AMK - Earnings call transcript Q4 2021 | AssetMark Financial Holdings, Inc.

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Operator

Good afternoon, everyone, and welcome to AssetMark's Fourth Quarter 2021 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

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

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

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

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

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

adjusted associated disclosures are and With filings of risk and Natalie, statements, for EBITDA business factors my to income, all Additionally, away. press financial turn our non-GAAP net margin financial take discussing information. today's our during call EBITDA, information non-GAAP we'll 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

to so Hello, Taylor. you and fourth everyone, Thank earnings quarter call. welcome much, our

as few from a AssetMark. weeks it We are has at what my CEO one-year away an anniversary and been year amazing

the at driven three, of month of and continued a platform have record analysts billion our advisers in not quarterly begin and skill our would dedication their $X teammates. XXX-plus and also flows XXXX included our assets team. flows X,XXX possible by start first to and advisers our I want was $X.X net record support December. thank loyalty billion, our it of of AssetMark. billion, our we Starting Before record the thanking prepared to net remarks, like without I of for by $XX.X on and a year slide year which the would ended been investors

a year for year as all-time were engaged ended platform net percentage digits assets of and beginning our were XX.X%. highs. year, the flows the Households and double the For advisers up period at both

top year-over-year $XXX was in We million also by net experienced XX% million. and the to XX% was metrics. record line to XXXX. Adjusted than financial business up continue for year income was evidenced XXX scale points in $XXX revenue little more up And to $XXX robust adjusted a results our up XX% less adjusted expand than ability to more million. EBITDA to margin Full net a XXXX as and than basis EBITDA we bottom both

Turning to four. slide

direct Our we and record outcome clients. bring advisers to results are a value of their the our

experience, thousands redefining adviser than TAMP. financial independent XX is years, the and everything their behind provided need businesses. to to run a what we By them more redefining serve For means it their of with and clients stood advisers also be they AssetMark modern

their have is We and we focus unmatched unbiased singular on their advisers AssetMark reach are serve financial their helping financial it. independence to value ally. a champion independent and The advisers goals. bringing objective, focused with sacred and recognize we When trusted work singularly Our independent that clients they is advisers clients.

We the of of part thousands and like-minded their are of of advisers. they an extension community team are

XXXX TAMP, we're As five I'll progress it a the means we to redefine be areas. made now we've what modern discuss key focused each. on in

launched strategy Since AssetMark where AssetMark new they to meet affiliations, on catering XXXX, growth X Institutional. we March a advisers. mature our a growth-oriented to advisers of component variety launched, In slide of are, has momentum. first gained lot Institutional The of is of or

firms see we of our the advisers, because the outsourcing million join RIAs, current the offering, platform of efforts transition. new of XXXX $XX building who we're AssetMark with averaging like-minded community during Just in have value of and first RIA year to done assets our as affiliated we in our value with broker-dealer a saw AssetMark, XX

account over XXXX, continuing XX% be platform of this in little RIA total our to addition XXXX. now In $XX of for on assets we'll platform a production build focused RIAs and In billion assets out offering. made up on

to Turning slide X.

out The second our conversations create holistic of XXXX, also platform a while with strategy acquisition advisers is wellness to to component deliver advisers offering, providing easy-to-use resources. and designed took saving and forward In an and and in importantly clients, huge we Voyant. advisers' to the differentiated time of building their their clients, growth our meaningful step experience end-to-end, a between very financial

highlight year one with pleased to areas We of results, want key and Voyant's three are their success.

on In numerous of Voyant exceptional dozens focus integrations new and let's from technology. approval upgraded added features. ratings maintained XXXX First, users

winner As voted Award FTAdviser's a UK's also Voyant Service a readers was and X-star Paraplanner. Paraplanners result, Non-Research Software Best of the for of Professional was by the

gave community expansion. Voyant XXXX, Voyant technology its Australia's began also advisers. growth launched Second the market and financial of US is entry financial and XX,XXX through In Australia to adviser acquisition was into tools positive. licenses its by has of Voyant planning we bringing by XX% approximately increased In and and extremely August, AssetMark. paraplanner In feedback Voyant's Voyant top XXXX, year-over-year. trial free advisers a been AssetMark's number of

income capabilities into retirement Lastly, powered is Planner, also and proposal Income integrated Voyant's into which financial integration AssetMark. eWealthManager is Voyant's We planning technology, Voyant. built by a planning

and more we advancement offering out telling with you as wellness in pleased and continuing it forward to are XXXX, look have progresses. financial we year the focused on are build made in our the We to

