Q2 2024 SEI Investments Co Earnings Call

July 24, 2024

Thank you everyone for standing by and welcome to the SEI second quarter 2024 earnings call. At this time all participants are in a listen-only mode. Later we will conduct a question and answer session. Instructions will be given at that time.

Operator: Thank you for your time. All participants are in a listen-only mode.

Time: all participants on a listen-only mode.

Unknown Executive: Later, we will conduct a question-and-answer session. Instructions will be given at that time. As a reminder, today's call has been recorded.

Leslie A. Wojcik: Later, we will conduct a question and answer session, and instructions will be given at that time. I will now turn the call over to you. Thank you and welcome everyone. We appreciate you joining us today for our second quarter 2024 earnings call. On the call, we have Ryan Hicke, SEI's Chief Executive Officer, Sean Denham, Chief Financial Officer, and members of our Executive Committee, Jay Cipriano, Sandy Ewing, Paul Klauder, Phil McCabe, Mike Peterson, Neha Shah, and Sanjay Sharma.

Leslie Wojcik: I will now turn the call to your host, Leslie Wojcik. Please go ahead.

As a reminder, today's call is being recorded. I will now turn the call over to your host, Leslie Wolchek. Please go ahead.

Ryan Hicke: Thank you and welcome, everyone. We appreciate you joining us today for our second quarter 2024 earnings call.

Leslie Wolchek: Thank you and welcome everyone. We appreciate you joining us today for our second quarter 2024 earnings call.

Ryan Hicke: On the call, we have Ryan Hicke, FBI Chief Executive Officer, Sean Denham, Chief Finance Financial Officer, and members of our Executive Committee, James Cipriano, Andy Ewing, Paul Klauder, Bill McCabe, Mike Peterson, Mayhasha, and Sanjay Sharma.

Speaker Change: On the call, we have Ryan Hicke, SEI's Chief Executive Officer, Sean Denham, Chief Financial Officer, and members of our Executive Committee, Jason Briano, Sandy Ewing, Paul Klauder, Phil McCabe, Mike Peterson, Sneha Shah, and Sanjay Sharma.

Ryan Hicke: Before we begin, I'd like to point out that our earnings press release can be found under the Investor Relations section of our website at fbID.com. This call is being broadcast live, and a replay will be available on the events and webcasts page of our website. We would like to remind you that during today's presentation, in our responses to your questions, we have and will make certain forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ materially. Please refer to our notices regarding forward-looking statements that appear in today's earnings press release and in our filings with the Securities and Exchange Commission.

Leslie A. Wojcik: Before we begin, I'd like to point out that our earnings press release can be found in the investor relations section of our website at sbic.com. This call is being webcast live, and a replay will be available on the events and webcast page of our website.

Speaker Change: Before we begin, I'd like to point out that our earnings press release can be found under the investor relations section of our website at sbic.com.

Speaker Change: This call is being webcast live and a replay will be available on the events and webcast page of our website.

Leslie A. Wojcik: We would like to remind you that during today's presentation and in our responses to your questions, we have and will make certain forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ materially. Please refer to our notices regarding forward-looking statements that appear in today's earnings press release and in our filings with the Securities and Exchange Commission. We do not undertake to update any of our board looking, and I'll now turn it over to CEO Ryan Hicke. Ryan. Thanks, Leslie, and good afternoon, everyone.

Speaker Change: We would like to remind you that during today's presentation and in our responses to your questions, we have and will make certain forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ materially.

Speaker Change: Please refer to our notices regarding forward-looking statements that appear in today's earnings press release and in our filings with the Securities and Exchange Commission. We do not undertake to update any of our forward-looking statements.

Ryan Hicke: We do not undertake to update any of our forward-looking statements.

Ryan Hicke: I'll now turn it over to CEO Ryan Hicke. Ryan. Thanks, Leslie. Good afternoon, everyone.

Ryan P. Hicke: I'll now turn it over to CEO Ryan Hicke. Ryan. Thanks, Leslie, and good afternoon, everyone. Our positive momentum carried through the second quarter as we once again delivered strong profit growth quarter over quarter and continued solid execution of sales in our technology and operational platforms.

Ryan Hicke: Our positive momentum carried through the second quarter, as we once again delivered strong profit growth quarter over quarter, and continued solid execution of sales in our technology and operational platforms. We posted $1.5 EPS for the quarter, $22 million in sales, of which $15.9 million is recurring, and $519 million in revenue.

Ryan P. Hicke: Our positive momentum carried through the second quarter as we once again delivered strong profit growth quarter over quarter and continued solid execution of sales in our technology and operational platform. We posted $1.05 EPS for the quarter. $22 million in sales, of which $15.9 million is recurring, and $519 million in revenue. Sean will provide a detailed breakdown of all corporate and business segment financial short, I'm a little over two years into the role, and at a high level, I'm really pleased with these five key areas.

Speaker Change: We posted $1.05 EPS for the quarter, $22 million in sales, of which $15.9 million is recurring, and $519 million in revenue.

Ryan Hicke: Sean will provide a detailed breakdown of all corporate and business segment financial short group. I'm a little over two years into the role, and at a high level, I'm really pleased with these 5C areas. First, our sales pipeline of market activity, client engagement is high; the reception to an enterprise positioning is resonating, and our total addressable markets are expanding. Second, EPS growth. As a result of increased market activity, expense management, and execution on our continued optimization programs, we continue to drive earnings growth. Third, unit results. IMS revenue with profit growth, really strong, private banking, margin expansion, and revenue growth potential, and the increased focus on reimagining and growing our advisor and institutional businesses remain a priority.

Ryan P. Hicke: Sean will provide a detailed breakdown of all corporate and business segment financials shortly.

Speaker Change: I'm a little over two years into the role, and at a high level, I'm really pleased with these five key areas. First, our sales pipeline and market activity. Client engagement is high. The reception to an enterprise positioning is resonating, and our total addressable markets are expanding.

Ryan P. Hicke: First, our sales pipeline and market activity, client engagement is high, the reception to an enterprise positioning is responding, and our total addressable markets are expanding. Second, EPS growth. As a result of increased market activity, expense management, and execution on our continued optimization programs, we continue to drive earnings growth. Universal, IMS revenue and profit growth really strong private banking margin expansion and revenue growth potential, and the increased focus on reimagining and growing our advisor and institutional businesses remain a priority, Four, culture, and talent.

Speaker Change: Second, EPS growth. As a result of increased market activity, expense management, and execution on our continued optimization programs, we continue to drive earnings growth.

Speaker Change: 3. Unit Results

Speaker Change: IMS revenue and profit growth, really strong, private banking, margin expansion, and revenue growth potential, and the increased focus on reimagining and growing our advisor and institutional businesses remain a priority.

Ryan Hicke: Fourth, culture and talent. Infusion of new talent and leadership, as well as engagement and employee mobility across the AI, is becoming part of our DNA again. The executive team has geled really well, and we are unified in our vision on organic and inorganic growth priorities. And lastly, RIA expansion, platform adoption in the RIA space is growing. And our ability to operate in that market creates strategic opportunity.

Ryan P. Hicke: Infusion of new talent and leadership, as well as engagement and employee mobility across SEI, is becoming part of our DNA again. The executive team has gelled really well, and we are unified in our vision for organic and inorganic growth priorities. And lastly, RIA Expansion.

Speaker Change: 4. Culture and Talent

Speaker Change: Infusion of new talent and leadership, as well as engagement and employee mobility across SEI, is becoming part of our DNA again. The executive team has gelled really well, and we are unified in our vision on organic and inorganic growth priorities.

Ryan P. Hicke: Platform adoption in the RI space is growing, and our ability to operate in that market creates strategic opportunity. From a more strategic perspective, we are proactively addressing industry headwinds and capitalizing on tailwinds to position ourselves for long-term success. For example, there is an increasing trend of consolidation in the intermediary space, especially with RIAs and broker-dealers. As advisor firms navigate transitions, including expanding their capabilities, monetizing their businesses, or planning for succession, we are actively engaged with them to provide more optionality to remain with SEI and accelerate their success with us.

Speaker Change: And lastly, RIA expansion. Platform adoption in the RIA space is growing, and our ability to operate in that market creates strategic opportunity.

Ryan Hicke: From a more strategic perspective, we are proactively addressing industry headwinds and capitalizing on tailwinds to position ourselves for long-term success. For example, there's an increasing trend of consolidation in the intermediary space, especially with RIAs and broker-dealers. As advisor firms navigate transitions, including expanding their capabilities, monetizing their businesses, or planning for succession, we are actively engaged with them to provide more optionality to remain with FCI and accelerate your success with us. Another significant trend is public markets continue to seek opportunities to expand access to private markets, and private asset managers are seeking access to the public markets.

Speaker Change: From a more strategic perspective, we are proactively addressing industry headwinds and capitalizing on tailwinds to position ourselves for long-term success. For example, there is an increasing trend of consolidation in the intermediary space, especially with RIAs and broker-dealers.

Speaker Change: As advisor firms navigate transitions, including expanding their capabilities, monetizing their businesses, or planning for succession, we are actively engaged with them to provide more optionality to remain with SEI and accelerate your success with us.

Ryan P. Hicke: Another significant trend is public markets continuing to seek opportunities to expand access to private markets, and private asset managers are seeking access to public markets. Phil is in the room, and IMS is in the center of this every day. He could comment during the Q&A.

Speaker Change: Another significant trend is public markets continue to seek opportunity to expand access to private markets and private asset managers are seeking access to the public markets.

Ryan Hicke: Phil was in the room, and IMS is in the center of this every day. He could comment during the Q&A, but we are well positioned to expand our footprint and capitalize on this trend across technology, operations, as well as asset management. We are also experiencing increased demand across European private asset managers, and our investment in the SEI Access platform across multiple markets will be a driver of future growth. Investor needs and demand continue to evolve. We also believe the shift in market preference and product price, asset allocation and investment choice presents opportunity, and that portfolio customization and tax optimization are key to meeting investors' needs in today's economic environment.

Phil: Phil is in the room, and IMS is in the center of this every day. He could comment during the Q&A, but we are well-positioned to expand our footprint and capitalize on this trend across technology, operations, as well as asset management.

Phil: We are also experiencing increased demand across European private asset managers and our investment in the SEI access platform across multiple markets will be a driver of future growth.

Ryan P. Hicke: We also believe the shift in market preference and product types, asset allocation, and investment choice presents opportunities and that portfolio customization and tax optimization are key to meeting investors' needs in today's economic environment. We've proactively made fee reductions in our SMA program in April and launched new SMAs and ETFs to increase client retention as well as new client acquisition. We really like to medium the long-term growth prospects of these businesses if we can capture more AUM. And finally, the overall demand for outsourcing grows daily.

Phil: Investor needs and demand continue to evolve. We also believe the shift in market preference and product types, asset allocation, and investment choice presents opportunity, and that portfolio customization and tax optimization are key to meeting investors' needs in today's economic environment.

Ryan Hicke: We have proactively made fee reductions in our SMA program in April, and launched new SMAs and ETFs to increase client retention, as well as new client acquisition. We really like the medium-to-long-term growth prospects of these businesses if we can capture more AUM. And finally, the overall demand for outsourcing grows daily. We are seeing increased engagement in sales with our professional services offering, inside the regional community bank segments and the UK private client that's the manager segment. Wealth management, operations, and technology infrastructure change. Those initiatives are complex and require significant expertise to successfully execute. MCI's professional services offerings are not only helping our clients execute these transformation programs successfully, but also helping our clients as they work on new initiatives to grow their business and improve operating efficiency.

Phil: We've proactively made fee reductions in our SMA program in April and launched new SMAs and ETFs to increase client retention as well as new client acquisition.

Speaker Change: We really like to medium the long-term growth for prospects of these businesses if we can capture more AUM.

Ryan P. Hicke: We're seeing increased engagement in sales with our professional services offering inside the regional community bank segments and the UK private client investment manager segments. Wealth Management, Operations, and Technology Infrastructure Change. Those initiatives are complex and require significant expertise to successfully execute.

Speaker Change: And finally, the overall demand for outsourcing grows daily. We're seeing increased engagement in sales with our professional services offering inside the regional and community bank segments and the UK private client investment manager segment.

Speaker Change: Wealth management, operations, and technology infrastructure change. Those initiatives are complex and require significant expertise to successfully execute.

Ryan P. Hicke: SEI's professional services offerings are not only helping our clients execute these transformation programs successfully but also helping our clients as they work on new initiatives to grow their business and improve operating efficiency. We believe this offering has enterprise applicability across all of FDI's segments. The market is looking to SEI to provide more services and capabilities, and that's a testament to our delivery, client-centric focus, investment in innovation, and long-term capital strength. As we all know, innovation is critical.

Speaker Change: SEI's professional services offerings are not only helping our clients execute these transformation programs successfully, but also helping our clients as they work on new initiatives to grow their business and improve operating efficiency.

Ryan Hicke: We believe this offering has enterprise applicability across all of FCI segments. The market is looking to FCI to provide more services and capabilities, and that's a testament to our delivery, client-centric focus, investment in innovation, and long-term capital strength.

Speaker Change: We believe this offering has enterprise applicability across all of FDI's segments.

Speaker Change: The market is looking to SEI to provide more services and capabilities, and that's a testament to our delivery, client-centric focus, investment in innovation, and long-term capital strength.

Ryan Hicke: As we all know, innovation is critical. A component of increasing scale and leverage across the company is investing in emerging growth ideas to maximize return on invested capital to shareholders and harness new technologies. For example, we are actively exploring the application of AI in all three of our pillars of expertise, targeting internal efficiencies, client service improvements, and operational automation. We are also progressing AI business cases through our strategic partnership with TIFFA. As I mentioned earlier, we want FCI to be a premier destination for existing and future talent. There are exciting signs that we are recapturing that space.

Speaker Change: As we all know, innovation is critical. A component of increasing scale and leverage across the company is investing in emerging growth ideas to maximize return on invested capital to shareholders and harness new technologies.

Speaker Change: For example, we are actively exploring the application of AI in all three of our pillars of expertise.

Speaker Change: targeting internal efficiencies, client service improvements, and operational automation. We are also progressing AI business cases through our strategic partnership with Tiffin.

Ryan P. Hicke: We are also progressing AI business cases through our strategic partnership with Tiffin. As I mentioned earlier, we want SEI to be a premier destination for existing and future talent. There are exciting signs that we are recapturing that space. In March, Sean joined SEI from Grant Thornton, and over the last four months, he has not only immersed himself in our business and culture, but he's brought new ideas to the table and challenged us in ways that are helping drive results. He will be ready for your Q&A in a few minutes.

Speaker Change: As I mentioned earlier, we want SEI to be a premier destination for existing and future talent.

Ryan Hicke: In March, Sean joined FCI from Grant Gordon, and over the last four months he has not only immersed himself in our business and culture, but he has brought new ideas to the table and challenged us in ways of our helping drivers. He is ready for your Q&A in a few minutes. Also in September, Michael Lane will join the SEI executive team from BlackRock, leading our advisor and institutional businesses. Michael brings years of experience across financial services, and we believe his leadership and depth of industry knowledge will help us further execute our road strategy, expand our total addressable market, and capitalize on further market opportunities.

Speaker Change: There are exciting signs that we are recapturing that space. In March, Sean joined SEI from Grant Thornton. And over the last four months, he has not only immersed himself in our business and culture, but he's brought new ideas to the table and challenged us in ways that are helping drive results.

Ryan P. Hicke: Also in September, Michael Lane will join the SEI executive team from BlackRock, leading our advisor and institutional business. Michael brings years of experience across financial services, and we believe his leadership and depth of industry knowledge will help us further execute our growth strategy, expand our total addressable market, and capitalize on further market opportunities. We look forward to welcoming Michael in September and introducing him to all of you.

Speaker Change: He is ready for your Q&A in a few minutes.

Speaker Change: Also in September , Michael Lane will join the SEI executive team from BlackRock, leading our advisor and institutional businesses.

Speaker Change: Michael brings years of experience across financial services, and we believe his leadership and depth of industry knowledge will help us further execute our growth strategy, expand our total addressable market, and capitalize on further market opportunities.

Ryan Hicke: We look forward to welcoming Michael in September and introducing him to all of you. Our conviction around our performance for 2024 remains that fast. The foundation of SEI is strong. Our core businesses are delivering solid results, and we are leaning into future growth initiatives. With our formidable balance sheet, unmatched set of capabilities, and laser focus strategy, we believe we are well positioned to drive growth and continuing delivering value to our shareholders.

Speaker Change: We look forward to welcoming Michael in September and introducing him to all of you.

Ryan P. Hicke: Our conviction around our performance for 2024 remains steadfast. The foundation of SEI is strong. Our core businesses are delivering solid results, and we are leaning into future growth initiatives. With our formidable balance sheet, unmatched set of capabilities, and laser-focused strategy, we believe we are well positioned to drive growth and continually deliver value to our shareholders. This concludes my prepared remarks. I will now turn it over to Sean to discuss our financial results for the quarter. Sean?

Speaker Change: Our conviction around our performance for 2024 remains steadfast. The foundation of SEI is strong. Our core businesses are delivering solid results and we are leaning into future growth initiatives.

Speaker Change: With our formidable balance sheet, unmatched set of capabilities, and laser-focused strategy, we believe we are well-positioned to drive growth and continually delivering value to our shareholders.

Ryan Hicke: This concludes my prepared remarks.

Sean Denham: Thanks, Ryan. As Ryan mentioned, EPS for the quarter was $1.05. Up 18% over the $0.89 in the prior year period and 6% over the $0.99 reported in the first quarter. Revenue for the quarter was $519 million, up slightly from Q1 and up 6% from the second quarter of 2023. Total expenses for the quarter were $382 million, which compares to $376 million last year and $386 million in the first quarter of 2024.

Sean Denham: I will now turn it over to Sean to discuss our financial results for the quarter. Sean? Thanks, Ryan. As Ryan mentioned, EPS for the quarter was $1.05. Up 18% over the 89 cents in the prior year period, in 6% over the 99 cents reported in the first quarter. Revenue to the quarter was $519 million of flight rate from Q1 and up 6% from the second quarter of 2023. Total expenses for the quarter were $382 million, which compares to $376 million last year, to $386 million in the first quarter of 2024. Net income for the quarter increased 17% over the second quarter of 2023 to $139 million and was up 5.9% compared to the first quarter of 2024.

Speaker Change: This concludes my prepared remarks. I will now turn it over to Sean to discuss our financial results for the quarter. Sean?

Sean: Thanks, Ryan. As Ryan mentioned, EPS for the quarter was $1.05, up 18% over the $0.89 in the prior year period and 6% over the $0.99 reported in the first quarter.

