Q3 2023 AssetMark Financial Holdings Inc Earnings Call

Speaker 1: Good afternoon, everyone, and welcome to asset marks third quarter 2023 earnings conference call. Currently, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will be given at that time. Today's call is being recorded. Now, I'd like to turn the call over to Taylor Hamilton, head of investor relations. So you go ahead, Mr. Hamilton.

Good afternoon, everyone and welcome to <unk> third quarter 2023 earnings Conference call. Currently all participants are in a listen only mode.

Later, we will conduct a question and answer session and instructions will be given at that time today's call is being recorded.

Now I'd like to turn the call over to Taylor Hamilton head of Investor Relations. Please go ahead Mr. Hamilton.

Speaker 2: Thank you. Good afternoon, everyone, and welcome to ASAP Marks 3rd quarter, 2023 earnings conference call. Joining me are ASAP Marks Chief Executive Officer, Michael Kim, and Chief Financial Officer, Gary Zyla. Today I'll discuss results for the 3rd quarter and provide an update to ASAP Mark's business outlook for 2023. Following our introductory remarks, we'll open up the call for questions. We also have an earnings presentation that Michael and Gary will reference during their prepared remarks. It can be accessed on our website at ir.asketmark.com.

Thank you good afternoon, everyone and welcome to <unk> third quarter 2023 earnings Conference call. Joining me are Mark <unk>, Chief Executive Officer, Michael Ken and Chief Executive Chief Financial Officer, Gary Zyla today, I'll discuss results for the third quarter and provide an update to <unk> business outlook for 2023, following our introductory remarks, we will open up the call for.

Questions. We also have an earnings presentation that Michael and Gary will reference during their prepared remarks. It can be accessed on our IR website at IR dot asset Mark Dot com.

Speaker 2: Before we get started, I'd like to note that certain statements made during this conference call are forward-looking statements. These forward-looking statements represent our outlook only as a data-discall and actual results could differ materially. Additionally, during today's conference call, we'll be discussing Net Revenue, Adjust Zibita, Adjust Dibit-on-Margent, and Adjust Net Income, all of which are non- GAAP financial metrics.

Before we get started I would like to note that certain statements made during this conference call are forward looking statements. These forward looking statements represent our outlook only as the date of this call and actual results could differ materially. Additionally, during today's conference call, we'll be discussing net revenue adjusted EBITDA adjusted EBITDA margin and adjusted net income all of which are non-GAAP.

Metrics. Please refer to our earnings press release, and SEC filings for more information on forward looking statements risk factors associated with our business and required disclosures related non-GAAP financial information and with that I'll turn the call over to my colleagues Michael take it away. Thank.

Speaker 2: Please refer to our earnings press release and SEC filings for more information. On board looking statements, risk factors associated with our business and required disclosure related non- GAAP financial information. And with that, I'll turn the call over to my colleagues, Michael, take it away.

Speaker 3: Thank you Taylor. Good afternoon and welcome to our third quarter earnings call and my first at CEO . I'm excited and honored to talk to you today. For those of you that I do not know me, let me briefly introduce myself and provide some perspective about why the board has selected me to lead Asamart into the future.

Thank you Taylor and good afternoon, and welcome to our third quarter earnings call and my first as CEO I am excited and honored to talk to you today for those of you that I do not know me, let me briefly introduce myself and provide some perspective about why the board has selected me to lead us into the future.

Speaker 3: I've been at AASIMR for 13 years, and I've spent almost 30 years in the financial services industry helping financial advisors and their clients. Prior to taking over as CEO in September , I most recently served as President and Chief Client Officer at AASIMR.

I've been asked the Micra 13 years now I've spent almost 30 years in the financial services industry, helping financial advisers and their clients prior to taking over as CEO in September I. Most recently served as president and Chief client officer at Adler.

Speaker 3: In that role, I led the firm's client success group, which is focused on helping advisors grow and deepening advisors engagement with advice.

In that role I led the firm's clients success group, which is focused on helping advisors grow and deepening advisors engagement with advisors.

Speaker 3: At Asimar, our mission is to make a difference in the lives of our advisors and their clients. We are an advisor-focused company. Every strategic decision we make, revolves around what is the best for the advisor.

Our mission is to make a difference in the lives of our advisers and their clients. We are an adviser focused company every strategic decision. We make revolves around what is the best for the advisor.

Speaker 3: Having the opportunity to lead our client success group for the last decade plus, I am a deep understanding of how advisors and their clients think about what solutions, tools and technologies they need to be successful. As a result, the leadership transition has been seamless for our teams, for our advisors and their clients.

The opportunity to lead our client success group for the last decade, plus I have a deep understanding of how advisers and their clients think about what solutions tools and technology they need to be successful as a result, the leadership transition has been seamless for our teams for advisors and their clients I'm very excited to continue to set the.

Speaker 3: I'm very excited to continue to set the strategic vision for the firm and to create continued value for advisors, their clients and our shareholders.

<unk> vision for the firm and to create continued value for our advisors their clients and our shareholders.

Speaker 3: Not only am I deeply committed to our mission, but I'm also deeply committed to our values of heart, integrity, respect, and action.

Now let me my deeply committed to our mission, but I'm also deeply committed to our values of heart integrity respect and excellence. These values define how we engage with our advisors partners and team members. During the first two months as CEO I've been on a listening tour and feedback has been clear coupled with my previous experience leading our clients.

Speaker 3: These values define how we engage with our advisors, partners, and team members.

Speaker 3: During the first two months of CEO , I've been on a listening tour, and feedback has been clear. Coupled with my previous experience leading our client success group, I'm gonna share some perspective on my long-term focus, which I believe will enhance shareholder value.

That's good I'm going to share some perspective on my long term focus, which I believe will enhance shareholder value.

Speaker 3: Turning to slide three, I am focused on three priorities. High for growth, accelerated capital deployment, and enhanced scalability. Let's dig into the details of each of these.

Turning to slide three I am focused on three priorities hyper growth accelerated capital deployment and enhanced scalability, let's dig into the details of each of these.

Speaker 3: First, hyper growth. The team and I are menically focused on accelerating the growth of the business. This starts with growing net flows and the number of engaged advisors on our platform. We are committed to return to 10% organic growth and believe that our recent acquisitions, platform enhancements, and compelling outsourced offering positions as well to get there. We are committed to getting to 5,000 engaged advisors by end of 2020.

First hyper growth the team and I am maniacally focused on accelerating the growth of the business. This starts with growing net flows in the number of engaged advisers on our platform. We are committed to return to 10% organic growth and believe that our recent acquisitions platform enhancements and compelling outsourced offering positions us.

Well to get there we are committed to getting to 5000 engaged advisers by end 2026, let me share with you. Why this is so important as you know engaged advisers make up north of 90% of our platform assets. These low advisers grow faster have stickier assets and enjoy more of the benefit.

Speaker 3: Let me share with you why this is so important. As you know, engage advisors make up north of 90% of our platform apps.

Speaker 3: These lawyer advises grow faster, have stickier assets, and enjoy more of the benefits of outsourcing.

So outsourcing.

Speaker 3: If we grow to 5,000 engage advisors, we double the size of the company. Let me repeat that. Over the next three years, we can double the size of that.

If we grow to 5000 engaged advisers, we doubled the size of the company, let me repeat that over the next three years, we can double the size of asset Mark second I am focused on accelerated capital deployment one of the asset marks many strengths as a company is our ability to generate cash it's time, we start putting that cash.

Speaker 3: Second, I'm focused on accelerated capital deployment. One of Asimar's many strengths as a company is our ability to generate cash. And it's time we start putting that cash to better use.

To better use to start we are increasing our focus on M&A and partnerships, which I will discuss a bit later in my prepared remarks next we are increasing our capex as a percent of total revenue to 8% to 10% from the previous 6% to 7% run rate. This will allow us to invest more in the business specifically into projects that drive growth.

Speaker 3: To start, we are increasing our focus on M&A and partnerships, which I will discuss a bit later in my prepared remarks.

Speaker 3: Next, we are increasing our CAP-X as a percent of total revenue to 8 to 10 percent from the previous 6 to 7 percent run rate. This will allow us to invest more in the business, specifically into projects that drive growth and scale a bit.

<unk> and scalability and.

Speaker 3: And speaking of scalability, that is my third long-term focus.

And speaking of scalability that is my third long term focus as the market has done a great job scaling with EBITDA margins up over 800 basis points since our IPO and we can continue to scale.

Speaker 3: As the market's done a great job scaling with EBITDA margins of over 800 basis points since our IPO and we can continue to scale. What are many areas of focus is automation, especially in our operations function where we can remove up to $25 million of costs per year while continue to invest in our already industry leading service office.

There are many areas of focus as automation, especially in our operations function, where we can remove up to $25 million of cost per year, while continuing to invest in our already industry, leading service offering I.

Speaker 3: I hope this gives you some insight into what is important to the Executive Committee and me as we take Asa Mark into the future. I look forward to updating you on these long-term priorities during subsequent earnings.

I Hope this gives you some insight into what is important to the executive Committee and me as we take <unk> into the future.

Look forward to updating you on these long term priorities during subsequent earnings calls now.

Speaker 3: Now, let's turn to the heart of today's earnings presentation. I will highlight our record quarter results and then provide an update on how we are executing on our strategy.

Now, let's turn to the heart of today's earnings presentation, I will highlight our record quarter results and then provide an update on how we are executing on our strategy on slide four the third quarter 2023 with another record quarter for <unk>. We ended the quarter, serving an all time high of 251.

Speaker 3: On slide four, the third quarter, 2023 was another record quarter for Asimar. We enter the quarter, serving an all time high of 251,000 plus households and over 9,300 advisors, of which approximately 3,000 are engaged.

Plus households at over 9300 advisers of which approximately 3000 are engaged our advisors are extremely pleased with their decision to outsource to ask mark as evidenced by our all time high NPS of 72, which we highlighted last quarter.

Speaker 3: Our advisors are extremely pleased with their decision to outsource to Asimar as evidenced by our all-time high NPS of 72, which we highlighted last quarter.

Speaker 3: From a financial standpoint, total revenue was record $191 million, up 23% year over year, while net revenue was a record of $139 million, up 20% year over year.