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

well added total, to of wallet our have advisers. as capture In products we were XXXX, turn investors. platform. on as on new tools able billion attract more platform of our We let's our X. rolling new serve features a XX-month and from basis. products this, enhancing In our existing to new through to to $X.X advisers advisers did we this platform, of job enabling tremendous adding by assets And Now, did a slide share

solutions enhancements to added investments our we iCapital, improve new clients past of well alternative client harvesting through made of we separately This wealthiest such will a accounts. advisers' experience. tax host as loss the managed quarter, as capability, which as suite a our For

For Savos affluent Personal mass new we've include suites. our emerging to Portfolios affluent and expanded advisers,

a found at are in features high-net-worth reminder, that minimum. As portfolios accessible usually solutions these investment an offer

Lastly, the we added pooled small employer to plans our retirement owners. of advisers needs help serve business

new $XX seen slide out and X in our more We I solutions of discussing which are offer, Last competitive fourth our to upcoming to team is XXXX, forward building by platform as business our quarter AssetMark. serve earnings businesses help to additions to a consulting component XXXX. platform calls. I and on billion on continually focused advisers In enable to adviser our investors, these strategy discussed platform grow increase a The our XX% look and scale programs. served their turnkey of is huge assets, advisers consulting in for offering business over advantage

new has you a Additionally of in quarter, detail for strategy and over Marketing supported which more marketing we important one they defined the launched been soft to outsourcing today. adviser launched fourth discuss and XX benefits, In Advantage, never with program. advisers. Having more executable marketing I want Assetmark's

full only Broadridge Advantage last than XX Advantage twice didn't. suite XX% In onboarded over advisers who brand, strategy designed yet found our that strategy, have survey, tools the weeks many as Advisor the adviser to Over marketing was Financial did those Marketing used attract response fact a we of and marketing soft enhance during need as clients two -- market have XXXX more adviser's this that months defined relationships client period ago. to have XXX and of is marketing a and a Marketing launch a an those alone in financial advisers a launch resources announced it business. strategy deepen just new

investors slide In to is strategy M&A strategy our and capabilities Voyant, in advisers' transactions component growth ability highlighted assets which of improve our final strategic to X. The Turning expand and business. their July. by growth acquisition pursue that closed to XXXX, by was our adding of serve

earnings month we borrowing a been million we have M&A that facility. deliberately are credit $XXX I about announced ever To focused new calls, very previous extent, mentioned As excited before. last than We're on we've in five-year more our execute capital while to our power in be as approximately opportunity disciplined buyer. million $XXX to access to purchasing well-positioned ongoing continuing remain We always with significantly increase M&A a the to rate. on reduce and

now, been commentary Gary Lastly, about we Talent some didn't more we that provide Right about I’d macro would to of have our to current briefly acquisition revenue. a never like talent. environment discuss thoughts on take and rates will impacts provide retention call and how the impact the interest remiss be if some Later spread-based in crucial. moment the AssetMark.

to Our address strategy this components has two need.

We impact and added of talent satisfaction in received than in employee at ensuring to place teamwork. the team is First our where work, continue need AssetMark. measures individuals a diversity, -- work new best high talented We all survey want marks work. AssetMark that make best to XXXX against work and is that the to talent to related importantly engagement strides members XXX and high annual most the so these wants of creating more to

at year-end bonus. we we increase at of of To in a board. across will high that last gave strategy compensation the a onetime the The second variable early compensation. end We level. our our team is year end, And appropriate each component member incentive funded XXXX salaries

and Gary which now us momentum. believe XXX We growing capabilities entered in highest call our go history. investor accounted diversify into for respect $XX a our and AssetMark. through Score ever growth changes have the all record achieving over quarter bottom grew of allowing in having financials was program results to and deeper will We compensating and fourth assets basis these will revenue us integrity minutes. Net turn to talent. heart Promoter to We households completed more creating and retain first dive a XXXX our updated excellence and plan, serve billion. values line We XXXX. expanded year In through development I our with the current take workplace and for by members provide and robust acquisition best along appropriately double-digit XXXX XXXX We that with expanded outlook while attract realized a a for who of of over All top help company's channel. learning an margins Gary, strong new than a few and will that embodies points. advisers Platform before will our been the us team closing, in and for a

