AMK - Earnings call transcript Q2 2021 | AssetMark Financial Holdings, Inc.

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Operator

Good afternoon, everyone, and welcome to AssetMark's Second Quarter 2021 Earnings Conference Call. [Operator Instructions] Please note that today's call is being recorded.

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

Taylor Hamilton

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

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

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

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

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

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

Natalie Wolfsen

our going three. you Taylor, will focus and have call. afternoon, two, and good you, and joining call to key your Gary fantastic doing I'll earnings everyone, enjoying during earnings then today. Slide cover been the Thank second We're our on that on quarter I thank X. is and everyone final take all hope the for well you Starting messages first summer. five

by strategy adviser our of AssetMark's is capture wallet scores. evidenced and we're record as greater The going to first message cover working, share that to results, satisfaction ability is

long growth adviser. our should our strategy term, our growth the drive of both This reframing with aligns which, for value shareholders. the over we're our Second, company's growth, advisers' around

year-to-date quarters, been in growth and AssetMark's beginning-period accelerated for which and strong our straight will fantastic a growth, are four has a flows XX.X% $X.X an flows net has Gary of Third, Organic high, are results. discuss of billion persistent net and second assets. organic quarter positive factor platform all-time

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to starting can like adviser-centric X, the see off, the capture strategy you to quarter, strong scores. record supported results our satisfaction adviser turn Slide and So to where of our for now advisers' ability assets share that is I'd to greater pay by

to as don't bit report, had of Let's want discuss a I you detail. released these record each seen Gary's in have more flows thunder, but second June quarter. when XX-K we the net we may in steal our

ability adjusted to to quarter. We we and net choice adjusted our pay outstanding to outsourced our provider continue deep results to enhancements the our clients mission These on our tied The of directly for execute also revenue, and EBITDA, platform advisers. made with strategy. continue the engaged our built we've dividends, we've remain relationships and for are EPS live all-time in adjusted net and income the to highs our and reported

more our wallet both of we have captured from engaged share of shows study share and non-engaged advisers. XXXX Our wallet that

for approximately Specifically of assets. advisers, XX% TAMP have we our engaged their

of total runway these engaged XX% is future significantly XXXX Additionally, advisers' captured assets. we from This for up ample and still about have provides growth.

June annual no Net XXXX. points XXXX, our AssetMark. relationship and we all-time be pleased on clients' it a survey with an X Based us should entrusting advisers with XX, are record are more from While Promoter their from up Score their with of assets, our received our of extremely surprise that Promoter Net advisers Score

to Slide our a let's discuss now So X strategy detail. to turn in bit more

As turn for at between Every We do. all the our should the make helping we a and centered a adviser business, to alignment X,XXX-plus advisers approximately grow which the we you is advisers our discussed and as their and reframed advisers grow company help AssetMark grow we Day, they our and recent and With drive put shareholders. be drive that growth growth and -- know, during there decision in said, clients around value mission-driven of as will client-focused believe help XXX,XXX AssetMark their serve. will company. we is investors and Analyst center long-term strategy that our

is Our key components. strategy focused on five growth

Cerulli Report, on their RIA as for business migrate needs. which to to and with components, define subsequent will broker-dealer independent of on growth. both stages different includes to and and some to why on. Advisor community each first do an approach the the priority color will independent serve RIAs. I advisers is is priorities hybrid succeed meet Today, we and progress help focused are five about hope advisers, component and each add about and that growth of I'll a continue focus unique this, a our fee-based moving what across area, varying Comments affiliated AssetMark each and serving to independent investor this and in To support advisers, you For our need serve channel, at and component these calls Further, RIAs their will I on And today. many good reframed current models, our on are of needs hybrid to making to give RIAs advisers initiatives advisers investment strategy careers, will serving This types. outsourced we focus now X. how Metrics area our serves affiliation diverging XXXX currently idea large where earnings advisers partner these grow. we we're the RIAs. We're the Slide important based they

you capitalize how launched has to It the update looks me so with an we going since AssetMark early on in March, it's we Institutional, Institutional, trend. secular AssetMark been this on an provide launched only innings. few months a let initiative in

So few as from that traditional while I still a at rate in away growing Institutional AssetMark the results, quarters same months. Institutional say affiliated advisers AssetMark can breaking broker-dealer we're our early out is the already

In leads. a to from as groundswell demand well be AssetMark addition, as activity there continues advisers to generate of new current

