AMK - Earnings call transcript Q2 2020 | AssetMark Financial Holdings, Inc.

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Operator

Good afternoon, everyone, and welcome to AssetMark's Second Quarter 2020 Earnings Conference Call. [Operator Instructions] Today's call is being recorded.

Now I'd like to turn the call over to Taylor Hamilton, Head of Investor Relations. Please go ahead, Mr. Hamilton.

Taylor Hamilton

you. Thank and Second everyone, Conference XXXX to Call. welcome afternoon, Quarter AssetMark's Earnings Good

are Officer, of discuss Chief Chief me outlook provide AssetMark's Joining remotely AssetMark's to Executive the quarter Gary business Today, an update for the Financial Zyla. Charles they results will remainder the for second and XXXX. Officer, and Goldman;

for Following remarks, will we our open questions. introductory up the call

our reference IR presentation during an at also earnings that be Charles accessed Gary can have on prepared their will website remarks. ir.assetmark.com. It We and

could Before started, statements like statements to note information factors annual is and Factors from made our section our affect Risk the to make Form we Act to during and on alter time, meaning result represent not could other differ only materially. as the or time forward-looking date statements Reform Private with titled that these as in statements, filings results including future included the We in outlook events expressly financial the the we our are report Relations Further on SEC of the next update available SEC expect or XX-K I'd on on file get any otherwise. forward-looking week. with that in on website our our XXXX. XX-Q Securities the Litigation file and XXXX, results undertake obligation this quarter our we XX, which to forward-looking Investor for and Form report quarterly new information, a certain conference within whether These of call of this of Actual disclaim do call. ended June

and and quantitative of all These which revenue, and than discussion similarly discussing we adjusted are conference non-GAAP non-GAAP today's reconciliations financial differently presented our that, other margin directly are ended are Charles, EBITDA, EBITDA on my calculated With metrics and will call the Relations adjusted calculated turn and it take of adjusted why non-GAAP adjusted be adjusted XX-Q accordance measures EBITDA, not metrics net report both XX, be by June during metrics. metrics in in Additionally, with for which may over margin quarter comparable of of quarterly titled Form most adjusted website. EBITDA Investor A GAAP our release to financial we'll companies. I'll be available income, net available the on press to away. GAAP XXXX, use income our the net call, colleagues.

Charles Goldman

everybody, messages Also call. us time dry. quarter you key We healthy. and Thank We on our afternoon, today, you all with second our families today call. thank for are you, we to earnings be X a hope and on going Taylor, and big the Slide to safe taking those are you there. focus and stay joining please your that good you appreciate on East the storm Coast, Starting there's we know of X, earnings for during and

these First, times. growing is our company despite challenging

quarter, We with current the are in this our environment. second especially pleased given performance

we take it. comment and are as through as the changes are and how regulators deep as seeing a Second, opportunity into is we on that will creating for these world investors, I'll changing, as participants dive I'll changes AssetMark. -- with the industry well for advisers, change how you well

even I these pandemic. the as some of making spend times us believe an and decisions will I'll emerge we stronger currently weather proactive that post Next, company time are detailing position some the to

financial Lastly, expectations. the Gary will with 'XX XQ were walk which us line in through our results,

nicely set for billion platform in us third up assets of higher $XX.X quarter. the revenue record Our

to X. Turning Slide

You can we see times. challenging that these despite are growing

market of at net $XX.X of This billion, $XXX recovery. all-time quarter second second and Platform million. driven to grow end by the high. an was continue the with were We the the flows assets organically quarter in flow net performance

and the added XXX we in in a no and quarter, result with During good May This new prospects few we in-person April is meetings that producing held very advisers. given June. second

million were, all pre-pandemic generation marketing environment Additionally, with and virtual us of of sales canceled. our our balance the our success. Cash for We course, position broker-dealer a have been to reasons key valuable as a by quarter our continued pipeline grew cash shift cash in our on credit million adapt strength. $XX.X and flow industry which to a for ability quickly be opportunity also We ended sales conferences, sheet. $XX.X force and to and