Gary Zyla

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

for Natalie adjusted EPS. As highlighted adjusted was an and a high in EBITDA, flows, record record income net platform numbers by XXXX and assets revenue, AssetMark, for year net discussed, all-time adjusted

conclude will start quarter will our This I of a platform about Starting record-breaking our our a discussion history net company's assets XXXX. were with year-over-year. I $X.X revenue, XX. update record talk of flows. in on quarter total the usual, growth reflects quarterly billion, an billion, flows XX% expenses the for Slide then As up of the highest on with Fourth then and outlook consecutive fourth assets and platform earnings. quarter $XX.X fourth

We also of realized gain fees. net market in $X.X billion

full is year, billion. over the platform excess our XX% of of annual achieved our assets, This $XX we For net of year of flows XX%. almost well of target in beginning

quarter quarter or NPAs Let's pandemic highest north the fourth third and beginning now producing XXX the of total added first our consecutive the advisers the NPAs In This since adviser of to XXX marks in the NPAs. attention quarter, metric. the turn is XXXX. new we of

total engaged engaged advisers engaged added of X,XXX. in and the fourth We Our the XXX fourth is XXX advisers XXXX. quarter the at quarter, advisers in end

our make advisers assets. up XX% engaged Our of platform

is growing and a point of for the financials. always crucial drive out our management growth is key we to platform engaged our advisers business number further and As focus of it its on

$XXX turn this to quarter's record which Slide revenue, let's was to XX Now, a discuss million.

revenue on we revenue the was for asset-based was million of revenue up to from of fourth In expenses. variable was the up is of As by $X.X revenue, which addition $XX you fourth net revenue net $XXX the was Spread-based XXXX, of Voyant, focus XX% quarter million. our net This and million. subscription-based XX% $X.X which million driven related quarter know, year-over-year.

on spread Speaking revenue. of the recent commentary will revenue, of effect rising from Fed spread-based positive a rates asset have

said, revenue a an at Turning to XX% Fed in our we growth. of Historically, about XX, benefit spread-based are put, rate through diversification of may funds million line. Simply rising result bottom annual basis earnings ending our billion That rate and basis. on positioned environment up in to our XX would revenue the XX is Trust in cash about AssetMark $X.X based increase speed planning. fall to on always point and a this Company, interest on well cautious January of revenue $X.X in about our Slide annualized

our You to not include greater color to ties XXXX quarter will XX in We does have our XXXX. plan look forward we that revenue rate see walk. our which net guidance operating once details clarity. more Slide hikes next providing year-over-year

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

item $X.X As a providers of line year-over-year basis fee another our restructuring that to spread-based Voyant Subscription added revenue the as year-over-year. average yield savings million in drove and revenue points. second compression this XX revenue in that basis by was decline our reminder, realized quarter Last, points $XXX,XXX about to negligible from ongoing XXXX. with well. we additional primarily the in revenue the driven increase XX revenue first positive due is in Voyant On decreased agreements from other note, consulting

expenses discuss increase XX. shown $XX.X by let's expenses million expense million, $XX.X an XX% compensation increased SG&A. increase expenses year-over-year in Now, $XXX and as million. operating XX% $X.X year-over-year million driven Quarterly on up to Total were to adjusted an in slide

slide to turning So, XX.

Let more our color expense increase. operating me -- some provide you additional some on

It's with I exciting. of to We expenses revenue XXXX operating increased million of This in time. very commencement As started my commensurate $XX.X events. growth travel due the and shows, million. is quarter -- fourth added volumes growth. graphic with mean we expenses $XX.X

of added million our about of made of XX% expense brings investments XXXX, to driven operating remainder result the fourth as to the in year. of the our was we as addition we Voyant The of not expenses us a quarter core in a which XXXX. Secondly, in $X.X This strong the up was by quarter reminder year-over-year. a in $XX.X expense million increase specific

excellence First, Natalie in award to increase all alluded which we and an including paid to accrual. $X.X bonuses an bonus annual million related employees to paid our

chose a will for on Second, growth and in additional was in strategic originally few we not $X.X XXXX beyond. million plan to specific but spend help XXXX This step an accelerate our initiatives.

noncash for first, discussion our four which compensation. let me adjustments quarter. $X.X million Before added pretax of wrapping million expense run back We quickly is up through total items; our a $XX the of of share-based comprised

million to average to quarter. this an decline expect We number in XXXX $X of about a

about expenses to decline to related $X.X acquisitions. million set million prior is we a expense adjustment have of number amortization Again, Second this to $X.X in XXXX quarter. to

primarily one-time pandemic. reorganization associated million acquisition-related in primarily expenses to $X related of our the Voyant. and Third, and acquisition integration to $XXX,XXX costs with lastly, related costs And

