Good day, ladies and gentlemen, and welcome to the LPL Financial Holdings First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we will host a question-and-answer session and our instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. It is now my pleasure to hand the conference over to Mr. Chris Koegel. Sir, please begin.

Thank you, Brian. Good afternoon and welcome to the LPL Financial first quarter 2017 earnings conference call. On the call today are Dan Arnold, our President and CEO; and Matt Audette, our CFO. Dan and Matt will offer introductory remarks, and then we will open the call for questions. We ask that each analyst limit their questions to one question and one follow-up. Please note that we have posted our earnings release and supplementary files on the Events & Presentations section of the Investor Relations page on lpl.com. Before turning the call over to Dan, I'd like to note that comments made during this conference call may include certain forward-looking statements concerning such topics as our future revenue, expenses, and other financial and operating results; the regulatory environment and its expected impact on us; industry growth and trends; our business strategy and plans; as well as other opportunities we foresee. Underpinning these forward-looking statements are certain risks and uncertainties. We refer our listeners to the Safe Harbor disclosures contained in the earnings release and our latest SEC filings to appreciate those factors that may cause actual, financial or operating results or the timing of matters to differ from those contemplated in such forward-looking statements. In addition, comments during this call will include certain non-GAAP financial measures governed by SEC Regulation G. For a reconciliation and discussion of these measures, please refer to our earnings press release. With that, I'll turn the call over to Dan.

Thank you, Chris. It's good to speak with everyone on today's call. Last quarter I reviewed our key strategic priorities for 2017. As a reminder, we're focused on growing our core business and executing with excellence, which we believe will create value for our advisors business and for our shareholders. With that as context, I'd like to start my remarks today by sharing the outcomes that resulted from our focus on those priorities. The macro environment was favorable in the first quarter, which helped advisors attract new assets as investors sentiment improved and the rising markets increase the value of existing assets. In addition, the Fed rate hikes in December and March created more value from our cash sweep deposit. This macro environment was supported to our efforts to grow our core business. At the end of the quarter, total assets reached $530 billion up 11% year-over-year and 4% sequentially driven by organic growth in rising markets. Total net new assets were $2.6 billion and advisory net new assets were $6 billion both up from the prior quarter. Additionally, following our previously announced price reductions and improved functionality. Our inflows on centrally managed platforms increased as more advisors use this capability to drive scale in their practices. These business results include the impact of the client departures that we spoke about last quarter. Excluding those departures first quarter totaled net new assets were $6.5 billion and our advisor count increased by 95. These results reflect the continued success of our advisors in the marketplace and our progress in growing our core business. Let now turn to our financial results for the quarter. Gross profit was up year-over-year driven by increased revenue from cash sweep and transaction and fees. Our EBITDA grew faster than gross profit as we stayed disciplined on…

Thank you Dan and I'm glad to speak with everyone on today's call. Q1 was a good start to the year. Equity markets and interest rates were up and our business and financial performance continued to strengthen. We grew assets organically increased gross profit, remained disciplined on expenses and drove operating leverage. Along with our solid business fundamentals, we refinanced our entire debt structure and we restarted share repurchase. This translated into $0.52 of earnings per share in Q1. And these results include a loss on early retirement of debt related to our refinancing. Excluding that charge, EPS was $0.66 up 18% year-over-year. We were pleased to start the year with these business and financial results. Let's now go into our Q1 results in greater depth. Starting with brokerage and advisory assets. We finished the quarter at $530 billion, up $21 million or 4% sequentially driven by a combination of market and organic growth. Net new assets were $2.6 billion or 2% annualized growth rate up slightly from $2.5 billion in Q4 and net new advisory assets were $6 billion or an 11% annualized growth rate up from $4.8 billion in Q4. These organic inflows help demonstrate that our advisors are successfully growing their practices and that LPL is winning in the marketplace for new advisors. As a reminder, last quarter we noted that we expected some large departure related to institutional clients and clients separations. In total, we expected about $6 billion in mostly brokerage assets and 210 advisors to leave over the first half of 2017. During Q1 we saw $3.9 billion in assets leave related to those departures. This included $1.1 billion of advisory assets and $2.8 billion of brokerage assets along with 118 advisors. Excluding those departures net new assets were $6.5 billion with advisory a…

[Operator Instructions] our first question will come from the line of Conor Fitzgerald with Goldman Sachs. Please proceed.

Just want to kick it off with a question on your other asset base fees. I know you talked about how higher asset levels were helping drive to growth this quarter. Could you talk about the core trends you're seeing in this revenue line? And then on that point, I know you [indiscernible] mutual fund broker IRA account last year. Can you just talk about where you are in this process and how we should think about this product, helping you grow your [indiscernible] revenue?