X. to Slide Turning

at were as that we net at While slower this adviser most doubt financial to quarter-over-quarter. and trend operating flows, we are key our pace pandemic. there growing a no key such is looking down data, the of are of is driver we behavior. prior A are growing metrics, than strong, our performance remains When

result Let me that have hindered bit advisers of These pandemic. strategies for meetings deeper. been events. Historically, business into development most a dive have been a little the the effective and as in-person

based previously learn with digitally but had result, meetings virtual advisers connect prospects a lacked to setting. and choice to a As that in how clients no

lives, adviser in pandemic, prior technology practices to recent a according While heavily users of the prevalent daily only to study. Cerulli our XX% technology were is of

Additionally, of their were existing few focused while we on found clients on a protect in lot businesses advisers order growth. rationally focused that were to

business of quarter, results, impact demonstrates with our XQ we the which advisers 'XX environment our of resilience the the are model. during on Given pleased

let's topic. Now X to turn on Slide next our

course cannot the a Over as industry dramatically services, I of as years think is time now. financial the in it where XX of changing is my

going to lose portfolios that want about While relative changing the investors these to from a In many some to to they adviser have coming investor also believe We to important adapt that model better accelerate all capabilities portfolio's talking are a out. are accelerate know want on to that Rather, investors delivering clients. for and that motion we are client's conversations and demand. believe the about Those the that fears investors interact benchmarks. attributes. the Today, going been fail changes about in summary, firms time, be most rapidly. challenges. their from are This returns and experience we change want. deeply industry. our focused changes and be goals, with build advisers not reach advisers, portfolios means the help Investors their about conversations advisers by want is in to them needs This how way the aspirations, goals, understood not fundamental which their believe is

as need change, business their will value models. As in investors -- advisers proposition business their successful adapt

is just become of the dreams this, environment. adviser into grow. for and the be their most technology comprehensive outsourcing fears. a has do advice focus clients, brought on breadth need and and and an been offerings tolerances For proposition. able advisers help This clients. wider experience product Outsourcing understand a they longer selling Advisers or their money. planning need to capacity, new about current Advisers their value ensure will to will risk to an of of integrated differentiate their To greater true on but not increasing remain is for risk their price-competitive, value-added reliance be services. focus financial importantly, provide given there the their the adviser, demand clients, custodians to clients' it to simply need clients' no sharp managing which They a and services

our but for will advisers the be because offers fee-based platform, AssetMark a and those to shift and efficient because management tailwind our of businesses. just build were winners. scalable Additionally, help towards tremendous This not outsourced practice able business who advisers independence practices consulting also is and more

participants. Next, industry let me turn to

definition the be economics As increasing you know, broad across under will of pressure industry. all our

investment As we've is solutions. for cost a there lower seen last shift the towards decade, continuing

further our are we us this the witnessing the results at about. on products what all ability increasing participants. transition At growth from This industry growth which platform. to our that reinvest in for classes to we scale. of additional to and institutional our AssetMark, economics and, the scale. coming organic With end retail lower as course, allows scale is cost pressure, focused At platform, is are is as We day, share we AssetMark of in under building introduce critical onto

BI and is Act protections This interest. good key a Lastly, as case of with conflicts is with XXXX. fiduciary message the Reg The towards has been Advisers regulators here on moving we thing. and see the is will focus of world the investor always

proponents helping build and practices. advice fiduciary are fiduciary of We

focus We practice. on fee-based transition this to advisers making commission are continuing building fiduciary that from to and advisory

in win to committed new are environment. this We

Let me success. are for turn what we discuss Slide X to position best and doing us to

increased we First, pillars. Instead, has continuing our focus. The strategic strategic not are our our to pandemic changed has it invest strategy. in

that model business serve to advisers our agile we grow. so they can grow and ensures Our to continue continue that

Let's on strategic each our pillars. briefly of touch

and third-party core effectively. tools suite you fully offers As is technology done more things our efficiently advisers integrated technology proprietary help get that with our services. know, It

While Zoom the regularly nearly advisers also and crisis, XX,XXX XXX-plus out for investors. our XX,XXX new reached we conducted webinars COVID continue have we and to capabilities April. over in given deliver meetings, top rolled These advisers features,