Summit are advisers RIAs as in all were RIAs May, with have community a with Institutional, the entirely With AssetMark our AssetMark. Institutional attendance, For we're XXX we opportunities these lead other hybrid example, building advisers over X/X over AssetMark just attendees XX hosted years. of to or RIA and in advisers we first that done of like-minded new past our

X. Slide So now let's to turn

of reminder help an strategic Voyant financial you this portion year. wellness our conversations Voyant, closed their to second quick which platform is also The key advisers on between and deliver a provide the of advisers us and update create is growth want holistic accelerate saving providing experience a of to A our advisers to with designed strategy. differentiated and meaningful which you then will vision, acquiring of half ago, I the a their component with clients our strategy briefly our end-to-end, provide their of acquisition easy-to-use an of to first time. benefits clients, on while we component of weeks few

our to channels. accelerates advisers and core expands First, wellness and AssetMark's Voyant financial ability attract in on vision adjacent

Voyant the and runway has long enterprise market success still had great Second, opportunities has outside a US internationally. of

in and from relationships know-how, strong financial AssetMark Voyant's will will US US. brand the Voyant strengthens Voyant and enterprise AssetMark benefit Third, space as our stand-alone also help growth the prospects position. enter

Lastly, immediately earnings geographical EPS and runway strong metrics accretive Voyant diversification meaningful growth. scale. It a and financial plus long for provides and is to provides

$X you and results. first Through an year, the is of financial Voyant's update $XX give revenue on EBITDA the track half adjusted on million. million me let of for XXXX Voyant of Now

in by our and million We will we X. building $X conversations Income and sales between August expect of $XX has and half of been eWealthManager, clients. we advisers income to Voyant already EBITDA as by realize of powered used on closed to acquisition team currently Voyant the the second July into Planner which be support are adjusted the in Voyant, and implemented the an year integrated million revenue

excited help create to have and as all I Voyant forward of adviser-client on part is AssetMark meaningful updating Voyant to family, to the on are doing you that more look future so the We conversations great things calls.

is wealth and The across enable third component advisers generation. life our stages to to growth of investors strategy spectrum, more serve varying the

to Slide X about to So hear more this. let's turn

of study, XX high to points to for those investments, XX% in assets. XXXX. offering. or U.S. the investable worth, that areas we've of different one net investable worth high building is custom cash solutions, with this building or more the of assets, households, net we're over and areas needs. worth But And And million set -- wealth serve this investors recent $X of management, up worth including more. as been our account per a XX% differing than transfer Cerulli investor require high out relates is net many One is out a it High net since aggressively

further very enhanced a and offering have compelling net We worth it. have high

Alternative we XXXX, and examples. asset platform. accounts managers. solution for through recognized So will in investors beginning that custom with provide we will aspiring to And clients. invest a a separately In in quality And in and be high Investments. added continue affluent accessible and the core Personal the December managed accounts service launching combination our on the future. personalization September of the quarter, is worth advisers serve provide Portfolios, a exposures affluent to separately this and managed recent of net of platform AssetMark program class new to launched around of manner last year, that This In look some a we and and boutique menu comprehensive and Savos year, in build worth affordable we a past launched just also high which we will an net third to

We of new attracting their while enhancements capture strategy, more scale relationships advisers to and with grow business to component are making advisers the our advisers of stickier and investors by our on turnkey growth fourth The allow also excited serve solutions help adviser needs. wallet seen create share and offering X, to programs. enhancements our Slide platform. existing and is as will us enable to even These we're investor advisers our to about more

discussed XX% AssetMark, outsourcing our As new technology of more and XXXX of that spent X/X advisers spend create advisers allowing with that they and non-client-facing clients non-client-facing time activities. relationships advisers at surveyed client provided aimed can of In to and investment Analyst time during solutions are activities client spend than drive on our so that their the relationships, higher and less time stronger Impact with By we reducing acquisition to on helps acquisition. of them client found cited survey, clients them deeper build also prospects, outsourcing increased retention. Day, Outsourcing

key So of our clients we'd part advisers our for which helping This client. working more and it's new and like of the do today, one to through outsourcing, priorities, acquire adviser AssetMark's efforts. we're create holistic proposition, on be relationships. entire feature marketing priority that drive growth only is help offering, And new one help stickier will will marketing value adviser expand outsourcing

earnings the marketing I further solution on providing out calls. first years, outsourcing on to subsequent year half -- further color and of the solutions on in to Our outsourcing forward look the outsourcing solutions next many color we over of launching second look is subsequent the roll few

