319,208 303,086 292,913 Net income attributable to Waddell & Reed Financial, Inc. $ 38,069 34,678 54,908 29,040 Net income per share, basic and diluted $ 0.46 0.42 0.66 0.35

Summary of Significant Accoun43

Summary of Significant Accounting Policies - Basis of Presentation and Consolidation (Details) $ in Millions	Jan. 01, 2017USD ($)	Dec. 31, 2017item	Dec. 31, 2017USD ($)
Number of operating business segments | item		1
Cumulative effect on retained earnings			$ (48.4)
ASU 2016-09 | Adjustments
Increase to additional paid-in capital	$ 3.5
Reduction to retained earnings	(2.2)
Increase to the non-current deferred tax asset	$ 1.3

Summary of Significant Accoun44

Summary of Significant Accounting Policies - Change in Financial Statements (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended			36 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2017
Income Statement Information:
Cumulative effect on retained earnings												$ (48,400)
Underwriting and distribution expenses									$ 593,424	$ 664,648	$ 774,428
Compensation and related costs									181,376	200,822	208,841
Income before provision for income taxes									245,577	239,993	386,804
Provision for income taxes									101,368	81,884	149,226
Net income									144,209	158,109	237,578
Net income attributable to Waddell and Reed Financial, Inc.	$ 29,765	$ 53,582	$ 24,061	$ 33,871	$ 29,040	$ 54,908	$ 34,678	$ 38,069	$ 141,279	$ 156,695	$ 237,578
Net income per share attributable to Waddell and Reed Financial, Inc. common shareholders, basic and diluted (in dollars per share)	$ 0.36	$ 0.64	$ 0.29	$ 0.40	$ 0.35	$ 0.66	$ 0.42	$ 0.46	$ 1.69	$ 1.90	$ 2.85
Statement of Comprehensive Income Information
Pension and postretirement benefit, net of income tax expense (benefit)									$ (224)	$ (1,220)	$ 1,667
Statement of Cash Flows Information:
Net income									144,209	158,109	237,578
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred taxes									20,481	1,982	(6,188)
Pension and postretirement plan benefits									(17,714)	3,166	18,390
Balance Sheet Information
Retained earnings	$ 1,092,394				$ 1,089,122				1,092,394	1,089,122		1,092,394
Accumulated other comprehensive income (loss)	524				(6,757)				524	(6,757)		524
Historical Accounting Method
Income Statement Information:
Underwriting and distribution expenses									600,067	671,105	769,781
Compensation and related costs									196,209	209,850	200,752
Income before provision for income taxes									224,101	224,508	399,540
Provision for income taxes									92,592	76,188	154,004
Net income									131,509	148,321	245,536
Net income attributable to Waddell and Reed Financial, Inc.									$ 128,579	$ 146,906	$ 245,536
Net income per share attributable to Waddell and Reed Financial, Inc. common shareholders, basic and diluted (in dollars per share)									$ 1.54	$ 1.78	$ 2.94
Statement of Comprehensive Income Information
Pension and postretirement benefit, net of income tax expense (benefit)									$ 12,476	$ 8,569	$ (6,291)
Statement of Cash Flows Information:
Net income									131,509	148,321	245,536
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred taxes									11,705	(3,714)	(1,410)
Pension and postretirement plan benefits									3,762	18,651	$ 5,654
Balance Sheet Information
Retained earnings	1,126,263				1,135,694				1,126,263	1,135,694		1,126,263
Accumulated other comprehensive income (loss)	$ (33,345)				$ (53,329)				$ (33,345)	$ (53,329)		$ (33,345)

Summary of Significant Accoun45

Summary of Significant Accounting Policies - Summary of property and equipment (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Furniture and fixtures | Minimum
Summary of property and equipment
Estimated useful lives	3 years
Furniture and fixtures | Maximum
Summary of property and equipment
Estimated useful lives	10 years
Computer software | Minimum
Summary of property and equipment
Estimated useful lives	1 year
Computer software | Maximum
Summary of property and equipment
Estimated useful lives	10 years
Data processing equipment | Minimum
Summary of property and equipment
Estimated useful lives	1 year
Data processing equipment | Maximum
Summary of property and equipment
Estimated useful lives	5 years
Buildings | Minimum
Summary of property and equipment
Estimated useful lives	1 year
Buildings | Maximum
Summary of property and equipment
Estimated useful lives	30 years
Other equipment | Minimum
Summary of property and equipment
Estimated useful lives	2 years
Other equipment | Maximum
Summary of property and equipment
Estimated useful lives	26 years
Leasehold improvements | Minimum
Summary of property and equipment
Estimated useful lives	1 year
Leasehold improvements | Maximum
Summary of property and equipment
Estimated useful lives	15 years
Software Developed for Internal Use
Summary of property and equipment
Internal costs capitalized	$ 10.5	$ 13.3
Software Developed for Internal Use | Minimum
Summary of property and equipment
Estimated useful lives	1 year
Software Developed for Internal Use | Maximum
Summary of property and equipment
Estimated useful lives	10 years

Summary of Significant Accoun46

Summary of Significant Accounting Policies - Deferred Sales Commissions and Revenue Recognition (Details)	12 Months Ended
	Dec. 31, 2017
Class B
Deferred Sales Commissions
Maximum service plan fee (as a percent)	0.25%
Maximum distribution plan fee (as a percent)	0.75%
Class C
Deferred Sales Commissions
Maximum service plan fee (as a percent)	0.25%
Maximum distribution plan fee (as a percent)	0.75%
Class A
Deferred Sales Commissions
Maximum service plan fee (as a percent)	0.25%
Maximum distribution plan fee (as a percent)	0.25%
Class A | Maximum
Deferred Sales Commissions
Sales charge (as a percent)	5.75%
Class E
Deferred Sales Commissions
Maximum service plan fee (as a percent)	0.25%
Class E | Maximum
Deferred Sales Commissions
Sales charge (as a percent)	5.75%
Ivy Funds Y
Deferred Sales Commissions
Maximum service plan fee (as a percent)	0.25%
Class R
Deferred Sales Commissions
Maximum service plan fee (as a percent)	0.50%