Second, we service. and deliver scalable personalized

service, have provided beyond We continued go above to the we have during always and and pandemic. best-in-class

with teams XX% quarter-over-quarter. interactions in up This our advisers the sales is have XX,XXX had Our quarter. second number

a X. we were hosted giving webinars, the the year, highly Advisers a of have first of XXX webinars, of webinars them over Additionally, X.X continue we half rating our valuable to attended satisfaction been over which way by out be of complementary serve advisers. XX,XXX In our clients.

key for We us. it continue competitive a to invest as in our service is advantage

curated and solutions. Our third our pillar holistic investment strategic is

the be of or key to the takeaways pandemic don't that skill is money many have managers. One effective from realized enough have advisers time they

deeper management week more with more their finding noted tasks function on outsourcing extra had to new and all up As outsourced. than their In more when our look with advisers of a impact businesses. building clients. to year working study, their which outsource result, clients time XX-plus clients on free if of to nearly to relationships benefit X is adviser what days a we believe hours advisers planning-based finding an a they an will do and this investment time new build best, focus focus Imagine, to then per clients and were

working, high. and last X proven of NPS by our points XXXX our points Our X as strategy up score all-time is from from away XX, year

promoter net is ever. relied was more between XX. technology June survey Thus, than conducted the the score July and Our on of when time XX advisers reflective

saw operations team call trading uncertainty volumes and higher and the persisted in markets. and service Our

accelerating is strategy, our continuing our to rapidly wellness. I discussed in response invest in also are This addition a In investment that changing we environment to financial the to earlier.

Slide needs. wellness to has To anticipate be their to centered investor are at has around goals. their interactions look adviser truly and of a the have able know deep understanding investor needs, let's client's client anticipating Financial So X. to

investors delivers We on, really and future dreams in focused fears. are hopes, that investing aspirations, what the the their

client-adviser the where planning stronger come tools and building all adviser. a their understands digital and the adviser their rich is their help discussion and the that investors top feels that The experience, relationship, digital This are together investor the risk invested to make articulate assets We so their more portfolio will loyalty. we emotions of are in lives. and future that assessment building in them aid greater on changes will is and goals it a dynamic creating

are we looking and do we business. improving all it what in capabilities get sales One how do to Lastly, smarter digital our our about lead we generation. example of through is areas

With in in common, to that, outlook benefit to that its quarter the year. in pillars, thing While The Gary? and in an is have who smarter wellness that financial everything the and of remainder our growth. financial performance to let second me will investment AssetMark. for our strategic one over Gary feel for turn our is still we and the outsourcing early this to business, discuss from do target it effective all stages, in we getting advisers way our

Gary Zyla

all Thank and afternoon call. those good you, the Charles, to on

in there As continued Charles We second slowdown our the our expense discussed, effectiveness management, business feel results. to of overall lot in growth and great unpack the of the the is has economy. quarter given about our a organic

other I'll As usual, then the I talk From end key Slide of our our discussion and financial our of with the balance X. discuss remarks and our there, for I will start on outlook about earnings. revenue, then highlights. expenses our will assets, year. platform Starting with rest a my sheet

our year-over-year we market of Second Year-to-date, has in quarter and a though, with XX.X% $XXX generated Net platform assets billion, large quarter decline the the were million, $X.X quarter. offset platform Market a billion XX.X% second growth in part were a on the record quarter-over-quarter. the expectations. saw flows negative the assets. up first market quarter for in line our impact $XX.X

flows redemptions a while beginning-of-period pre-pandemic net about percentage Year-to-date reflective quarter are reduction X.X% stable Second as net are quarter-over-quarter. level, flows now $X.X and remain or XX% assets. of of relatively of billion

In previous XX% target in to this look a of positive get we beginning-of-period environment. is barring of mentioned, environment, flows growth will -- expected as to all assets to previously get to back a strong Net given sign the are XXXX, look XXXX. organic current be to for As the our think percentage will any we changes macro of dramatic XX-plus percent. back we X%

XXX mentioned, of NPAs the X,XXX the XXXX. advisers. of The in from engaged second than total more little base adviser of we advisers, added As quarter Charles end second as which the quarter a X,XXX were defined at

engaged over were Our back $X $X adviser threshold. materially the to this advisers adds up quarter, engaged were some the appreciation. XX who our assets due count threshold engaged net market above market half XXX the the due million came adviser advisers' those to bringing quarter this or appreciation, about million Of

