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T. Rowe Price Group, Inc. is a financial services holding company that offers global investment management services through its subsidiaries to a wide array of clients, including individuals, advisors, institutions, and retirement plan sponsors . The company primarily generates revenue and net income from investment advisory services across various investment solutions, such as equity, fixed income, multi-asset, and alternative capabilities . These services are delivered through multiple vehicles, including U.S. mutual funds, subadvised funds, separately managed accounts, collective investment trusts, and other products like open-ended investment products outside the U.S., variable annuity life insurance plans, affiliated private investment funds, and collateralized loan obligations . T. Rowe Price also provides related administrative services, including distribution, mutual fund transfer agent, accounting, shareholder services, participant recordkeeping, and transfer agent services for defined contribution retirement plans, as well as brokerage and trust services . A significant portion of the company's assets under management is retirement-related, highlighting the importance of this segment to their business .
- Investment Advisory Services - Offers investment management across equity, fixed income, multi-asset, and alternative capabilities, primarily through U.S. mutual funds, subadvised funds, separately managed accounts, and collective investment trusts.
- Retirement Services - Focuses on managing retirement-related assets, which constitute over two-thirds of the company's assets under management, underscoring its critical role in the business.
- Administrative Services - Provides distribution, mutual fund transfer agent, accounting, shareholder services, participant recordkeeping, and transfer agent services for defined contribution retirement plans.
- Brokerage and Trust Services - Delivers brokerage and trust services to support the company's investment management offerings.
- International Investment Products - Includes open-ended investment products outside the U.S., variable annuity life insurance plans, affiliated private investment funds, and collateralized loan obligations.
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With the anticipated increase in net outflows during the fourth quarter due to both seasonal trends and a large sub-advised variable annuity termination, how does T. Rowe Price plan to mitigate the impact on overall net flows and what strategies are in place to prevent such significant terminations in the future?
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Given the softness in your investment performance this quarter, particularly in the one-year metrics where aggregate statistics are not where you want them, what specific actions are you taking to address underperformance in key strategies, and how confident are you in your approach to improve performance without drastic measures?
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As you expand your ETF franchise and acknowledge some cannibalization of existing mutual fund assets, can you elaborate on how you're balancing this risk and whether the cost of distribution for ETFs differs in a way that could impact your margins compared to traditional funds?
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With the launch of Managed Lifetime Income and Personalized Retirement Manager, both of which may introduce additional costs for plan participants, how do you intend to overcome the fee sensitivity of plan sponsors and demonstrate the value of these products despite the added expenses associated with insurance guarantees and customized managed accounts?
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Considering the regulatory uncertainties and infrastructural challenges surrounding the inclusion of private market allocations in target date funds and retirement plans, what concrete steps are you taking to position T. Rowe Price ahead of competitors once these hurdles are cleared, and how do you plan to leverage your existing capabilities in private markets through OHA to capitalize on this potential opportunity?