TAMP our empower opportunities -- and to I clients the are fast component that focused scale wealth platform. So both serve service-based ability top that to opportunities aspire with turning that capabilities scale businesses. effectively ability ecosystem is midsized cash pursue XX. growth to offerings their both sizes our our tech services, enabling of opportunities. and serve we're and The note to generate pursue The practice. just cash of final all aligned to enabling that wealth balance serve grow The highest-quality M&A on to that -- want investors advisers' will on with our them well We future advisers by and strong core us our their complementary to to to the improve priorities and low sheet, adding a debt position are capability are fit. M&A M&A ecosystem and develop and transactions Slide an strategic both of expand strategy to capabilities

company. As growth strategy adviser us you around a grow the centered reframed can our as see, helps

existing built advisers is share drive strategy additional and from Our of to advisers, investors advisers new increase serve. wallet attract the number our of

is All five of long-term in exceptional result the drive on growth will and shareholders. discuss a for these executing components these our will growth minute. strategy of of Gary performance The value our that

pleased we take for the to I I have handing how members in am to hard first their XXX be And all the the year. AssetMark to I over clients. emphasize difference extremely our advisers of for Before to accomplished a team year. to back half for half I'm also moment on making to want their him, over XXXX want in planned the call best a work year the deliver and the and of what shaping AssetMark, our dedication yet for of up to have the lives excited we is thank and

over Gary, now, you. to So it like I'd to turn

Gary Zyla

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

adjusted all-time outstanding, for discussed, quarter record net second Natalie our high adjusted revenue, income EPS. platform EBITDA, and As numbers highlighted flows, were adjusted by in and results assets in the net

then our and our XXXX an on a Slide start will outlook. starting XX. assets, will talk And I earnings. on usual, then discussion conclude I about platform with of expenses our revenue, update As with

annualized ahead in improvement assets organic quarter of net the again realized billion, a guidance flows second the have quarter-over-quarter history, while net quarterly June $XXX month. from in recent of our strong by million, net remained relatively flows expect percentage of stable. were company's XXXX XX% that total month redemption and growth highest a the in year-over-year. growth is net million platform increased of In as of company's fees. north this history. rate up our Second rates gain, million to we $XXX of we production, and market comfortably assets driven $X.X $XX.X $X.X over our X% highest alone, includes flows of for our the is Recall Strong record Year-to-date, continued XX.X%, net billion beginning-of-year XX%. reflects of of $XXX growth quarter flows our The July, in flows outflows acquisitions. net This billion,

into we As they have we been shared business. last integrated quarter, business longer as spinning out fully no are the [lost] core our

XX. Slide to Turning

You year, can the last our organic that has see over accelerated. growth

marks through We The flows. new us continually second The advisers have continue our platform. means from net winning made our believe increasing consecutive strategy fourth on just existing advisers Natalie our to the that of led of executing capture platform outlined. to are wallet to enhancements attract make and this quarter our we more quarter share we and have

advisers growth added in attention last XXXX, this since NPAs of We Speaking highest the turn second to of point, serves the term. metrics. let's to a our total the of quarter adviser the XXX producing quarter near and our as new medium in or first year. NPA source

are We on encouraged our new growing of and by advisers quantity platform. quality the

Our first increase the was quarter XX total XXXX. an engaged of of X,XXX, end the of the at quarter second advisers since advisers

engaged Over advisers. the we added last months, XXX XX have

base relatively While our X.X% remained consistent, has overall transitioned we count our adviser adviser of have engaged. to

highlighted of when wallet results. our platform Natalie as platform XX% our engaged growth, Our driver our Engaged now discussing make are of up assets. of advisers large asset a advisers share

offset decline net revenue, in spread-based on that variable due the half asset-based second Entering million. revenue Now XX a our of reflects increase of rate leading to Slide record the in revenue XXXX. to Year-over-year, in to revenue. our of quarter's $XX.X assets the let's quarter, revenue to expenses. decreases We $XXX first occurred billion, our focus this the were this discuss related turn by strong

year-over-year, quarter asset-based second $XX.X which was net $XX.X the revenue up For which to net is of up million revenue, XXXX, by XX.X% of was our million. XX% driven

consistently. the we received macro environment, questions current have quite Given two

does will assume these, continue and outlook But our spread-based Slide expenses? let's evaluate to rates may XX our discuss material and to to inflationary will interest second, turn our not how impact We any further. impact. for how revenue? rising And First, XXXX have impact pressures

opens. inflation. regarding inflationary I an future could our inflation generations, consensus pressure meets First, as regarding general with will environment economy has is the country two will on not impact That and seen this compensation that the almost expenses, extended and costs. said, start supply inflation potential this. and This travel demand its subside in

