Waddell planning to upgrade technology

NEW YORK — In a break with its past, Waddell & Reed Inc. will offer its advisers updated technology and next year will introduce a new outside platform for its top 300 or so registered representatives, company executives said last week. A common knock in the industry on the independent-contractor-broker-dealer unit of asset manager Waddell & Reed Financial Inc. of Overland Park, Kan., has been its lack of technology and adherence to systems that can date back decades. For its more than 2,100 affiliated reps, the firm uses an antiquated “check and application” system, in which brokers write out orders for mutual funds and send them to the home office. To address that issue, the broker-dealer, which essentially is self-clearing, plans to partner with Pershing LLC of Jersey City, N.J., and next year will introduce a new platform for its top producers, said Thomas W. Butch, president of Waddell & Reed Inc., and senior vice president and chief marketing officer of the parent company. Mr. Butch, along with Henry J. Herrmann, chief executive of the parent company, met with reporters here last Thursday. Along with the broker-dealer, Waddell & Reed Financial runs and distributes two fund groups and has more than $50 billion under management. Some financial advisers want “a broader tool base,” Mr. Butch said. Waddell & Reed brokers almost exclusively sell the company’s in-house products such as mutual funds and variable annuities. The Pershing platform will be available to top advisers on a “voluntary basis,” Mr. Butch said. The firm is also working with Automatic Data Processing Inc. of Roseland, N.J., to create a unified account statement for all its advisers’ clients, he said. In a parallel move to adding the Pershing platform, the firm for the first time is considering hiring recruiters to tap into competing broker-dealers, Mr. Butch said. The firm historically has recruited reps new to the business — such as college graduates and people changing careers, he said. And that helps account for the relatively low average production of its advisers, Mr. Butch said. Gross production per rep last year was $61,800. Many independent broker-dealers over the past few years have set minimum production levels for advisers of $100,000.