Waddell & Reed Financial (WDR) 10-Q 29 Apr 21 2021 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2021	Apr. 23, 2021
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2021
Entity File Number	001-13913
Entity Registrant Name	WADDELL & REED FINANCIAL INC
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	51-0261715
Entity Address, Address Line One	6300 Lamar Avenue
Entity Address, City or Town	Overland Park
Entity Address, State or Province	KS
Entity Address, Postal Zip Code	66202
City Area Code	913
Local Phone Number	236-2000
Title of 12(b) Security	Class A Common Stock, $.01 par value
Trading Symbol	WDR
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		62,024,785
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Entity Central Index Key	0001052100
Amendment Flag	false

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Assets:
Cash and cash equivalents	$ 193,864	$ 273,756
Cash and cash equivalents - restricted	62,460	63,594
Investment securities	452,059	486,765
Receivables:
Funds and separate accounts	13,995	14,837
Customers and other	46,151	68,466
Prepaid expenses and other current assets	31,341	36,318
Total current assets	799,870	943,736
Property and equipment, net	19,073	21,903
Goodwill and identifiable intangible assets	145,869	145,869
Deferred income taxes	22,089	19,200
Other non-current assets	21,288	23,123
Total assets	1,008,189	1,153,831
Liabilities:
Accounts payable	17,780	18,330
Payable to investment companies for securities	21,678	30,514
Payable to third party brokers	20,941	16,316
Payable to customers	70,890	82,165
Short-term notes payable		94,997
Accrued compensation	84,748	101,749
Other current liabilities	56,824	52,476
Total current liabilities	272,861	396,547
Accrued pension and postretirement costs	447	446
Other non-current liabilities	25,507	29,081
Total liabilities	298,815	426,074
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; 62,043 shares outstanding (62,398 at December 31, 2020)	997	997
Additional paid-in capital	309,294	303,757
Retained earnings	1,234,154	1,248,299
Cost of 37,658 common shares in treasury (37,303 at December 31, 2020)	(837,096)	(828,193)
Accumulated other comprehensive income	2,025	2,897
Total stockholders' equity	709,374	727,757
Total liabilities and stockholders' equity	$ 1,008,189	$ 1,153,831

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Mar. 31, 2021	Dec. 31, 2020
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	62,043	62,398
Common shares in treasury	37,658	37,303

Consolidated Statements of Inco

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenues:
Total Revenues	$ 295,351	$ 263,733
Operating expenses:
Distribution	136,692	120,033
Compensation and benefits (including share-based compensation of $12,112 and $9,983, respectively)	100,498	58,425
General and administrative	30,290	18,598
Technology	17,384	13,502
Occupancy	2,283	4,709
Marketing and advertising	301	1,896
Depreciation	2,396	3,513
Subadvisory fees	3,447	3,666
Total	293,291	224,342
Operating income	2,060	39,391
Investment and other income (loss)	1,808	(7,745)
Interest expense	(431)	(1,549)
Income before provision for income taxes	3,437	30,097
Provision for income taxes	1,825	9,633
Net income	1,612	20,464
Net loss attributable to redeemable noncontrolling interests		(1,522)
Net income attributable to Waddell & Reed Financial, Inc.	$ 1,612	$ 21,986
Net income per share attributable to Waddell and Reed Financial, Inc. common shareholders, basic and diluted:	$ 0.03	$ 0.32
Weighted average shares outstanding, basic and diluted:	62,485	67,675
Investment management fees
Revenues:
Total Revenues	$ 118,016	$ 105,219
Underwriting and distribution fees
Revenues:
Total Revenues	154,795	136,943
Shareholder service fees
Revenues:
Total Revenues	$ 22,540	$ 21,571

Consolidated Statements of In_2

Consolidated Statements of Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Consolidated Statements of Income
Compensation and benefits, share-based compensation	$ 12,112	$ 9,983

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Consolidated Statements of Comprehensive Income
Net income	$ 1,612	$ 20,464
Other comprehensive (loss) income:
Unrealized loss on available for sale investment securities during the period, net of income tax benefit of $(274) and $(760), respectively	(861)	(2,430)
Postretirement benefit, net of income tax benefit of $(4) and $(18), respectively	(11)	(49)
Comprehensive income	740	17,985
Comprehensive loss attributable to redeemable noncontrolling interests		(1,522)
Comprehensive income attributable to Waddell & Reed Financial, Inc.	$ 740	$ 19,507

Consolidated Statements of Co_2

Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Consolidated Statements of Comprehensive Income
Unrealized (loss) gain on available for sale investment securities during the period, income tax expense	$ (274)	$ (760)
Postretirement benefit, income tax (benefit) expense	$ (4)	$ (18)

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Equity and Redeemable Noncontrolling Interests - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-in Capital	Retained Earnings	Treasury Stock	Accumulated Other Comprehensive Income	Total
Balance at the beginning of the period at Dec. 31, 2019	$ 997	$ 312,693	$ 1,241,598	$ (749,625)	$ 3,234	$ 808,897
Balance (in shares) at Dec. 31, 2019	99,701
Increase (Decrease) in Stockholders' Equity
Net income (loss)			21,986			21,986
Recognition of equity compensation		7,693	71			7,764
Net issuance/forfeiture of nonvested shares		(37,985)		37,985
Dividends accrued			(16,571)			(16,571)
Repurchase of common stock				(53,939)		(53,939)
Other comprehensive loss					(2,479)	(2,479)
Balance at the end of the period at Mar. 31, 2020	$ 997	282,401	1,247,084	(765,579)	755	765,658
Balance (in shares) at Mar. 31, 2020	99,701
Balance at the beginning of the period at Dec. 31, 2019						19,205
Increase (Decrease) in Redeemable Noncontrolling Interest
Net income (loss)						(1,522)
Net subscription of redeemable noncontrolling interests in sponsored funds						1,387
Balance at the end of the period at Mar. 31, 2020						19,070
Balance at the beginning of the period at Dec. 31, 2020	$ 997	303,757	1,248,299	(828,193)	2,897	727,757
Balance (in shares) at Dec. 31, 2020	99,701
Increase (Decrease) in Stockholders' Equity
Net income (loss)			1,612			1,612
Recognition of equity compensation		5,491	4			5,495
Net issuance/forfeiture of nonvested shares		46		(46)
Dividends accrued			(15,761)			(15,761)
Repurchase of common stock				(8,857)		(8,857)
Other comprehensive loss					(872)	(872)
Balance at the end of the period at Mar. 31, 2021	$ 997	$ 309,294	$ 1,234,154	$ (837,096)	$ 2,025	$ 709,374
Balance (in shares) at Mar. 31, 2021	99,701

Consolidated Statements of St_2

Consolidated Statements of Stockholders' Equity and Redeemable Noncontrolling Interests (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Consolidated Statements of Stockholders' Equity and Redeemable Noncontrolling Interests
Dividends accrued (in dollars per share)	$ 0.25	$ 0.25

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash flows from operating activities:
Net income	$ 1,612	$ 20,464
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,660	3,168
Write-down of impaired assets	282
Amortization of deferred sales commissions	259	395
Share-based compensation	12,112	9,983
Investments and derivatives (gain) loss, net of collateral	(1,991)	50,012
Net purchases, maturities, and sales of trading and equity securities	9,297	(2,144)
Deferred income taxes	(2,612)	(12,071)
Net change in equity securities and trading debt securities held by consolidated sponsored funds		1,326
Other	171	212
Changes in assets and liabilities:
Customer and other receivables	18,090	6,804
Payable to investment companies for securities and payable to customers	(20,111)	(29,763)
Receivables from funds and separate accounts	842	3,023
Other assets	2,619	3,214
Accounts payable and payable to third party brokers	2,630	(3,219)
Other liabilities	(20,328)	(22,128)
Net cash provided by operating activities	5,532	29,276
Cash flows from investing activities:
Purchases of available for sale and equity method securities		(2,999)
Proceeds from maturities of available for sale securities	32,941	33,875
Additions to property and equipment	(71)	(3,182)
Net cash provided by investing activities	32,870	27,694
Cash flows from financing activities:
Dividends paid	(15,555)	(17,119)
Repurchase of common stock	(8,857)	(53,599)
Repayment of short-term debt, net of debt issuance costs	(94,997)
Net subscriptions (redemptions, distributions and deconsolidations) of redeemable noncontrolling interests in sponsored funds		1,387
Other	(19)	(40)
Net cash used in financing activities	(119,428)	(69,371)
Net decrease in cash and cash equivalents	(81,026)	(12,401)
Cash, cash equivalents, and restricted cash at beginning of period	337,350	226,140
Cash, cash equivalents, and restricted cash at end of period	$ 256,324	$ 213,739