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

have to margin adjusted For quarter EBITDA I basis year-over-year. was $XX.X that up the discussed. down previously just XX.X%, was for XXXX, the million, EBITDA year-over-year Adjusted XXX points due quarter XX% increased fourth expenses the

margin XXX with target XX basis, annual above Excluding well have operating our XX.X%. been those margin expanded EBITDA million basis of have long-term points. adjusted our points, EBITDA to we an non-repeating expenses, of quarter XX would $XX.X fourth basis an On

in fourth quarter XXXX. net income reported positive to income This $XX.X million Our positive negative million was the GAAP of income million. we compared consecutive the net and third quarter finished marks $XX.X of reported with XXXX $X.X

on the $X.XX fourth quarter fourth based share. is share XX.X This count adjusted Our the diluted for was or $XX.X million. per income of million net quarter

for XX.X%. tax please, net the effective son rate walk adjusted is XX. Our unchanged income year slide adjusted the color see Further at whole

fourth quarter to balance Turning our reported sheet. briefly

conversion and expect sorry We rate in little cash of operating XXXX In generate about a from our quarter investments. on you cash cash million the debt we to update at and we XXXX, continue position. $XX over XX% generate -- capital $XXX in activities cash. ended I'm and me million Let about with to

Turning to our debt position.

in million we LIBOR We've January, credit As adjusted of in new X.XXX%. an Natalie retire rate the We mentioned, term $XXX five-year interest debt. $XXX of had facility X%. rate used loan a to plus our million a sell-through existing announced facility plus of this with

our capital noted basis reduce the the rate opportunity and of we're our margin improvement really highlighted points. to access to As Natalie increase borrowing significantly XX.X excited about on

to Now an on our XX Slide to let's provide update turn expectations. XXXX

know built asset an we the the platform totals quarter. end advanced As at you of

we result the the have for revenue ending quarter already assets on year collected platform a from XXXX. of December As first based XX

So far in market in year-end. have in we in XXXX, seen our and platform down the from increased volatility January assets are

strong remaining weeks mid is momentum. upside possible, there business streets the in still However, and six quarter

As result, and we in XX%. of growth reaffirming presented in a anticipate guidance are excess the we earnings November

This our to flow XXX are net a in from of continue to excited We adviser expansion thrive will of strong to AssetMark's about will revenue likely This basis and revenue by growth increase Voyant, revenue grow. spread be EBITDA double-digit lead a adjusted in and in ability incredibly and and year and highlighted full points. growth. XXXX margin excess

provide will levels we certainty our more impact of an We the additional of XQ movements. any perhaps 'XX call, earnings quarter rate asset have end and update will course around of clarity on during as

So her to over concluding with remarks. Natalie it I'll for hand that,

Natalie Wolfsen

Gary and excited future everyone begin never updates company's the you, more our calls. subsequent This being at to to concludes earnings I question- the call call now I've to turn look about Thank upcoming been thanks today. for I sharing on prepared and the conferences and-answers. remarks. our future. forward on back will operator

Operator

Instructions] from of first [Operator Bailey Ryan is you. question Thank Sachs. Our Goldman

Ryan Bailey

Taylor. over and hear the have over acceleration and We about the decades. the potential Hi, population might question financial Natalie, high-level coming a often aging an Natalie, a we time of you. Gary for adviser

the day-to-day advisers of and or that advisers AssetMark? might net businesses of to what industry wondering the So for I mean then the of for remaining was might impact could speak you the what attrition mean

Natalie Wolfsen

question so for much Ryan. the Yes. Thank you

retirement average though as few has A the advisers that for out classic some way say reaching, common, can bring quite just they get continue their team, business they they I what in the of or is a a do to very, life want in are is, they so Instead that much, clients would successor part And very retire their on correct don't bring and to later sell much a serve that many that think in off what work or they they looking on time. are to because normally it satisfaction many of of we would and fully things of aspects advisers are you the them retire age retirement. so call Even much is been change value And of would you work. than some So expect. about those selling. you them advisers their fully adviser of classically increasing age, are so, fundamentally age. the advisers, for

the bigger are business if in younger form have entering are many of But plans Some part them becoming not of of one another. into or all practices. where them succession advisers