Summary of Significant Accoun47

Summary of Significant Accounting Policies - Advertising and Promotion (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Advertising and Promotion
Advertising expense	$ 9.7	$ 9.4	$ 15.7

Summary of Significant Accoun48

Summary of Significant Accounting Policies - Share Based Compensation and Accounting for Income Taxes (Details) - USD ($) $ / shares in Units, $ in Millions	Jan. 01, 2018	Dec. 31, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Percentage increments vested on anniversaries on the grant date			25.00%		33.33%
Vesting period			4 years
Par value, common stock		$ 0.01	$ 0.01	$ 0.01
Federal statutory tax rate			35.00%	35.00%	35.00%
Provisional tax impact related to the revaluation of deferred tax assets and liabilities		$ 5.4
Subsequent Event
Federal statutory tax rate	21.00%
Cash Settled RSU Plan
Percentage increments vested on anniversaries on the grant date			25.00%
Vesting period			4 years
Number of share of par value $0.01 on which lump sum cash payment is received by RSU holders		1	1
Par value, common stock		$ 0.01	$ 0.01

Investment Securities - Investm

Investment Securities - Investment securities (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Available for sale securities:
Available for sale securities	$ 389,214	$ 123,376
Trading securities:
Trading securities	216,090	175,365
Equity method securities
Equity method securities	95,188	30,009
Total investment securities	700,492	328,750
Certificates of deposit
Available for sale securities:
Available for sale securities	12,999
Trading securities:
Trading securities	1,999
Commercial paper
Available for sale securities:
Available for sale securities	34,978
Corporate bonds
Available for sale securities:
Available for sale securities	197,442
Trading securities:
Trading securities	55,414
U.S. treasury bills
Available for sale securities:
Available for sale securities	19,779
Trading securities:
Trading securities	4,929
Mortgage-backed securities
Trading securities:
Trading securities	10	13
Common Stock
Trading securities:
Trading securities	116	101
Consolidated Sponsored Funds
Trading securities:
Trading securities	139,086	145,710
Sponsored funds
Available for sale securities:
Available for sale securities	124,016	122,806
Trading securities:
Trading securities	13,841	29,541
Equity method securities
Equity method securities	95,188	26,775
Sponsored privately offered funds
Available for sale securities:
Available for sale securities		570
Trading securities:
Trading securities	695
Equity method securities
Equity method securities		3,234
Total investment securities	$ 700	$ 3,800

Investment Securities - Maturit

Investment Securities - Maturity (Details) $ in Thousands	Dec. 31, 2017USD ($)
Amortized Cost
Within one year	$ 98,323
After one year but within five years	167,936
Total amortized cost	266,259
Fair value
Within one year	98,390
After one year but within five years	166,808
Total fair value	265,198
Fair value
Within one year	12,064
After one year but within five years	45,288
After 10 years	5,000
Total fair value	$ 62,352

Investment Securities - Inves51

Investment Securities - Investment securities and summary of the gains (losses) related to securities (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Available for sale securities:
Amortized cost	$ 388,981	$ 129,692
Unrealized gains	2,752	1,133
Unrealized losses	(2,519)	(7,449)
Fair value	389,214	123,376
Certificates of deposit
Available for sale securities:
Amortized cost	13,000
Unrealized gains	1
Unrealized losses	(2)
Fair value	12,999
Commercial paper
Available for sale securities:
Amortized cost	34,836
Unrealized gains	142
Fair value	34,978
Corporate bonds
Available for sale securities:
Amortized cost	198,404
Unrealized gains	33
Unrealized losses	(995)
Fair value	197,442
U.S. treasury bills
Available for sale securities:
Amortized cost	20,019
Unrealized losses	(240)
Fair value	19,779
Sponsored funds
Available for sale securities:
Amortized cost	122,722	129,427
Unrealized gains	2,576	828
Unrealized losses	(1,282)	(7,449)
Fair value	$ 124,016	122,806
Sponsored privately offered funds
Available for sale securities:
Amortized cost		265
Unrealized gains		305
Fair value		$ 570

Investment Securities - Sponsor

Investment Securities - Sponsored Privately Offered Funds (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Investment Securities
Total investment securities	$ 700,492	$ 328,750
Investment securities, sold at fair value	237,200	234,400	$ 102,200
Net realized gain recognized from sale of available for sale securities	900	3,600	3,000
Available for sale securities, sold at fair value	86,900	98,200	31,600
Net realized gain (loss) recognized from sale of trading securities	(500)		600
Sales of trading securities	19,800		65,900
Net realized gain (loss) on equity method investments	6,900	(2,300)	(500)
Sale of equity method investments	73,200	58,700	$ 5,300
Consolidated Sponsored Funds
Investment Securities
Net realized gain (loss) recognized from sale of trading securities	1,500
Sales of trading securities	57,100
Sponsored privately offered funds
Investment Securities
Total investment securities	700	$ 3,800
Sponsored funds | Investment and other income (loss)
Investment Securities
Pre-tax charge to reflect the “other than temporary” decline in value of investments	$ 1,300

