SEI (NASDAQ: SEIC) is a leading global provider of investment processing, investment
management and investment operations solutions. We help corporations, financial
institutions, financial advisors, institutional investors and ultra-high-net-worth
families create and manage wealth by providing comprehensive, innovative, investment
and investment-business solutions. Our investment management business solutions
include:
Investment processing outsourcing solutions for providers of institutional and
private-client wealth management services, including banks, trust companies,
independent wealth advisers and other financial services firms;
Investment management solutions for institutional investors, including retirement
plan sponsors, not-for-profit organizations and affluent individual investors;
and
Investment operations outsourcing solutions for investment management firms,
banks and investment companies that sponsor and distribute mutual funds, hedge
funds and alternative investments.
We began doing business in 1968 by providing computer-based training simulations
for bank loan officers. We developed an investment accounting system for bank
trust departments in 1972 and became a leading provider of investment-processing
outsourcing services to banks and trust institutions in the United States. Later,
we broadened these outsourcing services and began offering bank clients a family
of mutual funds, as well as investment-operations outsourcing services. We became
a public company in 1981.
We began to adapt these solutions, and develop new investment management solutions,
for selected global markets in the 1990s, including: investment advisors, retirement
plan sponsors and institutional investors, asset management distribution firms,
investment managers and affluent individual investors. Today, we serve approximately
8,200 clients in the United States, Canada, the United Kingdom, continental
Europe, South Africa and East Asia.
In each of these markets, we have combined our core competencies - investment
processing, investment management and investment operations - to deliver broader
and more strategic solutions for clients and markets. Today, we offer a global
wealth platform and investment services for private banks and wealth services
firms; a complete wealth platform for operating an investment advisory business;
a comprehensive fiduciary management solution for retirement plan sponsors and
institutional investors; a total operational outsourcing solution for investment
managers and a complete life and wealth solution for ultra-high-net-worth families.
We seek to achieve growth in earnings and shareholder value by strengthening
our position as a provider of global investment management solutions. To achieve
this objective, we have implemented these strategies:
Create broader solutions for wealth service firms. Banks, investment managers
and financial advisors seek to enter new markets, expand their service offerings,
provide a differentiated experience to their clients, improve efficiencies,
reduce risks and better manage their businesses. We offer business solutions
integrating technology, operating processes and financial products designed
to help these institutions better serve their clients and provide opportunities
to improve their business success.
Help institutional investors manage retirement plans and operating capital.
Retirement plan sponsors, not-for-profit organizations and other institutional
investors strive to meet their fiduciary obligations and financial objectives
while reducing business risk. We deliver customized investment management solutions,
as part of a complete solution offering, that enable investors to make better
decisions about their investments and to manage their assets more effectively.
Help affluent individual investors manage their life and wealth goals. These
investors demand a holistic wealth management experience that focuses on their
life goals and provides them with an integrated array of financial services
that includes substantially more than traditional wealth management offerings.
We help these investors identify their goals and offer comprehensive life and
wealth advisory services including life planning, investments and other financial
services.
Investment Processing
Investment processing solutions consist of application and business process
outsourcing services, professional services and transaction-based services.
We offer these services to providers of institutional and private-client wealth
management services, including banks, trust companies, independent wealth advisers
and other financial services firms. We also deliver these solutions, combined
with our investment management programs, to investment advisors and other financial
services firms that provide wealth management services to their advisory clients.
Application services are delivered through two proprietary software applications:
TRUST 3000® and the SEI Wealth PlatformSM (the SEI Wealth Platform or the
Platform). We own, maintain and operate these applications and associated information
processing infrastructure and facilities, and are responsible for customer support.
We design and develop enhancements to these proprietary applications. Through
our wholly-owned subsidiaries, we also provide business-process outsourcing
services including custodial and sub-custodial services, and back-office accounting
services integrated with these software applications.
The TRUST 3000 product is a comprehensive trust and investment accounting system
that provides securities processing and investment accounting for all types
of domestic and global securities, and support for multiple account types, including
personal trust, corporate trust, institutional trust and non-trust investment
accounts.
The SEI Wealth Platform provides a global, unified and scalable platform for
operating a wealth management business. This comprehensive solution includes
investment processing and infrastructure services, and advanced capabilities
to support wealth advisory, asset management, and wealth administration functions.
