AMK - Earnings call transcript Q3 2020 | AssetMark Financial Holdings, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon everyone and welcome to AssetMark's Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. Today's call is being recorded.

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

Taylor Hamilton

afternoon, conference welcome call. Good quarter AssetMark's XXXX earnings everyone, you. to and third Thank

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

Following for questions. our introductory remarks, we will open 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

Before started, statements like statements. note made differ our date to during statements could forward-looking results the outlook materially. forward-looking we are of I'd get Actual that this only as this certain conference These call. represent call

factors adjusted of EBITDA income, our filings during adjusted financial forward-looking net are for and which with to business, earnings EBITDA, non-GAAP SEC adjusted Please to call call, away. today's press net Charles, Additionally, the risk more my conference and on refer related all over colleagues. margin, financial associated take information we'll information. non-GAAP I'll metrics. be with turn it disclosures and our statements, to that, And require release revenue, discussing

Charles Goldman

to afternoon finishing third up Thank hope this highly really just to up and for election joining doing you finishing well, close our anyway. all you're Taylor you, your time Thank on cases quarter rise, the good We call. And earnings everyone. appreciate today. with or COVID contested

messages three, and Gary colleagues. we're to five four going thoughts messages I'll key on and with three, one slide five. while Our Starting focus on your through are cover and discuss your feelings will and you today family messages.

a ability the ever, our our of difference advisors clients. of XXXX year our best to been in their and First, in terms lives has make

executing strategy, households advisors result year-over-year. our as are our up forming by engaged are living on we and growing assets, mission and double-digit Second, a of

growth priorities efforts. Third, of our support strategic which I will discuss all our XXXX

value advisor adjacent focus to on platform. and Next continuing our we and enhancing scale advisors and productivity, year, will attracting

net Next, Gary $X.X will discuss billion, up our organic quarter, quarter-over-quarter. growth. XX% the flows were third In

Lastly, strong public quarter metrics top third our July Gary EBITDA going since XXXX. financial highlighted bottom-line by were and will walk results our margin us in which highest through and XXXX

every XXXX, has have there the we Turning slide of close year, our delivered. this lives societal been have our roller interesting In embodied and XXXX business and have four, and extremely election. the and time we an way. actionable Advisors craving been more model are underscored truly have an Throughout to made clients. coaster, by shifts, for their all, step it presidential mission, them difference needed our uncertainty, have an in advisors a we during ever we of and advisors than this ideas information economic

advisor has discussed over of Advisors XX,XXX engagement our complimentary earning have world-class. virtual XXX we events. we hosted have calls, been attendees. these these have extremely previous times uncertain on Year-to-date, As during webinars with been

during advisors. times election insights We into impact on expectation and and managing market, include topics perspectives the matter its Meeting volumes. have These and tools, this of our how to They ability were our while manage and the was since Board the highly most over digital attendance AssetMark on October, week, country. in have Their provided the webinars, service increase from supporting people, we during XX year. Last of client plus that volatility, meetings in growing we business last you're a these attendees, virtual we person In virtual. XXX meeting XX% held your over had in advisor when hosted and the the beginning we short their to our of all advisors where together complementary we pandemic. the all brought held amazing. the field We've Advisory enhanced of accomplished increased nothing premier feedback

five actionable up our points but information XX, a and Promoter we Net value with and of we to we difference. advisors have year from provided wealth truly of shows takeaways, our productivity. Not a last our advisors' Our making have only are Score strengthened enhance platform also

slide advisors we As a can of and and helped setting. enhancements these on meaningful have in with clients connect delivered number see their XXXX. to products and enhancements good advisors technology our five, you prospects A virtual have throughout our clients

empower of Let proposals we how created clearly strategies demonstrate client me technology been August, financial proposal. in that and dreams. portfolio chosen enhanced From Since have review concerns, highlight client's features our on a based standpoint, client the are a XX,XXX over these and proposed launch tools have added. advisors new handful their goals, proposal to in

We advisors. deliver beyond our scalable and support eService personalized continue have and and to above to gone

delivered dedicated of applicable new have our who than digital a that the personalized advisors have who we service increasing servicing digital provides pandemic. for advisors launching, have financial do eService the XX% during demand more Relationship Manager. meet to channel. team have Since through dedicated -- not requests little come First, eService fast helps that not a response

rolled over conducted we also XX,XXX advisors investors. April. XXX in XX,XXX to nearly Second, meetings, advisors We've plus the breadth expanded out investment top our These webinars, have curated of our Zoom platform. and reached

first which keep digital have of XXX% gives introduced First, more clients liquidity the rate In lending, access months, one and year to with three running interest trust or assets by streamline to of issued on supported securities-backed been which we program's securities-backed block at our line goal. lines enhanced AssetMark of platform. our XXX low S demand credit faster us credit allows program,

platform. the first year client assets customized of last accretive Second, Portfolios Savos bring Portfolios, part solutions of planned we finished the management. which Personal Savos attracting XXX% important the rolled is at Personal our and of out to under an [Indiscernible]. This end year,

advisors rate our platform our solutions of markets, strengthening helps goal. accounts advisors only but navigate it and fixed client focused strategies first in client clients us attract their these income new clients launched long-term first not fixed in Lastly, fixed helps their income financial of a advisors. goals. year invested X,XXX of Nearly helping advisors help their remain have we The quarter, running portfolios, diversify also the our at investment two new XXX% that challenging and will on income achieve

