Assets Under Management (AUM) - Total assets under management (AUM) as of March 31, 2025, were $1,540.6 billion, an 8% decrease from $1,675.7 billion at September 30, 2024[68]. - Average AUM for the three months ended March 31, 2025, was $1,570.5 billion, a 1% decrease from $1,581.1 billion in the same period of 2024[73]. - AUM at March 31, 2025, was $1,540.6 billion, down from $1,644.7 billion at March 31, 2024, representing a 6% decrease[84]. - AUM decreased by $35.1 billion, or 2%, during the three months ended March 31, 2025, primarily due to $26.2 billion of long-term net outflows and a negative impact of $11.6 billion from net market changes[79]. - Cash management AUM increased by 12% to $68.9 billion as of March 31, 2025, compared to $61.7 billion in the previous year[72]. - AUM in the U.S. decreased by 7% to $1,071.3 billion as of March 31, 2025, compared to $1,155.9 billion in the previous year[84]. - The mix of average AUM for equity increased to 40% in 2025 from 35% in 2024, while fixed income decreased to 29% from 35%[73]. Revenue and Income - Operating revenues for the three months ended March 31, 2025, were $2,111.4 million, a 2% decrease compared to $2,152.8 million for the same period in 2024[71]. - Total operating revenues for the six months ended March 31, 2025, were $4,363.0 million, up from $4,143.9 million in 2024, representing an increase of 5%[132]. - Net income attributable to Franklin Resources, Inc. for the three months ended March 31, 2025, was $151.4 million, a 22% increase from $124.2 million in the prior year[71]. - Adjusted net income for the six months ended March 31, 2025, was $574.9 million, a 9% decrease from $635.1 million in the same period of 2024[71]. - Diluted earnings per share for the three months ended March 31, 2025, increased to $0.26 from $0.23 in 2024, a rise of 13%[133]. Expenses and Cost Management - Total operating expenses for the three months ended March 31, 2025, were $1,965.8 million, a decrease of 3% compared to $2,023.5 million in the same period of 2024[99]. - Compensation and benefits expenses decreased by $108.2 million (11%) for the three months ended March 31, 2025, primarily due to headcount reductions[99]. - The company plans to focus on expense management while investing strategically in systems and technology to enhance service quality[70]. - The effective investment management fee rate excluding performance fees was 41.4 basis points for the three months ended March 31, 2025, unchanged from the same period in 2024[93]. - Total operating expenses increased by 5% to $3,998.4 million for the six months ended March 31, 2025, compared to $3,808.1 million in the prior year[99]. Cash Flow and Investments - Operating cash flows for the six months ended March 31, 2025, were $(195.3) million, compared to $(115.3) million in 2024, indicating a worsening cash flow situation[134]. - Cash and cash equivalents as of March 31, 2025, were $2,714.3 million, down from $3,261.1 million in 2024, a decrease of 17%[137]. - Net cash used in investing activities increased to $(1,020.6) million for the six months ended March 31, 2025, compared to $(410.8) million in 2024, indicating a significant rise in investment expenditures[134]. - The company expects to invest more of its post-dividend free cash flow into business growth, including seed capital and acquiring resources for investment teams[146]. Market Performance and Flows - Long-term net flows for the three months ended March 31, 2025, were negative at $(26.2) billion, compared to positive net flows of $6.9 billion in the same period of 2024[76]. - Long-term inflows increased by 2% to $86.8 billion compared to the prior year, driven by higher inflows in alternative private funds and equity[80]. - Long-term outflows increased by 45% to $113.0 billion, largely due to higher outflows from fixed income vehicles and ongoing regulatory investigations[80]. - The market depreciation primarily occurred in the equity asset class, with a $16.7 billion decrease attributed to market conditions[81]. Shareholder Actions - The company repurchased 0.5 million shares at a cost of $10.0 million during the three months ended March 31, 2025, and 0.8 million shares at a cost of $15.8 million during the six months ended March 31, 2025[148]. - The company declared regular dividends of $0.64 per share during the six months ended March 31, 2025, compared to $0.62 per share in 2024, reflecting a 3% increase[147]. - The company authorized the repurchase of up to an additional 27.2 million shares in December 2023, bringing the total available for repurchase to 40.0 million shares[148]. Tax and Regulatory Matters - The effective income tax rate increased to 72.8% for the three months ended March 31, 2025, compared to 26.4% in the prior year, primarily due to losses of consolidated investment products (CIPs) with no related tax benefits[124]. - Investments held by consolidated investment products generated losses of $164.7 million for the three months ended March 31, 2025, compared to gains of $89.9 million in the prior year[121].