longer As at our intend this near-term no we budget. from within noted our impact to And though, AssetMark we industry. term, in this see manage

annually. Federal regarding end addition, least hikes officials move in And XX versus on AssetMark's basis recent the rate to Company, quarter about XX effect the At Trust funds XXXX. in million at through saw increase increase interest officials seven a would interest billion and An June interest Simply put, two have by about] from [that earnings XXXX XX% our them our XXXX. positive of total will $X.X saw increase XX spread-based Second, revenue rate XX cash revenue earlier-than-anticipated least growth. March our diversification seven hikes bottom a average revenue. the at $X rate early in Fed could of meeting, would fall one as spread-based a rates. Reserve rising of will at up Based as the point at on amount I of the of second this rates end of speed favored meeting. of line.

XX. to drivers net of turn yield Slide the discuss fully in let's change Now the year-over-year. And we'll

driven graph revenue. a reduction was $XX by growth, $X our generated is in waterfall net adding by revenue with up increase in ongoing providers. our revenue expenses. million in asset to This shows, net impact year-over-year, which the is As driven restructured asset-based of net Also additional million agreements savings the primarily

fee share very the compression net scale that last see is -- We waterfall. to Note classes shift. to have apologies, $X our this million been The will to you impact due year. the $X.X below mix that $X.X due to longer was through reduced ordinary in yield focused remaining basis about was impact impact, fund driven sorry, quarter. my this this basis points, we The million year-over-year $X.X X.X wallet. XX million of quarter, happy plan X compression the which basis Q. I'm this I'm the of regarding completed each this on is lower-cost the Starting million. point by Of for so sorry, no effectively expense, points, year-over-year impact below by creating we we're is compression Continuing mutual next more which revenue shift see is

million average revenue. XX spread in Overall, XX to from decreased basis to points yield of It total basis percentage points. decline $X.X the as to quarter our revenue a net second detail Moving due bottom a from platform was the basis assets helps Slide XX of XXXX. points, X down decline XX.X basis less points yield. the year-over-year for than The little in year-over-year

points shows, basis revenue shows over it quarters. quarter-over-quarter, revenue. notice driven of X last points is are expenses that mentioned XX X.X due asset-based As The reduce is net the bigger I in quarter XX.X yield. that decline X driven in point you is to and the the we've yield the taken asset-based second story is is the -- quarter-over-quarter measures by trends What change X.X net the in by will Slide basis points spread-based quarter-over-quarter up that the to yield basis earlier. basis the net

point still basis communicated we mix in a asset-based as of have we expect decline a historically, As X result shift. yield fee

Now XX. Slide on as let's expenses, shown discuss

million $XX.X year-over-year $X.X two SG&A. is increase a Operating adjusted to excellent program. by of in result of The by a our and million, year-over-year while doesn't SBLOC expense it continue base our as that a increase XX.X% outpace driven growing million. growth. to We were expense compensation up Spread-based expenses, million factors. $X.X $XX.X small, Total job managing largely in so do increase an increased doubled to year-over-year compensation XX.X% our expenses revenue expenses driven in

as the of incentive First, in as sales costs well a headcount. strong quarter sales as our result variable increased increased our

the benefit in expense, strong sales our revenue results increased of compensation quarters. realize our from the we it, upcoming will course, While

increase we XX% factors, in employees increased a primarily and over driven incremental the current increase functions. higher fees Second, our of last XX largely costs client-facing of about in variety The perpetual SG&A year, including our volume. was added associated with count, employee an in by

which than million our which run through $XX.X in of quarter, expense In of be lower quarter. $X year me is costs to previous share-based rest back total million should realized adjustments. let million per added compensation, X The acceleration second of due pretax, for last the of noncash items: about the quarter. is $X.X the million a comprised share-based first, we the Now compensation run quarters to $X we rate

XXXX to our is million adjustment expenses $X.X to amortization The related of expense second sale.

for modeling be amortized of will reminder fully most purposes, a end by expense XXXX. As of the this

of $X.X of Voyant acquisition-related expenses integration Third, GFPC and OBS. and in million associated our acquisition the with

Lastly, $X.X to reorganization and million integration. related primarily

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

XXXX growth. margin the improvement EBITDA macroeconomic a million, $XX basis up XX.X%, is management ability year-over-year points favorable XX% on XXX focus the quarter expense in management Second team's result record of year-over-year. in conditions for while This margin spread-based despite was year-over-year. EBITDA quarter adjusted in was and investing Adjusted our up to income a future decline

