Group 1: Sagard's Expansion in U.S. Wealth Management - Sagard has appointed Dayna Kleinman as head of its U.S. Wealth division, aiming to launch and distribute investment products in the U.S. wealth channel [1] - The firm, founded in 2002, is looking to broaden its reach beyond institutional investors, having recently secured a minority equity stake from Baird to facilitate product distribution [2] - Kleinman has a strong background in wealth management, previously serving as managing director at Monroe Capital and holding positions at Baird and Bank of America [3] Group 2: TIFIN's Leadership and AI Integration - TIFIN AG has named Andrew Dahlinghaus as its new chief operating officer to lead the next phase of its AI platform solutions [4] - Dahlinghaus has extensive experience in regulatory and complex environments, which aligns with TIFIN's goals in wealth and asset management [5][6] - TIFIN has partnered with Cetera Financial Group to enhance organic growth for over 12,000 financial advisors using its AI technology [6] Group 3: BMO Wealth Management's New Hire - BMO Wealth Management has appointed Henray Cohen as head of investments in the U.S., transitioning from a senior investment officer role at Northern Trust [7][8] - Cohen brings a robust background in investment strategy and wealth management, focusing on portfolio construction and risk management [9] Group 4: DPL Financial Partners' Distribution Strategy - DPL Financial Partners has hired Tom McCarthy as chief distribution officer to enhance its annuity and insurance platform for RIAs [10] - DPL aims to expand its services and client base, having previously partnered with Orion Advisor Solutions to provide access to its commission-free annuity marketplace [11] - McCarthy believes DPL is positioned for unprecedented growth, working with 8,500 financial firms representing over $5 billion in assets [12]

Core Insights - The alternative investment technology space is becoming increasingly competitive with the launch of Aria, a tech portal aimed at Registered Investment Advisors (RIAs), by InspereX in collaboration with Luma and SUBSCRIBE [1][3] - Aria will provide access to fixed income, structured products, and alternative investments, enhancing the ability of RIAs to create custom portfolios for their clients [1][3] Company Summaries - InspereX operates the BondNav platform, focusing on fixed-income investments, and aims to empower RIAs with the Aria platform [2][3] - Luma specializes in annuities, life insurance, and structured products, and its technology will be integrated into Aria to enhance personalized investment strategies [2][3] - SUBSCRIBE is focused on automating and digitizing the investment process for alternatives, contributing its technology to support the Aria initiative [2][3] Industry Developments - The launch of Aria follows a year of significant technological development aimed at facilitating the adoption of private market investments within the wealth management sector [3] - Other notable industry movements include AssetMark's launch of private market investment options, Charles Schwab's acquisition of Forge Global Holdings, and partnerships involving KKR, Apollo Global Management, and others on the Corastone blockchain platform [4]

Core Insights - GTCR, a Chicago-based private equity firm, has signed a definitive agreement to acquire Fiduciary Trust Company, a Boston-based wealth manager with $34 billion in client assets under advisement and management, with the deal expected to close in Q1 2026 [1][2] Group 1: Acquisition Details - This acquisition marks Fiduciary Trust's first institutional capital investment since its establishment as a family office in 1885 [2] - GTCR will collaborate with Fiduciary Trust's CEO Austin Shapard and his management team to enhance client service offerings and growth strategies [2][4] - Financial terms of the deal were not disclosed, with legal counsel provided by Kirkland & Ellis LLP for GTCR and Centerview Partners LLC and Debevoise & Plimpton LLP for Fiduciary Trust [5] Group 2: Market Context and Strategy - Shapard's 2024 annual letter highlighted the increasing need for financial advice firms to achieve scale and resources to compete effectively in a tight talent market, suggesting that larger firms will benefit from operational and service improvements [3] - GTCR has been actively investing in the wealth management space, with previous acquisitions including FMG Suite and AssetMark, and a 25% stake in RIA Captrust [3] - Under GTCR's ownership, Fiduciary Trust plans to enhance its investment platform offerings, expand client services, and invest in technology [4]

You can find original article here Wealthmanagement. Subscribe to our free daily Wealthmanagement newsletter. AssetMark Hires Alyson Tucci as SVP, Corporate Strategy and Development Wealth management platform AssetMark has hired Alyson Tucci from a director position at Alvarez & Marsal as senior vice president of its corporate strategy and corporate development group. Tucci, who also hosts a Barron’s Advisor podcast on next-generation talent, will report to Chairman and Group CEO Lou Maiuri and be based ...

You can find original article here Wealthmanagement. Subscribe to our free daily Wealthmanagement newsletter. Los Angeles-based hybrid registered investment advisor Signature Estate & Investment Advisors continues to climb above the $30 billion in assets club with its second-largest acquisition. SEIA has acquired Select Money Management, a $1.6 billion RIA based in Aliso Viejo, Calif. In April 2024, it bought its largest RIA, a Cleveland-based firm with $2 billion in assets. With its latest Califor ...