Sean: Revenue for the quarter was $519 million, up slightly from Q1, and up 6% from the second quarter of 2023.

Sean: Total expenses for the quarter were $382 million, which compares to $376 million last year and $386 million in the first quarter of 2024.

Sean Denham: Net income for the quarter increased 17% over the second quarter of 2023 to $139 million and was up 5.9% compared to the first quarter of 2024. In the quarter, we repurchased approximately 1.6 million shares of SEI stock at an average price of $67.44 per share for a total of $111 million in stock purchases.

Sean: Net income for the quarter increased 17% over the second quarter of 2023 to $139 million and was up 5.9% compared to the first quarter of 2024.

Sean Denham: In the quarter, we repurchased approximately $1.6 million shares of SEI stock at an average price of $67.44 per share for a total of $111 million stock purchases. On the sales front, net sales for the quarter total $22 million, of which $15.9 million is recurring. In our technology and investment processing businesses of private banking and investment managers, net sales events total $26.9 million in our expected to generate $21.5 million in recurring revenue. In our asset management related businesses, net sales were approximately negative $5.6 million. Primarily due to asset movement from our mutual fund products into other investment programs, as well as net losses in our institutional business.

Sean: In the quarter, we repurchased approximately 1.6 million shares of SEI stock at an average price of $67.44 per share for a total of $111 million of stock purchases.

Sean Denham: On the sales front, net sales for the quarter totaled $22 million, of which $15.9 million is recurring. In addition, our technology and investment processing businesses, of Private Banking and Investment Managers, net sales events total $26.9 million and are expected to generate $21.5 million in recurring revenue. In addition, for asset management-related businesses, net sales were approximately negative $5.6 million. Primarily due to asset movement from our mutual fund products into other investment programs as well as net losses in our institutional business.

Sean: On the sales front, net sales for the quarter totaled $22 million, of which $15.9 million is recurring. And our technology and investment processing businesses

Sean: of Private Banking and Investment Managers. Net sales have been totaled $26.9 million and are expected to generate 21.5 million in recurring revenue.

Sean: In our asset management related businesses, net sales were approximately negative $5.6 million, primarily due to asset movement from our mutual fund products into other investment programs, as well as net losses in our institutional business.

Sean Denham: We also sold $700,000 of recurring revenue in our investments in new business segment.

Sean: We also sold $700,000 of recurring revenue in our Investments in New Business segment.

Sean Denham: We also sold $700,000 of recurring revenue in our Investments in New Business segment. Now, I will cover financial highlights for each business segment. In our private banking business, net sales were $8.8 million, half of which were one-time events associated with increased adoption of our professional services offerings. During the quarter, the team recontracted with three clients, won new business with an existing client acquisition, and signed three new clients, two in the U.S. and one in the U.K. We're excited about second half sales events in private banking. Revenue for the quarter was $132.4 million compared to the first quarter of $130.1 million.

Sean Denham: Now I will cover financial highlights for each business segment. In our private banking business, net sales were $8.8 million, half of which were one-time associated with increased adoption of our professional services offering. During the quarter, the team re-contracted with three clients when new business with an existing client acquisition and signed three new clients. Two in the US and one in the UK were excited about second half sales events in private banking. Revenue for the quarter was $132.4 million compared to the first quarter of $130.1 million. Our backlog of sold, but expected to install in the next 18 months, recurring revenue is $14.9 million in Q2 compared to $18.5 million in Q1.

Sean: Now I will cover financial highlights for each business segment.

Sean: In our private banking business, net sales were $8.8 million, half of which were one time associated with increased adoption of our professional services offering.

Speaker Change: During the quarter, the team recontracted with three clients, won new business with an existing client acquisition, and signed three new clients, two in the US and one in the UK. We're excited about second half sales events in private banking.

Sean: Revenue for the quarter was $132.4 million compared to first quarter of $130.1 million.

Sean Denham: Our backlog of sold, but expected to install in the next 18 months, recurring revenue is $14.9 million in Q2 compared to $18.5 million in Q1. Margin expanded by 2.3% to 15.5% in Q2 versus Q1. However, approximately 2% of the increase was one-time, and if normalized, would have been 13.5% for the quarter.

Sean: Our backlog of sold, but expected to install in the next 18 months, recurring revenue is $14.9 million in Q2 compared to $18.5 million in Q1.

Sean Denham: Margin expanded by 2.3% to 15.5% in Q2 versus Q1. However, approximately 2% of the increase was one time, and it normalized what had been 13.5% for the quarter. In our investment managers business, net sales for the quarter were $18.1 million, $17.2 million of which is recurring. This included a record number of new clients in North America. Our cross-selling initiatives remained strong, and we saw increased adoption and expansion across most of our products. During the quarter, we re-contracted seven clients totaling 14.7 million of recurring revenue. Revenue for the quarter was $180 million, an increase of 4% compared to first quarter of $172.7 million and reflecting matriculation and previously announced events.

Sean: margin expanded by 2.3% to 15.5% in Q2 versus Q1. However, approximately 2% of the increase was one time and if normalized would have been 13.5% for the quarter.

Sean Denham: In our investment managers business, net sales for the quarter were $18.1 million, $17.2 million of which was recurring. This included a record number of new clients in North America. Our cross-selling initiatives remain strong, and we saw increased adoption and expansion across most of our products. During the quarter, we closed seven clients, totaling $14.7 million of recurring revenue. Revenue for the quarter was $180 million, an increase of 4% compared to the first quarter of $172.7 million and reflecting the matriculation of previously announced events.

Sean: In our Investment Managers business, net sales for the quarter were $18.1M, $17.2M of which is recurrent. This included a record number of new clients in North America.

Sean: Our cross-selling initiatives remain strong, and we saw increased adoption and expansion across most of our products.

Sean: During the quarter we recontracted seven clients totaling $14.7 million of recurring revenue.

Sean: Revenue for the quarter was $180 million, an increase of 4% compared to first quarter of $172.7 million and reflecting matriculation of previously announced events.

Sean Denham: Our backlog of sold, but expected to install in the next 18 months, recurring revenue is $28.3 million in Q2 compared to $28.9 million in Q1. Margin expanded 1.6% to 38% in Q2 versus Q1 due to expense optimization and a one-time expense benefit of 1%, which, when normalized, would be 37%. In our advisor business, net cash flows onto our platform were of $100 million driven by growth in the RIA segment, our strategist partner solutions, and managed to count pollution. This was all set by negative flows from active equity mutual fund products and consolidation in the advisor market.

Sean Denham: Our backlog of sold, but expected to install in the next 18 months, recurring revenue is $28.3 million in Q2 compared to $28.9 million in Q1. Margin expanded 1.6% to 38% in Q2 versus Q1 due to expense optimization and a one-time expense benefit of 1%, which when normalized would be 37%. In our advisor business, net cash flows onto our platform were up $100 million, driven by growth in the RIA segment, our strategic partner solutions, and managed account solutions.

Sean: Our backlog of sold, but expected to install in the next 18 months, recurring revenue is $28.3 million in Q2 compared to $28.9 million in Q1.

Sean: Margin expanded 1.6% to 38% in Q2 versus Q1 due to expense optimization and a one-time expense benefit of 1%, which when normalized would be 37%.

Sean: In our advisor business, net cash flows onto our platform were up $100 million, driven by growth in the RIA segment, our strategist partner solutions, and managed account solutions.

Sean: This was offset by negative flows from active equity mutual fund products and consolidation in the advisor market.

Sean Denham: We continue to demonstrate momentum in helping RIA achieve scale, business growth, and value creation for their clients. During the quarter, we welcomed 92 new advisors, 25 of which came from a large enterprise that was partially onboarded in the quarter. This compares to 61 advisors in Q1 2024. Revenue in Q2 is $120.6 million versus $122.7 million in Q1. The decrease was primarily driven by fee reductions and are separately managed account program and shifts in asset classes. Margin decreased from 45% in Q1 to 43% in Q2, mainly tied to the aforementioned SMA program fee reduction. One key item of note is the $10 million of revenue generated in the quarter from the FDIC-insured deposit program.

Sean Denham: This was offset by negative flows from active equity mutual fund products and consolidation in the advisor market. We continue to demonstrate momentum in helping RIAs achieve scale, business growth, and value creation for their clients. During the quarter, we welcomed 92 new advisors.

Sean: We continue to demonstrate momentum in helping RIAs achieve scale, business growth, and value creation for their clients.

Sean Denham: 25 of which came from a large enterprise that was partially onboarded in the quarter. This compares to 61 advisors in Q1 2024. Revenue in Q2 was $120.6 million versus $122.7 million in Q1. The decrease was primarily driven by fee reductions in our separately managed account program and a shift in asset classes. Margins decreased from 45% in Q1 to 43% in Q2, mainly tied to the aforementioned SMA program

Sean: During the quarter, we welcomed 92 new advisors.

Sean: 25 of which came from a large enterprise that was partially onboarded in the quarter. This compares to 61 advisors in Q1 2024.

Sean: Revenue in Q2 is $120.6 million versus $122.7 million in Q1.

Sean: The decrease was primarily driven by fee reductions in our separately managed account program and shift in asset classes.

Sean: Margins decreased from 45% in Q1 to 43% in Q2, mainly tied to the aforementioned SMA program fee reduction.

Sean Denham: One key item of note is the $10 million of revenue generated in the quarter from the FDIC Insured Deposit Program. As a reminder, this program launched in December 2023. At quarter end, there were approximately $900 million in assets in this program. In the institutional business, net sales events for the quarter were negative $1.8 million, reflecting positive client signings in our OCIO and unfunded OCIO offerings, offset by losses and repricing in client retention activity. Revenues for the quarter were essentially flat compared with the previous quarter.

Sean: One key item of note is the $10 million of revenue generated in the quarter from the FDIC Insured Deposit Program.

Sean Denham: As a reminder, this program launched in December 2023. At quarter ends, there were approximately $900 million in assets in this program.

Sean: As a reminder, this program launched in December 2023. At quarter end, there were approximately $900 million in assets in this program.

Sean Denham: In the institutional business, net sales events for the quarter were negative $1.8 million. Reflecting positive client signings in our OCIO and bundled OCIO offerings, all set by losses and repricing inclined retention activities. Revenues for the quarter were essentially flat to the previous quarter. Margin increased 2% to 46% in Q2 versus Q1 due to one-time expense benefits. Without these one-time expense benefits, Q2 margin would have been approximately 44%. In the investments in new business segment, revenues and expenses were also up compared to first quarter, with modest profit improvement. We re-contracted clients in family office services and are very active with implementations for single-family offices.

Sean: In the institutional business, net sales events for the quarter were negative $1.8 million, reflecting positive client signings in our OCIO and unfundled OCIO offerings, offset by losses and repricing in client retention activities.

Sean Denham: Margin increased 2% to 46% in Q2 versus Q1 due to one-time expense benefits. Without these one-time expense benefits, Q2 margin would have been approximately 44%. In the investments and new business segment, revenues and expenses were also up compared to the first quarter, with modest profit improvement. We recontracted clients and family office services and are very active with implementations for single family offices, and SEI Sphere, we implemented our largest client to date. During the quarter, we were actively engaged with the SEI Access Platform by Wealth Managers, Advisors, and Fund Managers.

Sean: Revenues for the quarter were essentially flat the previous quarter. Margin increased 2% to 46% in Q2 versus Q1 due to one-time expense benefits. Without these one-time expense benefits, Q2 margin would have been approximately 44%.

Sean: In the investments and new business segment, revenues and expenses were also up compared to first quarter, with modest profit improvement.

Sean: We recontracted clients in family office services and are very active with implementations for single family offices.

Sean Denham: In SEI sphere, we implemented our largest client today. During the quarter, we were actively engaged with the SEI Access platform across wealth managers, advisors, and fund managers. We continue to focus on identifying and exploring venture investment opportunities. LSV produced 34.2 million dollars of profit during the quarter. This compares to $31.6 million during the first quarter. Revenues for LSV were $113.8 million, compared to $107.3 million in the first quarter. Second quarter revenues included $13.5 million of performance fees. As a reminder, LSV recorded performance fees of $6 million during the first quarter. Performance fees are a reflection of continued positive relative performance.

Sean: and SEI Sphere, we implemented our largest client to date.

Sean: During the quarter, we were actively engaged with the SEI access platform across wealth managers, advisors, and fund managers.

Sean Denham: We continue to focus on identifying and exploring venture investment opportunities. LSV produced $34.2 million of profit during the quarter. This compares to $31.6 million during the first quarter. Revenues for LSV were $113.8 million compared to $107.3 million in the first quarter.

Sean: We continue to focus on identifying and exploring venture investment opportunities.

Sean: LSV produced $34.2 million of profit during the quarter. This compares to $31.6 million during the first quarter.

Sean: Revenues for LSV were $113.8 million compared to $107.3 million in the first quarter.

Sean Denham: Second quarter revenues included $13.5 million of performance fees. As a reminder, LSV recorded performance fees of $6 million during the first quarter. Performance fees are a reflection of continued positive relative performance. Our tax rate for the quarter was 23.9%.

Sean: Second quarter revenues included $13.5 million of performance fees.

Sean: As a reminder, LSV recorded performance fees of $6 million during the first quarter. Performance fees are a reflection of continued positive relative performance.

Sean Denham: Our tax rate for the quarter was 23.9%.

Sean: Our tax rate for the quarter was 23.9%.

Sean Denham: Before we turn to Q&A, Ryan asked me to share some strategic perspectives from my first four months. I've been fortunate to not just immerse myself in the SEI business, but have been in front of many of our clients, prospects, investors, and analysts, both domestically and globally. There is genuine enthusiasm for SEI's vision, and our value proposition is at an all-time high. I'm excited to see how many clients truly see SEI as a partner and not just a vendor. Our continued focus on the power of the SEI enterprise, as opposed to historically four distinct business units, and availing more capabilities to increase AUA, AUM, and services will undoubtedly create greater shareholder value.

Sean: Before we turn to Q&A, Ryan asked me to share some strategic perspectives from my first four months.

Ryan: I've been fortunate to not just immerse myself in the SEI business, but have been in front of many of our clients, prospects, investors, and analysts, both domestically and globally. There is genuine enthusiasm for SEI's vision, and our value proposition is at an all-time high.

Ryan: I'm excited to see how many clients truly see SEI as a partner and not just a vendor. Our continued focus on the power of the SEI enterprise, as opposed to historically four distinct business units.

Ryan: and unveiling more capabilities to increase AUA, AUM, and services will undoubtedly create greater shareholder value.

Sean Denham: I am thrilled to have joined SEI. Our future and what we need to do is clear. We are in full execution mode. We are well positioned to capitalize on secular market trends, driving demand for more technology, operations, and asset management services to accelerate growth for our clients, our shareholders, and our employees.

Sean Denham: Our future and what we need to do are clear. We are in full execution mode. We are well positioned to capitalize on secular market trends driving demand for more technology, operations, and asset management services to accelerate growth for our clients, our shareholders, and our employees. That concludes my remarks.

Ryan: I am thrilled to have joined SEI.

Ryan: Our future and what we need to do is clear.

Ryan: We are in full execution mode. We are well-positioned to capitalize on secular market trends driving demand for more technology, operations, and asset management services to accelerate growth for our clients, our shareholders, and our employees.

Sean Denham: That concludes my remarks. All of our unit heads are on the call.

Operator: All of our unit heads are on the call. We'll now take questions. Thank you. Thank you. If you wish to ask a question, please press 1 then 0 on your telephone keypad. To remove yourself from the queue, you may repeat the 1 then 0 command.

Speaker Change: That concludes my remarks. All of our unit heads are on the call. We will now take questions. Thank you.

Unknown Executive: We will now take questions. Thank you.

Unknown Executive: If you wish to ask a question, please press one and zero on your telephone keypad.

Speaker Change: Thank you. If you wish to ask a question, please press 1 then 0 on your telephone keypad.

Unknown Executive: To remove yourself from Q, you may repeat the one and zero command.

Speaker Change: To remove yourself from queue, you may repeat the 1-0 command.

Kristen Love: You go to the line of Kristen Love, Piper Sandler. Please go ahead.

Speaker Change: We go to the line of Crispin Love, Piper Sandler. Please go ahead.

Sanjay Sharma: Good afternoon. I appreciate your question. Just first on private banks and margins here. You have had some really good momentum, but can you just share some leading indicators in progress recently in private banks, other activities, pipelines, and then how you'd expect that to drive? and PV margins over the near intermediate term.

Unknown Executive: Good afternoon. Appreciate my questions. First, on private banks and margins here, you've had some really good momentum, but can you just share some leading indicators and progress recently on private banks, activity pipelines, and then how you would expect that to affect you? [inaudible] Yeah, sure. Crispin, I'll go first.

Crispin Elliot Love: Good afternoon, I appreciate my questions. Just first on private banks and margins here, you've had some really good momentum, but can you just share some leading indicators and progress recently in private banks, whether activity, pipelines, and then how you would expect that to drive?

Sanjay Sharma: And then can you also just detail what the one-time impact of the quarter was related to private banks?

Speaker Change: PV margins over the near to intermediate term. And then can you also just detail what the one-time impact in the quarter was related to private bank?

Sanjay Sharma: Yeah, sure. Chris Sago, first of all, you're doing well. I'll turn up the sign, Jay.

Ryan P. Hicke: I hope you're doing well. I'll turn it to Sanjay. For the sake of consistency, I think we've said in the last, you know, five, six calls that there were really four stages that we were executing on the private banking strategy. And, you know, the first was a refocus and a re-energization of the leadership. The second was right-sizing the expenses to the opportunity. The third was real different clarity and energy and focus on pipelines and segments where we thought we could repeatedly win.

Speaker Change: Yeah, sure. Crispin, I'll go first. I hope you're doing well.

Sanjay Sharma: I mean, for the sake of consistency, I think we said in the last, you know, five, six calls that there were really four stages that we were executing for the private banking strategy. And, you know, the first was a refocus and a re-energization of the leadership. The second was right-sizing the expenses to the opportunity. The third was real different clarity and energy and focus on pipelines and segments where we felt we could repeatedly win. And then to drive revenue growth that we believe would fall to the bottom line in a way that we drive margin expansion beyond just expense control.

Speaker Change: I'll turn it over to Sanjay. I mean, for the sake of consistency, I think we've said in the last, you know, five, six calls that there were really four stages that we were executing for the private banking strategy.

Sanjay: And, you know, the first was a refocus and a re-energization of the leadership. The second was right-sizing the expenses to the opportunity. The third was real different clarity and energy and focus on pipelines and segments where we thought we could repeatedly win.

Ryan P. Hicke: And then to drive revenue growth that we believe would fall to the bottom line in a way that would drive margin expansion beyond just expense control. And I think it's really clear that Sanjay and the team are in phase four and have been in phase four for some time.