The engaged first status ever. reached time those the other for XX engaged the who advisers were

to Turning XX. this to our I in operating quarter. detail another talk want more Slide key metrics of about

production advisers is production XXXX. reminder, continued metric was from the activity platform. as the lower at of a than dividing the This the In added the volatile the remains XXXX period. of growth and July orders equity production both pre-pandemic was XX.X% the was that XX.X% well advisers second that markets. given was share platform represents As quarter to first existing the organic due in lift lift metric client level. versus movement advisers business to a has the quarter, of our attributable these muted shelter-in-place to beginning for XX.X% second as in existing quarter by money of assets calculated period to adviser's This fact by found due trend the of and the our This and for now wallet in incremental any as advisers

in July We again will Next AMK flows in about net production lift week, of the our engagement we adviser XX%. release to million which for have we show will future, month. Report, north positive and our our the about $XXX feel set be

to Now quarter's million, were our the quarter, discuss $XX.X to the at let's top revenue leading $XX results. Slide X.X% turn Entering down assets billion, second XX line reported to year-over-year. of

a As XX% is level. of the based reminder, revenue from our asset quarter for about the beginning-of-quarter

$XX.X variable down net our focus we second expenses. revenue the our of million of quarter on was As X.X% net previously In related XXXX, discussed, revenue year-over-year. of

the to Let's components net turn our revenue. of now

negative a Asset-based platform over primarily revenue million, months, X.X% year-over-year decline was of spread-based market to net has year-over-year up $XX.X offset revenue was down cash XX was result rates, to bolstered the This assets. higher driven slightly by organic million. the Spread-based growth by net $X.X the by in last been strong XX.X% outweighing in growth impact. balances. the net The revenue lower

received an second Our points. average client which we basis yield of XX the for $X.X cash on annualized quarter billion, was net

on up XX Company basis in End to at annualized of was cash $X.XX XXXX, in Of Trust XX% billion expect be For $X.XX net at the second was quarter points. cash cash of high-yield approximately yield our AssetMark ATC, XX% cash billion, an remainder program. the quarter-over-quarter. we around

Turning to XX. Slide

our was discuss assets, X factors. X quarter, from which X XX decline basis net driven yield on The platform year-over-year. point the points Let's total quarter-over-quarter year-over-year basis basis by second and was points down

as income lower points a basis X spread declined yield spread to due lower net rates. First, result of

due to of which point GFPC yield compression and to mix shift. assets to yield as basis business. is core point a attributable additional of result basis X AssetMark's our X compared The normal Second, lower the on had OBS, addition is

point driven platform X I'm noted we past, as the revenue growth. do options sorry, net asset-based shift As the a growing in lower This in our assets the basis we year. of and expect each by a -- is decline have result cost mix and

In mutual of in higher shift will quarter, we point out this primarily drop X cost trend, addition yield experience basis to our regular asset-based a by driven funds. next

completed fund third-party institutional open retail of As shares. mutual XX, of strategies we from to the June our all conversion

annualized change on As will revenue mentioned $XX calls, in to million an prior million this about basis. $XX AssetMark's reduce

in per approximately result, the a quarter, revenue quarter. As starting this impact by million $X.X will our third

is our of earnings transparency, of XX presentation. of clarity Appendix variable the the For Slide annualized our expenses and calculation shown net yield in on revenue

Before discuss management, on we expense our turn on XX. laser-focused expenses especially remain to these earnings, Slide let's uncertain times. We in

our approaches number to a quarter, we balancing AssetMark expenses with and events top the earnings In such as targets. actions expectations of line the and of expenses, manage with disciplined a mentality, growth reduction for conferences. the desire a handful elimination roles for of of took travel, the growth