Investment Securities - Availab

Investment Securities - Available for sale sponsored funds with fair values below carrying values (Details) $ in Thousands	Dec. 31, 2017USD ($)
Fair value
Less than 12 months	$ 264,827
12 months or longer	23,707
Total temporarily impaired securities	288,534
Unrealized losses
Less than 12 months	(1,837)
12 months or longer	(682)
Total Unrealized losses on temporarily impaired securities	(2,519)
Certificates of deposit
Fair value
Less than 12 months	2,998
Total temporarily impaired securities	2,998
Unrealized losses
Less than 12 months	(2)
Total Unrealized losses on temporarily impaired securities	(2)
Corporate bonds
Fair value
Less than 12 months	192,409
Total temporarily impaired securities	192,409
Unrealized losses
Less than 12 months	(995)
Total Unrealized losses on temporarily impaired securities	(995)
U.S. treasury bills
Fair value
Less than 12 months	19,779
Total temporarily impaired securities	19,779
Unrealized losses
Less than 12 months	(240)
Total Unrealized losses on temporarily impaired securities	(240)
Sponsored funds
Fair value
Less than 12 months	49,641
12 months or longer	23,707
Total temporarily impaired securities	73,348
Unrealized losses
Less than 12 months	(600)
12 months or longer	(682)
Total Unrealized losses on temporarily impaired securities	$ (1,282)

Investment Securities - Consoli

Investment Securities - Consolidated Sponsored and Sponsored Privately Offered Funds (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Investment Securities
Cash	$ 207,829	$ 555,102	$ 558,495	$ 566,621
Redeemable noncontrolling interests	(14,509)	(10,653)
Consolidated Sponsored and Sponsored Privately Offered Funds
Investment Securities
Cash	8,472	6,885
Investments	139,086	145,710
Other assets	1,588	763
Other liabilities	(1,040)	(390)
Redeemable noncontrolling interests	(14,509)	(10,653)
Net interest in consolidated sponsored funds	133,597	$ 142,315
Deconsolidated cash and cash equivalents value	2,600
Deconsolidated investments value	53,600
Deconsolidated redeemable noncontrolling interest	$ 56,200

Investment Securities - Fair va

Investment Securities - Fair value of investment securities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Fair value of investments
Cash equivalents	$ 156,849	$ 71,758
Available-for-sale Securities	389,214	123,376
Trading Securities	216,090	175,365
Equity method securities	95,188	30,009
Total investment securities	700,492	328,750
Amount of transfer between levels	0	0
Money market funds
Fair value of investments
Cash equivalents	145,785
Certificates of deposit
Fair value of investments
Available-for-sale Securities	12,999
Trading Securities	1,999
Commercial paper
Fair value of investments
Cash equivalents	11,064
Available-for-sale Securities	34,978
Corporate bonds
Fair value of investments
Available-for-sale Securities	197,442
Trading Securities	55,414
U.S. treasury bills
Fair value of investments
Available-for-sale Securities	19,779
Trading Securities	4,929
Mortgage-backed securities
Fair value of investments
Trading Securities	10	13
Common Stock
Fair value of investments
Trading Securities	116	101
Consolidated Sponsored Funds
Fair value of investments
Trading Securities	139,086	145,710
Sponsored funds
Fair value of investments
Available-for-sale Securities	124,016	122,806
Trading Securities	13,841	29,541
Equity method securities	95,188	26,775
Sponsored privately offered funds
Fair value of investments
Available-for-sale Securities		570
Trading Securities	695
Equity method securities		3,234
Total investment securities	700	3,800
Level 1
Fair value of investments
Cash equivalents	145,785	71,758
Total investment securities	310,289	280,070
Level 1 | Money market funds
Fair value of investments
Cash equivalents	145,785
Level 1 | Common Stock
Fair value of investments
Trading Securities	116	101
Level 1 | Consolidated Sponsored Funds
Fair value of investments
Trading Securities	77,128	100,847
Level 1 | Sponsored funds
Fair value of investments
Available-for-sale Securities	124,016	122,806
Trading Securities	13,841	29,541
Equity method securities	95,188	26,775
Level 2
Fair value of investments
Cash equivalents	11,064
Total investment securities	389,508	44,876
Level 2 | Certificates of deposit
Fair value of investments
Available-for-sale Securities	12,999
Trading Securities	1,999
Level 2 | Commercial paper
Fair value of investments
Cash equivalents	11,064
Available-for-sale Securities	34,978
Level 2 | Corporate bonds
Fair value of investments
Available-for-sale Securities	197,442
Trading Securities	55,414
Level 2 | U.S. treasury bills
Fair value of investments
Available-for-sale Securities	19,779
Trading Securities	4,929
Level 2 | Mortgage-backed securities
Fair value of investments
Trading Securities	10	13
Level 2 | Consolidated Sponsored Funds
Fair value of investments
Trading Securities	61,958	44,863
Other Assets Not Held at Fair Value
Fair value of investments
Total investment securities	695	3,804
Other Assets Not Held at Fair Value | Sponsored privately offered funds
Fair value of investments
Available-for-sale Securities		570
Trading Securities	$ 695
Equity method securities		$ 3,234

Derivative Financial Instrume56

Derivative Financial Instruments (Details) - Not designated as a hedge - Total return swap contracts $ in Thousands	12 Months Ended
	Dec. 31, 2017USD ($)contract	Dec. 31, 2016USD ($)contract
Derivative Financial Instruments
Number of contracts | contract	6	3
Notional value	$ 213,900	$ 160,200
Cash collateral with the counterparties	9,700	7,100
Level 2 | Investment and other income (loss)
Derivative Financial Instruments
Net gains (losses) recognized in income	(36,368)	(31,974)
Level 2 | Other current liabilities
Derivative Financial Instruments
Fair value - liabilities	$ 1,093	$ 475

