Dan Fannon

Coleman said nothing was one-time and credited a multiyear expansion of the adviser footprint and investment performance.

Coleman named transaction-based and technology spend as the drivers and said charitable giving should not recur, but gave no growth rate.

Coleman described a diversified platform across corporate equity, credit, real estate, and hedge funds with multiple strategies within credit spanning capital structure, risk profiles, and geographies.

Coleman noted record $46B lending balances with significant room to grow. Deposit headwinds from competitive environment expected through 2026, with recovery to high double-digit durable revenue growth in 2027.

Coleman expects to grow lending activities and deposit levels but flagged potential NIM compression as headwind for 2026 from rate cycle expectations.

Coleman noted transaction-based and market development expenses grow with activity. Focused on constraining controllable costs like vendor fees and consulting.

Coleman said larger vehicle vintages plus new fundraising vehicle types driving broad-based growth from ~$65B historical to ~$100B this year.

Coleman said $4.6B unrealized incentive fees will pull through over next several years as monetization environment improves and sponsor activity accelerates.

Solomon said markets are large, diverse and global. Different levers move each quarter. Would need significant macro change to shrink overall wallet.

Solomon said building third-party wealth distribution partnerships and actively discussing retirement channel partnerships. Noted GS is overlooked beneficiary.

Coleman said they manage individual strategy fees not blended rate. Different channels bring different fee levels. Placement fees were down sequentially.

Coleman re-underscored high-single-digit growth expectation for combined AWM management fees, acknowledging recent outperformance.

Coleman said fundraising will remain diversified across asset classes with consistent volume and no meaningful fee compression per product type.

Pointed to pent-up sponsor demand and dry powder but said timing depends on valuation gaps closing; direction without a timeline.

Paul framed retention as the foundation of growth and cited a broad-based pipeline; answered directly.

Shoukry expressed optimism about adviser movement to RJF based on pipelines. Still viewed as destination of choice and leading wealth management grower. Roll-up developments could be additional catalyst. Emphasized marathon approach: indifferent to whether recruitment happens this year or five years from now, focused on preserving culture and J.D. Power trust award positioning.

Oorlog highlighted incremental spend in recruiting, sub-advisory fees (asset growth driven), and technology including AI as key growth-oriented investments. Shoukry emphasized $400M recruited production is equivalent to a medium-sized acquisition. Will start breaking out upfront recruiting amortization next quarter.

Shoukry confirmed NNA reflects record recruiting with lag impact. Noted competitive headwind from PE roll-ups and bank M&A ($2.7B platform loss expected next quarter). Retention solid, recruiting never stronger entering FY2026.

Shoukry explained 3-6-9 month lag from pipeline conversion to NNA impact. Also noted pressure from PE-backed roll-ups competing with big checks for existing advisers, particularly in independent channel, though moderating somewhat.

Shoukry distinguished RJF fixed income from bulge brackets. RJF serves depositories (banks/credit unions) with securities portfolio management, not high-volatility commodities/currencies. Best environment is deposit-rich banks with limited loan demand. SumRidge benefits from spread volatility, which has been muted.

Shoukry confirmed no notable adviser departures this quarter unlike prior quarters. Cited financial crisis as historical precedent where strong balance sheet drove best recruiting year. Still optimistic about pipelines.

Oorlog clarified cash balances down from quarter-end by roughly the $1.5 billion April fee billing amount, not additive. Shoukry noted this was a good result given concurrent tax payments.

Shoukry said 10% non-comp growth has been reasonable over the last couple years but will naturally decelerate if revenue drivers decelerate.

Reilly confirmed the large IC branch departure is essentially complete. Normal ~1% attrition expected. Biggest movement has been to RIA (assets retained). Pipeline as strong as it's been.

Shoukry highlighted technology as the biggest non-comp grower, aimed at advisor tools and efficiency. Also noted growth in sub-advisory fees linked to fee-based asset growth.

