Franklin Resources (BEN) 30 Jan 202020 Q1 Earnings call transcript

Company Profile

Participants

Greg Johnson	Chairman and CEO
Jenny Johnson	President and COO
Matthew Nicholls	CFO
Ken Worthington	JPMorgan
Brian Bedell	Deutsche Bank
Craig Siegenthaler	Credit Suisse
Patrick Davitt	Autonomous Research
Dan Fannon	Jefferies
Mike Carrier	Bank of America
Brennan Hawken	UBS
Alex Blostein	Goldman Sachs
Robert Lee	KBW
Michael Cyprys	Morgan Stanley
Glenn Schorr	Evercore
Brian Bedell	Deutsche Bank

Call transcript

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Unidentified Company Representative

Good morning and welcome to Franklin Resources Earnings Conference Call for the Quarter Ended December 31, 2019. Statements made in this conference call regarding Franklin Resources, Inc., which are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements involve a number of known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from any future results expressed or implied by such forward-looking statements. These and other risks, uncertainties and other important factors are described in more detail in Franklin's recent filings with the Securities and Exchange Commission, including in the Risk Factors and MD&A sections of Franklin's most recent Form 10-K and 10-Q filings.

Operator

Good morning. and your Kevin, operator is name I'll call be today. My conference As recorded. a Instructions] is reminder, [Operator this being

At this Greg time, over you to I'd begin. like to Resources may and turn Chairman CEO, Mr. Johnson. Johnson, Franklin Mr. the call

Greg Johnson

Matthew today the Hello quarter discuss next role and Operating of results. joining who Johnson and President first Officer, is CEO to Jenny and Nicholls, me will for thank Chief you our us CFO. With be month; assuming

our quarter Financial to strong reflecting ongoing results and drove commitment expense markets profitability. this which management, improved effective financial improved

solutions discussed continue the morning. outflows We to important expand experience this and to are multi-asset our we we quarter see this ETF for earlier businesses. including reasons in several to initiatives, in released traction encouraged commentary efforts But our

sheet acquire of this our will companies most in to We our assets evaluate our physical to that Earlier expand two accelerate Trust XX% as under growth. presence important also plans two believe is markets. announced one management we by opportunities assets and that expand Fiduciary we balance month, under-appreciated

to returned increased through share $XXX December. per to million the regular shareholders quarter, also We our $X.XX share repurchases Board in dividend this approximately in which

excited of XX of Franklin next after Templeton and After role more the vision we an future that the about confident genuinely and opportunities for I'm the years, firm in to as very our than come CEO month. lie will meeting my end annual Jenny's ahead. are leadership together

forward. our with and going continue remain Chairman Board Executive last calls this will While will will on participate of my you as I call CEO, be to the earnings

questions. like to now open I'd your line for the

Operator

Ken from Our first JPMorgan. is from question today Worthington coming

live. now is line Your

Ken Worthington

Management. couple acquisitions in So you've of bolt-on done a Wealth

that. couple questions So around

ago. Franklin flush think up, management are of why is first, when and a maybe guys bought can Fiduciary, well. And be synergies invest to good cleaning like any I thinking I may think here then the as there between maybe years rest you and management synergies it's wealth place wealth out, you XX So you are

maybe AUM. these - recollection had or I these billion all be much to remember billion of XX before billion that's deals. XX my it's don't wrong, that think maybe $XX days I bigger so and it today could for about I but

hasn't So over last if it at that grown XX the really much, all, years.

of better So, wealth a job given last a management least do you've you're the over today, at do what doing than How expect bunch growing you XX these to perception years? assets of done my bolt-ons.

Jenny Johnson

Fiduciary fee about I'll there's and incredibly is Well ahead go today And it. and hard you're grow, important to the as you us more to $XX justify no both you question firm billion take fee basically wealth sticky, but think I client think is based distribution, we it's post-acquisition pay every trying from their seeing it's month. for that also have services, a that once a add as but advisors that

on to trying They're than add investment management. just more

be that additional And Fiduciary advisors. we services so, can to to to of the packaged be provide capabilities some think able has

two geographies into are be but this management, for acquisitions that in expanded services. wealth we in added not geographies example For excellent recent only most to we

Athena OCIO. known in impact is well their So Capital for investing incredibly

not who for surviving, we're opportunity special can of and care how needs have and helpful has about in work as them families the to child Dr. issue special growth. helping worried as the essentially on a be Trust of Cooper that that's think need beyond us Pennsylvania that parents doing capabilities, We Lisette more focused say well very the to is an which with trust

those it. they as needs. our trust bifurcate with the on well [bifurcate] have with can we also that that financial administration investment clients as both be capability something as But can work We can advisors the

