Dee Sawyer: Thanks for the questions. In terms of — let me answer your second question first. I think we are in a really good position where we are with our overall approach to retirement income and how we are making sure that we are continuing to meet the evolving needs and addressing the complexity of decumulation. And so we certainly already have products in the marketplace. And then I mentioned a couple that are already in development that we’re excited about launching later in the year. And so I would tell you, I feel really well — really good about our position overall to be able to meet the needs of plan sponsors and end investors. I think it’s also important to note that we do plan to continue to extend those relationships through our other channels, including our intermediary channel, making sure that we’re partnering with advisers and their end clients.
And so we feel good about our lineup that we have today as well as the lineup coming. So that would answer the first question — or the second part of your question. Regarding the first part of your question, what I would tell you, though, is as we think about retirement income, it’s just important to note that there is a fair number of solutions in the marketplace. And where I would say we are differentiated is in the fact of the breadth of our platform. If you think about the fact that T. Rowe Price is uniquely positioned in the fact that we work with plan sponsors. We work with end investors. We work with intermediary clients. We work with institutions. We work with clients across the globe. We are uniquely positioned to be able to support that all the way across.
More specifically around retirement income, we also have solutions comparable to the solutions that you’ve mentioned. And so I do feel that we are well positioned, and there isn’t anything that I would say is notable to say that we’re behind to mention on this call.
Operator: Thank you. One moment for our next question, please. Our next question comes from the line of Brennan Hawken with UBS. Your line is now open.
Brennan Hawken: Good morning. Thank you for taking my questions. I was curious about a couple of things on the expense front. You mentioned that there’s a capitalization of labor in the U.K. So curious about what that impact was in the quarter and how you expect that would impact the expense growth going forward. You also referenced a change in practice around explicit payment for research. So curious about what sort of impact that has on 2024 growth in expenses? Thank you.
Jen Dardis: Sure. Thanks. I think for the first part of the question, just maybe to clarify, it wasn’t about a capitalization of labor. This was related to our U.K. entity where we moved into a new building at the end of last year, and we had a non-recurring benefit in the first quarter of this year related to that. It’s not material in terms of operations and really wouldn’t be expected going forward. We just called it out as a one-time benefit. With regard to research fees, yes, we did call that out as a benefit in 2024. I think what I would say is that we remain fully committed to external research and its value, but the mix of hard and soft dollar will flex over time as we work with different regulations and work with how our clients want to receive those costs.
Robert Sharps: Yeah. That mix is really driven by the regulatory environment and client preference.
Operator: Thank you. One moment for our next question, please. Our next question comes from the line of Aidan Hall with KBW. Your line is now open.
Aidan Hall: Great. Thanks for taking my question. Just wondering if you could provide us with some color on the trajectory of fee rates by asset class, just given some of the mix shift that’s taking place in the asset base. And then it was nice to see the contribution of performance fees this quarter. I know it’s tough to predict, but should we be thinking about that as a more normal contributor on a go-forward basis? Have you seen some stronger performance from your products?
Jen Dardis: Sure. So I mean, we’ve spoken in the past, on average, if we take a step back, I mean, a number of our products, whether it’s by different vehicles or by larger institutional clients, we tend to see about 1% to 1.5% fee compression annually. Again, that can be higher or lower depending on specific choices we make about fees. But certainly, the direction of travel has been that when clients can take advantage of scale, they will get discounts for the pricing and when they come in and we have a number of large relationships that we manage as part of our strategic relationships. With regard to performance fees, this was one-off. I mean, there are a handful of equity products that we have, not a significant number that have fee arrangements. Of course, within the OHA product range, there are more. This one in particular, this quarter related to a handful of equity products on the T. Rowe side.
Robert Sharps: Yeah. We use our scale to invest in our value proposition. And I would say that within asset classes, the trend of fee compression has — is something that we’ve navigated for a very long time and is comparatively stable right now. A few years ago, we made a substantial investment in fee competitiveness of the target date funds and called that out specifically at the time. But I would say, overall, I feel very good about our value proposition and our fee competitiveness right now. So where you see fee compression, I think it would be natural where you have a migration from funds to trust where you have more rapid growth in some lower fee vehicles or kind of ultimately, there are puts and takes. I’d say market movement also drives a fair bit of this from quarter-to-quarter. But I don’t think that there’s anything unusual or that I would call out with regard to the fee environment right now.
Eric Veiel: Yeah. This is Eric. The one other thing I would add to that is that even within asset class, again, client preference is an important part of that. And when you have really strong performance in something like structured research in the U.S. equity business, which competes directly with passive but at a better fee versus passive, but lower than our overall average fee, you’ll see some mix within asset class, but that’s really a good business for us and is a really strong endorsement of our underlying research capabilities.
Operator: Thank you. And this completes our Q&A portion. I’ll now turn the call back over to Mr. Rob Sharps for closing remarks.
Robert Sharps: All right. Great. Well, we appreciate your questions and your interest in T. Rowe Price. Thank you for joining us this morning. Hopefully, you found Dee’s retirement update informative. We will continue to evaluate special topics to integrate into future calls, so we can give you a deeper understanding of our business. So again, thanks for joining us, and have a good day.
Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day.