Sanjay: and then to drive revenue growth that we believe would fall to the bottom line in a way that would drive margin expansion beyond just expense control.

Sanjay Sharma: And I think it's really clear to signed Jay and the team are in phase four and have been in phase four.

Sanjay: And I think it's really clear that Sanjay and his team are in phase four and have been in phase four. I'll let him provide some color on the pipeline, but when you look at the pipeline and when we go through it as a leadership team,

Sanjay Sharma: I'll let him provide some color on the pipeline. But when you look at the pipeline and when we go through it as a leadership team, we're really encouraged by the quality, and we're encouraged by the breadth and the depth. We really changed our targeted focus around community and regional banks, UK private-fine investment managers, and making sure we had a different approach with larger organizations positioning professional services as well as our technology and operational platforms, and I think that's really bearing fruit.

Sanjay Sharma: I'll let him provide some color on the pipeline. But when you look at the pipeline and when we go through it as a leadership team, we're really encouraged by the quality, and we're encouraged by the breadth and the depth. We've really changed our target and focus around community and regional banks. You came prior to buying about some managers and making sure we had a different approach with larger organizations positioning professional services as well as our technology and operational platforms. And I think that's really bearing through. As we mentioned in the last quarter, something's just a product of timing.

Sanjay: We're really encouraged by the quality and we're encouraged by the breath and the depth.

Sanjay: We really changed our targeted focus around community and regional banks, UK private fine investment managers, and making sure we had a different approach.

Sanjay: with larger organizations positioning professional services as well as our technology and operational platforms.

Sanjay Sharma: As we mentioned in the last quarter, some of it's just a product of timing, but when we look at the late-stage pipeline and the activity in banking, we're very positive. Sanjay, would you like to give some color on where you think the business is and what you're doing execution-wise moving forward? Yeah, sure. Thank you, Ryan.

Sanjay: And I think that's really bearing fruit. As we mentioned in the last quarter, some of it's just a product of timing. But when we look at the late stage pipeline and the activity in banking, we're very positive. Sanjay, you want to try some color on where you think the business is and, you know, what you're doing execution-wise moving forward? Yeah, sure. Thank you, Ryan.

Sanjay Sharma: But when we look at the late stage pipeline and the activity in banking, we're very positive. So I was trying to call it on where to think the business is, and you know what you're doing execution-wise. We forward. Yes, sure.

Sanjay Sharma: I would add a couple of additional points. If you look at the previous point, we talked about the backlog delivery. We have been very disciplined, and you have seen, quarter by quarter, how efficiently we have delivered our pipeline of assigned clients. That has resulted in revenue growth for us, as well as helped us with margin expenses. As far as expense management is concerned, there again, we were laser-focused in terms of right-sizing the business and aligning our required people for the Revenue Growth Initiative.

Sanjay Sharma: Thank you, Ryan. I would add a couple of other useful points. If you look at previously, we talked about the back of delivery. We have been very disciplined, and if you have seen that quarter by quarter, how efficiently we have delivered the pipeline of sign clients. That has resulted in revenue growth for us, as well as it helps us with the margin expansion. As far as the expense management is concerned, there again, we were later focused in terms of rights rising the business and and aligning our required people on for the revenue growth initiative. That said, as far as the growth is concerned, our pipeline is solid.

Sanjay: I would add a couple of additional points. If you look at, previously we talked about the backlog delivery.

Sanjay: We have been very disciplined and you have seen that quarter by quarter how efficiently we have delivered the pipeline.

Sanjay: of assigned clients. That has resulted in revenue growth for us, as well as it helps us with the margin expenses.

Sanjay: As far as the expense management is concerned, there again we were laser-focused in terms of right-sizing the business and aligning our required people for the Revenue Growth Initiative.

Sanjay Sharma: That said, as far as growth is concerned, our pipeline is solid. I'm very excited about the depth and the quality of our pipeline. When I say quality of pipeline, it means that we can deliver that business with little or no incremental expense on our side. And that is resulting in our margin expense, and that's also helping us with improving our client engagement. And that's great. And Sanjay, I think Crispin had a question around kind of the one-time sales for the quarter to professional services. Yes,

Sanjay Sharma: I'm very excited about the depth and the quality of our pipeline. When I say quantity of pipeline, it is that we can deliver that business with a little or no incremental expense on our side. And that is resulting in our margin expansion as that's also helping us to the increasing our client engagement. Right. And that's great.

Sanjay: With that said, as far as the growth is concerned, our pipeline is solid. I'm very excited about the depth and the quality of our pipeline.

Sanjay: When I say quality of pipeline, it is that we can deliver that business with little or no incremental expense on our side. And that is resulting in our margin expense, and that is also helping us in improving our client engagement.

Sanjay Sharma: I think, Chris, we had a question about some color on the one time. Sales on the quarter of the Professional Services. Yes. On professional services, what we've done is that that's a new service we started providing. If you look at the professional services in two buckets, one, we are providing it to our existing client base. That is resulting in one-time revenue. Then we are providing professional services to our newly signed clients, helping them to own board, helping them to go through a crisis and change management, and helping them with systems integration. So you would see that along with as we are signing new clients and by banking space, the revenue growth is not just with the core offerings.

Sanjay: Bye

Sanjay: And that's great. And Sanjay, I think Crispin had a question around kind of the color on the one-time sales of the quarter, the professional services. Yes, so on professional services, what we've done is that it's a new service we started providing. If you look at the professional services, there are two buckets.

Sanjay Sharma: So on professional services, what we've done is that it's a new service we started providing. If you look at professional services, there are two buckets. One, we are providing it to our existing client base, which is resulting in one-time revenue. Then we are providing professional services to our newly signed clients, helping them to onboard, helping them to go through crisis and change management, and helping them with systems integration. So you would see that along with, as we are signing new clients in the private banking space, the revenue growth is not just with the core offerings but on the professional services side. I would ask Sean to provide color on the margin one-time impact. Sean?

Speaker Change: One, we are providing it to our existing client base that is resulting in one-time revenue.

Sanjay: Then we are providing professional services to our newly signed clients, helping them to onboard.

Sanjay: Helping them to go through crisis and change management. Helping them with systems integration. So you would see that along with as we are signing new client in the banking space, the revenue growth is not just with the core offerings but the professional services side.

Sean Denham: But on the professional services side, I would ask Sean to provide color on the margin one-time impact.

Sean Denham: Sean, yeah. And so we had, in the quarter, we received a one-time benefit, which was primarily related to a credit we received from one of our healthcare providers.

Sanjay: I would ask Sean to provide color on the Marcion one-time impact, Sean. Yeah, and so we had, in the quarter we received a one-time benefit which was primarily related to a credit we received from one of our healthcare providers.

Sean Denham: Yeah, and so in the quarter, we received a one-time benefit, which was primarily related to a credit we received from one of our healthcare providers. That benefit was allocated to each of the business units, so you'll see across the business units a little bit of an impact and an uptick in the margins, and that's what I called out in my remarks. Okay, and did you have a dollar amount of that benefit, whether it's kind of revenue or expense? Yeah, I think it was a little under $3 million in totality.

Sean Denham: And so we had in the quarter of the professional services side, we had in the quarter of the professional services side, we had in the quarter of the professional services side, we had in the quarter of the professional services side, we had in the quarter of the professional services side, we had in the quarter of the professional services side, we had in the quarter of the professional services side, we had in the quarter of the professional services side, we had in the quarter of the professional services side, we had in the quarter of the professional services side, we had in the quarter of the professional services side, we had in the quarter of the professional services side, we had in the quarter of the professional services side, we had in the quarter of the professional services side, we had in the quarter of the professional services side, we had in the quarter of the professional services side, we had in the quarter of the professional services side, we had in the quarter of the professional services side, we had in the quarter of the professional services side, we had in the quarter of the professional services side That benefit was allocated to each of the business units.

Sean Denham: So you'll see across the business units a little bit of an impact and uptick in the margins, and that's what I called out in my remarks. Okay, and did you have a dollar amount of that benefit, whether it's kind of the revenue or expense? Yeah, I think it was; I think it was a little under $3 million in totality.

Sean: That benefit was allocated to each of the business units. So you'll see across the business units a little bit of an impact and uptick in the margins and that's what I called out in my remarks.

Sean: [inaudible]

Unknown Executive: All right, thank you.

Sean Denham: All right, thank you. And then just on OPEX, pretty well contained in the second quarter here. But as we look to the back half of the year, anything specific to call out on the expense side? I know you typically make salary adjustments that show up in the third quarter. So would you expect comp increases to look pretty similar to past years 2Q to 3Q or if there's anything else to call out?

Sean Denham: And then I'm just on the op-x that's pretty well contained in the second quarter here, but as we look to the back half of the year, anything specific to call out on the expense, but I know you typically make salary adjustments that show up in the third quarter. So we're doing set comp increases, so it's pretty similar to past years: two, two to three, two, or just if there's anything else to call out. Yeah, so we did have some, we did have some raises that will be which will be seen in Q3. We have shifted, so about 70% of the company historically, somewhere around there, received mid-year raises.

Speaker Change: All right, thank you. And then just on OPEX, it's pretty well contained in the second quarter here, but as we look to the back half of the year, anything specific to call out on the expense side? I know you typically make salary adjustments that show up in the third quarter, so would you expect comp increases to look pretty similar to past years, 2Q to 3Q, and just if there's anything else to call out? Thanks.

Sean Denham: Yes, so we did have some raises that will be seen in Q3. We have shifted, so about 70% of the company historically, somewhere around there, received mid-year raises. We are actually shifting our raises. The timing of our raises and compensation increases more to year-end, and that will happen going forward, but we did have some for a portion of our workforce.

Speaker Change: Yes, so we did have some, we did have some raises that will be, which will be seen in Q3.

Speaker Change: We have shifted, so about 70% of the company historically, somewhere around there, received mid-year raises. We are actually shifting our raise.

Sean Denham: We are actually shifting our raise, the timing of our raises and compensation increases. This is more to year end, and that will happen going forward, but we did have, for a portion of our workforce, some compensation increases that will, which you'll see in Q3.

Speaker Change: The timing of our raises and compensation increases more to year-end and that will happen going forward but we did have for a portion of our workforce

Sean Denham: Some compensation increases that will, which you'll see in Q3. I will say we are really proud of the expense management and optimization that we've been embarking on over the last couple quarters, and we're steadfast to continue that in Q3 and Q4. Great. Thank you.

Speaker Change: Some compensation increases that will...

Sean Denham: I will say we have really proud of the expense management and optimization that we've been embarked on over the last couple quarters, and we're steadfast to continue that in Q3 and Q4.

Speaker Change: which you'll see in Q3.

Speaker Change: I will say we are really proud of the expense management and optimization that we've been embarked on over the last couple quarters, and we're steadfast to continue that in Q3 and Q4.

Unknown Executive: Great. Thank you.

Ryan Michael Kenny: I appreciate you taking my question. And our next question will come from the line of Ryan Kinney, Morgan Stanley. Please go ahead.

Unknown Executive: I appreciate your question.

Speaker Change: Great. Thank you. I appreciate you taking my questions.

Ryan Kinney: And our next question will come from line of Ryan Kinney, Morgan Stanley.

Speaker Change: And our next question will come from the line of Ryan Kenny, Morgan Stanley . Please go ahead.

Ryan Kinney: Let's go ahead. And I wanted to dig into the SEI Integrated Cash Program. There were a few large banks and brokers that recently reprised sweep deposits. Is there any competitive impact of those actions on your business?

Ryan P. Hicke: I wanted to dig into the SEI integrated cash program. There are a few large banks and brokers that recently repriced sweep deposits. Is there any competitive impact of those actions on your business? Hey, Ryan, hope you're doing well.

Speaker Change: End

Ryan Michael Kenny: Wanted to dig into the SEI integrated cash program. There were a few large banks and brokers that recently repriced sweep deposits. Is there any competitive impact of those actions on your business?

Ryan Hicke: Hey, Ryan. Hope you're doing well. I mean, I guess first and foremost, I think we try to make sure we reiterate that our program is complimentary to our business model. We're not relying on that to run the business. It's a great solution that we can all proud of in the market. As far as the competitive landscape and some of the things that happened in the market a couple weeks ago, that's for our competitors in the market to wave their way through. We have a little bit of a different business model.

Ryan P. Hicke: I mean, I guess, first and foremost, I think we try to make sure we reiterate that, you know, our program is complementary to our business model; we're not relying on that to run the business. You know, it's a great solution that we can offer in the market. As far as the competitive landscape and some of the things that happened in the market a couple weeks ago, that's for our competitors in the market to wade their way through. You know, we have, I think, a little bit of a different business model. Paul's in the room and can comment.

Speaker Change: Hey Ryan, hope you're doing well. I mean, I guess first and foremost, I think we try to make sure we reiterate that, you know, our program is complementary to our business model. We're not relying on that to run the business.

Ryan Michael Kenny: Yeah, it's good.

Paul: Great solution that we can offer out in the market. As far as the competitive landscape and some of the things that happened in the market a couple of weeks ago, that's for our competitors in the market to wade their way through. You know, we have, I think, a little bit of a different business model. Paul's in the room and can comment. But, you know, we're always looking at, you know, what can we do from a client-centric perspective?

Ryan Hicke: Paul's in the room if you comment. But we're always looking at what can we do from a client-centric perspective to enhance the value proposition services we give our advisors. But I think our important point that we try to reiterate here with this program is it's complimentary. It's not cool to how we run the business. We're not relying on it. Yeah, just from a competitive perspective, we think we have a very competitive rate that we offer investors. Our total balances are about 1% of our total AUM and AUA and AUM added together. That's very different than others.

Paul Francis Klauder: But, you know, we're always looking at, you know, what we can do from a client-centric perspective to enhance the value proposition services we give our advisors, but I think the important point that we try to reiterate here with this program is it's complementary. It's not core to how we run the business. We're not relying on it.

Paul: To enhance the value proposition services we give our advisors, but I think our important point that we try to reiterate here with this program is it's complimentary. It's not core to how we run the business. We're not relying on it.

Paul Francis Klauder: Yeah, I'll just add, just from a competitive perspective, we think we have a very competitive rate that we offer investors. Our total balances are about 1% of our total AUA and AUM added together, that's very different from others. And we provide our advisors with optionality, and they have choice, and there's full disclosure and transparency of the entire program, so we think we've entered this differently than many others when they kind of launched these programs five or six years ago.

Paul: Yeah, I'll just add just from a competitive perspective. We think we have a very competitive rate that we offer investors

Speaker Change: Our total balances are about 1% of our total AUM and AU.

Ryan Hicke: And we provide our advisors optionality, and they have choice, and there's full disclosure and transparency of the entire program. So we think we've entered this different than many others when they kind of launched these programs five or six years ago.

Speaker Change: AUA and AUM added together, that's very different than others.

Speaker Change: And we provide our advisors optionality, and they have choice, and there's full disclosure and transparency of the entire program, so we think we've entered this different than many others when they kind of launched these programs five or six years ago.

Ryan Hicke: When you think about the $10 million of fees from that program in the quarter, if we were to get rate cuts later this year, how should we think about the trajectory of that and you know how that might impact the level of deposit sweep and revenues that you guys got? Yeah, I mean you can do the math on rate cuts on 25 basis points like everyone else. As we get rate cuts, we'll look at what comes from SEI, which a portion will, and what comes from the investors themselves. So those are some kind of allocation to both, so we won't take the full 25 basis points, but there will be some kind of sharing, and we have a rate committee group that will decide that in the competitive environment that we know to be out there.

Paul Francis Klauder: When you think about $10 million in fees from that program in the quarter, if we were to get rate cuts later this year, how should we think about the trajectory of that, and you know how that might impact the level of deposit sweep and revenue that you guys get. Yeah, I mean, you can do the math on rate cuts of 25 basis points, like everyone else. As we get rate cuts, we'll look at what comes from SEI, which a portion will So there should be some kind of allocation to both.

Speaker Change: And when you think about the $10 million of fees from that program in the quarter, if we were to get rate cuts later this year, how should we think about the trajectory of that and, you know, how that might impact the...

Speaker Change: The level of deposit sweep and revenues that you guys get.

Paul Francis Klauder: So we won't take the full 25 basis points, but there'll be some kind of sharing, and we have a rate committee group that will decide that in the competitive environment that we know to be out there. Alright, great. There's one more question on the fee rate reduction and advisors. Was that the full impact in the second quarter?

Speaker Change: Yeah, I mean, you can do the math on rate cuts on 25 basis points like everyone else.

Speaker Change: as we get rate cuts.

Speaker Change: We'll look at what comes from SEI, which a portion will, and what comes from the investors themselves.

Speaker Change: So there'll be some kind of allocation to both. So we won't take the full 25 basis points, but there'll be some kind of sharing. And we have a rate committee group that will decide that in the competitive environment that we know to be out there.

Unknown Executive: All right, great.

Unknown Executive: There's one more question. On the fee rate reduction in advisors, was that full impact in the second quarter?

Speaker Change: Alright, great. There's one more question. On the fee rate reduction in advisors, was that full impact in the second quarter or was that implemented mid-quarter with, you know, another step down maybe showing up in 3Q results?

Unknown Executive: Was that implemented mid-quarter with you know another step down maybe showing up in three key results? Yeah, that was implemented April 1st. So we had the full impact in the quarter, and we're getting really good remarks there. We gave some, and then we got some fee reductions from our sub-advisors, so our advisors are really pleased with what we've been able to do, and it's really helping them from a competitive standpoint. Perfect.

Paul Francis Klauder: Was that implemented mid-quarter? With, you know, another step down, maybe showing up in three key areas. Yeah, that was implemented April 1. So we had the full impact in the quarter, and we're getting really good remarks there. We gave some, and then we got some fee reductions from our sub-advisors, so our advisors are really pleased with what we've been able to do, and it's really helping them from a competitive standpoint. Perfect. Thank you.

Speaker Change: Yeah, that was implemented April 1st.

Speaker Change: So, we had the full impact in the quarter, and we're getting really good remarks there. We gave some, and then we got some fee reductions from our sub-advisors, so our advisors are really pleased with what we've been able to do, and it's really helping them from a competitive standpoint.

Unknown Executive: Thank you. Thanks, Ryan.

Owen Lau: Next question is from the line of Owen Law Oppenheimer. Let's go ahead.

Speaker Change: Perfect, thank you. Thanks, Ryan.

Speaker Change: Our next question is from the line of Owen Lau, Oppenheimer. Please go ahead.