Matthew Nicholls

multiple for have capitalize that within broader on The I think that these We and it's helps is we reasonable. businesses I'll the just we expenses add of embedded think us that Trust. pay some Fiduciary Matthew. something it to

is So business essentially if beginning the by This wealth to the Fiduciary will. our of you having more strategy in grow assets and probably makes Trust our clients, efficient. second it more leg overall

You're right, had Fiduciary size next growth it Ken we years a surprise strategy. using But strategy a year it's over been this of around by doubled since number the two, the inorganically. if wouldn't or it of we've us Trust

Greg Johnson

you these a few ours as increase up I of keeping it's a I that there's to of calls spending smaller investors. we've years, And but with our and had add, technology, some would on the goal for always always with M&A just the their are just pressure think to size, know, been that for on being think within required pace more opportunities today keeping I firms services -

So, a we're just more few seeing for roll opportunities ups.

Ken Worthington

the or really officially your just Maybe you next What are three then or Jenny role And accomplish? directional is to in CEO. be Any to tend Thank hoping broadly worth for us? changes just highlight now you're two to officially as you. that years. priorities the highlighting

Jenny Johnson

it's last and there products. making which science focus sure have that bucket about are we management data the is just the think products of on on we've business and And couple places, you so if one doing best that's continuing is on protecting of, the leveraging focused a core a three opportunities, years, our on efforts been in to and we path - in think growth and enhance what capabilities we the around been I we're core for lot kind that has side, investment that the breed. of

income fixed our think things I quant. new and team combining exciting active really some has done And

sure and our just as as also that like is and things second core what not that things have from don't in then coverage that call it's as we'd be capabilities. or deepened product like your making to then much capability not existing expanding maybe geographies best-in-breed in, as adding maybe the we're distribution we're like strong category accelerators have again, high you business, in worth So growth net we growing

we've continue then And So been foolish underrepresented going that today for finally, area for to we businesses. that is on revolution disruption I institutional to have technology really think would be grow. in an U.S. be existing to not always us would our believe the all of interest example, industrial to

we're making investing that years. in sure things So five the be meaningful may that won't be even in material next or

But over that we business very think disruptive to long could be the run.

vault, of to is lab, the - that evolving. so enables our see things keep industry some doing on we're innovation investments And that's token which also where a really like us you just eye in an and the

Operator

is from Our Bedell next Brian coming Deutsche question from Bank.

live. now is line Your

Brian Bedell

sharply advisors, down the obviously outflows, there fixed even global and franchise you what weighing how - in the quarters, just financial can a the going. if to last to about the come in income maybe also saying seen increase advisors, just with you're Maybe off we've the maybe the three start bit that's on little conversations so and side sales obviously equity with the pretty global talk

tempo extra would the on performance into would color certain January, guess, reclass is around and Maybe I a Morningstar the or little you in maybe based that at a that there the request, sort just risk, level say that might AUM just of that? be of

Greg Johnson

I this neatly doesn't mean foremost, - think category. messaging any fit that into the it I first Yes, is and really one

for the the of the because They complements risk and it people familiar I and defensive beta drivers portfolios do it purposes. really are the big lowers sold do rates and So think against clearly it that it, fund market have well. interest the

messaging the to that's retail So side. that we through drive the continue

or saw quarter the the at And that the redemptions end of of I the you think some towards of year. the heightened end

can you a see and I That will that seen that very is what think driven off redemptions strong sector tough do. had the bit. we've have that just in you'll come in be levels that of a a when some gauge of heightened a to It's of kind always hard bull selling something market tax period. reclassification

this can quick quickly a asset just experience with and just with really movements rebounds performance is two. and say how can within I we macro, around. And see week class geopolitical moves global events within it or from

and are think messaging just to to - the understand and that want So advisors our we and continue most drive. the of shareholders that's I that

not reinforce and your cycles, drivers But down in positioned co-related it's how that's the drive. done it's this defensively to continue in past a but many to and clearly market defensive way, message and that's to messaging is we continue that of the that

Jenny Johnson

clients. tail a well they And And did is risk going that that always think the this not very Coronavirus portfolios to it's reminding in insurance policy positioned whether very been portfolio. good good you I piece or just received diverse and and that by have this not has very a serious epidemic And defensively. have an is on to one or be

Brian Bedell

late saw the So flow are January quarter in in this fourth versus we you area? in improvement momentum the in what seeing

Greg Johnson

what but prior lot Yeah we definitely I in better. saw better, still say lot would than Yes, side pressure the quarter. a better redemption

Brian Bedell

And the to undervalued of that if becoming as long-term? other then in $X.X the over more just excess or the is sheet different the M&A diversifying private Fiduciary about areas, you worth maybe expanding high and balance managers maybe into [guys] back you and net of commentary - billion it wealth cash a think maybe just of also rollup about strategy, the strategy, through

it those a be if bolt-on like a try of strategy firms actually And you have to so, a be toward more a large Fiduciary would more integrated of and or into strategy that integrating having is sort more platform? of

