Sei Investments Co Q1 FY2026 Earnings Call

Hello, and thank you for standing by. Welcome to SEI First Quarter 2026 Earnings Conference Call. Operator instructions. I would now like to hand the conference over to Brad Burke. You may begin.

Thank you, and welcome, everyone, to SEI's First Quarter 2026 Earnings Call. We appreciate you joining us today. On the call, we have Ryan Hicke, SEI's Chief Executive Officer; Sean Denham, our Chief Financial and Chief Operating Officer; and members of our executive management team, including Michael Lane, Phil McCabe, Mike Peterson, Sneha Shah, Sanjay Sharma and Amy Sliwinski. Before we begin, I'd like to point out that our earnings press release and the presentation accompanying today's call can be found under the Investor Relations section of our website at seic.com. This call is being webcast live, and a replay will be available on the Events and Webcast page of our website. With that, I'll now turn the call over to Ryan. Ryan?

Thank you, Brad, and good afternoon, everyone. This was a defining quarter for SEI. Q1 was not simply a strong start to the year. We believe it is emphatic evidence that the strategic and operating changes we have made set a new standard for what SEI is capable of delivering on a sustained basis. Q1 adjusted EPS totaled $1.44. That's more than a 20% increase from last year, driven by both top line growth and margin expansion. We also delivered $67 million of net sales events in Q1, including $57 million of recurring revenue and $10 million of professional services. This is an outstanding outcome. It exceeds our prior quarterly record by more than 40%. The scale and quality of these sales events reflect demonstrable progress in our core growth engines rather than a single market tailwind or discrete event. This distinction matters. It gives us confidence that what we delivered in Q1 is not an anomaly. During our Investor Day last fall, we outlined five strategic pillars that guide how we run the company, how we allocate capital and how we show up for clients. Q1 was decisive validation of that strategy and our ability to consistently execute against it. Let me walk through those pillars, how they showed up in Q1 and why we feel good about the trajectory ahead. First, we invest in proven great engines, most notably alternative investment managers and professional services. In IMS, demand for outsourcing remains strong, particularly among larger and more complex alternative managers. First quarter sales events reflect the initial phase of multiple enterprise-level mandates with first-time outsourcers, the "big deals" we've been talking about. These relationships are designed to expand over time as the clients deepen their partnership with SEI and as their fundraising and new product launches progress. These relationships also have the potential to grow into some of SEI's largest overall clients. The momentum in this business is incredible, giving us confidence that what we saw in Q1 is a starting point, not an end point. Professional services also continues to support growth. Clients are engaging SEI earlier and more strategically across a broader set of needs, which is improving win rates and increasing durability of relationships as evidenced by the previously announced Huntington Bank win. Second, reimagining asset management. I think we're actually now past the reimagining stage, and we are executing against our evolve strategy at pace. The strategy is showing meaningful results. Q1 represented our best quarter in several years with the improvement in flows that built through 2025 continuing into 2026. We saw progress across both the RIA and IBD channels where our strategy of delivering a broader SEI ecosystem to more scaled advisers is showing results. Engagement is improving every day, particularly with larger firms that value integrated solutions. Stratos integration is also well underway with multiple work streams focused on scalable infrastructure and building a centralized investment hub. We are encouraged by strong inbound interest from advisers seeking a long-term capital partner like Stratos. And in our institutional business, we remain on track towards net positive flows later this year while maintaining discipline around client fit and flow quality. Third is enterprise excellence. The partnership we recently announced with IBM reinforces and accelerates the direction we are taking around infrastructure modernization, automation and responsible AI deployment. As I have said in the past several earnings calls, we are applying AI and automation where it creates real impact, reduces friction, lowers unit costs and expands capabilities and services for clients and employees. These initiatives are translating into margin expansion with Q1 delivering higher margins at the consolidated level. Enterprise excellence is about running the company smarter, not just tighter and with increased accountability. Our margin expansion reflects real progress against that priority. We view AI as a force multiplier of time, and our execution of these programs will create additional capacity and opportunity for our employee base. Fourth, we continue to focus on boosting international returns. We are taking a more disciplined approach to how we operate outside the U.S. with clear accountability for growth, margins and capital deployment. In Q1, we began to see traction across both Professional Services and Asset Management with more than one-third of Professional Services sales events generated internationally this quarter. We also continue to build out our Singapore presence as part of our global expansion priority. This remains an important opportunity as we apply a more integrated enterprise-wide operating model across our international platform. Fifth is strategic capital allocation. In Q1, we repurchased over $200 million of SEI stock. Given the strength of our operating performance and long-term growth outlook, we believe our shares represent an attractive use of capital at current levels. Share repurchases will remain a meaningful lever within our capital allocation strategy, especially when market pricing does not, in our view, reflect the trajectory of our business. Beyond share repurchases, we also activated several investments targeted for later in the year, which are reflected in Q1 results. This was also our first full quarter with Stratos, which is deepening SEI's participation in the advice value chain and strengthening the overall reach and relevance of our platforms. We remain committed to disciplined capital deployment that balances reinvestment, M&A and consistent returns of capital to shareholders. Before turning the call over to Sean, a brief word on AI. We believe AI strengthens our value proposition and supports continued margin expansion and growth. It is a clear positive and accelerant for SEI. Our combination of regulated infrastructure, proprietary data, mission-critical processes and talent positions us well to apply AI in ways that can improve client outcomes and productivity. We have been proactive, investing over the past two years in AI-native capabilities, automation and AI-enabled expansions and extensions across our platforms. In parallel, we are selectively experimenting with more disruptive ideas that have the potential to substantially expand our addressable markets that we can serve. Importantly, clients are increasingly turning to SEI as a partner to help them think through responsible, scalable AI adoption in complex regulated environments. Stepping back, we believe Q1 represents a statement quarter for SEI. The quarter reinforces our confidence in the scalability of our business and the demand for our capabilities. But finally, I want to thank SEI employees for an outstanding quarter. The results reflect their focus, execution and daily and unwavering commitment to our clients. With that, I'll turn the call over to Sean.