Summary of AssetMark Financial (AMK) Update / Briefing July 24, 2025 Company Overview - **Company**: AssetMark Financial (AMK) - **Industry**: Financial Services, specifically focused on investment management for financial advisers - **Assets Under Management**: Approximately $150 billion for clients across the country [2] Key Points and Arguments Market Performance - **Market Recovery**: Despite a market downturn in early 2025, the S&P 500 recovered and set new highs, increasing by over 25% after a nearly 20% drop [12][13] - **Retail Investment**: Retail investors contributed significantly, with $155 billion invested in the US stock market in the first half of 2025 [14] - **Corporate Buybacks**: Companies engaged in record stock buybacks, taking advantage of lower stock prices due to tariff uncertainties [15] - **International vs. US Stocks**: International markets outperformed US markets for the first time in 15 years, aided by a weakening US dollar [16] Economic Indicators - **US Dollar Weakness**: The US dollar had its worst start to a year in 2025, benefiting international investments as other currencies appreciated [16] - **Gold Performance**: Gold prices rose by 25% due to its inverse relationship with the dollar and increased demand from global central banks [17][18] - **Diversification Importance**: The first half of 2025 highlighted the need for diversification in investment portfolios [19] Economic Policies and Tariffs - **Administration Policies**: Current policies are seen as pro-growth but also pro-inflation, with a focus on tax cuts and deregulation expected to support markets [22][25] - **Tariff Impact**: The average effective tariff rate started at 2.5% in 2025, with potential increases causing market nervousness. However, a steady high tariff policy is deemed manageable for the US economy [26][29] - **Economic Growth Expectations**: The economy is expected to rebound in the second quarter of 2025, with growth projected around 2.5% [32] Inflation and Interest Rates - **Current Inflation Rate**: The latest inflation reading is at 2.7%, with tariffs contributing to rising prices in goods [44] - **Interest Rate Outlook**: If inflation rises, the Federal Reserve may delay interest rate cuts, maintaining a floor on how low rates can go [49][55] Tax Bill Implications - **Deficit Concerns**: The US deficit is projected to rise significantly due to the new tax bill, which makes 2017 tax cuts permanent and introduces temporary tax breaks [51][55] - **Market Reactions**: The tax bill reduces uncertainty around tax policy and the debt ceiling, positively impacting market sentiment [52][54] Investment Strategies - **Technology and AI**: The rapid advancement of technology, particularly AI, presents significant investment opportunities, although the top 10 tech stocks dominate the S&P 500 [73][74] - **Diversification Strategy**: Investors are encouraged to diversify within the US and consider international markets, especially given the weaker dollar [78][80] - **Gold as a Diversification Tool**: Gold is recommended for portfolio diversification, but its volatility should be considered [85] Other Important Insights - **Volatility and Market Corrections**: Historical data shows that market corrections are normal and necessary for healthy long-term growth [86] - **Consumer Spending**: The US consumer remains a key driver of the economy, with stable job markets and rising wages, albeit at a slower pace [35][39] This summary encapsulates the key insights from the AssetMark Financial briefing, highlighting the company's perspective on market trends, economic indicators, and investment strategies for the remainder of 2025.

Financial Position - Total assets as of June 30, 2024, were $1,617,413,000, a slight decrease from $1,620,563,000 as of December 31, 2023[12] - Current assets decreased from $291,111,000 as of December 31, 2023, to $274,815,000 as of June 30, 2024, primarily due to a reduction in cash and cash equivalents[12] - Total liabilities decreased from $353,181,000 as of December 31, 2023, to $271,750,000 as of June 30, 2024, reflecting a reduction in long-term debt[12] - Stockholders' equity increased from $1,267,382,000 as of December 31, 2023, to $1,345,663,000 as of June 30, 2024, driven by retained earnings growth[12] Revenue and Income - The company reported a net income of $70,278,000 for the six months ended June 30, 2024, compared to $50,000,000 for the same period in 2023, representing a 40.56% increase[13] - Total revenue for Q2 2024 reached $198,491 thousand, a 13% increase from $175,521 thousand in Q2 2023[14] - Asset-based revenue increased to $158,878 thousand, up 15.7% from $137,336 thousand year-over-year[14] - Subscription-based revenue rose to $4,306 thousand, reflecting a 16.6% increase compared to $3,693 thousand in the same period last year[14] - Net income for Q2 2024 was $32,314 thousand, slightly down from $32,877 thousand in Q2 2023, representing a decrease of 1.7%[14] - Basic net income per share for Q2 2024 was $0.43, unchanged from Q2 2023[14] Expenses - Total operating expenses increased to $151,439 thousand, a 17.3% rise from $129,145 thousand in Q2 2023[14] - Employee compensation expenses rose to $51,902 thousand, up 8.5% from $48,099 thousand year-over-year[14] - Total asset-based expenses for the six months ended June 30, 2024, were $93,200, up from $76,778 for the same period in 2023, representing an increase of approximately 21.4%[63] Cash Flow - Net cash provided by operating activities for the six months ended June 30, 2024, was $99,436, slightly down from $105,479 in 2023, a decrease of 5.4%[21] - The company reported a net cash used in investing activities of $32,684 for the six months ended June 30, 2024, compared to $29,935 in 2023, an increase of 9.2%[21] - The company experienced a net change in cash of $(26,998) for the six months ended June 30, 2024, compared to an increase of $50,544 for the same period in 2023[21] Merger and Acquisition - The company entered into a merger agreement valued at approximately $2,622,573 with GTCR Everest Borrower, LLC, with the transaction subject to customary closing conditions[28] - The company incurred transaction costs associated with the merger of approximately $10,952 for the six months ended June 30, 2024[31] - The Company entered into an Asset Purchase Agreement with Morningstar, Inc. to acquire client advisory agreements, pending regulatory approval[41] Risks and Regulatory Matters - The company is exposed to various risks, including market fluctuations and cybersecurity threats, which could adversely affect its business operations[7] - The company has significant exposure to risks related to the pending merger, which could adversely affect its financial condition and operations[7] - The company is subject to various regulatory inquiries and litigation risks that could adversely affect its business and financial condition[77] - The company continues to comply with certain undertakings under the SEC settlement reached in September 2023[78] Shareholder Information - The weighted average number of common shares outstanding increased to 74,743,985 in Q2 2024 from 74,172,080 in Q2 2023[14] - Total stockholders' equity as of June 30, 2024, was $1,345,663 thousand, an increase from $1,184,439 thousand as of June 30, 2023[17] - The balance of common shares increased to 74,743,985 as of June 30, 2024, from 74,172,080 as of June 30, 2023, marking an increase of 0.8%[18] Accounting and Compliance - The company is evaluating the impact of new accounting standards issued by FASB, which will affect financial disclosures starting in 2024 and 2025[36] - The company performed an annual test for intangible assets impairment and determined that intangible assets were not impaired as of June 30, 2024[47] Taxation - The effective income tax rate was 28.3% for Q2 2024, compared to 26.2% for Q2 2023, and 25.8% for the first half of 2024, down from 26.8% for the same period in 2023[80]

Financial Performance - Net income for Q2 2024 was $32.3 million, or $0.43 per share, with adjusted net income of $49.8 million, or $0.66 per share on total revenue of $198.5 million[1]. - Total revenue for Q2 2024 was $198.5 million, a 13.1% increase from $175.5 million in Q2 2023[3]. - Adjusted net income for Q2 2024 was $49.767 million, representing a 20.5% increase from $41.242 million in Q2 2023[39]. - Net income for the six months ended June 30, 2024, was $70,278 thousand, compared to $50,099 thousand for the same period in 2023, reflecting a 40.2% increase[17]. - Total revenue for the six months ended June 30, 2024, was $388.757 million, an increase of 12.4% compared to $345.819 million for the same period in 2023[43]. - The total net income for the three months ended June 30, 2024, was $32,314 thousand, slightly down from $32,877 thousand in the same period of 2023, indicating a decrease of 1.7%[46]. - Adjusted earnings per share for Q2 2024 was $0.66, compared to $0.55 in Q2 2023, reflecting a 20% increase[39]. Revenue Breakdown - Asset-based revenue increased to $158,878 thousand for the three months ended June 30, 2024, up from $137,336 thousand, a growth of 15.7%[14]. - Subscription-based revenue rose to $4,306 thousand, a 16.6% increase compared to $3,693 thousand in the prior year[14]. - The company reported a total of $6.454 million in other revenue for Q2 2024, compared to $4.932 million in Q2 2023, marking a 31% increase[39]. Operating Metrics - Adjusted EBITDA for Q2 2024 was $71.9 million, representing 36.2% of total revenue, an increase from 34.4% in Q2 2023[3]. - Adjusted EBITDA for the three months ended June 30, 2024, was $71,873 thousand, up from $60,397 thousand, indicating a 19.5% increase year-over-year[25]. - The adjusted EBITDA margin for the three months ended June 30, 2024, was 36.2%, compared to 34.4% in the same period of 2023[25]. - Total operating expenses for the three months ended June 30, 2024, were $151,439 thousand, an increase of 17.3% from $129,145 thousand in the prior year[14]. Advisor and Asset Growth - Platform assets increased 18.5% year-over-year to $119.4 billion, with quarterly net flows of $1.7 billion and market impact net of fees of $0.8 billion[1][3]. - More than 4,300 new households and 164 new producing advisors joined the AssetMark platform during Q2 2024, totaling over 9,200 advisors and 261,000 investor households[2]. - Assets from engaged advisors at period-end increased 20.2% year-over-year to $111.9 billion[3]. - The company experienced a 20.2% annualized production lift from existing advisors, indicating organic growth and increased wallet share[2][3]. Expenses and Costs - Total adjusted operating expenses for the six months ended June 30, 2024, were $259.202 million, up from $235.333 million in the same period of 2023[43]. - The company’s total asset-based expenses for the six months ended June 30, 2024, were $93.200 million, compared to $76.778 million in the same period of 2023, an increase of 21.4%[43]. - Share-based compensation for the six months ended June 30, 2024, was $8,003,000, slightly higher than $7,974,000 in the previous year[32]. - Merger and acquisition expenses totaled $12,090,000 for the six months ended June 30, 2024, compared to only $173,000 in the same period of 2023[32]. Tax and Interest - The provision for income taxes increased to $24,496,000 for the six months ended June 30, 2024, from $18,366,000 in the prior year, reflecting a tax rate increase[26]. - Interest income for the six months ended June 30, 2024, was $(8,385,000), compared to $(4,560,000) in the same period of 2023, indicating a decline in interest income[26]. - Interest expense for Q2 2024 was $2.202 million, slightly up from $2.137 million in Q2 2023[39]. Acquisition and Settlement - The company signed a definitive agreement to be acquired by GTCR, expected to close in Q4 2024, subject to customary closing conditions and regulatory approvals[2][4]. - The company has recognized an accrual for SEC settlement amounting to $20,000,000 in the previous year, which is not present in the current reporting period[32].