Property and Equipment (Details

Property and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Summary of property and equipment
Property and equipment, at cost	$ 206,361	$ 208,484
Accumulated depreciation	(118,694)	(106,035)
Property and equipment, net	87,667	102,449
Depreciation	20,983	18,359	$ 16,046
Leasehold improvements
Summary of property and equipment
Property and equipment, at cost	$ 22,106	22,426
Leasehold improvements | Minimum
Summary of property and equipment
Estimated useful lives	1 year
Leasehold improvements | Maximum
Summary of property and equipment
Estimated useful lives	15 years
Furniture and fixtures
Summary of property and equipment
Property and equipment, at cost	$ 30,529	30,501
Furniture and fixtures | Minimum
Summary of property and equipment
Estimated useful lives	3 years
Furniture and fixtures | Maximum
Summary of property and equipment
Estimated useful lives	10 years
Equipment
Summary of property and equipment
Property and equipment, at cost	$ 20,802	20,616
Equipment | Minimum
Summary of property and equipment
Estimated useful lives	2 years
Equipment | Maximum
Summary of property and equipment
Estimated useful lives	26 years
Computer software
Summary of property and equipment
Property and equipment, at cost	$ 99,644	100,941
Computer software | Minimum
Summary of property and equipment
Estimated useful lives	1 year
Computer software | Maximum
Summary of property and equipment
Estimated useful lives	10 years
Data processing equipment
Summary of property and equipment
Property and equipment, at cost	$ 18,678	19,458
Data processing equipment | Minimum
Summary of property and equipment
Estimated useful lives	1 year
Data processing equipment | Maximum
Summary of property and equipment
Estimated useful lives	5 years
Buildings
Summary of property and equipment
Property and equipment, at cost	$ 11,759	11,699
Buildings | Minimum
Summary of property and equipment
Estimated useful lives	1 year
Buildings | Maximum
Summary of property and equipment
Estimated useful lives	30 years
Land
Summary of property and equipment
Property and equipment, at cost	$ 2,843	2,843
Property and equipment under capital leases
Summary of property and equipment
Property and equipment, at cost	1,900	1,800
Accumulated depreciation	$ (1,000)	$ (800)

Goodwill and Identifiable Int58

Goodwill and Identifiable Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Goodwill and identifiable intangible assets
Goodwill	$ 106,970	$ 106,970
Other	200	200
Total identifiable intangible assets	40,099	41,599
Total goodwill and identifiable intangible assets	147,069	148,569
Mutual fund management advisory contracts
Goodwill and identifiable intangible assets
Mutual fund contracts	38,699	38,699
Mutual fund management subadvisory contracts
Goodwill and identifiable intangible assets
Mutual fund contracts	$ 1,200	$ 2,700

Indebtedness (Details)

Indebtedness (Details) $ in Thousands	Oct. 20, 2017USD ($)	Dec. 31, 2017USD ($)item	Dec. 31, 2016USD ($)	Aug. 31, 2010USD ($)
Indebtedness
Short-term notes payable		$ 94,996
Long-term debt		94,783	$ 189,605
Credit Facility
Indebtedness
Revolving credit facility term	3 years
Maximum borrowing capacity	$ 100,000
Borrowing outstanding under the facility		$ 0	$ 0
Amount that borrowing capacity can be expanded upon entity's request	$ 200,000
Senior Notes
Indebtedness
Face amount of notes issued and sold				$ 190,000
Consolidated leverage ratio		0.6
Number of consecutive quarters for which the maximum consolidated leverage ratio is required to be maintained under financial covenants | item		4
Number of consecutive quarters for which the minimum consolidated interest coverage ratio is required to be maintained under financial covenants | item		4
Consolidated interest coverage ratio		29.2
Senior Notes | Maximum
Indebtedness
Consolidated leverage ratio		3
Senior Notes | Minimum
Indebtedness
Consolidated interest coverage ratio		4
Senior 5.0% unsecured notes due, 2018 ("Series A Notes")
Indebtedness
Fair value of outstanding short-term indebtedness		$ 95,100
Short-term notes payable		95,000
Senior 5.75% unsecured notes due, 2021 ("Series B Notes")
Indebtedness
Fair value of outstanding long-term indebtedness		101,700
Long-term debt		$ 94,800

Income Taxes - Provision for in

Income Taxes - Provision for income taxes and reconciliation of statutory federal income tax rate with effective income tax rate (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Current taxes:
Federal	$ 73,167	$ 72,711	$ 142,576
State	7,720	7,174	12,800
Foreign		17	38
Total currently payable	80,887	79,902	155,414
Deferred taxes	20,481	1,982	(6,188)
Provision for income taxes	$ 101,368	$ 81,884	$ 149,226
Reconciliation of statutory federal income tax rate with the entity's effective income tax rate
Statutory federal income tax rate (as a percent)	35.00%	35.00%	35.00%
State income taxes, net of federal tax benefits (as a percent)	2.50%	2.20%	2.00%
Share-based compensation (as a percent)	3.40%
Charges related to decrease in U.S. tax rate (as a percent)	2.20%
State tax incentives (as a percent)	(0.20%)	(0.30%)	(0.20%)
Valuation allowance on losses capital in nature (as a percent)	(1.00%)	(3.20%)	1.00%
Other items (as a percent)	(0.60%)	0.40%	0.80%
Effective income tax rate (as a percent)	41.30%	34.10%	38.60%

Income Taxes - Deferred tax lia

Income Taxes - Deferred tax liabilities and deferred tax assets (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Deferred tax liabilities:
Deferred sales commissions	$ (331)	$ (484)
Property and equipment	(7,301)	(13,906)
Identifiable intangible assets	(7,419)	(11,118)
Unrealized gain on investments securities and partnerships	(3,554)
Prepaid expenses	(1,679)	(1,968)
Additional post retirement liability	(150)	(356)
Total gross deferred liabilities	(20,434)	(27,832)
Deferred tax assets:
Benefit plans	3,381	15,425
Accrued compensation	5,558	10,678
Other accrued expenses	4,094	7,058
Unrealized losses on investment securities and partnerships		1,834
Capital loss carryforwards	57	3,920
Share-based compensation	15,047	20,516
Unused state tax credits	2,788	2,115
State net operating loss carryforwards	7,235	5,716
Other	2,817	3,428
Total gross deferred assets	40,977	70,690
Valuation allowance	(7,235)	(11,428)
Net deferred tax asset	13,308	31,430
Capital loss carryforward, valuation allowance	0	5,800
Operating loss carryforward, valuation allowance	7,200	$ 5,600
State tax credit carryforwards that will expire between 2024 and 2033 if not utilized	2,600
State tax credit carryforwards that will expire in 2026 if not utilized	$ 200