Description of Business and Sig

Description of Business and Significant Accounting Policies	3 Months Ended
	Mar. 31, 2021
Description of Business and Significant Accounting Policies
Description of Business and Significant Accounting Policies	WADDELL & REED FINANCIAL, INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS ​ 1. Description of Business and Significant Accounting Policies ​ Waddell & Reed Financial, Inc. and Subsidiaries ​ Waddell & Reed Financial, Inc. (hereinafter referred to as the “Company,” “we,” “our” or “us”) is a holding company, incorporated in the state of Delaware in 1981, that conducts business through its subsidiaries. Founded in 1937, we are one of the oldest mutual fund complexes in the United States, having introduced the former Waddell & Reed Advisors group of mutual funds (the “Advisors Funds”) in 1940. Over time, we added additional mutual funds: Ivy Funds (the “Ivy Funds”); Ivy Variable Insurance Portfolios, our variable product offering (“Ivy VIP”); InvestEd Portfolios, our 529 college savings plan (“InvestEd”); and the Ivy High Income Opportunities Fund, a closed-end mutual fund (“IVH”) (collectively, Ivy Funds, Ivy VIP, InvestEd and IVH are referred to as the “Funds”). In addition to the Funds, our assets under management (“AUM”) include institutional managed accounts. As of March 31, 2021, we had $76.0 billion in AUM. We derive our revenues from providing investment management and advisory services, investment product underwriting and distribution, and shareholder services administration to the Funds and institutional accounts. We also provide wealth management services, primarily to retail clients through Waddell & Reed, Inc. (“W&R”), and independent financial advisors associated with W&R (“Advisors”), who provide financial planning and advice to their clients. Investment management and advisory fees and certain underwriting and distribution revenues are based on the level of AUM and assets under administration (“AUA”) and are affected by sales levels, financial market conditions, redemptions and the composition of assets. Our underwriting and distribution revenues consist of fees earned on fee-based advisory programs, asset-based service and distribution fees promulgated under Rule 12b-1 of the Investment Company Act of 1940 (“Rule 12b-1”), distribution fees on certain variable products, and commissions derived from sales of investment and insurance products. The products sold have various commission structures and the revenues received from those sales vary based on the type and dollar amount sold. Shareholder service fee revenue includes transfer agency fees, custodian fees from retirement plan accounts, portfolio accounting and administration fees, and is earned based on client AUM or number of client accounts. Our major expenses are for distribution of our products, compensation related costs, occupancy, general and administrative, and information technology. The Company continues to proactively manage business continuity and safety considerations as circumstances of the coronavirus disease 2019 (“COVID-19”) evolve. Our leadership team’s priority is on ensuring the health and safety of all employees, clients, Advisors and communities, while also ensuring full continuity of service and access. The Company started transitioning to a work from home environment early in March 2020 and has been following the Centers for Disease Control and Prevention and local authorities’ recommendations on safe practices throughout this process. We have undertaken a number of steps to facilitate safety, security and full continuity of service, including: ● Our Enterprise Preparedness Team and COVID-19 steering committee continue to meet regularly to assess developments and determine the best action to ensure business continuity and the safety of our employees and partners. ● We have adopted interim business practices, including restricting business travel, requiring meetings to take place via remote access tools, adopting safety protocols to limit the potential for exposure, adopting social distancing practices, implementing a clearly-defined approval process for reentry to any worksite, advising personnel on preventive measures and offering remote collaboration and productivity tools and training resources to our employees. ● We enhanced monitoring and capabilities of our systems to allow our remote workforce to function efficiently and have continued our educational and monitoring practices to ensure there are no compromises to confidentiality, privacy and cybersecurity requirements. ● The Ivy investment management and distribution teams transitioned seamlessly to remote working. Our teams have a strong heritage of active collaboration which has migrated to a virtual environment without compromise. ​ ● Within our wealth management business, approximately 25% of Advisors are working from temporary locations. We are demonstrating our differentiated service and support model by continuing regular communications with Advisors as well as delivering additional advisor and client focused resources. ​ ● We have not initiated any layoffs, furloughs or reduced hours due to COVID-19. As we implemented our business continuity plans, we have intentionally maintained the same pay practices for all of our employees based upon their regular work schedule, paid spot bonuses to certain employees, implemented a temporary hourly wage increase to designated client services personnel, increased certain benefit coverages for specific COVID-19 related treatments and made targeted philanthropic contributions to local organizations to help support the COVID-19 responses in our community. ​ Basis of Presentation We have prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures are adequate to enable a reasonable understanding of the information presented. The information in this Quarterly Report on Form 10-Q should be read in conjunction with Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020 (our “2020 Form 10-K”). ​ The accompanying unaudited consolidated financial statements are prepared consistent with the accounting policies described in Note 1 to the consolidated financial statements included in our 2020 Form 10-K with the exception of the adoption of Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, ​ In our opinion, the accompanying unaudited consolidated financial statements reflect all adjustments (consisting of only a normal and recurring nature) necessary to present fairly our financial position at March 31, 2021 and the results of operations and cash flows for the three months ended March 31, 2021 and 2020 in conformity with accounting principles generally accepted in the United States. ​ Proposed Acquisition of Waddell & Reed Financial, Inc. by Macquarie ​ On December 2, 2020, the Company announced a merger agreement with Macquarie Asset Management, the asset management division of Macquarie Group. Subject to the terms and conditions of the Agreement and Plan of Merger (the “Merger Agreement”) by and The closing of the merger remains subject to the satisfaction or waiver of the remaining conditions to the merger set forth in the Merger Agreement. The Company expects the closing of the merger to occur on April 30, 2021. ​ Assets Held for Sale ​ Assets held for sale included real property and fractional aircraft ownership. The three months ended March 31, 2021 included asset impairment charges of $0.2 million on assets held for sale, which were recorded in general and administrative expenses in our consolidated statements of income. As of March 31, 2021, $3.8 million of buildings, $1.9 million of land and $1.0 million of equipment held for sale were included in Property and equipment, net on our consolidated balance sheets. As of December 31, 2020, $3.8 million of buildings and $1.9 million of land that were held for sale were included in Property and equipment, net on our consolidated balance sheets. The Company continues to actively pursue the sale of assets held for sale at market prices as soon as reasonably possible. ​ Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract ​ As of March 31, 2021 and December 31, 2020, the Company had $4.8 million of capitalized implementation costs for hosting arrangements with $793 thousand and $459 thousand, respectively, of accumulated amortization in prepaid and other current assets on the consolidated balance sheets. Our hosting arrangements that are service contracts include internal and external costs related to various technology additions in support of our asset management and wealth management businesses. Amortization costs are recorded on a straight-line basis over the term of the hosting arrangement agreement. ​

New Accounting Guidance

New Accounting Guidance	3 Months Ended
	Mar. 31, 2021
New Accounting Guidance
New Accounting Guidance	2. New Accounting Guidance ​ Accounting Guidance Adopted During the First Quarter of 2021 ​ On January 1, 2021, the Company adopted ASU 2019-12 , Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which simplifies and improves the consistent application of the accounting for income taxes by removing certain exceptions to general principles and by clarifying and amending existing guidance. The adoption of this ASU had an immaterial impact on our consolidated financial statements and related disclosures. ​

Revenue Recognition

Revenue Recognition	3 Months Ended
	Mar. 31, 2021
Revenue Recognition
Revenue Recognition	3. Revenue Recognition ​ All revenue recognized in the consolidated statements of income is considered to be revenue from contracts with customers. The vast majority of revenue is determined based on average assets and is earned daily or monthly or is transactional and is earned on the trade date. As such, revenue from remaining performance obligations is not significant. The following table depicts the disaggregation of revenue by product and distribution channel: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ ​ 2021 ​ 2020 ​ ​ ​ (in thousands) Investment management fees: ​ ​ Funds ​ $ 114,395 102,293 Institutional ​ 3,621 2,926 Total investment management fees ​ $ 118,016 105,219 Underwriting and distribution fees: ​ ​ ​ ​ ​ Unaffiliated ​ ​ ​ ​ ​ Service and distribution fees ​ $ 14,642 ​ 15,276 Sales commissions ​ ​ 15 ​ 451 Other revenues ​ ​ 44 ​ 135 Total unaffiliated distribution fees ​ $ 14,701 ​ 15,862 Wealth Management ​ ​ ​ ​ ​ Advisory fees ​ $ 94,280 ​ 77,118 Service and distribution fees ​ ​ 16,763 ​ 14,589 Sales commissions ​ ​ 19,423 ​ 20,657 Other revenues ​ ​ 9,628 ​ 8,717 Total wealth management distribution fees ​ ​ 140,094 ​ 121,081 Total underwriting and distribution fees ​ $ 154,795 ​ 136,943 Shareholder service fees: ​ ​ ​ ​ ​ Total shareholder service fees ​ $ 22,540 21,571 ​ ​ ​ ​ Total revenues ​ $ 295,351 263,733 ​

