Waddell & Reed continues to shed brokers, though productivity rises

Waddell & Reed Financial Advisors continued to lose brokers and advisers in the second quarter, although at a much slower pace than in the past. The broker-dealer reported that it lost 40 advisers in the most recent quarter compared with the quarter before, according to an earnings report released Tuesday by its parent company, Waddell & Reed Financial Inc. On a year-over-year basis, headcount was down 28.5%, and now stands at 1,130. As InvestmentNews had previously reported, the bulk of brokers and advisers leaving Waddell & Reed came in the second half of last year and were mostly the result of increasing minimum production requirements. The average productivity per adviser at the firm continues to rise as the firm focuses programs and support on high-performing advisers, the company said in the earnings release. The average adviser is now producing $314,000 in annual fees and commissions, or trailing 12-month revenue, according to the company, an increase of 35.3% when compared with last June, when the company reported annual average revenue per adviser of $232,000. "The adviser headcount numbers reflect our proactive step to focus on more experienced, highly productive advisers," said company spokesman Roger Hoadley. "That continues to be reflected in the increasing average productivity of Waddell & Reed advisers overall." Senior management at Waddell & Reed had previously said the company was well underway in making the broker-dealer more competitive. The broker-dealer's business model in the past primarily relied on its brokers and advisers selling the parent company's proprietary, actively managed mutual funds. Waddell & Reed has recently seen turnover in senior management. Thomas Butch, the longtime head of Waddell & Reed Financial Advisors, left the company in November and was replaced by Shawn Mihal. Waddell & Reed Financial Tuesday morning reported second quarter 2018 net income of $44.5 million, or 55 cents per diluted share, compared with net income of $24.1 million, or 29 cents per diluted share, during the second quarter of 2017.