Owen Lau: And thank you for picking my question. So on investment managers, I have two questions here. The margin went up to 38%, but I think that includes some one-time benefit. I remember there was a target of 36% a while back. Is it still the target you have on the margin? I mean, how do you think about the normalized margin for even as the managers? And then on the comment line make about you are helping public markets seeking access to private markets and also helping private market seeking access to public markets.

Ryan Michael Kenny: Thanks, Ryan. Thank you for taking my question. So on investment managers, I have two questions here. The margin went up to 38%, but I think that includes some one-time benefits. I remember there was a target of 36% a while back.

Owen Lau: And thank you for taking my question.

Speaker Change: So on investment managers, I have two questions here. The margin went up to 38%, but I think that includes some one-time benefit.

Owen Lau: I remember there was a target of 36% a while back. Is this still the target you have on the margin? How do you think about the normalized margin for investment managers?

Owen Lau: Is this still the target you have on the margin? How do you think about the normalized margin for investment managers? And then on the comment Ryan made about you helping public markets? Hey, Ellen, I hope you're having a good summer. Maybe we'll take those in a couple of chunks, and Phil and I will tag team this.

Owen Lau: And then on the comment Ryan made about you are helping public markets seeking access to private markets.

Speaker Change: and also helping private markets seeking access to public markets. I'm just wondering, could you please elaborate a little bit more on what kind of services and technology SEI can help your clients to expand their access? Thanks.

Owen Lau: I'm just wondering, could you please elaborate a little bit more on what kind of services and technology SBI can help you can help your clients to expand the access.

Owen Lau: Thanks.

Ryan Hicke: Hey, Owen, I hope you're having a good summer. Maybe we'll take those a couple of chunks and fill in. I will tag seeing this. So if you think about IMS margin, the bill can provide more color. I think the important thing to keep in mind for the community is we're not targeting specific margin targets at the unit levels. So we're not trying to run the business that way because if we see additional opportunity to accelerate growth, we're going to invest, and that's how we're going to continue to run the company. Now, as you're going to answer the earlier question about offense, there have been increased focus across SBI about kind of maximizing our capital allocation, managing expenses, and driving continued growth to earn a share.

Speaker Change: Hey Owen, I hope you're having a good summer. Maybe we'll take those in a couple chunks and Phil and I will tag team this.

Ryan P. Hicke: So, if you think about IMF margins, and Phil can provide more color, I think the important thing to keep in mind for the community is, you know, we're not targeting specific margin targets at the unit level. So, we're not trying to run the business that way, because if we see additional opportunities to accelerate growth, we're going to invest. And that's how we're going to continue to run the company. Now, as Sean answered the earlier question about OpEx, there is an increased focus across SEI about maximizing our capital allocation, managing expenses, and driving continued growth to earnings per share. And that's not going to change.

Speaker Change: So if you think about IMF margins, the bill can provide more color. I think the important thing to keep in mind for the community is, you know, we're not targeting specific margin targets at the unit levels. So we're not trying to run the business that way because if we see additional opportunity to accelerate growth, we're going to invest.

Speaker Change: And that's how we're going to continue to run the company.

Speaker Change: Now, as Sean answered the earlier question about OpEx, there is an increased focus across SEI about kind of maximizing our capital allocation, managing expenses, and driving continued growth to earners per share. And that's not going to change. We're going to be focused on that, but not at the expense of medium to long-term growth.

Ryan Hicke: And that's not going to change where it be focused on that, but not at the expense of meeting the long-term growth.

Ryan P. Hicke: We're going to be focused on that, but not at the expense of medium to long-term growth. So, I'll make a comment on the public-to-private, and I feel maybe you could kind of go in on both. We're seeing a tremendous amount of demand from both sides, though, and intermediary clients are looking to figure out how to access and incorporate alternative investments in portfolios for their clients. We're seeing increased demand for alternative products in the institutional market, as well as in the larger RIA space.

Ryan Hicke: So I'll make a comment on the public private one. So maybe you can kind of go and on both. We're seeing a tremendous amount of demand from both sides. So from intermediary clients are looking to figure out how to access and incorporate alternative investments in portfolios for their clients. We're seeing increased demand for alternative products in the institutional market as well as the larger RIA space. And then the flip side of that is a lot of our investment manager clients are looking at ways of how they create product and potentially leverage distribution to access a broader set of client base and the intermediary space.

Speaker Change: So I'll make a comment on the public, the private, and I feel maybe you could kind of go in on both. We're seeing a tremendous amount of demand from both sides, Owen, from intermediary clients are looking to figure out how to access and incorporate alternative investments into portfolios for their clients.

Owen: We're seeing increased demand for alternative products in the institutional market as well as kind of the larger RIA space.

Ryan P. Hicke: And then the flip side of that is a lot of our investment manager clients are looking at ways of how they could create products and potentially leverage distribution to access a broader set of the client base in the intermediary space. And we think we are really well positioned from both the technology, operational, and asset management perspective to create services and platforms that could help facilitate and accelerate that. The SEI Access Platform is one of those, but I think a more specific example, too, that Bill can give is that a lot of our traditional asset managers are working with SEI to try to figure out how they could launch alternative asset products and leverage our technology and operations to get those up quicker, out the door quicker, and into the market. So, Bill, you're sending this every day.

Owen: And then the flip side of that is a lot of our investment manager clients are looking at ways of how they can create products and potentially leverage distribution to access a broader set of the client base in the intermediary space.

Phil McCabe: And we think we are really well positioned from both the technology, operational, and asset management perspective to create services and platforms that could help facilitate and accelerate that. The SBI Access platform is one of those. But I think a more specific example too that Bill can give is a lot of our traditional asset managers are working with SBI to try to figure out how they could launch alternative asset products and leverage our technology and operations to get those up quicker, out the door quicker, and into the market. So feel yourself in this every desk. Sure.

Owen: And we think we are really well positioned from both the technology, operational and asset management perspective.

Phil: to create services and platforms that could help facilitate and accelerate that. The SEI access platform is one of those, but I think a more specific example too that Phil can give is a lot of our traditional asset managers are working with SEI to try to figure out how they could launch alternative asset products and leverage our technology and operations to get those up quicker, out the door quicker, and into the market. Phil, you're sending this every day. Sure. Thanks, Ryan, and thanks, Owen, for the question. We used to say that margins were going to be 34% to 36%, but with all the focus, the laser focus on optimization and on scaling operations, the numbers are closer to 35.5% to 37% or so. So we're starting to see a little bit of scale in that business.

Phil McCabe: Thanks, Ryan, and thanks, Owen, for the question. We used to say that margins were going to be 34 to 36%, but with all the focus, delays are focused on optimization and on scaling operations, and numbers are closer to 35 and a half to 37% or so. So we're starting to see a little bit of scale in that business. And from a public and private market convergence perspective, the clients are coming together massively. We used to think traditional managers were very different from alternative managers. The traditional managers, 20% of them now offer alternative asset classes. We see that number growing more and more and more with every single day on the alternative side.

Philip N. McCabe: Sure. Thanks, Ryan, and thanks, Owen, for the question. We used to say that margins were gonna be 34 to 36%, but with all the focus, the laser focus on optimization and on scaling operations, the numbers are closer to 35 12 to 37% or so. So, we're starting to see a little bit of scale in that business. And from a public and private market convergence perspective, clients are coming together massively. We used to think traditional managers were very different from alternative managers.

Bill: and from a public and private market convergence perspective.

Phil: The clients are coming together massively. We used to think traditional managers were very different from alternative managers. The traditional managers, 20% of them now, offer alternative asset classes. We see that number growing more and more and more with every single day. On the alternative side, the alternative managers are looking for distribution. They're launching collective investment trusts that have target date funds that include alternative funds.

Philip N. McCabe: The traditional managers, 20% of them now, offer alternative asset classes. We see that number growing more and more and more every single day. On the alternative side, the alternative managers are looking for distribution. They're launching collective investment trusts that have target date funds that include alternative funds. And they're also sort of growing their book within that world.

Phil McCabe: The alternative managers are looking for distribution. They're launching collective investment trusts that have target date funds that include alternative funds. And they're also sort of growing their book within that world. So we're seeing a ton of activity for us. We look downstream. It has impacts on our systems. We're very well prepared for that. We literally are right in the middle of the traditional alternative manager convergence. And we'll be careful, I think, on that for years to come.

Bill: And they're also sort of growing their book within that world. So we're seeing a ton of activity. For us, we look downstream. It has impacts on our systems. We're very well prepared for that. We literally are right in the middle of the traditional alternative manager convergence.

Philip N. McCabe: So, we're seeing a ton of activity. For us, we look downstream. It has impacts on our systems.

James John Cipriano: We're very well prepared for that. We literally are right in the middle of the traditional alternative manager convergence, and we'll be capitalizing on that for years to come. Got it, that's helpful. And then on institutional investors, you highlighted client losses in your press release, but your margin was still strong, I think 44% even picking out a one-time banner. Could you please talk about the effort to kind of turn around this segment and the timing of, Sure, Jay Cipriano is in the room. He leads that unit. Let him kind of provide some color on that, Owen.

James Cipriano: Got it, that's helpful. And then on institutional investors, you highlight a plan losses on your press relief, but your margin was still strong, I think 44%, even ticking out one time benefit.

Bill: and we'll be capitalizing on that for years to come.

Speaker Change: Got it, that's helpful. And then on institutional investors, you highlighted client losses on your press release, but your margin was still strong, I think 44%, even taking out a one-time benefit. Could you please talk about the effort to kind of turn around this segment and the timing of it? Thanks.

James Cipriano: Could you please talk about the effort to kind of turn around the segment and the timing of it? Thanks.

James Cipriano: Sure. James Cipriano is in the room. He leaves that unit; let him kind of provide some color on that, Owen. Sure. Thank you, Ryan. Thanks for the question, Owen.

Jay Cipriano: Sure. Jay Cipriano is in the room. He leads that unit. Let him kind of provide some color on that, Owen.

James John Cipriano: Sure, thank you, Ryan. Thanks for the question, Owen. I think Ryan and Sanjay mentioned when Sanjay came into the private banking group that they were in the fourth quarter now, turning around that execution strategy, which started with really a refocus on the leadership, right-sizing the business, identifying the proper segments to sell into and then executing. I'd say the institutional group is about in the second quarter right now of that. We continue to face headwinds in the defined benefit space.

James Cipriano: I think Ryan and Sanjay mentioned when Sanjay came into the private banking group that they are in the fourth quarter now, turning around that execution strategy, which started with really a refocus on the leadership, right sizing the business, identifying the proper segments to sell into, and then execute. I'd say the institutional group is about in the second quarter right now that we continue to face headmoons and the defined benefit states. Certainly the acceleration with folks, a new sizing or plans accelerated with the uptick of rates. We expect to continue to see that in 2025, but we're very optimistic about the markets that we serve outside of BB, health care, higher education, secondary education, not for profit unions and governments, where our OCI solutions are really resonating there.

Jay Cipriano: Sure. I'm going to go ahead and get started. I'm going to go ahead and get started.

Jay Cipriano: Thank you, Ryan. Thanks for the question, Owen.

Jay Cipriano: I think Ryan and Sanjay mentioned when Sanjay came into the private banking group that they were in the fourth quarter now, turning around that execution strategy, which started with really a refocus on the leadership.

Jay Cipriano: I'd say the institutional group is about in the second quarter right now of that. We continue to face headwinds in the defined benefits space.

James John Cipriano: Certainly, the acceleration with which folks are annuitizing their plans has accelerated with the uptick of rates. We expect to continue to see that in 2025, but we're very optimistic about the markets that we serve outside of DB. Healthcare, higher education, and secondary education, not-for-profit unions, and governments, where our OCI solutions are really resonating there. So, as I said, headwinds continue into 2025, but our pipeline continues to build, and we're very optimistic about what lies ahead in 2025 beyond those headwinds.

Jay Cipriano: Certainly, the acceleration with...

Speaker Change: Folks, annuitizing your plans accelerated with the uptick of rates.

Jay Cipriano: We expect to continue to see that in 2025, but we're very optimistic about the markets that we serve outside of DB, healthcare, higher education, secondary education, not-for-profit unions and governments, where our OCI solutions are really resonating there. So, as I said,

James Cipriano: So, as I said, headwinds continue into 2025, but our pipeline continues to build, and we're very optimistic about what lies ahead in 2025 beyond those headwinds.

Jay Cipriano: Headwinds continue into 2025, but our pipeline continues to build, and we're very optimistic about what lies ahead in 2025, beyond those headwinds. And the only other color I would add, and it was maybe an addendum to a previous question about, you know, leading indicators.

James John Cipriano: And the only other color I would add, and this was maybe an addendum to a previous question about, you know, leading indicators. You know, Owen, as you know, you know us really well. We're really careful to never get too far over our skis.

James Cipriano: And the only other color I would add is maybe an ascendant to a previous question about, you know, leading indicators. You know, Owen, as you know, you know, it's really well. We're really careful to never get too far over our seas. We don't spend too much time patting ourselves on the back because we get really focused on medium-long term. But when we look at new advisor acquisition last quarter, when you look at the new signings and institutional, when we look at the banking pipeline, IMS is record quarter, increased demand in Europe, things and family office services.

Jay Cipriano: You know, Owen, as you know, you know us really well. We're really careful to never get too far over our skis. We don't spend too much time patting ourselves on the back because we get really focused on medium to long term.

Ryan P. Hicke: We don't spend too much time patting ourselves on the back because we get really focused on the medium to long term. But when we look at the new advisor acquisition last quarter, when you look at the new signings and institutional, when we look at the banking pipeline, IMS's record quarter, increased demand in Europe, things in family office services, we feel that we're in a really strong spot with client activity, and prospect activity momentum. Now, it's up to us to deliver that. The other thing I want to make clear is that optimization is never going to be at the expense of client experience.

Owen: But when we look at new advisor acquisition last quarter, when you look at the new signings and institutional, when we look at the banking pipeline, IMF's record quarter, increased demand in Europe , things in family office services.

James Cipriano: We feel that we're in a really strong spot with client activity, prospect activity momentum. Now it's up to us to deliver that.

Owen: We feel that we're in a really strong spot with client activity, prospect activity momentum. Now it's up to us to deliver that. The other thing I want to make sure is clear, optimization is never going to be at the expense of client experience.

James Cipriano: The other thing I want to make sure is clear: optimization is never going to be at the expense of client experience. So the things we're doing to drive margin expansion and IMS, we're investing heavily in IMS. We're just being more thoughtful across the company around where we're deploying our capital, including talent, to make sure that our existing clients have the best experience possible. And when we close this pipeline, we are onboarding those clients with the experience that we would want them to have they wanted at the IMS. Got it, that's helpful.

Ryan P. Hicke: So, the things we're doing to drive margin expansion in IMS; we're investing heavily in IMS. We're just being more thoughtful across the company around where we're deploying our capital, including talent, to make sure that our existing clients have the best experience possible. And when we close this pipeline, we are onboarding those clients with the experience that we would want them to have on day one at FDI. Got it. That's helpful. And if I may, I want to squeeze in one more, maybe this one for Paul. When you talk about the integrated cash program, the cash balance is just about 1% of total AUA and AUM. Do you have any aspirational goal for how high it can go and also the track?

Owen: So the things we're doing to drive margin expansion in IMS, we're investing heavily in IMS. We're just being more thoughtful across the company around where we're deploying our capital, including talent, to make sure that our existing clients have the best experience possible, and when we close this pipeline, we are onboarding those clients with the experience that we would want them to have day one at FDI.

Paul Klauder: And finally, I want to squeeze one more, maybe this one for Paul. You can talk about the integrated cash program, the cash balance, it's just about 1% of total AUN, AUN. Do you have any aspiration of goal that how high it can go and also the traction of it? Thanks. Yeah, right now we're just holding the line with the 1%. We'll continue to evaluate the program based on the rates we provide investors and what other optionality is out there in the marketplace. But I think for your forecast, you should assume that kind of 1% operational cash will go for it.

Speaker Change: Got it, that's helpful. And if I may, I want to squeeze one more, maybe this one for Paul.

Paul: You talk about the integrated cash program, the cash balance is just about 1% of total AUA and AUM. Do you have any aspirational goal that how high it can go and and and also the traction of it? Thanks.

Paul Francis Klauder: Yeah, right now, we're just holding the line with 1%. We'll continue to evaluate the program based on the rates we provide investors and what other optionality is out there in the marketplace. But I think for your forecast, you should assume that kind of 1% operational cash, and I'll go for it. Alright, thanks a lot.

Paul: Yeah, right now we're just holding the line with the 1%. We'll continue to evaluate the program based on the rates we provide investors and what other optionality is out there in the marketplace. But I think for your forecast, you should assume that kind of 1% operational cash on a go for basis.

Unknown Executive: All right, thanks a lot.

Unknown Executive: And our next question.

Speaker Change: Alright, thanks a lot.

Unknown Executive: We will be from the line of Jeff Schmitt, William Blair. Please go ahead. You talked about growing in the RIA market and investment advisors. How much of the asset mix is that in the segment currently? And what are you doing to sort of grow your share there?

Speaker Change: Transcription by CastingWords

Speaker Change: And our next question will be from the line of Jeff Schmitt, William Blair. Please go ahead.

Paul Francis Klauder: We talked about growth in the RIA market and investment advisors. How much of the asset mix is that in the segment currently, and what are you doing to sort of grow your share there? Paul, do you want to take that one?

Jeffrey Paul Schmitt: You talked about growing in the RIA market and investment advisors. How much of the asset mix is that in the segment currently and what are you doing to sort of grow your share there?

Paul Klauder: Yeah, I can take that. So the 101 billion that's on the platform. The RIA marketplace represents about 23 billion of the 101 billion, the rest being advisors through independent broker-dealers. That is obviously our fastest growing segment. And where we're getting bigger chunk plays and largest larger advisors. We had a large one in the second quarter that partially funded that will finish the funding in third quarter. And there's a lot of growth with those opportunities as well.

Paul Francis Klauder: Yeah, I can take that. So of the $101 billion that's on the platform, the RIA marketplace represents about $23 billion of the $101 billion, the rest being advisors through independent broker-dealers. That is obviously our fastest-growing segment and where we're getting bigger chunk plays and larger advisors. We had a large one in the second quarter that was partially funded that will finish the funding in the third quarter. And there's a lot of growth potential with those opportunities as well.

Speaker Change: Yeah, I can take that. So of the $101 billion that's on the platform...

Speaker Change: The RIA marketplace represents about $23 billion of the $101 billion, the rest being advisors through independent broker-dealers.

Speaker Change: That is obviously our fastest growing segment and where we're getting bigger chunk plays and larger advisors. We had a large one in the second quarter that partially funded.

Speaker Change: that will finish the funding in third quarter. And there's a lot of growth with those opportunities as well. So we're really bullish on that marketplace.