Financial Performance - Net income for Q2 2025 was $151.4 million, or $0.26 per diluted share, down 7% from the previous quarter and up 22% year-over-year[3]. - Adjusted net income decreased by 21% to $254.4 million, with adjusted diluted earnings per share at $0.47, a 20% decline from the previous quarter[3]. - Operating revenues for the quarter were $2,111.4 million, a 6% decrease from the previous quarter[8]. - Total operating revenues for the three months ended March 31, 2025, were $2,111.4 million, a decrease of 2% compared to $2,152.8 million in the same period of 2024[14]. - Investment management fees decreased by 2% to $1,673.6 million for the three months ended March 31, 2025, compared to $1,713.9 million in the same period of 2024[14]. - Net income attributable to Franklin Resources, Inc. was $151.4 million for the three months ended March 31, 2025, representing a 22% increase from $124.2 million in the same period of 2024[14]. - Earnings per share (EPS) for the three months ended March 31, 2025, were $0.26, up 13% from $0.23 in the same period of 2024[14]. - Operating income increased by 13% to $145.6 million for the three months ended March 31, 2025, compared to $129.3 million in the same period of 2024[14]. - Total operating expenses decreased by 3% to $1,965.8 million for the three months ended March 31, 2025, compared to $2,023.5 million in the same period of 2024[14]. - Compensation and benefits expenses decreased by 11% to $920.0 million for the three months ended March 31, 2025, compared to $1,028.2 million in the same period of 2024[14]. - The operating margin improved to 6.9% for the three months ended March 31, 2025, compared to 6.0% in the same period of 2024[14]. - Dividends declared per share increased by 3% to $0.32 for the three months ended March 31, 2025, compared to $0.31 in the same period of 2024[14]. - Adjusted operating income for the three months ended March 31, 2025, was $377.2 million, compared to $412.8 million for the previous quarter and $419.6 million for the same period last year[26]. - Total operating revenues for the three months ended March 31, 2025, were $2,111.4 million, down from $2,251.6 million in the previous quarter and $2,152.8 million in the same period last year[26]. - Adjusted net income for the three months ended March 31, 2025, was $254.4 million, compared to $320.5 million in the previous quarter and $306.6 million in the same period last year[27]. - Diluted earnings per share for the three months ended March 31, 2025, were $0.26, down from $0.29 in the previous quarter and $0.23 in the same period last year[27]. - Adjusted diluted earnings per share for the three months ended March 31, 2025, were $0.47, compared to $0.59 in the previous quarter and $0.56 in the same period last year[27]. - The company reported an operating margin of 6.9% for the three months ended March 31, 2025, compared to 9.7% in the previous quarter and 6.0% in the same period last year[26]. - The adjusted operating margin for the three months ended March 31, 2025, was 23.4%, down from 24.5% in the previous quarter and 25.2% in the same period last year[26]. Assets Under Management (AUM) - Total Assets Under Management (AUM) was $1,540.6 billion, a decrease of $35.1 billion during the quarter, primarily due to $26.2 billion in long-term net outflows[8]. - The company's beginning AUM for the three months ended March 31, 2025, was $1,575.7 billion, compared to $1,455.5 billion for the same period in 2024, reflecting a year-over-year increase of 8.2%[16]. - Long-term inflows for the three months ended March 31, 2025, were $86.8 billion, up from $84.9 billion in the same period of 2024, indicating a growth of 2.2%[16]. - Long-term outflows increased significantly to $113.0 billion for the three months ended March 31, 2025, compared to $78.0 billion in the same period of 2024, representing a rise of 44.9%[16]. - The total net flows for the three months ended March 31, 2025, were negative at $(23.5) billion, contrasting with positive net flows of $2.1 billion in the same period of 