Income Taxes - Unrecognized tax

Income Taxes - Unrecognized tax benefits narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Income Taxes
Unrecognized tax benefits, including penalties and interest that if recognized would impact effective tax rate	$ 10.9	$ 11.5
Unrecognized tax benefits, including penalties and interest, net of federal tax benefit that if recognized would affect effective tax rate	8.9	8.4
Accrued interest and penalties related to uncertain tax positions	4	3.8
Accrued interest and penalties related to uncertain tax positions, net of federal benefit	3.5	$ 3.1
Total expense of interest and penalties, net of federal benefit related to uncertain tax positions	$ 0.5

Income Taxes - Reconciliation o

Income Taxes - Reconciliation of unrecognized tax benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Reconciliation of unrecognized tax benefits, excluding penalties and interest
Balance at the beginning of the period	$ 7,734	$ 8,448	$ 8,105
Increases during the year:
Gross increases - tax positions in prior period	244	465	1,401
Gross increases - current-period tax positions	97	494	700
Decreases during the year:
Gross decreases - tax positions in prior period	(56)	(167)	(308)
Decreases due to settlements with taxing authorities	(178)	(21)	(486)
Decreases due to lapse of statute of limitations	(998)	(1,485)	(964)
Balance at the end of the period	$ 6,843	$ 7,734	$ 8,448
Number of open tax years settled		2 years	3 years

Pension Plan and Postretireme64

Pension Plan and Postretirement Benefits Other Than Pension - Changes in net funded status, disclosure of amounts recognized in the balance sheet, and the assumptions used to determine the benefit (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Amounts recognized in the statement of financial position:
Current liabilities	$ (400)
Noncurrent liabilities	$ (15,137)	$ (38,379)
Pension Benefits
Pension Plan and Postretirement Benefits Other than Pension
Final number of years of employee's compensation to determine the benefits payable	10 years
Reduction of the accrued pension liability	$ (30,000)
Curtailment gain	31,621
Change in projected benefit obligation:
Net benefit obligation at beginning of year	180,921	210,783	$ 208,085
Service cost	8,367	12,199	12,080
Interest cost	6,248	9,432	8,420
Benefits paid	(8,511)	(52,288)	(10,184)
Actuarial (gain) loss	28,841	(19,886)	(7,618)
Curtailment gain	(31,621)
Settlement loss		20,681
Net benefit obligation at end of year	184,245	180,921	210,783
Accumulated benefit obligation		150,100
Change in plan assets:
Fair value of plan assets at beginning of year	144,529	173,885	175,548
Actual return on plan assets	24,863	2,932	(11,479)
Employer contributions	10,000	20,000	20,000
Benefits paid	(8,511)	(52,288)	(10,184)
Fair value of plan assets at end of year	170,881	144,529	173,885
Funded status at end of year	(13,364)	(36,392)	(36,898)
Amounts recognized in the statement of financial position:
Noncurrent liabilities	(13,364)	(36,392)	(36,898)
Net amount recognized at end of year	$ (13,364)	$ (36,392)	$ (36,898)
Weighted average assumptions used to determine benefit obligation at December 31:
Discount rate (as a percent)	3.76%	4.39%	4.60%
Rate of compensation increase (as a percent)		5.12%	5.12%
Other Postretirement Benefits
Pension Plan and Postretirement Benefits Other than Pension
Age of employees after which the plan does not provide benefits	65 years
Curtailment gain		$ 8,475
Change in projected benefit obligation:
Net benefit obligation at beginning of year	$ 2,446	8,421	$ 9,902
Service cost		555	910
Interest cost	58	297	397
Benefits paid	(954)	(674)	(505)
Actuarial (gain) loss	139	1,790	(2,632)
Retiree contributions	506	532	349
Curtailment gain		(8,475)
Net benefit obligation at end of year	2,195	2,446	8,421
Change in plan assets:
Employer contributions	448	142	156
Retiree contributions	506	532	349
Benefits paid	(954)	(674)	(505)
Funded status at end of year	(2,195)	(2,446)	(8,421)
Amounts recognized in the statement of financial position:
Current liabilities	(422)	(458)	(316)
Noncurrent liabilities	(1,773)	(1,988)	(8,105)
Net amount recognized at end of year	$ (2,195)	$ (2,446)	$ (8,421)
Weighted average assumptions used to determine benefit obligation at December 31:
Discount rate (as a percent)	3.28%	3.46%	4.44%

Pension Plan and Postretireme65

Pension Plan and Postretirement Benefits Other Than Pension - Pension plan asset allocation (Details)	Dec. 31, 2017	Dec. 31, 2016
Pension Plan and Postretirement Benefits Other Than Pension
Cash (as a percent)	40.00%	18.00%
Equity securities:
Domestic (as a percent)	29.00%	49.00%
International (as a percent)	18.00%	17.00%
Fixed income securities (as a percent)	8.00%	10.00%
Gold bullion (as a percent)	5.00%	6.00%
Percentage of plan assets allocation	100.00%	100.00%