Paul Francis Klauder: So we're really bullish on that marketplace through the leadership of Eric Collin and Gabe Garcia, and we're redeploying more sales folks and more technical resources to support that marketplace. The good news with that is that often they come over as AUA, but as they see our investment platform, they may consume some of that AUM.

Paul Klauder: So we're really bullish on that marketplace through the leadership of Vera Collin and Gabe Garcia. And we're redeploying more sales folks and more technical resources to support that marketplace. The good news with that is often they come over as AUA. But as they see our investment platform, they may consume some of that AUM. So there's some up sale revenue activity that we get once they get to understand at the end of the full capabilities. So we would be continue to be positive on that as we move forward.

Speaker Change: Through the leadership of Eric Collin and Gabe Garcia, and we're redeploying more sales folks.

Speaker Change: and more technical resources to support that marketplace.

Speaker Change: The good news with that is often they come over as AUA, but as they see our investment platform, they may consume some of that AUM.

Paul Francis Klauder: So there's some upsell revenue activity that we get once they get to understand SEI and its full capabilities. So we would continue to be positive about that as we move forward. Thank you.

Speaker Change: So there's some upsell revenue activity that we get once they get to understand SEI and the full capabilities. So we would be continue to be positive on that as we move forward.

Unknown Executive: Okay, thank you.

Paul Francis Klauder: I'm just curious how much of that cash is held in advisory accounts, or is that mainly in broke? It's all an advisory account. Okay, thanks. Hi, can you hear me?

Unknown Executive: And then one more on the cash program. I'm just curious how much of that cash is held in advisory accounts, or is that mainly in brokerage accounts? It's all in advisory accounts.

Speaker Change: Okay, thank you and then one more on the cash program. I'm just curious how much of that cash is held in advisory accounts or is that mainly in in brokerage accounts?

Unknown Executive: Okay, thank you.

Patrick O'Shaughnessy: All right, and our next question, we go to line of Patrick O'Shaughnessy.

Speaker Change: It's all in advisory accounts.

Speaker Change: Okay. Thank you.

Speaker Change: Unknown . . .

Speaker Change: All right, and our next question will go to the line of Patrick O'Shaughnessy.

Patrick O'Shaughnessy: Raymond James, please go ahead. Sir, your line is open now.

Speaker Change: Raymond James, please go ahead.

Speaker Change: Sir, your line is open now.

Patrick O'Shaughnessy: Hi, can you hear me? Yeah, we can hear you, Patrick. Okay, thank you.

Patrick: Yeah, we can hear you, Patrick. Okay, thank you. Maybe beat the horse a little bit dead here on the insured deposit program. Is there any level of concern that the program might not be consistent with advisors' fiduciary obligations to their clients in the eyes of the SEC? I mean, we've looked at all the disclosures, we've looked at all the documents that we've provided to advisors and investors. Operational cash is something that we need to have in order to operate the overall portfolio that's consistent with our investment thesis. So we think we're on sound ground.

Patrick O'Shaughnessy: Hi, can you hear me? Yeah, we can hear you, Patrick. Okay, thank you. Maybe to beat the horse a little bit dead here on the insured deposit program, is there any level of concern that the program might not be consistent with advisors' fiduciary obligations to their clients in the eyes of the SEC?

Ryan Hicke: Maybe to beat the horse a little bit dead here on the insured deposit program.

Ryan Hicke: Is there any level of concern that program might not be consistent with advisors, producers, obligations to their clients in the eyes of the SEC? I mean, we've looked at all the disclosures. We've looked at all the documents that we provided Advisors and Investors. Operational cash is something that we need to have in order to operate the overall portfolios that's inconsistent with our investment thesis. So we think we're on sound ground. Obviously, it's a fluid nature in the industry of what's happening. And we will adjust based on whatever regulatory guidance is provided. But we think based on the combination of the investor rate that we give investors the optionality, we give advisors the 1% the need for operational cash in the models.

Speaker Change: I mean, we've looked at all the disclosures, we've looked at all the documents that we provided to advisors and investors. Operational cash is something that we need to have in order to operate the overall portfolio. That's been consistent with our investment thesis.

Paul Francis Klauder: Obviously, it's a fluid nature in the industry of what's happening, and we will adjust based on whatever regulatory guidance is provided. But we think based on the combination of the investor rate that we give investors, the optionality we give advisors, the 1%, and the need for operational cash in the models, all those are consistent with an advisor meeting their fiduciary obligation. But it'll be fluid as things change in the marketplace. I appreciate that.

Speaker Change: So we think we're on sound ground. Obviously, it's a fluid nature in the industry of what's happening.

Speaker Change: We will adjust based on whatever regulatory guidance is provided, but we think based on the combination of the investor rate that we give investors, the optionality we give advisors,

Ryan Hicke: All those are consistent with an advisor meeting their producer allegation, but it'll be fluid as things change in the marketplace.

Speaker Change: The 1%, the need for operational cash in the models, all those are consistent with an advisor meeting their fiduciary obligation, but it'll be fluid as things change in the marketplace.

Ryan Hicke: Yeah, I'd appreciate that.

Paul Francis Klauder: And then, sticking with the IA segment here, a couple of competitors to that business recently were acquired or had acquisitions and were taken out of private equity. Have you seen any change to the competitive landscape as a result? Yeah, the firms that just got acquired are still competitors, and they're, you know, they're worthy competition, specifically AssetMark and InvestNet. We know that, you know, they're going through some changes in integration and things like that into their new organizations.

Ryan Hicke: And then sticking with the IA segment here, a couple of competitors to that business recently were acquired or had acquisitions and getting taken on private equity. Have you seen any change to the competitive landscape in that business as a result? Yeah, the firms that just got acquired are still competitors, and they're, you know, they're worthy competitions, specifically asset market investment. We know that. You know, they're going through some changes in integration and things like that, into the new organizations. We think our program stack up very competitively versus those two firms, especially as we go into the higher end of the RIA marketplace with the robustness of our technology, our operations, and our investment management.

Speaker Change: Appreciate that. And then sticking with the IA segment here, a couple of competitors to that business recently.

Speaker Change: were acquired or had acquisitions announced getting taken out of private equity. Have you seen any change to the competitive landscape in that bit as a result?

Speaker Change: Yeah, the firms that just got acquired are still competitors and they're, you know, they're worthy competition, specifically AssetMark and InvestNet, we know that.

Speaker Change: They're going through some changes in integration and things like that into their new organizations.

Paul Francis Klauder: We think our programs stack up very competitively versus those two firms, especially as we go into the higher end of the RIA marketplace with the robustness of our technology, our operations, and our investment management. There's a lot going on in the marketplace. There are a lot of firms that are getting aggregated and being acquired. We're very active in consulting with our advisors, providing a pathfinder program for our advisors, and ultimately contemplating whether or not, you know, we need to be a destination firm, but that's something for the future. So we think about this every day.

Speaker Change: We think our programs stack up very competitively versus those two firms, especially as we go into the higher end of the RIA marketplace with the robustness of our technology, our operations, and our investment management.

Ryan Hicke: There's a lot happening in the marketplace. There's a lot of firms that are getting aggregated and being acquired. We're very active in consulting with our advisors, providing a pathfinder program for our advisors, and ultimately contemplating whether or not we need to be a destination firm, but that's something for the future. So, we think about this every day. We know what's happening in the marketplace, and those competitors, as I said, are formidable. But, you know, we think we stack up very well from a capability standpoint.

Speaker Change: There's a lot happening in the marketplace.

Speaker Change: There's a lot of firms that are getting aggregated and being acquired. We're very active in consulting with our advisors.

Speaker Change: providing a pathfinder program for our advisors, and ultimately contemplating whether or not, you know, we need to be a destination firm, but that's something for the future. So we think about this every day, we know what's happening in the marketplace.

Paul Francis Klauder: We know what's happening in the marketplace, and those competitors, as I said, are formidable, but, you know, we think we stack up very well from a capabilities point of view. Terrific. Thank you.

Speaker Change: And those competitors, as I said, are formidable, but we think we stack up very well from a capability standpoint.

Unknown Executive: Perfect. Thank you.

Speaker Change: Terrific, thank you.

Aidan Hall: Okay, our next question is from Aidan Hall, KBW. Let's go ahead.

Speaker Change: Okay, our next question will be from the line of Aiden Hall, KBW. Please go ahead.

Aidan Hall: Interesting, my question. Maybe just to follow up on IMS, you know, questions kind of around SCI's offering as it relates to the semi-liquid retail products that have become very popular with the alternative asset management space. So, how are conversations going within the channel? How do you think SCI's offering is differentiated versus peers? Then similarly, what areas are you most focused on here to continue gaining market share over the next couple of years?

Aidan Patrick Hall: Maybe just to follow up on IMS, you know, my question's kind of around SCI's offering as it relates to the semi-liquid retail products that have become very popular with the alternative asset management space. So, how are conversations going within the channel? How do you think SEI's offering is differentiated versus peers? And similarly, what areas are you most focused on here to continue gaining market share over the next? Okay, over to you, Phil.

Aiden Hall: Just taking my question, maybe just to follow up on IMS, you know, my question's kind of around SEI's offering as it relates to the semi-liquid retail products that have become very popular with the alternative asset management space. So,

Speaker Change: How are conversations going within the channel? How do you think SEI's offering is differentiated versus peers? And similarly, what areas are you most focused on here to continue gaining market share over the next couple of years?

Phil McCabe: Okay, over to you, Phil. All right, thank you. Thanks for the question. We are right, again, in the middle of all of the semi-liquid funds that clients are offering. All of our top largest clients are either launching BDCs or semi-liquid funds. We have a matrix that we update daily that basically tells us all the different components and capabilities that they have or that they require. For us, we have all the technology in place. We're used to servicing very, very high volumes of investors. We're very, very good at it. We are tweaking our offering where need be, but we're really in a great spot with all of the retailization of all to the democratization of all.

Philip N. McCabe: All right, thank you. Thanks for the question. We are right again in the middle of all of the semi-liquid funds that clients are offering. All of our top, largest clients are either launching BDCs or semi-liquid funds. We have a matrix that we update daily that basically tells us all the different components and capabilities that they have or that they require. For us, we have all the technology in place.

Speaker Change: Okay, over to you Phil. All right. Thank you. Thanks for the question

Phil: We are right again in the middle of all of the semi-liquid funds that clients are offering. All of our top largest clients are either launching BDCs or semi-liquid funds.

Speaker Change: We have a matrix that we update daily that basically tells us all the different components and capabilities that they have or that they require. For us, we have all the technology in place.

Philip N. McCabe: We're used to servicing very, very high volumes of investors. We're very, very good at it. We are tweaking our offering where necessary, but we're really in a great spot with all of the retailization of all to the democratization of all. Great, thanks.

Speaker Change: We're used to servicing very, very high volumes of investors. We're very, very good at it. We are tweaking our offering where need be, but we're really in a great spot with all of the retailization of all to the democratization of all.

Phil McCabe: Great, thanks.

Ryan P. Hicke: And then, Ryan, maybe just one on kind of the inorganic growth opportunity. Can you just remind us how you would kind of stack rank the priorities there, whether by segment, region, or capability? Yeah, absolutely.

Ryan Hicke: Ryan, yeah, maybe just one on kind of inorganic growth opportunities. Can you just remind us how you would kind of stack rank the priorities there, whether by segment, region, or capability? Yeah, absolutely. So, I think, you know, it's consistent with the Investor Day two years ago. We've continued to kind of hone our focus. I think there's kind of three areas where we stay really active right now. It's dramatically anything in that RIA space that would increase our ability to drive client growth and client adoption, but, as also Paul mentioned, to broaden out our capability to offer succession opportunities, a different outcome for our advisors.

Ryan Michael Kenny: Great, thanks. And then Ryan, yeah, maybe just one on kind of inorganic growth opportunities. Can you just remind us how you would kind of stack rank the priorities there, whether by segment, region, or capability?

Ryan P. Hicke: So I think, you know, consistent with Investor Day two years ago, we've continued to kind of hone our focus. I think there are kind of three areas where we stay really active right now, Aidan. Thematically, anything in that RIA space that would increase our ability to drive client growth and client adoption but, as Paul mentioned, to broaden out our capability to offer succession opportunities, a different outcome for our advisors, you will be more active there.

Ryan Michael Kenny: Yeah, absolutely. So I think, you know, consistent with the Investor Day two years ago,

Ryan Michael Kenny: We continue to kind of hone our focus. I think there's kind of three areas where we stay really active right now.

Speaker Change: thematically anything in that RIA space that would increase our ability to drive client growth, client adoption.

Speaker Change: But as also Paul mentioned...

Paul: to broaden out our capability to offer

Ryan Hicke: You will be more active there. When you talk about filled business, the IMF business, the areas that could expand our operational or technological delivery, especially in the areas in the malls and especially outside the US and expand that global footprint. And then when you just think about value added technology or services, either to our intermediary base across banks, advisors, wealth managers, I would say focus there. So the good news for us, Ainin, is we definitely progress that. Sean, Mike, and I were with our board the last two days, citing a lot of clarity, and I think the notification around what we're going to do moving forward.

Paul: Succession opportunities, a different outcome for our advisors, we'll be more active there.

Ryan P. Hicke: When you talk about Phil's business, the IMS business, the areas that could expand our operational or technological delivery, especially in the areas of all and especially outside the U.S., and expand that global footprint, and then when you just think about value-added technology or services, either to our intermediary base across banks, advisors, and wealth managers, we stay focused there. So the good news for us, Aidan, is we have definitely progressed that

Paul: When you talk about Phil's business, the IMS business, the areas that could expand are operational or technological delivery.

Speaker Change: especially in the area of Nepal and especially outside the U.S. and expand that global footprint.

Aidan: And then when you just think about value-added technology or services, either to our intermediary base across banks, advisors, wealth managers, we stay focused there. So the good news for us, Aidan, is we've definitely progressed that. Shawn, Mike, and I were with our board the last two days.

Ryan P. Hicke: Sean, Mike, and I were with our board the last two days. So I think there's a lot of clarity, and I think unity, around what we're going to do moving forward. But also, I think we're really disciplined around the segments and areas that we're targeting for organic growth. And it's exciting because we think they could be real accelerants now that we have the foundation across the board solidified for organic growth. I appreciate it, Collar.

Aidan: So I think there's a lot of clarity and I think unification around what we're going to do moving forward.

Ryan Hicke: But also I think we're really disciplined around the segment in areas that we're targeting for an organic. And it's exciting because we think they could be real accelerates now that we have the foundation across the board solidified for our organic growth. Okay. Got it. Appreciate it, Collar.

Aidan: But also, I think we're really disciplined around the segments and areas that we're targeting for in organics. And it's exciting because we think they could be real accelerants now that we have the foundation across the board solidified for organic growth.

Unknown Executive: Interesting, my questions. Yeah, I hope it helps.

Aidan: Got it. Appreciate it, Collar. Thanks for taking my questions. Yeah.

Unknown Executive: Okay, and we do have a follow-up on the line of Ryan Kinney, Morgan Stanley. Please go ahead.

Aidan Patrick Hall: Thanks for taking my questions. Yeah, I hope it helped. We do have a follow-up on the line. Hey, thanks for taking my follow-up. Just a technical question on the health care credits.

Speaker Change: Okay, and we do have a follow-up from the line of Ryan Kenny, Morgan Stanley . Please go ahead.

Ryan Kinney: Hey, thanks for taking my follow up. Just a technical question on the healthcare credits. If we add them up by segment, 70 basis points in IMS 160 and banking, 230 and institutional. I get that's around 5 million. So that's a little higher than the 3 million that was referenced earlier. So I just want to check if that math was right or if you could help reconcile. Thanks.

Unknown Executive: If we add them up by segment, 70 basis points in IMS, 160 in banking, 230 in institutional, I get to around 5 million, so that's a little higher than the 3 million that was referenced earlier, so I just want to check if that math was right or if you could help reconcile it. Yeah, so I said primarily, so primarily, the healthcare benefits were shy of $3 million. There's always, one time here and there, but so the number I gave of shy of $3 million was the majority of that difference or that one-time benefit. No further questions in queue, so I'm going to go back over to CEO Ryan. Well, thank you for all the questions.

Ryan Michael Kenny: Hey, thanks for taking my follow-up. Just a technical question on the health care credits.

Ryan Michael Kenny: If we add them up by segment, 70 basis points in IMS, 160 in banking, 230 in institutional, I get to around 5 million.

Speaker Change: So, that's a little higher than the 3 million that was referenced earlier, so I just want to check if that math was right, or if you could help reconcile. Thanks.

Sean Denham: Yeah, so there. So I could primarily. So primarily the healthcare benefit was shy of 3 million. There's always one time here and there, but so the number I gave of shy of 3 million was the majority of that difference. Or that one-time benefit.

Speaker Change: Yeah, so there's, so I said primarily that, uh, so primarily, uh, the health care benefits was shy of 3 million. There's always.

Speaker Change: One time here and there but so the number I gave of shy of three million was the majority of that difference or that one-time benefit.

Unknown Executive: Okay, no further questions in queue.

Ryan Hicke: I'm going to go back over to see all Ryan Hakey for closing remarks. Well, thank you for all the questions. It's great to see the engagement. Our results through the first half of the year.

Speaker Change: Okay, with no further questions in queue, I'm going to go back over to CEO Ryan Hicke for closing remarks.

Ryan P. Hicke: It's great to see the engagement. Our results through the first half of the year reinforce our commitment and execution against our strategy to drive growth in the short and long term. And we're going to continue to build upon our success. As I mentioned earlier, we're going to be hosting an Investor Day on November 7th. Additional details will be shared in the coming months. I look forward to welcoming you all back to our Oaks campus.

Ryan P. Hicke: Well, thank you for all the questions. It's great to see the engagement. Our results through the first half of the year reinforce our commitment and execution against our strategy to drive growth in the short and long term. And we're going to continue to build upon our success.

Ryan Hicke: We're going to start commitment and execution against our strategy to drive drive road in the short and long term. And we're going to continue to build upon our success.

Ryan Hicke: I, as I mentioned earlier, we're going to be hosting in the next day on November 7. Additional details will be shared in the coming months. Look forward to welcoming you all back to our office. And thank you for joining today's call.

Speaker Change: As I mentioned earlier, we're going to be hosting an Investor Day on November 7th. Additional details we'll be sharing in the coming months. Look forward to welcoming you all back to our Oaks campus. And thank you for joining today's call.

Ryan P. Hicke: And thank you for joining today's call. Yes, and once again... conference, you may now disconnect. Have a good day. We're sorry, your conference is ending now. Please hang, music music music music music music music music music music, Thank you for your time; all participants are in a listen only mode.