expenses GFPC hold adjusted in which we are the asset-based red $X million assets shown added The very quarter, be a line spread-based of compensation our the to compensation with and the first, total On for control are expenses X compensation $XX are X.X%, increase the primarily million, compensation; cost the reorganization same pretax, COVID-XX. of X.X%. items: by related rate reflecting to amortization adjusted due down million lower costs. SG&A, grew Employee our continuity was we on box, much in good plan the effort and slide, platform fourth, estimate third, this lower people is In a quarter and second, sales; of a of company, about to revenue: our call. $X.X effort acquisition-related flat and result, public back down $X market expense to XXXX the year-over-year, of OBS; business adjustments. lines expense response the in annually. and and expenses costs while about to up headcount affecting X.X%, million, add-backs due noncash the environment. As our to by feel $X.X is interest SG&A making being were million which this on We acquisition driven share-based impact the our our of drivers to million costs next with we page to or our and related a associated X EBITDA. Also comprised of and million $XX.X SG&A integration expenses our second $X.X in

we the flat year full be the XXXX XXXX. we to expenses -- mentioned for expect expect relatively to As previously, the full

our item and Appendix color additional statement 'XX table For for presentation. income earnings line found expense on of in be adjusted Slide reconciliation the can

Slide turn quarter. XX Now to for let's discuss the earnings to our

decrease quarter share, a Our million on in XX% of based was per The decrease income This diluted or adjusted quarter the $XX.X net count $X.XX second million. $XX.X year-over-year second year-over-year. is while of share net $XXX,XXX. million, million, income of of in $X.X amortization interest adjusted adjusted by was $X.X offset net EBITDA and higher driven lower by lower lower $X.X taxes of of expense million

marginal tax rate is year-to-date Our XX.X%.

view adjusted an our as addition EBITDA health. In income, to net equally measure we important adjusted of company's

the For of back adjusted add items amortization same except items. we EBITDA, mentioned, related expense the

Our given adjusted of XX.X%, XX.X% margin second EBITDA and basis quarter quarter the current in EBITDA of year-over-year. expectation, was for million, down second environment in the XXXX. with the Adjusted XXXX down line our $XX.X points was XXX quarter

in our basis business times points profits As a XX into model is normal XX reminder, the to to expansion. invest margin back achieving of while incremental

on serve less clients, fully but, and organic we margin these During our as on to times, will growth focused generate volatile expansion our focused be maintain the cash. need always,

I highlight Now would balance quarter the reported second sheet. items. let's X look at

in with that cash added $XX.X our available company. million noted Charles the Initially, to million First, and $XX.X a cash. we $XX quarter-over-quarter we the line for still have credit second earlier, ended is as position quarter million

us shareholders. may focused in through to foremost, our leverage thinking well the look or are, we growth, flexibility low as And and organically return we balance either cash to on cash. debt about ways capital Our cash, M&A. at deploying In future, will give as first

primarily Second, improve to and capital technology capabilities, investments service. reflect our create in expenditures new long-term scale increase

to For investing total are year-over-year quarter, X.X% our up future. continue was second capital we the X.X% of spend is in million the as This committed $X.X or revenue.

our will discuss of I remainder Now for expectations the XXXX.

to Let's Slide XX. turn

the the -- advance, the impact in reflects building year the the our the we very full collected July. of our slide versus if range down market XXXX for result little X% our third market have X is outcomes fourth as of on in The a revenue quarter will revenue on the end advanced billing. have to of reflect X% quarter. of revenue of results due shown shown quarters approximately As up The

first earlier range Given discussed full half second yield that $XXX spread $XXX net between the we and million for year. for be market income, revenue the half XXXX to the equal about expectations and expect our of million or for to

times be ensure relatively with these we our that flat spend will how continue to during We to expenses unprecedented year-over-year. are judicious

the As revenue. offset and quarter EBITDA for will a result, between $XXX we to on fall fourth the expect which million and variability our in $XXX year third adjusted our million, based market the range impact, quarter

More than be our XXXX despite the year. metrics, operating we expect Our this down is view are for In net expected our is in EBITDA, key as focused environment. organic This financial will as our the level. approximately decline spread we driven difficult XXXX by come year revenue absence such with outlook, are We revenue absence XXXX, to adjusted and margin XXXX and from of revenue. the year-to-date full around on the growth. points XX.X%, year-over-year in of flat spread levels, a that margin this reset ever, margin XXX basis

on end, registration like a SEC. Before AssetMark that with the comment I make I shelf filed yesterday the would to

remarks. for to any know, any to be standard set has said, filing future And depending As clear, practice a date for this on with to offering. is offerings. public Charles it the never go-to-market hand his for circumstances. you no most facilitate easier it companies that, may I'll over concluding That happen, for been And

