Wilma Burdis

Wilma Burdis asked if macroeconomic volatility generally benefits WisdomTree's diversified business or if it's more dependent on specific themes, whether the digital asset growth strategy focuses on educating new users or capturing existing ones, and if new product development primarily uses internal expertise or outside talent.

Answer

Jeremy Schwartz, Global Chief Investment Officer, and Jonathan Steinberg, CEO, emphasized WisdomTree's broad diversification across asset classes and geographies, making it resilient in various market environments, citing growth in thematics and commodities. Will Peck, Head of Digital Assets, stated the digital asset strategy primarily targets clients already familiar with operating on-chain, leveraging regulatory clarity and growing wallet adoption. Jonathan Steinberg, CEO, explained that new product development largely utilizes existing internal talent and expertise, noting the business's scalability, but also mentioned strategic investments in firms like Quorus and AlphaBeta for enhanced capabilities.

Wilma Burdis questioned if LPL Financial is approaching a short-term interest rate level that would lead to more cash build, and how the rate cuts in Q4 2025 might have contributed to the cash build in that quarter.

Answer

President and CFO Matt Audette explained that average cash balances per account have been stable around $5,000 for some time, suggesting these are necessary levels for account management, leading to a bias for stable to upward cash sweep balances as rates decline. He attributed the Q4 build primarily to seasonal factors like rebalancing and tax-loss harvesting, rather than individual rate cuts.

Wilma Burdis asked if there's a short-term interest rate level at which more cash build would occur, if LPL is approaching that level, and how the Q4 2025 rate cuts might have contributed to the quarter's cash build.

Answer

President and CFO Matt Audette explained that average cash balances per account have been stable at around $5,000, which he believes is the necessary level to manage an account, suggesting a bias towards stable to upward cash sweep balances as rates come down. He attributed the Q4 cash build primarily to seasonal factors like rebalancing and tax-loss harvesting, rather than individual rate cuts.

Wilma Burdis asked for more color on Ameriprise's Q4 2025 flow results and expectations for early 2026, specifically noting the recruitment of 91 advisors in Q4. Wilma Burdis also inquired about Ameriprise's future buyback strategy and the optimal use of its $2.1 billion in excess capital, especially in the current environment.

Answer

CFO Walter Berman confirmed good results in organic recruiting and retention, acknowledging seasonality but emphasizing positive traction in fundamentals. Chairman and CEO Jim Cracchiolo highlighted the company's opportunistic approach to buybacks, noting the strong Q4 capital return. He indicated that returning 85%-90% of operating earnings through dividends and buybacks is a good target range for 2026, reflecting investment in businesses and shareholder value.

Wilma Burdis asked for more insight into Ameriprise's flow expectations for early 2026, considering the recruitment of 91 advisors in Q4 2025. She also inquired about the future strategy for share buybacks and the optimal use of the company's $2.1 billion in excess capital, especially given the current market environment.

Answer

CFO Walter Berman indicated that organic drivers, recruiting, and retention are showing good results, but noted the presence of seasonality. Chairman and CEO Jim Cracchiolo stated that Ameriprise would remain opportunistic with buybacks and dividends, confirming comfort with capital generation in 2026 and reiterating an 85%-90% range for total capital return (dividends and buybacks) as a good measure.

Wilma Burdis inquired about the lower flow activity in the wealth management business, asking if it indicates an overheated market or irrational pricing. She also asked if potentially over-leveraged advisor roll-up operations could present future opportunities for Ameriprise.

Answer

Chairman and CEO Jim Cracchiolo attributed lower flow activity to a combination of factors, including strong client engagement, rebalancing, high cash balances, and the competitive recruiting environment, emphasizing Ameriprise's balanced, long-term approach. He confirmed that over-leveraged advisor roll-up operations absolutely present a future opportunity, highlighting Ameriprise's sound fundamentals, strong margins, and long-term investment strategy.

Wilma Burdis asked for more detail on Ameriprise's forward-looking recruiting strategy and inquired about how clients are positioning their portfolios, particularly regarding annuities and their willingness to deploy cash.