Now business topic. strategy, continuing let's environment. We our embodied this strategy, slide which to but company and financial grow and Not our challenging by mission also despite year, allowed and have strong next the believe on execute we that on live executed has to to the truly results turn our six have our our will only follow. mission we

million year-over-year our XX.X% platform high. to over advisors year-over-year. Our assets assets have XX.X% all-time and platform ended number grown find of of on third increased The engaged those at with X an have quarter the is

Lastly, have XX.X% increased households year-over-year.

advisors producing XXX XX% producing in of the have the The have third dealer average we by is XXX showing RIA This New NPAs size new production quarter driven also broker is NPAs and year-over-year is were by higher year-to-date; winnage NPA than channels. up XXXX independent per added advisors. NPA. quality prior from measured been XXXX NPAs strong. quality years. and higher

some long of a plan RIA are I'll beyond. have further We channel history to in winning discussing in NPAs IBD of the we a and drive spend our opportunity. the space on quantity to working quality XXXX time capitalize tirelessly in bit and and

want With year, the then priorities some of XXXX we a how about about only accomplished ends, still left I briefly XXXX. long key lot of of to we until opportunity a have but were growth next talk weeks runway our past in year. for indeed highlight have us. We ahead thinking And organic

grow we focused which three will believe So let's to slides. areas organically. us in the XXXX, share, advisors, We're turn and to on in gain market page new seven allow attract

we as will First, to look we productivity. enhance advisor value always, and

We experiences a are an interactions norm the imperative. meaningful wellness digital building to Virtual and are improving with wellness program financial new support solutions conversations.

to We practices these educate and will toolkit grow enhance our look on to how them digital leveraging tools. advisors their

marketing expanding We help services will be with also core and to outsourcing operations. advisors

attracting through Second, channel expansion. focus adjacent we advisors on will

Our RIAs; scale as growth believe we served drive help greatly that believe are are and providers. experience, enhance better value. their by they in biggest can businesses, by their opportunities us, underserviced We enterprise subscale their client we

in platform our to growth. to and need to we infrastructure invest continue Lastly, future the support

We back enhance our systems, security are to and trading strengthening all office, competitiveness.

back we we get we plus eight, in and believe growth slide rate support to XX% XXXX to organic Turning there. growth priority get efforts, our our can strategic a to aspire

do isn't in we money shelter-in-place in realistic organic at be motion growth to to an want COVID result. However, a same we and outstanding continue to environment believe X% in rate, XX% people will the where deliver range, Still the we that

of drivers growth the organic Let's year. next discuss

net flows. of to about meaningfully at net flow annual makes historically a our let's net and are There our up existing XX% positive of our look advisors contribution which contribute to signs XXXX that grow existing continue advisors, flows. First, our lot will from

First, XXX who advisors year. year-to-date, next we have become added will MPAs existing

higher this As cohort as average per quality, measured much I by mentioned production earlier, exhibiting is NPA.

these new on platform. have to grow year existing we expect as very their advisors We first during found grow from continue advisors, our that advisors to quickly tend

up we low XXX our year platform rates. sticky the XX% very Second, redemption make are beginning engaged almost assets added advisors and of advisors Engaged of the assets since those with

shown with Third, and as as as points again, up highly by sure advisors our score existing our engaged satisfied NPS five we talked XX, us year-over-year. of are about highly earlier,

integrated GFPC this have year, we Lastly, and OBS. two acquisitions

our platform found service, acquired after surrounded integration and are our typically on as have the that new We grow year by technology. operations advisors they

quantity from flows which historically internally annual net to up we are Second, of net doing will believe are let's at make quality things lead and XX% our NPAs, There of we variety look a our about flows. higher NPAs. of that

as This I revamped NPS this leads well we allow estimate the number of much in to high of sales NPS As phase producing pipeline, our at quality as last to the lead deliver recently more pilot a to corporate cost we Starting per forward quarter. are larger lower phase. have digital is share We've I well-positioned we acquisition. increase as made fully that existing investments we part this advisors, gain launched, will year. pilot advisors. project attract that look project website. generation and you through will new Once to may project us sharing of a from noticed, also October, small ensure incremental more into the qualified wallet mentioned attract strategic progress additional our our

the breadth technologies have we our a First, I added of platform. to described helping expand investment bit and solutions earlier, new as

features are adding RIAs. to to our our more platform make and we tools attractive Second,

more. with RIAs the for years. RIA channel discuss working the opportunity been RIAs hybrid a Let's in bit or We've

we RIAs platform, our advisor and third of base or As had XX% assets. of over XX% hybrid quarter, platform representing XXX of our approximately total the RIAs on our

do most of their parts managed least advisor just building AMP have this. success RIAs we portfolio, at also are with using to will own had the While or our platform RIAs allow interested RIAs portfolios; ability in offering, managed

us Regardless top billion penetrate on and We have believe our with RIA our further a the to and and our we of on have quality these the in things market. where platform, advisors pilot platform we more on the we help control; increasing partner outsourcing of them. capitalizing the AMP. opportunity valuable quantity community selected focused wallet to of $XXX be long eight advisors; the stand for what addressable help of NPAs; RIA history on share enhance RIA firms RIAs from are existing the can proposition market. plus so a business can value We assets gaining pandemic, more consolidate will our will who this and solution AMP

turn growth. organic financial the remainder All outlook discuss of driving the these and Gary? to year. With call third our now quarter over for to that, our of to the for areas the performance I'll Gary contribute

