BEN - Earnings call transcript Q1 2021 | Franklin Resources, Inc.

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

Operator

Welcome to the Franklin Resources Earnings Conference Call for the Quarter Ended December 31, 2020. My name is Mishaye, and I will be your call operator today. Statements made on 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 section of Franklin's most recent Form 10-K and 10-Q filings. participants a all mode. time, this are listen-only in At is reminder, [Operator a conference being Instructions] As this recorded. CEO, time, turn to and your this call Johnson. At I over Franklin would Resources' like to Jenny President Ms. Johnson, you may begin.

Jenny Johnson

joining for first our of you thank quarter And us discuss results fiscal Franklin to XXXX. for Templeton's Hello.

July combined morning Following first include on Mason full the organization. we results quarter Legg the the close the the announced of of transaction XX, earlier this

our that and Matthew Distribution environment, stability as Adam potential. significant of and made work our in healthy and everyone On first as Johnson, firm. together Head firm with our a became number specialist degree progress under as collective joining the additionally call to CFO last Vice Executive investment across of safe. of every me over closed Legg its We'd Greg the day Global well also and on President Chairman; call our remote and continue maximize to months been To Global X. time, is business. who time today all Executive like to is joined incredible employees July Mason and that hope within is trends our our Nicholls, We're bringing for the the Partner Adam high Managing we've Brandywine Spector. October recognize a acquisition clients organization, seeing staying teams our of we the encouraging we start, of It our our on managers. work since six a has of hard behalf while and And

high driven $XX by under performance. an strong primarily this $X.X of during management trillion approximately assets of off, increase quarter. reached X% market That's a or the billion record First quarter,

a operating operating to expense additional and XX% revenues increased to in Adjusted and discipline results. of financial due continued an XX.X%. Legg million month XX% adjusted and to operating to to margins Higher in income billion, revenues increase resulted $X.X results. $XXX primarily increase Turning in Mason by next an

investment On strategy respective composites front, with quarter four XX%, periods. time XX% our their the this benchmarks performance results XX%, for key of and XX% the our outperforming improved

and continues and billion of those products assets total standout strongly into assets. decade. billion. numbers, many ClearBridge $XX net at And reach billion $XXX as have the worth highest both all-time our over the managers to net our $XXX billion we ClearBridge global performance and across which AUM, of at Fiduciary AUM of Trust Brandywine an quarter. strategies, Likewise, is multi-sector quarter-end. Franklin another in fronts record Templeton rebounded one Western saw of a high reaching deeper Asset into inflows $XXX example latter It's performance long-term improvement level was at performance on in investment part and a in is high specialized saw in Looking in in

also improvement oriented business equity relative $XX.X flows were our improved positive of for Franklin our of funds this international and generated investment noteworthy the Income levels the AUM was U.S. at performance of Record A quarter. While several Partners driver Clarion generated reached for billion, our Fund also strategies mutual quarter. significant and value also the also results. long-term net

performance income. strong see to continue equities We in fixed U.S. U.S. and

and five Our by during now rated XXX stars Morningstar or four mutual increased that quarter funds. funds number are the

Royce inflows and $XX.X a Equity which Western our a number $XX.X reinvested net includes including of notably, long-term On billion, front, outflows build managers, Partners, with distributions. positive investment $X.X flows continued to Benefit are billion into distribution in But led specialized Clarion Income, Street which billion momentum reached Group Partners, Franklin record ClearBridge, Fixed Fiduciary strong Franklin saw DynaTech, the the Trust, Franklin Templeton Group, were AUM. Currie, which Equity Franklin Asset. Martin of

of have a won, and unfunded end, combined $XX As a of promising billion. we wins opportunities of of institutional but pipeline total quarter

for been strategic management on themselves noted that a firm to demand our billion the we've in assets With channel, strategies robust has we calls, alternative across not $XXX to in passive expand platform previous seen offerings replication. alternatives do under As relationships the retail lend focus and to our offer for retail alternatives increase.

were Our expertise knowledge In unmatched top locations sharing. saw now the around estate. deliberate the that leading market on the launch Institute; into infrastructure we're XX hub SMA the importantly, flows Franklin the in through to position be from net a three in vehicle of sets existing Stephen time, strength and increased with research firm apart, collective expanded insight CEO billion of we news, Investments for launch the on this of Terrence Dover the led effort we excited our become as down role our our Templeton, Franklin ground role as retail of Investments. we our which experts social EMEA region on new clients we've doubling the over retaining will look what innovative with same investment At and focus and other while talent, have assets. ClearBridge way into his world. positive for Murphy’s business, tapping Head to leadership Equities research Templeton Also a real $XXX in to quarter multi-strategy investment to an and choice,

investment our and maintain their will growth. Terrence and the drive processes continue to collaboration equity results individual While to will across teams groups autonomy, facilitate

important key remains another at capital area, management focus. an Looking

$XXX principal financial a offering sheet XXXX evolve coupon. issued balance due million with at to the and $X.X to notes and us strong business. X.X% strategic Our our flexibility Cash provide senior public totaled following aggregate investments continues of billion

our it the offering. with pay of intention explained, expensive is proceeds debt down the previously to more As

note the from and Excluding cash net billion in senior we have proceeds offerings, $X.X investments.