From a financial standpoint, total revenue was record $191 million up 23% year over year, while net revenue was a record $139 million up 20% year over year.

Speaker 3: These all-time high top-line results allowed us to achieve best-ever bottom-line results.

These all time high topline results allowed us to achieve best ever Bottomline results.

Speaker 3: Specifically, adjusted EBITDA was $67 million for the quarter. This marks the sixth straight quarter of record-setting quarterly EBITDA, a powerful testament to our diversified revenue mix and disciplined expense management.

Specifically adjusted EBITDA was $67 million for the quarter. This marks the sixth straight quarter of record setting quarterly EBITDA, a powerful testament to our diversified revenue mix and disciplined expense management.

Speaker 3: Adjusted EBITDA margin was a record 34.9% and up 90 basis points year over year.

Adjusted EBITDA margin was a record at 34, 9% and up 90 basis points year over year.

Speaker 3: Net income was $38 million, up 28% year-over-year, while adjusted net income was $46 million, up 32% year-over-year.

Net income was $38 million up 20, 28% year over year, while adjusted net income was $46 million up 32% year over year adjusted.

Speaker 3: Adjusted earnings per share was $0.62 in the third quarter, also up 32% year over year.

Adjusted earnings per share was <unk> 62 in the third quarter also up 32% year over year.

Speaker 3: Results for the third quarter were excellent, and we feel we are well on track for the best year in our company's history.

Results for the third quarter were excellent and we feel we are well on track for the best year in our company's history.

Speaker 3: Next, I want to give you an update on our strategic execution. As I stated earlier, it is important to note that our strategy is 100% advisor focused, meaning every strategic decision we make is made with the advisor in mind.

Next I want to give you an update on our strategic execution as I stated earlier. It is important to note that our strategy is 100% advisory focus meaning every strategic decision. We make is made with the advisor in mind moving.

Speaker 3: Moving to slide five, the first component of our growth strategy is to meet advisors where they are.

Moving to slide five the first component of our growth strategy.

It has to meet advisors, where they are at.

Speaker 3: Adhesion Wealth had another strong quarter and continues to focus on bringing on new RIA firms while expanding share wallet of existing firms.

Adhesion wealth had another strong quarter and continues to focus on bringing on new firms, while expanding share of wallet of existing firms.

Speaker 3: Adhesion added a total of $485 million of assets from new firms through the first three quarters of the year. 75% of RIA firms experienced growth year-to-date, with 46% seeing significant double-digit growth.

<unk> added a total of $485 million of assets from new firms through the first three quarters of the year, 75% of our firms experienced growth year to date with 46% seeing significant double digit growth.

Speaker 3: Adhesion added four new managers and 25 models to their platform while adding three new Adhesion Alliance managers.

<unk> added four new managers and 25 models to their platform, while adding three new adhesion alliance managers in the third quarter adhesion was able to advance their strategic goals, specifically around building out their API toolkit and enhancing their platform with their pilot of adhesion tax Alpha dashboard.

Speaker 3: In the third quarter, Adhesion was able to advance their strategic goals, specifically around building out their API toolkit and enhancing their platform with their pilot of Adhesion Tax Alpha-A.

Speaker 3: We are excited about the advantage that Adhesion gives us in the RIA market and look forward to sharing their continued progress during future earnings.

We are excited about the advantage that adhesion gives us in the market and look forward to sharing their continued progress during future earnings calls.

Speaker 3: Turning to slide six, the second component of our growth strategy is to deliver a holistic, differentiated experience to our advisors and their clients. This quarter, I want to share some exciting news that will allow us to further penetrate the bank trust channel. First, let me provide some context.

Turning to slide six the second component of our growth strategy is to deliver a holistic differentiated experience to our advisers and their clients. This quarter I want to share some exciting news that will allow us to further penetrate the bank Trust channel.

First let me provide some context thanks.

Speaker 3: Banks are seeing increased competition from regional RIAs and wire house advisors who are competing for a client wallet share and raising the level of service model standard.

Banks are seeing increased competition from regional <unk> and Whitehouse advisors, who are competing for our client wallet share and raising the level of service model standards today wealth management services are becoming integral to help banks better serve their clients get it well integrated trust accounting and wealth manager solution has remained elusive.

Speaker 3: Today, wealth management services are becoming integral to how banks better serve their clients, yet a well-integrated trust accounting and wealth management solution has remained elusive in the market.

In the marketplace not anymore I am pleased to announce that we have entered a partnership with an accurate Tech company Cheetah do better penetrate the $600 billion plus total addressable market.

Speaker 3: Not anymore. I am pleased to announce that we have entered a partnership with an agri-tech company, Cheetah, to better penetrate the $600 billion plus total addressable market.

Speaker 3: Cheetah is a modern, cloud-based trust accounting system built to serve the evolving needs of banks and their end clients. Together, Cheetah and Asimark will offer a premier, integrated trust accounting and wealth management solutions that will allow banks to empower their trust officers and wealth advisors with a full ecosystem of trust accounting and investment capability.

As a modern cloud based trust accounting system built to serve the evolving needs of banks and their end clients together Cheetah and asset Mark who will offer a premier integrated trust accounting and wealth management solutions that will allow banks to empower their trust officers and wealth advisors with a full ecosystem.

Accounting and investment capabilities.

Speaker 3: We plan to invest between $5 to $10 million of capital as an upfront technology investment in the partnership and expect to start onboarding clients in the second half of 2020.

We plan to invest between $5 million to $10 million of capital as an upfront technology investment and the partnership and expect to start Onboarding clients in the second half of 2024 to.

Speaker 3: To highlight the potential long-term opportunity, we forecast an incremental $25 billion of platform assets by end of 2028. We cannot be more excited about this opportunity. It represents Atomar's continued expansion into the Bank Trust's channel and integral part of the firm's growth strategy.

To highlight the potential long term opportunity, we forecast an incremental $25 billion of platform assets by end of 2028, we could not be more excited about this opportunity. It represents the asset marks continued expansion into the bank Trust channel and integral part of the firm's growth strategy.

Speaker 3: The third component of our growth strategy is to enable advisors to serve more investors. Let's turn to slide seven.

The third component of our growth strategy is to enable advisors to serve more investors, let's turn to slide seven.

Speaker 3: Tax considerations play a prominent role in most wealth management activities. Nearly half of high net worth investors are looking for proactive tax planning support from their financial advisors, and studies show that tax management may improve after-tax returns by over 1%.

Tax considerations play a prominent role in most wealth management activities nearly half of high net worth investors are looking for proactive tax planning support from their financial advisors and studies show that tax management may improve tax after tax returns by over 1%.

Speaker 3: Last month, we soft-launched At The Marks Tax Management Services, or TMS, for a select group of 350 advisors.

Last month, we soft launched <unk> tax management services or Tms.

A select group of 350 advisers TNF.

Speaker 3: TMS is a personalized and comprehensive service that enables advisors to unlock new tax efficiencies for their clients at every step of their financial journey.

<unk> is a personalized and comprehensive service that enables advisors to unlock new tax efficiencies for their clients at every step of their financial journey. This.

Speaker 3: This includes a tax-efficient transition of assets from an existing investment strategy into a new investment strategy, ongoing tax-loss targets.

This includes a tax efficient transition of assets from an existing investment strategy into a new investment strategy ongoing tax loss harvesting tax efficient rebalancing and tax efficient client directed activity.

Speaker 3: tax-efficient rebalances, and tax-efficient client-directed activities.

Speaker 3: The user-friendly service makes tax management a straightforward, efficient, and seamless process, and has key benefits for advisors, clients, and S.

The user friendly service makes tax management, a straightforward efficient and seamless process and has key benefits for advisers clients and asset Mark for aftermarket Tms allows us to amplify our financial wellness offering and provides increased revenue opportunity with additional fee of 10 basis.

Speaker 3: For Asimarc, TMS allows us to amplify our financial wellness offering and provides increased revenue opportunity with additional fee of 10 basis points on enrolled AUM per year.

Points on enrolled AUM per year.

Speaker 3: We expect to roll out a national launch to all of our advisors in early 2024.

We expect to rollout a national launch to all of our advisers in early 2024.

Speaker 3: Let's turn attention to slide eight and the fourth component of our growth strategy to help advisors grow and scale their business.

Let's turn our attention to slide eight and the fourth component of our growth strategy to help advisors grow and scale their business. This quarter I will provide an update on our business consulting offering.

Speaker 3: This quarter, I want to provide an update on our business consulting.

Speaker 3: Previously leading our client success group, I had the privilege to oversee our business consulting function and truly believe it is a competitive differentiator for Asimar. Today I want to highlight some of the programs we have rolled out over the last year and provide an update on the document.

Previously, leading our client success group I had the privilege to oversee our business consulting function and truly believe it is a competitive differentiator for <unk> today I want to highlight some of the programs that we have rolled out over the last year and provide an update on adoption.

Speaker 3: First is Ask the Marks Marketing Advantage. Since launch, it has been adopted by close to 400 advisors, which is over 150% of our goal.

First as <unk> marketing advantage since launch it has been adopted by close to 400 advisers, which is over 150% of our goal.

Speaker 3: Second is Asimark's Investment Consulting. We have been extremely pleased with our results here as the program has been leveraged by over 45 advisors with over $2 billion of total business commitment. Investment Consulting is one of the key programs that will help us accelerate our organic growth. Lastly, AdvisorLink. We have over 100 advisors who have requested access with majority set up as buyers on the platform.

Second is as asset marks investment consulting we have been extremely pleased with our results here as a program as leverage has been leveraged by over 45 advisors with over $2 billion of total business commitment.

Investment consulting is one of the key programs that will help us accelerate our organic growth Lastly advisor link we have over 100 advisers, who have requested access with majority setup as buyers on the platform.

Speaker 3: Turning to slide 9, the final component of our growth strategy is to pursue strategic transactions.

Turning to slide nine the final component of our growth strategy is to pursue strategic transactions.

Speaker 3: M&A is a key component of our business model, and as CEO , I am highly committed to leveraging M&A to grow our business. I want to provide some color on what we are seeing in the

<unk> is a key component of our business model and as CEO I am highly committed to leveraging M&A to grow our business I want to provide some color on what we're seeing in the market and our position.

