Profile: Waddell & Reed Financial Inc (WDR.N)
3 Dec 2013
Waddell & Reed Financial, Inc., incorporated on December 24, 1981, is engaged in providing investment management, investment product underwriting and distribution, and shareholder services administration to mutual funds and institutional and separately managed accounts. The Company conducts business through its subsidiaries. The Company operates its investment advisory business through its subsidiary companies, primarily Waddell & Reed Investment Management Company (WRIMCO), a registered investment adviser, Ivy Investment Management Company (IICO), the registered investment adviser for Ivy Funds (the Ivy Funds) and Legend Advisory Corporation, the registered investment adviser for Legend. Its underwriting and distribution revenues consist of commissions derived from sales of investment and insurance products, Rule 12b-1 asset-based service and distribution fees, distribution fees on certain variable products, fees earned on fee-based asset allocation products, and related advisory services. As of December 31, 2012, the Company had $96.4 billion in assets under management.
The Company’s underwriting and distribution business operates through two broker/dealers: Waddell & Reed, Inc. (W&R) and Ivy Funds Distributor, Inc. (IFDI). W&R is a registered broker/dealer and investment adviser that act primarily as the national distributor and underwriter for shares of the Advisors Funds, other mutual funds and a distributor of variable annuities and other insurance products issued by its business partners. In addition, W&R is the ninth distributor of its Ivy Funds. IFDI is the distributor and underwriter for the Ivy Funds. During 2012, the Company committed to a plan to sell its Legend group of subsidiaries (Legend), and on October 29, 2012 the Company signed a definitive agreement to execute the transaction. The sale closed effective January 1, 2013.
Waddell & Reed Services Company (WRSCO) provides transfer agency and accounting services to the Advisors Funds, Ivy Funds, Ivy Funds VIP and InvestEd.. The Company operates its business through three distinct distribution channels. Its retail products are distributed through its sales force of independent financial advisors (the Advisors channel) or through third-parties, such as other broker/dealers, registered investment advisors (including the retirement advisors of the Legend group of subsidiaries (Legend)) and various retirement platforms, (collectively, the Wholesale channel). It also markets its investment advisory services to institutional investors, either directly or through consultants (the Institutional channel).
Investment Management Operations
The Company’s investment advisory business provides one of its sources of revenues and profits. The Company earns investment management fee revenues by providing investment advisory and management services pursuant to investment management agreements with each fund within the Advisors Funds family, the Ivy Funds family, the Ivy Funds VIP family, and InvestEd (collectively, the Funds).
Investment Management Products
The Company’s mutual fund families offer a range of investment options. The Company is an underwriter and distributor of 80 registered open-end mutual fund portfolios, which include offerings in the Advisors Funds, Ivy Funds, Ivy Funds VIP and InvestEd. The Advisors Funds, variable products offering the Ivy Funds VIP, and InvestEd are offered primarily through its financial advisors and Legend advisors; in some circumstances, certain of these funds are also offered through the Wholesale channel. The Ivy Funds are offered through both its Advisors channel and Wholesale channel. The Funds' assets under management are included in either its Advisors channel or its Wholesale channel depending on which channel marketed the client account or is the broker of record. During 2012, the Company added one fund to its product line. The Company launched the Ivy Global Equity Income fund for investors interested in generating a reasonable level of current income given current market conditions. The fund focuses on equity securities issued by companies located largely in developed markets, of any size. Under normal circumstances, the fund invests at least 80% of its net assets in equity securities. For this purpose, equity securities consist primarily of dividend-paying common stocks across the globe. The fund also may invest in preferred stock, convertible securities, or other instruments whose price is linked to the value of common stock. The fund may invest in United States and non-United States issuers.
The Company’s Advisors channel, it distributes various business partners' variable annuity products, which offer the Ivy Funds VIP as an investment vehicle. It also offers its Advisors channel customers’ retirement and life insurance products underwritten by its business partners. Through its insurance agency subsidiaries, Waddell & Reed financial advisors also sell life insurance and disability products underwritten by various carriers. In addition, the Company offer its Advisors channel customers fee-based asset allocation investment advisory products, including Managed Allocation Portfolio (MAP), MAPPlus and Strategic Portfolio Allocation (SPA), which utilize its Funds. As of December 31, 2012, clients had $8.2 billion invested in its MAP, MAPPlus and SPA products. These assets are included in its mutual fund assets under management.
Waddell & Reed Financial Inc
6300 Lamar Avenue
OVERLAND PARK KS 66202