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements for Q1 2024 show significant net income growth and a pending merger agreement with GTCR [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and stockholders' equity increased as of March 31, 2024, driven by higher cash balances and retained earnings Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $247,626 | $217,680 | | Total current assets | $322,093 | $291,111 | | Goodwill | $487,909 | $487,909 | | **Total assets** | **$1,656,826** | **$1,620,563** | | **Liabilities & Equity** | | | | Total current liabilities | $69,247 | $75,842 | | Total liabilities | $347,312 | $353,181 | | Total stockholders' equity | $1,309,514 | $1,267,382 | | **Total liabilities and stockholders' equity** | **$1,656,826** | **$1,620,563** | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Q1 2024 net income rose significantly due to revenue growth and the non-recurrence of a prior-year SEC settlement accrual Q1 2024 vs Q1 2023 Income Statement (in thousands, except per share data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total revenue | $190,266 | $170,298 | | Total operating expenses | $138,576 | $124,148 | | Other (income) expense, net | ($332) | $19,865 | | Income before income taxes | $49,728 | $23,938 | | Net income | $37,964 | $17,222 | | Diluted EPS | $0.50 | $0.23 | - The significant increase in net income was largely due to a **$20.0 million accrual for an SEC settlement** recorded in 'Other (income) expense, net' during Q1 2023, which did not recur in Q1 2024[72](index=72&type=chunk)[163](index=163&type=chunk)[165](index=165&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased in Q1 2024 due to higher net income, while investing cash use grew and financing activities were nil Cash Flow Summary (in thousands) | Activity | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $47,415 | $39,126 | | Net cash used in investing activities | ($17,469) | ($13,932) | | Net cash used in financing activities | $0 | ($25,000) | | **Net change in cash** | **$29,946** | **$194** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, goodwill stability, debt, and disclose the significant subsequent merger agreement with GTCR - On April 25, 2024, the Company entered into a merger agreement with GTCR Everest Borrower, LLC, valued at approximately **$2.62 billion**[81](index=81&type=chunk) - In September 2023, the company settled with the SEC regarding a previously disclosed matter, paying a civil penalty of **$9.5 million** and disgorgement and prejudgment interest of **$8.8 million**, with a **$20 million** accrual recorded in Q1 2023[72](index=72&type=chunk)[194](index=194&type=chunk) - The company's goodwill balance remained unchanged at **$487.9 million** as of March 31, 2024, and a qualitative analysis determined it was not impaired[37](index=37&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strong Q1 2024 revenue and asset growth, the pending GTCR merger, and improved non-GAAP metrics [Overview and Merger Agreement](index=19&type=section&id=Overview%20and%20Merger%20Agreement) The company agreed to be acquired by an affiliate of GTCR for $35.25 per share, pending regulatory approvals - On April 25, 2024, the company entered into a merger agreement with GTCR Everest Borrower, LLC, where stockholders will receive **$35.25 per share in cash**[87](index=87&type=chunk)[88](index=88&type=chunk) - The company's majority stockholder, HIIHL, has already provided the required stockholder approval for the merger via written consent[89](index=89&type=chunk)[91](index=91&type=chunk) [Financial and Operational Highlights](index=20&type=section&id=Financial%20and%20Operational%20Highlights) The company reported double-digit year-over-year growth in revenue, net income, platform assets, and engaged advisers in Q1 2024 Q1 2024 Financial Highlights (YoY) | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $190.3M | $170.3M | +11.7% | | Net Income | $38.0M | $17.2M | +120.9% | | Adjusted EBITDA | $65.9M | $58.8M | +12.1% | Asset and Adviser Growth (as of March 31) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Platform Assets | $116.9B | $96.2B | +21.5% | | Engaged Advisers | 3,208 | 2,976 | +7.8% | [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Revenue growth was driven by higher asset-based fees, while a significant increase in net income was aided by a non-recurring prior-year expense Revenue Breakdown (in thousands) | Revenue Type | Q1 2024 | Q1 2023 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Asset-based | $149,984 | $131,039 | $18,945 | 14.5% | | Spread-based | $30,093 | $31,999 | ($1,906) | (6.0)% | | Subscription-based | $4,252 | $3,544 | $708 | 20.0% | | **Total Revenue** | **$190,266** | **$170,298** | **$19,968** | **11.7%** | - Asset-based expenses increased by **$7.4 million (19.8%)** due to higher platform assets[156](index=156&type=chunk) - Employee compensation rose by **$3.1 million (6.6%)** due to increased salaries and related expenses to support growth[158](index=158&type=chunk) [Non-GAAP Financial Metrics](index=24&type=section&id=Non-GAAP%20Financial%20Metrics) Adjusted EBITDA and Adjusted Net Income both grew in Q1 2024, excluding items like share-based compensation and a prior-year SEC accrual Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net income | $37,964 | $17,222 | | Adjustments (Taxes, Interest, D&A) | $19,557 | $15,440 | | **EBITDA** | **$57,921** | **$32,662** | | Share-based compensation | $4,168 | $3,822 | | Reorganization and integration costs | $3,841 | $1,909 | | Accrual for SEC settlement | $0 | $20,000 | | Other adjustments | ($23) | $405 | | **Adjusted EBITDA** | **$65,907** | **$58,788** | Adjusted Net Income Reconciliation (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net income | $37,964 | $17,222 | | Acquisition-related amortization | $2,180 | $2,174 | | Expense adjustments | $3,853 | $22,216 | | Share-based compensation | $4,168 | $3,822 | | Other (income) expense, net | ($35) | $88 | | Tax effect of adjustments | ($2,910) | ($5,821) | | **Adjusted net income** | **$45,220** | **$39,701** | [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains sufficient liquidity through cash from operations and its credit facility, with cash and equivalents of $247.6 million - As of March 31, 2024, the company had cash and cash equivalents of **$247.6 