2024[16]. - The ending AUM as of March 31, 2025, was $1,540.6 billion, down 2.2% from $1,575.7 billion at the end of December 2024[17]. - The average AUM for the three months ended March 31, 2025, was $1,570.5 billion, a decrease of 4% from $1,634.5 billion in the previous quarter[17]. - The AUM by asset class showed a decline in equity AUM to $598.1 billion, down 4% from $620.0 billion at the end of December 2024[17]. - The AUM in fixed income also decreased by 5% to $446.0 billion from $469.5 billion at the end of December 2024[17]. - Cash management AUM increased by 9% to $68.9 billion, up from $63.4 billion at the end of December 2024[17]. - The total AUM in the United States was $1,071.3 billion, a decrease of 3% from $1,102.5 billion at the end of December 2024[18]. - As of March 31, 2025, the company had $1.54 trillion in assets under management (AUM)[29]. Business Operations - Long-term inflows increased by 9% quarter-over-quarter, with multi-asset and alternatives generating $9.7 billion in positive net flows[3]. - The ETF business achieved $4.1 billion in positive net flows, marking the 14th consecutive quarter of growth[3]. - Fundraising in alternatives generated $6.8 billion, with private market assets totaling $6.1 billion, including the launch of the Franklin Lexington Private Markets Fund[4]. - The institutional pipeline of won-but-unfunded mandates rose by $2.3 billion to $20.4 billion, the highest level since 2022[3]. - Cash and cash equivalents were $5.0 billion, with total stockholders' equity at $13.2 billion[9]. - The company repurchased 0.5 million shares for a total cost of $10.0 million during the quarter[9]. - The company serves clients in over 150 countries, leveraging its expertise in equity, fixed income, alternatives, and multi-asset solutions[29]. - The company has over 1,500 investment professionals and more than 75 years of investment experience[29].

AUM and Flows - Ending AUM decreased to $1.54 trillion, a 2.2% decrease compared to the prior quarter and a 6.3% decrease compared to the prior year[8, 50] - Long-term net outflows were $26.2 billion[7] - Excluding Western Asset Management, long-term net inflows were $7.4 billion[7] - Alternatives fundraised $6.8 billion, with $6.1 billion in private market assets[7] - ETF experienced $4.1 billion of net flows, reaching a record high AUM of $37.0 billion[7] Financial Performance - Adjusted revenue was $1.61 billion, a 4% decrease compared to the prior quarter and a 3% decrease compared to the prior year[8, 55] - Adjusted operating income was $377.2 million, a 8.6% decrease from the prior quarter and a 10.1% decrease from the prior year[8, 39] - Adjusted net income was $254.4 million, a 20.6% decrease from the prior quarter and a 17% decrease from the prior year[8, 39] - Adjusted diluted EPS was $0.47, a 20.3% decrease from the prior quarter and a 16.1% decrease from the prior year[8, 39] - Adjusted effective fee rate was 38.3 bps, compared to 37.2 bps in the prior quarter and 38.5 bps in the prior year[8, 10] Capital Management - Total cash and investments were $6.1 billion as of March 31, 2025[48]

Core Insights - Over half of the S&P 500 Dividend Aristocrats are considered too expensive or have low dividends, but four of the ten lowest-priced options are seen as good buying opportunities [1] Group 1 - A significant portion of the S&P 500 Dividend Aristocrats is either overpriced or offers minimal dividends [1] - Among the lowest-priced "Dogs" of the Aristocrats, there are four candidates that are recommended for purchase [1]

Franklin Resources, Inc. First Quarter 2025 Results January 31, 2025 | Investor Presentation Jenny Johnson President Chief Executive Officer Matthew Nicholls Executive Vice President Chief Financial Officer Chief Operating Officer Adam Spector Executive Vice President Head of Global Distribution Forward-looking statements and non-GAAP financial information This commentary contains forward-looking statements that involve a number of known and unknown risks, uncertainties and other important factors. This com ...