Our $XX costs improvement was IPO-related of $X.X have net of fully second lower the the net amortized. quarter with share-based million with a the income as in XXXX loss reported almost a grants as of million result in compensation income associated as compared to reported

net which was income based the second million. million, second XX.X per diluted on $XX.X is share, the adjusted quarter share in $X.XX count Our or quarter

lower of quarter we of driven XX% last in second tax Our year. was tax our the effective quarter XXXX. by rate the tax second rate in than created decrease is XX.X%, effective for efficiencies The

color, further Slide see please the adjusted income walk on XX. net For

to our briefly reported quarter balance second Turning sheet.

quarter pursue the with to outstanding positions June from our that reduce the sheet, $XXX our well to today $XXX.X ability million on $XX end debt remaining cash of of in and low to cash closing our Let stands credit position. debt, The me facility it number cash July. to some After million. generate and in the as This we at We fund down of excess then we and update Voyant, us debt cash used M&A future balance close Voyant, on our the ended cash. which you at of reflects occurred cash our million drew opportunities.

expectations to XXXX. turn our let's XX Slide discuss Now for and

EBITDA long-term earnings in grow revenue a and the XX%. expand by low is margins points XX of reminder, to to adjusted in digits, grow range our double XX the As expectation

the Our revised market growth of half second expectation the on the Voyant and as as in quarter well for XXXX the impact impact year. reflects of strong organic second

growth to net our increasing XX% for expectation are of to XX% previous XX%. XX% We outlook revenue to year the compared to our

which operating is to SG&A, and XXXX. of XX% revenue to investment our discipline that growth. compensation will to in outpace was maintain note consists XX% are expected expenses, Our due increase expense important to It growth not to we increased in

As a are point result, we we of around are margin of XXX the This and outlook guided have the XX%. revised revising basis phenomenal laid XX on our growth We our our XXXX ongoing out, adjusted is the think our outlook over Based EBITDA and momentum target. investing growth XX% for Voyant XXX to the it estimation find given With this our for concluding half XX year above higher of first basis continue to year, reflects our hand that significantly. than of I'll expect Natalie scale points, expansion to we of business. to much strong to ability points to XX% plus, full basis of previously which the remarks. still we in the that, is previous ways impact range expectation

Natalie Wolfsen

conferences the be turn And now on and This a I to will time Gary, call earnings you, and member calls. back forward great our subsequent look today. AssetMark everyone prepared team shareholder. I call begin an Q&A. and to It's at to Thank upcoming operator adviser, to to the remarks. thank concludes the sharing future you updates on

Operator

Jefferies. is First Instructions] the from line [Operator of Gerry O'Hara question of

Gerry O'Hara

back look you be a color to for the year. expect the update what beyond us some to road beyond leverage the as might and and Voyant required as to contribution there's able we of grow into this year. It of investment the to that the sounds integration that Voyant Thanks I or -- hoping any what that, down able give would was on around economics might could half be beyond year. that could be little the I especially be half this some just there'd that though the to don't know perhaps platform but like efforts back if

Natalie Wolfsen

that much question, appreciate so for Thanks Gerry. it. Really

hand cover integration then off specifics. are to the integration capabilities further more to domestically we few So our regular be cost budget. start, of foundational further Voyant, advisers. to on of related AssetMark Gary or and I'll But investing that And to delivered in development I'll we give further planning to to within financial planning expect capital a

So budget around of to within keep the that we try revenue. X%

for time. then addition started of the our expect that, be we will Kaufman, relationships introductions and investment United States, we've in to to In those several US. CEO are about Voyant, that grow speaking partners Voyant what of already next and the of I over should outside And David Voyant the the the of level

And within of Voyant, weeks. In [InvestorGo] the fact, they're launching be very the or component which they Game. should investor The call that close to launching next generation their of coming

to in is seats providers. revenue sure licenses the They onboarded. the in so that their new outside make providers in and started. terms intend new And of We with relationships that the terms incremental has traction before are existing had their announce new what that already US good investment revenue the announce the to We wanted number realized that. of of means until or we don't

you'd And there. it take so Gary, know I from don't like if to

Gary Zyla

million I Thanks, we Natalie again. expect $XX page, question, Voyant To with EBITDA. sure talk $X full earlier, of the said same on Gerry. as have don't share you to revenue, million year in make about to It's the you to economics details nice Voyant. think for we're Natalie. be XXXX on about XXXX And we thanks to year for any full

terms we it I of go. business. or right? of quarter, it's are numbers know I update a maybe right in business, from helpful, we quarter but into later very We have the not do might don't revenue for next hoping where Gerry, firm updated fourth what think So compares we'll more obviously now. is that give But about just core think any to upsized that growth on, our how thinking