Gary Zyla

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

results public. margin quarter As Charles are this organic our since our and best Engagement growth, and gave by great revenues us strong discussed, we going pleased satisfaction highlighted earnings, with very great on talk expenses, into rest for about will the remarks platform our then earnings. the I and with difficulty] [technical about heading our discussion then year. outlook of our assets, end my revenue, momentum our

with assets nine record X.X% the made our billion, quarter-over-quarter. growth progress XX% our year-over-year Turning $XX.X to and of up We've XX% third great quarter over were assets XX months. IPO past since platform slide in

quarter-over-quarter with quarter, stable. of flows by and flows net redemption have The market During had driven remained billion $X.X while billion basis, for improvement is X.X% flows is [ph]. we our annualized an Through billion rates assets, third the line third I'm net relatively annually XX%. of net $X.X production, to sorry. realized in of gain beginning year, communicated -- increased the your guidance On this metaphase in X% of which $X.X is of previously our in quarter,

that more September our year. our upon would to net deep like In would like report, AMK into dive our take flows and regarding Now, I additional expand our for you'll detail to and we net our the that well two impact OBS, we an business. what show a our a flows flows see I the provide now. as On will GFPC from call acquisitions, XX, from bit we slide the core recent on as

acquisition, And the any likely XX general, as or this flows. results net surround first there with is can with in outsized we and with us. engage engage. a bit clients This always In possible. never certain operation, technology, the volatility more As the so, our service, months will isn't the advisors faster will more they in

our making that of of the difference it We be non-acquisition our and block. of will the success clients. year the model the our and Given in trend it helpful business and advisors lives we think share sense underlying their to a think shows this

see, business annualized X.X% entire business. has our an the in rate XXXX As to you growth core compared XX% for can of

seen For the accretive redemptions to AssetMark engaged OBS, have you and advisors paying giving been business. on new OBS earnings, engaged in never GFPC have clear monthly in platform. a loans advisors. have our [ph] acquisitions be who the been specific naming though, There's To both revenue very report our the

have As in XXX of engaged. as in quarter, are we defined the third which XX OBS, advisors

of GFPC, advisors the as from we've engagement. manage on the engaged. which their half business, are sales in advisers third of XX half revenue XXX had proof discussed activity before platform defined have a Also, been the as last which have have of as For our quarter had days. outflows XX% OBS we've adviser mark. the then about And yielding nominal XX GFPC, of point With

of OBS comment engagement We advisers. month. are $XXX released net AMK with report great another October One Today, of flows. the GFPC last million, flows very with net both our and pleased we on

outflows net with difference million our the $XXX Specifically, core the business flows, business. did OBS representing from

highest Additionally, November, earlier, advisers noted we week week our since the last into XXX production, Coming our was the production business entire key quarter XXXX. strong to Charles our for is to March. remain third in of metrics in NPA of as

total X,XXX platform. Engaged base a which over total X,XXX accounts and up of advisers now in for at more of quarter Our were end than XX.X% advisers. of little assets are as year, the third was divisors year defined our adviser engaged the XX%

assets Entering Now this revenue To down slide reported XX. third $XXX.X billion, were leading let's the $XX.X turn at discuss million of to to X.X% revenue. quarter's quarter, our year-over-year.

Now our we of focus net on revenue those expenses. related variable

quarter our $XX.X down third net the year-over-year. of was XXXX of X.X% million, For revenue

X.X% revenue base in XX% decline to was rates million $X.X a spread is in this offset This revenue year. year-over-year Asset by changes million. due and net up or with based $XX.X earlier

well from year-over-year that million us net growth XX, more as as revenue slide was net the by of $X in to turn actions growth revenue OBS and is waterfall XXXX two as shows, the OBS This year-over-year, the had change fully the in $X.X from discuss is for base in revenue up reset million $X million amount Let's drivers the the the going This forward. acquisition. of asset offset strength flow with acquisition.

impact First, and our as we'll minute. discuss mutual to in on revenue terms the transition models the cost, yield, for previously out discussed outlook by a of played fund the in million and third of our part year-over-year. anticipated, this revenue party This revenue lower year actually which $X.X both was impact more reduce

to XX quarter expect Trust $X.XX $X.X third yield XXXX, remainder our AssetMark year The XX% average over quarter around Second, XX The and the revenue for quarter, Average third points annualized just approximately was of of net to year-over-year over end points. we tax the yield in $X.X net of billion. be client yield the X% was Company program. to basis high of which decline in declining down XXXX. due third XX billion At was net basis million within cash went spread-based to last and spread-based cash $X.X -- revenue the million. cash

environment. interest consists decreased operating other interest which Lastly, earned rate the income, an to due lower of cash again primarily AssetMark $XXX,XXX,

was seven platform down the was decline expectations. Nearly basis assets on the point net in with X due mostly X.X points for decline by is third the from total chain. quarter driven mutual X.X income in and basis fund basis points spread, from points from basis decline Our Quarter-over-quarter lower a the points our X.X basis yield and This down year. to the shift here last line cash. points X.X quarter to and from basis prior mutual corporate interest funds points basis XX is cost the

quarter-over-quarter yield annualized maintain on and net product calculation shown good shift. no in We its variable mix and will There's to revenue The and our slide due that our the sign both clarity the appendix our year-over-year of these yield transparency, other was sentence presentation. to over mix revenue there know periods. earnings little declined of a XX, platform a is