Investment Securities

Investment Securities	3 Months Ended
	Mar. 31, 2021
Investment Securities
Investment Securities	4. Investment Securities ​ Investment securities at March 31, 2021 and December 31, 2020 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2021 2020 ​ ​ ​ ​ (in thousands) ​ Available for sale securities: ​ ​ ​ ​ ​ ​ Commercial paper ​ $ — ​ 9,705 ​ Corporate bonds ​ ​ 133,652 ​ 157,832 ​ Total available for sale securities ​ 133,652 ​ 167,537 ​ Trading debt securities: ​ ​ ​ ​ ​ ​ Commercial paper ​ ​ 14,079 ​ 11,785 ​ Corporate bonds ​ 70,427 ​ 76,734 ​ Mortgage-backed securities ​ — ​ 1 ​ Term loans ​ ​ 48,077 ​ 47,224 ​ Total trading securities ​ 132,583 ​ 135,744 ​ Equity securities: ​ ​ ​ ​ ​ ​ Common stock ​ 42,323 ​ 41,410 ​ Sponsored funds ​ ​ 82,323 ​ 81,019 ​ Sponsored privately offered funds ​ 1,224 ​ 1,165 ​ Total equity securities ​ ​ 125,870 ​ 123,594 ​ Equity method securities: ​ ​ ​ ​ ​ ​ Sponsored funds ​ 59,954 ​ 59,890 ​ Total securities ​ $ 452,059 ​ 486,765 ​ ​ Corporate bonds accounted for as available for sale and held as of March 31, 2021 mature as follows: ​ ​ ​ ​ ​ ​ ​ ​ Amortized ​ ​ ​ ​ cost Fair value ​ (in thousands) Within one year $ 74,726 ​ 75,746 After one year but within five years ​ 56,513 ​ 57,906 ​ $ 131,239 ​ 133,652 ​ Commercial paper, corporate bonds and term loans accounted for as trading and held as of March 31, 2021 mature as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value ​ ​ ​ (in thousands) Within one year ​ ​ $ 38,039 After one year but within five years ​ ​ ​ 68,227 After five years but within 10 years ​ ​ ​ 26,317 ​ ​ ​ $ 132,583 ​ The following is a summary of the gross unrealized gains related to securities classified as available for sale at March 31, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized Unrealized Unrealized ​ ​ ​ cost ​ gains ​ losses ​ Fair value (in thousands) ​ Available for sale securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate bonds ​ $ 131,239 2,413 ​ — 133,652 ​ ​ The following is a summary of the gross unrealized gains (losses) related to securities classified as available for sale at December 31, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized Unrealized Unrealized ​ ​ ​ cost ​ gains ​ losses ​ Fair value ​ ​ (in thousands) ​ Available for sale securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial paper ​ $ 9,720 ​ — ​ (15) ​ 9,705 ​ Corporate bonds ​ ​ 154,270 3,562 ​ — 157,832 ​ ​ ​ $ 163,990 3,562 (15) 167,537 ​ ​ There are no available for sale investment securities with fair values below carrying values at March 31, 2021. A summary of available for sale investment securities with fair values below carrying values at December 31, 2020 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than 12 months ​ 12 months or longer ​ Total ​ ​ ​ ​ ​ Unrealized ​ ​ ​ Unrealized ​ ​ ​ Unrealized ​ Fair value losses Fair value losses Fair value losses ​ ​ (in thousands) Corporate bonds ​ $ 2,414 ​ (15) ​ — ​ — ​ 2,414 ​ (15) ​ ​ The Company’s investment portfolio included no available for sale securities in an unrealized loss position at March 31, 2021. The Company’s evaluation of available for sale securities in an unrealized loss position includes reviewing credit ratings, assessing the extent of losses, and considering the impact of market conditions for each individual security. ​ For equity securities held at the end of the period, net unrealized gains of $2.6 million and net unrealized losses of $35.9 million were recognized for the three months ended March 31, 2021 and March 31, 2020, respectively. ​ Sponsored Funds ​ The Company has classified its equity investments in the Funds as equity method investments (when the Company owns between 20% and 50% of the fund) or equity securities measured at fair value through net income (when the Company owns less than 20% of the fund). These entities do not meet the criteria of a variable interest entity (“VIE”) and are considered to be voting interest entities (“VOE”). The Company has determined the Funds are VOEs because the structure of the investment products is such that the voting rights held by the equity holders provide for equality among equity investors. ​ Sponsored Privately Offered Funds ​ The Company holds an interest in a privately offered fund structured in the form of a limited liability company. The members of this entity have the substantive ability to remove the Company as managing member or dissolve the entity upon a simple majority vote. This entity does not meet the criteria of a VIE and is considered to be a VOE. ​ 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 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. Term loans are valued using a price or composite price from one or more brokers or dealers as obtained from an independent pricing service. The fair value of loans is estimated using recently executed transactions, market price quotations, credit/market events, and cross-asset pricing. Inputs are generally observable market inputs obtained from independent sources. Term loans are generally categorized in Level 2 of the fair value hierarchy, unless key inputs are unobservable in which case they would be categorized as Level 3. 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 March 31, 2021 and December 31, 2020 that are recognized in our consolidated balance sheets using fair value measurements based on the differing levels of inputs. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2021 Level 1 Level 2 Level 3 Other Assets Held at Net Asset Value ​ Total ​ ​ (in thousands) Cash equivalents: (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Money market funds ​ $ 20,062 ​ — ​ — ​ — ​ 20,062 ​ Commercial paper ​ ​ — ​ 25,801 ​ — ​ — ​ 25,801 ​ Total cash equivalents ​ $ 20,062 ​ 25,801 ​ — ​ — ​ 45,863 ​ Available for sale securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate bonds ​ $ — ​ 133,652 ​ — ​ — ​ 133,652 ​ Trading debt securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial paper ​ ​ — ​ 14,079 ​ — ​ — ​ 14,079 ​ Corporate bonds ​ ​ — ​ 70,427 ​ — ​ ​ ​ 70,427 ​ Term loans ​ — 46,355 1,722 — ​ 48,077 ​ Equity securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common stock ​ ​ 42,018 ​ — ​ 305 ​ — ​ 42,323 ​ Sponsored funds ​ ​ 82,323 ​ — ​ — ​ — ​ 82,323 ​ Sponsored privately offered funds measured at net asset value (2) ​ ​ — ​ — ​ — ​ 1,224 ​ 1,224 ​ Equity method securities: (3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sponsored funds ​ ​ 59,954 ​ — ​ — ​ — ​ 59,954 ​ Total investment securities ​ $ 184,295 ​ 264,513 ​ 2,027 ​ 1,224 ​ 452,059 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 Level 1 Level 2 Level 3 Other Assets Held at Net Asset Value ​ Total ​ ​ (in thousands) Cash equivalents: (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Money market funds ​ $ 82,085 ​ — ​ — ​ — ​ 82,085 ​ Commercial paper ​ ​ — ​ 47,421 ​ — ​ — ​ 47,421 ​ Total cash equivalents ​ $ 82,085 ​ 47,421 ​ — ​ — ​ 129,506 ​ Available for sale securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial paper ​ $ — ​ 9,705 ​ — ​ — ​ 9,705 ​ Corporate bonds ​ ​ — ​ 157,832 ​ — ​ — ​ 157,832 ​ Trading debt securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial paper ​ ​ — ​ 11,785 ​ — ​ — ​ 11,785 ​ Corporate bonds ​ ​ — ​ 76,734 ​ — ​ ​ ​ 76,734 ​ Mortgage-backed securities ​ — 1 — — ​ 1 ​ Term loans ​ — 46,030 1,194 — ​ 47,224 ​ Equity securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common stock ​ 41,079 ​ — ​ 331 ​ — ​ 41,410 ​ Sponsored funds ​ 81,019 ​ — ​ — ​ — ​ 81,019 ​ Sponsored privately offered funds measured at net asset value (2) ​ ​ — ​ — ​ — ​ 1,165 ​ 1,165 ​ Equity method securities: (3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sponsored funds ​ ​ 59,890 ​ — ​ — ​ — ​ 59,890 ​ Total investment securities ​ $ 181,988 ​ 302,087 ​ 1,525 ​ 1,165 ​ 486,765 ​ ​ (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 net asset value 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) The Company’s equity method investments are investment companies that record their underlying investments at fair value. ​ The following table summarizes the activity of investments categorized as Level 3 for the three months ended March 31, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the three months ended ​ ​ March 31, 2021 ​ ​ (in thousands) Level 3 assets at December 31, 2020 ​ $ 1,525 Transfers into level 3 ​ ​ 4,863 Transfers out of level 3 ​ ​ (4,293) Gains in Investment and other income (loss) ​ 33 Redemptions and paydowns ​ ​ (101) Level 3 assets at March 31, 2021 ​ $ 2,027 ​ ​ ​ ​ Change in unrealized losses for Level 3 assets held at March 31, 2021 ​ $ (26) ​

Derivative Financial Instrument

Derivative Financial Instruments	3 Months Ended
	Mar. 31, 2021
Derivative Financial Instruments
Derivative Financial Instruments	5. Derivative Financial Instruments ​ The Company has in place an economic hedge program that uses total return swap contracts to hedge market risk related to 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. ​ The Company was party to nine total return swap contracts with a combined notional value of $205.1 million and 10 total return swap contracts with a combined notional value of $198.2 million as of March 31, 2021 and December 31, 2020, respectively. These derivative financial 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) in the Company’s consolidated statements of income. ​ The counterparties of the total return swap contracts posted $1.4 million in cash collateral with the Company as of March 31, 2021, which is included in accounts payable in the Company’s consolidated balance sheet. The Company posted $3.4 million in cash collateral with the counterparties of the total return swap contracts as of December 31, 2020, which ​ The following table presents the fair value of the derivative financial instruments as of March 31, 2021 and December 31, 2020 and is calculated based on Level 2 inputs: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ ​ December 31, ​ ​ Balance sheet ​ ​ 2021 ​ ​ 2020 ​ location Fair value Fair value ​ ​ ​ (in thousands) Total return swap contracts Prepaid expenses and other current assets ​ $ 529 ​ ​ — Total return swap contracts ​ Other current liabilities ​ $ 26 ​ ​ 3,464 Net total return swap asset (liability) ​ ​ $ 503 ​ ​ (3,464) ​ The following is a summary of net (losses) gains recognized in income for the three months ended March 31, 2021 and March 31, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ Income statement ​ March 31, ​ location ​ 2021 ​ 2020 ​ ​ ​ (in thousands) Total return swap contracts Investment and other income $ (4,080) ​ 42,069 ​