Answer

Chairman & CEO James Cracchiolo stated that the recruiting pipeline has increased and their strategy focuses on the firm's total value proposition, not just large financial packages. He noted that clients are showing continued interest in structured annuities and variable annuities without living benefits, which Ameriprise is focused on providing as complementary retirement solutions.

Wilma Burdis from Raymond James Financial asked for more details on Ameriprise's forward-looking recruiting strategy and how clients are positioning themselves, particularly regarding annuities and their willingness to deploy cash.

Answer

James Cracchiolo, Chairman & CEO, stated that the recruiting pipeline has increased, with a focus on the firm's total value proposition, including technology and support, rather than just large signing bonuses. He also noted that clients continue to show strong interest in structured and variable annuities without living benefits, driven by retirement and tax planning needs.

Wilma Burdis asked about the forward timing and impact of the Mexico tax law change and whether any positive assumption updates in Asia were expected to be ongoing.

Answer

Eric Clurfain, Regional President of MetLife Latin America, explained that the Mexico tax law change, affecting health products, resulted in a notable charge in Q3 2025, with lesser impact in 2026 and little to no impact by 2027, as they adjust rates and implement management actions. He emphasized the market's resilience and the temporary, isolated nature of the impact. John McCallion, CFO, confirmed that the positive assumption updates in Asia were generally one-time in nature.

Wilma Burdis from Raymond James inquired whether any of the positive assumption updates in MetLife's Asia segment were ongoing.

Answer

John McCallion, CFO of MetLife, clarified that the positive assumption updates recognized in the Asia segment were generally one-time in nature.

Wilma Burdis asked about Apollo's approach to balancing higher volumes against higher spreads in the current ultra-tight credit spread environment, and how this trade-off affects Athene's capital efficiency and Return on Equity (ROE).

Answer

CEO Marc Rowan emphasized Apollo's focus on 'excess return per unit of risk' rather than absolute spread, adapting requirements based on rating levels. He stated that Athene prioritizes adequate spread over volume to maintain capital efficiency and ROE, as the business is ultimately 'origination-constrained.' President Jim Zelter added that actions, such as upgrading CLO holdings, reflect a consistent view on credit quality over maximizing short-term ROE.

Wilma Burdis of Raymond James requested more detail on the 'other inflows' within Retirement Services, noting the mention of defined contribution plans, and asked about the outlook for this area.

Answer

CFO Martin Kelly identified the inflows as related to stable value products. CEO Marc Rowan elaborated on the broader strategy, emphasizing a push toward product innovation to create simpler, guaranteed lifetime income solutions. He described this as the 'Holy Grail' for the industry, aiming to eventually embed these options within 401(k) and other defined contribution structures.

Wilma Burdis asked why Unum reports earnings on its closed block and Long-Term Care (LTC) business, given that the block has historically lost capital. She also sought confirmation that her takeaways from the assumption review were fair: no negative cash impact, future cash generation from rate increases, and reduced risk of future charges by removing assumptions.

Answer

Chief Financial Officer Steve Zabel explained that reporting earnings for the entire entity, including the closed block and LTC, is a requirement. He noted that LTC is in closed block status for segmentation, and the focus is on cash generation/deployment, with no foreseen capital needs for the block. Mr. Zabel confirmed that Wilma's takeaways were accurate, stating that the assumption changes created less risk around less controllable assumptions (like morbidity improvement) and bolstered more controllable ones (like rate increases), which are expected to generate value and cash directly.

Wilma Burdis from Raymond James questioned why Unum Group continues to report earnings on the closed block and Long-Term Care (LTC) segment, given its historical capital losses. She also sought confirmation on her takeaways from the assumption review: no negative cash impact, future cash generation from rate increases, and reduced risk of future charges by removing certain assumptions.

Answer

Tim Arnold (Heads of Colonial Life and Voluntary Benefits Lines) explained that reporting earnings for the entire entity is a requirement, and they segment LTC as a closed block, focusing on its capital needs, which are currently none and not foreseen. CFO Steve Zabel added that while statutory reporting separates the closed block, GAAP requires segment reporting. Arnold confirmed Burdis's takeaways on the assumption review, agreeing that it creates less risk from less controllable assumptions and bolsters controllable ones like rate increases to generate value and cash.