first call, such XXXX well travel, earnings in roles, and volume year-over-year on items, the expenses $XX eliminated as expenses let's hold employee I measures, from X.X% and The elimination X.X% through compensation we variable as year-over-year line of discuss of in throughout a cost about a XXXX our decline in to quarter costs mentioned $XX.X and We reduction great shown year-over-year that costs. compensation in handful efforts our our as million by as In a XXXX. the slide XX. and Adjusted operating decrease events, feel driven of expenses compensation, our in million. including SG&A decline costs X% variety related decrease to on Now conferences, budget training SG&A. is

number management of a are there has done. of year, expense this earlier entire team steps the our excellent to addition In examples

costs. First, we’re compensation controlling our

roles when well year our only staffing future, critical all managed as investing as all in the investment to on off non-critical staffing volume, needed focus while holding to our in and areas. have We

while key a for result, in roles As adding growth.

next our only steady said, to We one in to accelerate as the adjacent is as XX roles expectation build, about or in have year of by the channels. beginning our the our on technology of staffing end the employee investment associates with in our These count as focused quarter year, XX That up well held October. X% headcount our or two. be additional will all of

high SG&A Adviser and have our we maintaining very our than is our held with XXX more engagement Virtual beginning of as Premier events earlier, advisers, meetings the October advisers, our XX% Second, of in than down attendance shift Meetings and attendance our more while about Charles expenses to mentioned which in year. person the virtual

Third, the third eight our of of three as closed to offices of the effort ongoing we in an reduce quarter, end have costs.

We have by the our right working real far, workforce given they're just and enjoying to that endured it, footprint. our side we is in many have it learned estate remotely positively was trial December, as the right time productive

will about continue closing, sense to will While clients. of take One for we things close to discipline a normal, expect this find our a on annually to and reach in effective focus returned this to million $X.X serve action. about quarter we $X.X maintaining ways we charge million and save from more

repurpose Charles early -- client XXXX, discussed goal into growth in virtual that allow us to will example, be event those For form and activities re-growth into earlier. our savings annual

million on which we of added four our is In our me items. quarter, $XX.X moving third adjustments. earnings, Before comprised pre-tax, run to expense back the let through

First share based $XX.X million compensation. of non-cash

OBS. I expense expenses -- XXXX office and related the amortization with expense $X.X above. that our of acquisition And million forth related related in buyback GFPC Second sale. acquisition mentioned with to million the are primarily integration is $X.X $X and closure associated There the amortization million

can our table slide and for XX For on statement the income of reconciliation color line found items earnings additional appendix presentation. adjusted be in expense

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

million million Our $XX.X quarter per higher in marginal adjusted quarter was on is a of $X.X increase $XX.X adjusted lower is of million. of income by and The an adjusted offset third was -- for X.X% net of $X.X third count million. million. diluted This XX.X% the or the income the Lower year-over-year. EBITDA tax increase taxes interest year-over-year year-to-date. share XX.X% $X.X quarter was A $X.XX share of based

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

back For add adjusted EBITDA, that of amortization the set expense related items. the we same items

EBITDA up EBITDA Adjusted XX.X%, adjusted million, XXXX since basis of public X.X% year-over-year. was was quarter points and the third year-over-year. margin Our highest the $XX.X going up XX for quarter

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

cash First, for and the in do million a million we our its $XXX.X ending position, third cash. cash continue to great quarter of generating $XX.X with and quarter-over-quarter job

lines to the Additionally, company. $XX credit have we still available million

our cash Our as leverage will us cash. debt loan in balance well flexibility as give deploying

was primarily XXXX, and million, total in reflect on expenditures as capital quarter, X% increased $X.X revenue. scale In capability, total your invest be create technology, capital or revenue investments capital new the the expenditures In long setting are service. term Second, third to we to future. improve our in X.X% of span about continue we

discuss for remainder I will the our expectation of Now, XXXX.

strong Let's our our the expense slide excellent turn outlook what expect forecasted last Due end quarter at management, to our results, market, XX. we quarter. of to and positive XXXX flow we net top third

$XXX full Specifically, and revenue that for representing year-over-year $XXX million with year million, at growth net-net X% midpoint. a retain the

and around from for XX% fall up outlook last $XXX EBITDA about adjusted the coming between for adjusted million, to $XXX and XX%. margins quarter expect basis EBITDA points We year XXX

with growth in pleased Charles extremely it remarks. are that, over With concluding these I'll year-over-year financial to key hand We metrics. his the for

Charles Goldman

and future the forward XXXX. resources thanks in have Gary. capital to our call And invested I Thanks, to and today. in Despite conferences. subsequent we pandemic, growth you look into on to our all grown of And have earnings progress time, calls with sharing we on the XXXX. you accelerate the

our it remarks. hand questions-and-answers. operator we'll And with back concludes the to some this for that, So prepared

Operator

line Kevin question Thank from of Suisse. McVeigh comes Credit first you. with [Operator Instructions] the Your

line open. Your is

Kevin McVeigh

obviously just quarter in positioning sector wonder, a and notice so thinking much. any given you I consolidation there's thoughts been as and the Thank on client congratulations of just results. within about continues we're volatility behavior, Great. you change maybe? a the context and give the the sense, in over some Hey, the could you'll us

Charles Goldman

cut its just Kevin, you out Charles. last me? in Could on of Hey, change part say the