Goodwill and Identifiable Intan

Goodwill and Identifiable Intangible Assets	3 Months Ended
	Mar. 31, 2021
Goodwill and Identifiable Intangible Assets
Goodwill and Identifiable Intangible Assets	6. Goodwill and Identifiable Intangible Assets ​ Goodwill represents the excess of purchase price over the tangible assets and identifiable intangible assets of an acquired business. Our goodwill is not deductible for tax purposes. The Company performs an annual goodwill impairment assessment during the second quarter of each year and identified no impairment during the most recent assessment. Goodwill and identifiable intangible assets (all considered indefinite lived) at March 31, 2021 and December 31, 2020 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2021 ​ 2020 ​ ​ ​ (in thousands) ​ Goodwill $ 106,970 106,970 ​ ​ ​ ​ ​ ​ ​ Mutual fund management advisory contracts ​ 38,699 38,699 ​ Other ​ 200 200 ​ Total identifiable intangible assets ​ 38,899 38,899 ​ ​ ​ ​ ​ ​ ​ ​ Total ​ $ 145,869 145,869 ​ ​

Indebtedness

Indebtedness	3 Months Ended
	Mar. 31, 2021
Indebtedness
Indebtedness	7. Indebtedness ​ During the first quarter of 2021, the Company repaid our senior unsecured notes that matured January 13, 2021. ​

Income Tax Uncertainties

Income Tax Uncertainties	3 Months Ended
	Mar. 31, 2021
Income Tax Uncertainties
Income Tax Uncertainties	8. Income Tax Uncertainties In the accompanying consolidated balance sheets, unrecognized tax benefits that are not expected to be settled within the next 12 months are included in other liabilities; unrecognized tax benefits that are expected to be settled within the next 12 months are included in income taxes payable; unrecognized tax benefits that reduce a net operating loss, similar tax loss, or tax credit carryforward are presented as a reduction to non-current deferred income taxes. As of March 31, 2021 and December 31, 2020, the Company’s consolidated balance sheets included unrecognized tax benefits, including penalties and interest, of $2.0 million ($1.7 million net of federal benefit) and $1.9 million ($1.7 million net of federal benefit), respectively, that if recognized, would impact the Company’s effective tax rate. ​ 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. The Company does not expect the resolution or settlement of any open audits, federal or state, to materially impact the consolidated financial statements. ​ Our 2017-2020 federal income tax returns are open tax years that remain subject to potential future audit. Our state income tax returns for all years after 2016 and, in certain states, income tax returns for 2016, are subject to potential future audit by tax authorities in the Company’s major state tax jurisdictions. ​

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Mar. 31, 2021
Stockholders' Equity
Stockholders' Equity	9. Stockholders’ Equity ​ Earnings per Share ​ The components of basic and diluted earnings per share were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ ​ March 31, ​ ​ ​ 2021 ​ 2020 ​ ​ ​ ​ ​ ​ ​ ​ Net income attributable to Waddell & Reed Financial, Inc. $ 1,612 21,986 ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding, basic and diluted ​ 62,485 ​ 67,675 ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share, basic and diluted ​ $ 0.03 ​ 0.32 ​ ​ Dividends ​ During the quarter, the Board of Directors declared a quarterly dividend on our common stock in the amount of $0.25 per share with an April 30, 2021 payment date and an April 9, 2021 record date. The total dividend to be paid on April 30, 2021 is $15.8 million. ​ 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 issuing shares to employees in our stock-based compensation programs. The terms of the Merger Agreement restrict our ability to repurchase shares of our common stock while the merger is pending; however, we may continue to repurchase shares of our common stock from employees to cover their tax withholdings in connection with the vesting of restricted shares. ​ There were 353,909 shares and 3,807,438 shares repurchased in the open market or privately during the three months ended March 31, 2021 and 2020, respectively, which includes 353,909 shares and 231,393 shares, respectively, repurchased from employees who tendered shares to cover income tax withholdings with respect to vesting of stock awards during these two reporting periods. ​ Accumulated Other Comprehensive Income ​ The following tables summarize accumulated other comprehensive income (loss) activity for the three months ended March 31, 2021 and March 31, 2020. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the three months ended March 31, ​ ​ ​ ​ ​ ​ Total ​ ​ Unrealized ​ Postretirement ​ accumulated ​ ​ gains (losses) on ​ benefits ​ other ​ ​ AFS investment ​ unrealized ​ comprehensive ​ ​ securities ​ gains (losses) ​ income (loss) ​ ​ (in thousands) ​ Balance at December 31, 2020 $ 2,696 201 2,897 Other comprehensive loss before reclassification (700) — (700) ​ Amount reclassified from accumulated other comprehensive income (161) (11) (172) ​ Net current period other comprehensive loss (861) ​ (11) (872) ​ Balance at March 31, 2021 ​ $ 1,835 190 2,025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2019 $ 2,521 713 3,234 Other comprehensive loss before reclassification (2,228) — (2,228) ​ Amount reclassified from accumulated other comprehensive income (202) (49) (251) ​ Net current period other comprehensive loss (2,430) ​ (49) (2,479) ​ Balance at March 31, 2020 ​ $ 91 664 755 ​ ​ ​ Reclassifications from accumulated other comprehensive income (loss) and included in net income are summarized in the tables that follow. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the three months ended March 31, 2021 ​ ​ ​ ​ ​ ​ ​ ​ Tax ​ ​ ​ ​ ​ ​ Pre-tax ​ expense ​ Net of tax ​ Statement of income line item ​ ​ (in thousands) ​ ​ ​ Reclassifications included in net income: ​ Gains on available for sale debt securities ​ $ 213 (52) 161 Investment and other income (loss) ​ Amortization of postretirement benefits ​ ​ 15 (4) 11 Compensation and benefits ​ Total ​ $ 228 (56) 172 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the three months ended March 31, 2020 ​ ​ ​ ​ ​ ​ ​ ​ Tax ​ ​ ​ ​ ​ ​ ​ Pre-tax ​ expense ​ Net of tax ​ Statement of income line item ​ ​ (in thousands) ​ ​ ​ Reclassifications included in net income: ​ Gains on available for sale debt securities ​ $ 266 (64) 202 Investment and other income (loss) ​ Amortization of postretirement benefits ​ ​ 67 (18) 49 Compensation and benefits ​ Total ​ $ 333 (82) 251 ​ ​ ​ ​

Leases

Leases	3 Months Ended
	Mar. 31, 2021
Leases
Leases	10. Leases ​ The Company has operating and finance leases for corporate office space and equipment. Our leases have remaining lease terms of less than one year to five years , some of which include options to extend leases for up to 20 years , and some of which include options to terminate the leases within one year . Certain leases include variable lease payments in future periods based on a market index or rate. We determine if an arrangement is a lease at inception (or the effective date of ASU 2016-02, Leases ). Operating lease assets and liabilities are included in other non-current assets, other current liabilities, and other non-current liabilities in our consolidated balance sheets. Finance leases are included in property and equipment, net, other current liabilities, and other non-current liabilities in our consolidated balance sheets. ​ Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date (or the effective date of ASU 2016-02, Leases , Leases ​ During January 2020, we signed a fifteen-year lease, which was expected to commence during 2022, relating to the development of a new 260,000 square foot corporate headquarters building in downtown Kansas City, Missouri. The lease will be recognized in the Company’s consolidated financial statements during the period that includes the lease’s commencement date. The impact that our proposed merger with Macquarie will have on our new corporate headquarters lease, including eligibility for state and local tax savings, has not been determined. ​ The components of lease expense were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ For the three months ended March 31, ​ ​ 2021 ​ 2020 ​ ​ (in thousands) Operating Lease Cost ​ $ 1,478 $ 3,233 ​ ​ ​ ​ ​ ​ ​ Finance Lease Cost: ​ ​ ​ ​ ​ ​ Amortization of ROU assets ​ $ 14 $ 55 Interest on lease liabilities ​ ​ 1 ​ 9 Total ​ $ 15 ​ $ 64 ​ ​ ​ ​ ​ ​ ​ ​ Supplemental cash flow information related to leases was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the three months ended March 31, ​ ​ 2021 ​ 2020 ​ ​ (in thousands) Cash paid for amounts included in the measurement of lease liabilities: ​ ​ Operating cash flows from operating leases ​ $ 1,792 $ 3,143 Operating cash flows from finance leases ​ 1 9 Financing cash flows from finance leases ​ ​ 19 ​ ​ 58 ​ ​ ​ ​ ​ ​ ​ ROU assets obtained in exchange for lease obligations: ​ ​ ​ ​ ​ ​ Operating leases ​ ​ — ​ ​ 7 Finance leases ​ ​ — ​ ​ — ​ Supplemental balance sheet information related to leases was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2021 ​ December 31, 2020 ​ ​ (in thousands, except lease term and discount rate) Operating Leases: ​ ​ Operating lease ROU assets (Other non-current assets) ​ $ 12,124 $ 13,461 ​ ​ ​ ​ ​ ​ ​ Other current liabilities ​ $ 5,394 ​ $ 6,247 Other non-current liabilities ​ ​ 7,765 ​ ​ 8,812 Total operating lease liabilities ​ $ 13,159 ​ $ 15,059 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Finance Leases: ​ ​ ​ ​ ​ ​ Property and equipment, gross ​ $ 181 ​ $ 333 Accumulated depreciation ​ ​ (144) ​ ​ (277) Property and equipment, net ​ $ 37 ​ $ 56 ​ ​ ​ ​ ​ ​ ​ Other current liabilities ​ $ 25 ​ $ 41 Other non-current liabilities ​ ​ 8 ​ ​ 11 Total finance lease liabilities ​ $ 33 ​ $ 52 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average remaining lease term: ​ ​ ​ ​ ​ ​ Operating leases ​ ​ 4 years ​ ​ 4 years Finance leases ​ ​ 1 year ​ ​ 1 year ​ ​ ​ ​ ​ ​ ​ Weighted average discount rate: ​ ​ ​ ​ ​ ​ Operating leases ​ ​ 4.11% ​ ​ 4.08% Finance leases ​ ​ 6.00% ​ ​ 6.00% ​ Maturities of lease liabilities are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating ​ ​ Finance ​ ​ Leases ​ ​ Leases ​ ​ (in thousands) Year ended December 31, ​ ​ ​ ​ ​ ​ 2021 (excluding the three months ended March 31, 2021) $ 4,834 ​ 22 2022 ​ ​ 2,424 ​ ​ 12 2023 ​ 2,090 ​ — 2024 ​ 2,090 ​ — Thereafter ​ 2,613 ​ — Total lease payments ​ 14,051 ​ 34 Less imputed interest ​ ​ (892) ​ ​ (1) Total ​ $ 13,159 ​ 33 ​