Financial Performance - Operating revenues for the three months ended December 31, 2024, were $2,251.6 million, a 13% increase from $1,991.1 million in the same period of 2023[68]. - Net income attributable to Franklin Resources, Inc. for the same period was $163.6 million, a 35% decrease from $251.3 million in 2023[68]. - Adjusted operating income for the three months ended December 31, 2024, was $412.8 million, a slight decrease of 1% from $417.0 million in 2023[68]. - The operating margin for the three months ended December 31, 2024, was 9.7%, down from 10.4% in the same period of 2023[68]. - Adjusted operating margin decreased to 24.5% for the three months ended December 31, 2024, down from 27.3% in the prior year[124]. - Net income attributable to Franklin Resources, Inc. for the three months ended December 31, 2024, was $163.6 million, a decrease of 34.9% from $251.3 million in the same period of 2023[125]. - Adjusted net income for the same period was $320.5 million, slightly down from $328.5 million year-over-year[125]. Assets Under Management (AUM) - Total assets under management (AUM) as of December 31, 2024, were $1,575.7 billion, an 8% increase from $1,455.5 billion on December 31, 2023[64]. - The average AUM for the three months ended December 31, 2024, was $1,634.5 billion, a 17% increase from $1,394.2 billion in 2023[70]. - The equity asset class AUM increased by 33% to $620.0 billion from $467.5 billion in 2023[69]. - Total AUM at December 31, 2023, reached $1,455.5 billion, an 8% increase from $1,374.2 billion at October 1, 2023[75]. Inflows and Outflows - Long-term inflows for the three months ended December 31, 2024, were $97.8 billion, a 42% increase from $68.9 billion in 2023[72]. - Long-term net outflows totaled $50.0 billion, a significant increase of 900% compared to $5.0 billion in the previous year[72]. - Long-term inflows increased 42% to $97.8 billion compared to the prior year, driven by higher inflows in equity and multi-asset open-end funds[74]. - Long-term outflows increased 100% to $147.8 billion, primarily due to higher outflows from fixed income vehicles and equity open-end funds[74]. Revenue and Fees - Investment management fees rose 9% to $1,799.3 million for the three months ended December 31, 2024, due to a 17% increase in average AUM[81][82]. - Sales and distribution fees increased 27% to $375.5 million, driven by revenue from Putnam products post-acquisition[81][86]. - Total operating revenues for the three months ended December 31, 2024, were $2,251.6 million, a 13% increase from $1,991.1 million in the prior year[81]. - Performance fees decreased to $141.6 million for the three months ended December 31, 2024, down from $166.4 million in the prior year[84]. Expenses - Total operating expenses increased 14% to $2,032.6 million, influenced by the integration of the Putnam acquisition[90]. - General, administrative, and other operating expenses increased by $53.2 million, largely due to the acquisition of Putnam and higher legal and professional fees[104]. - Amortization of intangible assets increased by $26.8 million, attributed to a reduction in the remaining useful life of definite-lived intangible assets related to WAM[103]. - Occupancy expenses increased by $8.4 million for the three months ended December 31, 2024, primarily due to expenses incurred by Putnam following the acquisition[101]. Cash Flow and Liquid Assets - Operating cash flows for the three months ended December 31, 2024, were $(145.2) million, an improvement from $(251.9) million in the prior year[126]. - Total liquid assets decreased to $5,151.5 million as of December 31, 2024, from $5,664.4 million at September 30, 2024[128]. - Cash and cash equivalents at December 31, 2024, were $2,765.4 million, down from $3,261.1 million[128]. Shareholder Actions - The company declared regular dividends of $0.32 per share during the three months ended December 31, 2024, compared to $0.31 per share in the same period of 2023[138]. - During the three months ended December 31, 2024, the company repurchased 0.3 million shares at a cost of $5.8 million, compared to 2.4 million shares at a cost of $58.8 million in the prior year[139]. Workforce and Acquisitions - The global workforce increased to approximately 10,100 employees from 9,100 at December 31, 2023, mainly due to the acquisition of Putnam[97]. - The company expects to make a deferred cash payment of $100.0 million related to the acquisition of Lexington during the third quarter of fiscal year 2025[140]. - The company maintains an $800.0 million 5-year revolving credit facility, which remains undrawn as of the filing date[134]. - As of December 31, 2024, the company had $500.0 million of short-term commercial paper available for issuance under an uncommitted private placement program[135].