Kevin McVeigh

Sure, Charles.

the extent is administration client any of any as change to impact well? Just activities -- there in that

Charles Goldman

you I know, you I Well, that. promise

for hope you're So thanks Kevin, I doing your well. question.

it's our adviser in advisers So, an broad for the interesting community. been time, would say I

less bit we survey surveys, out talked and across a in one they're think little We of engagement should they've in advisers, what from that I different the any last unhappy after talking crisis, with unhappy might the that crisis, J.D. motion, there experience clients. goes they're of the because the call. of the to engagement kinds interesting happens level, a got adviser all got the these particularly There's than I in their goes around that, think, their or quarterly Power came saw experience they providers. in the folks from It a with people lack motion, kind of with different that a money in level, we at variety from money and community June given that say investor know industry. was reflects different was at

be a in for we that actually in delivered good their those activity capital, advisors position content really aggressive intellectual that expect clients with sales our to enabled to we and intellectual number the been meet of through webinars, all of their experiences are all number zoom, we service in And so motion. the clients, with so their contacts, clients, have the and of number the via of that as advisors helping money the we many

question, frankly, we for positions. Remember, ton it's your around and as long-haul strategists massively didn't of the manage we moving more election we manage to moving -- the conservative to long-haul. Specifically the our interesting for a advisors investors see or investments, or strategists approached,

happen. And election. movements sure so people looking quantitative clarity. all did, way people into were make same measures, to strategists they think read of all just or that heading factor-based will I were the going you some I'm sort while commentary, we guessing there tactical the was other one for measures, the what are And were generally on

wave I expected other many, estate with think have pretty be around the saw net a particularly changes preparing planning. tax or would issue was for, the we blue people expected and worth estate that that In big meaningful planning. around you say, election, ultra-high there'd were should I this, of

So million the be $XX.X exemption would changed.

thing been a continue going to most investments, flurry plans, planning. estate other much more to I planning, execute guess suspect, and what those advisors we advisory there's had quite around do will, interesting of the mentioned so communicate see a but they And geography I and I with within would broader bring so represent up engaged advisors, add, I those advisors our field geography. connect we board last responsibility where now. They people to cut together, XX way for week, planning, the we and less Be their have the around planning tax on. estate

back ran marketplace. of the advisor room were, emotional we at examples interesting, to it doing, a And about in went was clients, the that and way a with stuck at things behavioral group. doing, were of another was been how and in what was about cook out I excited were my high? to where investments on about running, spirits about both was XXX% advisors communicate seminar, really head webinar about what was how a about level. talked they and tangentially mean it and have when alone, lot you're connecting heads that of a us your that couple was I issues COVID? manage investments. alone? about investors not And the as XXX% one towards it's they behavioral A around So were that that because How surprised to keep lot to through are And and or think

Kevin McVeigh

could maybe you'd changes to sales on. activity highlight given because any helpful. in then more in result outsourcing of the That's as opposed advisors more person, sales, in follow remote back just seeing as queue. process that? terms And Are obviously, just a change, get of then just And you I'll

Charles Goldman

Kevin. Thanks, Yeah.

that. So we're we believe seeing

new but this strong Our our down. producing are numbers really year, NPA, advisor

of environment, place. function been to In as have strong for So with we're really stay people investors. people seeing they're little the a moves. making they a been more what have remote in advisors been. and advisors harder as not it's it's seeing bit We're with And move,

those Let my in a It's in I always me and those what mistakes, will won't. order made motion that going maybe bunch same on belief value asset I'm a But business get to rewards money minute or mostly up my the it's happens. is reap our goes that it's or always throughout whoever for freezing happened after and stay crises. thing. of proposition, investors, the It and whether the us said repeat or ago, value proposition career, froze focused manager, advisor strong up

And been sales busy. have so teams incredibly our

I think our normal were we reported quarter that sales last of contact. double sort

there. We are out

Our specific I ago, advisors we've mentioned which of minute digital a lead pilot in where persona advisor you is kind just are are. defined on messaging enabling and by which gen, based the

you to a And website those And go messaging web focus them, that's course, through ability get where deliver feel content. check advisors, to to are, then for intellectual see If different relevant content and the of out, them it platforms. to you of kind and they that. our to

us. to All of brand new is that

And -- just to our to RIA cusp traditional think choose their outsource it's choose money. the will segment, else the think that so platform, broker-dealer’s in advisors is our I going or that number And of both somebody we're think opportunity. we on the big. to of be but we space that platform, in that the let manage And

Operator

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

line open. is Your

Ryan Bailey

of revenue wondering you're hope question. Charles, dynamics. guidance, to bit you a keeping Hi, well. To was speak start if all little some I on Taylor. Gary a just could and had the off quick with I I

I but the is which on X%, if you're million quarter-over-quarter, think little $XX it's I base a guide, about think, more. like essentially based implying for the flat XQ, up asset looks not about

So just is back at which holding wondering, at is play revenues the there something there all?