Matthew Nicholls

of of of Yes, wealth of to make I It's roll-ups, combination - Brian, aspects a more it's we a those management. a I it's both we two potential think the think and this broadly don't is should business expect certain integration clear, expand also wealth. across things but

a significant as on states franchise have second capitalize specialized a that bases is ultra-high-net-worth I mentioned different we This foundation with see with Fiduciary in different Trust. client opportunities ago, the we that, where

all that's what is So this about.

what So important as Company. with overall shouldn't we're our strategy we doing aspect that confuse a of

in the pipeline is getting where and for move ideas the focused hope terms shorter this, do the our out, institutional, various ideas of growth in across products some in of traditional those management year. pointed much and asset are Jenny larger of We aspects other just are many where action, alternatives that including that would distribution example, we're as we we our on business, actually have we and list shorter take quarter-to-quarter next

Brian Bedell

of for years say, expect so. couple next should more or the M&A the sheet we a utilization over balance So of

Greg Johnson

Yes.

Operator

next Our Siegenthaler coming is Craig from from Suisse. Credit today question

Your line is live. now

Craig Siegenthaler

the and too, new invest product, total also cost? able Just how decline are expenses to reduce able also in and in while distribution the guidance to you looking technologies, at

Jenny Johnson

So I'll take that.

global our positions had So as global has service us I things to cost really as provider for been global not always platform. and a well opportunity lower a the over you providers ship historically footprint, mean we've often could there time regions accommodate that one who to so of there as were

getting these I keep we keep so, it's administration. amount it better hard probably some to overlap. a opportunities scale portion managed more we market massive and recently research there in-house centrally an of always have our where it at opposed investment And would where of data when fund had And historically most to then finding you in-house things of that finding outsourcing as by to you was needs the looking announced and so, like teams at just say, data out and and

So continuing opportunities through those scour exist. out and it's figuring where just to

Matthew Nicholls

making hobby-type luxury-type given disciplined in think become in moving would see candidly, in the gotten of investments investing in that we've from I sort our we've the just disciplined that order, were environment just business needle and much on shift say I we reasons thing short more but really about for we the candidly that more much other projects that. away about the is fairly good moving

the be found that structure more within And other continues cost challenged. that flexibility the market frankly we to in areas event provide the

to think terms So flexibility about in we've has noted the we can that the of our cost little remarks our the prepared reduce and costs we're bit a I of moved guidance as confident in very positive our structure.

Craig Siegenthaler

most and CNN distribution, Wealth strategy on it's U.S. talking Franklin And for outside U.S. And just Fiduciary business up U.S. have and in? one sort and interested is of of within targeting segment Penn I RIAs? your Trust, what what finding you follow fastest are RIAs growing products Trust the of my that, the as I'm

Jenny Johnson

popular. ETFs more and to want of traditional or less obviously the its kind RIAs very traditional extent are then

SMAs and So run hired business as talked that's we to somebody popular SMA to and our we about, starting there grow. are

$X.X with billion. had Our ETFs ever, its quarter best

As a bond of think our matter which of our ETF fact, in the third-fastest FLCO, I the core was XXXX. launch growing is

provides services that's management mindshare RIA, So into RIAs finding have what to services that as can a ways we're tools and those their costly those broadly, to clients more you for but Fiduciary some to that can capabilities business it, more channel, how of business the talking are aren't about the wealth more interesting of us but leveraged that additional be value-added Trust its and particularly do to take that really its grow had provide we for add get there. of to

Operator

Our next coming Davitt is Autonomous from question from today Patrick Research.

is now. line Your

Patrick Davitt

First Fiduciary revenue the running they come as think or each and should through through Trust deals adding standpoint of deal one, of from we on the about how it, to the future kind about results bolt-on should those doubling about a lens these of more operating - and then AUM maybe through? think broadly we financials the over comment income how

Greg Johnson

I morning, Yes, - think Good Patrick.

that with the margin are Pennsylvania mind Athena the opportunities size And in margin is about April, is see $X.XXX as about that similar think you proportion these to share looking a there. I in that very announced, but they'll be to roughly in closes that two Trust of in to a we line in The transactions think earnings. our may way bearing at we transactions. transactions Company, to add and collectively $X.XX closes that we've February the expansion should to

So level that's willing detail think point. give to of at I we're this the

Patrick Davitt

quarters? we on any the the mean couple any commentary, take in you should you as have that calling there then are not past specific And to redemptions that out aren't of

Jenny Johnson

aware There are of. some are that we

comes We don't - it have we aware I redemption know episodic we're quarter not of this is just dates when is don't a specific any we don't, that $X.X in. in. any coming think billion, there