Thank you, Ryan. I'll begin on Slide 4 and to reiterate Ryan's comments, SEI delivered an outstanding first quarter. On a GAAP basis, EPS increased by 20% and operating profit increased 21% versus Q1 of last year. On an adjusted basis, EPS increased 21% year-over-year. The sequential decline in adjusted EPS from Q4 was expected and reflects items we discussed last quarter. Most notably, a higher effective tax rate and lower investment income and performance fees from LSV, which tend to be seasonal in nature. In total, our tax rate, LSV and other below-the-line items drove a combined $0.15 headwind to EPS relative to Q4 last year. Adjusted operating income, which excludes these items, increased by 6% from the fourth quarter. This quarter also marks our first period reporting adjusted financial metrics. We believe this enhanced disclosure aligns our reporting more closely with market practice and provides investors with a more effective basis for comparability. For additional context, we have also included historical quarterly disclosures on an adjusted basis at the end of our press release. Turning to Slide 5. SEI's adjusted operating profit increased 6% sequentially and by 24% year-over-year. Performance was strong across the enterprise. Private Banking delivered a notable increase in revenue and, more impactfully, operating margins. This reflects continued execution in deeper client engagement as banks increasingly partner with SEI earlier and across a broader set of strategic and operational needs, not just investment processing. For example, we are now playing a more active role in client implementations, resulting in less lag time between contract wins and revenue recognition. In addition, we were pleased to announce the Huntington win during the quarter, which underscores our relevance and credibility in the regional community bank market, especially at the higher end of that segment. Our Advisors segment had a healthy start to the year, but the first full quarter of our Stratos partnership reflected in the Advisors segment makes comparison with prior periods challenging. Given our 57.5% ownership, Stratos is fully consolidated in our results. Stratos contributed nearly $20 million of revenue and $3 million of operating profit to advisers in Q1 before considering noncontrolling interests. Excluding depreciation and amortization, primarily acquired intangible amortization, Stratos generated $8 million of EBITDA at the consolidated level. Several planned transactions also closed during the quarter, so the underlying run rate contribution is modestly higher than reflected in Q1 results. Excluding the impact of Stratos, all of SEI's businesses delivered year-over-year revenue growth, operating profit growth and margin expansion. This performance reflects execution against the strategic priorities Ryan outlined earlier, so I will not reiterate those themes here. Turning to Slide 6. Consolidated operating margins were very strong, continuing the improvement trend we've seen over the past several years. At a segment level, the improvement in Private Banking margins, both year-over-year and sequentially reflects continued execution against the five-point plan Sanjay discussed during our Investor Day. Key contributors include Professional Services growth, increased adoption of our Asset Management offerings internationally and operating leverage against deeper engagement with our clients. For our IMS business, the modest sequential decline in margins versus Q4 was expected and primarily driven by the absence of the revenue accrual true-up we referenced last quarter, which accounted for approximately 150 basis points of the decline. The balance reflects onboarding costs associated with the substantial sales events delivered in the quarter. Advisors margins declined due to the inclusion of Stratos, which was weighed down by intangible amortization, as I just discussed. Absent the impact of Stratos, Advisors margins increased approximately 50 basis points relative to Q1 last year. At the consolidated level, adjusted operating profit margins improved versus both the prior quarter and the prior year on both a GAAP and adjusted basis. Slide 7 summarizes our sales events for the quarter. We debated opening the presentation with this slide, but decided it was best to remain consistent. Sales activity in the quarter was exceptional. Investment Manager Services led the business with more than $50 million of net sales