In certified diverse much advisers number more those financial there as planners much, a And And fact, and the a emerging this age, the are total than there younger financial were in a the just of new group. rate are advisers, XXXX. new planners example, they're of much field if rate group financial never leaving. look you at been have of who certified planners, more replacement or certified at entering an

they that succession emergency a long-term focuses call new that of say you'll their business instead, on I advisers be financial the thing that sure succession I things these one a grooming a so planners, have our are huge industry. don't entered The group, a expect group a robust amount mentioned will serve we generation where emerging and advisers over with succession lower will advisers. take that both that just rotation the much and see consulting making And much, is plan and plan actively that But which there these is I'll earlier they last there of younger plan the be business. to on that the quite new lot

Ryan Bailey

it. Got

this. And Okay. it's a maybe related maybe separate to point, somewhat

you're sort of if per from of adviser AssetMark we was I you they freeing wallet keep guys about the more should comment households is. you, growing your up Is while years. doing for anything So over else XX% share what just is that on that time Are up wondering work what winning you it for are is for in financial advisers? that two the mind? them, the or there could driver because organically they is last

Natalie Wolfsen

Yes. I all is that really the question mean, above. answer of to the

earlier value is of So in attract We that. don't. advisers rate. outsourcing found We've better, are our what helping more been just recent that They mentioned grow earnings new call program just outsourcing faster at than in clients the our in I advisers XXXX most fact marketing market survey. And that absolutely efficiently the on also investing growing. example our more advisers that outsource completed is and of advisers we a our today.

So growth households. increasing advisers' rate ability new and our track to

Our to to likely that XXXX really of of are service provided be coming level highly the the they out advisers competition. that their outpaced referred and specifically clients,

helped new saw of before. clients. thing and grow so AssetMark decade advisers' entire sleeves over and we've also wallet, serve AssetMark the offering services has XXXX us other in from products haven't added the individual. are we has And been platform, really where that Personal to example able categories clients. our new our much so that tremendous then a serve is, offering. serve been services we larger mention just our from building they to And we businesses that also I'll that Portfolios of can new adding of we're investors products The new One high-net-worth added the now for And that that high-net-worth growth high-net-worth

Ryan Bailey

it that comment the a line, deposit to bottom is or to or spread XX% XX%? if into falling comment, reinvestment I Gary one sneak more beta that about And that the is that one revenues quick in. the maybe is through can business, of related both? Is

Gary Zyla

The – I would probably yes say,

Ryan Bailey

Thank Okay. you.

Operator

from O'Hara is question next Gerry Jefferies. from Our

Gerry O'Hara

Hi, Great. how Okay. Thanks. you. are

or a and it or go-forward gaps nature? of in Are identifiable seen on that any opportunities how is particular of basis. kind of identified, kind or product opportunistic kind a M&A would of question there color context Thank you. just sort there just thinking sort you're helpful. of or be it about you've more So around Any

Natalie Wolfsen

Yes, for question the absolutely. Thanks so Gerry. much

look are And thing to practices AssetMark. areas want the say advisers. is, As those to use, it what's are all first just opportunities are at they I And universe relates powering related serve the to to growing of thriving. technology areas for that high-opportunity that there M&A the that services need, advisory we and of they

Voyant Financial So Planning obviously, is business. a a successful huge of advisory part

M&A doing business make mentioned We disciplined like we for In we And going other of the on. are to and feel opportunities That or one other aggressive in management, acquiring. adviser means as we're so accretive asset dedicated to wanted interested term lot of aspects those to scale opportunistic. to we're asset in is we parts environment that at And servicing We that we're for you that like tough. have quality those and to one of buyer. to the this our like There critical that to that quite available, I make leadership both whether medium now, have the other a have in this strategic AssetMark environment, an adviser's focus of and be most of very and to want the on the areas to call, we're deliver sift earnings aspects that a need capabilities, that and opportunities the And can market are last it's an technology, experience. you does it and are are entire part we'll support own we of that And environment of about Gary their ability the those said, I be and are conversations. right fit clients become the sure the aspects the continue acquisitions. part that. to identified researching sense. team in to get -- that we through to those deliver ensuring

Gerry O'Hara

$X.X helpful. what you and kind recur That's I to that? then exactly -- to give are one any it you And initiatives missed expected strategic was as million on if Okay. you if this, that context did not perhaps apologies the of did but that of or can relates

Natalie Wolfsen

why Sure. Yes. don't it? Gary do you

Gary Zyla

Yes.

we've we Valentine's Gerry growth. discussed not Day. so didn't anything. look have did I But adviser began our -- basically an we you initiative So -- miss Happy initiatives for

We digital lead-generation have initiative. a

online We were another to web advisers and thought making the planning whatnot. in creating XXXX, we These them bringing are initiative that to and begin for related have do presence more our to of with business initiatives easier leads. in again