Matthew Nicholls

the little it why episodic see better net that's commentary. with so the picture I to written in Yes, don't it large quarter think say very way known that have early the flow a far, and is so we're you outflows, into we

Greg Johnson

and - release our just the know one levels sometimes know you it's mean would timing to and I or a anything in you past, the we add, I regular say And just two it when hard when we it's not better asset basis. don't on

but to there's be course, past. from pressure very be to and talked the still just that Of still on going difficult, there sometimes redemptions the is side, larger business get timing VA to about is as trying we've coming the going in

Operator

coming is Fannon Dan Jefferies. from Our from next question

live. now Your line is

Dan Fannon

of you follow I this on guess at I us that assets VA just give in up left that, point? business to could guess, the level

Matthew Nicholls

around new think it's all you, $XX been of we'll said some business, has the again, It's is billion, way - - I risk. think just like but obviously - about of I before but that's off number. Not to able as we've somewhere into I'll that the we've that our lower get that's that to at back under lower like accounts business switching different a transition and them model. been and using from volume and our products funds models part by actually index cost products, those and of we've in some been of to using transitioning retain solutions

be that growth one have hopeful business traditional of think decline that I that funds we're So the a constant in can that's - instead been under been as pressure. that,

Jenny Johnson

Greg's confirm will I number. And

Greg Johnson

up, good it support. looked it's Jenny so

Dan Fannon

the potentially last then the obviously has seen of Fund, redemption And necessarily three factor being as in performance a you the just in but investment commentary about in. levels you mentioned we've and increase a follow-up kind growing, over talked Income outflows bigger performance, there for in decisions quarters, come yield

on that go-forward of and that we or kind fund can they're and thinking a to the of in context think basis fund it distribution should platforms again partners So how that everything how about talk about you just about and else? either based on category

Greg Johnson

just the I start say and mean, will I yield. yield foremost, its X.X mean and is first that times I category Yes,

creature, So it's than advisors a it's very again, And appreciate different most that where measured against. fact.

maybe duration So you're the a like than risk going in they risk more category. have that the up and in rates little if credit go did more quarter to generally

in as about the and fits is Act models an talked Income meet we secular that under as of building traditional that's lineup building new the landscape before this but and we're model the to and traditional world it's factor, how Fund the brokerage for and of big versus pressure. our adapting fee-based less, sales that, is XX other solutions the models of well product The opportunity fund fee-based into less it fund

hard as introduced it's But just fee our and to people are gain settles lose think our the hopefully that gauge to we to under do of those be I So of in think pressure what performance and could how don't in SICAV Europe based, we really it's is much related, we're of in be going it, some like to there it's attractive we I a still world. in and as always lot best, transition going markets other brokerage lineup still redemptions. you

Jenny Johnson

The add. and and the specifically X% decline category X% sales a has just got up I'll XX%. Income And gross of about up were Fund we were

the dinged category much it huge but think lower love for is the yielding we measurement in business to that So And is clients often product. Greg's gets its so opportunity yield. and SMA point, strategy the there there on the

So for around a plus reason. it's XX been years

Operator

America. Carrier is Bank Mike Our next question coming of from from

Your line is live. now

Mike Carrier

been little in. and just up, one at the that, a interested when one you the you're mentioned We've you wealth guess some that side, product on and distribution areas hit you've look on more I obviously backdrop, follow but active question guys just have areas, on M&A bit more

you're was out. you on it's in how kind and you're on backdrop, on more spending Management, when Asset whether you're playing an kind the of it's see returns whether that you that of thinking about just that just update how Walter competitive pricing, just curious, at investments how area I look given thinking time about

Greg Johnson

transactions obviously asset the should is in. of at this growing. terms asset perfect So, exception, across that height we're prices no the in inorganic in market no we're execute we're And the that cycle every and class fact that you when is class nearly given of interested

is part tough to a that answer. So one

Other in we firm for more efficient than we make particular we're the two we point and it's important utilize That's a a for standalone that at so that areas future more more make can the multiplier of the basis and in very expensive efficient things you fact will put targets when looking acquisition us attractive and alpha as we them, are even and have think that the better effect that together. a more resources like one. think

just at of return hurdles such, I terms assets, In distribution principle what a for I quantitative in we rated achieving cost would we look precedents which look at and referred discount of the metrics important example, the around risk our of of current of own appropriate very of the comps, our to, qualitative risk transaction including increase a rates sorry capital. one could say basic a and adjusted is just excess metrics, number - return how that and

with, is The see positive focused terms the what a on can that of exciting the pretty very increasing our things of our that very, areas, cash cash see be level, you you're industry future in Frankly pressure notwithstanding a on. capitalizing very earnings turning many the and catalyst simple and what into very we're a we're more focused efficient in very to resources on. our size in firm making we familiar