events driven by the large enterprise mandates Ryan discussed earlier. Together, portions of these wins accounted for just over half of total IMS sales events. As Ryan noted, we expect these relationships to continue contributing to sales activity in IMS over the coming quarters and years. Before moving on from IMS, a brief comment on private credit and a broader market commentary. We are not seeing any slowdown in IMS demand. Our exposure to retail private credit, including public BDCs, currently remains limited and the vast majority of our private credit exposure is institutional. We continue to see strong pipeline activity across existing and prospective clients and with the launch of our registered transfer agency in Q3, we would expect our retail exposure to increase with evergreen fund launches. IMS led the quarter, but the strength of those results should not diminish the continued progress we have seen in both Private Banking and Asset Management. While the magnitudes differ, all three businesses are contributing positively to growth. Asset Management delivered its strongest sales events quarter in several years, driven by growing demand for ETFs, SMAs and our custody-only platform offerings. We are encouraged by the momentum in this business and expect continued progress as we expand our product lineup and distribution capabilities. Investments in new businesses generated approximately $4 million of net sales events, including engagements won in conjunction with Private Banking. This is another example of how our investment in Professional Services is supporting growth across the enterprise. Additionally, while not reflected in sales events, we successfully recontracted eight Private Banking clients, renewing an average contract term of approximately four years and retaining $34 million of recurring revenue with no material impact to run rate profitability. Turning to Slide 8. We saw continued asset momentum during the quarter. In Asset Management, growth was led by the Advisors Business. Last quarter, Ryan mentioned that we're accelerating Investment Management product launches in ETF, SMAs, models and alts. This quarter, we are seeing progress against those initiatives, driving approximately $1.5 billion of net inflows. Institutional investors experienced less than $1 billion of net outflows, almost entirely attributable to a large defined benefit client annuitization following the achievement of funding objectives. This outflow is a result of SEI advising a client to successfully meet their long-term investment objectives. Based on current pipeline visibility, we expect improved flow performance in this business over the balance of the year. Regarding market impact, SEI's portfolios remain highly diversified across equities, fixed income, alternatives, cash and geographies with a relatively higher weighting towards value which mitigated market headwinds during March. And market performance in April has been very encouraging. LSV had a strong start to the year with key products in Global and U.S. Large Cap outperforming benchmarks by single-digit percentages in Q1, more than offsetting market weakness in March and approximately $2 billion of net outflows in the quarter. Assets under administration and on platform increased 4%, driven by strong new business wins and lower mark-to-market sensitivity. Turning to Slide 9 and building on Ryan's comments on capital allocation. In Q1, we repurchased $208 million of SEI shares. While repurchase activity was elevated during the quarter, we continue to maintain significant capacity and intend to remain active buyers. We ended the quarter with $363 million of cash on the balance sheet and substantial financial flexibility. This balance sheet strength provides ample capacity to continue investing in the business while maintaining a disciplined and opportunistic approach to capital returns. Stepping back, the first quarter represents an amazing start to the year for SEI. We delivered meaningful earnings growth, improved margins and exceptional sales activity while continuing to invest to support the opportunities we are seeing across the business. The quality of our results reflect disciplined execution against the strategic priorities we outlined at Investor Day, and it reinforces our confidence on the path ahead. There are a lot of exciting things happening right now at SEI, and there's more to come. With that, operator, please open the line for questions.