Natalie Wolfsen

nonrecurring in engage work advertising they're to instances we XXXX. consulting Because or many nature. in on in And forward projects again into expenditures pull XXXX

Gerry O'Hara

Okay. taking afternoon. questions this my Great. Thanks for

Natalie Wolfsen

you. Thank

Operator

of next question Our JPMorgan. Worthington is with Kenneth

Kenneth Worthington

And to growth an this going then these it the of going Sorry is in tell. onetime forward sort we're Does exclusive in about Hi of money just Like why of the up sense. and expenses of was on again? makes more bonuses are sort number, following to of of of onetime happen it I well? the onetime And good things the that investments? play one-timers But quite onetime the XQ why don't this some see expense the off so the we as or sort Is then the future? aren't And it question as pull higher inclusive? all there? ongoing couldn't XX% Does onetime that future tradition sort got expenses afternoon. it XX% with there and isn't again we growing you've in Hi, sort to so sort recurring. great is to be of bonuses. think incorporate of AssetMark going pay these sort

Natalie Wolfsen

Yes.

had our history history in share of success two team terms prepared let of modeling onetime growth, difficult in in They terms great results in It best best EBITDA, extraordinary of XXXX assets. incredibly to first of don't working a mentioned in And history everyone pandemic change the of asset the to to also EBITDA expense year So the team. was growth? I of we at in history best was terms leadership as best in take the as in I of So history hard. in remarks, in in a year Gary best terms why but and speak year XXXX. in and the questions AssetMark a in with still then in it Gary relates to an wanted in revenue, expansion. that being XX% of XX% terms in and the an here terms those net we're terms bonuses and of new

wonderful did everyone got And And group in so, It's for lives to at we the earned to advisers at here of dedicated a the in making set tell for every came history time bonus of an onetime extraordinary results. our But the you an I extraordinary day. a the they it. with people the a bonus first just wonderful, firm. of team difference time

And so we that's then same why XXXX maybe won't. as year will extraordinary If we deliver don't in did an we we onetime. If in like we XXXX have we categorized it of the bonus. kind

nature onetime And it to us. felt in so

at end our because advance, to overall answer question the always quarter based money to quarter, more the the about future. fourth I in results on bill something expect assets yes. the where there's just is have want We is something this into the the of invested we on visibility The in should more very probably, question in second And be the is comment your to thing good fourth before. quarter that is we because business we invest in

and our I'll expense give the working And investing Gary take results we're And will year. I that with quarter, end just the I small very off future we that. about the And what talk And to where can. to growth or last a to then that growth know quarter to that we reinforce year. investing so we the the expanded We we expectations. the we fourth growth. about of be clear by when third margin margin that at fourth by Gary for need And how of feel we for are points. executive that's XXX should and we make year in sure appropriately basis tried opportunity part the the be in committed margin And Last had wanted want revenue do hand to already you to to invest and growth have team expansion. we balance future in

Gary Zyla

Yeah.

on Ken, in what's And we're so to coming year. to it's communicate question, fact forward, -- make right? you for no great think We through that it try and right? Ken so try goes our of investors through, And through to to goals are the in going And upcoming trying one the real there Natalie as we be year. through the was our surprises like go sure a as outlook is

into about think year XXXX, XX% salaries. I expenses, to categories. you About when is growth of would bucket next four directly and volume So them that related in our X/X

attractive in always are capture expenses be related action we year talent travel Voyant XXXX to that increase is budget. will half expenses that a up the year. going of a year talking had year of had about year of increased ran we of late About for be cost full because in fourth only So for the and call Natalie to would cost rates we what our part next was quarter one -- a to events when Voyant, That's one-third does of plan full Voyant. a We last About our our about. due so and expense of right?

our Forum a $X have XX million last a going to million hold week Gold done except year every we year. to Event. in It's Specifically It's what for years $X Annual we're event. from now

and going list long stoked about we this is then right? growth there top we're alluded making And investments bringing of the time a to about we next is investments that all And Ken our third $X.X are bucket of XXX our million so budgeted have have a we I That the fourth now that expense and year our because advisers helped? large of the is we some last investments And stuff. And that to so further could that event. And on exciting. accelerated seeing the advisers excited very XXXX. in still for out quarter

Kenneth Worthington

excellent. That's Awesome. Okay.

