SEI Investments Company (NASDAQ:SEIC) Q3 2023 Earnings Call Transcript

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So this is a really important proof statement. And they are really happy where they are right now with this conversion, with a successful weekend. It’s a big book of business. And it’s one that the market’s been watching. Sanjay, I don’t know what you would add to this.

Sanjay Sharma: I would echo the same as well. Hey, Ryan. In terms of strategy for TRUST 3000 and as Ryan mentioned that we would stay aligned with our client strategy. So you can look at the overall TRUST 3000 business in two different segments, our larger clients who are in software-as-a-service model. They’re closely watching how we are implementing U.S. Bank, and that is going very successfully. And the second segment, you can look at the clients we are running in an outsourced operations model. And that’s where we are actively engaging with our clients. And as and when they are coming up for renewal, we are working with them to move them to SWP but it’s not a post match.

Ryan Kenny: And then just as a follow-up, definitely appreciate the efforts to get the private banking margins towards higher profitability. It looks like you’ve started to make some progress there with margins moving from low single digits to it looks like now high single digits. Is that the right range going forward? And as you put together all the piece parts of the SWP migration and expense management, is there any update on what margin level you’d be happy with in that business?

Ryan Hicke: So I think, Ryan, this is one — we’ve been really consistent. The team continues to execute on a plan to continue to grow those margins and to do that incrementally quarter-over-quarter, either through a combination of revenue, installation and revenue increase through sales and continued expense management. So, I mean, we are really focused on that, we don’t plan to deviate from that plan and to continue to grow those margins moving forward. That — the first thing I said in the first call, 18 months ago, and the team has done an excellent job. As I mentioned on the call, we have some losses that were announced over the last couple of years. We’ve had to absorb and Sanjay and his team has done a terrific job through new sales, increased revenue to continue to smooth that trajectory and drive those margins higher. We’re not deviating from the previous stance that that business is going to get back to historical margins over the next few years.

Dennis McGonigle: And Ryan, just to close the loop, one of those losses that we had talked about for probably close to a year has still not matriculated at all. And I think on the last call, we talked about potentially by the end of third quarter. And now, we’re in the kind of range of sometime in the fourth quarter, but they’re still — they haven’t left us. So, we’ll see how that plays out. But that’s one of the things that the private banking business will have to absorb when it happens. The good news is it hasn’t happened yet, and that’s always a positive. The other comment that Sanjay didn’t make, but he can give color if you’re interested. We just finished two days or three days with a large group of our both TRUST 3000 and SWP clients here on campus.

And we can only think that getting them in the room together and hearing the stories and the positive stories about being on SWP, both technologically and operationally will just help encourage more TRUST 3000 clients like the one that made the decision to convert in the third quarter make that decision. So it’s really successful, 2.5 days of sessions with our broad banking client base.

Operator: And we’ll go over to Crispin Love, Piper Sandler. Please go ahead.

Crispin Love: First, are you able to give a little more color on the client losses in the quarter in the Investment Advisors and Institutional Investors segments? Any key reasons there? Anything out of the ordinary or anything that you can provide or would call out there?

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