million**[166](index=166&type=chunk) - The company has a 2022 Credit Agreement which includes a **$375.0 million** revolving credit facility and a term loan, with an outstanding balance of **$93.8 million** as of March 31, 2024[169](index=169&type=chunk)[171](index=171&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risk from asset values, interest rate risk from client cash programs, and variable-rate debt - A **1% decrease** in the aggregate value of assets on the platform would have caused pre-tax income for the quarter to decline by approximately **$1.3 million**[181](index=181&type=chunk) - A **100 basis point** change in short-term interest rates would result in an approximate **$22.4 million** annual change in income before taxes from the client cash program[184](index=184&type=chunk) - A **100 basis point** increase in the interest rate on the 2022 Credit Agreement would decrease annual income before taxes by approximately **$0.9 million**[185](index=185&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of the quarter-end with no material changes to internal controls - The Principal Executive Officer and Principal Financial Officer concluded that as of March 31, 2024, the company's disclosure controls and procedures were effective[188](index=188&type=chunk) - There were no material changes in the company's internal control over financial reporting during the first quarter of 2024[189](index=189&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material impact from ongoing legal proceedings, referencing a previously disclosed and settled SEC matter - In September 2023, the company settled a matter with the SEC, paying a **$9.5 million** civil penalty and **$8.8 million** in disgorgement and prejudgment interest[194](index=194&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from its pending merger, market volatility, competition, regulation, cybersecurity, and its controlling stockholder [Risks Related to the Merger](index=37&type=section&id=Risks%20Related%20to%20the%20Merger) The pending merger with GTCR creates uncertainty, operational restrictions, and risks of non-completion or potential litigation - The company is subject to business uncertainties and contractual restrictions while the merger is pending, which could harm business relationships and financial results[195](index=195&type=chunk) - Failure to complete the merger could adversely affect the business and stock price, and the company may be required to pay a termination fee of approximately **$80.8 million** under certain circumstances[196](index=196&type=chunk)[198](index=198&type=chunk) [Risks Related to Business and Regulation](index=38&type=section&id=Risks%20Related%20to%20Business%20and%20Regulation) Business risks include revenue volatility from market conditions, intense competition, and compliance with extensive government regulations - Revenue may fluctuate significantly due to market conditions, as a majority of revenue is asset-based[202](index=202&type=chunk)[210](index=210&type=chunk) - The company operates in an intensely competitive industry and derives nearly all revenue from the financial advisory sector, making it vulnerable to industry downturns[205](index=205&type=chunk)[207](index=207&type=chunk) - The business is subject to extensive and evolving government regulation in the U.S., and failure to comply could result in fines, sanctions, or revocation of registrations[297](index=297&type=chunk)[305](index=305&type=chunk) [Risks Related to IP, Data, and Cybersecurity](index=46&type=section&id=Risks%20Related%20to%20IP,%20Data,%20and%20Cybersecurity) The company faces significant threats from cyber-attacks, data breaches, evolving AI risks, and complex data privacy regulations - The company is exposed to data and cybersecurity risks that could result in data breaches, service interruptions, and significant liability due to the sensitive financial information it stores[255](index=255&type=chunk) - The integration and use of Artificial Intelligence (AI) exposes the company to risks including potential biases, cybersecurity threats, and a rapidly evolving regulatory landscape[284](index=284&type=chunk)[285](index=285&type=chunk) - The company must comply with numerous, evolving data protection regulations like California's CCPA/CPRA and Europe's GDPR, which imposes significant compliance costs[262](index=262&type=chunk)[266](index=266&type=chunk)[272](index=272&type=chunk) [Risks Related to Controlling Stockholder and Ownership](index=52&type=section&id=Risks%20Related%20to%20Controlling%20Stockholder%20and%20Ownership) The PRC-based controlling stockholder introduces risks related to foreign laws, CFIUS review, and exemptions from certain NYSE governance rules - The controlling stockholder, HTSC, is subject to PRC laws and regulations that may influence decisions and require PRC regulatory approval for certain corporate actions[286](index=286&type=chunk)[288](index=288&type=chunk) - Future acquisitions may be subject to review by the Committee on Foreign Investment in the United States (CFIUS), which could delay or block transactions[293](index=293&type=chunk) - The company is a "controlled company" under NYSE rules due to HTSC's majority ownership, exempting it from requirements like having a majority of independent directors[331](index=331&type=chunk) [Other Information (Items 2-6)](index=62&type=section&id=Other%20Information%20(Items%202-6)) This section confirms no unregistered equity sales, defaults, or new 10b5-1 plans, and lists the exhibits filed with the report - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the first quarter of 2024[350](index=350&type=chunk) - The sections for Unregistered Sales of Equity Securities, Defaults Upon Senior Securities, and Mine Safety Disclosures are not applicable[349](index=349&type=chunk)