Gerry O'Hara

I It's, of think, that reasonable. clearly completely that's it capture curious be one more see on of start or strategy the where a share the strong as hope helpful. That TAMP quite and And perhaps No, around assets would of as some new advisers the of as could But is to share engaged the wallet bit out you little to assets. then just you follow-up. kind roll to relates these products. perhaps might go, the especially total

Natalie Wolfsen

really wallet is is capturing XX%, remaining limiting existing engaged the our total things. from I And in of two XX% in the of earlier So call. share our as what's advisers mentioned us terms

first solutions they can't elsewhere The AssetMark. is use access that advisers at

Investment Alternative example of before so of a latter part in Separately good this launching but the separately of And launched Alternative that accounts another that, year. we're example managed accounts is platform. our we Investments managed is

Some of solutions that, launch be XXXX. another to which hoping lending in we're would example

And so have don't offered And could basis. -- just assets a that that there through our an capture working way there's we investment of solution our potential total we're today. be that methodically are by on platform size

wallet of is share wallet is The isn't of available the eligible because other it's currently that fee-based. of share component that not

solutions an And understand are and place that increasing better -- eligible commission way more platform. towards our of moving place in investing we moving And successful their suited on have and incredibly from projects put that helping of are extensive to investors away the this assets been in have needs and in incredibly that been we orientation. help thriving total businesses helping fee-based. the has advisers find are to assets grow their to number commission clients So fee-based, to extensive their advisers that these programs in and benefits programs

assets. categories So commission insurance-oriented would commission mutual commission two other would the be -- be fund-oriented and the assets, top

Operator

line the question from Sachs. of of Alexander Next Goldman Blostein is

Alexander Blostein

A and a guess one, really last organic nice clearly, of just good maybe here months. over couple questions growth. the improvement around of couple I very momentum

So curious if acceleration. a bit picture, the you little sort behind you. then a for Natalie, of guys this can And probably bit little about bigger talk sources

a that time? guys the As what get some double-digit in kind could growth also you outlined is more of for approach consistent firm market, organic to do you can into should you over of create sort reframed kind growth? think business the AssetMark's this we there organic incremental to the this offsets it reasonable are So more consider? think Or of

Natalie Wolfsen

first for of sources really the current are the success. there main sources of our of acceleration, growth current X question, organic So our the part and

we've the wallet we've platform currently AssetMark. universe is solutions receive expanded of include to receive that achieved those that from and The on first our because of the share couldn't gains that advisers previously -- from

is the fee. second The commission to move to

that frequency. we of advisers. the last The efficiency to greater our of serve just so advisers result, growth their platform, clients advisers then serve year on them the from third kind the of the help and a is did is those clients fourth payback at the picking, our work And advisers general as and

in to sort going of So take I'm them order.

business As and platform. share it of of of planning improvement best exercises share for that to solutions us understand our sources teams platform help sales on portfolios what our could of in those opportunities potential are the understand actively be are our for served then investor pieces year, their to the expand wallet advisers. relates with to our tackle growth help them and and all we engaged We of future greatest then the have wallet, on our areas us advisers each the what their to rank

result it Portfolio is a be is launch, Personal our those $X our big Savos portion already which And with organic billion. of over so initiatives, growth a of whether

then it's Our from areas of and and other new, lending. results addition too was yet our haven't expansion of Alternative like have Investments platform really, big to early very we in -- that

fee from and the there's is management moving fee-based to why really orientation a conversation The terms part about the between of explicit Best their interest regulation. move in second the more BI more the Reg is and has advisers to investments. commission investor more pricing in can interest ongoing of opened or the because the clients of general best be

diligence, we commission with et And so fees. investment assessments, with work them are in from we we help interested have advisers who programs cetera. client to where moving communications, And

that are third is growing. our advisers The

outsourcing in XXXX, What is As more offers of initiatives call, our more extending and to of they who they platform, know I our mentioned outsourcing our outsource value one we AssetMark, in investments can to on outsource accelerated is spend faster. with starting see And advisers navigate to do organic we the following advisers our grow because that then served, that and or that And to practices client so the our time their what when want in of advisers that with earlier from we -- the main is communications platform, them service new environment. more really growth them. help their and outsource advisers effort more. from those their materials, service are in map, are that where advisers a from And leads clients. best growth investors we a years very tools, see advisers lot of to had leadership, tough the our spent great invest road you beneficiaries what you had therefore more through business making investors was advisers -- sure and our thought well years in growth receive were technology

future? organic more the So growth. I five areas talk about about those Do that the of questions really any are you before have