record dividend firm over increase and the that continued consecutive XX wrap December. regular months our We our best boutique six with we've a in a global specialization. stronger created year the worlds; also To X% dividend combines things strength the track for to growth in of up, past both

expanded think to points the has range growth capabilities. a specialized markets around positive a greater future. presence of all global And in high that with key investment quality world Our we

I'd like your to Now Operator? questions. open up the call to

Operator

Schorr Your comes from first Glenn ISI. with Evercore question

Glenn Schorr

Hi, curious, started talked thanks very have results. about cross-selling initiatives yield to you much. I'm positive

Head are being Global on talked being we down and mandate Distribution. about Can Thank cross is? color these Adam a cross Adam’s of you. new some initiatives what drill You and little sells What further new get sold? what's producing

Jenny Johnson

nothing it better Sure. I match. mean, horses is hearing from the than there

have Adam take the so it So on fortunately we Adam line, away.

Adam Spector

there. think I caught was I horse a just

what Difficulty] trying if we're think do, three it's about to really growth [Technical So I priorities,

Jenny Johnson

Adam, are you still…

Adam Spector

there? still you are Glenn,

Jenny Johnson

you Adam’s back dialing – think you Adam, I in. – are can

start? Mason we did for seeing added was XX we Mason I Franklin talked much on we're where And again, – penetration so of are side, stronger independent many on stronger is So are about, like the the just distributor as example, has I them that really and wirehouse we funds. funds, side. mean, much Legg good – our cross-selling, largest new was

able And getting gatekeepers basically to through listings and the cross-sell so on platform we've been those platforms.

fixed well. but an Legg top look five if nine worked of balanced. And are you to flows, one and of income, flows, are nines don't our funds, top from are top – those about is why, diversification I the them and it a top as of the funds, five idea that's So XX, at of three Franklin the give know Mason four nine, for are equities you XX% accounts just of

more So both as we'll we're the the products. well so cross-selling platforms, diversification by products listed, through of getting penetration, seeing them are the see continue gatekeepers a getting good getting on with as diversification platforms and types

of have single of of don't we So that potentially the the gets large product that kind favor. risk out

add you’re great. So back I it's much know, Greg, anything Adam, there. don't on, more you want diversified. if to

Adam Spector

working know cut cell I from one but day landline with and off this don't that's how age a I got home. Yes. a in phone message, new on a of

ability to said. So I not what have did Jenny hear the

instance true world, instead that higher Mason one that where had system. might We're of products de-risk if of I'm distribution the we some types overlap One, to sell really regional set when leaving strategies I where other real Those I Legg cross-selling positive play U.S. have when in for strength at are legacy what outside that both in well, firms into dealers like lower would even there the system traditionally the products would of really in was time, look really in to banking real couple we Mason is can are to. we've situation to there had comes to we've strategies a able banking get money So through within where world. we've instance had Legg platform bit particular have seen positive. of same are ClearBridge where the with Japan, another there that's countries a is thing start something wires, Mason error been wasn't our within instance different defense and Mason that tracking Legg Legg initiatives stronger States, so seeing a clients strong quite terms and where the in the at Legg the broker when be cross-selling we've strategy much legacy United BSP said that the much And strengths. And legacy strong where was cross-selling a higher had a Franklin in the Western same want on again, success been Franklin to ball able the that, like on able we I for retail of little been strong, they Canada, The as Mason. cross-selling the say we've there been her point firm's look stronger also legacy was there. of private into Franklin some but the really to momentum Germany, system. that's with for Franklin things comments, of are that going in shift were and outside maybe efforts alpha, stronger,

retaining as a assets doing through well. cross-selling actually job we're So better

Glenn Schorr

that in that's a end new be this the I shot have sometime are you hate product on progress a to much getting lot of back towards a offerings. and we of all direction? do I flows your forward year, like comment, you that lot too leading, and think that the trending combine flat towards but with at

Adam Spector

see to quarter. a they're that's now. strong, other see salesforce are of it momentum, first takes the we it hit full little we in now we're are we and stride well, think it thing trending their a time its place redemptions And is – bit Sales for month-over-month. getting hitting Unlike really better. combined I have people

the I'm So good about very future. feeling

Glenn Schorr

appreciate that. Thanks I for all it. of

Adam Spector

you. Thank

Operator

Craig Your Suisse. next Credit with question comes from the Siegenthaler line of

Craig Siegenthaler

Can comments your and everyone, and on back retail alternatives well. you're all European on morning, dig demand come doing Things for Good rising they’re a driving channels yield the type of you. to about characteristics products what Thanks. downside channel. hope bit also little in looking what Thank wanted correlation, and I And like deeper you or for? protection. low talk markets are the that demand? or

Jenny Johnson

take Adam. Do you to that? want

Adam Spector

Sure.

think in all alternatives in one we're for all of alternatives. strengths. is And seeing grow, If a forcefully and countries. we core that's more about of push regions priorities our Diversify I about our moving into really all defend diversify. think

heard $XXX our is some but you've mentioned as you here never as probably And this billion progress, we're of. have making Europe. alternatives We leap book, alternatives in firms quiet

combine got there some in been us. strong Europe strong demand demand the there, with alternative for thing other we see combination that we've ESG. I for strong is ESG. products That has really think And alternatives is

predominantly retail to thing different trying they're so can We're to mandate now the take we're much other vehicle a types. in used and do institutional them, alternatives package separate The be that market, the is, saleable broad to sold we really to that in that of more many more given working so offer account market.