Gary Zyla

earn quarter-over-quarter. of, to month, there are Thanks revenue of I terms other there days don't be -- this guys holidays but and is small the well. basis from points dynamics Hey greetings. the well think is we as -- quarter, are tactical the No, flat to obviously, and our and going hope items. are at safe there we you think, of keeping think do relatively the in stuff in play going Ryan, -- were And Gary. you're no number for you terms I what

give trying not an we any your So at observation expecting the our our that as deal. correct, but et variability the are compression on make account, we to also market, we're forecasts, cetera. material But is

Ryan Bailey

Understood.

looks gain. about as increased percentage you Do total engaged through relative the like key advisors just that in could advisors it total push year-over-year. XXXX? you the the if X% two by back, And just see engaged maybe then any quarters, to has the engaged could market advisors could of a stepping maybe that turning accelerate has and advisors of increase And appreciation you share the I for maybe because last how kind of was advisors the advisors. flows much been the wallet engaged -- Okay, last to mix in something quarter drivers last wondering speak thus of of to

Charles Goldman

do part Gary, and the second that. part I’ll asks of do the you first

Gary Zyla

Perfect. Okay. Thanks, Ryan.

-- the different second advisors the came So back. in market rebound we the lot when quarter a first and drop large at market in saw as engaged a quarter of

lot is is the and loss. little I But a always market, in growth with forth think that and due third a the more quarter to do to goes of less the back margin engaged market. the to no, the net bit and advisors

Charles Goldman

Thanks And for Ryan, joining. talk good to to you.

was sales really the know that to make much about doing the through and want we on funnel the the experience. the about bring as being people of we And sure kinds traditionally is our outsourcing In become size and experience is that of right early that numbers to XX%, in advisors experiences what as advisors, the more aligning kind mentioned then they and earlier, when see so I the Selling, the years we're last of engaged most them with to understanding we production we're value of important with really engaged saw top as and terms XX over is to funnel, number thing, of that the we the trying don't bring everybody new advisors us the advisors. of we're formed business the engaged what And us do as the And make last year think is than thing. producing about of terms business producing and can, the with information of doing. their they're as percentage the delivering can, really obviously sales trying a trying things know the they management. funnel that in as new is we're we're we so they right do classic sure of in those At they advisors, it much important business.

that two, that an experience account trends allows because the try everybody. for or Let's generally

how I net more better what advisors we're custom by engaged get a a share real part can as to on clients bring deem all so these become AssetMark experience worth worth added the everything, and our ism focused an at my go, been gosh, it. portfolios high driver big important I accounts. of and has from gain capabilities, of been wallet And has we do right, High net capabilities advisor, bringing rest that for on better

that The on component wallet, to products. other share focus of big is

portfolios over year. mass with where experienced in predecessor some firms So, added very who week of launched, custom it and Savos, as of of of was that week has us affluent really set just phenomenal more in it year. going terms income area. in have another worth this the getting their very a capabilities been experience a earlier, mentioned We do feeling we're was we this think marketplace CIBC, high custom down portfolio the manager, last I is Savos number to of net with doing a before, is What to I fixed had attractive,

product the going having about outsource it's that I the and so in and that XXXX number delivering engaged to a the a to what's it then wow, having platform the advisor, up that really go set drive right for grow that can function is advisor And knowledge knowledge of faster to really easy and that on makes advisor and beyond.

Ryan Bailey

Thank you for the color. It's helpful. very

Charles Goldman

you. Thank

Operator

next Your with Chris comes line of William the Instructions] question [Operator Blair. Shutler from

is open. line Your

Unidentified Analyst

continues the And around coming need these in then What what some on their of think more replace interest you the of which for Hey, you BDs good Thanks. dealers the AssetMark? loss do pricing? the advisory seeing broker- afternoon. doing home Are to rate implications [ph] some terms office consolidate a This or broker-dealer service aggressive of offerings? terms offerings companies. the Charles, for in the of in their the larger getting to given one, and years quick landscape, just revenue are Chris. is for Devon likelihood

Charles Goldman

Yeah.

You here. are to to get going talk

Let start I second with first the part. to repeat ask that me you part question, of might the

particularly larger becoming at capable, So the part, more mostly systems. we product in on more we're services, and products their in continue second We're the strain large technology, seeing also seeing broker-dealer sophisticated, the to investment from see community broker-dealers. and

revenue revenue, on doubt revenue Of and the own but in that, broker-dealer course, of to bring of value source. there's a no they're platforms advisors impacts loss of having community some their assets their that own spread the product is the as sort changes counterbalancing recognizes of

larger to see to continue in particularly an capability. for the expect broker-dealers we so And investment

what have Gentlemen, bigger given we mean? size really as of person has of always new can worked we a Accounts. that us we're that just for SVP positioning, quite several years. really number and And Strategic brought of we scale who on we've does Now known for excited our at many the well broker-dealers, One, and things. actually it's world their they aren't don't A right given every advisor. to want for experience. choice. want a broker-dealer businesses. whatever or independent want at not independent that broker-dealers advisors a may choice. for with where And they We or or wires grow because They whether reason be, the And any them it solution, in help AssetMark they work a is work

is have and we management advisors investment outsourcing, technology. with more those do want broker-dealers partner to And so what to

So growing time which know advisor, better all spend planning capabilities, that the can better for us. clients investor, their is better for for serving business broker-dealer, both we the and really advisor for with better the

-- of positioning, because the consolidation hand-in-hand going with period we're we're the of in I TAMPs work of a so because our broker-dealers. side, to into our And think desire because where

great a do so success continue many where, they'll capabilities, although There's chance with to had in And for broker-dealers real so. us, they a investing are have partnership.

What the was part we're first so excited question? And your about that. of

Unidentified Analyst

Charles, the it, consolidation answered for us. of you was it impact on

Charles Goldman

All right. Great. Okay. Thanks.