Unknown Executive: Yes, and once again, ladies and gentlemen, thank you for joining today's conference.

Unknown Executive: You may now disconnect. Have a good day. We're sorry.

Unknown Executive: Your conference is ending now. Please hang up. Thank you.

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Speaker Change: Thank you everyone for standing by and welcome to the SEI second quarter 2024 earnings call. At this time all participants are in a listen only mode. Later we will conduct a question and answer session. Instructions will be given at that time.

At this time, our participants are in a listen-only mode. Later, we welcomed Dr. Cushion Nancy Session. Instructions will be given at that time. As a reminder, today's call has been recorded.

Leslie A. Wojcik: Later, we will conduct a question and answer session. Instructions will be given at that time. I will now turn the call over to you. Thank you and welcome everyone. We appreciate you joining us today for our second quarter 2024 earnings call. On the call, we have Ryan Hicke, SEI's Chief Executive Officer, Sean Denham, Chief Financial Officer, and members of our Executive Committee, Jay Cipriano, Sandy Ewing, Paul Klauder, Phil McCabe, Mike Peterson, Sneha Shah, and Sanjay Sharma.

I will now turn the call to your host, Leslie Wojcik. Please go ahead.

Speaker Change: As a reminder, today's call is being recorded. I will now turn the call over to your host, Leslie Wolchek. Please go ahead.

Thank you, and welcome everyone. We appreciate you joining us today for a second quarter of 2024 earnings call. On the call, we have Ryan Hicke.

Leslie Wolchek: Thank you and welcome everyone. We appreciate you joining us today for our second quarter 2024 earnings call.

SEI's Chief Executive Officer, Sean Denham, Chief Financial Officer, and members of our Executive Committee: Joseph Rihanna, Sandy Ewing, Paul Klauder, Bill McCabe, Mike Peterson, Mayha Shah, and Sanjay Sharma.

Speaker Change: On the call, we have Ryan Hicke, SEI's Chief Executive Officer, Sean Denham, Chief Financial Officer, and members of our Executive Committee, Jay Cipriano, Sandy Ewing, Paul Klauder, Phil McCabe, Mike Peterson, Sneha Shah, and Sanjay Sharma.

Before we begin, I'd like to point out that our earnings press release can be found under the Investor Relations section of our website at fbic.com. This call is being broadcast live, and a replay will be available on the Events and Webcast page of our website. We would like to remind you that during today's presentation and in our responses to your questions, we have and will make certain forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ materially. Please refer to our notices regarding forward-looking statements that appear in today's earnings press release and in our filings with the Securities and Exchange Commission.

Speaker Change: Before we begin, I'd like to point out that our earnings press release can be found under the investor relations section of our website at sbic.com.

Speaker Change: This call is being webcast live and a replay will be available on the events and webcast page of our website.

Speaker Change: Please refer to our notices regarding forward-looking statements that appear in today's earnings press release and in our filings with the Securities and Exchange Commission.

We do not undertake to update any of our forward-looking statements.

I'll now turn it over to CEO Ryan Hicke. Ryan. Thanks, Leslie, and good afternoon, everyone. Our positive momentum carried through the second quarter, as we once again delivered strong profit for a quarter of a quarter, and continued solid execution of sales in our technology and operational platforms. We posted $1.5 EPS for the quarter, $22 million in sales, of which $15.9 million is recurring, and $519 million in revenue.

Speaker Change: We do not undertake to update any of our forward-looking statements.

Ryan P. Hicke: Thanks, Leslie, and good afternoon, everyone. Our positive momentum carried through the second quarter, as we once again delivered strong profit growth quarter over quarter and continued solid execution of sales on our technology and operational platform. We post $1.05 EPS for the quarter. $22 million in sales, of which $15.9 million is recurring, and $519 million in revenue. Sean will provide a detailed breakdown of all corporate and business segment financial short, I'm a little over two years into the role, and at a high level, I'm really pleased with these five key areas.

Speaker Change: We posted $1.05 EPS for the quarter, $22 million in sales, of which $15.9 million is recurring, and $519 million in revenue.

Sean will provide a detailed breakdown of all corporate and business segment financial shortcomings. I'm a little over two years into the role, and at a high level, I'm merely pleased with these 5C areas. First, our sales pipeline of market activity, client engagement is high; the reception to an enterprise positioning is resonating, and our total addressable markets are expanding. Second, EPS growth. As a result of increased market activity, expense management, and execution on our continued optimization programs, we continue to drive earnings growth. Third, unit results. IMS revenue with profit growth.

Speaker Change: Sean will provide a detailed breakdown of all corporate and business segment financials shortly.

Speaker Change: I'm a little over two years into the role, and at a high level, I'm really pleased with these five key areas.

Sean Denham: First, our sales pipeline and market activity, client engagement is high, the reception to an enterprise positioning is resonating, and our total addressable markets are expanding.

Sean Denham: Second, EPS growth. As a result of increased market activity, expense management, and execution on our continued optimization programs, we continue to drive earnings growth.

Ryan P. Hicke: IMS revenue and profit growth is really strong. Private banking, margin expansion, and revenue growth potential, and the increased focus on reimagining and growing our advisor and institutional businesses remain a priority. Fourth, culture and talent.

Sean Denham: 3. Unit Results

Really strong. Private banking, margin expansion, and revenue growth potential, and the increased focus on reimagining and growing our advisor and institutional businesses remain a priority. Fourth, culture and talent. Infusion of new talent and leadership, as well as engagement and employee mobility across the I, is becoming part of our DNA again. The executive team has geled really well, and we are unified in our vision on organic and inorganic growth priorities. And lastly, RIA expansion. Platform adoption in the RIA space is growing. And our ability to operate in that market creates strategic opportunities.

Sean Denham: IMS revenue and profit growth, really strong, private banking, margin expansion, and revenue growth potential, and the increased focus on reimagining and growing our advisor and institutional businesses remain a priority.

Sean Denham: 4. Culture and talent. Infusion of new talent and leadership, as well as engagement and employee mobility across SEI, is becoming part of our DNA again. The executive team has gelled really well, and we are unified in our vision on organic and inorganic growth priorities.

Ryan P. Hicke: Platform adoption in the RIA space is growing, and our ability to operate in that market creates strategic opportunity. From a more strategic perspective, we are proactively addressing industry headwinds and capitalizing on tailwinds to position ourselves for long-term success. For example, there is an increasing trend of consolidation in the intermediary space, especially with RIAs and broker-dealers. As advisor firms navigate transitions, including expanding their capabilities, monetizing their businesses, or planning for succession, we are actively engaged with them to provide more optionality to remain with SEI and accelerate their success with us.

Sean Denham: And lastly, RIA expansion. Platform adoption in the RIA space is growing.

From a more strategic perspective, we are proactively addressing industry headwinds and capitalizing on tailwinds to position ourselves for long-term success. For example, there is an increasing trend of consolidation in the intermediary space, especially with RIAs and broker-dealers. As advisor firms navigate transitions, including expanding their capabilities, monetizing their businesses, or planning for succession, we are actively engaged with them to provide more optionality to remain with SEI and accelerate their success with us. Another significant trend is public markets continue to seek opportunities to expand access to private markets, and private asset managers are seeking access to the public markets.

Sean Denham: And our ability to operate in that market creates strategic opportunity.

Sean Denham: From a more strategic perspective, we are proactively addressing industry headwinds and capitalizing on tailwinds to position ourselves for long-term success. For example, there is an increasing trend of consolidation in the intermediary space, especially with RIAs and broker-dealers.

Sean Denham: As advisor firms navigate transitions, including expanding their capabilities, monetizing their businesses, or planning for succession, we are actively engaged with them to provide more optionality to remain with SEI and accelerate their success with us.

Sean Denham: Another significant trend is public markets continue to seek opportunity to expand access to private markets and private asset managers are seeking access to the public markets.

Phil was in the room, and IMS is in the center of this every day. He could comment during the Q&A. But we are well positioned to expand our footprint and capitalize on this trend across technology, operations, as well as asset management. We are also experiencing increased demand across European private asset managers, and our investment in the SEI access platform across multiple markets will be a driver of future growth. Investor needs and demand continue to evolve. We also believe the shift in market preference and product types, asset allocation, and investment choice presents opportunity. And that portfolio customization and tax optimization are key to meeting investors' needs in today's economic environment.

Philip N. McCabe: Phil is in the room and IMS is in the center of this every day. He could comment during the Q&A, but we are well positioned to expand our footprint and capitalize on this trend across technology, operations, as well as asset management.

Ryan P. Hicke: But we are well positioned to expand our footprint and capitalize on this trend across technology, operations, as well as asset management. We are also experiencing increased demand across European private asset managers, and our investment in the SEI access platform across multiple markets will be a driver of future growth. Investor needs and demand continue to evolve. We also believe the shift in market preference and product types, asset allocation, and investment choice presents opportunities, and that portfolio customization and tax optimization are key to meeting investors' needs in today's economic environment.

Philip N. McCabe: We are also experiencing increased demand across European private asset managers and our investment in the SEI Access Platform across multiple markets will be a driver of future growth.

Philip N. McCabe: Investor needs and demand continue to evolve. We also believe the shift in market preference and product types, asset allocation, and investment choice presents opportunity. And that portfolio customization and tax optimization are key to meeting investors' needs in today's economic environment.

We proactively made fee reductions in our SMA program in April and launched new SMAs and ETFs to increase client retention as well as new client acquisition. We really like the medium to long-term growth prospects of these businesses if we can capture more AUM.

Ryan P. Hicke: We've proactively made fee reductions in our SMA program in April and launched new SMAs and ETFs to increase client retention as well as new client acquisition. We really like to improve the long-term growth prospects of these businesses if we can capture more AUM. And finally, the overall demand for outsourcing grows daily.

Speaker Change: We've proactively made fee reductions in our SMA program in April and launched new SMAs and ETFs to increase client retention as well as new client acquisition. We really like to medium the long-term growth prospects of these businesses if we can capture more AUM.

And finally, the overall demand for outsourcing grows daily. We're seeing increased engagement in sales with our professional services offering inside the regional community bank segments and the UK private client that's the manager segment. Wealth management operations and technology infrastructure change. Those initiatives are complex and require significant expertise to successfully execute. NCI's professional services offerings are not only helping our clients execute these transformation programs successfully, but also helping our clients as they work on new initiatives to grow their business and improve operating efficiency. We believe this offering has enterprise applicability across all of SDI segments. The market is looking to SDI to provide more services and capabilities, and that's a testament to our delivery, client-centric focus, investment and innovation, and long-term capital strength.

Speaker Change: Wealth management, operations, and technology infrastructure change. Those initiatives are complex and require significant expertise to successfully execute.

Speaker Change: We believe this offering has enterprise applicability across all of FDI's segments.

As we all know, innovation is critical. A component of increasing scale and leverage across the company is investing in emerging growth ideas to maximize return on invested capital to shareholders and harness new technologies. For example, we are actively exploring the application of AI in all three of our pillars of expertise, targeting internal efficiencies, client service improvements, and operational automation. We are also progressing AI business cases through our strategic partnership with TIFFA.

Ryan P. Hicke: A component of increasing scale and leverage across the company is investing in emerging growth ideas to maximize return on invested capital to shareholders and harness new technologies. For example, we are actively exploring the application of AI in all three of our pillars of expertise. Targeting Internal Efficiencies, Client Service Improvements, and Operational Automation. We are also progressing AI business cases through our strategic partnership with Tiffin. As I mentioned earlier, we want SEI to be a premier destination for existing and future talent.

Speaker Change: For example, we are actively exploring the application of AI in all three of our pillars of expertise.

Speaker Change: Targeting Internal Efficiencies, Client Service Improvement, and Operational Automation.

Speaker Change: We are also progressing AI business cases through our strategic partnership with Tiffin.

As I mentioned earlier, we want to see how to be a premier destination for existing and future talent. There are exciting signs that we are recapturing that space. In March, Sean joins SEI from Grant Gordon. And over the last four months, he has not only immersed himself in our business and culture, but he brought new ideas to the table and challenged us in ways of helping drive ourselves. He is ready for your Q&A in a few minutes.

Speaker Change: As I mentioned earlier, we want SEI to be a premier destination for existing and future talent.

Ryan P. Hicke: There are exciting signs that we are recapturing that space. In March, Sean joined SEI from Grant Thornton, and over the last four months, he has not only immersed himself in our business and culture, but he's brought new ideas to the table and challenged us in ways that are helping drive results. He is ready for your Q&A in a few minutes.

Speaker Change: There are exciting signs that we are recapturing that space.

Speaker Change: In March, Sean joined SEI from Grant Thornton, and over the last four months, he has not only immersed himself in our business and culture, but he brought new ideas to the table and challenged us in ways that are helping drive results.

Also in September, Michael Lane will join the SEI executive team from BlackRock, leading our advisor and institutional businesses. Michael brings years of experience across financial services. And we believe his leadership and depth of industry knowledge will help us further execute our road strategy, expand our total addressable market, and capitalize on further market opportunities. We look forward to welcoming Michael in September and introducing him to all of you. Our conviction around our performance for 2024 remains that fast. The foundation at SEI is strong. Our core businesses are delivering solid results, and we are leading into future growth initiatives.

Speaker Change: He is ready for your Q&A in a few minutes.

Speaker Change: Also in September , Michael Lane will join the SEI executive team from BlackRock, leading our advisor and institutional businesses.

Speaker Change: We look forward to welcoming Michael in September and introducing him to all of you.

Speaker Change #101: Our conviction around our performance for 2024 remains steadfast. The foundation of SEI is strong. Our core businesses are delivering solid results and we are leaning into future growth initiatives.

With our formidable balance sheet, unmatched set of capabilities, and laser focus strategy, we believe we are well positioned to drive growth and continually delivering value to our shareholders.

Speaker Change #100: With our formidable balance sheet, unmatched set of capabilities, and laser-focused strategy, we believe we are well-positioned to drive growth and continually delivering value to our shareholders.

This concludes my prepared remarks.

Sean Denham: Thanks, Ryan. As Ryan mentioned, EPS for the quarter was $1.05. Up 18% over the $0.89 in the prior year period and 6% over the $0.99 reported in the first quarter. Revenue for the quarter was $519 million, up slightly from Q1, and up 6% from the second quarter of 2023. Total expenses for the quarter were $382 million, which compares to $376 million last year and $386 million in the first quarter of 2024.

I will now turn it over to Sean to discuss our financial results for the quarter. Sean? Thanks, Ryan. As Ryan mentioned, EPS for the quarter was $1.5, up 18% over the 89 cents in the prior year period and 6% over the 99 cents reported in the first quarter. Revenue to the quarter was $519 million, up slightly from Q1 and up 6% from the second quarter 2023. Total expenses for the quarter were 382 million, which compares to $376 million last year, to $386 million in the first quarter 2024. Net income for the quarter increased 17% over the second quarter 2023 to $139 million and was up 5.9% compared to the first quarter 2024.

Speaker Change #100: This concludes my prepared remarks. I will now turn it over to Sean to discuss our financial results for the quarter. Sean?

Sean Denham: Thanks, Ryan. As Ryan mentioned, EPS for the quarter was $1.05, up 18% over the $0.89 in the prior year period and 6% over the $0.99 reported in the first quarter.

Sean Denham: Revenue for the quarter was $519 million, up slightly from Q1, and up 6% from the second quarter of 2023.

Sean Denham: Total expenses for the quarter were $382 million, which compares to $376 million last year and $386 million in the first quarter of 2024.

Sean Denham: Net income for the quarter increased 17% over the second quarter 2023 to $139 million and was up 5.9% compared to the first quarter 2024. In the quarter, we repurchased approximately 1.6 million shares of SEI stock at an average price of $67.44 per share for a total of $111 million in stock purchases.

Sean Denham: Net income for the quarter increased 17% over the second quarter 2023 to $139 million and was up 5.9% compared to the first quarter 2024.

In the quarter, we repurchased approximately $1.6 million shares of SEI stock at an average price of $67.44 per share for a total of $111 million stock purchases. On the sales front, net sales for the quarter total $22 million, of which $15.9 million is recurring. In our technology and investment processing businesses of private banking and investment managers, net sales events total $26.9 million in our expected to generate $21.5 million in recurring revenue. In our asset management related businesses, net sales were approximately negative $5.6 million. Primarily due to asset movement from our mutual fund products into other investment programs, as well as net losses in our institutional business.

Sean Denham: In the quarter, we repurchased approximately 1.6 million shares of SEI stock at an average price of $67.44 per share for a total of $111 million of stock purchases.

Sean Denham: On the sales front, net sales for the quarter totaled $22 million, of which $15.9 million is recurring. In addition, our technology and investment processing businesses, of Private Banking and Investment Managers, net sales have been totaled $26.9 million and are expected to generate $21.5 million in recurring revenue. And our asset management-related businesses, net sales were approximately negative $5.6 million. Primarily due to asset movement from our mutual fund products into other investment programs as well as net losses in our institutional business.

Sean Denham: On the sales front, net sales for the quarter totaled $22 million, of which $15.9 million is recurring.

Sean Denham: and our technology and investment processing businesses.

Sean Denham: of Private Banking and Investment Managers. Net sales have been totaled $26.9 million and are expected to generate 21.5 million in recurring revenue.

Sean Denham: In our asset management related businesses, net sales were approximately negative $5.6 million, primarily due to asset movement from our mutual fund products into other investment programs, as well as net losses in our institutional business.

We also sold $700,000 at recurring revenue in our investments in new business segment.

Sean Denham: We also sold $700,000 of recurring revenue in our Investments in New Business segment.

Sean Denham: We also sold $700,000 of recurring revenue in our investments in new business sectors. Now, I will cover financial highlights for each business segment. In our private banking business, net sales were $8.8 million, half of which was one-time associated with increased adoption of our professional services offer. During the quarter, the team recontracted with three clients, won new business with an existing client acquisition, and signed three new clients, two in the U.S. and one in the U.K. We're excited about second-half sales events in private banks. Revenue for the quarter was $132.4 million compared to the first quarter of $130.1 million.

Now I will cover financial highlights for each business segment. In our private banking business, net sales were $8.8 million, half of which were one time associated with increased adoption of our professional Cooring. During the quarter, the team re-contracted with three clients when new business with an existing client acquisition and signed three new clients, two in the US and one in the UK. Were excited about second half sales events and private banking. Revenue for the quarter was 132.4 million dollars compared to first quarter of 130.1 million. Our backlog of sold, but expected to install in the next 18 months, recurring revenue is 14.9 million dollars in Q2 compared to 18.5 million in Q1.

Sean Denham: Now, I will cover financial highlights for each business segment.

Sean Denham: In our private banking business, net sales were $8.8 million, half of which were one time associated with increased adoption of our professional services offering.