Our first question comes from the line of Alex Kramm with UBS.

Just maybe starting with the strong sales in IMS. I was hoping you can give a little bit more color around, I think you said multiple first-time deals, so maybe a little bit more about how competitive these wins were? And then most importantly, you said the pipeline remains very strong. So is this a run rate that we should be expecting in terms of new sales? Or is this going to be lumpy? Yes, just a little bit more color on how this year could shape up here given the recent strength here.

Sure, Alex. It's Ryan here. Thanks for the question. I think we'll turn that one to Phil. And then, Phil, if you want to kind of unpack them in a couple of different ways, we can add on.

All right, that sounds great. Thank you for the question. A couple of quick highlights. By every measure, we had a phenomenal quarter. We won two of the largest and most complex alternative managers in the entire industry. It was an extremely competitive bake-off that lasted over a period of a full year. Both of those managers who are moving from in-sourcing to outsourcing, one of them is in the top five globally and the other is in the top 15 globally among alternative managers. So we believe there's meaningful room to land and expand, as we always do over the course of the next several years. Both of these clients will be in our top five. But these deals are in addition to what we would normally sell on a quarterly basis. So from a pipeline perspective, we're really strong. We are supported by the enterprise mindset from Ryan and Michael and Sanjay; we're all out in the market selling together and we're probably talking to 20 of the top 50 alternative managers right now. So we expect sales events to continue to trend up year-over-year. And one last fun fact. We are now the third largest fund administrator in North America. So we're moving up the league tables. Ryan, anything to add? Anything I missed?

No. I think you nailed it. The appetite for outsourcing increases literally daily and the more effective we have been in helping our firms deploy capital in different areas for their growth acceleration, it has increased the partnership and deepened our relationship. If you're looking from an average quarterly basis of sales, we would expect those numbers to continue to grow. Some quarters will be a little bit lumpier than others based on size of deals and timing, but the pipeline and the market and our positioning in this space is extremely strong.

Okay. And then maybe staying on the same topic, and you already addressed this somewhat proactively in terms of what's going on in private credit and private equity right now. But maybe we can go a little bit deeper there and not to lead the witness here too much, but we've seen in the past, for example, during the financial crisis on the hedge fund side and through other periods, there was a lot of outsourcing demand that suddenly came out of some of that stress and scrutiny around that space. So again, not trying to paint too rosy of a picture here, but just curious how the discussions have changed given what's going on? Do you think this could actually be maybe an accelerant to saying, "Hey we need to open the kimono a little bit, and this will be maybe one of the ways to do it." So yes, just curious about what you're hearing live?

So just to answer that real quick, this is Phil. Three of our largest clients are looking at launching flagship products this year. So we're not seeing any slowdown in demand, especially on the institutional side. And I do think if the market was ever to get a little bit more interesting or challenged, we're playing in the very, very large end of the market, and these clients are very strong at what they do. We're a little lighter on the retail side of the market, but we expect that to pick up when we launch our registered transfer agency solution over the course of the next couple of months.

I think it's also important to distinguish, when we talk about this business, 70% of IMS is driven by exposure to alternatives and 25% of that 70% is private credit.

Ladies and gentlemen please standby. All right we'll move on to the next person. Our next question comes the line of Jeff Schmitt with William Blair.

So in private banks, I know the margin can jump around, but it was up to 21% in the quarter. Professional Services growth is obviously helping. But how much of that was driven by the reduction in the workforce? Or were there any other one-time items that were in there?

So Jeff, can you hear me? It's Ryan.

Yes, I can.

Okay. So I'll open up here for Sanjay. The reduction in workforce had little to no impact specifically in banking. That was across the enterprise. Sanjay can talk about the execution against the five specific things that we discussed in New York in September, and he continues to execute against that quarter-over-quarter. Sanjay, do you want to highlight some of the specific things that drove the increased margin this quarter?

Yes, absolutely. That's a good question. If you look at the five-pillar strategy we talked about on September 18, 2025, two of those pillars were Professional Services and how we're going to market with new logos. We had significant Professional Services events in the third quarter and fourth quarter, and our revenue realization is much faster for those kinds of deals. In Q1, that's a reflection that we sold new Professional Services in third quarter and fourth quarter, and we realized that revenue. That is one dimension of it. Second, we are very judicious about how we're going to market and the new contracts we are signing are coming with a higher margin. So it's a combination of those. Our GCC initiative is playing a big role here. We are leveraging GCC. We have been judicious about our Software-as-a-Service expenses. When you combine all those things together, you see the margin improvement, and you will see further progress in the coming quarters as well. We are continuously making progress on all five pillars.

Okay. Great. And then it sounds like transaction multiples for RIAs have been on the rise. Is that the case? Are you seeing that in the market? And do you think that would be a hindrance for your roll-up strategy for Stratos? Or are there still good opportunities out there?