Speaker 3: Activity is bouncing back. This past quarter saw a number of deals announced in the wealthtech space and adjacent sectors such as RIA consolidation and wealth management, and we are seeing the follow on effects in sectors of interest to assets.

Activity is bouncing back this past quarter saw a number of deals announced in the wealth tech space and adjacent sectors, such as <unk> consolidation and wealth management and we are seeing the follow on effects and sectors of interest to asthma. We're also encouraged by increased interest from businesses seeking a strategic partner.

Speaker 3: We are also encouraged by increased interest from businesses seeking a strategic partner.

Speaker 3: We're in a great position to be successful and capitalize on the warming M&A market. We have a strong balance sheet with significant dry powder and very low debt, which differentiates us from many of our peers.

We're in a great position to be successful and capitalize on the warming M&A market, we have a strong balance sheet with significant dry powder and very low debt, which differentiates us from many of our peers.

Speaker 3: Our story is resonating with potential buyers. They see significant value in our market-leading footprint, additive distribution capabilities, technology, and deep corporate resources we bring to the table.

Our story is resonating with potential buyers they see significant value in our market, leading footprint additive distribution capabilities technology and deep corporate resources, we bring to the table.

Speaker 3: Sellers see the opportunity to take their business to the next level by partnering with

So, let's see the opportunity to take their business to the next level by partnering with us.

Speaker 3: We're also developing creative ways to use our balance sheet to help advisors with succession planning and growth. We see much interest in this area and are excited about the opportunity to deepen our relationship with advisors.

We're also developing creative ways to use our balance sheet to help advisors with succession planning and growth we see much interest in this area and are excited about the opportunity to deepen our relationship with advisors.

Speaker 3: Overall, we are in a great position to be an acquirer and making the right acquisitions will be crucial to achieve some of the long term priorities I laid out at the beginning of.

Overall, we are in a great position to be an acquirer and making the right acquisitions will be crucial to achieve some of the long term priorities I laid out at the beginning of the call.

Speaker 3: I will now turn the call over to Gary to take us through a deep dive on our third quarter results and provide an outlook on our 2023 outlook.

I will now turn the call over to Gary to take us through a deep dive on our third quarter results and provide an outlook on our 2023 outlook.

Speaker 4: Thank you, Michael and congratulations on your new role. It's truly an honor to be here. Good afternoon.

Thank you Michael and congratulations on your new role, it's truly an honor to be here good afternoon to those on the call.

Speaker 4: Michael mentioned the third quarter was another record quarter for asset mark. During my remarks today, I will highlight our results for the quarter and then provide an update to our 2023 out.

As Michael mentioned, the third quarter was another record quarter for asset Mark during my remarks today I will highlight our results in the corner and then provide an update to our 2023 outlook.

Speaker 4: Starting with slide 10, third quarter platform assets increased 26% year over year to $99.6 billion.

Starting on slide 10 third quarter platform assets increased 26% year over year to 99 $6 million.

Speaker 4: Quarter over quarter, platform assets were slightly down, driven by the negative market impact net of fees of $2.7 billion, partially offset by quarterly net flows of $1.5 billion.

Quarter over quarter.

This was slightly down driven by a negative market impact net.

Net of fees of $2 7 billion.

Partially offset by quarterly net flows of $1 5 billion.

Speaker 4: You're to date how annualized net flows as a percentage of the beginning period assets is 7.1.

Year to date, our annualized net flows in the percentage of beginning period assets and seven 1%.

Speaker 4: Given current market dynamics, we are pleased with our 3rd quarter net flows, but make no mistake about it, as Michael said, we are committed to getting back to our 10% plus organic growth and have a strategy to get

Given current market dynamics, we are pleased to announce third quarter net flows.

Make no mistake about it as Michael said, we're committed to getting back to a 10% plus organic growth and have a strategy to get there.

Speaker 4: Turning to our advisors, our advisor metrics, we added 158 new producing advisors or MPAs in the quarter. We are pleased that the quality of these MPAs is much higher than it has been in the past.

Turning to our advisors or advisor metrics, we added 158, new producing advisers on NPA in the corner.

Please and the quality of the <unk> is much higher than it has been in the past.

Speaker 4: through the third quarter, year-to-date MPAs are down 6.4% year-over-year, yet production, so this year's MPAs, is up over 50% as compared to last year.

During the third quarter unity MPA were down six 4% year over year, yet production. So this huge MTA and up over 50% as compared to last year.

Speaker 4: improvement in the first year production from MPAs should lead to them getting to engaged status at a faster rate than previous MPA ventures.

This improvement in the first year of production from <unk> should lead to them getting engaged status at a faster rate and premium NPA banking teams.

Speaker 4: We are focused on continuing to stay close to our existing advisors. We just finished our third quarter premier advisor meetings with approximately 600 advisors attending across 18 locations.

We are focused on continuing to stay close to our existing advisors. We just finished our third quarter Premier advisor meetings. We have constantly 600 advisors attending across 18 locations. We are focused on winning new advisors and share of wallet from existing advisers, both of which can positively impact future flows.

Speaker 4: We are focused on winning new advisors and share a wallet from existing advisors, both of which can positively impact future.

Yeah.

Speaker 4: On slide 11, we show our engaged advisor count. We ended the third quarter with 2,995 total engaged advisors, down to 3,032 engaged advisors in the second quarter.

On slide 11, which our engaged adviser count we ended the third quarter of 2995 total engaged advisers now 3030, <unk> engaged advisors in the second quarter to.

Speaker 4: quarter-over-quarter decline with the result of third-quarter market appreciation, which took 49 advisors below the $5 million platform asset threshold, and was offset, though, by 12 new organic engaged advisor entities.

The quarter over quarter decline was the result in the third quarter market depreciation. We took 49 advisors the loan of $5 million platform asset threshold and was offset offset though by 12, new organic engaged advisor ads.

Speaker 4: Our engaged advisors account for 32% of all advisors using our platform and make up 92% of our platform assets.

Our engaged advisers to account for 32% of all advisers, using our platform and make up 92% of our platform assets growing the number of engaged advisers and a key focus for management as it is crucial to drive further growth of our business and its financials as Michael mentioned, we are focused on getting to 5000 <unk> advisor.

Speaker 4: growing the number of engaged advisors and the key focus management as it is crucial to drive further growth of our business and its finance.

Speaker 4: We are focused on getting to 5,000 age advisors by the end of 2026, which will double the size of the company.

By the end of 2026, which will double the size of the company to achieve this.

Speaker 4: We need to convert more non-engage advisors to engage in status, while also increasing the speed and rate at which we get MTAs to engage.

Need to convert more non engaged advisors to engage.

We're also increasing the speed and rate at which we get NPA to engaged status.

Speaker 4: M&A is also a crucial part of adding more engaged advisors to our platform.

M&A is also crucial part of any more engaged advisers to our platform.

Speaker 4: In addition to asset level and a vibe account of third-way-me-measure growth, which is not asset-based.

In addition to asset level and adviser count a certain way, we measure growth, which is not asset based.

Speaker 4: is the number of households in our platform. The number of households are up 13% you're a year to 251.

As the number of households in our platform. The number of households are up 13% year over year to 251000.

Speaker 4: Now let's turn to slide 12 to discuss this quarter's revenue, which is a record 991 million out.

Now, let's turn to slide 12, and discuss this quarter's revenue, which is a record $191 million.

Speaker 4: As you know, we focus on our revenue net of related variable expenses for the third quarter 2023. Our net revenue was a record $139 million up 20% year over year.

And you know we focus on our revenue net of related variable expenses for the third quarter of 2023, our net revenue was a record $179 million.

Up 20% year over year.

Speaker 4: all four components of our revenue increase year-over-year with spread and other income up a robust 52 percent and 129 percent.

All four components of our revenue increase year over year with sprint and other income up a robust, 52% and 149% respectively.

Speaker 4: Flight 13, detail the Euro-Year Net Remu 1.

Slide 13 details our year over year net revenue walk.

Speaker 4: After face revenue was up $9.1 million, you're over year. 11.7 million of that increase can be attributed to the end of 11.1 billion dollar increase in billable assets.

Asset based revenue was up $9 $1 million year over year $11 $7 million of that increase can be attributed to the <unk> 11 $1 billion increase in billable assets.

Speaker 4: In addition to an incremental $2.4 million revenue from a T as well.

In addition to an incremental $2 $4 million in revenue from adhesion well deep.

Speaker 4: These increases were partially offset by two headwinds to our acid-based remedy for the quarter, so our speed compression of approximately one base...

These increases were partially offset by Q headwinds our asset based revenue for the quarter for RSP compression of approximately one basis point.

Speaker 4: relatively in line with our expectations. And second, higher acid-based sensors due to an expense shift from SNA to acid-based events.

Currently in line with our expectations and second higher asset based expenses Q2 minutes spent shift from SG&A activation.

Speaker 4: I grabbed you with up $9.8 million over year. Do you ever buy yield improvement for 209 basis points, to 402?

<unk> revenue was up $9 $8 million year over year, driven by yield improvement of 290 basis points to 400 and <unk> basis points.

Speaker 4: of this total yield, our Securities Backed Line of Credit Program, or SBLOC, contributed $10,000.

This total yield on our securities backed lines of credit program or S block contributing 10 basis points, excluding the contribution from S block net yield for the quarter was 392 basis points.

Speaker 4: excluding the congregation from S block, net yield for the quarter was 392.

Speaker 4: Scripture revenue from Boynt was up approximately 25% year over year. Do you have any microbes in software revenue and foreign? It's game count.

Subscription revenue from <unk> was up approximately 25% year over year, driven by growth in software revenue and foreign exchange tailwind.

Speaker 4: Lastly, other income increased $3.3 million a year, driven large, even higher interest income, earned on a corporate campus.

Lastly, other income increased $3 $3 million year over year, driven largely by higher interest income earned on our corporate cash.

Speaker 4: Now let's discuss expenses. Turning this live 14, total adjusted expenses increased 19% year-over-year, 130 million dollars.

Now, let's discuss expenses turning to slide 14, total adjusted expenses increased 19% year over year and $30 million.

Speaker 4: Quarterly operating expenses were 11% year-over year to $69.5 million. Given my increases in both employee compensation and SQ&A.