Reilly confirmed trend toward fewer but much larger advisor books. Technology platform and high net worth offerings driving destination status for large teams.

Galik declined to isolate Korea, saying growth was broad-based across all regions and account types.

Milan emphasized universal success across all account sizes, activity levels, and client types, attributing it to technology, fair pricing, and global access rather than promotions or incentives.

Milan indicated expense growth has been consistent at roughly 6% headcount growth and 10% compensation growth, noting AI initiatives may affect future expense trajectories but did not quantify the impact.

Thomas confirmed the account growth profile is consistent with prior quarters across all geographies and client segments including direct clients, introducing brokers, prop trading firms, financial advisers, and hedge funds.

Paul suggested the current quarter is a typical expense run rate. Milan elaborated that IBKR does not allocate budgets to specific projects but rather pursues opportunities as they arise, a philosophy dating back to Thomas's founding of the firm.

Paul acknowledged the improvement was concentrated in a few high flyers rather than broadly diversified, with general lending rising from larger client base and fully paid lending program.

Milan noted pipeline integrations increased Q/Q, with former prospects who chose competitors or in-house builds now returning to IBKR after recognizing superior offering and pricing.

Milan disclosed the prior deal failed because one seller wouldn't sell their 30% stake, making 100% ownership impossible, and no new attractive opportunities have materialized.

Paul confirmed excess capital remains at $6-7 billion, noting growing profitability supports both business reinvestment and the dividend increase.

Milan confirmed continued openness to M&A but acknowledged a failed attempt at acquiring a competitor, with no specific pipeline updates.

Milan gave a general answer about listening to client feedback across all segments and investing in system capacity and backend reliability rather than naming specific individual product plans.

Schlossberg framed Hong Kong and Tokyo cross-listings as amplifying existing recognition and said the halo will be leveraged more than new product launches.

Dukes gave both ratios: 22.7% in Q2 for third-party plus distribution over management fees trending toward 23%, and roughly 40% comp to revenue for 2026.

Allison guided comp-to-revenue at midpoint of 38-42% range for 2026. Hybrid platform implementation trending $10-15M/quarter toward higher end, with incremental platform expense building from $4M to $10M by year-end. Canada partnership impact of $5-10M OI drag starting Q3.

Andrew declined to comment on specific platforms but noted industry-wide vehicle shift from mutual funds to ETFs will logically shift platform fees. New fees would focus on new assets, not existing. No material impact expected on Invesco economics.

Allison confirmed actual year-over-year savings in 2027 versus 2026, with implementation expenses ($10-15M/quarter) tapering off and system decommissioning reducing ongoing operating expenses. Also noted long-term cost avoidance given AUM nearly doubled since platform initiative began.

Andrew highlighted $20 billion+ full-year China flows driven by fixed income plus strategies reflecting growing equity confidence. Stimulus, consumption push, easing U.S.-China trade tensions, and developing retirement market all supporting outlook.

Allison expects implementation costs to modestly increase and peak in 2026, with decommissioning and savings becoming a 2027 opportunity. Can't turn off legacy systems until implementation is substantially complete.

Allison confirmed $15M seasonal comp in Q1, comp-to-revenue at 43-44%, and $7M one-time in G&A/property office should be added back for Q2 baseline.

Andrew noted defensive positioning in US but broadening flows into Europe and Asia. Fixed income focused on shorter duration. Institutional fundings proceeding as planned.

Allison provided clear alpha cost breakdown: ~$50M in 2024, expected $20-25M higher in 2025, with $10-15M/quarter implementation costs.

Management prioritizes organic investment but acknowledged private credit as a capability gap, noting the space is crowded and expensive.

Sharon highlighted broad-based NNA growth with no single driver, noting greater workplace asset retention and channel migration from workplace to adviser-led contributing over $1 trillion.

Sharon acknowledged the topic but pivoted to long-term vision around tokenized/on-chain worlds rather than quantifying near-term NII risk from cash optimization tools.