Contingencies

Contingencies	3 Months Ended
	Mar. 31, 2021
Contingencies
Contingencies	11. 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.” 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 should be disclosed. Management’s judgment is required related to contingent liabilities because the outcomes are difficult to predict. ​ Litigation Relating to the Merger

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2021
Subsequent Events
Subsequent Events	12 . Subsequent Events ​ Investment Portfolio ​

Description of Business and S_2

Description of Business and Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2021
Description of Business and Significant Accounting Policies
Basis of Presentation	Basis of Presentation We have prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures are adequate to enable a reasonable understanding of the information presented. The information in this Quarterly Report on Form 10-Q should be read in conjunction with Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020 (our “2020 Form 10-K”). ​ The accompanying unaudited consolidated financial statements are prepared consistent with the accounting policies described in Note 1 to the consolidated financial statements included in our 2020 Form 10-K with the exception of the adoption of Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, ​ In our opinion, the accompanying unaudited consolidated financial statements reflect all adjustments (consisting of only a normal and recurring nature) necessary to present fairly our financial position at March 31, 2021 and the results of operations and cash flows for the three months ended March 31, 2021 and 2020 in conformity with accounting principles generally accepted in the United States.
Assets Held for Sale	Assets Held for Sale ​ Assets held for sale included real property and fractional aircraft ownership. The three months ended March 31, 2021 included asset impairment charges of $0.2 million on assets held for sale, which were recorded in general and administrative expenses in our consolidated statements of income. As of March 31, 2021, $3.8 million of buildings, $1.9 million of land and $1.0 million of equipment held for sale were included in Property and equipment, net on our consolidated balance sheets. As of December 31, 2020, $3.8 million of buildings and $1.9 million of land that were held for sale were included in Property and equipment, net on our consolidated balance sheets. The Company continues to actively pursue the sale of assets held for sale at market prices as soon as reasonably possible.
Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract	Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract ​ As of March 31, 2021 and December 31, 2020, the Company had $4.8 million of capitalized implementation costs for hosting arrangements with $793 thousand and $459 thousand, respectively, of accumulated amortization in prepaid and other current assets on the consolidated balance sheets. Our hosting arrangements that are service contracts include internal and external costs related to various technology additions in support of our asset management and wealth management businesses. Amortization costs are recorded on a straight-line basis over the term of the hosting arrangement agreement.

Revenue Recognition (Tables)

Revenue Recognition (Tables)	3 Months Ended
	Mar. 31, 2021
Revenue Recognition
Summary of disaggregation of revenue	All revenue recognized in the consolidated statements of income is considered to be revenue from contracts with customers. The vast majority of revenue is determined based on average assets and is earned daily or monthly or is transactional and is earned on the trade date. As such, revenue from remaining performance obligations is not significant. The following table depicts the disaggregation of revenue by product and distribution channel: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ ​ 2021 ​ 2020 ​ ​ ​ (in thousands) Investment management fees: ​ ​ Funds ​ $ 114,395 102,293 Institutional ​ 3,621 2,926 Total investment management fees ​ $ 118,016 105,219 Underwriting and distribution fees: ​ ​ ​ ​ ​ Unaffiliated ​ ​ ​ ​ ​ Service and distribution fees ​ $ 14,642 ​ 15,276 Sales commissions ​ ​ 15 ​ 451 Other revenues ​ ​ 44 ​ 135 Total unaffiliated distribution fees ​ $ 14,701 ​ 15,862 Wealth Management ​ ​ ​ ​ ​ Advisory fees ​ $ 94,280 ​ 77,118 Service and distribution fees ​ ​ 16,763 ​ 14,589 Sales commissions ​ ​ 19,423 ​ 20,657 Other revenues ​ ​ 9,628 ​ 8,717 Total wealth management distribution fees ​ ​ 140,094 ​ 121,081 Total underwriting and distribution fees ​ $ 154,795 ​ 136,943 Shareholder service fees: ​ ​ ​ ​ ​ Total shareholder service fees ​ $ 22,540 21,571 ​ ​ ​ ​ Total revenues ​ $ 295,351 263,733

Investment Securities (Tables)

Investment Securities (Tables)	3 Months Ended
	Mar. 31, 2021
Investment Securities
Schedule of investment securities	Investment securities at March 31, 2021 and December 31, 2020 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2021 2020 ​ ​ ​ ​ (in thousands) ​ Available for sale securities: ​ ​ ​ ​ ​ ​ Commercial paper ​ $ — ​ 9,705 ​ Corporate bonds ​ ​ 133,652 ​ 157,832 ​ Total available for sale securities ​ 133,652 ​ 167,537 ​ Trading debt securities: ​ ​ ​ ​ ​ ​ Commercial paper ​ ​ 14,079 ​ 11,785 ​ Corporate bonds ​ 70,427 ​ 76,734 ​ Mortgage-backed securities ​ — ​ 1 ​ Term loans ​ ​ 48,077 ​ 47,224 ​ Total trading securities ​ 132,583 ​ 135,744 ​ Equity securities: ​ ​ ​ ​ ​ ​ Common stock ​ 42,323 ​ 41,410 ​ Sponsored funds ​ ​ 82,323 ​ 81,019 ​ Sponsored privately offered funds ​ 1,224 ​ 1,165 ​ Total equity securities ​ ​ 125,870 ​ 123,594 ​ Equity method securities: ​ ​ ​ ​ ​ ​ Sponsored funds ​ 59,954 ​ 59,890 ​ Total securities ​ $ 452,059 ​ 486,765 ​
Summary of maturities of securities held	Corporate bonds accounted for as available for sale and held as of March 31, 2021 mature as follows: ​ ​ ​ ​ ​ ​ ​ ​ Amortized ​ ​ ​ ​ cost Fair value ​ (in thousands) Within one year $ 74,726 ​ 75,746 After one year but within five years ​ 56,513 ​ 57,906 ​ $ 131,239 ​ 133,652 ​ Commercial paper, corporate bonds and term loans accounted for as trading and held as of March 31, 2021 mature as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value ​ ​ ​ (in thousands) Within one year ​ ​ $ 38,039 After one year but within five years ​ ​ ​ 68,227 After five years but within 10 years ​ ​ ​ 26,317 ​ ​ ​ $ 132,583
Summary of the gross unrealized gains (losses) related to securities	The following is a summary of the gross unrealized gains related to securities classified as available for sale at March 31, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized Unrealized Unrealized ​ ​ ​ cost ​ gains ​ losses ​ Fair value (in thousands) ​ Available for sale securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate bonds ​ $ 131,239 2,413 ​ — 133,652 ​ ​ The following is a summary of the gross unrealized gains (losses) related to securities classified as available for sale at December 31, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized Unrealized Unrealized ​ ​ ​ cost ​ gains ​ losses ​ Fair value ​ ​ (in thousands) ​ Available for sale securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial paper ​ $ 9,720 ​ — ​ (15) ​ 9,705 ​ Corporate bonds ​ ​ 154,270 3,562 ​ — 157,832 ​ ​ ​ $ 163,990 3,562 (15) 167,537 ​
Summary of available for sale sponsored funds with fair values below carrying values	There are no available for sale investment securities with fair values below carrying values at March 31, 2021. A summary of available for sale investment securities with fair values below carrying values at December 31, 2020 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than 12 months ​ 12 months or longer ​ Total ​ ​ ​ ​ ​ Unrealized ​ ​ ​ Unrealized ​ ​ ​ Unrealized ​ Fair value losses Fair value losses Fair value losses ​ ​ (in thousands) Corporate bonds ​ $ 2,414 ​ (15) ​ — ​ — ​ 2,414 ​ (15)
Schedule of fair value of investment securities	The following tables summarize our investment securities as of March 31, 2021 and December 31, 2020 that are recognized in our consolidated balance sheets using fair value measurements based on the differing levels of inputs. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2021 Level 1 Level 2 Level 3 Other Assets Held at Net Asset Value ​ Total ​ ​ (in thousands) Cash equivalents: (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Money market funds ​ $ 20,062 ​ — ​ — ​ — ​ 20,062 ​ Commercial paper ​ ​ — ​ 25,801 ​ — ​ — ​ 25,801 ​ Total cash equivalents ​ $ 20,062 ​ 25,801 ​ — ​ — ​ 45,863 ​ Available for sale securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate bonds ​ $ — ​ 133,652 ​ — ​ — ​ 133,652 ​ Trading debt securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial paper ​ ​ — ​ 14,079 ​ — ​ — ​ 14,079 ​ Corporate bonds ​ ​ — ​ 70,427 ​ — ​ ​ ​ 70,427 ​ Term loans ​ — 46,355 1,722 — ​ 48,077 ​ Equity securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common stock ​ ​ 42,018 ​ — ​ 305 ​ — ​ 42,323 ​ Sponsored funds ​ ​ 82,323 ​ — ​ — ​ — ​ 82,323 ​ Sponsored privately offered funds measured at net asset value (2) ​ ​ — ​ — ​ — ​ 1,224 ​ 1,224 ​ Equity method securities: (3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sponsored funds ​ ​ 59,954 ​ — ​ — ​ — ​ 59,954 ​ Total investment securities ​ $ 184,295 ​ 264,513 ​ 2,027 ​ 1,224 ​ 452,059 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 Level 1 Level 2 Level 3 Other Assets Held at Net Asset Value ​ Total ​ ​ (in thousands) Cash equivalents: (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Money market funds ​ $ 82,085 ​ — ​ — ​ — ​ 82,085 ​ Commercial paper ​ ​ — ​ 47,421 ​ — ​ — ​ 47,421 ​ Total cash equivalents ​ $ 82,085 ​ 47,421 ​ — ​ — ​ 129,506 ​ Available for sale securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial paper ​ $ — ​ 9,705 ​ — ​ — ​ 9,705 ​ Corporate bonds ​ ​ — ​ 157,832 ​ — ​ — ​ 157,832 ​ Trading debt securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial paper ​ ​ — ​ 11,785 ​ — ​ — ​ 11,785 ​ Corporate bonds ​ ​ — ​ 76,734 ​ — ​ ​ ​ 76,734 ​ Mortgage-backed securities ​ — 1 — — ​ 1 ​ Term loans ​ — 46,030 1,194 — ​ 47,224 ​ Equity securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common stock ​ 41,079 ​ — ​ 331 ​ — ​ 41,410 ​ Sponsored funds ​ 81,019 ​ — ​ — ​ — ​ 81,019 ​ Sponsored privately offered funds measured at net asset value (2) ​ ​ — ​ — ​ — ​ 1,165 ​ 1,165 ​ Equity method securities: (3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sponsored funds ​ ​ 59,890 ​ — ​ — ​ — ​ 59,890 ​ Total investment securities ​ $ 181,988 ​ 302,087 ​ 1,525 ​ 1,165 ​ 486,765 ​ ​ (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 net asset value 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) The Company’s equity method investments are investment companies that record their underlying investments at fair value.
Schedule of activity of investments categorized as Level 3	The following table summarizes the activity of investments categorized as Level 3 for the three months ended March 31, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the three months ended ​ ​ March 31, 2021 ​ ​ (in thousands) Level 3 assets at December 31, 2020 ​ $ 1,525 Transfers into level 3 ​ ​ 4,863 Transfers out of level 3 ​ ​ (4,293) Gains in Investment and other income (loss) ​ 33 Redemptions and paydowns ​ ​ (101) Level 3 assets at March 31, 2021 ​ $ 2,027 ​ ​ ​ ​ Change in unrealized losses for Level 3 assets held at March 31, 2021 ​ $ (26)