things, of all a really Mike. those - of those all it's combination So

Greg Johnson

more going I to say you that that value benefit and we as the the how older then proof before, that one can of date say, we benefit add and and look just we all to of at that emerging on lower well at versus one grow new add XX again would category Act institutional or cost continue of would we positionings retail managers products think what, relationships is I is validated that's we from type said would those to year when distribution and higher look are some we looking an I classic do and and that being those passive we the it be to build to the street bring at I example think think very and our world type, can next out as we into so mean, ready cost landscape, landscape a managers. are And a in

the focused can and for more that those we on other think important look technology, be that We'd platforms anything be distribution to areas helpful accelerate and us. then that at could build we be could very and globally, are

like we're alternatives the And would we allows our have before be kind build categories, the then said again and that of those proof us heading. distribution things where finally as say then that alternatives, passive really I'd estate categories have in breadth of real of private and specialization the specialization group have that equity to out

MikeCarrier

follow-up guys of term, products, Right, in I like one a the and of the records guess a just have you then newer on models, distribution, a the challenges that's quick helpful long the have near maybe a multi-assets, organic hand, the a the track lot some bit of performance on in SMAs, areas and the hand, hurdle. you other

on how just seeing you're to see that do on up. traction the shift you an update to front, need of want some shorter-term order get pick in to performance that to much maybe and So be

Greg Johnson

our of think of that with in and is discipline Yes, asset I but think that they the they solutions discipline your in business Jenny business have styles in portfolios, a value don't successful style Templeton of doesn't with mix the and the, are that challenges I'll know mean be the because required and not cycle. follow the put can't if not appropriate I your we mean the this you those SMA value me, to mutual let

platforms distribution it's our growth are think don't into successful the there it I been back held today. all. at getting some very seeing and models We've larger So

at that flows. that how don't as benefits growth does across the value just from versus you board today retail well and solutions style our growth are funds issues look our again they if of I performance of the think it certainly So they and doing are

Jenny Johnson

for certain resources talked he Yes, more we've traction. wins where we as and the model I billion SMAs put assets ago, hitting us think as are XX% call mentioned, of newer on same categories we prior up from or the a know, portfolios, there, a about good period year the and mentioned up $X couple Greg you had

in firm that still advisors in ETF as you of issuer financial go provide with but $X Once the having all had growing then far model, to were last billion year. and good you the get already traction the and kind actually it the individual U.S. sell as support, ETFs, have through we've mentioned we fastest firm the there with assets above

So in these of investment in new delivered the are we've which think vehicles we all is in areas. management fee-based where traction kind and this got getting those model good

Operator

coming Our from from Hawken Brennan question next UBS. is

live. Your now line is

Brennan Hawken

the you channel. on there broker-sold the that approach One and offering into expansion of considering SMA, guys' the

it, my does the need wholesalers got think understanding any other investment, platforms, ramp. sales obviously portion clear. those makes - you connectivity each and think whether those effort you automated assets products into that further as are sense the those sort into guys when further or as already about curious you there. that your investments what Because and it's or of make that in about require you've you which of wrapper you need Just do is But not pipes trading to of

Jenny Johnson

we I place been to needed new think think on, I a mentioned is I in what and would working as bringing a SMAs, today. head about I bit So do that of the that what good we we're more in we've say learned

Greg Johnson

been business for we've Templeton for group over us, well muni the XX that business years not long and been very for we've on time it but something big SMAs. in in emphasis at early than as been a focused a and a it's But hasn't so

Brennan Hawken

the of all own the the part the sense securities. it's of underlying wrapper for make you lineup which not might because since that to portion need well And about question that

Jenny Johnson

have industries individual so uptick those. right, so and Well, a Income can't client in securities the fund, there mutual few completion are you the just there and launched have do the on so own Fund, that statement of we a the way the

statement would there So can for appropriate advisor client and completion the to anything that that example, to be the the individually, equities and underlying client the fund. be own that the bonds on then are would allocate

Brennan Hawken

one follow-up that that have And you here encouraging January, best a on indicative last accelerated trends is moderated think us flow look but seen seem the the is month quarters, guys in have of at the three can the necessarily way forward deterioration when trends about each the certainly the path help and performance. and we to quarter understand to that's have because in you just redemptions with the it why coincided

something trend sustainable about the more should flipped, translate So great. when Thank a would that is there you. maybe calendar that that specific proving be on into or little color