Wilma Burdis inquired about the growth of spread-based balances in Retirement and Income Solutions (RIS), focusing on specific products, and asked about the drivers of favorable loss ratios in Specialty Benefits and the outlook for the upcoming quarter.

Answer

CEO Deanna Strable and President Chris Littlefield highlighted strong growth in Workplace Savings and Retirement Solutions (WSRS) GA products, disciplined pension risk transfer (PRT) in smaller segments, and RILA business for lifetime income. President Amy Friedrich attributed favorable Specialty Benefits loss ratios to lower LTD incidents in group disability, lower frequency in group life, and a 100 basis point improvement in dental, driven by pricing discipline and focus on the SMB market.

Wilma Burdis inquired about the drivers behind the favorable loss ratios in Specialty Benefits and the outlook for the upcoming quarter.

Answer

Amy Friedrich (President, Benefits and Protection) attributed the exceptional underwriting results to strong performance across group disability (lower LTD incidents), group life (lower frequency), and a 100 basis point improvement in the dental loss ratio. Supplemental health and individual disability performed as expected. She emphasized focus on the small to medium-sized business market, pricing discipline, and growth in voluntary practices, which contribute to margin expansion. She sees more opportunities for profitable business ahead for 1/1 renewals.

Wilma Burdis of Raymond James asked for the drivers of Principal International's strong performance and its sustainability. She also requested an update on the capital generation outlook for the remainder of the year and into 2025.

Answer

CEO Dan Houston credited strong leadership and an improving macro environment in Asia. Interim CFO Joel Pitz detailed record earnings and AUM for the segment. President and COO Deanna Strable-Soethout addressed capital, expressing confidence in meeting the full-year 75%-85% free cash flow conversion target. She noted that strong Q3 generation kept capital levels stable despite significant shareholder returns and expects a strong Q4.

Wilma Burdis of Raymond James Financial inquired about the expected EBITDA improvement from exiting the international real estate business, the margin profile of net flows, the full quarterly impact of the Kontoor acquisition, and the strategy for recruiting advisory teams.

Answer

CFO Michael Harrington confirmed the real estate exit would remove a quarterly EBITDA drag of approximately $2 million. CEO Michael Tiedemann explained that the ROA on international inflows is accretive, while U.S. flow profitability varies by client size. He also noted the Kontoor acquisition's focus is on converting clients to higher-margin mandates and that Alti is actively pursuing recruitment opportunities where there is a strong cultural fit.

Wilma Burdis of Raymond James asked for clarification on whether recent hedging actions contributed to the modest increase in Total Adjusted Capital (TAC) in Q2. She also inquired about the company's appetite to continue its strong sales momentum.

Answer

Executive VP & CFO Edward Spehar clarified that the TAC increase was not due to hedging actions but rather a 'divergence' effect in the VA framework where reserves declined more than the total asset requirement in a strong market, muting the impact of the normalized statutory loss. President & CEO Eric Steigerwalt confirmed there are no changes to the company's new business strategy and that the third quarter was off to a nice start.

Wilma Burdis requested more detail on the progress of hedging the legacy block and asked about the mechanics of the share repurchase program, noting the activity in April.

Answer

CFO Ed Spehar explained the stand-alone hedging approach for new business but declined to provide specifics on the legacy block strategy to protect the company's market position. CEO Eric Steigerwalt detailed the recent repurchase amounts ($59 million in Q1, $26 million through May 6) and reiterated that the company does not provide forward-looking guidance on buybacks.

Wilma Burdis of Raymond James Financial asked for clarification on the $12 million 'other income' item that contributed to the significant net EPS beat. She also questioned how the company is thinking about future rate increases, given that margins are now at target but high inflation may persist.

Answer

CFO Fawwad Qureshi clarified that the income was a one-time gain from the exchange of preferred stock in their partner, Baystride, for intellectual property related to the food initiative. CEO Margi Tooth addressed the inflation question, noting a current deceleration trend. She explained that this trend is being factored into rate setting for 2026, which will lead to softer increases for members. However, as long as veterinary costs continue to rise, some level of rate increase will be necessary to honor the company's value proposition.