Quarterly operating expenses were up 11% year over year to $69 $5 million driven by increases in both employee compensation and SG&A.

Speaker 4: The point compensation increased 4.4 million dollars at 12% year over year, given my increased head count of 60, of which 80% of the money...

Employee compensation increased $4 $4 million of 12% year over year, driven by increased head count is 60.

Of which 80% from the acquisition of adhesion.

Speaker 4: S-DNA increased 2.6 million dollars or 10% year over year. Do you remember my increased audit preparation cost? The end, the end, the end, I'm sorry. Increased audit preparation cost, the addition of a T-GEN, S-DNA, and other professionals.

G&A increased $2 6 million or 10% year over year, driven by increased audit preparation costs.

And.

I'm, sorry increased audit preparation costs. The addition of the heating SG&A and other professional fees.

Speaker 4: Now I quickly run through our adjustments from the quarter. In the third quarter we added back at almost $7.4 million pre-cats, which is comprised of three items.

Now I'll quickly run through our adjustments in a corner in the third quarter. We added back a total of $7 $4 million pre tax which is comprised of three items.

Speaker 4: First, $4.3 million in non-cash share rates compensation.

<unk> $4 $3 million of noncash share based compensation, we anticipate approximately $4 5 million next quarter and between five five and $6 million per quarter in the first half of 2024.

Speaker 4: and we treat five and a half to six million dollars per quarter in the first half of 2020.

Speaker 4: Second adjustments, $2.7 million related primarily to re-organization and integration.

Second adjustment $2 $7 million related primarily to reorganization and integration costs.

Speaker 4: and last 8, 2.2 million dollars of affidition-related amiguration. Now let's turn this slide.

And lastly, $2 2 million of acquisition related amortization.

Now, let's turn to slide 15 to discuss our earnings for the quarter.

Speaker 4: Third quarter, 2023 adjusted EBITDA with a record $66.5 million, about 26% year over year. And more than the then record, $60.4 million we reported last year.

Third quarter 2023, adjusted EBITDA was a record $66 5 million up 26% year over year and more than the then record 64 million, we reported last quarter.

As Michael mentioned this is the sixth straight quarter of record adjusted EBITDA and is a testament to our growing revenue diversification and the flexibility and disciplined management of our expense base.

Speaker 4: even in margin was also a record, a 90 basis point zero year to 34.9.

Adjusted EBITDA margin was also up erect was also a record up 90 basis points year over year to 34, 9%.

Our reported net income for the quarter was a record $38 4 million. While adjusted net income was also a record $46 million.

Or a record 62 per share.

Speaker 4: This is day and sunset recorded in the limited share count of 74.7 million. Our estimated tax rate for the full year is 24%. Further color please.

This is Dan since third quarter, then the share count of $74 7 million.

Our estimated tax rate for the full year is 24%.

Caller. Please see the adjusted net income walk on slide 20.

Speaker 4: Now let's look at the recorded third quarter balance sheet. I would highlight two eyes.

Now, let's look at the reported third quarter balance sheet I would highlight two items.

Speaker 4: First, you can continue to do a great job of generating cash. In the third quarter, we generated a robust $54 million of cash from operating it.

And continued great job of generating cash in the third quarter, we generated a robust $54 million of cash from operating activities in the first three quarters of the year, we have generated over $159 million in cash from operating activities.

Speaker 4: In the first three quarters of the year, we have generated over $159 million in cash from operating up.

Speaker 4: Now let's discuss capital expenditures, which primarily reflect how long-term investments in creating new capabilities, increased scale, and improving service.

Now, let's discuss capital expenditures, which primarily reflect our long term investments in training new capabilities increase scale and improving service in the third quarter, our capital spend was $11 $6 million or six 1% of total revenue.

Speaker 4: The reporter, a capital of Sam, is $11.6 million, or 6.1% of total revenue.

Speaker 4: Michael mentioned earlier, we are planning to increase our CAPEX run rate next year to 8 to 10% of polar revenue, and that we can invest in more growth and scalability products.

As Michael mentioned earlier, we are planning to increase our Capex run rate next year to 8% to 10% upon the revenue that we can invest in more growth and scalability projects.

Speaker 4: During the slide 16, I would like to provide some commentary and a meaningful impact and spread based around new continues to make our financial results.

Turning to slide 16, I would like to provide some commentary and a meaningful in patents spread based revenue continues to make on our financial results and how we look to maintain.

Speaker 4: Our bill needs to earn spread as a direct result of owning our custodian at Mark Trust Company or

Our ability to earn spread as a direct result of owning our custodian.

Company or ATC.

Speaker 4: Red based revenue is a function of the amount of cash, help, I am asking that through the ATC. And in-

Spread based revenue is a function of the amount of cash held by investors ATC and interesting. So first lets discuss cash balances in the third quarter total cash as a percentage of assets ATC was three 9%.

Speaker 4: So first let's discuss cash balances. In the third quarter, polo cash is a percentage of assets ATC was 3.9%. All ICD or non-discussionary cash was 3.2%.

CD or non discretionary cash was three 2%.

Speaker 4: Cash in the percentage of platform assets has been on a downward trajectory and more and more strategies put money to work in the equity and fixed income market.

Cash and the percentage of platform assets has been on a downward trajectory as more and more strategy put money to work in the equity and fixed income markets.

Speaker 4: we have set ICD cash and the percentage of assets an agency to return to more historical levels of three and a half.

We have set ICD cash and the percentage of asset and agency can return to more historical levels of three 5%.

Speaker 4: Turning our attention to interest rates has said increased rate once during the quarter. These rate increases are highly beneficial for the growth of our spread income. Rates will not stay high forever. As discussed in previous quarters, we have started an employee apportion of an insured cash deposit to fix term agreements.

Turning our attention and interest rates the fed increased rates once during the quarter. These rate increases are highly beneficial for the growth of our spread income ranked will not stay high forever.

As discussed in previous quarters, we have started to deploy a portion of uninsured cash deposits to fixed term agreements.

Speaker 4: As of September 30th, 39% of cash ATC is a fixed rate term. And then average maturity of 1.38 years and a gross rate of 4.59.

As of September 30th 39% of cash ATC is at a fixed rate term and an average maturity of one three years and a growth rate of 459%.

Speaker 4: We are now close to the 40% of cash at ATC into 6-rate current, which is currently our target threshold.

We are now close to 40% of cash at ATC into fixed rate term currently our target threshold.

Speaker 4: We will continue to update you on the deployment of cash into fixed rate terms on future earnings.

We will continue to update you on the deployment of cash into fixed rate term on future earnings call.

Speaker 4: Finally, let's turn to slide 17 to discuss our revised 2023 outlook. Outlook. Our platform asks...

Finally, let's turn to slide 17 to discuss our revised 2023 outlook outlook.

Our platform asset guidance is 10% year to date in the third quarter platform assets were up 9% and full year platform asset growth will be impacted by the fourth quarter market impact. In addition to our net flows.

Speaker 4: Your date to the third quarter of platform assets from 9% and full year of platform asset growth will be impacted by the fourth quarter market impact in addition to our next list.

Speaker 4: where you're revising our revenue, net revenue to 20% from our previous guidance of 2020 to 2020.

We are revising our revenue net revenue grew 20% from our previous guidance of 20% 22%.

We lost $2 7 billion and our platform asset and the result on the down markets and startup corner and this is this will have an adverse effect on our fourth quarter revenue.

Speaker 4: We've lost $2.7 billion as a platform asset as a result on the down markets in the third quarter. And this will have an adverse effect on our fourth quarter revenue.

Speaker 4: We are maintaining our expense growth outlook for the year of 15 to 7 people.

Turning to expenses, we are maintaining our expense growth outlook for the year of 2015% to 17%.

Speaker 4: Reminder about who asserted this increases the result of the addition of adhesion.

As a reminder, about a third of this increase is a result of the addition of adhesion.

Speaker 4: This level of a Stence Growth allows us to continue to meaningfully invest in the future of business while maintaining discipline for the Stence Growth will not outpace revenue.

Level of expense growth allows us to continue to meaningfully invest in the future of our business, while maintaining discipline on the expense growth will not outpace revenue growth.

Speaker 4: We are maintaining our adjusted EBITDA guidance at 22 plus percent in 2023, which we believe is fantastic, given the fact that we grew adjusted EBITDA by 27 percent in 2022.

We are maintaining our adjusted EBITDA guidance in 'twenty, two plus percent in 2023, which we believe in sand casting, giving the fact that we grew adjusted EBITDA by 27% in 2020.

Speaker 4: Lastly, we are targeting adjusted even a margin of expansion of 100 basis points for the year. We are extremely pleased about our financial results this year and our on track for the best year and our company's decision.

Lastly, we are targeting adjusted EBITDA margin expansion of 100 basis points for the year.

Greenlee clean.

About our financial results the here and now.

And are on track for the best year in our company's history.

Speaker 4: With that, I will hand this over to Michael for his conclusion.

With that I will hand, it to Michael for his concluding remarks.

Speaker 3: Thank you, Gary. And thank you to everyone on the call today. I look forward to building relationships with all of you on the line. I'm always open to a conversation with our investors and potential investors. I'll be on the road with Gary and Taylor in early December , attending the Goldman Sachs U.S. Financial Services Conference.

Thank you Gary and thank you to everyone on the call today and look forward to building relationships with all of you on the line and I'm always open to a conversation with our investors and potential investors that will be on the road with Gary Inhaler in early December attending the Goldman Sachs U S Financial Services Conference. This concludes our prepared remarks, I will now turn the call back to the operator.

Speaker 3: This concludes our prepared remarks. I will now turn the call back to the operator to begin Q&A.

To begin Q&A.

Yeah.

Speaker 1: Certainly. If you would like to ask a question please press star followed by one on your telephone keypad. If for any reason you would like to remove that question please press star followed by two. Again to ask a question press star one. As a reminder if you are using a speakerphone please remember to pick up your handset before asking your question. We will pause here briefly as questions are registered.

Hey, Anthony.

If you would like to ask a question. Please press star followed by one on your telephone keypad. If for any reason you would like to remove that question. Please press star followed by two again to ask a question press Star one.