Jenny Johnson

to that, – rate everybody I is this looking in add obviously environment to yield. for mean, just And low

managers. on credit retail see you private with great so searches a perfectly mentioned, in gaining just side the more lot performance, BSP, on traditionally institutional side Adam both the And institutional positioned for traction and as

certain real have received performed Clarion coming to as well they as cloud largest in the – are side, for they've But estate the being and there they're is so gotten well one large and lessor they environment, of been – retail the space, real some of well. this on largest actually very think in spaces So traction tech, industrial uncertainty in out I the very, the estate. storage the is

So people served assets yield are for and looking in well. environment, that a yield both with low is Clarion BSP and

Craig Siegenthaler

Glenn's question a back to And Got it. quick on I then follow-up net just flows. coming had

merger. did a just guys You big

not salesforce, your of size a the lot, reduced but You bit. a little

kind So merger there any dis-synergies any in do off out actually them in are help dis-synergies the of you driven dropping flow rate there I run could net and you're today, your flow some imagine would or If which future, they're the by that see be redemptions there trajectory? seeing. the

Jenny Johnson

ultimately really we we've Legg Mason’s with in was Mason one relationships seeing on XXX,XXX of a Franklin, had change talking has the and part like with by up. really because salesforces would little retail redemptions. not just we've XXX we're New big Otherwise would things. financial that me of the plan kind you are talked who's kind teeny just an I deal-based having they One say only mean, earnings again pick any in one – to of been going advisors, or give just start to recently two already go was that have with Legg pick there aware XXX say one, about of only side, than of just there you how you're surprised One an issue Jersey is call we'll out that's and I to number let respect agreement most we're Franklin the X.X% in some, issues about the independent. when last plan. plan – XXX deal the of will obviously which Korea, advisor, two, win complaints would – from of of And talking and we wirehouses the to in I call then the a you're strike to territory. Adam complaints example say couple in them less on really the and of

wasn't you on many there the overlap deals. So kind would of have expected

and anything do distribution not say overlap. else? want there to product overlap Adam, really not So was really you

Adam Spector

Yes.

basis points I reaction out XXs negative track. than think the had we that right of X,XXXs of points advisors we Jenny less hit contacted XX right, all we the of she's of

essentially thing that's other is that in The true Franklin salesforce I XX-XX by the say would in channel. fall Legg, legacy legacy is not U.S. the and

is people predominantly channel Our Templeton, regional wired are [Technical is predominantly Difficulty]. Franklin channel

we strongest before because not sales, we a So were disruption Franklin Templeton. the really limited moved had, the channels that approach specific that which in channelized to have kept in folks and who did we

Greg Johnson

the just little to this. a earlier around And of bit in put we in just of it executive the did bit pro And forma and some month data what of are lower. assuming to we we little same commentary a the might some look bit transaction footnote is that Mason. and little three are include help try of did We, in a charts, closed notice that, a you'll redemptions Legg – the the a roughly full at sales you months the a when

at up. attrition we looking quite But pattern look the come So so and obviously when we to go understand of it's trying to far. to quantify encouraging redemptions we want sales in down risk, want further, terms quarter-by-quarter,

Craig Siegenthaler

Thank you guys. Great.

Greg Johnson

Craig. Thanks,

Operator

line from with of question next Dan Fannon comes Jefferies. the Your

Dan Fannon

terms of and progress morning. gatekeepers of also those just opportunity guess, I guess the guys opening just on institutional opportunity? the can be the one the and those Thanks. diversity and get sales the you won of have channels question, been the in talk and you kind but potential unfunded but momentum Good consultants might kind about also there, distribution retail and how into pipeline, I up have. going? discussing Maybe you more

Adam Spector

it's Sure. it's way I unfunded essentially good look is, steady. but staying at news, The won

is going funding What of strong. because investments steady, number central is historically we're distribution many investment actually the adding, own. Franklin on distributed I community, that in Franklin affiliates, consultant I say community Templeton to has did Mason of in that, $XX consultants not deals because terms of that's staying around out billion the think all of believe so the institutional them their fact, team, the would not I but that for Legg it's and we're