Pension Plan and Postretireme66

Pension Plan and Postretirement Benefits Other Than Pension - Plan assets fair value (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Pension Plan and Postretirement Benefits Other than Pension
Amount of transfer between levels	$ 0	$ 0
Pension Benefits
Pension Plan and Postretirement Benefits Other than Pension
Total fair value	170,881	144,529	$ 173,885	$ 175,548
Pension Benefits | Domestic
Pension Plan and Postretirement Benefits Other than Pension
Total fair value	49,540	71,159
Pension Benefits | International
Pension Plan and Postretirement Benefits Other than Pension
Total fair value	31,431	24,622
Pension Benefits | Equity derivatives
Pension Plan and Postretirement Benefits Other than Pension
Total fair value		12
Pension Benefits | Mortgage-backed securities
Pension Plan and Postretirement Benefits Other than Pension
Total fair value		10
Pension Benefits | U.S. treasuries
Pension Plan and Postretirement Benefits Other than Pension
Total fair value	6,455	4,801
Pension Benefits | Corporate bonds
Pension Plan and Postretirement Benefits Other than Pension
Total fair value	587	526
Pension Benefits | Foreign Bonds
Pension Plan and Postretirement Benefits Other than Pension
Total fair value	6,591	8,897
Pension Benefits | Gold bullion
Pension Plan and Postretirement Benefits Other than Pension
Total fair value	8,369	8,420
Pension Benefits | Total investment securities
Pension Plan and Postretirement Benefits Other than Pension
Total fair value	102,973	118,447
Pension Benefits | Cash and cash equivalents
Pension Plan and Postretirement Benefits Other than Pension
Total fair value	67,908	26,082
Pension Benefits | Level 1 | Domestic
Pension Plan and Postretirement Benefits Other than Pension
Total fair value	49,540	71,159
Pension Benefits | Level 1 | International
Pension Plan and Postretirement Benefits Other than Pension
Total fair value	4,889	24,622
Pension Benefits | Level 1 | Gold bullion
Pension Plan and Postretirement Benefits Other than Pension
Total fair value	8,369	8,420
Pension Benefits | Level 1 | Total investment securities
Pension Plan and Postretirement Benefits Other than Pension
Total fair value	62,798	104,201
Pension Benefits | Level 2 | International
Pension Plan and Postretirement Benefits Other than Pension
Total fair value	26,542
Pension Benefits | Level 2 | Equity derivatives
Pension Plan and Postretirement Benefits Other than Pension
Total fair value		12
Pension Benefits | Level 2 | Mortgage-backed securities
Pension Plan and Postretirement Benefits Other than Pension
Total fair value		10
Pension Benefits | Level 2 | U.S. treasuries
Pension Plan and Postretirement Benefits Other than Pension
Total fair value	6,455	4,801
Pension Benefits | Level 2 | Corporate bonds
Pension Plan and Postretirement Benefits Other than Pension
Total fair value	587	526
Pension Benefits | Level 2 | Foreign Bonds
Pension Plan and Postretirement Benefits Other than Pension
Total fair value	6,591	8,897
Pension Benefits | Level 2 | Total investment securities
Pension Plan and Postretirement Benefits Other than Pension
Total fair value	$ 40,175	$ 14,246

Pension Plan and Postretireme67

Pension Plan and Postretirement Benefits Other Than Pension - Components of net periodic costs, weighted average assumptions, and expected benefit payments (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Compensation and Related Costs
Components of net periodic benefit cost:
Total			$ 9,700
Underwriting and Distribution Expense
Components of net periodic benefit cost:
Total			3,500
Pension Benefits
Components of net periodic benefit cost:
Service cost			8,367	$ 12,199	$ 12,080
Interest cost			6,248	9,432	8,420
Expected return on plan assets			(10,113)	(13,927)	(14,510)
Actuarial (gain) loss			14,091	(8,891)	18,371
Settlement loss				20,681
Curtailment gain			(31,621)
Total			$ (13,028)	$ 19,494	$ 24,361
Weighted average assumptions used to determine net periodic benefit cost
Discount rate (as a percent)				4.60%	4.13%
Expected return on plan assets (as a percent)	6.00%			7.50%	7.75%
Rate of compensation increase (as a percent)			5.12%	5.12%	5.12%
Expected benefit payments
2,018	$ 10,895		$ 10,895
2,019	8,667		8,667
2,020	8,642		8,642
2,021	9,659		9,659
2,022	9,406		9,406
2023 through 2027	50,906		50,906
Total	98,175		$ 98,175
Pension Benefits | Maximum
Weighted average assumptions used to determine net periodic benefit cost
Discount rate (as a percent)			4.39%
Expected return on plan assets (as a percent)			7.00%
Pension Benefits | Minimum
Weighted average assumptions used to determine net periodic benefit cost
Discount rate (as a percent)			3.96%
Expected return on plan assets (as a percent)			6.00%
Pension Benefits | Expected
Weighted average assumptions used to determine net periodic benefit cost
Expected return on plan assets (as a percent)		5.00%
Other Postretirement Benefits
Components of net periodic benefit cost:
Service cost				$ 555	$ 910
Interest cost			$ 58	297	397
Actuarial (gain) loss amortization			(180)	(153)
Prior service cost (credit) amortization			(4)	4	19
Curtailment gain				(8,475)
Total			(126)	$ (7,772)	$ 1,326
Amounts that will be amortized from accumulated other comprehensive income into net periodic benefit cost in next fiscal year
Estimated net gain (loss) that will be amortized from accumulated other comprehensive income into net periodic benefit cost	120		120
Estimated prior service cost that will be amortized from accumulated other comprehensive income into net periodic benefit cost	2		$ 2
Weighted average assumptions used to determine net periodic benefit cost
Discount rate (as a percent)			3.46%	4.44%	4.07%
Expected benefit payments
2,018	421		$ 421
2,019	421		421
2,020	315		315
2,021	241		241
2,022	199		199
2023 through 2027	484		484
Total	$ 2,081		2,081
Contributions by participants			$ 506	$ 532	$ 349