As a reminder, if you are using a speaker phone. Please remember to pick up your handset before asking your question. We will pause briefly ask questions are registering.

Speaker 1: Our first question is from the line of Michael Cho with JP Morgan. Please proceed.

Our first question is from the line of Michael Cho with Jpmorgan. Please proceed.

Speaker 5: Hi, good afternoon guys, my name is Larry. Thanks for taking my questions.

Hi, Good afternoon, guys, Michael Gary Thanks for thanks for taking my questions.

Speaker 5: I just want to touch my first question on your comments, Michael and Deirons, around engaged advisors. So if I just look over history and buy engaged advisors went from about 2000 to 3000.

I just wanted to touch on my first question on your comments Michael and.

<unk> engaged advisors.

<unk> engaged advisors went from about 2000 3000.

Speaker 5: over the course of about four to five years. And Michael, you kind of laid out today that we're gonna add, I think 2000 in the next couple of years. And so I'm just trying to understand how much of this acceleration is driven by, you know, capabilities and asset marks toolkit today and how much of it is really things from... Starting now.

What were the cost about four to five years.

Michael you kind of laid out today that we're going to add.

2000, and the next couple of years and so on.

Trying to understand how much of that acceleration is driven by our capabilities in asset box toolkit today and how much of it is really things from.

Speaker 5: that you're hoping to develop in the future. And as you mentioned, M&A as well. So ultimately, I'm just trying to better understand, you know, what gives you so much confidence in this accelerated growth profile look net?

You said, you're hoping to build both in the future and you mentioned M&A as well so I'm just trying to better understand whats taking so much confidence in this accelerated growth profile looking ahead.

Speaker 3: Yeah. Hey, Michael, it's Michael came here. So thank you for that question. Why don't I get the conversation started and Gary please add in additional details here as well. So Michael, you're absolutely right. I mean, the engaged advisors is a top, top focus for our firm here. And as I mentioned during the prepared remarks, the engaged advisors, they represent over 90% of our platform assets.

Hey, Mike.

Michael Kim here. So thank you for that question why don't I get the conversation started and Gary Please add in additional details here as well. So so Michael Youre, absolutely right I mean, the engaged advisers as a top top focus for our firm here and as I mentioned during the prepared remarks, the engaged advisers they represent over <unk>.

90% of our platform assets and as we take the March towards 5000 engaged advisers that will effectively help us double the size of the company by 2026, and so I cannot stress enough the importance of the engaged advisers and and Michael to your question when we think about the.

Speaker 3: And as we take the march towards 5,000 engaged advisors, that will effectively help us double the size of the company by 2026. And so I cannot stress enough the importance of the engaged advisors. And Michael, to your question, you know, when we think about the how part of how we get to the 5,000 engaged advisors and really accelerating the growth, there's three key areas that we are focused on in terms of driving the number of engaged advisors.

How part of how we get to the 5000 engaged advisers are really accelerating the growth. There are three key areas that we're focused on in terms of driving the number of engaged advisers and the firm.

Speaker 3: The first is re-engaging what we call our non-engaged abode.

First is re engaging what we call our non engaged advisers. So Michael we have actually of over 6000 non engaged advisers. Those advisers that are less than $5 million and these are advisors that have already made a decision for one or more of their clients to work with at the moment.

Speaker 3: So Michael, we have actually over 6,000 non-engaged advisors, those advisors that are less than 5 million. And these are advisors that have already made a decision for one or more of their clients to work with at the market.

Speaker 3: And so this represents, this group represents a huge opportunity for us to reengage them and really share with them the full value of outsourcing with AftonMark. And we believe there's a tremendous opportunity, you know, from this group alone.

So this represents this group represents a huge opportunity for us to reengage them and really share with them the full value of outsourcing with aftermarket and we believe there is a tremendous opportunity from this group alone.

Speaker 3: At the same time, the second area that we're extremely focused on is really around new producing advisors, or NPAs.

The second.

At the same time, the second area that we're extremely focused on is really around new producing advisers or NPA.

Speaker 3: Gary alluded to this as well. We believe we have an opportunity to really accelerate the NPAs and their journey towards the engaged status.

Gary alluded to this as well we believe we have an opportunity to really accelerate the npa's and their journey towards engaged status.

Speaker 3: We are focused on not only the quantity, but as we talked about earlier today, we are seeing improved quality of our NPAs coming on board our platform. Gary alluded to production higher than about 50% from prior year NPA production. And so we're seeing signs of improved quality and we want to make sure that we continue that momentum to help us get to the 5,000 engage dividers.

We are focused on not only the quantity, but as we talked about earlier today, we are seeing improved quality of our NPA is coming onboard our platform Gary alluded to production higher that about 50% from prior year NPA production and so we are seeing signs of improved quality and we want to make sure that we continue that.

Momentum to help us get to the 5000 engaged advisers and then the third area is really around M&A. We believe as we continue to focus on our consolidation opportunities as well as capability acquisitions that are focused on M&A opportunities will help us.

Speaker 4: And then the third area is really around M&A. We believe as we continue to focus on our consolidation opportunities, as well as capability acquisitions, that our focus on M&A opportunities will help us really drive towards the 5,000 engaged advisor count. So those are the three key areas that we're focused on. Gary, we'd love to see if you have other details that you can share with Michael here as well. Michael, when you talk about how, as well, you can

Really drive towards the 5000 engaged adviser count. So those are the three key areas that we're focused on Gary I'd love to see if you have other details that you can share with Michael here as well Michael.

When you talk about how as well.

Wade can weigh in visors engagement it starts with the introduction and call out in the Onboarding process.

Speaker 4: The way advisors engage with us starts with the introduction we call the onboarding process. And then once they are onboarded, we have numerous processes and methods to help them increase their share of wallets.

And then and then once they are on boarded.

We have numerous.

Processes and.

Methods to health net.

Increasing our share of wallet with us and each in each one of those steps in the lifecycle of the advisor and the lifecycle of our relationship with them. We are focused on improving them and there are multiple projects with this initiative.

Speaker 4: And each one of those steps in the life cycle of the advisor and the life cycle of our relationship with them, we are focused on improving them and there are multiple projects with under this initiative. But it is a holistic approach. Okay, both, like Michael said, the new producing advisors as well is that very large dip in age.

But in a holistic.

Mystic approach paintball like Michael said, the new new producing advisers as well as that gets at that in very large disengagement.

Speaker 5: Great, thank you for the explanation. For just my second question, I want to switch gears just a little bit on the investment side. We talked through

Okay, great. Thank you for the explanation.

Purchased for my second question I wanted to switch gears, just a little bit on the investment side.

Talk through.

Speaker 5: a bit about the heightened level of cat sex going forward. And I think you mentioned the TLAF partnership as well, but...

A bit about the.

Heightened level of Capex going forward and I think you mentioned that Chinas partnership as well, but just curious.

Speaker 5: Just curious, you know, where's the focus in terms of the increase in CapEx and, you know, over the next year and a half or so, and then, you know, does the accelerated investment period merit any revisit to the margin expansion framework that asset markets operate under for the last?

Where is the focus in terms of.

The increase in Capex and in over the next five or so and then.

Does the accelerated investment periods merit any.

We visit to that margin expansion framework that asset markets operate under for the last few years.

Speaker 3: Michael, thank you again for the question. And so we are really sort of taking a very close look at the amount of capital that we have an opportunity to deploy. And that's actually one of our...

Yes, Michael Thank you again for the question and so.

We are we're really taking a very close look at the amount of capital that we have an opportunity to deploy and that's actually one of our top initiatives to really accelerate the deployment of capital and make sure that we get the right return on the capital and as I mentioned during the prepared remarks that we will be increased.

Speaker 3: top initiatives to really accelerate the deployment of capital and make sure that we get the right return on the capital. And as I mentioned during the Precarview Marks that we will be increasing the CapEx budget to about 8 to 10% of revenue from the current run rate of about 67%.

Seeing that capex budget to about 8% to 10% of revenue from the current run rate of about 6% to 7% and really the two primary goals with respect to increase in the investments, but what is really to drive growth.

Speaker 3: And really, there's actually two primary goals with respect to increase in the investment.

Speaker 3: So what is really to drive road? You alluded to the Cheetah partnership. Michael, we are very excited about this partnership here with Cheetah.

You alluded to the Chita partnership Michael we are very excited about this partnership here with Cheetah not only does it help us expand our footprint into the bank Trust channel, but with a $5 million to $10 million of additional capital investment in this relationship that will really allow us to bring some of the trust.

Speaker 3: Not only does it help us expand our footprint into the bank trust channel, but with a five to $10 million of additional capital investment in this relationship, that will really allow us to bring some of the trust capabilities even to our core channel as well. And so that's a great example where the capital expense, capital investment will help drive additional growth.

Capabilities, even to our core channel as well and so that's a great example, where the capital expense capital investment will help drive additional growth. The other side of our objective is to really continue to drive scalability.

Speaker 3: The other side of our objective is to really continue to drive scalability. And as I mentioned, automation, especially in our service and operations group is a key focus for us.

As I mentioned automation, especially in our service and operations group is a key focus for US we haven't updated remove up to $25 million of annual cost per year, while of course never taking the foot off the pedal on our already World class service offering and so we have an opportunity to really drive both grew.

Speaker 3: We have an opportunity to remove up to $25 million of annual costs per year while, of course, never taking the foot off the pedal on our already world-class service offering. And so we have an opportunity to really drive both growth as well as enhancing our scale through the capital investments that we discussed earlier.

As well as enhancing our scale through the capital investments that we discussed earlier.

Speaker 4: No, I would just echo that last point. We know advisors come to us for service. We talked about last quarter our MPS score of 72, which is like Michael said, world class. And so the events we want to make Michael are to allow us to grow, to scale a week, grow into the future. And as we head, that's from the first question the old brigade advisors to be able to continue offer all of them the same amazing level of service that we have now.

No I would just echo that last point, we know volume come to us for service.

<unk> talked about last quarter, our NPS score of 72 weekends like Michael said World class and so the investments we want to make Michael our Q.

Wow us to grow scale Omi grow.

And into the future and as we had on the first question yields engaged advisors to be able to continue to offer all of them. The same maintain level of service that we have now.

Okay.

Great. Thank you so much.

Speaker 6: Is this as good as yourself?