Going them, as for business as that's channel where call forward, have, a the the will on approach like been continue successful remember they historically. consultant SIMs Legg stronger we're in to differentiated much a always institutional really Mason the having

is changing So former investment to smaller Templeton's Outside resources, of many of in say research global do where of firms, what have approach that to some trying we'll Legg with the leverage in we on trying is field to consultants. but what own, we're Franklin we're that the consultants with SIMs global recognizing the the all general, to consultants consultants. holistically as I a much them their beginning Mason to are connectivity SIMs and financial these those not to with U.S., coverage are the especially may the consultants field face do would global large cover firm. of similar centers of more have institutions we're

organized we've team centralized need of coverage as on the our some really definitely ourselves. at investment groups see distribution that all teams. are might like And not where the how we into that's general, help of Western larger So they smaller allowing each SIMs in central rely In fit. consultants to the area, tap

Dan Fannon

And the follow-up markets of assets for Great. the just of this the then travel year, for you normalization year. your increase. this a think assumption of terms expense about went movement away that kind understand as in and But higher a the and past bit about and progress and curious just marketing as outlook drove in of spending

Matthew Nicholls

Yes.

haven't that moved forward of what in need the the a we and in travel of G&A will bit, that third advertising do to a we've So there given terms be and there pickup like we've in out assumptions. we we assumed but money that have in our guidance in particular, taken combined company other and numbers our the items quarter and in that fourth the some

bit billion up little the the I But to So next say. in guidance. a expect that's last quarters two would in particular, in $X.XX G&A we included – in of would the creep

more to the revenue that's there's think more with what the move caused growth the and is in and that's little it's of we're commissions a little line change more, all benefits I comp the that, number likely some – business. we the the with a guidance in So bit selling so which involved is bit, in expect linked

about quarter, X% basis we maybe from think expect an or the compensation I line saves in again markets by the X% that expect then of probably or X%, on to down the maybe X%, to in than adjusted next down and a more the little transaction gets little up, bit about come So $X.XX billion, stable. to a which up in the that, so us fourth $X.X of go could billion to cost couple the by bit the third a if the the maybe percent, to then because quarter quarter more stay

Dan Fannon

Great. you. Thank

Matthew Nicholls

Thank you.

Operator

Bank with comes America. question Mike Carrier Next of from

Mike Carrier

the Hi, thanks good morning, and questions. for taking

First you And importantly to throughout as a just what the longer-term? in question. the a Can full maybe can XXXX distribution line maybe product context happened versus and getting as provide timing channels? distribution much of on follow-up some like for far just the on what for you the and the process has of thus context, expect

Adam Spector

go think had stages. about this way Yes, is I about in I this to several the think we

get of partners, where are of That's we've We've of two pretty distribution middle that we that right stage really might them the we really we've order and So because products approved. research is of we're and sales we're all was get started for what in their they're them The the marching team, got we're now, trained, now all that platforms going but that all next on-boarded it's them settled effectively, stage doing really we have the of number the different happened. into the our selecting most where the kind a expect first to cross-listed in cross-sell teams products, where to getting think through already well. territories bang. and can you largest our trained, on

to set back board seeing more getting is offices things So themselves getting of correctly one have that across want eager the do it, we're that to it's platform. fewer with a really the the the question things are The on business of up bigger distributors people and players.

fact array attractive to styles styles, not them. ETF to the much that the only funds investment partners, and able different SMA such an to that but of from bring we're to these makes vehicles more So investment us

to with working So can start them as they're to more. onboarding, sell our we seeing really get as quickly on-board what we're get that is they as products able at to us we're

So bit going on the some for now, real and of Mason worse, some Legg for instance, a continuing the well uptake regional on-boarded are January of legacy regionals, platforms, seen just schedule. but we're we've those a in because and products at December it's getting it's ahead

Mike Carrier

helpful not update. Okay, great. just provided And then Matt, you expense, a

at mentioned additional looking split ways investment maybe these areas, more You areas well you're standpoint. business the an some as as that to of from also at efficiently, looking operate Thanks.

Matthew Nicholls

Thanks Yes. Mike.

there two So there. think I is things

and management and seen side we've different the cost side understanding things on away And that firm more future how work. just First in price of partners from interesting we specialized expenditures, information together of that and natural and we of capital just That's have that scratching from good information as of operational cost improve it's just spent leverage across process as from and externally. just money we're data that safe managers, to is some the share very been spend to really how on that terms teams company, We frankly a a that what not ways and how and And investment joint all, with system position efficiencies operations interesting a I data just cost. together. working time potential we is information vendors. naturally work there speaking that. of in hard in we embedded our teams the benefits we is on technology the risk also the improve And terms very things, The on surface there. money investment lot can various think output find then

to don't a to specific six and now, firm, very think next So going we're put but to opportunities numbers I And the over report interesting year, action. to months around to see take some the of we in at some provide for we'll million the nothing we’re we're per annum likely $XX on specific today. things talking guidance you more next any guidance least looking that the quarter. it, and to have we're million, But $XX some at,

Mike Carrier

Great. Thanks.

Matthew Nicholls

Thank you.

Operator

Next with of from Alex the question Blostein comes Goldman line Sachs.