[Executive Summary & Highlights](index=1&type=section&id=1.%20Executive%20Summary%20%26%20Highlights) AssetMark reported strong Q1 2024 financial and operational growth, with significant increases in net income, platform assets, and key advisor metrics, detailed across financial and operating highlights [First Quarter 2024 Financial and Operational Highlights](index=1&type=section&id=1.1%20First%20Quarter%202024%20Financial%20and%20Operational%20Highlights) AssetMark reported strong Q1 2024 results with significant growth in net income, adjusted net income, and platform assets, alongside an increase in new households and advisors Q1 2024 Financial Highlights | Metric | Value | | :------------------- | :------------------- | | Net income | $38.0 million | | Net income per share | $0.51 | | Adjusted net income | $45.2 million | | Adjusted net income per share | $0.60 | | Total revenue | $190.3 million | | Adjusted EBITDA | $65.9 million | | Adjusted EBITDA margin | 34.6% of total revenue | - Platform assets increased **21.5% year-over-year** to **$116.9 billion**, and **7.3% quarter-over-quarter**, driven by **$6.1 billion** market impact net of fees and **$1.8 billion** quarterly net flows[1](index=1&type=chunk) - Year-to-date annualized net flows as a percentage of beginning-of-year platform assets were **6.8%**[1](index=1&type=chunk) - The AssetMark platform added over **3,000 new households** and **169 new producing advisors** during the first quarter[2](index=2&type=chunk) - An **18.6% annualized production lift** was realized from existing advisors, indicating organic growth and increased wallet share[2](index=2&type=chunk) [Key Operating and Financial Metrics](index=2&type=section&id=1.2%20Key%20Operating%20and%20Financial%20Metrics) A detailed comparison of Q1 2024 versus Q1 2023 reveals significant year-over-year growth across most operational and financial indicators, particularly in platform assets, net flows, and net income First Quarter 2024 Key Operating Metrics (YoY Variance) | Metric | 1Q23 | 1Q24 | Variance per year | | :--------------------------------------------------- | :------- | :--------- | :---------------- | | Platform assets (at period-beginning) (millions of dollars) | $91,470 | $108,929 | 19.1 % | | Net flows (millions of dollars) | 1,631 | 1,842 | 12.9 % | | Market impact net of fees (millions of dollars) | 3,102 | 6,130 | 97.6 % | | Platform assets (at period-end) (millions of dollars) | $96,203 | $116,901 | 21.5 % | | Net flows lift (% of beginning of year platform assets) | 1.8 % | 1.7 % | (10 bps) | | Advisors (at period-end) | 9,319 | 9,280 | (0.4)% | | Engaged advisors (at period-end) | 2,976 | 3,208 | 7.8 % | | Assets from engaged advisors (at period-end) (millions of dollars) | $88,587 | $109,267 | 23.3 % | | Households (at period-end) | 243,775 | 257,162 | 5.5 % | | New producing advisors | 166 | 169 | 1.8 % | | Production lift from existing advisors (annualized %) | 18.8 % | 18.6 % | (20 bps) | | Assets in custody at ATC (at period-end) (millions of dollars) | $70,069 | $86,373 | 23.3 % | | ATC client cash (at period-end) (millions of dollars) | $3,189 | $3,170 | (0.6)% | First Quarter 2024 Key Financial Metrics (YoY Variance) | Metric | 1Q23 | 1Q24 | Variance per year | | :--------------------------------------------------- | :------- | :--------- | :---------------- | | Total revenue (millions of dollars) | $170.3 | $190.3 | 11.7 % | | Net income (millions of dollars) | $17.2 | $38.0 | 120.9 % | | Net income margin (%) | 10.1 % | 20.0 % | 990 bps | | Capital expenditure (millions of dollars) | $10.0 | $11.9 | 19.0 % | | Adjusted EBITDA (millions of dollars) | $58.8 | $65.9 | 12.1 % | | Adjusted EBITDA margin (%) | 34.5 % | 34.6 % | 10 bps | | Adjusted net income (millions of dollars) | $39.7 | $45.2 | 13.9 % | [Corporate Developments](index=2&type=section&id=2.%20Corporate%20Developments) AssetMark announced its acquisition by GTCR, leading to the withdrawal of financial guidance, while highlighting its core business as a wealth management platform for independent advisors [Acquisition Announcement](index=2&type=section&id=2.1%20Acquisition%20Announcement) AssetMark announced its agreement to be acquired by GTCR, with the transaction expected to close in Q4 2024, leading to the withdrawal of previous financial guidance and cancellation of the earnings call - AssetMark entered into an agreement to be acquired by GTCR on April 25, 2024[5](index=5&type=chunk) - The transaction is subject to customary closing conditions and regulatory approvals, expected to close in Q4 2024[5](index=5&type=chunk) - Due to the announced transaction, AssetMark will not host an earnings call and has withdrawn all previously provided financial guidance[5](index=5&type=chunk) [About AssetMark Financial Holdings, Inc.](index=3&type=section&id=2.2%20About%20AssetMark%20Financial%20Holdings%2C%20Inc.) AssetMark operates a wealth management platform supporting independent financial advisors with flexible solutions to enhance client engagement, efficiency, and advisor productivity - AssetMark operates a wealth management platform that powers independent financial advisors and their clients, offering flexible, purpose-built solutions[8](index=8&type=chunk) - The platform serves over **9,200 financial advisors** and over **257,000 investor households**[8](index=8&type=chunk) - As of March 31, 2024, the company had **$116.9 billion in platform assets**[8](index=8&type=chunk) [Financial Statements](index=4&type=section&id=3.%20Financial%20Statements) The company's Q1 2024 financial statements show increased total assets, significant revenue growth, and a substantial rise in net income and operating cash flow [Condensed Consolidated Balance Sheets](index=4&type=section&id=3.1%20Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows an increase in total assets from $1,620,563 thousand at December 31, 2023, to $1,656,826 thousand at March 31, 2024, primarily driven by higher cash and capitalized software Condensed Consolidated Balance Sheets (in thousands) | ASSETS | March 31, 2024 (unaudited) | December 31, 2023 | | :------------------------------------------ | :------------------------- | :------------------ | | Cash and cash equivalents | $247,626 | $217,680 | | Total current assets | $322,093 | $291,111 | | Capitalized software, net | $113,123 | $108,955 | | Goodwill | $487,909 | $487,909 | | Total assets | $1,656,826 | $1,620,563 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Total current liabilities | $69,247 | $75,842 | | Long-term debt, net | $93,567 | $93,543 | | Total liabilities | $347,312 | $353,181 | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=3.2%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) For Q1 2024, total revenue increased by 11.7% year-over-year to $190.3 million, while net income more than doubled to $38.0 million, resulting in a significant improvement in net income margin