Greg Johnson

slower on December Yes, December there's better in January, January I and generally flows. is mean better I one, a generally number in year-end a you lot think generally redemptions of just quarter it's because have hard, a and think I sales terms going is month, higher and that month tax and selling

been gauge ways. of equation, story, would you You which to billion us that quarter, outflows have the categories a obviously Global if have both been big if Bond. much last you, had driver for we look of and if know, say it's hard hard how But flows and where at a out the that's $X of global three acceleration of inflows, because we very within is take major of the positive bond tax the didn't to it's selling again,

So that right I asking where go. question, it think in does you're

to moved the the bonds. short-term seen we're terms in quarter already date global before pressure I things as relative some with said quarter, was of think I performance have for more and and performance in quickly there recapture and

quickly to it past that how in seen quickly can So cycles, moving move from inflows. back and it we've to outflows went

Operator

is Alex question from Goldman next coming from Blostein Sachs. Our

is now live. line Your

Alex Blostein

on acquisitions I - I that and regarding one to the of Fiduciary the to or expect things follow next to earlier just wanted two. you build guys you year said you Trust think the mentioned over up out the base double asset

and the because you space would seeing competitive the dynamics corner of lot EBITDA comfortable the of of on key industry decide market, minutes scale there could maybe presence competitor, the in are like sell discussions, to points multiples just to wealth end Franklin? to paying businesses a couple a add of management you're corner more selling at the the think why and there's people that the of the of or what you I is So the that spend in you're it are a kind do one-off day,

Jenny Johnson

Yes, that about let EBITDA. then I'll and in take multiples you talk part the

of mentioned you're these absolutely talk a financial they're requirements capabilities realize as technology to and they and it can't of buyers. point they these the continue adding are all know, are lot where, Greg really you are right, feeling that there invest subscale You when wealth a regulation because the advisors, in they around when at usually

stored who space a acquisitions know is net XXXXs, so us two will always and going around out Fiduciary five we beyond much multigenerational who has looking did families. space, they're business It be since because investment they well marquee and at issues and clients and it assets. saying, go management the high net worth us by The worth been set it Trust chose that understands the and chose ultra-high will just is where really competitive was up asset be a it the they best that of returns these figuring to be their that

is And so our selling point. think what we that's big

Greg Johnson

be for and acquisitions private yet, broader of space in what in wealth think, area wealth think for and that know have the referring of we actually in that course, managers terms multiple even plus is EBITDA may some businesses other mass And in 'XX-'XX the don't in equity you the discussed I the very, competition multiples here the being to of example. very assets, business, the wealth I these closed times in are Yes. management Alex, price affluent active the

So space a highly is just a rollout it the very competitive from so sense. make perspective much because economics

others they're upon the connection very worth the us you becomes to degree say there a In really us are the very and to on to ultra-high Trust for bit ultra-high economically and that to say say specialized and more retain different that us handful across integration as with services this in solutions, expensive invest provide Jenny focused lower. very to to mentioned area ten in a provide slew a Fiduciary becomes of are you digits advisory low-double is the for the focused team certain whole And the area versus double-digits managers, have little we're and net if will wealth to that reason very for folks. efficient sophisticated low multiples, I'd and times pure it. right to small of the worth very with compelling net collaboration so, need to that I'd

billion firms getting we more We're to upon that there there of and are strategy. billion a news several marketplace and that scouring why AUM think the announcement that sides. that's transactions Fiduciary become sorts these very ground. mentioned a that for dates going coming Trust, other $X a good be the out also necessarily we've we're in just sort good will $X Not than fit finding are Jenny together important interest our very our home, out Fiduciary actually as the the area So in in of we and of also $X contain Trust both billion, of in U.S. in thought as the through

Alex Blostein

the follow-up My look mentioned you 'XX. X.X% of the fiscal deals guiding earlier, expense one you're about just down billion that I for to a quick year and but want to versus I was I base if expenses. $X.X announced. think apologize, expense question the confirm you around that's it for that's at obviously of XXXX just last growth total you inclusive a guidance,

So be little with that's going of come bit is to a through well. going that revenue to as there

the help revenue of and year the planning this for think year contribution about close. Thanks. that this expense just for are maybe us the number from confirm kind deals So to you

Greg Johnson

I'd item, guidance confirm our the revenue confirm inclusive be guidance that the but larger generally of announced. that also until would consistent just that going we've separate to line on expense speaking transactions expect the we We're side. is not And where I to becomes the that, on yet expenses revenue a also. out that

this quarter. we done with - we and So the as have quarter same last

leverage XXXX. guidance say for be objective to and the to have would operating in would that Our positive our our I do business best is very

XXXX based we'd revenue X.X% of off that Alex, X% to side, a more to, reduction little even So expense referred our on would hope that guidance to better the say I bit perhaps than you be so that.