Unidentified Analyst

T&E XXXX? how lost might XXXX the G&A that cost on in one, COVID there for then be of color, versus I terms may, might we -- filling thinking second moreover just And in in should Appreciate through expenses. be if of due but of that is rolling the Gary, down stay about Thanks. kind splitting to amount

Gary Zyla

Sure.

costs, XXXX, things. rethinking the the did are there be the stretch expenses. we our number proud of some more invest we a on when I will do are as we now longer noted of in job return back stretches second next in this consider very feel to further As to a script, process out, travel, we quarters, events the What COVID managing I event will mentioned, out. some play few we But and going that

our XXXX, that. of clarity ourselves investment know it can detail much don't back XXXX that's [ph] a the on I on than more But not give if company of terms can't barely we're our so kind more in where normal I and looks Travel because And I to go will to & getting headcount. growing do to compensation in going expense rates for normal really see Events, our level. be here. based back still I on our get our someone

Unidentified Analyst

That's very helpful.

Charles Goldman

that. Let me something add to

Unidentified Analyst

Sure.

Charles Goldman

the that, And said that And to off just It's are hopeful part certainly makes I get of these sure to and XXXX like would I we The our our markets reaction know home enjoy and sitting, that. may that, that, a good. is things. here travel hard as yesterday the obviously strategy, my Having on that mean the office, and makes hard some we for strategy. back whether we're it sitting re-engineering forecast But reengineering have dinner for from in February, I we'll event and that, be in am maybe I XXXX Pfizer was with or really super our or I charts April, to all great to or and and employees. that hard or be know March clients hard doubt January you out but it's much doing June our July. and news had

As in us least most business forces the ago about, you of talked as the at in the we've past, all field. years not in probably had sales know, but of maybe AssetMark and someone out our

the zoom more meetings home. our are sales And And deeper and we us meetings engagement. phone, advisor are from fantastically of incredibly I from become the that's delivering little of things way the productive. meeting And either technologies really that and almost on of And of had now the advent a force are had with it one this allowed ago, are getting more offices We've to one other us productive. made we most have now our Now had that used, to us were over two to people. obvious premier like is way. used success think enormous XXX also those content we weeks that where

far, and sized a up better something in create content the you and via it of dynamic in in way And far to to If deliver that and from Newport we delivery. content byte around that you chunks Well, Irvine, content. an had LA, or up meeting most were drive was conversations can hour fact was technology, half.

it's which do, is going the how have ways which can experience to experience, happen. delivering can then close but human human adviser the in Now smaller more to the

of we be And strategy using of all elements think about servicing more engaging. technology. model, that costs some it'll client event lower of our frankly engagement as our our And reengineering and around of so model

to point of effectiveness to things and enhancements those the from productivity a cost an of perspective All will from returning Gary's drive perspective. not levels XXXX

Unidentified Analyst

Thanks sense. Makes very much.

Operator

James. from Raymond comes of with the Patrick O'Shaughnessy question line Next

Your lines open.

Patrick O'Shaughnessy

Hey, good afternoon.

you account underwrite you into your the post-closing to potential acquisitions take provide GFPC, outflows and us to related can Given OBS how outflows?

Gary Zyla

Absolutely. Sure. Absolutely.

retention evaluate, the for advisors. me we We that let at our those acquisitions, mid-single-digit, remain for as revenue. times evaluate -- on that of platform and the these pay. overlap what synergy then sales synergies look looking we ongoing are and block need in manage these We're that an running generate expenses somewhere incremental of on the is there. that, more multiple both between looking cost make a the a assets back need. And our as we assets. well a status in into evaluate, including we generally of step deals it's Locked that we for the profit to we six are we we the eight of So most of EBITDA the their What will we're costs, percent business in

say, with Now, retained OBS both on we're I GFPC, and would assets the for pretty are of that pleased platform. level the

of there. billion For GFPC, priced less bit assets. we still are assets And we that $X those of assets billion that turning into we have acquired that $X we OBS, little the for than a revenue accretive

Charles Goldman

if Gary, talk of things. could couple Yeah. to to add I Patrick, that, good you. to A

we'll need and have acquisition it retention, don't -- do look it. our ones different in underwriting multiples to the to that fundamentally as And Gary we course, is And a there's at forecastable. it, said, about of again, we notice is we've modeling course So -- controllable. the do kinds we And generally but synergies, part different synergies. at consolidating that, and the which focused a And acquisitions different then don't Gary and that be look and capabilities the we past of small after revenue when that consolidation which criteria. you were in mentioned realm, deal, past, all different feel then we underwrite kinds of to We don't kinds about talk comes of which is really have, different it single-digit which look into that highly kind synergies may looking of we've wanted pretty underwriting we cost accretive. consolidation of range, in down be talked on the the we in only to we break to do that capabilities. as the bigger in mention at If a cost we didn't time, would

Patrick O'Shaughnessy

And follow-up. Got then it. Thank you. my

advisor particular what model platform you're for is how in for I but this past, how talked piloting positively about And advisor about managed remind you the probably managed with business alternative those and assets? RIAs them. strategy? some that talked me you monetize So the can you