they're suggestions at seem to not Sort you to it? stock, good, execution How I all, communicating are about the about with good if potential this The have if even do Anyway, or think a does they or you. of been price might stock Management about with the a management improve question even they Huatai get to in There's great. you remains comes price really is receptive Thanks. be I'm room they're my concern? is, performance? to good. else. half to reflecting seems world things guess stock is the sort that. they and for act of the stock want elephant what a solution And better fundamentals up the the this of the do be and me sure floated be very to suggestions there, and what sure might about a away a number part me. I'm to never team? not of everybody

Natalie Wolfsen

Yeah.

is thanks so agree for And I with It Ken question. room. much asking the the in you. the So elephant

the really And so glad question. I'm you asked

Huatai shareholder. thing First they're just a to want majority I is, say

of our shareholders their control you we and making is long are in to that, so and price. same if that What difference clients. a shareholder price everything stock the At majority medium-term about care would. can by as And their Board management advisers talk deeply we the the the we frustrated is And time our They and stock stock for the what sure do control matters. nothing doing we're make the team And about they fundamental. price and lives understand they don't the to we any over needs. else the

so conversations are with having Huatai. absolutely And we

matters. if don't else don't price. and shareholder you if And you stock majority focused they all As clients, matters the are at deliver end happy absolutely fundamentals, if have of a don't your delight the the team, on a that strong nothing you day,

focused so that. And we're on

Kenneth Worthington

you Okay, very great. Thank much.

Natalie Wolfsen

Ken. Thanks

Operator

of from next Securities. Our is Michael question Young Truist

Natalie Wolfsen

Michael. Hi

Michael Young

are Thanks for Natalie? Hi, you taking question. the how

Natalie Wolfsen

Good. Thank you? are How you.

Michael Young

maybe start to wanted I well. Doing with Gary. for one

Just point offset X.X% if the year-over-year as to part how that EBITDA year again market rates. weren't that most about But from of much be flat we at year rates? appreciation EBITDA the least an ex impact as think potential just that the that's elusive the we the expansion think at materialize and we, and margin for think we kind about could is were just market within with of, higher this appreciation target maybe about and

Gary Zyla

mean, ballparky. very is this I So,

say billion you're already Michael, of assets X.X% about with the to be revenue to sell about revenue billing That XX a million already the missed basis first right? If we've quarter, points very would in talking range. we locked take it you So the somewhere in year quarter. entered said $XX about million that if -- on I'd of ballparky $X to impact $XX growth

short, does fourth of whatever year. the to for the so matter doesn't because in quarter market in actually going next quite that year And this that's

the given the And of what talking any and into next And executive Natalie, so focused market be we've will be you the rest time when and main already market we're myself, mitigated making about we in our February, team And quarter. so the quarter quarter the planning the that risk are this will appropriately. of doing sure year right? of focus on we are investments expenses at same our always to

of the will does And some not, timing so market recovers we our alter or of as the investments.

Michael Young

higher if revenue. materialize. question did could were outlook I of time the have Right. offset that the XX%, appreciate an XX% and rate seems piece have and follow-up would expense then on a rates. that that guess, a other lower leeway I on lot And which side, guys to It performance market other is was like lead the the great. be fully you additional of I spread

last cash rates any we that in twofold; higher cycle. Do has expect rates in us see that impact to down gearing were or as you since those assets, might that. the percentage can shift may tend of this mix terms as well we remind of then occurred time we higher the And a just absolute rise? cash levels as rates come what balances of Just of one, should balances,

point what maybe you catch of the betas deposit at in rate hike up on do cycle? So kind later

Natalie Wolfsen

Yeah.

So interest a at we to just cash model go client Trust want the rates a balances have cash type of when about those held say fees. in of cash to couple things pay balances I up, that balances cash are balances cash AssetMark

the cash bulk our that up two true we less see there's we of if than volatility are to are One would balances of our is tends position-based have a the to And and like elastic, are cash they're rates. assets to see trust cash pay that it's In market, neither about cash, at to term the activities on aggregate, but And more be balances platform up. held so platform and the high-yield need go for balances assets cash cash that little for go they are short cash elastic to held at be balances custodian. We the more or influence fees. X.X% so company. bit honestly, do And a the conservative less to because cash there our clients cash have more the in related the conservative. be extreme on rebalance because strategists you

one volatility the is for cash of platform the really reallocate we're of third, amount then is to raise the not term, our might influences attracting they reason which when rates. level to then is short rates And thing because And that cash the as strategist influences assets one that so move for market other And is go related will the of our or that assets thing another. the X.X% those assets. overall reallocate the their cash. either fees to to They

question. look great It's of a different a And at. it's we something very nature makes closely elasticity and cash our the So here. little the AssetMark