Sure Joe.

Speaker 1: Our next question is from Jeff Smith with William Blair. Blair, you may proceed.

Our next question is from Jeff Smith with William Blair You May proceed.

Hi, good afternoon, Michael and Gary.

Speaker 7: Looking at your fixed-rate mix, it's near 40% now, and then you're at the net yield threshold of 4% too. So, just curious if you're considering increasing fixed-rate allocations. You know, I know you want to maintain flexibility there, but, you know, are you thinking of increasing that, and how high could you potentially go there?

Looking at your fixed rate mix, it's near 40% now.

And then you're at the net yield threshold of 4% to so just curious if youre considering increasing fixed rate allocation I know you want to maintain flexibility there but.

Are you thinking to increase that and how high could you potentially go there.

Speaker 4: Sure, Jeff. Thank you for the question. So obviously, not obviously, but our first concern with the cash that we're managing in the ICB program is doing sure that we have liquidity for every client. And so...

Karen Thank you for the question. So obviously, not obviously, but our first concern with the cash that we're managing in the ICD program is to ensure that we have liquidity for every client and so that's why we've started out in that 40% threshold, we have evaluated going.

Speaker 4: That's why we've started out in that 40% threshold. We have evaluated going a little bit higher.

Speaker 4: We could both go higher and we could also extend the duration out past the 1.4 years that we have. If pricing and rates really allow us to do this.

And a little bit higher.

Cobalt go higher and we can also extend the duration.

Past the one four years that we have if pricing and rates really allow us to do that.

Speaker 4: You know, you're right that our overall rate is approaching the four percent.

Youre right that our overall rate is approaching a 4% cap that we have that and so as we look for further growth that will lead growth through our.

Speaker 4: cap that we've talked about. And so as we look for further growth, that will be growth through our high yield cash offering, other cash alternatives, as well as just our overall growth at NREL.

Our high yield cash Hoffman other other cash alternatives as well as just our overall growth at Arrow custodian.

Speaker 7: Okay, great. And then client cash balances look to be stabilizing around this $2.9 billion level. Could you speak to that? I mean, are you seeing sorting slowing? Do you think we're approaching sort of these operational or transactional cash needs? Because I think, Gary, I think you had mentioned earlier that that percentage would go up to three and a half percent. I presume that's sort of X the high yield savings. So maybe if you could speak to that.

Okay, Great and then client cash balances look could be stabilizing around this $2 $9 billion level.

Could you speak to that I mean are you seeing sorting slowing do you think we're approaching sort of these operational or transactional cash needs.

I think Gary I think you had mentioned.

You mentioned earlier that that percentage would go up to three 5% I presume that's sort of the.

The high yield savings.

Maybe if you could speak to that.

Speaker 4: I'll start Michael even give you a perspective as well, but just regarding the numbers guess. So yeah, the ICD program, which is that kind of non-discussionary cash, is that 3.2% and has to climb over the M.

Yeah, I'll start and Michael can.

Give me your perspective, as well, but just regarding the numbers get.

So yes, the ICD program when she does that kind of non discretionary cash is at three 2% Manhattan has declined over the past couple of quarters now.

Speaker 4: quarters. Now, in our prepared remarks, we noted that historically it's been at least three and a half percent, and we expect it to get back to there when we do our long-term planning and when we're looking out into next year. We believe that it is at its lower rate now, primarily because the strategists are putting more money to work rather than leave it in the ICD program.

Our prepared remarks, we noted that historically, it's been at least three 5% and we expect it to get back to there and when we do our long term planning and when we're looking out into next year.

We believe that it is assets lower right now.

Primarily because.

The filing is are putting more money to work rather than leaving it in the in the ICD program.

Speaker 4: You know, I think when you think about the cash sorting and how that works, I think that's impact this issue a little bit less because this is non-descriptionary cash. It does impact our overall flows. This is when it comes on your own platform or into bank account. But I believe the impact this item a little.

I think when you think about the cash sorting and how that works I think that impact this issue a little bit less because it is non discretionary cash it does impact. Our overall flows is money coming onto our platform are in Q Bank account I believe an impact list item a little bit less.

Speaker 3: Yeah, Gary, the only other point that I would add is related to cash sorting. We have definitely heard from advisors just in terms of their search for additional yield for their clients. And what they've been really delighted with is really around kind of the curated set of solutions on our platform. So whether it be our short term U.S. Treasury ladder strategies and or high yield.

Yes, Gary the only other point that I would add is related to cash sorting. We have definitely heard from advisors just in terms of their search for additional yield.

For their clients and what they've been really delighted with is really around kind of a curated set of solutions on our platform. So whether it be our short term U S treasury ladder strategies and or high yield cash and we've recently launched a money market pilot as well and so those are some of the products and services that.

Speaker 3: And we've recently launched a money market pilot as well. And so those are some of the products and services that our advisors are gravitating towards to really meet the needs of their clients as it relates to the yield.

Our advisors are gravitating towards to really meet the needs of.

Other clients as it relates to the yield.

Yeah.

Okay very helpful. Thank you.

Okay.

Thank you Mr. Smith.

Speaker 1: Our next question is from Patrick O'Shaughnessy with Raymond James. You may proceed.

Our next question is from Patrick O'shaughnessy with Raymond James You May proceed.

Speaker 8: Hi, good afternoon. Maybe to follow on the earlier question on your engaged advisor goals, is there anyone to quantify how you get to doubling it or get to 5,000 by 2026 in terms of the expected contribution from M&A market appreciation step up from non-engaged advisors, etc?

Hi, good afternoon, maybe to follow up on the earlier question on your engaged adviser goals is there any way to quantify how you get to doubling it or get to 5000 by 2026 in terms of the expected contribution from M&A market depreciation step up from non engaged advisers et cetera.

Speaker 4: Yeah, Patrick, let me give you rough math, right? And who knows exactly how it's gonna play out, right? But we're attracting, let's call it, seven to eight hundred million, seven to eight hundred new producing a body of your year, a year. And we're currently converting those, those, to engage status, and about a mid-teens rate.

Yes, Patrick let me give my rough math, right and who knows exactly how it's going to play out, but we're attracting let's call. It seven to 800.

Seven to 800, new producing advisers, a year a year and where we're currently converting those are those.

Who engaged status in about a mid teens rate.

Speaker 4: We aspire to double that, and so if you're going to double that, you're going to add that's going to increase our rate about 100 each year.

We aspire to double that and so if you're going to double that youre going to add that is going to increase our hour rate about 100 each year.

Speaker 4: Then, so you can look over the three-year period that engaged advisors from our MPA group could be in that, let's call it, rough range.

And then so you can look over the three year period that engaged advisers from our NPA group could be in that let's call. It.

Rough range four to 500 range.

Speaker 4: When you look at the non-engaged advisors, the 6,000 non-engaged advisors, if we can capture, again, rough math, 10 to 15% of that, you're talking somewhere between 600 to 900 engaged advisors from that 6,000 group.

When you look at the non engaged advisers of 6009 engaged advisers. If we can capture again rough math, 10% to 15% of that youre talking somewhere between six to $900.

Engaged advisers from that 6000 group.

Speaker 4: And then as Michael said, M&A is going to play a large part. There are consolidation planes out there. We've done that before. We believe we're a great home for advisors and that fills in the hole. And so, and you know, those numbers could be a little higher or lower, but that's sort of how you're breaking out from the paradigm that Michael played.

And as Michael said M&A is going to play a large part there are consolidation plans out there and we've done that before we believe we're a great home for advisers and that backfill.

That fills in the hall and so.

Any of those numbers can be a little higher or lower but that's far higher break announced net from the paradigm that Michael laid out.

Speaker 3: In Patrick, it's Mike Lee here and you have to kind of maybe underscore the last voice.

Hey, Patrick it's Michael here, just to kind of how maybe underscore that last point.

Speaker 3: Last point about the M&A, one of the key areas that we've been really, really focused on is to ensure that we have that focus on the consolidation opportunities for sub-scale tams and other platforms that can yield scaled access to a number of advisors. And so we absolutely do believe that acquisition is going to be a meaningful part of our March stores 5,000 Engage Survival.

Last point about the M&A.

One of the key areas that we've been really really focused on is to ensure that we have that focus on the consolidation opportunities for our <unk> and other platforms that can yield scaled access to a number of advisors and so we absolutely do believe that acquisitions is going to be a meaningful part of our March towards 5000.

Engaged advisers.

Yeah.

Speaker 8: Got it, that's helpful, thank you. And then obviously some big news in the R.A. space's past trigger was the conversion wish-wob and TD Ameritrade. Was there any impact that I smart either positive or negative?

Got it that's helpful. Thanks, and then.

Obviously, some big news in the.

<unk> was the conversion was schwab and TD Ameritrade was there any impact either positive or negative.

Speaker 3: Yeah Patrick, why don't I start that and Gary please feel free to add in the details here, but you know leading up to the Labor Day conversion, one of the custodians that we had a very large relationship with was TD Ameritrade.

Yes, Patrick why don't I start that and Gary Please feel free to add any details here, but.

Leading up to the labor day conversion.

One of the the custodians that we had a very large relationships with was TD ameritrade.

Speaker 3: And maybe just by way of context, given really the open architecture nature of our platform, not only do we have Athamark Trust as a main custodian, but we also offer Fidelity, Pershing, and Schwab, and of course TD Ameritrade prior to the conversion as really RIA custodial options.

And maybe just by way of context, given really the open architecture nature of our platform not only do we have asked the Mark Trust as a as a main custodian, but we also offer fidelity Pershing and Schwab and of course TD ameritrade prior to the conversion as really RIAA custodio options.

Speaker 3: You know, we've been planning for this conversion for months and months and months. And on one hand, we were actually quite thrilled to get the conversion completed.

We've been planning for this conversion for months and months and months and on one hand, we were actually quite thrilled to get the conversion completed.

Speaker 3: On the other hand, we've been working very closely with our partners at Schwab to work through so they post conversion details.

On the other hand, we work with.

We've been working very closely with our partners at Schwab to work through so the post conversion details and this is for both <unk> and four.

Speaker 3: And this is for both Asimar and for

Speaker 3: You know, and for adhesion as well. And so we are going through some of the post conversion operational kinks.