Derivative Financial Instrume_2

Derivative Financial Instruments (Tables)	3 Months Ended
	Mar. 31, 2021
Derivative Financial Instruments
Schedule of fair value of the derivative financial instruments	The following table presents the fair value of the derivative financial instruments as of March 31, 2021 and December 31, 2020 and is calculated based on Level 2 inputs: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ ​ December 31, ​ ​ Balance sheet ​ ​ 2021 ​ ​ 2020 ​ location Fair value Fair value ​ ​ ​ (in thousands) Total return swap contracts Prepaid expenses and other current assets ​ $ 529 ​ ​ — Total return swap contracts ​ Other current liabilities ​ $ 26 ​ ​ 3,464 Net total return swap asset (liability) ​ ​ $ 503 ​ ​ (3,464)
Summary of net (losses) gains recognized in income	The following is a summary of net (losses) gains recognized in income for the three months ended March 31, 2021 and March 31, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ Income statement ​ March 31, ​ location ​ 2021 ​ 2020 ​ ​ ​ (in thousands) Total return swap contracts Investment and other income $ (4,080) ​ 42,069

Goodwill and Identifiable Int_2

Goodwill and Identifiable Intangible Assets (Tables)	3 Months Ended
	Mar. 31, 2021
Goodwill and Identifiable Intangible Assets
Schedule of goodwill and identifiable intangible assets	Goodwill represents the excess of purchase price over the tangible assets and identifiable intangible assets of an acquired business. Our goodwill is not deductible for tax purposes. The Company performs an annual goodwill impairment assessment during the second quarter of each year and identified no impairment during the most recent assessment. Goodwill and identifiable intangible assets (all considered indefinite lived) at March 31, 2021 and December 31, 2020 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2021 ​ 2020 ​ ​ ​ (in thousands) ​ Goodwill $ 106,970 106,970 ​ ​ ​ ​ ​ ​ ​ Mutual fund management advisory contracts ​ 38,699 38,699 ​ Other ​ 200 200 ​ Total identifiable intangible assets ​ 38,899 38,899 ​ ​ ​ ​ ​ ​ ​ ​ Total ​ $ 145,869 145,869 ​

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	3 Months Ended
	Mar. 31, 2021
Stockholders' Equity
Components of basic and diluted earnings per share	The components of basic and diluted earnings per share were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ ​ March 31, ​ ​ ​ 2021 ​ 2020 ​ ​ ​ ​ ​ ​ ​ ​ Net income attributable to Waddell & Reed Financial, Inc. $ 1,612 21,986 ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding, basic and diluted ​ 62,485 ​ 67,675 ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share, basic and diluted ​ $ 0.03 ​ 0.32 ​
Summary of accumulated other comprehensive income activity	The following tables summarize accumulated other comprehensive income (loss) activity for the three months ended March 31, 2021 and March 31, 2020. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the three months ended March 31, ​ ​ ​ ​ ​ ​ Total ​ ​ Unrealized ​ Postretirement ​ accumulated ​ ​ gains (losses) on ​ benefits ​ other ​ ​ AFS investment ​ unrealized ​ comprehensive ​ ​ securities ​ gains (losses) ​ income (loss) ​ ​ (in thousands) ​ Balance at December 31, 2020 $ 2,696 201 2,897 Other comprehensive loss before reclassification (700) — (700) ​ Amount reclassified from accumulated other comprehensive income (161) (11) (172) ​ Net current period other comprehensive loss (861) ​ (11) (872) ​ Balance at March 31, 2021 ​ $ 1,835 190 2,025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2019 $ 2,521 713 3,234 Other comprehensive loss before reclassification (2,228) — (2,228) ​ Amount reclassified from accumulated other comprehensive income (202) (49) (251) ​ Net current period other comprehensive loss (2,430) ​ (49) (2,479) ​ Balance at March 31, 2020 ​ $ 91 664 755 ​
Summary of reclassifications from accumulated other comprehensive income and included in net income	Reclassifications from accumulated other comprehensive income (loss) and included in net income are summarized in the tables that follow. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the three months ended March 31, 2021 ​ ​ ​ ​ ​ ​ ​ ​ Tax ​ ​ ​ ​ ​ ​ Pre-tax ​ expense ​ Net of tax ​ Statement of income line item ​ ​ (in thousands) ​ ​ ​ Reclassifications included in net income: ​ Gains on available for sale debt securities ​ $ 213 (52) 161 Investment and other income (loss) ​ Amortization of postretirement benefits ​ ​ 15 (4) 11 Compensation and benefits ​ Total ​ $ 228 (56) 172 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the three months ended March 31, 2020 ​ ​ ​ ​ ​ ​ ​ ​ Tax ​ ​ ​ ​ ​ ​ ​ Pre-tax ​ expense ​ Net of tax ​ Statement of income line item ​ ​ (in thousands) ​ ​ ​ Reclassifications included in net income: ​ Gains on available for sale debt securities ​ $ 266 (64) 202 Investment and other income (loss) ​ Amortization of postretirement benefits ​ ​ 67 (18) 49 Compensation and benefits ​ Total ​ $ 333 (82) 251 ​ ​ ​