Charles Goldman

strengthen to Appreciate and, for our that from shareholders. clients, our and growing call grow Well pandemic, today. positioned company, of making our us a course, like message our well one decisions is partners there's their that our everyone Really, call which benefit to we take post-pandemic are this the are and employees, in I'd to advisers, world. will We're appreciate we the Gary. all through away if joining done. Thanks, you

to that to prepared So questions answers. now turn operator I'll our it concludes and remarks. the the begin back you. Thank

Operator

line Your JPMorgan. first of Worthington comes the Instructions] question from Ken [Operator from

Ken Worthington

environment? Going acclimate expect sales to to by, production, brokers net or to to force see as meetings work to the not -- continues recover what and should extent can held expect if are people pandemic to remotely we we there that better? that the are place further seeing to might that, now that are taking that And season things green signs positive any shoots process getting or has acclimation is and ended tax you're conclude

Charles Goldman

Ken, the question. about would you hard interesting I thanks spikes to COVID It's of we're in number the for in we're terms different the this in we environment Charles. data and coming are to on prepared that, the see field in and sales for fantastic. and seeing with call appreciate engagements advisers out we meetings hard questions? are activity, predict. as producing challenge both parts joining as we new our our country teams call the place. sheltering predictive new interpret it particularly It's is how Having is said to -- well today. really of people The the The thought to that advisers in of as as are having, existing back in advisers going respond and

of one I a could quoted you with I've a been prospects few group earlier, As -- I myself. York had were today. They quite see meetings them on New Zoom. doing

as about for And at their advisers and a first were see a but were we're their in different what just be just capabilities some we're to We're And and very predictive, is what frozen. to J.D. to environment. growth." who this advisers a their people And COVID, talk study, said the And -- we they the their of people mostly homes, "Okay, given clients sorry, offices, to we're saw We've different according my quite About what of also advisers got of shoots, in then part building country. it's our existing of in quite -- really to sort sitting is, is this to going engaged. was start going in "I'm lot reality. seeing, it's seeing So me reach according even from Power clients. seeing in with they predictive asked, I'm we're dynamics weren't And in to clients X/X of, about few be early growth the about green contacting a were dialogue it's their a be difficult advisers too to to statistics while. happens." out this so to Now hearing, the think the you talk I different to part that. communicate

Ken Worthington

in typical and production And a be future? that might during Fair and and foregone Okay. reappears. really given never you up But Does that than lower XQ that production think sense? -- is just weaker sort at forward can quarter, bigger has any then enough. weaker by been the this stronger that make do gone forever or move may production? of there sales production Has in the concept made here of you pent-up that demand concept exists pandemic the sort that of pace? Does

Charles Goldman

whether prepared, or minute providers different to and an continue always as out are -- that accelerate other understand a things future. or if periods reach firms to I of and it's in the capabilities, distress, like prepared But are the intellectual touch in in bring said doing stress down, and meaning bring ago, speed look post that continue to It's prospects, capabilities, of hard to tells you look out at in predict things performance, advice, motion, money clients, adviser slow you people capital, crisis. people at I question. invest work in past touch that History perspectives, different us they crisis, different interested, what investors that much happened are pretty the every goes us are after interested up distress, capabilities. are of And periods that those Yes, rapidly.

during they the So money different." advisers. "Gosh, definitely something appreciate And crisis. to for isn't now, those and before goes firms we And say, want in motion see delivered that really advisers I do was have working working what

so And and everything and we for a day. but you are us do history each we give that that of investing in the be would that do acceleration, that tell I see and and every preparing won't we predictive kind number, for

Operator

Your next question comes from the Bailey line of Sachs. from Ryan Goldman

Ryan Bailey

mentioned you scale on X. Slide Charles, a

much So speak not you for announcements in been and larger could now from stage TAMP I the in competition have space. earning focus an potential a capital they're the of the the There or consolidation as broker-dealers increased was about that then wondering to couple if spread on seeking increased revenue.

of could competition wondering some So elaborate seeing. you I was just you're the on if