Alexander Blostein

We No, that all of to makes sense. the go part the question. next can

Natalie Wolfsen

as So to low in we growth of objectives. ongoing mentioned, our the as future, organic target of terms Gary part mid-double-digit

of the an to now, we're making So of just strategy making And we're attempt all objectives. say all time. over those new averages want that they're investments numbers, in long-term is our achieve each investments to those I the of like

we in over do that. outlined as achieve But we'll that Other time, to that. Gary we'll better the do years, earlier his targets well years, Some not as than comments. expect

Alexander Blostein

and follow-up the the quarter run one the you around look we maybe business in today levels just Gary, just exiting second of you acquisition, then guidance are If provided. then, like rate the actually slide. quarter well at you guess the the for on as like And it the I run asset and you could the you described, anything, layering feels guys feels it guidance there. you're ahead of when

from missing the to we a would that plus? the or or next XX% of of half just big there -- is plus are detract sort back year So the anything

Gary Zyla

is we're What investment the envisioning in year the continued second in company. half of the

in kind And some other some the also of onetime investing in people so to kind of the -- terms us base. company, of that in people expenses, up need but compensation non-compensation we're more both going we of investments see in in kind we ongoing and things stepping that invest client-facing do [effectively] costs,

first in to of us spend you're -- have that will missing probably to planning way year say of say, [good] that what the up is in. if of in spend So we spend keep might come in the it. where you year. But the have, overall the sort controlled step we make second That some half half the of we're to sure

Operator

Securities. from question Next the is line of Young of Michael Truist

Michael Young

follow Gary. just on Wanted maybe comment, to that up

you back Just positive revenue very very had guys growth strong are again the looking and half. things in have

about and you expect or things that you've or that when that are is over talked about, talk drawing the kind on are there, next and So it already six spend investment about hear should to still these things accelerated we of board articulated so? that months the

Gary Zyla

out the what about going Natalie, to of nature are bring within board these Michael, In might our where some on we're we year, invest meet talk the to things are during spend Natalie the advisers it year. tools the talking part our to them expenses. where that start the manage been was that our they in numbers, need. and for things. things the on and just is general of to budget and calendar I'll on terms the current can Yes. they have our you But maybe about of is

And cautious. already. we revenue. feel it's very realized we're built third you're right, quarter We now confident So quarter about have third

investment. more so confident feel And making we even about more

you of a on you little talked topics pause we next about? three Natalie, give do be want two, some in the I'll the color So there. where to might investing quarters regarding

Natalie Wolfsen

are to just development. are Michael, ideation in and that items that in There first thing say, are are the newly here well that investing executed, we're there investing things talked or are about executed we're areas is other that So want The either I in planned. that I in research phase. nearly

at to many opportunity advisers So of initiatives and can we in to to one, and product look at able like how in life be cycle. offering take might And development this our that compete in to stage we to succeed. we each like R&D invest them years the more the ways help have initiatives expand

needs talk growth are making expanding offering, outsourcing every them you are so to We're stages are which changing so in and presentation of technology the the of also examples about to our looking we And some from at scale -- earlier, more mentioned close greater are like initiatives and our of our in development. sure at And much serve I that can marketing can others the some earliest the then that launch, that technology emerging advisers, detail. looking day. meeting and always we

I much through time talking as in the about But map didn't really that. we take So am as spend to you future calls, expecting road today well. earnings technology

Michael Young

of or over where pressure could to would any opportunities expect kind if little pricing And talk quarter, the yield the you as to there that drive I Could other improvement see going that we you forward? it's a about. apologize Gary, time good see switch But that see net gears about just via talked offset and here this are bit. natural we things that to continue scale other any can

Gary Zyla

work They We the And are earn activate platform. We back, if the through same pay of so the a the And Those broker-dealers. season. who you we're to we different kind fees, groups, on custodians. we that's right? asset-based payments our -- advisers take pay of allowances. pay always part sure custodians on make X they We step those right? pay And strategists platform made expenses, variable our page, do. were expenses marketing third-party

have. them, contracts there of For all that we are

many them, they points. great structured For with are of already

to we bringing So where them bringing others into of many cetera. we're And of up, as scale. discussions they're scale us, less go because asset per regularly paying of value the and with dollar wind we about our knew we -- up going you're basis et them, partners per

make sure so And what the there, we're all a answer just on page long is. this it's on like to same

contracts. those And sort to at actually so breakpoint-type this. costs majority looking ] with strategists and of those are continually we expenses [ The are of

because do the cost build point, in to decrease to want continue kind to announce. investor. we don't Michael, ongoing to the I to anything to And to hope improvement now highlight seeing nothing there's is so offset natural end that, of your focus, an this But in exactly and