Wilma Burdis of Raymond James Financial asked for the reasons behind the favorable expense results in Q2 and if there was a sustainable element to it. She also inquired about the company's efforts to grow its ISP-licensed sales force.

Answer

EVP & CFO Tracy Tan stated the lower expenses were mainly due to the timing of technology and infrastructure investments, which are expected to ramp up later in the year. CEO Glenn Williams noted that while growing the securities-licensed sales force is challenging, the company is seeing positive results from its efforts to provide resources and support for the licensing process.

Wilma Burdis of Raymond James Financial sought more detail on the Blue Owl partnership, including how the offering works, future product plans, and potential for other alt-manager partnerships. She also asked about the fee structure and economic split for these products.

Answer

CEO - Voya Investment Management Matt Toms detailed that the Blue Owl partnership will focus on co-creating solutions, likely via CITs, that offer strong risk-adjusted returns net of fees for retirement plan participants. He noted that while Voya's platform is open, the primary focus is on building with Blue Owl. Regarding fees, Toms explained the model is akin to traditional active management, where the value proposition must justify the cost, and that the fee structure is still in development.

Wilma Burdis of Raymond James asked if recent earnings noise was deal-related and if results would stabilize post-transaction. She also inquired about the FABN program and any potential drag from deploying proceeds.

Answer

CFO Robin Raju confirmed that with the RGA deal closing and reducing mortality volatility by 75%, results should become more stable and predictable. Regarding the FABN program, he stated that the in-house capabilities of AllianceBernstein allow for efficient deployment of proceeds, enabling them to achieve attractive IRRs above 15% without a drag.

Wilma Burdis asked if the data breach during the quarter caused any pause in U.S. sales. She also inquired whether Aflac is exposed to rising cancer treatment costs and if this could increase the attractiveness of its fixed-benefit products.

Answer

Virgil Miller, President of Aflac, stated there was no material operational or financial impact from the data breach. An unnamed executive confirmed that Aflac is primarily exposed to the frequency of diagnosis, not the severity or cost of treatment, due to the fixed-benefit nature of its products. Chairman & CEO Daniel Amos added that Aflac updates its products to cover new treatments, which helps drive additional sales to existing accounts.

Wilma Burdis of Raymond James asked if the recent data breach impacted U.S. sales and whether Aflac's fixed-benefit product structure insulates it from rising cancer treatment costs, potentially increasing product attractiveness.

Answer

Virgil Miller, President of Aflac, confirmed the data breach had no material impact on operations or financials. An executive then explained that Aflac is exposed to the frequency of cancer diagnoses, not the severity or cost of treatment. CEO Daniel Amos added that Aflac continually updates its products to cover new treatments, which creates opportunities to sell additional coverage to existing clients.

Wilma Burdis of Raymond James Financial asked if higher costs from advanced healthcare treatments could eventually be offset by savings in life insurance claims. She also inquired about RGA's confidence in its reserving for the remaining weakness in the excess healthcare business.

Answer

EVP & Global Chief Risk Officer Jonathan Porter and President & CEO Tony Cheng agreed with the premise, noting that medical advances support their diversification strategy and could benefit long-term mortality. Porter also affirmed confidence in their current reserves for earned premium, while Cheng reiterated that the block is short-term and will be repriced.

Wilma Burdis asked about the outlook for mortality and the ability to reprice the Equitable block.

Answer

EVP Jonathan Porter noted encouraging trends in general population mortality and potential benefits from GLP-1s. CEO Tony Cheng explained the initial repricing using RGA's pricing assumptions.

Wilma Burdis from Raymond James Financial asked for an update on the investment environment and best opportunities since the recent investor session. She also inquired about recruiting activity, agent training, and the expected conversion to sales later in the year.

Answer

CIO Eric R. Johnson reiterated that the investment approach is 'steady as she goes,' with continued focus on opportunities in agency-eligible residential mortgage loans, CRE CDO triple-A's, and taxable munis to drive book yield while maintaining quality. CEO Gary Bhojwani commented on recruiting, stating they are pleased with both recruiting and agent productivity trends in the consumer and worksite divisions and expect the momentum to continue without any signs of a slowdown.