Michael Young

kind Great. et returns see XXX diminishing just of sort that we And as cetera. one point? the Do the Gary then, into rates was up last on maybe at we points basis of beta move in

Gary Zyla

we it was much that point basis be would get right yes. Generally call our -- line Another but champagne problem have, that will into what speaking, range, now a about would XXX say think, little beta but higher less we as you to XX% bit less. that our I not diminished bottom moving

Natalie Wolfsen

the you you're range, there, lot obviously incremental point of XXX the get And basis above returning rates if client. get a those to we as

of So as I'm -- yeah, be X.X X% -- you're to get sorry that we'll to X.X%, returning -- you much want some that clients. above of

Michael Young

for info. the Thank Perfect. all you Okay.

Gary Zyla

Sure.

Operator

Raymond from is question O'Shaughnessy James. Patrick last from Our

Patrick O'Shaughnessy

you that outlook the last expense XXXX. initial non-repeating the your did XX% Was XX% on gave I the for contemplate during Question -- think spend quarter guys. afternoon, of fourth Good to Hey. outlook guys when quarter? growth,

Gary Zyla

No.

Go ahead. Sorry.

Natalie Wolfsen

a is predicted. that we we range provide reasons not say So, to essential, so to one what could lower is implement have the I range of things be are of at want end the the but that that absolutely flexibility

and adjusted year. the the so as end our we range could given do that happy And We were do we had team, the the quarter, one-time extraordinary I said, did then last that at and an upwards. bonus within very, we of very of was for it that to bounds it

that we flexibility think end And to or the that within of so the that business. again, we growth make range. the given, of to range we is have important that our stay lower expect health so are for future And decisions

Patrick O'Shaughnessy

Okay. Understood. Appreciate that.

flows? there month, an your net kind typically Omicron year-over-year, January just since much but you – commentary on sort flows up quarter last can provide read $XXX January? what lowest but one it want rather don't or factor? there seasonality May lowest Your is of month of million year Is since too to in of into I Obviously, January

Natalie Wolfsen

absolutely. mean, I Yeah.

happy last in definitely pipeline absolutely really Even with it of what So an but down of strongest and Januaries see and last year. up as our we of the as fourth year, XX.X% our really, market Omicron XXXX. There ever is well in so to January quarter our element versus versus I'm yeah, one pipeline volatility.

to XX.X% happier So just obviously, there year-on-year. couldn't be be we January up seasonality into we'd the that also in happier a like month is flows. be month it, of And every volatility but lot better, we where love December or a couldn't it's have it's pipeline. with And can

Patrick O'Shaughnessy

than your was Anything, for lot Got since advisers going that rather driving last you would really advisers I but guys forward? engaged more attention think you did it. add, new maintain that? XXXX. pay strongest a quarter I to advisers, me, momentum know expect call this you quarter, to XX would And total which And is you total out then

Natalie Wolfsen

Yeah.

high the the our new last out of quarter that the our as three well call as the and things number in in relates advisers our of couple a as – just of of would number producing to So XXXX. number fourth of advisers advisers we year it all and increasing, were engaged

just thing, concerted development. that digital We've to a to engaged. have sure be we that account say invested I'll disengaged growing effort make is of the are heavily advisers we're new a channel First in

they've raising in Scores in So colleagues. ever we Promoter raising being of Net adviser friends done haven't ways broadly been lastly, of before. community as awareness as brand, and to the AssetMark our high awareness our our that advisers then offer with are their And referring

time are addition, helping In and and grow save them money we faster.

in so success wanting And take part and advisers' colleagues are to it. seeing that

those impact last credit our things channels advisers with of in an that and number to say – leading The as well. producing well. have is, as going entering I'll all thing, where relationships RIA, just and So new has general we are made the unions going up channels of new bigger enterprise institutions sorry, advisers up

advisers that their program from where of them leadership business. and a advantage for we of we're types help a we seeing part these and have momentum attract call we learn of how together enterprise grow, and it our bring new advisers lot clients to to We

Patrick O'Shaughnessy

Great. Thank you.

Gary Zyla

Thanks, Patrick.

Natalie Wolfsen

Thanks, Patrick.

Operator

this further I at closing the registered would pass remarks. time, Nathalie for no are There any questions so like to conference back to

Natalie Wolfsen

a safe stay much for great your today. next look so talking and to you We you time Everyone again spring. Thank forward quarter. to have

AssetMark Financial (AMK) 16 Feb 222021 Q4 Earnings call transcript