And for adhesion as well and so.

So we are going through some of the the post conversion operational case, nothing that is really bubbled up to the level, where it's of major concern what has been interesting Patrick is really the number of new opportunities that our teams have encountered.

Speaker 3: nothing that is really bubbled up to the level where it's of major concern.

Speaker 3: What has been interesting, Patrick, is really the number of new RIA opportunities that our teams have encountered as related to the TDA to Schwab conversion. Whether it be our adhesion.

As related to the TDA to Schwab conversion.

Whether it be our adhesion of folks.

Speaker 3: as well as the Asim Mark folks out in the field, given the conversion, that has really raised the awareness and really sort of...

As well as the asset more folks out in the field given the conversion there doesn't really raise the awareness and really sort of.

Speaker 3: Reinstall the importance of kind of having that platform that is the easiest to do business with. And of course, we take a lot of pride in that ease of use experience. And so that has actually led us to a number of new RIA opportunities.

We installed the importance of kind of having that platform that is the easiest to do business with and of course, we take a lot of pride in that ease of use experience and so that has actually led us to number of new opportunities.

Speaker 3: as a result of this TDA to Schwab conversion. So, obviously, we'll provide additional updates during future earnings calls. But, you know, on the operational front, you know, the conversion went well. We're working through some post-conversion operational kinks. But on the business development front, sort of many newfound opportunities related to the conversion.

As a result of this TVA to show up conversion. So obviously, we'll provide additional updates during future earnings calls but.

On the operational front.

The conversion went well we are working through some post conversion operation, Okay, but on the business development front, so to many new found opportunities related to the conversion.

Yeah.

Great. Thank you.

Thank you Mr Oshaughnessy.

Speaker 1: Our next question is from the line of Dan Bannon with Jefferies. Please proceed.

Our next question is from the line of Dan Fannon with Jefferies. Please proceed.

Speaker 9: Thanks. Good afternoon. I wanted to follow up on the organic growth returning to 10 percent. Maybe some context as to what's been a challenge or why you haven't been there in more recent quarters since, Michael, you've been there. And then also, if the bulk of doubling or a large percentage of doubling engaged advisors is going to come through M&A, we're still trying to bridge the organic side of the story here and why that's going to reaccelerate.

Alright. Thanks, Good afternoon, I wanted to follow up on the organic growth returning to 10%.

Maybe some context as to what's been a challenge or why you haven't been there in more recent quarters since Michael you've been there and then also if.

So bulk of doubling or a large percentage of doubling engage advisors are going to come through M&A.

Trying to bridge the organic side of the story here and why that's going to Reaccelerate.

Speaker 3: Yeah, yeah, absolutely. And thank you, Dan, for the question here. And Gary, why don't I get the conversation started and please chime in here as well. So, Dan, you're absolutely right. I mean, our organic growth focus and our commitment to getting back to the 10% plus level, it is definitely one of our top, top initiatives.

Yes, absolutely.

And for the other question here and Gerry why don't I get the conversation started and please chime in here as well so so that youre absolutely right.

Our organic growth focus and our commitment to getting back to the 10% plus level. It is definitely one of our top top initiatives.

Speaker 3: And as you know, when we think about organic growth, it is really about both share wallet growth from our existing advisors, kind of the same store sales, and of course, the new producing advisors, the new store sales that we've been able to garner over the years. You know, when we think about how do we drive both share wallet growth, as well as new producing advisors?

And as you know when we think about organic growth. It is really about both.

Share of wallet growth from our existing advisors kind of the same store sales and of course, the new producing advisers and new store sales that we've been able to garner over the years.

Yeah, when we think about how do we drive both share of wallet growth as well as new producing advisers, there's probably three key areas that we are extremely focused on one is really around the product and the platform enhancements you heard us reference capabilities like tax management services Tms Hasnt.

Speaker 3: There's probably three key areas that we are extremely focused on. You know, one is really around the product and the platform enhancement.

Speaker 3: You heard us reference capabilities like tax management services, TMS, as an example.

Example.

Speaker 3: Not only will it yield additional 10 basis points of revenue opportunities for us, but we absolutely believe that TMS will unlock kind of the asset opportunities for our advisors, whether it be sort of growing the existing clients of our advisors, but also the ability for our advisors to acquire new clients using a service like TMS.

Not only will it yield additional 10 basis points of revenue opportunities for us, but we absolutely believe that Tms will unlock the asset opportunities for our advisors, whether it would be.

So growing the existing clients of our advisors, but also the ability for advisers to acquire new clients using our services Tms and of course, our ability to attract new producing advisers to our platform leveraging these types of services. I mean, these are all going to yield to that incremental organic growth that we've been talking about.

Speaker 3: And of course, our ability to attract new producing advisors to our platform leveraging these types of services. I mean, these are all going to yield to that incremental organic growth that we've been talking about.

Speaker 3: Second area is really around continued RIA focus. Adhesion is, we are building up great momentum within adhesion. We alluded to over $480 million of net new assets just from their new advisors alone this year.

Second area is really around continued focus.

<unk> is we are building up great momentum within adhesion, we alluded to over $480 million.

Net new assets just from their new advisors alone this year and the pipeline looks great and so we absolutely believe that adhesion is going to be a key part of our 10% plus organic growth rate and then of course as we were talking about sort of the accelerated capital deployment.

Speaker 3: And the pipeline looks great. And so we absolutely believe that adhesion is going to be a key part of our 10% plus organic growth.

Speaker 3: And then, of course, as we've been talking about, sort of the accelerated capital deployment, not only M&A opportunities, but examples like the Cheetah Partnership that we alluded to, we absolutely believe that that's going to drive, help us drive towards that 10% plus organic growth.

Not only M&A opportunities, but examples like the Cheetah partnership that we alluded to we absolutely believe that that's going to drive help us drive towards that 10% plus organic growth.

Speaker 4: Hey, Dan, this is Gary. Hope you're doing well. Meeting is flying by. So I wanted to point out a couple of things, Dan. First.

And Gary.

Doing well.

Meaningful flying a lot.

So I wanted to point out a couple of things Dan.

First.

Speaker 4: When we were talking about the engaged advisor growth, what I was trying to lay out was a sort of, you know, around 600 are going to come from our new producing advisors, somewhere, let's call, I said, six to 900 would come from existing. And so if you take those two together, that should be about

When we were talking about me engaged adviser growth.

Trying to lay out what it is.

Around <unk>.

600 going to come from our new producing advisers.

Somewhere let's call it six to 900 would come from existing and so if you take those two together that should be about.

Speaker 4: two thirds to three quarters of that.

Yes.

Two thirds to three quarters of that gas in the half of 2000, and Simon mentioned that I think I think I heard you say something that.

Speaker 4: gap we have for 2000. And so I know I mentioned that because I think I think I heard you say something that a majority of the growth will come from M&A and I don't mean to convey that. Majority of the growth from gauge advisors are going to come from new producing advisors as well as our existing.

A majority of the growth will come from M&A and I don't mean to convey that mark majority of the growth engage environment, they're going to come from new producing advisers as well as our existing book.

Speaker 4: Talking about the existing book, we have a statistic in our key operating metrics that we

Talking about the existing book, our we have a statistic in our key operating metrics that we don't talk about enough is something we always show the production lift from our existing advisory book. This quarter. It was 18, 7% last year at this time of 14, 9% and feel great about that improvement of course year over year in that number.

Speaker 4: I won't talk about it enough, but it is something we always show, which is the production list from our existing advisory book.

Speaker 4: This quarter, it was 18.7%. Last year, at this time, it was 14.9%. We feel great about that improvement, of course, year over year. And that number should be over 20%, that number. And what Michael was talking about in terms of the initiatives we're taking to what we're investing in. But even to add to that, finding solutions for cash is gonna be really key.

Should be over 20% of that number.

Michael was talking about in terms of the initiatives were taking Q.

What we're investing in.

Even even even to add to that.

Finding solutions for cash is going to be really key over the next 18 months or so.

Speaker 4: months or so. As more and more folks are parking money in cash, Michael alluded to a number of initiatives that we have already on that. That should be a real key component in increasing that share of all.

More and more folks are parking money in cash and Michael alluded to a number of initiatives that we have ready on that that can be a real key component in increasing that share markets.

Speaker 9: Thank you. That's helpful. And then just as a follow-up, the $25 million in costs that you see in potentially removal from the cost base due to automation, what is the time period you think that might be realized? And also, in the context of how you're thinking about growth for next year for expenses, and I know you haven't given formal guidance yet, but just thinking about the setup for next year versus maybe where we've been the last couple of years.

Thank you that's helpful and then just as a follow up the.

$25 million.

And cost that you see in sort of a potentially removal from the cost base due to automation.

Is the time period do you think that might be realized and then also in the context of.

How you're thinking about growth for next year for expenses and.

I know youre not that you haven't given formal guidance, yet, but just thinking about the setup for next year versus maybe where we've been the last couple of years.

Speaker 3: Yeah, Dan, let me get the response started. And again, I'll look to Gary to provide additional details. So, you know, when we think about kind of the increase in CapEx spend to eight to 10% of revenue, automation is going to be a key part of that allocation. And so, you know, what we're really focused on is for those processes, those operational transactions,

Yes.

Let me get the.

Spot started and get a look to Gary to provide additional details so when.

When we think about kind of the increase in capex spend to 8% to 10% of revenue automation is going to be a key part of that allocation and so what we're really focused on is for those processes those operational transactions.

Speaker 3: We want to make sure that we automate as much of that as possible.

We want to make sure that we automate as much of that as possible.

Speaker 3: while at the same time, of course, continuing to deliver that world-class service.

While at the same time of course, continuing to deliver that world class service experience.

Speaker 3: Part of what we're thinking about is over the next three years or so, be able to implement enough of the automation to ensure that we take out approximately about $25 million of annual costs.

Part of what we're thinking about is over the next three years or so.

Be able to implement enough of the automation to ensure that we take out approximately about $25 million of annual cost key thing that I just want to stress, though is as we wanted to make sure that all of our advisors continues to receive the best service experience possible with that is the hallmark of asset market, we want to make sure.