Alex Blostein

guys, bit. for and very if to Thanks seeing of robust morning. the the named Hey narrow quite seeing of to question. kind dollars given you’re I respect opportunities you you inflows in opportunities good to firm. sort combined a the three products focus of terms just down little wanted most wondering with net incremental if from on were maybe this cross-selling taking those combined cross-selling, you're of what are franchise, a you for affiliates we was the could And where affiliates? I really capabilities, set follow-up where and of guys and have bit cross-selling a

Adam Spector

most guess, I dollars. the think don't about really I terms in it of

about where is it I demand. there think as a significant

Western's board seen obviously with seeing has exposure real fixed So favor in there. broad very across everything, that ClearBridge, lot say capability ClearBridge I the has income their that's and size in to ESG we're and a breadth, strong and given a growth. would

of demand for firms, the funds inflows there. global saw that has a oriented that's strong anyone given are Royce, we Martin than demand were For so that Currie, the income X% for more strong. income few them

of in and demand group If estate. of they're like alternatives, more you real at than look the Clarion in a what's their take game a top

demand across really we're all So for board, of firms. the our seeing

Jenny Johnson

of a reverse getting traditional that the is, just add of and Well, getting is on interest big support. the the sort for Equity of that's we're Group phenomenal wirehouses and Legg I crossing Franklin would of lot giving some Franklin in DynaTech into the Mason BSP, the

we And And really where entire again, firm wasn't just the bringing relationships. the about so, there overlap. have deep it's to

say didn't those key you're at products kind complimentary in the we across making of that of and just have filling the the So board representation. where firms any sense are any of

Adam Spector

Yes, I thought Jenny; and was I misunderstood question. one-way question. a it the

You're right.

been directions. that’s we're equal attracted products thing we're that have is and there So that there in vehicle SMA seeing decades is able that's both offer really other going way instance, to strength to for the our that we're seeing is types. another for business And cross-sell, some And significant in growth there. new around

Alex Blostein

for sorry, if new can affiliates that. comprise associated And along and lines Great. you business, I billion this, $XX similar the but rate without pipeline, specify base? the I guess missed Thanks AUM of which what's fee pipeline

Adam Spector

do I'll I data, that that. to hierarchy from back you have not a to get on have

Matthew Nicholls

I income well income Franklin some the expect of pipeline and fixed with you'd mean, Western, be funded which fixed wins. most it's as Templeton top would of the two of

Alex Blostein

Got much. very it. Thanks

Operator

next of Your Autonomous question comes Davitt line the with from Patrick Research.

Patrick Davitt

Davitt. everyone. good Thanks call. Hey, for Patrick It's morning, the

market better into First rate question guess, on the expected. probably much so than got you what in fee the in obviously because I already came came last quarter, a little bit you above

you fair you're XX market, So you given a even higher, last of or what is do already it think assume do with quarter? track to could got to to kind normal XX it still more above

Matthew Nicholls

we alternatives mean, of reason the that any we higher because up things the to alternatives in right I question those income and the fixed the that quarter, if because up in about lower in the areas. just about. why we with where outflows see way outflows and the equity quarters took answer familiar with. little of when If you're is that areas just global a saw any quarter that last that in the it the scale the much I in outflows last in in the talked pushes that, is of rate bond then think also less and – that – that think equities our faster And mainly way very turn it the if push higher we way was I we is institutional areas the experienced the over of increase rate. grew that sort in, in and/or markets. I equities describe down in of just just fee outflowing the the having strength we that And What higher of in fee we several also we've think the also those helps fee, the

think why equal. in and else fixed I remaining equal. reason could which for else fee a all I we for talked very steady rate this, out model the any rate We we see there a But a reason going think momentum be institutional down, the shouldn't the be about continued significant positive we've XX be in could remaining year, fee area. income, don't fairly all

that's I – where I guide to say to – wouldn't we And think expect on year. today low pretty we say certainly I very end So the be think much but are close higher, very, would things. XX to for we is of the

Patrick Davitt

Okay, open could the Very India to it's much My been getting follow-ups see again, come resolution like situation, those off. so AUM, we up looks how thanks. can close us you finally which helpful. already on funds out, as update on turned that's

the adjust when I So broadly kind we AUM. has can guess, been report pretty more negative. estimates news you And then their of

to the would So broader franchise be any update on Indian the impact helpful.

Jenny Johnson

cash assets. out is recently, of support And we're the to the remembering of in So, I'm them, the if of up able approved winding Supreme all, shareholders percentage came I and the then our voted which think that mean, thankful right being Court distribute overwhelmingly those most XX%, funds. first I maybe in

So that'll out soon. pretty go

in much assets. remainder it's so continue to those a equity taking business, support and our see of right standpoint. a continue retention now, but the portion we already are flows recent we And that and flows, see out on the We're to India in also from both market. committed fee very then, the We to liquid assets fee

Patrick Davitt

Thanks.

Matthew Nicholls

Thank you.

Operator

next Bank. Brian Bedell from line question the with of Your Deutsche

Brian Bedell

morning. hear thanks. Hey, you me? Can Good

Matthew Nicholls

Hi.