Financial Performance - Franklin Resources, Inc. reported net income of $163.6 million or $0.29 per diluted share for Q1 2025, compared to a net loss of $84.7 million in the previous quarter and net income of $251.3 million in Q1 2024[3]. - Adjusted net income was $320.5 million for the quarter, a slight increase from $315.2 million in the previous quarter, but down from $328.5 million in the prior year[7]. - Operating income was $219.0 million, compared to an operating loss of $150.7 million in the previous quarter and an operating income of $206.5 million in the prior year[7]. - The company reported a net income attributable to Franklin Resources, Inc. of $163.6 million for the three months ended December 31, 2024, recovering from a loss of $84.7 million in the previous quarter[26]. - Adjusted diluted earnings per share for the three months ended December 31, 2024, was $0.59, consistent with the previous quarter[26]. Revenue and Assets Under Management - Operating revenues for the quarter were $2,251.6 million, reflecting a 2% increase from the previous quarter and a 13% increase year-over-year[7]. - Total assets under management (AUM) were $1,575.7 billion at December 31, 2024, down $102.9 billion during the quarter due to $52.9 billion in net market changes and $50 billion in long-term net outflows[7]. - Average AUM for the quarter was $1,634.5 billion, a 17% increase from $1,394.2 billion year-over-year[14]. - The AUM as of December 31, 2024, was approximately $1.6 trillion, indicating a strong market presence and investment capability[29]. - Total AUM by asset class showed a decline in equity and fixed income, with equity at $620.0 billion (down 2%) and fixed income at $469.5 billion (down 16%) compared to the previous quarter[15]. Inflows and Outflows - Long-term inflows improved by 34% year-over-year, generating positive net flows of $17 billion across equity, multi-asset, and alternatives, despite long-term net outflows of $50 billion[3]. - Long-term inflows for the quarter were $97.8 billion, a 42% increase from $68.9 billion year-over-year[14]. - Long-term outflows doubled to $147.8 billion from $73.9 billion in the same period last year, resulting in long-term net flows of $(50.0) billion, a 900% decline[14]. - Long-term net flows for the three months ended September 30, 2024, were negative at $31.3 billion, driven by outflows in Fixed Income and Alternative assets[18]. Strategic Investments and Shareholder Value - The company remains committed to strategically investing in its business while managing expenses to enhance shareholder value[6]. - The company repurchased 0.3 million shares of common stock for a total cost of $5.8 million during the quarter[8]. - Fundraising in alternatives reached $6 billion, with $4.3 billion in private market assets, and the launch of a new evergreen secondaries private equity fund achieved $900 million in assets under management[4]. Market Presence and Operations - The company operates in over 150 countries, leveraging its extensive investment management expertise and technology solutions[29]. - Total reinvested distributions amount to $20.1 billion[11]. - Direct investments in CIPs total $1.1 billion, with additional third-party investments of approximately $356 million[11]. - Cash and investments related to deferred compensation plans amount to approximately $437 million[11].

PART I [Forward-Looking Statements](index=4&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section highlights that the Annual Report contains forward-looking statements, which are subject to known and unknown risks, uncertainties, and important factors that may cause actual results to differ materially from expectations - Forward-looking statements are provided under the 'safe harbor' protection of the Private Securities Litigation Reform Act of 1995[5](index=5&type=chunk) - Such statements involve known and unknown risks, uncertainties, and other important factors that may cause actual results to differ materially[6](index=6&type=chunk) - The Company undertakes no obligation to publicly announce changes to expectations or revisions to forward-looking statements, unless required by law[8](index=8&type=chunk) [Item 1. Business](index=4&type=section&id=Item%201.%20Business) Franklin Resources, Inc. is a global investment management organization operating under various brand names, with over $1.6 trillion in assets under management (AUM) as of September 30, 2024 - Franklin Resources, Inc. is a holding company with subsidiaries operating under Franklin Templeton® and/or subsidiary brand names, trading on the NYSE under 'BEN' and included in the S&P 500 Index[9](index=9&type=chunk) - The Company has one operating segment: investment management and related services[9](index=9&type=chunk) - As of September 30, 2024, the Company managed over **$1.6 trillion in assets under management (AUM)**[11](index=11&type=chunk) [General](index=4&type=section&id=GENERAL) Franklin offers diverse investment management and related services globally through various products and vehicles under distinct brand names - Franklin offers services and products under various distinct brand names, including Alcentra, Benefit Street Partners, Brandywine Global, Clarion Partners, ClearBridge