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2021
Leases
Schedule of components of lease expense	The components of lease expense were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ For the three months ended March 31, ​ ​ 2021 ​ 2020 ​ ​ (in thousands) Operating Lease Cost ​ $ 1,478 $ 3,233 ​ ​ ​ ​ ​ ​ ​ Finance Lease Cost: ​ ​ ​ ​ ​ ​ Amortization of ROU assets ​ $ 14 $ 55 Interest on lease liabilities ​ ​ 1 ​ 9 Total ​ $ 15 ​ $ 64 ​ ​ ​ ​ ​ ​ ​
Schedule of supplemental cash flow information	Supplemental cash flow information related to leases was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the three months ended March 31, ​ ​ 2021 ​ 2020 ​ ​ (in thousands) Cash paid for amounts included in the measurement of lease liabilities: ​ ​ Operating cash flows from operating leases ​ $ 1,792 $ 3,143 Operating cash flows from finance leases ​ 1 9 Financing cash flows from finance leases ​ ​ 19 ​ ​ 58 ​ ​ ​ ​ ​ ​ ​ ROU assets obtained in exchange for lease obligations: ​ ​ ​ ​ ​ ​ Operating leases ​ ​ — ​ ​ 7 Finance leases ​ ​ — ​ ​ —
Schedule of supplemental balance sheet information	Supplemental balance sheet information related to leases was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2021 ​ December 31, 2020 ​ ​ (in thousands, except lease term and discount rate) Operating Leases: ​ ​ Operating lease ROU assets (Other non-current assets) ​ $ 12,124 $ 13,461 ​ ​ ​ ​ ​ ​ ​ Other current liabilities ​ $ 5,394 ​ $ 6,247 Other non-current liabilities ​ ​ 7,765 ​ ​ 8,812 Total operating lease liabilities ​ $ 13,159 ​ $ 15,059 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Finance Leases: ​ ​ ​ ​ ​ ​ Property and equipment, gross ​ $ 181 ​ $ 333 Accumulated depreciation ​ ​ (144) ​ ​ (277) Property and equipment, net ​ $ 37 ​ $ 56 ​ ​ ​ ​ ​ ​ ​ Other current liabilities ​ $ 25 ​ $ 41 Other non-current liabilities ​ ​ 8 ​ ​ 11 Total finance lease liabilities ​ $ 33 ​ $ 52 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average remaining lease term: ​ ​ ​ ​ ​ ​ Operating leases ​ ​ 4 years ​ ​ 4 years Finance leases ​ ​ 1 year ​ ​ 1 year ​ ​ ​ ​ ​ ​ ​ Weighted average discount rate: ​ ​ ​ ​ ​ ​ Operating leases ​ ​ 4.11% ​ ​ 4.08% Finance leases ​ ​ 6.00% ​ ​ 6.00%
Schedule of maturities of operating leases	Maturities of lease liabilities are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating ​ ​ Finance ​ ​ Leases ​ ​ Leases ​ ​ (in thousands) Year ended December 31, ​ ​ ​ ​ ​ ​ 2021 (excluding the three months ended March 31, 2021) $ 4,834 ​ 22 2022 ​ ​ 2,424 ​ ​ 12 2023 ​ 2,090 ​ — 2024 ​ 2,090 ​ — Thereafter ​ 2,613 ​ — Total lease payments ​ 14,051 ​ 34 Less imputed interest ​ ​ (892) ​ ​ (1) Total ​ $ 13,159 ​ 33
Schedule of maturities of finance leases	Maturities of lease liabilities are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating ​ ​ Finance ​ ​ Leases ​ ​ Leases ​ ​ (in thousands) Year ended December 31, ​ ​ ​ ​ ​ ​ 2021 (excluding the three months ended March 31, 2021) $ 4,834 ​ 22 2022 ​ ​ 2,424 ​ ​ 12 2023 ​ 2,090 ​ — 2024 ​ 2,090 ​ — Thereafter ​ 2,613 ​ — Total lease payments ​ 14,051 ​ 34 Less imputed interest ​ ​ (892) ​ ​ (1) Total ​ $ 13,159 ​ 33

Description of Business and S_3

Description of Business and Significant Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020	Dec. 02, 2020
Assets under management	$ 76,000,000
Impairment on assets held for sale	200
Assets held for sale	19,073	$ 21,903
Capitalized implementation costs for hosting arrangements	4,800	4,800
Accumulated amortization of hosting arrangement	793	459
Buildings
Assets held for sale	3,800	3,800
Land
Assets held for sale	1,900	$ 1,900
Equipment
Assets held for sale	$ 1,000
Macquarie Asset Management
Cash per share to be received (in dollars per share)			$ 25

New Accounting Guidance (Detail

New Accounting Guidance (Details)	Mar. 31, 2021
ASU 2019-12
New Accounting Guidance
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]	false

Revenue Recognition - Disaggreg

Revenue Recognition - Disaggregation of revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenue Recognition
Total Revenues	$ 295,351	$ 263,733
Investment management fees
Revenue Recognition
Total Revenues	118,016	105,219
Funds
Revenue Recognition
Total Revenues	114,395	102,293
Institutional
Revenue Recognition
Total Revenues	3,621	2,926
Underwriting and distribution fees
Revenue Recognition
Total Revenues	154,795	136,943
Unaffiliated
Revenue Recognition
Total Revenues	14,701	15,862
Unaffiliated service and distribution fees
Revenue Recognition
Total Revenues	14,642	15,276
Unaffiliated sales commissions
Revenue Recognition
Total Revenues	15	451
Unaffiliated Other revenues
Revenue Recognition
Total Revenues	44	135
Wealth Management
Revenue Recognition
Total Revenues	140,094	121,081
Wealth Management Advisory Fees
Revenue Recognition
Total Revenues	94,280	77,118
Wealth Management Service and distribution fees
Revenue Recognition
Total Revenues	16,763	14,589
Wealth Management Sales commissions
Revenue Recognition
Total Revenues	19,423	20,657
Wealth Management Other revenues
Revenue Recognition
Total Revenues	9,628	8,717
Shareholder service fees
Revenue Recognition
Total Revenues	$ 22,540	$ 21,571

Investment Securities - Investm

Investment Securities - Investment securities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Available for sale securities:
Available for sale securities	$ 133,652	$ 167,537
Trading debt securities:
Trading debt securities	132,583	135,744
Equity securities:
Equity securities	125,870	123,594
Equity method securities:
Total investment securities	452,059	486,765
Commercial paper
Available for sale securities:
Available for sale securities		9,705
Trading debt securities:
Trading debt securities	14,079	11,785
Corporate bonds
Available for sale securities:
Available for sale securities	133,652	157,832
Trading debt securities:
Trading debt securities	70,427	76,734
Mortgage-backed securities
Trading debt securities:
Trading debt securities		1
Term loans
Trading debt securities:
Trading debt securities	48,077	47,224
Common Stock
Equity securities:
Equity securities	42,323	41,410
Sponsored funds
Equity securities:
Equity securities	82,323	81,019
Equity method securities:
Equity method securities	59,954	59,890
Sponsored privately offered funds
Equity securities:
Equity securities	$ 1,224	$ 1,165

Investment Securities - Maturit

Investment Securities - Maturity (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Amortized Cost
Within one year	$ 74,726
After one year but within five years	56,513
Amortized Cost	131,239	$ 163,990
Fair value
Within one year	75,746
After one year but within five years	57,906
Total fair value	133,652	$ 167,537
Fair value
Within one year	38,039
After one year but within five years	68,227
After five years but within 10 years	26,317
Total fair value	$ 132,583

Investment Securities - Inves_2

Investment Securities - Investment securities and summary of the gains (losses) related to securities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Available for sale securities:
Amortized Cost	$ 131,239	$ 163,990
Unrealized gains		3,562
Unrealized losses		(15)
Fair value	133,652	167,537
Commercial paper
Available for sale securities:
Amortized Cost		9,720
Unrealized losses		(15)
Fair value		9,705
Corporate bonds
Available for sale securities:
Amortized Cost	131,239	154,270
Unrealized gains	2,413	3,562
Fair value	$ 133,652	$ 157,832

Investment Securities - Availab

Investment Securities - Available for sale sponsored funds with fair values below carrying values (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021USD ($)security	Mar. 31, 2020USD ($)	Dec. 31, 2020USD ($)
Unrealized losses
Securities in an unrealized loss position | security	0
Net unrealized gains (losses) on equity securities	$ 2,600	$ (35,900)
Corporate bonds
Fair value
Less than 12 months			$ 2,414
Total fair value			2,414
Unrealized losses
Less than 12 months			(15)
Total unrealized losses			$ (15)

Investment Securities - Fair va

Investment Securities - Fair value of investment securities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Fair value of investments
Cash equivalents	$ 45,863	$ 129,506
Available for sale securities	133,652	167,537
Trading debt securities	132,583	135,744
Equity securities	125,870	123,594
Total investment securities	452,059	486,765
Money market funds
Fair value of investments
Cash equivalents	20,062	82,085
Commercial paper
Fair value of investments
Cash equivalents	25,801	47,421
Available for sale securities		9,705
Trading debt securities	14,079	11,785
Corporate bonds
Fair value of investments
Available for sale securities	133,652	157,832
Trading debt securities	70,427	76,734
Mortgage-backed securities
Fair value of investments
Trading debt securities		1
Term loans
Fair value of investments
Trading debt securities	48,077	47,224
Common Stock
Fair value of investments
Equity securities	42,323	41,410
Sponsored funds
Fair value of investments
Equity securities	82,323	81,019
Equity method securities	59,954	59,890
Sponsored privately offered funds
Fair value of investments
Equity securities	1,224	1,165
Level 1
Fair value of investments
Cash equivalents	20,062	82,085
Total investment securities	184,295	181,988
Level 1 | Money market funds
Fair value of investments
Cash equivalents	20,062	82,085
Level 1 | Common Stock
Fair value of investments
Equity securities	42,018	41,079
Level 1 | Sponsored funds
Fair value of investments
Equity securities	82,323	81,019
Equity method securities	59,954	59,890
Level 2
Fair value of investments
Cash equivalents	25,801	47,421
Total investment securities	264,513	302,087
Level 2 | Commercial paper
Fair value of investments
Cash equivalents	25,801	47,421
Available for sale securities		9,705
Trading debt securities	14,079	11,785
Level 2 | Corporate bonds
Fair value of investments
Available for sale securities	133,652	157,832
Trading debt securities	70,427	76,734
Level 2 | Mortgage-backed securities
Fair value of investments
Trading debt securities		1
Level 2 | Term loans
Fair value of investments
Trading debt securities	46,355	46,030
Level 3
Fair value of investments
Total investment securities	2,027	1,525
Level 3 | Term loans
Fair value of investments
Trading debt securities	1,722	1,194
Level 3 | Common Stock
Fair value of investments
Equity securities	305	331
Other Assets Held at Net Value
Fair value of investments
Total investment securities	1,224	1,165
Other Assets Held at Net Value | Sponsored privately offered funds
Fair value of investments
Equity securities	$ 1,224	$ 1,165