Pension Plan and Postretireme68

Pension Plan and Postretirement Benefits Other Than Pension - Narrative (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Feb. 28, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Pension Plan and Postretirement Benefits Other than Pension
Current portion of postretirement liability		$ 400
Pension Benefits
Pension Plan and Postretirement Benefits Other than Pension
Accrued costs of benefit plan		$ 13,400	$ 36,400
Other Postretirement Benefits
Pension Plan and Postretirement Benefits Other than Pension
Initial health care cost trend rate (as a percent)			6.82%	7.55%
Initial health care cost trend rate prior to age 65 (as a percent)		7.02%
Initial health care cost trend rate subsequent to age 65 (as a percent)		8.47%
Rate to which the cost trend rate is assumed to decline (as a percent)		4.50%
Effect of 1% annual increase in assumed health care cost trend rates on the accumulated postretirement benefit obligation		$ 102
Effect of 1% annual increase in assumed health care cost trend rates on the service and interest cost components		108
Effect of 1% annual decrease in assumed health care cost trend rates on the accumulated postretirement benefit obligation		91
Effect of 1% annual decrease in assumed health care cost trend rates on the service and interest cost components		97
Accrued costs of benefit plan		1,800	$ 2,000
Current portion of postretirement liability		$ 422	458	$ 316
SERP
Pension Plan and Postretirement Benefits Other than Pension
Percentage of executive's base salary that is used to credit participants SERP accounts		4.00%
Amount of discretionary awards made to participants		$ 0	0	$ 0
Accrued costs of benefit plan			3,800
Lump sum payment	$ 3,800
Current portion of postretirement liability			$ 400

Employee Savings Plan (Details)

Employee Savings Plan (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Employee Savings Plan
Employer's matching contribution to the plan	$ 6	$ 6.8	$ 6.6
Percentage of participant’s eligible compensation for discretionary nonelective contribution	4.00%
Defined Contribution Plan Employer Discretionary Contribution Amount	$ 5.5

Stockholders' Equity - Earnings

Stockholders' Equity - Earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Components of basic and diluted earnings per share
Net income attributable to Waddell and Reed Financial, Inc.		$ 29,765	$ 53,582	$ 24,061	$ 33,871	$ 29,040	$ 54,908	$ 34,678	$ 38,069	$ 141,279	$ 156,695	$ 237,578
Weighted average shares outstanding - basic and diluted										83,573,000	82,668,000	83,499,000
Earnings per share:
Earnings per share, basic and diluted (in dollars per share)										$ 1.69	$ 1.90	$ 2.85
Dividends
Dividends accrued, per share (in dollars per share)	$ 0.25									$ 1.63	$ 1.84	$ 1.75
Dividends to be paid	$ 20,700	$ 20,700				$ 38,200				$ 20,700	$ 38,200
Common stock repurchases
Shares repurchased in the open market or privately										1,842,337	2,320,726	1,955,509
Shares repurchased from employees to cover minimum income tax withholdings										402,337	423,726	432,353

Stockholders' Equity - Other co

Stockholders' Equity - Other comprehensive income (loss) activity (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
AOCI Attributable to Parent, Net of Tax
Balance at the beginning of the period	$ 844,002	$ 846,455	$ 786,084
Net current period other comprehensive income (loss)	7,281	(1,612)	(3,104)
Balance at the end of the period	872,884	844,002	846,455
Accumulated Other Comprehensive Income(Loss)
AOCI Attributable to Parent, Net of Tax
Balance at the beginning of the period	(6,757)	(5,145)	(2,041)
Other comprehensive income (loss) before reclassification	7,676	2,018
Amount reclassified from accumulated other comprehensive income (loss)	(395)	(3,630)
Net current period other comprehensive income (loss)	7,281	(1,612)	(3,104)
Balance at the end of the period	524	(6,757)	(5,145)
Unrealized (gains) losses on investment securities
AOCI Attributable to Parent, Net of Tax
Balance at the beginning of the period	(3,972)	(3,729)
Other comprehensive income (loss) before reclassification	4,039	1,948
Amount reclassified from accumulated other comprehensive income (loss)	78	(2,191)
Net current period other comprehensive income (loss)	4,117	(243)
Balance at the end of the period	145	(3,972)	(3,729)
Change in valuation allowance for unrealized gains (losses) on investment securities
AOCI Attributable to Parent, Net of Tax
Balance at the beginning of the period	(3,388)	(3,240)
Other comprehensive income (loss) before reclassification	3,743	1,195
Amount reclassified from accumulated other comprehensive income (loss)	(355)	(1,343)
Net current period other comprehensive income (loss)	3,388	(148)
Balance at the end of the period		(3,388)	(3,240)
Postretirement benefits unrealized gains (losses)
AOCI Attributable to Parent, Net of Tax
Balance at the beginning of the period	603	1,824
Other comprehensive income (loss) before reclassification	(106)	(1,125)
Amount reclassified from accumulated other comprehensive income (loss)	(118)	(96)
Net current period other comprehensive income (loss)	(224)	(1,221)
Balance at the end of the period	$ 379	$ 603	$ 1,824

Stockholders' Equity - Reclassi

Stockholders' Equity - Reclassifications from accumulated other comprehensive income (loss) and included in net income (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Reclassifications from accumulated other comprehensive income (loss)
Reclassifications included in net income:
Pre-tax	$ 60	$ 3,638
Tax (expense) benefit	335	(8)
Net of tax	395	3,630
Sponsored funds investment gains(losses) | Investment and other income (loss) | Reclassifications from accumulated other comprehensive income (loss)
Reclassifications included in net income:
Pre-tax	(124)	3,489
Tax (expense) benefit	46	(1,298)
Net of tax	(78)	2,191
Change in valuation allowance for unrealized gains (losses) on investment securities
Reclassifications included in net income:
Net of tax	355	1,343
Change in valuation allowance for unrealized gains (losses) on investment securities | Provision for income taxes | Reclassifications from accumulated other comprehensive income (loss)
Reclassifications included in net income:
Tax (expense) benefit	355	1,343
Net of tax	355	1,343
Postretirement benefits unrealized gains (losses)
Reclassifications included in net income:
Net of tax	118	96
Postretirement benefits unrealized gains (losses) | Underwriting and distribution expense and Compensation and related costs | Reclassifications from accumulated other comprehensive income (loss)
Reclassifications included in net income:
Pre-tax	184	149
Tax (expense) benefit	(66)	(53)
Net of tax	$ 118	$ 96