Sure I'll take the first, I think Dan will probably take the second one, mutual fund. I think on other aspect asset base and this is primarily sponsored revenue. So I think when you just look at the quarter highlight two things. First one that we talked about and you observed the average billable assets are going up [indiscernible] increase. The other thing just to highlight is the large attrition we talked about is primarily brokerage related and it shows up in the commission lines as well as this line. If you have a little bit of offset in that growth. The way I think about is, it's really connected to the brokerage side of the business and where you see the growth there mostly.

And just on the mutual fund, only solution. We continue to work on the solution we're excited about its capabilities and how we believe it will help the advisors differentiate themselves going forward with respect to supporting commission based mutual fund business and as we prepare for that work, we just got to be thoughtful about how we introduced that into the system in the spirit of helping our advisors manage through change and also some of the uncertainty around when the fiduciary rule may go into effect or more specifically the DOL rule. So we haven't landed on any specific dates relative to the availability of it, but we continue to be excited about offering it.

That's helpful thanks and then just on quarter for net new asset growth. Just any commentary on some of the particular areas you had success and then maybe a bigger picture question, but I know one of the big themes at the Investor Day last May was between your focus on growing the core business and kind of getting back on your front foot, just wondering if kind of the posturing or [indiscernible] attitude from the companies is maybe helping to inflect growth upward.

And I'm sorry, what was the first part of your question. I got the second one, what was the first part?

Yes just any area of particular success you had recruiting from or kind of competitor step.

Great, thank you. So let me hit the recruiting one first then I'll go back and talk about the macro growth question. So on the recruiting front we continue to see good advisor movement across what I would call the independent and employee based channels we typically recruit from, so that's encouraging if you think about just the independent space, the typical. Advisors that's [indiscernible] so we see good movement across the entire spectrum and certainly this was helpful for delivering good solid both fourth quarter and first quarter results from a recruiting standpoint. So we feel good about the momentum that's represented in those two quarters. So hopefully that helps you with the question around recruiting. I think with respect to your bigger question around our focus on growth. Well clearly that is one of our priorities and our strategy and we got good alignment across the organization around how we do that, that is ultimately in recruiting and adding new advisors to our business from an organic standpoint, that's supporting and helping our existing advisors grow their business and then continuing to create a compelling value proposition such that we retain the advisors that we support and I think no doubt being clear about what it is, that we're focused and how we go about doing those three things is certainly improving the execution behind that aspiration to achieve that. I think we also see to complement that organic growth opportunity, we continue to see opportunity potentially with the change in the marketplace and then the environment opportunity for potential consolidation and thus we feel like and believe we're well positioned to capitalize on any opportunity we see that will create shareholder value to complement those organic growth aspirations. Let me pause there and see if that helps you.

That does, thank you and appreciate taking my questions in your monthly disclosure.

Thank you. Our next question will come from the line of Steven Chubak with Nomura. Please proceed.

So wanted to start with a follow-up for letting to one of Connor's earlier questions about the mutual fund only brokerage accounts and I know it's a new initiative you're looking to introduce, but also you can maybe just help us size the opportunity from bringing those mutual fund assets on platform there sitting with those third parties and in particular just try and parse the benefit that we expect from higher non-cash asset base fees versus the benefit of having access to those cash balances once they're cost to these with LPL.

Sure, Steven I'll start with that one. I think high level way to think about it is we've got little bit north of $50 billion and mutual fund assets held direct. If you look at the ROA of the brokerage side of the business it's in the low 20s. I think our custody business would be north of that and the direct business would be south of that. So I think the opportunity is, overtime that $50 billion moving from just under 20 to just over 20. Is a directional way to go about it? So hopefully that helps.

[Indiscernible] to speak about the potential benefit you get from having access to that cash, is like 5% of those balances or off that $50 billion are reasonable expectation. And maybe how long would it take for you to fully onboard the $50 billion, like what's your reasonable timeline?

Yes Steven, I think when you think about the difference in the ROA, I think having custody of the cash is probably the primary driver or one of the primary drivers, so how many more precision for you than other than that, that's the primary driver, in timing we'll have to see and I guess Dan discussed, we don't have specific dates on that yet, but I think timing we'll just have to see.

Got it and just one more on the deposit rate guidance looking at the ICA deal [ph] this quarter? I was hoping you could actually parse some of the individual components that you were speaking to that drove the positive surprise. So how much was the function of the lower deposit rate versus the frontloading of the LIBOR increase and maybe what's your expectation at least in the near term given some of the competitive dynamics you're seeing? In terms of what's reasonable deposit rate expectation? I know you talked about 50% longer term, but just over the next couple of rate hikes, what should we expect?