Operator

Robert question from Lee coming is next KBW. Our from

live. Your now is line

Robert Lee

in between question. of and closer get to try a some may think philosophical of asset. the owner investments more platforms. This one challenges broadly worth a to be owner? think ultra been the growing of there the has Is business, I the here the you're net to need ultimate there for asset desire But of someone if various of is end I you making or the the high always high the I mean industry -

So important trying strategy, who closer of owns actually you pulls think the your to an kind asset of part and get trigger? to that's that you're a

Jenny Johnson

Yes.

are financial big end providing So believers I we still in advisor mean advice.

believers the in the intermediate that is end advisor to, and machine the going to, not that We are is Advisor. robo going Financial

more we these which robo of the a TurboTax. You out are big now like of CPAs and was put to the going business TurboTax know CPAs is all users akin advisors, things to think

So tools to wealth closer for invest investment kind about their what financial at of side, and be to like adds expanding we other advisor beyond the better in is be and platforms end advisor be advisor the on that kind get them more we the just us key of to so the can capabilities as influence can as capabilities. or help able what planning to business technology think our it management investments things is that

Robert Lee

discussion what mean interested. be is on M&A a you're clearly any confirm kind to continuing interested there's just call, follow-up, merger. not not driven assume the just I of a And you're maybe but I on a in maybe to lot this quick question, scale And of

Greg Johnson

very those planet an that. or would other make shortlist. I certainly previous transactions want I've said out contain on as frank. few on you we for at are that that don't that single - And accurate in like said that's thing sense don't as looking that is on there, seem but our there, us, calls, contain we we're think to every the element of scale there's We be in it,

Matthew Nicholls

we think and of the for point be never that the secondarily on benefit scale. as but We is combining that cutting get first would list something out I cost the bringing of it, to complement of sake about may a can Yes, of it's areas eliminate in future, going certainly the but firm the you in of of scale out things that that and distribution believe growth benefit that. and doesn't areas we in the areas get be strong certainly that really are

Greg Johnson

mean is could, to I may operation perhaps in. would that contain overseas be countries Yes, the we that remembering an but applicable for that U.S., party we're in that what not consolidate business in example, that many

Operator

is today Michael Cyprys question Stanley. next Our from Morgan coming from

is line live. now Your

Michael Cyprys

you and here through and following what talk Fiduciary looking just little identify Maybe the on and bit might that process about build there elaborate a you prioritize your could firms strategy Trust out, acquire sift and is. more there. ultimate on your in hoping little maybe what about you you for talk you're the and a vision could How

Jenny Johnson

more - regulatory have the to do until I'll very they're we are are really it's but and their this. family there thinking, let just looking demands almost that environment done they're the wealth services sift scale business And, that financial I want managers or you the difficult that up very, well know advisors And and are at now. increased. have through. things, Again how on offices handle to add Matt -

looking generation and you education it's they're wealthier in the and older most with investment becomes get, it's the efficiency important And ultra-high next home about net understands the so, returns, of tax and the part it's wealth generation the a that planning, that. state about education the And wealth. worth firm about and of the business, the business trust for about is next

And that so make a clients, firm net provide for what worth if a takes of you has ultra-high that capability the if about? not and the core becomes culture they're don't to high that they affluent really a happening sure their are want of also connecting the meshing and longevity that that Matt, all you with looking out to provide there family, understanding it mass manage that with for talk they're at ultra-high want can net worth worth. danger both the of kind roll-ups diluting net and to know same I

Matthew Nicholls

have have, as I mean, a mentioned and financial we these look, question, Alex's discipline things. moment I Yes, we around ago to

for work structures earn-out business. have performance the there's to the make various in then upfront and against obviously we So we terms financially to want us sure it's that going of that targets multiple, and

important frankly is that's future the the does specialized feel of we I made what the want own in Jenny or we base exactly that we think is dilute the terms nature where Trust - very thing as disruption - well. that do important, they the limiting last that diluting as obviously of could very the point that to targets of Fiduciary location and companies always, partners around how

do. They they what don't any do diluted want what be in - we way by to to

these we're achieve discussions, same what is very that ultimately. a having trying we're goal when understanding really So to it's a the rapidly coming to mutual

is, so. our an to and of disciplined, very overall very sort good for a make use bit sense little summary pretty the of frankly us needs obviously, cash of scheme financially good So, under-appreciated things, Fiduciary the it's in we're a it a use of being Trust, asset

Michael Cyprys

some follow-up where ETF And there around as the $X and in a for you hoping was maybe just the that inorganic that? on what as and side, in on geographic I I are other more through about sense appetite regions or today. be could around scenario means a way quickly strategy maybe may is more scale you that ETF strategies elaborate just interest the curious AUM that billion material add could more But what think is you to makes well

Jenny Johnson

Asia, U.S., actually are with happy in launched multi-factor smart we of first one assets. looking of - We we're we at growth. the So the and Europe that's quite and Canada biggest issuers our beta group and were

able And to with active be our ETFs to have institutions. the third is cheapest category the and The attract always that the second which to passive get scale challenge the actually our the ETFs is you is, are they're in passive in.

