WDR: Waddell & Reed Financial Message Board

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Non-Tech : WDR: Waddell & Reed Financial

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From: drsterling	7/11/2001 12:49:35 PM
	of 3

WADDELL & REED FINANCIAL INC. (WDR- $29.76) rated a BUY Selling Retirement Savings to Middle America INITIATING COVERAGE Friedman, Billings, Ramsey & Co., Inc. (FBR) is initiating coverage of Waddell & Reed Financial Inc. (WDR), a mutual fund company distributing funds through a sales force that represents the company on a virtually exclusive basis. NO INTERMEDIARY WDR bypasses the intermediaries by distributing funds directly through its proprietary sales force. This allows WDR to make money accumulating assets, while competitors incur large expenses to pay for commissions and advertising. STICKY ASSETS WDR’s funds stay with the company for a long time. The average account duration is 14 years, as compared to 4 years for the rest of the mutual fund industry. A focus on IRA and loaded funds, in combination with and individualized sales process helps asset retention. HIGH PROFITABILITY OF ASSETS The combination of high retention and healthy fees makes a dollar of assets generated by WDR three times more profitable than the industry average. A RETIREMENT SAVINGS FOCUS More than 53% of WDR’s funds are in IRA and roughly 71% of new sales are generated from this category. The growth rate of IRA savings has been roughly double that of the 401(k) market. MIDDLE AMERICA WDR focuses on Middle America, where competition is low, and the need for advice is the most. WDR is growing by increasing its sales force and increasing penetration into existing accounts. RATING WDR A BUY FBR is rating WDR a BUY and a 12-month price target of $44 a share.

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