Franklin Resources(US:BEN)2025-11-10 19:19Assets Under Management (AUM) - As of September 30, 2025, Franklin Resources, Inc. has over $1.6 trillion in assets under management (AUM) across various investment strategies[19]. - The AUM by asset class includes $851.4 billion in equity (41%), $438.7 billion in fixed income (26%), $263.9 billion in alternatives (16%), $193.9 billion in multi-asset (12%), and $78.5 billion in cash management (5%)[29]. - Total Assets Under Management (AUM) was $1,661.2 billion as of September 30, 2025, a 1% decrease from $1,678.6 billion at September 30, 2024[179]. - Average AUM increased by 3% during fiscal year 2025, reaching $1,606.7 billion compared to $1,565.8 billion in fiscal year 2024[186]. - AUM decreased by $17.4 billion or 1% during fiscal year 2025, primarily due to $97.4 billion of long-term net outflows, partially offset by $67.6 billion of net market change and $12.6 billion of cash management net inflows[191]. - AUM in the United States remained stable at $1,171.5 billion for 2025, while total international AUM decreased by 2% to $489.7 billion[193]. Financial Performance - Operating revenues for fiscal year 2025 were $8,770.7 million, representing a 3% increase from $8,478.0 million in fiscal year 2024[187]. - Net income attributable to Franklin Resources, Inc. was $524.9 million for fiscal year 2025, a 13% increase from $464.8 million in fiscal year 2024[187]. - Diluted earnings per share for fiscal year 2025 were $0.91, up 7% from $0.85 in fiscal year 2024[187]. - Total operating revenues for fiscal year 2025 were $8,770.7 million, reflecting a 3% increase compared to $8,478.0 million in 2024[200]. Investment Management Fees - Investment management fees, which represent a majority of revenues, are based on a percentage of AUM and vary by asset class and service type[28]. - Investment management fees increased by $159.6 million in fiscal year 2025, primarily due to one additional quarter of revenue from Putnam and an increase in average equity AUM[202]. - Performance fees rose to $474.0 million in fiscal year 2025, up from $390.7 million in 2024, driven by changes in performance fees from alternative investment managers[204]. - Shareholder servicing fees increased by $35.2 million in fiscal year 2025, mainly due to one additional quarter of fees from Putnam and higher related AUM[212]. - The effective investment management fee rate excluding performance fees was 40.5 basis points for fiscal year 2025, a decrease from 41.1 basis points in 2024[203]. Regulatory Environment - The company operates in a complex regulatory environment, which adds to the challenges of compliance and operational efficiency[22]. - Regulatory compliance is extensive, with the company subject to various U.S. federal and state laws, including the Securities Act of 1933 and the Dodd-Frank Act[59]. - The SEC's amended rules require public companies to disclose material cybersecurity incidents within four business days, impacting the company's reporting obligations[63]. - Sustainability and ESG topics are under increased regulatory scrutiny, with new climate disclosure rules being considered that may affect future reporting[64]. - The SEC and CFTC adopted amendments to Form PF in February 2024, requiring private fund advisers to report additional information including assets under management and fund performance, with compliance extended to October 2026[69]. - The DOL's 2024 amended fiduciary rule broadens the definition of "investment advice fiduciary," impacting financial services providers and potentially subjecting them to ERISA fiduciary standards[68]. Market Conditions and Competition - The financial services industry is highly competitive, with competition based on factors such as investment performance, product offerings, and service quality[51]. - Market conditions, including geopolitical risks and economic crises, can adversely affect investment performance and AUM[98]. - The investment management industry is experiencing transformative pressures, including increased fee pressure and a shift towards alternative and passive strategies, which could affect the company's competitive position[113]. - The company competes with numerous investment management firms, and increased competition could lead to a decline in market share and revenues[114]. Operational Risks - The company faces operational risks related to compliance with regulatory requirements and the complexity of its global operations[107]. - The company faces risks associated with inadequate controls and risk management policies, which could adversely affect its global operations and financial position[108]. - The company is investing in a third-party technology solution to unify its investment management technology platform, which may require significant capital spending[122]. - Any significant failure or security breach in the company's information and cybersecurity infrastructure could disrupt operations and harm its financial condition[123]. - The company faces significant cybersecurity risks, including potential financial losses and reputational harm due to system disruptions or breaches[126]. Employee and Workplace - As of September 30, 2025, the company employed approximately 9,800 employees and operated offices in over 30 countries[93]. - The company has established resources to promote an inclusive workplace and drive employee engagement, which is critical for long-term success[94]. - Key personnel are critical to the company's success, and losing them could adversely affect client retention and financial performance[130]. Real Estate and Assets - The company has a total of 2,677,753 square feet of owned properties, with 1,093,776 square feet leased to third parties[158]. - As of September 30, 2025, the company leased and occupied approximately 2,022,000 square feet of office space worldwide[158].