Speaker Change #102: During the quarter, the team recontracted with three clients, won new business with an existing client acquisition, and signed three new clients, two in the US and one in the UK. We're excited about second half sales events in private banking.

Speaker Change #102: Revenue for the quarter was $132.4 million compared to first quarter of $130.1 million.

Sean Denham: Our backlog of sold but expected to install in the next 18 months, recurring revenue is $14.9 million in Q2 compared to $18.5 million in Q1. Margin expanded by 2.3% to 15.5% in Q2 versus Q1. However, approximately 2% of the increase was one-time and, if normalized, would have been 13.5% for the quarter. In our investment managers business, net sales for the quarter were $18.1 million, $17.2 million of which is recurrent. This included a record number of new clients in North America.

Speaker Change #102: Our backlog of sold, but expected to install in the next 18 months, recurring revenue is $14.9 million in Q2 compared to $18.5 million in Q1.

Margin expanded by 2.3% to 15.5% in Q2 versus Q1. However, approximately 2% of the increase was one time, and it's normalized would have been 13.5% for the quarter.

Speaker Change #102: Margin expanded by 2.3% to 15.5% in Q2 versus Q1. However, approximately 2% of the increase was one time, and if normalized, would have been 13.5% for the quarter.

In our investment managers business, net sales for the quarter were 18.1 million, 17.2 million dollars of which is recurring. This included a record number of new clients in North America. Our cross selling initiatives remained strong, and we saw increased adoption and expansion across most of our products. During the quarter, we re-contracted seven clients totaling 14.7 million of recurring revenue. Revenue for the quarter was 180 million dollars and increased a 4% compared to first quarter of 172.7 million and reflecting matriculation and previously announced events. Our backlog of sold, but expected to install in the next 18 months, recurring revenue is 28.3 million dollars in Q2 compared to 28.9 million in Q1.

Speaker Change #102: In our Investment Managers business, net sales for the quarter were $18.1M, $17.2M of which is recurrent. This included a record number of new clients in North America.

Sean Denham: Our cross-selling initiatives remain strong, and we saw increased adoption and expansion across most of our products. During the quarter, we closed 7 clients totaling $14.7 million of recurring revenue. Revenue for the quarter was $180 million, an increase of 4% compared to the first quarter of $172.7 million and reflecting matriculation of previously announced events. Our backlog of sales is sold, but we expect to install in the next 18 months. Recurring revenue was $28.3 million in Q2 compared to $28.9 million in Q1.

Speaker Change #102: Our cross-selling initiatives remain strong, and we saw increased adoption and expansion across most of our products.

Speaker Change #102: During the quarter we recontracted seven clients totaling $14.7 million of recurring revenue.

Speaker Change #102: Revenue for the quarter was $180 million, an increase of 4% compared to first quarter of $172.7 million and reflecting matriculation of previously announced events.

Speaker Change #102: Our backlog of sold, but expected to install in the next 18 months, recurring revenue is $28.3 million in Q2 compared to $28.9 million in Q1.

Margin expanded 1.6% to 38% in Q2 versus Q1 due to expense optimization and a one-time expense benefit of 1%, which when normalized would be 37%.

Sean Denham: Margin expanded 1.6% to 38% in Q2 versus Q1 due to expense optimization and a one-time expense benefit of 1%, which when normalized would be 37%. In our advisor business, net cash flows onto our platform were up $100 million, driven by growth in the RIA segment, our strategist partner solutions, and managed account solutions. This was offset by negative flows from active equity mutual fund products and consolidation in the advisor market. However, we continue to demonstrate momentum in helping RIAs achieve scale, business growth, and value creation for their clients. During the quarter, we welcomed 92 new advisors.

Speaker Change #102: Margin expanded 1.6% to 38% in Q2 versus Q1 due to expense optimization and a one-time expense benefit of 1%, which when normalized would be 37%.

In our advisor business, net cash flows onto our platform were of 100 million dollars driven by growth in the RIA segment, our strategist partner solutions, and managed to count solutions. This was all set by negative flows from active equity mutual fund products and consolidation in the advisor market. We continue to demonstrate momentum in helping RIA achieve scale, business growth, and value creation for their clients. During the quarter, we welcomed 92 new advisors, 25 of which came from a large enterprise that was partially onboarded in the quarter. This compares to 61 advisors in Q1, 2024. Revenue in Q2 is 120.6 million versus 122.7 million in Q1.

Speaker Change #102: In our advisor business, net cash flows onto our platform were up $100 million, driven by growth in the RIA segment, our strategist partner solutions, and managed account solutions.

Speaker Change #102: This was offset by negative flows from active equity mutual fund products and consolidation in the advisor market.

Speaker Change #102: We continue to demonstrate momentum in helping RIAs achieve scale, business growth, and value creation for their clients.

Speaker Change #102: During the quarter, we welcomed 92 new advisors, 25 of which came from a large enterprise that was partially onboarded in the quarter. This compares to 61 advisors in Q1 2024.

Speaker Change #102: Revenue in Q2 is $120.6 million versus $122.7 million in Q1.

The decrease was primarily driven by fee reductions in our separately managed account program and shift in asset classes. Margin's decrease from 45% in Q1 to 43% in Q2 mainly tied to the aforementioned SMA program fee reduction. One key item of note is the $10 million of revenue generated in the quarter from the FDIC-insured deposit program. As a reminder, this program launched in December 2023. A quarter ends; there were approximately $900 million in assets in this program.

Speaker Change #102: The decrease was primarily driven by fee reductions in our separately managed account program and shift in asset classes.

Sean Denham: Margins decreased from 45% in Q1 to 43% in Q2, mainly tied to the aforementioned SMA program fee reduction. Another key item of note is the $10 million of revenue generated in the quarter from the FDIC Insured Deposit Program. As a reminder, this program launched in December 2023. At quarter end, there were approximately $900 million in assets in this program. In the institutional business, net sales events for the quarter were negative $1.8 million, reflecting positive client signings in our OCIO and unfunded OCIO offerings, offset by losses and repricing in client retention activity. Revenues for the quarter were essentially flat compared with the previous quarter.

Speaker Change #102: Margins decreased from 45% in Q1 to 43% in Q2, mainly tied to the aforementioned SMA program fee reduction.

Speaker Change #102: One key item of note is the $10 million of revenue generated in the quarter from the FDIC Insured Deposit Program.

Speaker Change #102: As a reminder, this program launched in December 2023. At quarter end, there were approximately $900 million in assets in this program.

In the institutional business, net sales events for the quarter were negative $1.8 million, reflecting positive client signings in our O-CIO and unbundled O-CIO offerings, offset by losses and reprising inclined retention activities. Revenues for the quarter were essentially flat to the previous quarter. Margin increased 2% to 46% in Q2 versus Q1 due to one-time expense benefits. Without these one-time expense benefits, Q2 margin would have been approximately 44%.

Speaker Change #102: In the institutional business, net sales events for the quarter were negative $1.8 million, reflecting positive client signings in our OCIO and unfundled OCIO offerings, offset by losses and repricing in client retention activities.

Speaker Change #102: Revenues for the quarter were essentially flat the previous quarter. Margin increased 2% to 46% in Q2 versus Q1 due to one-time expense benefits. Without these one-time expense benefits, Q2 margin would have been approximately 44%.

In the investments in new business segments, revenues and expenses were also up compared to first quarter, with modest profit improvement. We re-contracted clients and family office services and are very active with implementations for single-family offices. In SEI sphere, we implemented our largest client today. During the quarter, we were actively engaged with the SEI Access platform across wealth managers, advisors, and fund managers. We continue to focus on identifying and exploring venture investment opportunities. LSV produced $34.2 million of profit during the quarter. This compares to $31.6 million during the first quarter. Revenues for LSV were $113.8 million compared to $107.3 million in the first quarter.

Speaker Change #102: In the investments and new business segment, revenues and expenses were also up compared to first quarter, with modest profit improvement.

Speaker Change #102: We recontracted clients in family office services and are very active with implementations for single family offices.

Speaker Change #102: and SEI Sphere, we implemented our largest client to date.

Speaker Change #102: During the quarter, we were actively engaged with the SEI access platform across wealth managers, advisors, and fund managers.

Speaker Change #102: We continue to focus on identifying and exploring venture investment opportunities.

Speaker Change #102: LSV produced $34.2 million of profit during the quarter. This compares to $31.6 million during the first quarter.

Speaker Change #102: Revenues for LSV were $113.8 million compared to $107.3 million in the first quarter.

Second quarter revenues included $13.5 million of performance fees. As a reminder, LSV recorded performance fees of $6 million during the first quarter. Performance fees are a reflection of continued positive relative performance. Our tax rate for the quarter was 23.9%.

Speaker Change #102: Second quarter revenues included $13.5 million of performance fees.

Speaker Change #102: As a reminder, LSV recorded performance fees of $6 million during the first quarter. Performance fees are a reflection of continued positive relative performance.

Before we turn to Q&A, Ryan asked me to share some strategic perspectives from my first four months. I have been fortunate to not just immerse myself in the SEI business but have been in front of many of our clients, prospects, investors, and analysts both domestically and globally. There is genuine enthusiasm for SEI vision, and our value proposition is at an all-time high. I'm excited to see how many clients truly see SEI as a partner and not just a vendor. Our continued focus on the power of the SEI enterprise as opposed to historically four distinct business units and availing more capabilities to increase AUA, AUM, and services will undoubtedly create greater shareholder value.

Speaker Change #102: Our tax rate for the quarter was 23.9%.

Speaker Change #102: Before we turn to Q&A, Ryan asked me to share some strategic perspectives from my first four months.

Sean Denham: I'm excited to see how many clients truly see SEI as a partner and not just a vendor. Our continued focus on the power of the SEI enterprise, as opposed to historically four distinct business units, and deploying more capabilities to increase AUA, AUM, and services will undoubtedly create greater shareholder value. I am thrilled to have joined SEI. Our future and what we need to do are clear. We are in full execution mode. We are well positioned to capitalize on secular market trends driving demand for more technology, operations, and asset management services to accelerate growth for our clients, our shareholders, and our employees. That concludes my remarks.

Ryan: and availing more capabilities to increase AUA, AUM, and services will undoubtedly create greater shareholder value.

I am thrilled to have joined SEI. Our future and what we need to do is clear. We are in full execution mode. We are well positioned to capitalize on secular market trends driving demand for more technology, operations, and asset management services to accelerate growth for our clients, our shareholders, and our employees.

Ryan: I am thrilled to have joined SEI.

Ryan: Our future and what we need to do is clear.

That concludes my remarks.

All of our unit heads are on the call.

We will now take questions. Thank you.

Speaker Change #103: That concludes my remarks. All of our unit heads are on the call. We will now take questions. Thank you.

If you wish to ask a question, please press 1.0 on your telephone keypad. To remove yourself from the queue, you may repeat the 1.0 command.

Speaker Change #104: Thank you. If you wish to ask a question, please press 1 then 0 on your telephone keypad.

Speaker Change #105: To remove yourself from queue, you may repeat the 1-0 command.

of Kristen Love, Piper Sandler. Please go ahead.

Speaker Change #105: We go to the line of Crispin Love, Piper Sandler. Please go ahead.

Good afternoon, I appreciate my question. Just first on private banks and margins here. You've had some really good momentum.

Unknown Executive: Good afternoon, I appreciate my questions. Just first on private banks and margins here, you've had some really good momentum, but can you just share some leading indicators and progress recently on private banks, activity pipelines, and then how you would expect that to drive? S.H.C. P.V.

Crispin Elliot Love: Good afternoon, I appreciate my questions. Just first on private banks and margins here, you've had some really good momentum, but can you just share some leading indicators and progress recently in private banks, activity, pipelines, and then how you would expect that to drive?

But can you just share some leading indicators and progress recently in private banks or activity pipelines, and then how you'd expect that to drive PV margins over the near intermediate term? And then can you also just detail what the one-time impact in the quarter was related to private banks? Yeah, sure, Chris Sago.

Ryan P. Hicke: margins over the near to intermediate term, and then can you also just detail what the one-time impact in the quarter was? Yeah, sure. Chris, I'll go first.

Speaker Change #106: PV margins over the near-to-intermediate term. And then can you also just detail what the one-time impact in the quarter was related to private bank?

First, I hope you're doing well.

I'll turn over to Sanjay. I mean, for the sake of consistency, I think we've said in the last five, six calls that there were really four stages that we were executing for the private banking strategy. And the first was a refocus and a re-energization of the leadership. The second was right-sizing the expenses to the opportunity. The third was real different clarity and energy and focus on pipelines and segments where we felt we could repeatedly win. And then to drive revenue growth that we believe would fall to the bottom line in a way that we drive margin expansion beyond just expense controlled.

Sanjay Sharma: Yeah, sure, Crispin, I'll go first. I hope you're doing well. I'll turn it over to Sanjay. I mean, for the sake of consistency, I think we've said in the last, you know, five, six calls that there were really four stages that we were executing for the private banking strategy.

Sanjay Sharma: And, you know, the first was a refocus and a re-energization of the leadership.

Sanjay Sharma: The second was right-sizing the expenses to the opportunity. The third was real different clarity and energy and focus on pipelines and segments where we thought we could repeatedly win.

Speaker Change #108: and then to drive revenue growth that we believe would fall to the bottom line in a way that would drive margin expansion beyond just expense control.

And I think it's really clear to Sanjay and the team are in phase four and happen in phase four. I'll let them provide some color on the pipeline. But when you look at the pipeline and when we go through it as a leadership team, we're really encouraged by the quality, and we're encouraged by the breadth and the depth. We really changed our target and focus around community and regional banks, UK private finance and managers, and making sure we had a different approach with larger organizations, positioning professional services as well as our technology and operational platforms. And I think that's really bearing fruit.

Sanjay Sharma: And I think it's really clear that Sanjay and his team are in phase four and have been in phase four. I'll let him provide some color on the pipeline, but when you look at the pipeline and when we go through it as a leadership team, we're really encouraged by the quality and we're encouraged by the breath and the depth.

Ryan P. Hicke: But when you look at the pipeline, and when we go through it as a leadership team, we're really encouraged by the quality, and we're encouraged by the breadth and the depth. We really changed our targeted focus around community and regional banks, UK private-fine investment managers, and making sure we had a different approach with larger organizations positioning professional services, as well as our technology and operational platforms, and I think that's really bearing fruit.

Speaker Change #109: We really changed our targeted focus around community and regional banks, UK private finance investment managers, and making sure we had a different approach.

Speaker Change #109: with larger organizations positioning professional services as well as our technology and operational platforms.

Ryan P. Hicke: As we mentioned in the last quarter, some of it's just a product of timing, but when we look at the late-stage pipeline and the activity in banking, we're very positive. Sanjay, would you like to try to comment on where you think the business is and what you're doing execution-wise moving forward? Yeah, sure. Thank you, Ryan.

As we mentioned in the last quarter, some of it's just a product of timing. But when we look at the late stage pipeline and the activity in banking, we're very positive.

Speaker Change #109: and I think that's really bearing fruit.

Sanjay Sharma: As we mentioned in the last quarter summit, it's just a product of timing, but when we look at the late stage pipeline and the activity in banking, we're very positive. Sanjay, do you want to try some color on where you think the business is and, you know, what you're doing execution-wise moving forward? Yeah, sure. Thank you, Ryan.

Sanjay, you want to try some color on where to think the business is and what you're doing execution, why are we forward? Yeah, sure. Thank you, Ryan. I would add a couple of additional points. If you look at previously, we talked about the backlog delivery. We have been very disciplined, and if you have seen that quarter by quarter, efficiently, we have delivered the pipeline of the signed clients. That has resulted in revenue growth for us, as well as it helps us with the margin expansion. As far as the expense management is concerned, there again, we were laser-focused in terms of right-sizing the business and aligning our required people for the revenue growth initiative.

Sanjay Sharma: I would add a couple of additional points. If you look at it, previously we talked about backlog delivery. We have been very disciplined, and you have seen, quarter by quarter, how efficiently we have delivered our pipeline of assigned clients. That has resulted in revenue growth for us, as well as helped us with margin expenses. As far as expense management is concerned, there again, we were laser-focused in terms of right-sizing the business and aligning our required people for the Revenue Growth Initiative.

Sanjay Sharma: I would add a couple of additional points. If you look at, previously we talked about the backlog delivery. We have been very disciplined, and you have seen that quarter by quarter how we, efficiently, we have delivered the pipeline.

Speaker Change #110: of assigned clients. That has resulted in revenue growth for us, as well as it helps us with the margin expenses.

Speaker Change #110: As far as the expense management is concerned, there again we were laser-focused in terms of right-sizing the business and aligning our required people for the Revenue Growth Initiative.

Sanjay Sharma: That said, as far as growth is concerned, our pipeline is solid. I'm very excited about the depth and the quality of our pipeline. When I say quality of pipeline, it means that we can deliver that business with little or no incremental expense on our side. And that is resulting in our margin expense, and that is also helping us with improving our client engagement. And that's great.

As far as the growth is concerned, our pipeline is solid. I'm very excited about the depth and the quality of our pipeline. When I say quality of pipeline, it is that we can deliver that business with little or no incremental expense on our side. And that is resulting in our margin expansion. And that's also helping us in increasing our client engagement. Right. And that's great.

Speaker Change #110: With that said, as far as the growth is concerned, our pipeline is solid. I'm very excited about the depth and the quality of our pipeline.

Speaker Change #110: When I say quality of pipeline, it is that we can deliver that business with little or no incremental expense on our side. And that is resulting in our margin expense, and that is also helping us with improving our client engagement.

Sanjay Sharma: And Sanjay, I think Crispin had a question around kind of the so-called one-time sales of the quarter for professional services. Yes, so on professional services, what we've done is that it's a new service we started providing. If you look at professional services, there are two buckets.

And Sanjay, I think Chris Bennett, a question about some color on the one-time sales and the quarter of the fragile services. Yes. So on professional services, what we've done is that that's a new service. We started providing, if you look at the professional services in two buckets, one, we are providing it to our existing client base; that is resulting in one-time revenue. Then we are providing professional services to our newly signed clients, helping them to own goal, helping them to go through a crisis and change management, and helping them with systems integration. So you would see that along with, as we are signing new clients and by banking space, the revenue growth is not just with the core offerings, but on the professional services side. I would ask Sean to provide color on the margin one-time impact.

Speaker Change #110: Bye.

Sanjay Sharma: And that's great. And Sanjay, I think Crispin had a question around kind of the color on the one-time sales in the quarter, the professional services.

Sanjay Sharma: Yes, so on professional services, what we've done is that it's a new service we started providing. If you look at the professional services, there are two buckets. One, we are providing it to our existing client base. That is resulting in one-time revenue.