see just, we opportunity and every that the team, there flows and entertain right - if certainly a we're have but I great there. and at up, starting this it, came more we'd more probably And focused it so, growth to day think on we're the point the

Greg Johnson

I ETFs it And in anytime where it a now. wait would of the few you we've think in takes we're good the and distributors critical you new on and pretty point I all a know, like of of just as I platforms mean much add, many mean business, been getting the out big that I performance get at all years,

where the cycle. So change of I think the that's in we are big

that that that really will So we're growth. optimistic accelerate can

Jenny Johnson

scale think leveraging genomic, a ETFs from we Dynetek that I been this existing three month, disruptive provide runs there launching machines fund teams somatic example, to scale, are, wanted the historically team feedback in to products, be you're the those type somatic able we're And and have basically mutual they because that traditional that some - and that are clients able to that from products it's commerce was specialized for funds. so the our Franklin doing are intelligent

Operator

coming from from question Evercore. is Glenn Schorr Our next

live. Your line is now

Glenn Schorr

earlier your of and macro. comments micro and update micro new you Street curious if us related could distribution performance, Benefit on one to the one I'm anything to level, At follow-up on penetration just one products Thanks. Just and part PE higher addressing that the how about estate things that. real infrastructure other classes family, curious private across thinking then now seen, the like they're level, asset you're and at you've that

Greg Johnson

Yes, on funds Europe. planning be in think plug side, these more meaningful for And of set expect not just I'll up are and mean, also the complex one going you BSP to summer the in U.S. just interval I retail having we've we and distribution and retail, and it's retail product of here all a in are on BDC before, of set year to both the terms the we with distributors a up see start this flows complex, this offering major in year. it's flows for the as I the with said and something

done up continue gotten a be behind think with training And a with lot how pace complex of more lined our it's sale there. to the we've we've I performance, optimistic it. but kind very is we've pleased So we're and that and it very of distribution learned, -

the just go tactics got find know and make buy say the as real it's driven to the buy, difficulty right and you've asset out driven, very classes, you hard work. the equity so or fee and private think to around to estate other when that performance, you I of it's partnership buy its combination incentives

let I'll not easy always do if And add. Matt it's So want that. to you to

Matthew Nicholls

Yes, just Street. of got other couple a Benefit on points

the revenue due of to First all, was their terms largely but quarter performance to was in still its $XX contribution from million that up for of X% last quarter increased contribution. fees,

thing arena, the very new for that they're frankly Franklin U.S. managers, second the domestically the overall Benefit terms experienced of considering I the the internationally. leverage spending area at think is with the in in in other and strategy our alternative asset with for team asset is all Street alternative us specialized providing spending classes both time smaller targets acquisition including tremendous time

we on Benefit about the which to other activity sort the get are So we multiple there's enthusiastic away organic going benefits - just owning future. of from we have Street

Operator

Our coming from final is Brian Bedell Bank. from question today Deutsche

line Your is now live.

Brian Bedell

of semitransparent track And you on already or more you'd if the Thanks like like My that M&A follow-up. performing think on then maybe is of for in ETFs, I strategy. organic ETF distribution-oriented leverage that you taking it Maybe product-oriented? to your terms just you of records? Is better view is would the the that answered, I could my develop but more question things. also and was your some in something mentioned couple expand think a to add geographies, active

Greg Johnson

On I'll the go start ETF Jenny the latter one. one, would and

be certain if depends local other it's markets, markets beyond latter both, markets you of a we have the distribution. it's as sometimes market driven. On several it's local in can know, one, the a combination on management distribution what In really emerging business asset of more

will, same count. just, and amount we group, very can in certain in a you operational based these much the be have if head more And it's good cases with scaled we countries of certain of

countries those growing very mean that's we're on certain key by focused what countries, that. So and we

Jenny Johnson

non-transparent vehicles that approved have U.S. really been ETF equity. they're And the

And talked limited. product ones absolutely we feel that Dynetek about are entertain a requires three felt you in we these those. it, we've So And need that the that as in certainly non-transparent, on fixed particular out where non-transparent at we funds comfortable will mentioned didn't point we rolling rolled out. income and it, I the we

is for are it, to So haven't we far, for product. sense not particular makes it felt averse that but it we if the something need

Operator

for question-and-answer Thank turn the comments. further or I closing That any back will you. floor our concludes over session.

Greg Johnson

forward call Well, thank Thank next you you. speaking and everyone for attending we look quarter. our to

Operator

does That teleconference. conclude today’s you. Thank

We may thank for You time participation disconnect and your wonderful lines day. today. your you have this at a

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