The Platform provides global wealth management capabilities including a 24/7
operating model, global securities processing, and multi-currency accounting
and reporting. Built around a client-centric relationship model, the Platform
has an open architecture and supports workflow management and straight-through
processing. We began delivering the SEI Wealth Platform to private banks and
independent wealth advisers in the United Kingdom in 2007 and to banks in the
United States in 2012. We have also implemented select groups of existing investment
advisor clients in the United States.
Investment processing revenues are earned as monthly fees for contracted services
including software licenses, information processing and business-process outsourcing.
Revenues are primarily earned based upon the type and number of investor accounts
serviced or as a percentage of the market value of the clients’ assets
processed. These revenues are recognized in Information processing and software
servicing fees on the accompanying Consolidated Statements of Operations.
Professional services revenues are earned from contracted, project-oriented
services, including client implementations, and are recognized in Information
processing and software servicing fees on the accompanying Consolidated Statements
of Operations.
We also offer transaction execution services through our proprietary software
applications. Fees are earned primarily from commissions earned on securities
trades executed on behalf of clients. These revenues are recognized as Transaction-based
and trade execution fees on the accompanying Consolidated Statements of Operations.
Investment Management Programs
Investment management programs consist of money market, fixed-income and equity
mutual funds, collective investment products, alternative investment portfolios
and separately managed accounts. Through our wholly owned subsidiaries, we serve
as sponsor, administrator, transfer agent, investment advisor, distributor and
shareholder servicer for many of these products. We distribute these programs
through investment advisory firms, including investment advisors and banks,
and directly to institutional and individual investors.
These investment products are used to formulate an investment strategy tailored
to meet the needs of different investors, taking into consideration their objectives
and risk tolerances. Our clients or our client’s clients are the investors
in these products. Investors typically invest in a globally diversified portfolio
that consists of multiple asset classes and investment styles.
We have expanded these investment management programs to include other consultative,
operational and technology components, and have created comprehensive solutions
tailored to the needs of a specific market. These components may include investment
strategies, consulting services, administrative and processing services and
technology tools.
Expand globally. Global markets are large and present significant opportunities
for growth. We have evolved U.S. business models for the global wealth management
marketplace, focusing on the needs of institutional investors, private banks,
independent wealth advisers, investment managers, investment advisors and affluent
individual investors.
We are guided by these fundamental principles in managing the business and
adopting these growth strategies:
Achieve growth in revenue and earnings. We seek to grow the business by providing
additional services to clients, adding new clients, introducing new products
and adapting products for new markets.
Forge long-term client relationships. We strive to achieve high levels of customer
satisfaction and to forge close and long lasting client relationships. We believe
these relationships enable us to market additional services and acquire knowledge
and insights that fuel the product development process.
Invest in product development. We continually enhance products and services
to keep pace with industry developments, regulatory requirements and the emerging
needs of markets and clients. We believe ongoing investments in research and
development give us a sustainable, competitive advantage in our markets.
Maintain financial strength. We adopt business models that generate recurring
revenues and positive cash flows. Predictable cash flows serve as a source of
funds for continuing operations, investments in new products, common stock repurchases
and dividend payments.
Leverage investments across the business. We create scalable, enterprise-wide
solutions designed to serve the needs of multiple markets, potentially offering
operating efficiencies that can benefit corporate profitability.
Create value for shareholders. The objective of achieving long-term sustainable
growth in revenues and earnings strongly influences the management of the business.
This philosophy guides corporate management practices, strategic planning activities
and employee compensation practices.
Investment Operations
Investment operations outsourcing solutions consist of accounting and administration
services, and distribution support services. We deliver these solutions to investment
management firms that offer traditional and alternative products. We support
traditional managers who advise a variety of investment products including mutual
funds, UCITS schemes, collective investment trusts (CITs), exchange-traded funds
(ETFs), institutional accounts and separately managed accounts. We also provide
comprehensive solutions to investment managers worldwide that sponsor and distribute
alternative investments such as hedge funds, funds of hedge funds, private equity
funds and real estate funds, across both registered and partnership structures.
Accounting and administration services include account and fund administration,
investment portfolio and fund accounting; cash administration and treasury services;
trade capture, settlement and reconciliation; trustee and custodial services;
legal, audit and tax support; and investor services. Distribution support services
may include access to distribution platforms and market and industry analyses
to identify specific product distribution opportunities. These solutions are
delivered by utilizing a highly integrated, robust and scalable technology platform
adapted to fit the specific business needs of our investment manager clients.
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