Sanjay Sharma: One, we are providing it to our existing client base, and that is resulting in one-time revenue. Then we are providing professional services to our newly-signed clients, helping them to onboard, helping them to go through crisis and change management, helping them with systems integration. So you would see that, along with, as we are signing new clients in the private banking space, revenue growth is not just with the core offerings but on the professional services side. I would ask Sean to provide color on the margin one-time impact.

Sanjay Sharma: Then we are providing professional services to our newly signed clients, helping them to onboard.

Sanjay Sharma: Helping them to go through a crisis and change management and helping them with systems integration

Sanjay Sharma: So you would see that along with, as we are signing new clients in the banking space, the revenue growth is not just with the core offerings, but on the professional services side.

Sean Denham: In the quarter, we received a one-time benefit, which was primarily related to a credit we received from one of our healthcare providers. That benefit was allocated to each of the business units, so you'll see across the business units a little bit of an impact and an uptick in the margins, and that's what I called out in my remarks. Okay, and did you have a dollar amount of that benefit, whether it's kind of revenue or expense? Yeah, I think it was a little under $3 million in totality.

Sean? Yeah. And so we had, in the quarter, we received a one-time benefit, which was primarily related to a credit we received from one of our healthcare providers. That benefit was allocated to each of the business units. So, you'll see across the business units a little bit of an impact and uptick in the margins, and that's what I called out in my remarks. Okay, and did you have a dollar amount of that benefit, whether it's on kind of the revenue or expenses? Yeah, I think it was; I think it was a little under $3 million in totality.

Sanjay Sharma: I would ask Sean to provide color on the March in one-time impact. Sean? Yeah. And so we had, in the quarter, we received a one-time benefit, which was primarily related to a credit we received from one of our health care providers.

Sean Denham: That benefit was allocated to each of the business units. So you'll see across the business units a little bit of an impact and uptick in the margins and that's what I called out in my remarks.

Speaker Change #111: Okay, and did you have a dollar amount of that benefit, whether it's on kind of the revenue or expense side?

Speaker Change #112: Yeah, I think it was, I think it was a little under $3 million in totality.

All right, thank you. And then I'm just on the off-ex that's pretty well contained in the second quarter here.

Speaker Change #113: Alright, thank you. And then just on OPEX, it's pretty well contained in the second quarter here, but as we look to the back half of the year, anything specific to call out on the expense side? I know you typically make salary adjustments that show up in the third quarter, so would you expect comp increases to look pretty similar to past years, 2Q to 3Q, and just if there's anything else to call out, thanks.

But as we look to the back half of the year, anything specific to call out on the expense side? I knew you typically make salary adjustments that show up in the third quarter. So we do set comp increase until it's pretty similar to past years, 2, 2 to 3, 2, or just if there's anything else to call out. Yeah, so we did have some, we did have some raises, that will be, which will be seen in Q3. We have shifted, so about 70% of the company historically, somewhere around there, received mid-year raises.

Speaker Change #114: Yes, so we did have some, we did have some raises that will be, which will be seen in Q3.

Speaker Change #115: We have shifted, so about 70% of the company historically, somewhere around there, received mid-year raises. We are actually shifting our raise.

We are actually shifting our raise, the timing of our raises and compensation increases. More to year end, and that will happen going forward, but we did have, for a portion of our workforce, some compensation increases that will, which you'll see in Q3.

Speaker Change #115: The timing of our raises and compensation increases, more to year-end, and that will happen going forward. But we did have, for a portion of our workforce,

Sean Denham: Some compensation increases that will, which you'll see in Q3. I will say we are really proud of the expense management and optimization that we've embarked on over the last couple quarters, and we're steadfast to continue that in Q3 and Q4. Great. Thank you.

Speaker Change #115: Some compensation increases that will.

I will say we have really proud of the expense management and optimization that we've been embarked on over the last couple quarters, and we're steadfast to continue that in Q3 and Q4.

Speaker Change #115: which you'll see in Q3.

Speaker Change #116: I will say we are really proud of the expense management and optimization that we've been embarked on over the last couple quarters, and we're steadfast to continue that in Q3 and Q4.

Okay, thank you. I appreciate just my question.

Ryan Michael Kenny: I appreciate you taking my question. And our next question will come from the line of Ryan Kinney, Morgan Stanley. Please go ahead.

And our next question will come from line of Ryan Kinney, Morgan Stanley. Let's go ahead.

Speaker Change #117: Great. Thank you. I appreciate you taking my questions.

Speaker Change #117: And our next question will come from the line of Ryan Kenny, Morgan Stanley . Please go ahead.

And I wanted to dig into the SEI Integrated Cash Program. There were a few large banks and brokers that recently reprised sweep deposits. Is there any competitive impact of those actions on your business?

Ryan P. Hicke: I wanted to dig into the SEI integrated cash program. There were a few large banks and brokers that recently repriced sweep deposits. Is there any competitive impact of those actions on your business? Hey, Ryan, hope you're doing well.

Speaker Change #117: end

Hey Ryan, hope you're doing well. I mean, I guess first and foremost, I think we try to make sure we reiterate that our program is complimentary to our business model. We're not relying on that to run the business. It's a great solution that we can all browse in the market. As far as the competitive landscape and some of those things have happened in the market a couple weeks ago, that's for our competitors in the market to wave their way through. You know, we have a little bit of a different business model, falls in the room and we can comment.

Ryan P. Hicke: I mean, I guess first and foremost, I think we try to make sure we reiterate that, you know, our program is complimentary to our business model. We're not relying on that to run the business. You know, it's a great solution that we can offer out in the market as far as the

Speaker Change #118: Hey Ryan, hope you're doing well. I mean, I guess first and foremost, I think we try to make sure we reiterate that, you know, our program is complementary to our business model. We're not relying on that to run the business.

But, you know, we're all looking at, you know, what can we do from a client-centric perspective to enhance the value proposition services we give our advisers. But I think our important point that we try to reiterate here with this program is it's complimentary. It's not cool to how we run the business. We're not relying on it.

Yeah, I'll just add, just from a competitive perspective, we think we have a very competitive rate that we offer investors. Our total balances are about 1% of our total AUM and AUA and AUM added together. That's very different than others. And we provide our advisers optionality, and they have choice, and there's full disclosure and transparency of the entire program. So, we think we've entered this different than many others when they kind of launched these programs five or six years ago.

When you think about the $10 million of fees from that program in the quarter, if we were to get rate cuts later this year, how should we think about the trajectory of that and how that might impact the level of deposit sweep and revenues that you guys got? Yeah, I mean, you can do the math on rate cuts of 25 basis points like everyone else as we get rate cuts. We'll look at what comes from SEI, which a portion will, and what comes from the investors themselves. So those be some kind of allocation to both.

So we won't take the full 25 basis points, but there'll be some kind of sharing, and we have a rate committee group that will decide that in the competitive environment that we know to be out there.

All right, great.

There's one more question. On the fee rate reduction in advisors, was that full impact in the second quarter? Was that implemented mid-quarter with, you know, another step down maybe showing up in three key results? Yeah, that was implemented April 1st. So we had the full impact in the quarter, and we're getting really good remarks there. We gave some, and then we got some fee reductions from our sub-advisors. So our advisors are really pleased with what we've been able to do, and it's really helping them from a competitive standpoint.

Perfect. Thank you.

Thanks, Ryan.

Next question is from the line of Owen Locke, Oppenheimer.

Let's go ahead. And thank you for picking my question. So on investment managers, I have two questions here. The margin went up to 38%, but I think that includes some one-time benefit. I remember there was a target of 36% a while back. Is it still the target you have on the margin? I mean, how do you think about the normalized margin for investment managers?

And then on the comment line make about you are helping public markets seeking access to private markets and also helping private markets seeking access to public markets.

I'm just wondering could you please elaborate a little bit more on what kind of services and technology SDI can help you closely expand the XX. Thanks.

Hey, Owen. I hope you're having a good summer.

Maybe we'll take those a couple of chunks, and Phil and I will tag scene this. So if you think about IMS margin, this will come right more color. I think the important thing to keep in mind for the community is we're not targeting specific margin targets at the unit levels. So we're not trying to run the business that way because if we see additional opportunity to accelerate growth, we're going to invest. And that's how we're going to continue to run the company. Now, as Sean answered the earlier question about offense, there is an increased focus across SDI about kind of maximizing our capital allocation, managing expenses, and driving continued growth to our infrastructure share.

And that's not going to change. We're going to be focused on that, but not at the expense of meeting the long-term growth.

So now I'll make a comment on the public's pride when Phil made you kind of going on both. We're seeing a tremendous amount of demand from both SDI, so from intermediary clients are looking to figure out how to access and incorporate alternative investments in portfolios for their clients. We're seeing increased demand for alternative products in the institutional market as well as under the larger IMS space. And then the flip side of that is a lot of our investment manager clients are looking at ways at how they create product and potentially leverage distribution to access a broader set of the client base and the intermediary space.

And we think we are really well positioned from both the technology, operational, and asset management perspective to create services and platforms that could help facilitate and accelerate that.

The SDI access platform is one of those, but I think a more specific example too that Phil can give in a lot of our traditional asset managers are working with SDI to try to figure out how they could launch alternative asset products and leverage our technology and operations to get those up quicker, out the door quicker, and into the market. So you're sending this every day.

Thanks, Ryan, and thanks, Owen, for the question. We used to say that margins were going to be 34 to 36 percent, but with all the focus, the laser focus on optimization and on scaling operations, the numbers are closer to 35 and a half to 37 percent or so. So we're starting to see a little bit of scale in that business. And from a public and private market convergence perspective, the clients are coming together massively. We used to think traditional managers were very different from alternative managers. The traditional managers, 20 percent of them now offer alternative asset classes.

We see that number growing more and more and more with every single day. On the alternative side, the alternative managers are looking for distribution. They're launching collective investment trusts that have target date funds that include alternative funds. And they're also sort of growing their book within that world. So we're seeing a ton of activity for us.

We look downstream. It has impacts on our systems. We're very well prepared for that. We literally are right in the middle of the traditional alternative manager convergence, and we'll be capitalizing on that for years to come.

Got it, that's helpful. And then on institutional investors, you highlight a plan losses on your press release, but your margin was still strong, I think 44%, even ticking out one-time benefit.

Could you please talk about the effort to kind of turn around the segment and the timing of it?

Thanks. Sure, James Cipriano's in the room; you leave that unit, let him kind of provide some color on that, Owen. Sure.

Thank you, Ryan. Thanks for the question, Owen. I think Ryan and Sanjay mentioned when Sanjay came into the private banking group that they are in the fourth quarter now, turning around that execution strategy, which started with really a refocus on the leadership, right sizing the business, identifying the proper segments to sell into, and then execute. I'd say the institutional group is about in the second quarter right now that we continue to face segments in the defined benefit space. Certainly, the acceleration with folks annuitizing their plans accelerated with the uptick of rates. We expect to continue to see that in 2025, but we're very optimistic about the markets that we serve outside of DB, healthcare, higher education, secondary education, not-for-profit unions, and governments, where our OCI solutions are really resonating there.

So, as I said, headwinds continue in 2025, but our pipeline continues to build, and we're very optimistic about what lies ahead in 2025 beyond those headwinds.

And the only other color I would add that was maybe an ascendant to a previous question about, you know, leading indicators. And Owen, as you know, you know, it's really well. We're really careful to never get too far over our fees. We don't spend too much time patting ourselves on the back because we get really focused on medium-long term. But when we look at new advisor acquisition last quarter, when you look at the new signings and institutional, when we look at the banking pipeline, IMF's record quarter increased demand and you were up things and family office services, we feel that we're in a really strong spot with client activity, prospect activity momentum.

Now it's up to us to deliver that.

The other thing I want to make sure is clear: optimization is never going to be at the expense of client experience. So the things we're doing to drive margin expansion in IMF, we're investing heavily in IMF. We're just being more thoughtful across the company around where we're deploying our capital, including talent, to make sure that our existing clients have the best experience possible. And when we close this pipeline, we are onboarding those clients with the experience that we would want them to have they wanted at the IMF.

God, if that's helpful.

And finally, I want to squeeze one more, maybe this one for Paul. You just talked about the integrated cash program; the cash balance is just about 1% of total AUN, AUN. Do you have any aspiration to go that how high it can go and also the traction of it?

Thanks. Yeah, right now we're just holding the line with 1%. We'll continue to evaluate the program based on the rates we provide investors and what other optionality is out there in the marketplace.

But I think for your forecast, you should assume that kind of 1% operational cash, and I'll go for it.

You talked about growing in the R.I.A. market and investment advisors. How much of the asset mix is that in the segment currently, and what are you doing to sort of grow your share there?

Paul, you want to take that one? Yeah, I can take that. So the 101 billion that's on the platform, the R.I.A. marketplace represents about 23 billion of 101 billion, the rest being advisors through independent broker dealers. That is obviously our fastest growing segment and where we're getting bigger chunk plays and larger advisors. We had a large one in the second quarter that partially funded that will finish the funding in third quarter, and there's a lot of growth with those opportunities as well. So we're really bullish on that marketplace through the leadership of Vera Collin and Gabe Garcia, and we're redeploying more sales folks and more technical resources to support that marketplace.

The good news with that is often they come over as AUA, but as they see our investment platform, they may consume some of that AUM. So there's some up sale revenue activity that we get once they get to understand SEI and the full capabilities. So we would be continue to be positive on that as we move forward.

Okay, thank you.

And then one more on the cash program. I'm just curious how much of that cash is held in advisory accounts or is that mainly in brokerage accounts? It's all in advisory accounts.

Okay, thank you.

All right, and our next question: we go to the line of Patrick O'Shaughnessy.

Raymond James, please go ahead. Your line is open now.

Hi, can you hear me? Yeah, we can hear you, Patrick. Okay, thank you.

Maybe we'd beat the horse a little bit dead here on the insured deposit program.

Is there any level of concern that the program might not be consistent with advisors, producer obligations to their clients in the eyes of the SEC? I mean, we've looked at all the disclosures. We've looked at all the documents that we provided to advisors and investors. Operational cash is something that we need to have in order to operate the overall portfolios that's inconsistent with our investment thesis. So, we think we're on sound ground. Obviously, it's a fluid nature in the industry of what's happening. And we will adjust based on whatever regulatory guidance is provided. But we think based on the combination of the investor rate that we give investors the optionality, we give advisors the 1% the need for operational cash in the models.

All those are consistent with an advisor meeting their producer allegation, but it'll be fluid as things change in the marketplace.

Yeah, I'd appreciate that. And then, sticking with the IA segment here, a couple of competitors to that business recently were acquired or had acquisitions and getting taken on private equity. Have you seen any change to the competitive landscape in that business as a result? Yeah, the firms that just got acquired are still competitors, and they're, you know, they're worthy competitions, specifically asset market investment. We know that you know they're going through some changes in integration and things like that into the new organizations.

We think our program stack up very competitively versus those two firms, especially as we go into the higher end of the RIA marketplace with the robustness of our technology, our operations, and our investment management. There's a lot happening in the marketplace. There's a lot of firms that are getting aggregated and being acquired. We're very active in consulting with our advisors, providing a Pathfinder program for our advisors.

And ultimately, contemplating whether or not, you know, we need to be a destination firm, but that's something for the future. So we think about this every day. We know what's happening in the marketplace. And those competitors, as I said, are formidable; but, you know, we think we stack up very well from a capability standpoint.

Perfect. Thank you.

Okay, our next question is from Ryan of Aidan Hall, KBW. Let's go ahead.

Interesting.

My question. Maybe just to follow up on IMS, you know, my question is kind of around SCI's offering, as it relates to the semi-liquid retail products that have become very popular with the alternative asset management space. So how are conversations going within the channel? How do you think SCI's offering is differentiated versus peers? Then, similarly, what areas are you most focused on here to continue gaining market share over the next couple of years?

Okay. Over to you, Phil. All right. Thank you. Thanks for the question. We are right, again, in the middle of all of the semi-liquid funds that clients are offering. All of our top largest clients are either launching BDCs or semi-liquid funds. We have a matrix that we update daily that basically tells us all the different components and capabilities that they have or that they require. For us, we have all the technology in place. We're used to servicing very, very high volumes of investors. We're very, very good at it.

We are tweaking our offering where need be, but we're really in a great spot with all of the retailization of all to the democratization of all.

Great. Yeah.

Maybe just one on kind of inorganic growth opportunities.

Can you just remind us how you would kind of stack rank the priorities there, whether by segment, region, or capability? Yeah, absolutely. So I think it's consistent with the Investor Day two years ago. We've continued to kind of hone our focus. I think there's kind of three areas where we stay really active right now. It's dramatically anything in that RIA space that would increase our ability to drive client growth, client adoption, but as also Paul mentioned, to broaden out our capability to offer succession opportunities, a different outcome for our advisors. You will be more active there.

When you talk about filled business, the IMF business, the areas that could expand are operational or technological delivery, especially in the areas of loss and especially outside the US and expand that global footprint. And then when you just think about value added technology or services, either to our intermediary days across banks, advisors, wealth managers, I would say focus there. So the good news for us, Aidan, is we definitely progress that. Sean, Mike and I were with our board the last two days, setting up a lot of clarity and I think unification around what we're going to do moving forward, but also I think we're really disciplined around the segment in areas that we're targeting for an organic.

And it's exciting because we think they could be real accelerates. Now that we have the foundation across the board solidified for organic growth.

Thank you. Got it. Appreciate it, Collar.

Interesting, my questions. Yeah, over to help.

Okay, and we do have a follow-up on the line of Ryan Kinney, Morgan Stanley. Please go ahead.

Hey, thanks for taking my follow up. Just a technical question on the healthcare credits. If we add them up by segment, 70 basis points in IMS 160 and banking, 230 and institutional. I get around five million. So that's a little higher than the three million that was referenced earlier. So I just want to check if that math was right. Or if you could help reconcile.

Thanks. Yeah, so there, so I could primarily.

So primarily, the healthcare benefit was shy of three million. There's always one time here and there. But, so the number I gave of shy of three million was the majority of that difference. Or that one-time benefit.

Okay, no further questions in queue.

I'm going to go back over to see all Ryan Hakey for closing remarks. Well, thank you for all the questions. It's great to see the engagement. Our results through the first half of the year. We're going to start commitment and execution against our strategy to drive drive road in the short and long term. And we're going to continue to build upon our success.

I, as I mentioned earlier, we're going to be hosting an investor day on November 7th. Additional details will be shared in the coming months. Look forward to welcoming you all back to our office.

And thank you for joining today's call.

Yes, and once again, ladies and gentlemen, thank you for joining today's conference.

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