Condensed Consolidated Statements of Comprehensive Income (in thousands, except per share data) | Revenue | Three Months 2024 | Three Months Ended March 31, 2023 | | :--------------------------- | :------------------ | :-------------------------------- | | Asset-based revenue | $149,984 | $131,039 | | Spread-based revenue | $30,093 | $31,999 | | Subscription-based revenue | $4,252 | $3,544 | | Other revenue | $5,937 | $3,716 | | Total revenue | $190,266 | $170,298 | | Total operating expenses | $138,576 | $124,148 | | Income before income taxes | $49,728 | $23,938 | | Provision for income taxes | $11,764 | $6,716 | | Net income | $37,964 | $17,222 | | Net income per share (Basic) | $0.51 | $0.23 | | Net income per share (Diluted) | $0.50 | $0.23 | | Weighted average common shares outstanding (Diluted) | 75,269,626 | 74,370,353 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=3.3%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities increased to $47.4 million in Q1 2024, while net cash used in investing activities also increased, leading to a substantial net change in cash, cash equivalents, and restricted cash Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flows From | Three Months 2024 | Three Months Ended March 31, 2023 | | :--------------------------------------------------- | :------------------ | :-------------------------------- | | Net income | $37,964 | $17,222 | | Net cash provided by operating activities | $47,415 | $39,126 | | Net cash used in investing activities | $(17,469) | $(13,932) | | Net cash used in financing activities | $0 | $(25,000) | | Net change in cash, cash equivalents, and restricted cash | $29,946 | $194 | | Cash, cash equivalents, and restricted cash at end of period | $262,626 | $136,468 | [Non-GAAP Financial Measures Reconciliation](index=7&type=section&id=4.%20Non-GAAP%20Financial%20Measures%20Reconciliation) This section provides detailed reconciliations of Adjusted EBITDA and Adjusted Net Income to GAAP measures, defining their utility and limitations for evaluating core operating performance [Adjusted EBITDA and Adjusted EBITDA Margin](index=7&type=section&id=4.1%20Adjusted%20EBITDA%20and%20Adjusted%20EBITDA%20Margin) This section defines Adjusted EBITDA and its margin, explains their utility for evaluating core operating performance by excluding non-cash and non-recurring items, and outlines their inherent limitations [Definition and Use](index=7&type=section&id=4.1.1%20Definition%20and%20Use) Adjusted EBITDA is defined as EBITDA adjusted for certain non-cash charges and other items not representative of core business, used for performance evaluation, planning, and resource allocation - Adjusted EBITDA is defined as EBITDA (net income plus interest expense, income tax expense, depreciation and amortization, less interest income) further adjusted to exclude certain non-cash charges and other adjustments[21](index=21&type=chunk) - It excludes items not representative of core business, such as share-based compensation, strategic initiatives, reorganization, and integration costs[21](index=21&type=chunk) - Adjusted EBITDA is used for evaluating operating performance, planning, resource allocation, and in communications with the board of directors[23](index=23&type=chunk) - Limitations include not reflecting all cash expenditures, future capital requirements, working capital needs, or interest expense on debt[23](index=23&type=chunk) [Reconciliation to GAAP Net Income](index=9&type=section&id=4.1.2%20Reconciliation%20to%20GAAP%20Net%20Income) The reconciliation shows Adjusted EBITDA increased by 12.1% to $65.9 million in Q1 2024, primarily due to higher net income and adjustments for income taxes, share-based compensation, and reorganization costs Reconciliation from Net Income to Adjusted EBITDA (in thousands, except percentages) | Metric | Three Months 2024 | % of Revenue | Three Months Ended March 31, 2023 | % of Revenue | | :----------------------------------- | :------------------ | :----------- | :-------------------------------- | :----------- | | Net income | $37,964 | 20.0 % | $17,222 | 10.1 % | | Provision for income taxes | 11,764 | 6.2 % | 6,716 | 3.9 % | | Interest income | (4,023) | (2.2)% | (2,051) | (1.2)% | | Interest expense | 2,294 | 1.2 % | 2,347 | 1.4 % | | Depreciation and amortization | 9,922 | 5.2 % | 8,428 | 5.0 % | | **EBITDA** | **$57,921** | **30.4 %** | **$32,662** | **19.2 %** | | Share-based compensation | 4,168 | 2.2 % | 3,822 | 2.2 % | | Reorganization and integration costs | 3,841 | 2.0 % | 1,909 | 1.1 % | | Acquisition expenses | 12 | — | 313 | 0.2 % | | Business continuity plan | — | — | (6) | — | | Accrual for SEC settlement | — | — | 20,000 | 11.8 % | | Other (income) expense, net | (35) | — | 88 | — | | **Adjusted EBITDA** | **$65,907** | **34.6 %** | **$58,788** | **34.5 %** | [Summary of Adjustments](index=10&type=section&id=4.1.3%20Summary%20of%20Adjustments) Total adjustments to Adjusted EBITDA were $7.986 million in Q1 2024, primarily driven by share-based compensation and reorganization and integration costs Summary of Adjustments to Adjusted EBITDA (in thousands) | Adjustment Type | Three Months 2024 Compensation | Three Months 2024 NonCompensation | Three Months 2024 Total | Three Months 2023 Compensation | Three Months 2023 NonCompensation | Three Months 2023 Total | | :----------------------------------- | :----------------------------- | :-------------------------------- | :---------------------- | :----------------------------- | :-------------------------------- | :---------------------- | | Share-based compensation | $4,168 | $— | $4,168 | $3,822 | $— | $3,822 | | Reorganization and integration costs | 1,532 | 2,309 | 3,841 | 1,064 | 845 | 1,909 | | Acquisition expenses | — | 12 | 12 | 100 | 213 | 313 | | Business continuity plan | — | — | — | — | (6) | (6) | | Accrual for SEC settlement | — | — | — | — | 20,000 | 20,000 | | Other (income) expense, net | — | (35) | (35) | — | 88 | 88 | | **Total adjustments to adjusted EBITDA** | **$5,700** | **$2,286** | **$7,986** | **$4,986** | **$21,140** | **$26,126** | Summary of Adjustments to Adjusted EBITDA Margin (% of Revenue) | Adjustment Type | Three Months 2024 Compensation | Three Months 2024 NonCompensation | Three Months 2024 Total | Three Months 2023 Compensation | Three Months 2023 NonCompensation | Three Months 2023 Total | | :----------------------------------- | :----------------------------- | :-------------------------------- | :---------------------- | :----------------------------- | :-------------------------------- | :---------------------- | | Share-based compensation | 2.2 % | — | 2.2 % | 2.2 % | — | 2.2 % | | Reorganization and integration costs | 0.8 % | 1.2 % | 2.0 % | 0.6 % | 0.5 % | 1.1 % | | Acquisition expenses | — | — | — | 0.1 % | 0.1 % | 0.2 % | | Business continuity plan | — | — | — | — | — | — | | Accrual for SEC settlement | — | — | — | — | 11.8 % | 11.8 % | | Other (income) expense, net | — | — | — | — | — | — | | **Total adjustments to adjusted EBITDA margin %** | **3.0 %** | **1.2 %** | **4.2 %** | **2.9 %** | **12.4 %** | **15.3 %** | [Adjusted Net Income](index=11&type=section&id=4.2%20Adjusted%20Net%20Income) This section defines Adjusted Net Income, detailing its adjustments to GAAP net income to provide a clearer view of core operating performance, while also acknowledging its limitations as a non-GAAP measure [Definition and Use](index=11&type=section&id=4.2.1%20Definition%20and%20Use) Adjusted net income is defined as net income before share-based compensation, amortization of acquisition-related intangibles, acquisition/integration expenses, and restructuring costs, aiming to reflect core operating performance - Adjusted net income represents net income before share-based compensation, amortization of acquisition-related intangible assets, acquisition and related integration expenses, restructuring and conversion costs, and certain other expenses[32](index=32&type=chunk) - It is prepared to eliminate the effects of items not considered indicative of core operating performance, such as non-cash equity grants and acquisition-related amortization[32](index=32&type=chunk) - Adjusted net income has limitations as an analytical tool, as it is not defined under GAAP and does not reflect all cash expenditures or working capital needs[33](index=33&type=chunk) [Reconciliation to GAAP Net Income](index=12&type=section&id=4.2.2%20Reconciliation%20to%20GAAP%20Net%20Income) Adjusted net income increased by 13.9% to $45.2 million in Q1 2024, reflecting adjustments for employee compensation, depreciation and amortization, and other expenses Reconciliation from Net Income to Adjusted Net Income (in thousands, except per share data) | Metric | Three Months 2024 GAAP | Adjustments | Three Months 2024 Adjusted | Three Months 2023 GAAP | Adjustments | Three Months 2023 Adjusted | | :--------------------------------------------------- | :--------------------- | :---------- | :------------------------- | :--------------------- | :---------- | :------------------------- | | Total revenue | $190,266 | $— | $190,266 | $170,298 | $— | $170,298 | | Employee compensation | $50,007 | $(5,700) | $44,307 | $46,911 | $(4,986) | $41,925 | | General and operating expenses | $27,324 | $(1,710) | $25,614 | $25,689 | $(884) | $24,805 | | Professional fees | $6,081 | $(611) | $5,470 | $5,393 | $(168) | $5,225 | | Depreciation and amortization | $9,922 | $(2,180) | $7,742 | $8,428 | $(2,174) | $6,254 | | Total operating expenses | $138,576 | $(10,201) | $128,375 | $124,148 | $(8,212) | $115,936 | | Income before income taxes | $49,728 | $10,166 | $59,894 | $23,938 | $28,300 | $52,238 | | Provision for income taxes | $11,764 | $2,910 | $14,674 | $6,716 | $5,821 | $12,537 | | **Net income / Adjusted net income** | **$37,964** | | **$45,220** | **$17,222** | | **$39,701** | | Adjusted earnings per share | | | $0.60 | | | $0.53 | | Weighted average common shares outstanding (diluted) | | | 75,269,626 | | | 74,370,353 | [Summary of Adjustments](index=14&type=section&id=4.2.3%20Summary%20of%20Adjustments) Total adjustments to Adjusted Net Income were $7.256 million in Q1 2024, primarily from acquisition-related amortization, expense adjustments, and share-based compensation, offset by tax effects Summary of Adjustments to Adjusted Net Income (in thousands) | Adjustment Type | Three Months 2024 Compensation | Three Months 2024 NonCompensation | Three Months 2024 Total | Three Months 2023 Compensation | Three Months 2023 NonCompensation | Three Months 2023 Total | | :----------------------------------- | :----------------------------- | :-------------------------------- | :---------------------- | :----------------------------- | :-------------------------------- | :---------------------- | | Net income | | | $37,964 | | | $17,222 | | Acquisition-related amortization | $— | $2,180 | $2,180 | $— | $2,174 | $2,174 | | Expense adjustments | 1,532 | 2,321 | 3,853 | 1,164 | 21,052 | 22,216 | | Share-based compensation | 4,168 | — | 4,168 | 3,822 | — | 3,822 | | Other (income) expense, net | — | (35) | (35) | — | 88 | 88 | | Tax effect of adjustments | (1,397) | (1,513) | (2,910) | (1,197) | (4,624) | (5,821) | | **Adjusted net income** | **$4,303** | **$2,953** | **$45,220** | **$3,789** | **$18,690** | **$39,701** | [Additional Information](index=3&type=section&id=5.%20Additional%20Information) This section includes cautionary forward-looking statements regarding potential risks and uncertainties, along with essential contact information for investor relations and media inquiries [Forward-Looking Statements](index=3&type=section&id=5.1%20Forward-Looking%20Statements) This section serves as a cautionary note, indicating that the press release contains forward-looking statements subject to risks and uncertainties, and actual results may differ materially - This press release contains forward-looking statements regarding future financial and operating performance, which involve risks and uncertainties[9](index=9&type=chunk) - Actual results may differ materially from predicted results due to known and unknown risks, uncertainties, assumptions, and other factors[9](index=9&type=chunk) - The company undertakes no duty to update this information unless required by law[9](index=9&type=chunk) [Contacts](index=14&type=section&id=5.2%20Contacts) Provides contact details for investor relations and media inquiries for AssetMark Financial Holdings, Inc - Investors can contact Taylor J. Hamilton, CFA, Head of Investor Relations, at InvestorRelations@assetmark.com[40](index=40&type=chunk) - Media inquiries can be directed to Alaina Kleinman, Head of PR & Communications, at alaina.kleinman@assetmark.com[40](index=40&type=chunk)