Share-Based Compensation - Narr

Share-Based Compensation - Narrative (Details)	1 Months Ended	12 Months Ended
	Apr. 30, 2016shares	Dec. 31, 2017plan$ / sharesshares	Dec. 31, 2015	Dec. 31, 2016$ / shares
Share-Based Compensation
Number of stock-based compensation plans | plan		1
Vesting period		4 years
Percentage increments vested on anniversaries of the grant date		25.00%	33.33%
Par value, common stock | $ / shares		$ 0.01		$ 0.01
Cash Settled RSU Plan
Share-Based Compensation
Vesting period		4 years
Percentage increments vested on anniversaries of the grant date		25.00%
Number of share of par value $0.01 on which lump sum cash payment is received by RSU holders		1
Par value, common stock | $ / shares		$ 0.01
Number of shares of common stock on which each RSU holders are entitled to dividend equivalent payments		1
1998 Stock Incentive Plan ("SI Plan")
Share-Based Compensation
Increase in number of shares available for awards	5,600,000
Maximum number of shares of common stock authorized for issuance		35,600,000
Number of shares of common stock available for issuance		2,458,263

Share-Based Compensation - Nonv

Share-Based Compensation - Nonvested share activity and related fair value (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Nonvested stock awards
Nonvested Stock Shares
Nonvested at the beginning of the period (in shares)	4,786,103
Granted (in shares)	1,717,333
Vested (in shares)	(1,109,002)
Forfeited (in shares)	(305,794)
Nonvested at the end of the period (in shares)	5,088,640	4,786,103
Nonvested Stock Shares, Weighted Average Grant Date Fair Value
Nonvested at the beginning of the period (in dollars per share)	$ 34.74
Granted (in dollars per share)	19.77
Vested (in dollars per share)	48.22
Forfeited (in dollars per share)	26.31
Nonvested at the end of the period (in dollars per share)	$ 27.26	$ 34.74
Compensation expense	$ 57.7	$ 51.5	$ 47.5
Related income tax benefit recognized	12.2	19.2	17.6
Remaining unamortized expense of nonvested stock expected to be recognized	$ 83.7
Period for expense amortized	2 years 4 months 24 days
Total fair value of shares vested	$ 20.8	$ 26.7	$ 53.9
Cash Settled RSU Plan
Nonvested Stock Shares
Granted (in shares)	1,284,459
Vested (in shares)	(522)
Forfeited (in shares)	(70,908)
Nonvested at the end of the period (in shares)	1,213,029

Uniform Net Capital Rule Requ75

Uniform Net Capital Rule Requirements - Narrative (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017USD ($)subsidiary
Uniform Net Capital Rule Requirements
Number of subsidiaries registered as broker dealers | subsidiary	2
Maximum ratio of aggregate indebtedness to net capital	15
Minimum net capital | $	$ 250
Net capital percentage of debit balances	2.00%

Uniform Net Capital Rule Requ76

Uniform Net Capital Rule Requirements - Net capital and aggregated indebtedness information for broker/dealer subsidiaries (Details) $ in Thousands	Dec. 31, 2017USD ($)	Dec. 31, 2016USD ($)
Waddell & Reed, Inc. (W&R)
Net capital and aggregated indebtedness information for entity's broker/dealer subsidiaries
Net capital	$ 28,024	$ 52,639
Required capital	250	250
Excess of required capital	27,774	52,389
Ivy Funds Distributor, Inc. (IFDI)
Net capital and aggregated indebtedness information for entity's broker/dealer subsidiaries
Net capital	21,167	12,894
Required capital	1,757	2,152
Excess of required capital	$ 19,410	$ 10,742
Ratio of aggregate indebtedness to net capital	1.25	2.50

Rental Expense and Lease Comm77

Rental Expense and Lease Commitments (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Rental Expense and Lease Commitments
Rent expense	$ 24,500	$ 24,300	$ 23,700
Future minimum rental commitments under non-cancelable operating leases
2,018	19,921
2,019	14,181
2,020	9,050
2,021	5,340
2,022	2,746
Thereafter	7,489
Total	$ 58,727

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Related Party Transactions
Total revenues	$ 774,503	$ 852,446	$ 1,100,844
Receivables due from the Funds	20,600	21,600
Investment management fees
Related Party Transactions
Total revenues	508,035	523,304	654,727
Rule 12b-1 service and distribution fees
Related Party Transactions
Total revenues	159,873	208,901	303,046
Shareholder service fees
Related Party Transactions
Total revenues	$ 106,595	$ 120,241	$ 143,071

Contingencies (Details)

Contingencies (Details) $ in Millions	Feb. 22, 2018USD ($)
Case No I6CV02338 Div. 4 | Subsequent Event
Shareholder Derivative Litigation
Settlement amount	$ 19.9

Selected Quarterly Informatio80

Selected Quarterly Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Selected Quarterly Information (Unaudited)
Total revenues	$ 294,476	$ 289,447	$ 286,657	$ 286,564	$ 292,913	$ 303,086	$ 319,208	$ 323,816	$ 1,157,144	$ 1,239,023	$ 1,516,631
Net income	$ 29,765	$ 53,582	$ 24,061	$ 33,871	$ 29,040	$ 54,908	$ 34,678	$ 38,069	$ 141,279	$ 156,695	$ 237,578
Earnings Per Share, Basic and Diluted	$ 0.36	$ 0.64	$ 0.29	$ 0.40	$ 0.35	$ 0.66	$ 0.42	$ 0.46	$ 1.69	$ 1.90	$ 2.85