Investments, Fiduciary Trust International, Franklin, Franklin Mutual Series, K2, Legg Mason, Lexington Partners, Martin Currie, O'Shaughnessy, Putnam, Royce, Templeton, and Western Asset Management Company[10](index=10&type=chunk) - The Company provides investment management and related services to retail, institutional, and high-net-worth investors globally through various products and vehicles, including sponsored funds, separate accounts, and sub-advised products[12](index=12&type=chunk) [Company History](index=5&type=section&id=Company%20History) Engaged in investment management since 1947, Franklin expanded through strategic acquisitions including Templeton, Legg Mason, Lexington Partners, Alcentra, and Putnam - Engaged in investment management since 1947, Franklin was incorporated in Delaware in 1969 and expanded through strategic acquisitions, including Templeton (1992), Legg Mason (2020), Lexington Partners (2022), Alcentra (2022), and Putnam (2024)[15](index=15&type=chunk) [Our Business Structure](index=5&type=section&id=OUR%20BUSINESS%20STRUCTURE) Revenues and income are primarily derived from providing investment management and related services, with fees largely dependent on AUM levels and mix - Revenues and income are primarily derived from providing investment management and related services, with investment management fees largely dependent on the level and mix of AUM[16](index=16&type=chunk) [Our AUM by Asset Class and Product Type](index=6&type=section&id=Our%20AUM%20by%20Asset%20Class%20and%20Product%20Type) The Company offers a broad product mix across equity, fixed income, alternative, multi-asset, and cash management asset classes - The Company offers a broad product mix across equity, fixed income, alternative, multi-asset, and cash management asset classes, delivered through U.S. funds, non-U.S. funds, institutional separate accounts, and retail separately managed accounts[19](index=19&type=chunk)[20](index=20&type=chunk) AUM by Asset Class and Product Type (in billions) as of September 30, 2024 | (in billions) as of September 30, 2024 | U.S. Funds | Non-U.S. Funds | Institutional Separate Accounts | Separately Managed Accounts | Other | Total | Percentage of Total AUM | |:---------------------------------------|:-----------|:---------------|:--------------------------------|:----------------------------|:------|:--------|:--------------------------| | Equity | $ 359.1 | $ 101.9 | $ 60.7 | $ 94.4 | $ 16.0| $ 632.1 | 38 % | | Fixed Income | 179.1 | 63.9 | 251.3 | 34.1 | 28.0 | 556.4 | 33 % | | Alternative | 145.9 | 79.8 | 23.9 | 0.2 | 0.1 | 249.9 | 15 % | | Multi-Asset | 99.9 | 10.9 | 4.6 | 16.6 | 44.2 | 176.2 | 10 % | | Cash Management | 33.0 | 30.0 | 1.0 | — | — | 64.0 | 4 % | | Total | $ 817.0 | $ 286.5 | $ 341.5 | $ 145.3 | $ 88.3| $ 1,678.6 | 100 % | [Our Investment Management Related Services and Products](index=6&type=section&id=Our%20Investment%20Management%20Related%20Services%20and%20Products) Specialist investment managers offer diverse expertise across asset classes and strategies, marketing products globally to retail, institutional, and high-net-worth clients - Specialist investment managers offer diverse expertise across asset classes and strategies, marketing products under their own brand names, with corporate distribution subsidiaries providing support[22](index=22&type=chunk) - Investment products are offered globally to retail, institutional, and high-net-worth clients, including mutual funds, closed-end funds, private funds, and separate accounts, designed for various investment goals including sustainable and ESG preferences[23](index=23&type=chunk) [Our Funds](index=7&type=section&id=Our%20Funds) Specialist investment managers manage fund portfolios, with most U.S. mutual fund investment management agreements requiring annual renewal and board or shareholder approval - Specialist investment managers manage fund portfolios according to stated objectives, with subsidiaries providing or arranging investment, shareholder servicing, and administrative services, often outsourcing to third parties[26](index=26&type=chunk) - Most U.S. mutual fund investment management agreements require annual renewal and approval by the board of directors or trustees, or shareholders, and are subject to termination with prior notice[27](index=27&type=chunk) [Retail Separately Managed Account Programs](index=7&type=section&id=Retail%20Separately%20Managed%20Account%20Programs) Certain specialist investment managers provide services to retail separately managed account programs, offering clients various investment strategies with an all-inclusive fee - Certain specialist investment managers provide services to retail separately managed account programs, allowing clients to choose from various investment strategies with an all-inclusive fee covering asset management, allocation, custody, and administration[28](index=28&type=chunk) [Alternative Products and Strategies](index=8&type=section&id=Alternative%20Products%20and%20Strategies) Alternative products encompass a range of private credit, structured, private equity, and real estate funds, employing diverse investment strategies - Alternative products include private credit funds, structured products, business