Operator

Next question is from Kevin the McVeigh Credit Suisse. line of of

Kevin McVeigh

if marketing. question because last don't run following And on Gary, you're seems it your guess, pretty just is the what for this part intriguing you, type know revenue of as it's, I infrastructure point, but a current support? up on I adding two your Now can rate

to So to framing Natalie, to that do organically, about out combination of market expect you wanted of what to scale be? a can should you So thinking I add of infrastructure to sense understand, those how just we current do bear? a inorganically, be can potential And terms what get the initiatives addressable other bring can then modules as both? and trying it relates what in

Natalie Wolfsen

I'll to if Gary, start follow and to please feel So free you then, have anything add, on.

just I current infrastructure a say. support, can As to it the our relates to that of scale couple things want

investments. an and investments infrastructure It's is race. first arms The technology

You to time. need to be the be investing you in we all need -- believe

technology in absolute our every capital our terms capital keep our but X% infrastructure of in inside infrastructure every and budget to do and when into the team, team every that And to we capital and budgets quarter investments so year in is that we, And we investing ahead growth. we we it's budget of that revenue leadership our attempt employ we budgets on discipline our total expenditures around that year. and need build the at make grow a

investing And expense I in equation, say every of so just in terms the we're want of to that infrastructure side day. the

we been disciplined for will and years, a we that do continue in and eight will have way. the last to, We

expand of to looking and always the In our total -- market, we're for ways addressable revenue addressable the total market. looking terms

to has in when the acquired AssetMark stand-alone talked services Voyant, a able on component past about As serve that technology we to basis. need that been we a advisers there's

that we're segments into We're do channel. so adding the those market wallet segments. new we our and total but pretty that total We're can we And RIA significantly. market in existing that addressable when we are And have. increases geared only of not that, in trust that share our services from US addressable the we And bank the towards worldwide. serve the adviser investing Voyant expand through expanding

also our addressable total increases market that resulting the revenue. So and

thoroughly, ways revenue, how way, Gary it So serve we can at relates revenue. always have regions, as types to we we're more we And market. different right looking expand can see as -- addressable we our have affiliation asset-based advisers different to in every then said, now,

Voyant through revenue. then spread-based adding other revenue And and have solutions. We subscription-based we're technology

new And so is see over you'll what time, as areas, there'll X of sources on we be updates asset-based our give revenue. strategic

sources technology as So interest spread-based advisers There being our interest lending with revenue, one. as launch separately managed and planning accounts the new be -- services if expand Investments. first is an financial example so we will of to of we that, subscription-based solutions or revenue then changes, Alternative rate new the environment

Kevin McVeigh

things plan And conversion that basic how a of model terms opposed the would of subscription you Voyant like -- kind in the reaction client place? as that where then of has more initial already marketing fall? Or So lot the have been that you to into fall in just had the would seen to the that, of in more subscription?

Natalie Wolfsen

you And But it for thank clearly, relates as really both. So that Voyant. to question. I'll it's tackle early

those both spread-based asset-based our revenue on that to small revenue growth main marketing our the it feeds start, achieve for First of to change it be we how our the of would be expect the platform. on the advisers and interest fall growth thing outsourcing, as that relates advisers marketing-based as Again, that and into the revenue. subscription-based rates to benefit outsourcing platform to our and

only planning. to about fantastic. has on of cash the As same closed the success probability been of on seeing They alongside it early view the in planning Voyant, really relates want X. from Voyant advisers interested They're flow July both page. of view We feedback our like

Voyant conversations starting. week about just these integrated only ago. We a into are just platform our So

financial to weeks. the relates It's share those But planning started terms haven't And or being in with then really really we of have upsold AssetMark so you four point. data conversations been versus as And fantastic. any basic usage about only using adoption today at Voyant, yet. to this to don't it are early conversations really at

And so started haven't those where are conversations introductions right now. we basic yet. The are

Operator

everyone. call closing for you, over the Natalie to Wolfsen I'll turn now Thank remarks. back

Natalie Wolfsen

you, we thank our to really talking you We joining everyone. Well, call forward today, look next again quarter. and appreciate you to

Operator

that you today's joining. all conference. And concludes Thank for

disconnect. may You now

AssetMark Financial (AMK) 31 Jul 212021 Q2 Earnings call transcript