Yes, I think when we look at the quarter's results right when sitting here last quarter we're looking in the low 80s and came in at 88 and obviously we were assuming the current interest rate environments, we did have a benefit of another rate hike. And I think probably the primary thing I'll point you to is things are not just indexed to Fed funds, we've got to 1-month and 3-mont LIBOR and then I just emphasized the team is constantly managing the portfolio. So in the level of precision of low 80s versus upper 80s there are a lot of different things going on. I think on looking forward on deposit rate. I mean we continue to think 50% rate or 50% pricing coefficient. In hindsight we'll end up being conservative, so I think that's where the $40 million EBITDA per rate hikes that walk through and the prepared remarks comes from. We think that will be conservative but we don't know exactly where, so I think it's probably the best thing I can point you to.

Got it, okay and just quick follow-up, the delta between the growth in the DCA versus the ICA? Can you speak to what drove that dynamic or that discrepancy?

I'm assuming you're talking about on the rates.

Yes, just on the rate size like 23 basis points on the DCA versus the ICA which was a little bit more muted?

I think the key thing to remember there is, that the DCA is a fee per account, so just movements and the balances themselves it doesn't change economics, it will change the way that we display the rate and the balances got a little bit smaller there. So it is just the nature the DCA accounts is going to be a little bit more volatile when the economics are expressed in basis points, that's all it was going on.

Got it. Thanks for taking the extra question.

Thank you. Our next question will come from the line of Christian Beloof [ph] of Credit Suisse. Please proceed.

So my follow-up, capital allocation. Just curious in your commentary around well it sounds to me like buyback is an increase preference [indiscernible] buyback's excess capital. But just curious how do you think about M&A and read merits really grow in the franchise here, given you have increased financial and competitive strength and decision M&A to grow the business as opposed to I guess financial [indiscernible] share count.

Yes, well I'll start and I think Dan will - can jump in here. I mean, I think the way we view M&A is when you think about our deploying capital and help drive our strategy there is lots of things that we're doing, I'd call just growth investments whether it's transition assistance to drive organic recruiting or investing in technology to drive growth overall and we see M&A, if there is M&A that make sense it helps move that strategy along then I think we would do that. I mean, I think that's our overall view, is if it could help move the strategy forward. We would look at it.

I think just the only color I would add to that is, that we would tend to prioritize those growth opportunities first from a deployment of capital given the appropriate shareholder returns and then complement that with the return of capital and so I think the strategy we have around positioning balance sheet set up to do that well.

Okay, thank you that's it from me.

Our next question will come from the line of Devin Ryan with JMP Securities. Please proceed.

Maybe back to the net new asset observation obviously another nice quarter there. Just curious, what you guys are seeing in retail customer engagement. Right now, do you feel like you're maybe winning more wallet [ph] from our clients or they're just more engaged or more invested right now, maybe even kind of post-election time period or any other anecdotes you can share just to give us some perspective of how retail investors are feeling?

So let me take a stab at that and I'll give you probably more of a macro answer without being overly precise on numbers I don't specifically have, but I think you're right certainly the macro environment improved, which we saw a strong correlation with investment sentiment and that created more opportunities for advisors to put money to work and I think you're right, it comes from both existing money that many not have been invested in the market and then also it comes from putting or gathering new assets and putting those to work. So I definitely think that is a contributor to overall flows in Q1. The second one is, we're actually seeing more movement of assets because of some of the changes in the industry and our advisors are getting opportunities associated with the movement of those assets and again whether it be environmental things that are changing, whether it be regulatory changes. Policy changes occur at one firm that create a shift or change and that creates an opportunity for advisors to provide a different solution and thus ultimately gather those assets and put it to work. So I think those are two dynamics that we're seeing in our existing advisor base, that are supporting and helping the growth and inflows of assets in Q1.

Got it terrific and then just another one here on the ICA. Maybe just a mechanical question, so the 100 basis points kind of guidance of next quarter. Maybe that seems a little bit conservative to us if the deposit cost don't change and if you go back look at kind of where you were in the third quarter last year. I think you were 62 basis points there. We've had two fed hike since, I think LIBOR is up just as much. So I'm just curious, is it timing or maybe more could flow through, I know there is obviously a lot of contract and so it's complicated but just trying to think about what we might be missing and kind of basic mechanics of the step up.