Brian Bedell

you Can me? hear

Matthew Nicholls

Yes.

Brian Bedell

for great. great, my taking Thanks Okay, questions.

coming on into fee to the management guide the fund cash Just guess, what in one market XX extent product the – year into basis just money waivers market on money fee or the I coming approximately next points, that, the – expectation into from quarter? – is the

Matthew Nicholls

as level corporate holding yes, share the because about principally or embedded money revenue level in of fund the $X to with fee to like – close the business currently by to within have the is that's million overall already. waiver we Yes, now again, $XX million so million on guidance, be all end but our – it's at market the that something rate good. the expect the which embedded We that with of fee the moved firms, company impact that $X those the year, involved an par

Brian Bedell

then new Got investment well products strong you that management could talk launching see and it, leveraging comment you is like whether in now Europe well. about And that process. dedicated think research also happen in for And products? more obviously, maybe Jenny demand integration pretty for there both on follow-up you're research AUM a you is you right your the portfolio how ESG can and research products. sounds alternative fairly the And across dedicated on the on to still especially, you in and plan the as ESG integrated but it. progress, Thank Perfect. ESG process describing the ESG said within if you. based It Adam maybe if

Jenny Johnson

Anybody So of I reality third like I and stat a had markets interesting. real And was something ESG. maybe has have a global an managers’ player. process. incorporate talking in we in it fact that a asset gave advantage very and always Europe focused a player have or somebody investment operated think Australia into their me as or the that assets global to and recently I is is has this find or

in certainly having they’re there's good ESG consideration So we risks investment and be an And at those they're incorporated their to clearly in there, belief their institutional of our about all of without no our out being articulate feel it's that to level how processes. risks their process. very teams going considering investment manager credible able

we've As lake, by thing a sources talked their our matter unique any for contributed about are various same where fact, of available of that analysis. on We've data teams done for and investment data they're teams have we the ESG.

ESG. to investment portion lake is our we So have of a data dedicated that

and XX% we providers the macro our It ESG team data only teams consider correlate of And ESG, now any important that's different example, their time. lake, and process. into top feeds. get to of the all five it is as because data for know available the XX So the ESG global cleansed in for goes that

and active engagement management information. So you ESG really takes to imagine accurate that can it get

processes. in So to our answer all well absolutely your question, of it is incorporated

and out those. think the Europe for have X. the and to ones been ensuring, pipeline X, – we there also I that very that sell coming X is with it's something qualify that products Article We selling Article on are the And focused Article March there date are

Article kind is X Article in is, portfolio construction. evaluated X Article investing. and ESG I've ESG it And is is impact of considerations So considered my overweight really X

first Paris And Aligned, bond like so global or our green our ETF. we have products active

getting well We have and there infrastructure for those social X. are as Article a flows they good qualify as

think be lockdown, on And investors visited U.S. about And not prior the very and the I had institutions were ESG. I U.S. single anecdotally, to seen. mixed a before talking we the whether lockdown. remains And year before the ESG right lockdown, – in it visited I institutional one was So was focused to they ESG. or just every

focused we know, I to So want committed. you and add that's are Adam, that. to why don't still

Adam Spector

little U.S., bit newer part for only perfect. in advantages do. a developed, France is and investment into being and Nordics of what of It in XXX% Australia years, a active would be just the the integrated but firm of that been here a you and to strong I It’s it's we've the is process. and has one kind while that is that of trend this say global

But do with that the integrated completely to our So ESG more extreme all create ESG investment spectrum. ESG teams moving all across is at have of impact we're we're kind of at far this integrated, of funds point. the what teams of their to

Brian Bedell

you. That’s great Thank color.

Operator

the line Morgan from Cyprys of with Next question Stanley. Michael

Jenny Johnson

Michael. Hey

Michael Cyprys

questions. think of for Hey, you’ve hoping and circle asset down of just good how on just channel. kind had can back morning. retail maybe of taking I by us I billion to you SMA, a give breaks had Thanks the class SMA. sense retail that $XXX about I we mentioned

initiatives growth SMAs, SMA about on and optimistic your just some of strategies talk in vehicle? which you can you are If the to retail accelerate growth most with the

Matthew Nicholls

think places in a demand. we're SMAs most those optimistic as vehicle for I where that about most are strategies the are

technology. we or still Fund So, Franklin a Income Franklin sell DynaTech is of, lot something

on most have business… had been the leaders in that perspective, SMA the than those can fun vehicles for we the and I years. our channel sale good very to flows, ClearBridge a very expand strength and think All a more have business we're good the and SMA Western offering products of from side, with different of Mason Legg starting move sales, to wires, we've more From

Michael Cyprys

Great.

little Just that color say rate the maybe any follow-up business, a SMA and quick I for I as maybe mutual share around how And longer, profile imagine, serve, was bit side, costly versus more you the is probably duration color a around there's lower to I a any more assets arguably of curious, probably little maybe or fee, compares on Act XX guess, SMA you could fund vehicles. fee bit elaborate so little just that? sticky just margin but the could the a your bit