Michael, did you hear the question?

I didn't. Jeff said it seems like EBITDA multiples are rising for RIAs or IBD roll-ups. Do we think that's impairing our strategy with Stratos and their M&A strategy? No, not at all. We do see that the multiples on the high end have been increasing. If you look at scaled firms, a report recently indicated typical multiples between 22 and 24. Remember, we acquired Stratos at a much lower multiple than that. You do see it at the very high end for the scale players. But when you go into the marketplace where you're looking at the $100 million RIAs up to about $1 billion RIAs, there is still a reasonable multiple arbitrage opportunity between what you buy them at versus what they would then reprice at when they become part of a scale player. So we're not seeing any slowdown at all right now.

Our next question comes from the line of Crispin Love with Piper Sandler.

I had some feedback issues earlier in the call. Just one follow-up on the IMS sales wins, you mentioned two of the largest and most complex alts being part of those wins. Can you discuss any concentration on the wins in the quarter? I mean how much of the $51 million came from those two or just any other concentrations worth calling out from the sales?

I can take it. Crispin, those two deals were less than 50% of the concentration for the quarter. So not even half and we expect a lot more later.

Perfect. And then just on margins, 32% core margins in the quarter, commentary seems to be very positive. Can you just discuss the outlook for margins? Are you still expecting the high 20s range? Or could there be a new run rate here, maybe high 20s to low 30s? And then if there's anything one-time that impacted the core margin in the first quarter that's out of the ordinary?

Crispin, thanks for the question. The main driver for overall margin improvement was revenue growth. We're doing a much better job of managing our expense. We had nice sequential improvements in Private Banking and Institutional, but primarily margin improvement was driven by revenue growth. Our fixed costs are largely fixed. There are some variable costs, but for the most part, you're seeing appreciation of margin due to increased revenue. As we have sustained improvement in revenue and sales growth, we expect margins to continue to improve.

Our next question comes from the line of Ryan Kenny with Morgan Stanley.

Can you hear me?

Yes.

All right. Great. So on the AI theme, you touched on it in the opening remarks a little bit, but can you dig in a little bit deeper because I think there is a perception in the market that some of the businesses that you operate in, like fund administration maybe could be at risk of disruption or maybe you could see fee rates come down over time if you're expected to pass on efficiencies that you gain. So could you just dive a little deeper on how you view yourself as more protected from AI disintermediation?

Yes. We'll answer that in a few ways. Sneha is in the room and can provide some color. Productivity and efficiency through leveraging technology and process engineering has always been part of our strategy and how we maintain margin expansion or pricing levels relative to the competitive market. AI will be an accelerant to that. We see AI as a significant positive for SEI. We're not naive about the disruptive possibilities, but our ability to provide a full suite of capabilities and platforms to our clients positions us well. Clients are looking to SEI to harness these capabilities to expand services, drive scale and productivity. Organizations may try to displace parts of the offering, and it's our job to maintain the positioning across our full suite. Right now, we're very excited about the engagement we have with clients who want SEI as a partner for responsible, scalable AI deployment.

I'll add two elements. One is the ability for us to do more with the resources we have, which we're actively driving. We have an AI-enabled employee base using these tools in their day-to-day jobs. We're also delivering growth more efficiently. For example, we are winning work without adding proportional cost, which is helping margin expansion. We're also seeing clients ask SEI to help them become more AI-native, using our data cloud, professional services and security capabilities. On the IMS side, clients are asking what additional services we can provide as they grow that AI makes possible. We view AI as a net driver of growth for our people, our businesses and our clients.

And we get the question a lot on fee rate impact from AI. But as you mix shift into areas like alts, could your reported aggregate fee rate actually go up or stay stable? How should we think about fee rate in the various businesses?

Right now, we've seen a tremendous amount of stability in our fee rates and have been able to continue to win new business at premium prices and deliver premium service. We're aware of market change and are aggressively experimenting and innovating. Specific to your fee rate question, we haven't seen fee pressure; we're excited about our current position and do not plan to lessen our focus on maintaining it.

From an IMS perspective, we're not seeing a lot of fee pressure at all. What we expect from AI is faster NAVs, higher quality, and access to adjacent markets. Our clients are expecting that. We're in the higher end of the market and clients want things better, faster and perfect.

Our next question comes from the line of Alex Bond with KBW.