Wilma Burdis of Raymond James Financial asked for an update on the investment environment and current opportunities. She also inquired about agent recruiting activity and the expected conversion into future sales.

Answer

CIO Eric R. Johnson stated the investment strategy is 'steady as she goes,' continuing to find value in residential mortgage loans, CRE CDO triple-A's, and taxable munis while maintaining high quality and liquidity. CEO Gary Bhojwani added that the company is pleased with agent recruiting and productivity in both divisions, expects the momentum to continue, and sees no reason for a slowdown.

Wilma Burdis asked for an update on the investment environment and current opportunities. She also inquired about recruiting activity and how agent training is expected to convert into future sales.

Answer

CIO Eric R. Johnson reiterated that the company continues to see good value in residential mortgage loans, CRE CDOs, and taxable munis, describing the strategy as 'steady as she goes' while maintaining high quality and liquidity. CEO Gary Bhojwani added that the company is pleased with agent recruiting and productivity in both divisions, expects the positive momentum to continue, and sees no reason for it to slow down.

Wilmer Burdis from Raymond James Financial asked for an update on the investment environment and opportunities. He also inquired about agent recruiting activity and how it is expected to translate into future sales.

Answer

CIO Eric R. Johnson stated the investment strategy is 'steady as she goes,' continuing to focus on opportunities in agency-eligible residential mortgage loans, CRE CDOs, and taxable municipal bonds. CEO Gary Bhojwani added that agent recruiting and productivity remain strong in both divisions, with a continued focus on productivity driving sales momentum.

Wilma Burdis from Raymond James asked if M&A has become more attractive given the significant share buybacks and freed-up capital. She also inquired how the anticipated Q3 life reserve releases and ongoing mortality gains would flow through to earnings in future years.

Answer

Co-Chairman & Co-CEO J. Matthew Darden responded that while they remain opportunistic, share buybacks are still the most compelling use of capital. Executive VP & CFO Thomas Kalmbach and Co-Chairman & Co-CEO Frank Svoboda explained that while current mortality is favorable, the new baseline assumption is pre-pandemic levels. Future results will show continued gains only if mortality remains better than that baseline.

Wilma Burdis of Raymond James Financial inquired if M&A was becoming more attractive given the significant capital returns and future flexibility, and asked how the ongoing favorable mortality gains would flow through earnings in future years.

Answer

Co-Chairman & Co-CEO J. Matthew Darden responded that M&A remains opportunistic and that stock buybacks are currently a more compelling use of capital. Executive VP & CFO Thomas Kalmbach explained that since recent mortality is favorable to their new pre-pandemic baseline assumptions, continued remeasurement gains could emerge next year if the trend persists. Co-Chairman & Co-CEO Frank Svoboda added that long-term margins are expected to normalize around 41%.

Wilma Burdis of Raymond James Financial asked if M&A has become a more interesting prospect given the significant share buybacks and anticipated capital being freed up. She also inquired about the future impact of mortality trends, asking how the expected Q3 reserve release and ongoing remeasurement gains would flow through in subsequent years.

Answer

Co-Chairman & Co-CEO J. Matthew Darden responded that M&A remains opportunistic and must fit their organic growth strategy, noting that share buybacks currently offer a compelling use of funds. On mortality, Executive VP & CFO Thomas Kalmbach explained that if recent favorable mortality experience continues, it would lead to further remeasurement gains against the new baseline assumptions. Co-Chairman & Co-CEO Frank Svoboda added that if mortality reverts to long-term assumptions, life margins would likely stabilize around 41%.

Wilma Burdis asked about freeing capital from morbidity margins in Japan and why Prismic reinsured a recent block of business rather than a legacy one more punitive under ESR. She also asked if 2025 EPS growth would be at the low end of the 5-8% target range.

Answer

Vice Chairman Rob Falzon explained the reinsured block was a long-duration, dollar-denominated product that is strained under ESR, making it a perfect test case to build credibility for third-party deals. Head of International Businesses Andy Sullivan noted morbidity is within expectations. CFO Yanela Frias confirmed that due to near-term headwinds, 2025 results would likely reflect a greater impact from those headwinds than later years in the forecast period.