development companies, hedge funds, private equity funds, secondary funds, venture capital funds, and real estate funds, employing diverse investment strategies[29](index=29&type=chunk) [High-Net-Worth Investment Management, Trust and Custody Services](index=8&type=section&id=High-Net-Worth%20Investment%20Management,%20Trust%20and%20Custody%20Services) Through Fiduciary Trust International, the Company offers comprehensive services to high-net-worth individuals, families, family offices, foundations, and institutional clients - Through Fiduciary Trust International, the Company offers investment management, advisory, trust, custody, and related services to high-net-worth individuals, families, family offices, foundations, and institutional clients[30](index=30&type=chunk) [Sales and Distribution](index=8&type=section&id=Sales%20and%20Distribution) The global distribution group manages sales, marketing, and business development through regional teams and various channels, with fees primarily from mutual fund distribution - The global distribution group manages sales, marketing, and business development through regional teams and various channels (retail, institutional, private wealth, retirement, insurance), leveraging a global footprint and investment capabilities[31](index=31&type=chunk) - Sales and distribution fees are primarily earned from distributing mutual funds, consisting of upfront sales commissions and ongoing distribution fees, which are largely paid to financial advisors and intermediaries[34](index=34&type=chunk)[37](index=37&type=chunk) [Shareholder Servicing](index=9&type=section&id=Shareholder%20Servicing) Shareholder servicing fees are earned from sponsored funds for transfer agency services, determined by contractual margin or a percentage of AUM and account activity - Shareholder servicing fees are earned from sponsored funds for transfer agency services, including statements, transaction processing, client service, and tax reporting, determined by contractual margin or a percentage of AUM and account activity[39](index=39&type=chunk) [Competition](index=9&type=section&id=COMPETITION) The financial services industry is highly competitive, with competition based on reputation, investment performance, product mix, service quality, innovation, distribution relationships, and fees - The financial services industry is highly competitive, with competition based on reputation, investment performance, product mix, service quality, innovation, distribution relationships, and fees[40](index=40&type=chunk) - The Company faces strong competition from numerous investment management companies, brokerage firms, banks, and other financial institutions, with increasing competition for third-party distribution channels leading to rising costs[40](index=40&type=chunk)[44](index=44&type=chunk) [Regulation](index=10&type=section&id=REGULATION) The Company is subject to extensive and evolving U.S. federal and state, and international regulations, including securities, compliance, corporate governance, disclosure, privacy, anti-bribery, anti-money laundering, and sanctions laws - The Company is subject to extensive and evolving U.S. federal and state, and international regulations, including securities, compliance, corporate governance, disclosure, privacy, anti-bribery, anti

Call Start: 11:00 January 1, 0000 12:00 PM ET Franklin Resources, Inc. (NYSE:BEN) Q4 2024 Earnings Conference Call November 04, 2024 11:00 AM ET Company Participants Selene Oh - Chief Communications Officer & Head of Investor Relations Jenny Johnson - President & Chief Executive Officer Matt Nicholls - Chief Financial Officer & Chief Operating Officer Adam Spector - Head, Global Distribution Conference Call Participants Bill Katz - TD Cowen Benjamin Budish - Barclays Dan Fannon - Jefferies Michael Cyprys - ...

AUM and Flows - Ending AUM reached $1.6786 trillion, a 22.2% increase compared to the previous fiscal year[9, 12, 15] - Long-term inflows increased by 25% year-over-year, with growth in all regions[9, 33] - Long-term net outflows were $32.6 billion, including $20.7 billion of reinvested distributions; excluding Western Asset Management, there were long-term net inflows of $16.0 billion[9, 33] - Private markets fundraising totaled $14.8 billion[9, 24] Financial Performance - Adjusted revenues increased by 7.5% for fiscal year 2024, primarily due to the inclusion of Putnam Investments and higher average AUM[14, 15] - Adjusted operating income decreased by 6.1%, mainly due to higher incentive compensation, lower performance fees, and increased operating expenses[14, 15] - Adjusted net income and EPS declined by 4.2% and 8.1%, respectively, due to lower operating income and a higher tax rate[14, 15] - Adjusted performance fees were $293.4 million, down from $382.8 million in the prior year[14] Strategic Initiatives - Specialist investment managers acquired since 2019 represent 64% of AUM and 55% of adjusted operating revenue[16, 17] - The company returned $946 million to shareholders through dividends and share repurchases, with cash and investments at $6.73 billion at year-end[14] - Fiduciary Trust International AUM has more than doubled in the past five years, growing from $16.9 billion to $39.3 billion[28]