Matthew Nicholls

come that to I just… specifics, on you with back We'll

Jenny Johnson

in a investment because allows gaining great to be The decisions. thing the advisor are I to appear SMAs it more environment traction in active their fee-based would just much highlight there, financial

also lot a fees those by will have So in arguably it's there a index really of mutual not distribution that future. of you think that important that are we it may important, an in and fees direct service Remember or are that in be fund. embedded the we think trend kinds is SMA

top because back compare fee – with can't it's apples will and but come it you at we more quite why it that's details. apples rate So isn't the that, line look to

Michael Cyprys

But last Does say it the point? longer thoughts but fair Right. capital is that on duration to assets stickier? any are that is it

Matthew Nicholls

can't as years remember of something you like like but to I it's around exact, think on an mean, average, that, industry, about details I it's average five those or five, because think we and across the the I come minimum Yes. the you think that, something of a specifics. think it we'll back being like, I on

Michael Cyprys

much. very Thanks

Matthew Nicholls

Thank you.

Operator

Lee the question question of Next from Mr. your with open. Robert KBW. Lee, line is

Robert Lee

goals it. get it about – that seems And Thanks like a taking that. to still we just to into different space? a looking drill because there's is forward about in early optimization Just for Jenny, that GOE, more engine? demand days, help the precisely its should that sense possibly what see aspects in you working like my little were questions. while of, comprise what trying be bit thinking Sorry this you can this to and how Maybe

Jenny Johnson

Sure.

really on the want retire. home. good second a filed want out if platform if can to put have heck some that's you but – die beach. so money money as my kids are, the I well, second there's into leftover them, I you to enough what home buy of goals be so I'm enough patent I'd any tool. we tied – aside be kids It'd my must planning nice lose for the on goals have rolling to I me if and retire. all, three on really that help that and it. and I like That's let So financial so first and doing to, of I'm on that, think I want it why think your Because say, cloud-based we a to can there, let's

come risk they're think different. the think well you your to would many if if path models, final with on down your really money how rolls achieving trajectory have. about When of likelihood waterfall be portfolio you about kind it it very it you What you goal. single a and is If rolls a those your achieve goal doing you'd up however – into And it guide next as financial it traditional or think that ahead, And portfolio. you does based you're they your of down, planning structure follows goal. a and that, of into portfolios, goal your it

as all older you to more retirement, closer, not octane get getting want high second path conservative. the glide on out. You're unless be home you're to your to stay going going and But you're

when of they about you, and it And does with with we you're data, with AI things. a well it that on up dimension. We skeptical. to it. worked sort it's not data way with the it, have the very simple We to so were this resonates I our resonated of the has shown, So a as work? team because and analytics adds it very said, we've doing at idea, they talking benchmarks well, looked And team little about came came really up it. pitched universities they clients – think sort because tell

about in something are we talking we in are China them. we And that APIs You're interested platforms. And to talking it. demand various where a absolutely to to into need easy global with things find who connect built it firm

platform. So in really Asia, we just see Europe, our resonated with and it's well

Robert Lee

And and that of and it's an in be about less shrinking private source for revenue of driving demand in being I is kind assumed own a as all assuming your incremental products this correct would it relationships…

Jenny Johnson

do have Right. of architecture, open are closed choice architecture. the our an We either all products

in we of it we it that are way our investment investment mean, depends. – we're think it. with you the an but to to our to if clients we way be want sale architecture as across I case. ourselves of yes, in create fee, receive some really which a And a flexible – types I a want as manager, can that, Adam's solution-based just capabilities open for deliver And it's we're that assets whatever point, view investment all different fundamental but

of for our So vehicle provide traditional SMA, model agnostic build a CIT, them a kind solutions-based whether individually ETF like we'll distributors. or mutual fund, they’ll in portfolio or

Robert Lee

investors sort marketplace just to Maybe the capture I ETFs product in lot if of of through trying like initially exposure. you ESG and in the a their about have talked of mean, lot seems ESG, you've ETF been connecting and the early a U.S., of kind that it's a follow-up, capabilities kind look

of ahead then feel trying launch are two AUM, like own and about plans of us, to just for growth of you – thinking to drive but have connect a how you about kind is through of now how how, trying ESG ETF you're your this So within those or get for probability product for where there you? talk

Jenny Johnson

Yes.

category. I just like think to ETF of and in financial have say that are sell a don't product a advisors that that fair set to it's you there

You're financial not advisors. going with to those resonate

able whatever the focused are being are. we or And flexibility so to on provide vehicles kind of

beta. smart largest is our million, passive. active or XX third category the I think Our And second is is

traction, They've we're Although, country. traction, starting significantly institutional to here small, get XX XX are… and competitive points think – but our ETFs, if don't Matt, price, somewhere did between get that? we to been the more even as know up they're but low pick side. on we'll you you want add their they're they're we'll I than more country to basis anything

Matthew Nicholls

way Jenny. some And that to like a offer and clients, said, one a I to add think an as investment specific is than strategy. to different that, not different this a thing to I we of ETF think vehicle