Sharon said both revenue and efficiency drivers. Fee-based flows growing from advice model adoption. Self-directed transactional revenues also rising via E-Trade Pro investment. AI tools like LeadIQ driving revenue-side productivity. Workplace particularly exciting as funnel integration mechanism.

Ted said IB flywheel is taking hold across industry groups, regions, and regulatory backdrop. Deglobalization and AI CapEx driving strategic activity. Pipeline looks very good across all three regions. Optimistic but noted geopolitical risk.

Sharon detailed strength across all three channels. Workplace migration running ahead of $60B/year historical pace with three quarters already exceeding full-year figures. IPO market driving workplace assets into fee-based flows. E-Trade self-directed also strong.

Ted emphasized organic runway is extraordinary across all three segments. Inorganic must fit squarely within raise/manage/allocate strategy. Bar is high. Stick to knitting.

Sharon detailed strength in all 3 channels. Workplace-originated flows running ahead of $16B/year prior pace. 70% of workplace flows are net new to firm. E-Trade marketing investments paying off.

Ted confirmed strong inbound recruitment interest. Advisers seeing value of integrated firm. Self-directed and workplace channels all contributing to the funnel.

Sharon noted $100B+ in private alternatives representing ~5% of qualified assets vs GIC recommendation of 15%. Significant growth opportunity being actively pursued.

Sharon shifted from companion accounts to channel migration metrics, citing $300B moving from workplace to advisor-led since 2020 as the more relevant KPI.

Nicholls gave a blended fee rate of about 65 basis points (ranging 40 basis points to over 100 basis points plus performance fees), with about 80% of private markets fee-generating. Direct.

Matt: voluntary buyout included in projections. Q3 guide: EFR mid-to-high 37s, comp $830M ($50M perf fees at 55%), IS&T $155M (slightly higher from AI), occupancy $70M, G&A $210-215M (includes $23-25M fundraising expenses, $9-10M advertising). Full year: ~1.5% above FY2025 but revenue growing 4x. Q4 margin high 29s. Full year margin 27s, both ahead of plan.

Matt sees room for further cost saves into FY2027 from ongoing initiatives. Jenny detailed three upside categories: 1) product streamlining (one-third reviewed, conversions to ETFs), 2) acquisition integration (11 deals over 5-6 years, ongoing system consolidation), 3) AI/technology (Intelligence Hub reducing call prep 90%, meetings up 9-10%). Matt added: ETFs, Canvas, Solutions reaching scale where margin expands despite lower fee rates.

Matt explained Lexington fundraise will temporarily push EFR to higher 37s/38s. But lower-fee growth areas (ETFs at Putnam's 34bp average, Canvas, multi-asset) offset. Alt strategies becoming more predictable and steady at higher EFR. Result: stable EFR with episodic upside during flagship fundraisings.

Matt clarified FY2026 = FY2025 minus $200M plus Apera ($30M) and potential higher alt distribution costs. Excludes performance fees from both years. Fee rate stable at high 37s. Prior quarter EFR shortfall 80% due to daily vs monthly AUM calculation (0.4bp). Mix shift to higher-fee equities offset by competitive pricing on large institutional mandates. FX impact of 0.2bp from weaker dollar.

Success in munis ($1B), stable value, high yield, insurance customized strategies, CLOs ($2B), and short duration. Western at $245B with $10B net outflows but $5B gross sales. Half of unfunded pipeline is fixed income.

Matt confirmed $200-250M is incremental reduction from FY2025's flat base. Full benefit expected from October 1 (FY2026 start). Royce is last remaining independent operation needing integration.

Jenny confirmed Royce is last independent public markets SIM. Alternatives managers stay standalone due to specialized deal-team operations. Vision: one scaled public markets operation plus separate alt businesses.

Matt guided expenses flat YoY normalized for full year of Putnam, excluding performance fees. Revenue loss from Western expected to be offset by other growth areas. One quarter of Putnam expenses ~$125 million.