The Spokane division of Waddell & Reed Financial Advisors has grown while the financial services industry as a whole has been shrinking, says Jason Renskers, managing principal here.
Waddell & Reed, a subsidiary of Overland Park, Kan.-based Waddell & Reed Financial Inc., provides customized investment management and financial planning services for individuals and business owners.
The company's adviser-brokers handle a variety of investment instruments, including mutual funds, individual securities, insurance products, and annuities.
As of May 25, year-to-date revenue through Waddell & Reed's Spokane division has exceeded the year-earlier period by 4 percent, he says, adding that 2011 was an up compared with 2010.
Companywide, Waddell & Reed reported first-quarter revenues this year of $307 million, up from $297 million in the year-earlier quarter. Its annual revenues in 2011 totaled $1.2 billion, up from $1 billion in 2010. Net income for 2011 was $175 million, up from $157 million for 2010.
"We're trying to continually expand," Renskers says. "The increase in net sales is mostly due to new money coming in through the door."
Most new clients seek Waddell & Reed's advisers through referrals from other clients and professionals, he says.
Waddell & Reed's advisers are independent contractors who collectively serve a broad market because the makeup of clients is unique to each adviser, Renskers says.
"We can help anyone from those who are starting their financial lives to people with extensive estate-planning issues," he says.
The parent company was founded in 1937 and the Spokane division dates back at least as far as the early 1970s, says Renskers. He's been with Waddell & Reed for 14 years, starting as a financial adviser in Helena, Mont., and working for two years in Vancouver, Wash., before taking a principal position in Spokane in 2005.
The office here has nine adviser-brokers and occupies 4,000 square feet of leased space at 111 N. Post, on the second floor of the Banner Bank Building downtown.
The Spokane district also operates an office in Coeur d'Alene, at 509 W. Hanley, with two broker-dealers.
Hoyt, Lewis & Associates LLC, which operates a separate, independent office in the Tapio Center at 104 N. Freya, also offers securities and investment services through Waddell & Reed's Spokane division, Renskers says.
Waddell & Reed's investment strategies helped float the company and its clients through the rough waters of the recession, he says.
"Generally, we manage conservatively," Renskers says. "We focus more on the big pictureon the planning side. Our fund managers understand we're working with other people's money."
Waddell & Reed offers a combination of fee and commission products. "We don't pigeonhole our clients into one relationship," Renskers says.
Fee-based products, though, are more prevalent, Renskers says. "It puts advisers and clients on the same side of the table," he says. "It tends to involve more planning and relationship building."
In a fee-based arrangement, an adviser's compensation is a percentage of a client's total portfolio value, regardless of how many transactions are executed. In contrast, compensation for commission-based investments is based on the volume of transactions made on behalf of the client.
As an "open-architecture" brokerage, Waddell & Reed brokers proprietary and nonproprietary investment products directly to its clients, and its parent company also manages funds that are sold by other investment brokerages.
"What's unique about us is we're a broker-dealer paired with a mutual fund complex," he says.
A mutual fund complex includes families of funds with wide arrays of diversified shares in large portfolios of investments managed by its own professionals.
Two of Waddell & Reed's fund families, Ivy Investment Management and Waddell & Reed Investment Management, recently topped Barron's financial magazine's list of best mutual fund families over the last five years.
"We've succeeded because our investments have done well," Renskers asserts. "Our redemption rate is one of the lowest in the industry."
Redemption is the repayment of asset values to a client who decides to liquidate holdings.
When the industry was seeing customers cash out of their investments at the rate of 20 percent a year nationwide, the redemption rate for Waddell & Reed funds was around 10 percent, he claims.
The Spokane division office moved downtown about three years ago from smaller quarters in Spokane Valley. The move in part was intended to increase Waddell & Reed's visibility in the downtown business district, and also to raise its recruiting image here.
"We wanted a seamless look and feel," he says.
Waddell & Reed's Spokane adviser-brokers have worked for the company for as long as 30 years, and its most recent recruit has been there three months, Renskers says.
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