Charles Goldman

is Yes, we is accelerating. competitive competitive that Ryan. seeing think we environment And no that a are doubt an increasingly environment. There

I a is One think you drivers that. number associated broker-dealer of the talked community that with about. there's

advisers shift we've So with and We've broker-dealers are broker-dealer, products for that change revenue of started economics rapidly. as the ownership. has those lost We've those seen in revenue seen the to broker-dealers. scale decline as broker-dealers build those inside a spread seen affiliated they

it's have level And of we're investors build we seeing before. see as internal get think we advisers, technology do. TAMPs. see what better that. practice to and to so for that, this for competition And frankly what is good is we good building we that at all build talked some broker-dealers looking We've of But definitely management. account platforms, those build some managed level And broker-dealers about we

better dramatically. in deliver our to Now positive flows. that think more net experience. we Net We And it and we're and our see can Promoter think a integrated Scores we from technology able differentiate you

build, Most And set limiting offering platform massive, hard scalable to massive broker-dealers the to the then of are it's culture, on. investment quite because magic quite and hard and all our your it's to hard the that a or experience hard it to model, put choices is investment it's different. actually curated down, service do. to deliver curating and is into replicate Our is very of hard

point, much $X industry, of do. increased see in your us less as seeing We going to increased expect make less larger investment So we stronger, to we're do see the pretty TAMPs, to see we're everything at that's better more continued players, and billion, out And scale, billion to going competition. that aggressiveness, fragmentation do everybody. and we $X

Ryan Bailey

ask you and into bit that It June. about little a a gears switch household question could I growth. if Maybe reaccelerated looks it. like Got

maybe than provide new kind doing just if the in bit be think in same-store advisers dynamics you seeing actually of the net trends, might better what floors. some existing perhaps sales a that seen you that you've of is and wondering So any July little can on color we any households,

So just wondering that. if you could comment on

Charles Goldman

I'll So just, Ryan, repeat that.

to So on you're ability new the asking advisers their bring about for and business households? existing

Ryan Bailey

Right.

just new the So households. and April you actually clients July I on even if growth look in trends and like between as the count in sort May kind and and perhaps a of looked the reacceleration in May to It COVID I And any guess, elaborate was saw that of if with environment? June. June of newer wondering could happened connect at in then households able advisers we were

Charles Goldman

Yes.

me and Let an that. Gary, I suspect GFPC the element answer that that there's this, to element generally. OBS And acquisition to

we saying, about really, the focused basically, motion. that is stable of the issue So on seeing clients maybe we're be on are to making focused Ryan, half, are "You to really and is doing to XX% going X/X supplicate existing and estimation, those and darn here, what, sure my a And their then businesses gut, XX%, personal aren't now. are that just have existing in advisers sheltered clients at seeing this of it's a My lot. engaged of love. XX% But We're money XX% advisers the in about feeling really And is end. pretty XX% know, place and the key in are set are their advisers. seeing somewhere number the to is and growing that range right who that limited to and

to the with And XX% camp the we're towards figure They I Now time." summer way, with geared go use prospects. technology-enabled. prospects, XX% a are that use launched webinars. a by out communicate of to go in advisers out how clients and "Wow, webinars people, going, to their are summer, my with fact, set content." and that advisers in the that's to seeing is Zoom, We've, great can And thing. clients, out

would are go-getters you to People Gary, are really growth the And think that is reality. them aggressive I find And that focused to do are and going put is have way the household middle are going those ways. starting big number? do to a green I accept it of way little earlier sort Ken the So the have put on it bit a help of that. ways, the finding to sense we're shoots.

Gary Zyla

Sure.

as noted, households from in Ryan, in we June So grew May. about the we AMK Report our do, X.X%

they to talking indicator. X.X% if be growing. certainly month, February jumped great households a that bringing generally, growth on back about, think that rate about you We our is to go along X% But are due Charles the over right? going goes I acquisition. somewhere are And is to in -- is certainly our what with

AMK That's indicators it's are sign is -- on. the indicator on focusing that and platform. in reasons Report. are yes, why are organically, of you're right that. households households think is of a one It our our growing to One And core that, we that a I these bringing coming our on absolutely on main great advisers

Operator

of next comes question the line from from Blair. Chris Your Shutler William

Unidentified Analyst

This is for on Chris Shutler. actually [Dave Chaudhary]

So our and your I it's relationship Capital is, offering exclusive Personalized first is UMA Clark with think so small. Navigator question

end first type in offering? impact is what us off, any correct? are to percent sense expect can that way? you you lastly, of assets Second, that that of flows do invested your And the of give exclusivity in So a of

Charles Goldman

Yes.