Investment Securities - Inves_3

Investment Securities - Investment category (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021USD ($)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Level 3 assets at beginning of period	$ 1,525
Transfers into level 3	4,863
Transfers out of level 3	(4,293)
Gains in Investment and other income	$ 33
Fair Value, Recurring Basis, Unobservable Input Reconciliation, Asset, Gain (Loss), Statement of Other Comprehensive Income [Extensible List]	Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax
Redemptions and Paydowns	$ (101)
Level 3 assets at end of period	2,027
Change in unrealized losses for Level 3 assets held	$ (26)

Derivative Financial Instrume_3

Derivative Financial Instruments (Details) - Not designated as a hedge - Total return swap contracts $ in Thousands	3 Months Ended
	Mar. 31, 2021USD ($)contract	Mar. 31, 2020USD ($)	Dec. 31, 2020USD ($)contract
Derivative Financial Instruments
Number of contracts | contract	9		10
Notional value	$ 205,100		$ 198,200
Cash collateral posted by counterparties	1,400
Cash collateral with the counterparties			3,400
Level 2
Derivative Financial Instruments
Net total return swap (liability) asset	503		(3,464)
Investment and other income (loss) | Level 2
Derivative Financial Instruments
Net (losses) gains recognized in income	(4,080)	$ 42,069
Prepaid expenses and other current assets | Level 2
Derivative Financial Instruments
Fair value - assets	529
Other current liabilities | Level 2
Derivative Financial Instruments
Fair value - liabilities	$ 26		$ 3,464

Goodwill and Identifiable Int_3

Goodwill and Identifiable Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Goodwill and Identifiable Intangible Assets
Impairment of goodwill	$ 0
Goodwill	106,970	$ 106,970
Mutual fund management advisory contracts	38,699	38,699
Other	200	200
Total identifiable intangible assets	38,899	38,899
Total goodwill and identifiable intangible assets	$ 145,869	$ 145,869

Income Tax Uncertainties (Detai

Income Tax Uncertainties (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Income Tax Uncertainties
Unrecognized tax benefits, including penalties and interest that if recognized would impact effective tax rate	$ 2	$ 1.9
Unrecognized tax benefits, including penalties and interest, net of federal tax benefit that if recognized would affect effective tax rate	$ 1.7	$ 1.7

Stockholders' Equity - Earnings

Stockholders' Equity - Earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Components of basic and diluted earnings per share
Net income attributable to Waddell & Reed Financial, Inc.	$ 1,612	$ 21,986
Weighted average shares outstanding - basic and diluted	62,485,000	67,675,000
Earnings per share:
Earnings per share, basic and diluted (in dollars per share)	$ 0.03	$ 0.32
Dividends
Dividends declared (in dollars per share)	$ 0.25	$ 0.25
Dividends payable to stockholders	$ 15,800
Common stock repurchases
Shares repurchased in the open market or privately	353,909	3,807,438
Shares repurchased from employees to cover income tax withholdings	353,909	231,393

Stockholders' Equity - Accumula

Stockholders' Equity - Accumulated other comprehensive income activity (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
AOCI Attributable to Parent, Net of Tax
Balance at the beginning of the period	$ 727,757	$ 808,897
Balance at the end of the period	709,374	765,658
Accumulated Other Comprehensive Income
AOCI Attributable to Parent, Net of Tax
Balance at the beginning of the period	2,897	3,234
Other comprehensive income (loss) before reclassification	(700)	(2,228)
Amount reclassified from accumulated other comprehensive income	(172)	(251)
Net current period other comprehensive income (loss)	(872)	(2,479)
Balance at the end of the period	2,025	755
Unrealized gains (losses) on AFS investment securities
AOCI Attributable to Parent, Net of Tax
Balance at the beginning of the period	2,696	2,521
Other comprehensive income (loss) before reclassification	(700)	(2,228)
Amount reclassified from accumulated other comprehensive income	(161)	(202)
Net current period other comprehensive income (loss)	(861)	(2,430)
Balance at the end of the period	1,835	91
Postretirement benefits unrealized gains (losses)
AOCI Attributable to Parent, Net of Tax
Balance at the beginning of the period	201	713
Amount reclassified from accumulated other comprehensive income	(11)	(49)
Net current period other comprehensive income (loss)	(11)	(49)
Balance at the end of the period	$ 190	$ 664

Stockholders' Equity - Reclassi

Stockholders' Equity - Reclassifications from accumulated other comprehensive income and included in net income (Details) - Reclassifications from accumulated other comprehensive income (loss) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Reclassifications included in net income:
Pre-tax	$ 228	$ 333
Tax expense	(56)	(82)
Net of tax	172	251
Gains (losses) on available for sale debt securities | Investment and other income (loss)
Reclassifications included in net income:
Pre-tax	213	266
Tax expense	(52)	(64)
Net of tax	161	202
Postretirement benefits unrealized gains (losses) | Compensation and benefits
Reclassifications included in net income:
Pre-tax	15	67
Tax expense	(4)	(18)
Net of tax	$ 11	$ 49

Leases - Narrative (Details)

Leases - Narrative (Details) - ft²	3 Months Ended
	Mar. 31, 2021	Jan. 31, 2020
Leases
Option to extend - Operating	true
Option to extend - Finance	true
Option to terminate - Operating	true
Option to terminate - Finance	true
Minimum
Leases
Lease term - Operating	1 year
Lease term - Finance	1 year
Maximum
Leases
Lease term - Operating	5 years
Lease term - Finance	6 years
Option to extend period - Operating	20 years
Option to extend period - Finance	20 years
Option to terminate period - Operating	1 year
Option to terminate period - Finance	1 year
Corporate Headquarters
Leases
Lease term - Finance		15 years
Square footage		260,000

Leases - Components of Lease (D

Leases - Components of Lease (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Components of lease expense
Operating Lease Cost	$ 1,478	$ 3,233
Amortization of ROU assets	14	55
Interest on lease liabilities	1	9
Total	$ 15	$ 64

Leases - Supplemental Cash Flow

Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Leases
Operating cash flows from operating leases	$ 1,792	$ 3,143
Operating cash flows from finance leases	1	9
Financing cash flows from finance leases	$ 19	58
ROU assets obtained in exchange for lease obligations - Operating leases		$ 7

Leases - Supplemental Balance S

Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Leases
Operating lease ROU assets	$ 12,124	$ 13,461
Financial position	Other non-current assets	Other non-current assets
Operating lease liabilities - current	$ 5,394	$ 6,247
Financial position	Other current liabilities	Other current liabilities
Operating lease liabilities - noncurrent	$ 7,765	$ 8,812
Financial position	Other non-current liabilities	Other non-current liabilities
Total Operating lease liabilities	$ 13,159	$ 15,059
Financing Lease ROU assets	$ 37	$ 56
Financial position	us-gaap:PropertyPlantAndEquipmentNet	us-gaap:PropertyPlantAndEquipmentNet
Finance lease liabilities - current	$ 25	$ 41
Financial position	Other current liabilities	Other current liabilities
Finance lease liabilities - noncurrent	$ 8	$ 11
Financial position	Other non-current liabilities	Other non-current liabilities
Finance lease liabilities	$ 33	$ 52
Weighted average remaining lease term - Operating leases	4 years	4 years
Weighted average remaining lease term - Financing leases	1 year	1 year
Weighted average discount rate - Operating leases	4.11%	4.08%
Weighted average discount rate - Financing leases	6.00%	6.00%
Finance lease assets
Leases
Property and equipment, gross	$ 181	$ 333
Accumulated depreciation	$ (144)	$ (277)

Leases - Maturity of Lease Liab

Leases - Maturity of Lease Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Operating Leases maturities:
2021 (excluding the three months ended March 31, 2021)	$ 4,834
2022	2,424
2023	2,090
2024	2,090
Thereafter	2,613
Total lease payments	14,051
Less imputed interest	(892)
Total	13,159	$ 15,059
Finance Leases maturities:
2021 (excluding the three months ended March 31, 2021)	22
2022	12
Total lease payments	34
Less imputed interest	(1)
Total	$ 33	$ 52

Contingencies (Details)

Contingencies (Details) - Litigation Relating to the Merger	3 Months Ended
	Mar. 31, 2021item
Loss Contingencies [Line Items]
Number of complaints filed	7
Number of plaintiffs	7

Subsequent Events (Details)

Subsequent Events (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Apr. 30, 2021	Mar. 31, 2021	Mar. 31, 2020
Subsequent Events
Net realized gain (loss) on sale of securities		$ 1,991	$ (50,012)
Subsequent Event
Subsequent Events
Net realized gain (loss) on sale of securities	$ 2,400
Proceeds from the sale of securities	$ 211,400