Charles Goldman

do. to happy Sure,

So is strategy model. an the core business outsourcing

that senior AUM. we that to and and gone over us most what has may join be going those of our and net net own people buy more call worth do, time are integrate The technology, fund so time, we to do not has be, more whatever so though, But RIAs made you business requirements know, most compliance portfolios was the work And strategist with which high and clients. become platform okay. going high more that will do I'll and And I'm it those I'm non-outsourcers What of I of ago, below you to my that manage what to range way mutual mutual complicated fidelity. worth recognize custodian years the do it are due do or on And managing portfolios, $XXX expect independent, particularly diligence, us, fund tougher, tougher say ran more want that expensive. think of start businesses outsource. with frankly, going RIAs regular as at have And executives the been more at I clients don't want, They years that $XXX I'm many to we and independent, Mark technologies to the million million, I'm real RIAs tended to it. got the business. on, particularly of period. and fully Schwab been be as in themselves, have for Traditionally, I have custodian to the the many and do

point, the may to They're just need custodial come go platform, and directly. a or that not a for an outsource we're whatever you have a And mindset to the could kind offer going or of worth or that. going it look, be persona, to is do to going advisor or that or be whatever purging they fidelity advisors, expect those Schwab to be. able a to if want whatever, attract us that high to we your can so cap outsource you large to that growth our we entry net say on learn And as manage to to

straightforward. And is so the question pretty monetization

regular integrated on So way. And will of and be AssetMark custody we're trading business, the tools, much things. open because it'll then technology, is the offering -- reporting. be Management community. Management business proposal account Practice part that reconciliation regulatory the the the those And the what AMP right and all money Model technology cost, ability a movement the is all the lower

So But on platform full It'll set be whole things still there's there. us. of fee can't that. a charge meaningfully our we but to less, meaningful

Patrick O'Shaughnessy

you. Great. Thank

Charles Goldman

Welcome. Thank you.

Operator

Next question from Worthington comes the JPMorgan. of line Ken with

open. line Your is

Unidentified Analyst

Good Worthington. the Hi. one I for advisors for This from integration AssetMark in its have just for portfolio? quick afternoon. is seen Maybe portfolio? about ESG of How into thinking coming me. demand more investment Jamie a is Ken ESG

Charles Goldman

to it Ken to voice for the Thanks your call. was that -- so when Jamie. nice but Great Hey, to you. doesn't your was so joining -- like and hear voice sound talk Ken,

believe we an ESG, investors. is element for So important

want for runs they have about it. not the development which But already. is years some demand I the do us, generation of strategy side. who toolkit of product Wilson ESG. there And yeah, we the the they're toolkit. or lukewarm That's toolkit, answer taking momentum, And group are that And it maybe but are we're very clients week. lots on Natalie FAB would We changing. that's advisors. doing side, lukewarm might not best. momentum, a it's retail board SRI might I asked get we'll of that And interesting, some that like about those. in the we change into. research. And of If driven next you it And reaction a was was would field globally, on the getting Hey, advisory it issues, to lot seeing specifically. attract some it, by asked research We've said at Having actually we're have on some want And seeing And asking But done ago, it. last not pretty said, to for know have but lot two you'd with our luke-cold. that, their group, and asked might ESG this me I'd we I really and was the certainly have and institutional was a

XXXX can We'll have. be invest though, I'll not tools said tell you, So I'm we've that, to ESG that, we more what we feedback sure add the having said that and in continue given it's will having to gotten. consistently it'll and that XXXX in suspect knowledge on be capabilities, to going and a And more we'll turn And to capability see over as wave. that XXXX our come I with a and the to education need. advisors for they they XXXX, like it ready so like empower

Unidentified Analyst

Got what firm, are it. well? Maybe near maybe tax to solutions as currently be a tax AMK not going Thanks overlay there similarly does you as more offer, demand or solutions seeing lot. term it's

Charles Goldman

pay worth, mass a So things affluent, in in because aware people few those is high we them the already. hand, lot or into capabilities the one net focused their are on tax of in are taxes. investor tax, interested tax when solutions well already. goes focused our I October they And and on of is workout down and quite Most tax tax, April other of have custom which on that everybody's of a we it's offer think every

measure, so hard to put hard those measure, want quite actually believe talk also source And people a on can and although investors you it's of quite of that value. advisors and to a that about. is hard That quite things to one People report it's that. also

in opportunity presentation to enjoy the so those tax week, will and maybe some we more earlier outside outsourcing doing more advisory one to advisor, tax capabilities, when We area is of workouts us board an tax interest. about of illustrate taking quality allowing high outsourcing about we it's is So adviser our of the strategist work And quite capabilities. develop in talked it. think an it field the for talked tax high last the off we continue

Unidentified Analyst

a Thanks lot.

Charles Goldman

you. Thank

Operator

have over questions the this call back further turn I time. Goldman. at Mr. to We no will

Charles Goldman

a over you we engagement, time, year I time, know seems work I like like I that. advisors call it hope no is and client technology, you. thank feels that this today's right, go of went interaction, days time folks time, strange in feel by a All offices. lives valuable. client the clients. the the during XXXX found apologize ability as difference their for ability in to use our what But we the the fantastic to the make of is does It

to the in work been of people all at we've able deliver environment this doing proud of day. and and fantastic so. continue We're We do every proud that AssetMark results to our they're for the each

for So stay your interest again on the in call and time thanks safe today.

Operator

concludes Ladies participating. today's call. and gentlemen, conference you Thank for this

You now may disconnect.

AssetMark Financial (AMK) 10 Nov 202020 Q3 Earnings call transcript