And ever and Brendan win their Clark. partner AssetMark, talk Dave, such deal joked of with Clark best my win AssetMark. because been Capital It with huge So in was ever a our their their their huge growth investors. Clark. of sales works important clients their the with the our but with distribution core Clark business win a deep relationship is advisers, business, force with business, for has their is our other dedicated really an AssetMark. of huge is to Clark, in life a I core part to it the involved great was that that good for was it and such is for I've you. clients, the platforms it's CEO, a a and

like we we aggressively any sure don't. partnership. on relationship And the we carefully strategies. relationship. so that We We like disclose have not I'm pretty there. particular work I'm sure the we and

strategists that, that disclose particular talk advisers have let So are assets any I we of relationship and the parts I'll both with quite and focus about Gary, continuing But their in but on the we our from you think don't excited field their the the platform. to delight actually capabilities. organization, continuing

Gary Zyla

is one levels about of Clark we high of together Yes. our network more of strategists individual kind platform. Gary. favorite right, to offerings. of is a add And Dave, a talk our part Charles what is portfolio, the color. this don't on of asset our strategists. semi-group kind little Well, just It's we've is

high multiple network platform have AssetMark. our we on on So offerings

We change the are flows you and and into mentioned, relationship. we expecting in our gave I -- Charles any as don't, not anticipating we're impact outlook the modeling from our not a

Unidentified Analyst

second And the based that are more the you're Schwab-Ameritrade be adviser with having you expecting a new Great. your Okay. is, today, to pipeline? on of your catalyst some advisers merger discussions of for

Charles Goldman

of that, going lot disruption. create that question lot to a The a of think, I is Yes. press the in that's, speculation

as going has TD Schwab business a done is far, So to to with of TDA be, about their adviser And done custody, concern it on job, pretty particularly to assets. advisers. job darn I the custody that nice advisers But tell comes tends among straight you has and what's happen, sticky. particularly there a would nice the the

pure think that's if what service see driven levels heard only for it happen, choice. that does happens. RIAs custody meaningfully. the that, So we'll happens see but we'll And a if deteriorate we'll if that see or will because custodians have happens not. it if I've And yet, to not happening I be make

about in decision. outsourcing producing architecture custody. a is really not not and business, the our decision custodial We adviser not is open the new For or driver offer a The change custodian. adviser decision

can us offer can -- You you more trust. offer

And all to practice And as for that all advisers all but management relative from efficient, take we industry, their time what the the need we we capabilities, risk plan trying the that help I the goals? You have the buy think at to looking I smaller and model do Ameritrade and integrate doing the particularly for we the with can TD that make the the change that and risk to the unlimited portfolios isn't to all investor the experience. can to the about portfolio." that about do adviser understanding Really, create adviser is do leading their it capacity. is tolerance, outsource visualize And spending better. we meet for and best. deep -- helping choice service to time Fidelity, in visualize It's clients and work advisers future, advisers day, advisers And could clients spend what -- their that their the the And need construct model and our want that due into do is we tolerate? the universe, business does clients, in that think their how of to figure I practice that that is much how around and serve a change that out technology we they an my levels that's and are to we risk build what and how a actually diligence practice which serve can how plan. end better in the change Schwab. are of just trying -- saying, do high because part custodial How consumer, driver. adviser more need Pershing, my about the those and mega that understand in "Gosh, more really not their clients to those adviser that the they business my risk to trends

Operator

Okay. questions no time. this are conclude does your for call. there participation. Ladies you further This and Thank gentlemen, conference at today's

wonderful have now day. a may Everyone, disconnect. You

Charles Goldman

everybody to thank Thanks on, you, operator. and

AssetMark Financial (AMK) 5 Aug 202020 Q2 Earnings call transcript