Speaker 3: The key thing that I just want to stress, though, is we want to make sure that all of our advisors continue to receive the best service experience possible. That is the hallmark of Asimark, and we want to make sure that they are continuing to receive the best service experience, but behind the scenes, through this type of automation, that we realize the expense savings that we're committed to.

They are continuing to receive the best service experience, but behind the scenes through this type of automation that we realize the expense savings.

We're committed to Gary Yes, Thank you, Michael and Nanjing and catch the second part of your question, which I think Mike when you talk about how our long term aspiration for scalability I think you asked.

Speaker 4: Yeah. Thank you, Michael. And then to address the second part of your question, which I think, you know, Michael was just talking about how our long-term aspirations for scalability, I think you asked, you know, how does it look in the more near term and into 2024? And, you know, we'll talk about a 2024 outlook at our next call, I'm sure, but just to give you some thoughts, right? You know, our expenses have grown materially over the past few years, partly driven by our two acquisitions, of course, and some really material investments we made.

Look into more near term and into 2024.

We'll talk about 2024 outlook at our next call Im sure, but can you give me some thoughts right.

Our expenses have grown materially over the past few years, partly driven by our two acquisitions of course in some really material investments we made.

Speaker 10: I'm ill.

Speaker 4: I would have spent our operating costs to grow somewhere, certainly in the single digits next year. We are going to have a real focus on making sure that we are investing in what we need to invest in, but also making sure that we are causing nothing wrong with. We are being very thoughtful about how it stands while at the same time on the capital side, growing our investment in the old polling fields.

I wouldn't set our operating cost to grow somewhere certainly in the single digits next year. We are gonna have a real focus on making sure that we are investing in what we need to invest in while also making sure that we are.

Housing not pausing nothing wrong word we are being very thoughtful about and incentive comp while at the same time on the capital side.

Growing our investment in now both long term.

We can make.

Great. Thank you.

Thank you Mr Bannon.

Speaker 11: Our next question is from Michael Vinci with Goldman Sachs.

Our next question is from Michael <unk> with Goldman Sachs.

Yes.

Speaker 12: Hey guys, this is Michael on for Alex Blossin. So maybe just a...

Hey, guys. This is Michael on for Alex Washington, So maybe just.

Speaker 12: Follow up on some of the M&A questions, it sounds like you guys are obviously more focused on consolidation and consolidation opportunities near term, but maybe you can kind of talk about what you're seeing on the non-consolidation, more capability-focused side, and to what extent, you know, to that end, to what extent would you guys leverage your stock as a currency? Obviously, you spoke to the 550 of purchasing power you have, but to the extent that you guys have public stock that you can use, how would you factor that into your kind of M&A outlook there?

Follow up on some of the M&A questions. It sounds like you guys are obviously more focused on consolidation and consolidation opportunities near term, but maybe you can kind of talk about what youre seeing on the non consolidation more.

Capability focus side and to what extent to that answer to what extent would you guys leverage your stock as a currency. Obviously you spoke to the $5 50, a purchasing power you have but to the extent that you guys have a public stock that you can use.

Would you factor that into your.

Kind of M&A outlook there.

Speaker 3: Yeah, Michael, thank you for the question. Again, I'll get the conversation started and Gary will share additional details here. So when we think about the M&A and really under the broader context of accelerated capital deployment, like you have to write a consolidation and capabilities, those opportunities remain a core part of our focus, as it always has been.

Yes, Michael Thank you for the question.

I'll get the conversation started and Gary will share additional details here. So when we think about the M&A and really under the broader context of accelerated capital deployment luxury you're absolutely right, our consolidations and capabilities those opportunities remain a core part of our focus as it always has been.

Speaker 3: You know, at the same time, Michael, I do believe that we have an opportunity to expand our expand our focus. And so, as examples, we talked earlier about our new partnership with cheetah.

At the same time, Michael I do believe that we have an opportunity to expand our expand our focus so as examples we talked earlier about our new partnership with Cheetah and.

Speaker 3: And we believe that there are other partnerships, partnership opportunities out there where leveraging our capital, leveraging our balance sheet, we can go ahead and connect better with those firms ultimately to drive growth. I think there's also firms out there where based on sort of the synergies that exist, we may have opportunities to make some minority investments.

We believe that there are other partnerships partnership opportunities out there, we're leveraging our capital and leveraging our balance sheet. We can go ahead and connect better with those firms ultimately to drive growth I think there is also a firms out there where.

Based on sort of the synergies that exist, we may have opportunities to make some minority investments again.

Speaker 3: Again, we are evaluating different opportunities on that front.

Again, we are evaluating different opportunities on that front.

Speaker 3: And then, you know, lastly, we're also looking at various different advisor growth opportunities where to the extent that we can strategically partner with the right firms to help them drive their growth. We believe there's opportunities for us to leverage our balance sheet.

Then.

Lastly, we're also looking at various different advisor growth opportunities where to the extent that we can strategically partner with the right firms to help them drive their growth. We believe there is opportunities for us to leverage our balance sheet to help them grow as well, Gary and Mike just a question on the staff and whatnot.

Speaker 4: to help them grow as well. Gary? Yeah, Michael, just to your question about the stock and whatnot. The way we look at our dry powder, we have an unused line of credit of $375 million, and we're gonna end the year with a little bit over $200 million probably in excess cash or something right around $200 million of excess cash. And so, that's probably gonna be our main source of capital for acquisitions about.

The way, we look at our our dry powder.

Have an unused line of credit of $375 million and we're going to end the year with alumina over $200 million, having excess cash something around right around $200 million.

And so Matt.

<unk> going to be our main source of.

Capital for acquisitions now.

Speaker 4: So that's about almost $600 million there. We have used our stock for one purchase for wine in a modest way. And I guess that's not due in the future, but I would think of it more as cash.

Almost $600 million there.

We have used our stock.

From one country song from wine and.

In a modest way and I guess, that's an opportunity in the future, but I would think of it more as a cash acquisition.

Speaker 3: You know, Michael, the other thing that I just want to mention here is that as part of our overall corporate development team, we've also added two senior officers to the team here as well, one really focused on a new deal acquisition opportunities and the other officer focused on the integration as well. We're also collaborating with a number of other executives on the team to ensure that we have the best implementation and integration possible. So.

Michael the other thing that I just wanted to mention here is that as part of our overall corporate development team. We've also added two senior officers to the team here as well.

One really focus on a new deal.

Acquisition opportunities and the other officers are focused on the integration as well.

Also collaborating with a number of other executives on the team to ensure that we have the best implementation and integration possible. So so youre actually right. We are extremely excited and focused on not only deploy capital in the right way, but really identifying the right opportunities and talking to them into the <unk> ecosystem.

Speaker 3: So you're absolutely right. We are extremely excited and focused on not only deploying capital in the right way, but really identifying the right opportunities and talking them into the aftermark ecosystem.

Yeah.

Speaker 12: Great, thanks guys. And maybe that's a quick follow up. Just in shifting gears a bit in light of the recent DOL proposal, kind of wondering what you guys are hearing. I know it's early days, but ear to the ground. Last time around, we obviously saw a shift into advisory accounts, kind of pre-trading the proposed DOL rule last time. So anything you guys are hearing on the ground on that front, obviously early days, but you guys, any, any commentary you might have around that would be great. Thanks.

Great. Thanks, guys and maybe as a quick follow up.

Just shifting gears a bit in light of the recent Dol proposal kind of wondering what you guys are hearing I know, it's early days, but ear to the ground.

Last time around we obviously saw a shift into advisory accounts kind of pre trading the proposed overall last time so.

Anything you guys are hearing on the ground on that front, obviously early days, but you guys any.

Any commentary you might have around that would be great. Thanks.

King.

Speaker 3: Yeah, thanks Michael for the question there. And I think as we all know, there is a new proposal that I believe has been submitted to the White House for their review regarding the latest version of the DoL producer rule.

Yeah. Thanks, Michael for the question, there and I think as we all know there is a new proposal that I believe is yes.

Has been submitted to the White house for their review regarding the the latest version of the Dol fiduciary rule.

Speaker 3: You know, I'm not sure if there's a lot of clarity, Michael, in terms of what that newest version of the the proposal looks like. We've been in active conversations with a number of different industry folks, our council regarding the interpretation.

I'm not sure. If there is a lot of clarity Michael in terms of what that newest version of the the proposal looks like.

<unk> been in active conversations with number of different industry folks are counsel regarding the interpretation and I think the industry at large is sort of in a wait and see mode here, but even with that you know our belief is that all advisors are fiduciaries and they have an obligation to put the.

Speaker 3: And I think the industry at large is sort of in a wait and see mode here.

Speaker 3: But even with that, you know, our belief is that all advisors are fiduciaries and they have an obligation to put the best interest of the client at the center of everything that we do. And frankly, that is so consistent with how we think about supporting advisors. And so we absolutely welcome the fiduciary rule. We absolutely support the advisors.

Best interest of the client at the center of everything that we do and frankly that is so consistent with how we think about supporting advisors and so we absolutely welcome. The fiduciary rule, we absolutely support the advisors in there and fulfilling their fiduciary responsibilities to the clients and so obviously as we learn more about the latest.

Speaker 3: in fulfilling their fiduciary responsibilities to the clients. And so, obviously, as we learn more about the latest DOL proposal, we'll update not only this group here on our future earnings calls, but our advisors.

Dol proposal will update not only this group here on their future earnings calls, but our advisers and our clients as well and so we look forward to learning more about the finer details of that proposal.

Speaker 3: and our clients as well. And so we look forward to learning more about the finer details of that proposal.

Okay.

I will now turn the call back to Michael.

Okay.

Yeah.

Speaker 3: Okay, very good. Well, why don't we wrap up with a big thank you to all of you that have joined us here today. We appreciate all your support and your engagement and we look forward to seeing you on the road very soon. Thanks, everybody.

Okay very good well why don't we wrap up with a big Thank you to all of you that have joined US here today. We appreciate all your support and your engagement and we look forward to seeing you on the road very soon thanks everybody.

Goodbye.

Speaker 11: That concludes today's asset Mark Financial Holdings, E3Q23, an in-profit call. Thank you for your participation.

That concludes todays asset Mark Financial Holdings, Inc.

<unk> 23 earnings conference call. Thank you for your participation you may now disconnect your lines.