I So market and three just roughly passive. Jenny others little is our some of That's only six and put than billion, in think data is guide assets of beta, it smart that said different a to behind growth a weighted future. what the more Three it about little $XX it is active. of

Robert Lee

kind for we million about the And one next fees, quarters. roll and how of but difficult on how this one now, maybe where can should guidance of think last give $XX couple sit quarter, you to course, performance of Okay. in of should Matt, always any predict change think quick you

Matthew Nicholls

think quite this it Yes, high quarter. in do I was seasonably for us

the year say, again our will larger end of in So maybe we up bit to with XXXX and become I a rising larger $XX could then fees. because at of lower end performance those $XX million. Clarion, a share back then fees getting performance it the arrangement quarter, And because is next expect million to think you the be good estimate again a of

Robert Lee

take questions. Great, that’s Thanks for helpful. Thanks. my

Matthew Nicholls

Sure.

just because to answer got question, wanted before the next I address that. we we just SMA start Sorry, to question the

it had So I the Cyprys think question. was Mike

about So that is in life the is SMAs to the the the mid-XXs average years. eight and asking fee and you're six between

longer it’s So but fee, periods. we for them generally lower hold

it's So, business a very for why that's us. good

to Just we make answer question. that wanted sure

Operator

of final with Citigroup. question the Bill your Katz And from line

Bill Katz

questions morning. Good taking much. you today. for my very you Thank Thank

back one just just you, expense Matt, XXXX guide. fiscal for So to the going

paraphrasing. case sort Is that? some, felt X.XX parts I I X.X because moving of but that on last upside be G&A the firm I pretty quarter, and to appreciate X.X, no competent of regardless heard a market number, some is you the is line, the action. was number think may the there it at I or still X.X anchor still

Matthew Nicholls

you the so question. Bill, Yes, thank for

billion which low some increasing increase So gone single on as pressure does we've as the that I low above quite said compensation. considerably single-digits. the market sort within to the was put X.X long mid Honestly, of the –

the line come we X% X% X%. up expense quarter, third I the mentioned per expect in that discipline can to that's again that's should for X% the remain communicated else down as it the at in that roughly all fourth by they're another quarter, based today. to down, As levels stat, the sort on then management go But quarter, down, equals of compensation X% second so we've the to the

So I'd very say on line items, it's little that all the other change.

high that if and as possible little to to also anything, think mostly a down the function be it'll higher as we're tight more that's low billion guide as expense bit again a the back as leading X.XX as in is double-digits it bring X.X to ago. I down to that the think billion. I billion but communicated communicated. keep than comes billion, trying of finding single-digits us range. double-digits If X.X I is We're But ways – the up to moment to the create opportunities a markets X.X expenses being

Bill Katz

just then now, need more if the at Okay, gaps? and cross sort you appetite there be of of Do the guess, been just is of perfect. M&A in clarification. Franklin sell be sort what you they I where Thank just you, about thinking think big you filling in of any for as a so, lot picture to or momentum. Jenny, might through one is the specifically, for talking And level terms for where residual its footprint. any

Jenny Johnson

that and first going to catch you're So foremost, look, I would say this ball.

the are we're that four we that focused absolutely well-integrated make laser to focus You're deals and sure going did that. on that our last year and is

by acquisitions they are good that feel feel we independent. test they very getting they out. worked Now Mason where were having quickly good Fiduciary flows. pretty already are, two at and with that We Surprised said was Legg it Trust technology the how with a really when

that making size focus Trust. will want first continue we continue just to Having of do we've to said those the said grow. well. We sure So a double our that, Fiduciary is to

come just opportunities smaller If we as So up, there, expand there. continue We'd to some And the to hard I in alternative to that's a love space do space. acquisitions is think sense made bolt-on that traditional disrupting something distribution. acquire. think FinTech we

acquisitions, they're in us investments, the opportunity we right make where certainly there's with you'll distribution has be it So some see investments places but just think make to one, investments. FinTech greater continuing to we'll whether

Matthew Nicholls

great our be I but the given just fit and add It's met alternatives. few that Jenny's to it's one breadth the Yes, for have, the right out they're asset a all of for we've a that alternative would for find we we think strategy. would quite to a great us difficult firm about exact alternatives – there fit point

see $XXX pieces of matter in right year. out have alternative would we like something plenty absolutely rest the there. over for and and or We the like It's the to with of space we the asset of revenues million finding that we've that that opportunities a the of timing got. one already grow fits And

Bill Katz

much. very you Thank

Matthew Nicholls

you. Thank

Operator

the Johnson call final comments. back to hand for And to CEO, Jenny over I’d like

Jenny Johnson

to achieve Well, to truly again in unique you. employees ahead. able today's to efforts, what call, focus. thank lie all their we our look been that are client everyone Great. dedication thank in opportunities Once we've environment. participating we're to quarter. significant again, We proud to all of you I'd Thank see forward like you the this And for excited really speaking and next for

Operator

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

You disconnect. may now

Franklin Resources (BEN) 2 Feb 212021 Q1 Earnings call transcript