Another follow-up on the wins in the IMS segment this quarter and just the impact on the margin. In the past, you've spoken to the fact that through the onboarding processes for large wins like this, the IMS margin may dip slightly before reaching the full run rate once the implementations are completed. Can you just help us size up the timing and magnitude of these processes on the IMS margin over the next few quarters?

Sure. We'll convert these clients in a few different tranches over the next year or so. We expect revenue to increase quarter-over-quarter over the next 15 months. From an event perspective, we'll continue to land and expand as we always do. This year, revenue and expense will be flattish for those two deals, but we expect to return to normal margins for those two deals in mid-2027, and we'll start to see significant revenue in that time frame as well.

Got it. Great. That's very helpful. And then maybe just moving to the Professional Services suite. I think you all also made reference previously to expanding that offering within other areas of the business like IMS and certainly appreciate the new breakout there this quarter. Can you help us think about the opportunity set within IMS or other areas of business for the Professional Services offering maybe relative to Private Banking where you've seen the majority of sales for Professional Services to date? And then also maybe how sizable the international opportunities for Professional Services are given the strength that you all noted this quarter as well?

If you think about the breadth of capabilities in Professional Services, some of the things with the most momentum are the AI-enabled data cloud platform, where we help clients harmonize, ingest and create business intelligence from their data sets. Sanjay and his team pioneered that with banking and it applies in IMS and to larger RIAs and enterprise-scale organizations. Integration services continue to have significant demand, helping truncate lag time between signing and implementation because we take on more integration responsibility. We're also seeing demand from firms that want to become more AI-enabled. We had a strong quarter with our cybersecurity capabilities through SEI Sphere as well. That gives you a sense of the cross-segment demand.

Great question. On Professional Services, we are engaging with prospects earlier and changing our playbook. Rather than leading with platform change, we lead with enterprise capabilities, which creates different growth opportunities. Not many institutions look for platform change every year, but almost every financial institution needs professional services to keep pace with change. That presents significant opportunity for SEI. We're seeing that opportunity not just in the U.S. but internationally. About one-third of our Professional Services wins last quarter came from the U.K., and we're seeing that momentum build. I'm partnering with Michael Lane and Phil on how to expand that enterprise-level work.

Our next question comes from the line of Patrick O'Shaughnessy with Raymond James.

Another AI question for you. How are you guys thinking about AI potentially disrupting the wealth management advice industry broadly in terms of disintermediating your clients, whether it's AI-native software or something else?

Good to talk to you, Patrick. This topic dates back to the first robo-advisers 25 years ago. Robo advice didn't displace the financial adviser business. AI will supplement and make advisers more efficient. It will enable advisers to serve more clients in a more efficient way. There's a shortage of financial advisers and demand for advice is increasing. AI will be necessary to be more efficient and to serve more people. I don't see it disintermediating advisers. When people achieve a reasonable amount of wealth, they want to talk to a human. AI will supplement the advice that's given.

Our next question comes from Alex Kramm. We have a follow-up question from him. He's with UBS.

Just a very quick follow-up. I don't think this has come up, but can you just give a quick view on your integrated cash programs? There's been more noise around brokers, investment managers and some of their cash programs and new offerings; some large banks have talked about optimizing cash programs. So just wondering if you could outline—it's a relatively new program for you over the last few years—but how sticky do you think it is? And if there's any risk from those assets going out or that cash going out the door at some point?

Absolutely. We've been reading the same headlines about a large bank talking about optimizing cash across different programs. We're aware of the pressures on cash management programs from the prior year and rate changes. Our program is relatively young at about 2.5 years old and structured differently than many competitors. Ours was structured as a 1% operational cash fee, which was meant to cover operational expenses. It wasn't a percentage of a portfolio or a model. That's a differentiator. Many competitors have higher cash positions; the average balance can be up to 4%, whereas our aggregate balance is still less than 2% across our book. Because we are a diversified business, total cash revenue from our sweep programs is around 3% of gross revenue of SEI. Even in the Advisor business, it's still only 12% of total revenues. So while there is pressure on these programs, it's not new. Several companies have optimized cash programs that sweep amounts above minimums into higher-yielding investments. That's existed for years. We haven't seen an impact to date.

Thank you. Ladies and gentlemen, I'm showing no further questions in the queue. I would now like to turn the call back over to Ryan for closing remarks.

Thank you again for the discussion today. We appreciate and we are encouraged by the execution and progress we've seen early in the year. Have a great evening.

Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.