Waddell & Reed’s Wealth Unit Assets Up 10% YoY

By Alex Padalka October 29, 2020

Waddell & Reed saw substantial growth in net new advisory assets, but brokerage assets continued to dwindle as the firm’s advisor count remained lower year-over-year.

Waddell & Reed ended the quarter with $62.7 billion in assets under administration, up from $59 billion in the prior quarter and $57.1 billion in the third quarter of 2019, according to the company’s third-quarter earnings report.

The firm added $437 million in net new advisory assets in the third quarter, compared to $189 million in the prior quarter and $328 million in the third quarter of 2019, Waddell & Reed says. The company attributes the rise to advisory products continuing to drive the majority of new sales.

Brokerage accounts continued experiencing outflows, however, with $475 million leaving the firm in the third quarter, up from $346 million that clients withdrew in the prior quarter but down from the $720 pulled out in the third quarter of 2019, according to the report.

In all, Waddell & Reed’s total net assets under administration during the latest quarter fell by $38 million, although that was far lower than the $157 million drop experienced in the second quarter of 2020 and the $392 million reported leaving the firm in the third quarter of 2019, the company says.

Waddell & Reed’s ranks of advisors and advisor associates, meanwhile, inched down to 1,313 by the end of the third quarter, down from 1,317 in the prior quarter and 1,344 in the third quarter of 2019, according to the report.

Advisor productivity, however, grew, with average trailing 12-month revenue per advisor reaching $474,000 in the third quarter of 2020, up from $464,000 in the prior quarter and $422,000 in the third quarter last year, Waddell & Reed says.

The company’s total revenues rose 12% during the third quarter to $267.7 million, but that was still 1% lower year-over-year, according to the report. Total operating expenses, meanwhile, stayed essentially unchanged from the second quarter, at $230 million, but represented a 6% increase year-over-year, Waddell & Reed says.

Net income attributable to the firm rose to $30.5 million in the third quarter, up from $24.8 million in the prior quarter but down from $33.1 million posted in the third quarter of 2019, according to the report.

Do you have a news tip you’d like to share with FA-IQ? Email us at editorial@financialadvisoriq.com.