I think if you start with just where we've seen, just starting with Fed funds, right so Fed funds was 70 bps average in Q1. It's been hovering around 90 right now, so to think as a starting point we're talking about 20 and then we've got things indexed to one month and [indiscernible] LIBOR like I talked about as well as some fixed rate balances. So just even at that point we would expect something less than that and 88 to around 100 is 12. So those are the key things that bring it down, so maybe just keeping in mind I'm talking about where the interest rate environment is right now and Fed funds is up 20 off to Q1, not 25 so far.

Great. I'll hop back in the queue. Thanks guys.

Thank you. Our next question will come from the line of William Katz with Citigroup. Please proceed.

Thank you very much. And also thanks so much for the extra disclosure very helpful. As you think about what's happening on the mutual fund size of the business, it seems to be an evolution of what that business is going to look like over the next several years. How do you sort of see if any changes on the point of sale economics for your franchise as the magic business looks like it's facing tighter margins and lower fees rates? And I guess the ultimate questions, would you see any type of pressure on platform fees or just any of the trailer economics here as they adopt to a low profit model as well.

Bill, thanks. I think the whole industry has to continue to assess the impact of lower fees and where that impacts or effects the overall ecosystem and so, I think we're all constantly evaluating what those potential impacts could be and we continue to work with product sponsors thinking through that and exploring kind of creative ideas around, how do we best adapt to an environment that has pricing pressures or price points that are going to change overtime. And so it's hard to tell exactly where that may land, I think with respect to the mutual fund landscape. We believe offering mutual funds both cross advisory and brokerage solutions is still going to be relevant, we still want to make sure that we create and maintain that choice and we want to design those product such that they are ultimately appealing for the end investor and create opportunity for the advisor to put that to work. If those require modifications to the overall pricing to ensure that you get good value for what you're paying for, I think that's something that we'll have to work through and I would be remiss if I got out over my season [ph] so it's just going to be exactly expedite. I do think the industry will have to go through and continue to work on that and then I think you see some of the product sponsors already beginning to make strategic moves that are reflective of trying to bring down the differential between the cost of active management and it's after cost performance relative to other options and alternatives and I think that's a good indication of the ecosystem needs asset managers and it needs distributors and collectively they've got to work together to continue to deliver good products to the end client.

Okay that's helpful color and then my final question coming back to capital management for a moment. In the past, I think you've expressed some channeled thoughts on pricing expectations from potential sellers. Just wanted to give us an update on within the context of maybe an M&A pipeline whether you're in early stage discussions, middle stage discussions and how are some of the big ask spread playing out between what you really want and maybe purchase something adverse, what the expectations are?

Bill, I think I just emphasize the way we think about M&A is that's going to help move the strategy forward. We don't have any comment on where we are with anything or any price or roles other than it's got to drive value for shareholders. And the way you drive value for shareholders is the right price, based on returns, it doesn't move the strategy for it. So those will be your guiding principles on any place that were deploying capital.

Okay, thanks to hear my questions.

Thank you. Our next question will come from the line of Anna [indiscernible] with KBW. Please proceed.

I wanted to piggyback on one of Bill's question on kind of what's facing the fund sponsors the challenges facing them. When you talked about enhancing advisor solutions you mentioned lowering third party manager as a benefit to your client, so is that kind of the circumstance for the fund sponsors expecting a lower rate to be part of your managed program.

The context around that were the investments that we continue to make in our centrally managed platforms, we've got several different platforms for example model wealth portfolios or MWP, we also have a separately managed platform of which we continue to work on enhancing both the capabilities within that platform as well as the pricing in it and one of the ways of which to reduce the overall cost of that is work with the managers that participate in that platform and what they ultimately charge to the end investor. So if you're an equity manager and you charge X you might decide to continue to work on that platform, you're going to charge X, 0.90% of X and we ultimately then will pass that through the end investor and it's just a way to create more appeal for that centrally managed solution both through capabilities and lower price. So that's the concept that we're talking about.

Okay understood, is there any kind of give up on LPL's part to help kind of degrade some of that lower fee for the asset manager.

Well I think that you've seen a great example of that through what we do in the last couple of years within MWP, where we've reduced platforms fees and strategist fees and we worked with the other strategist, the third party strategist to lower their fees. So yes I think you're seeing a collaborative efforts across what we think are really important platforms that add great value to our advisors and the investors and focus on working together to lower those costs, so they are more appealing and good leverage points for our advisors. So MWP is a great example of that, our separately managed platform that I'm describing, we would take that same approach in working through that.

Okay great appreciate the color and for my follow-up. Just wanted to check in on something it looks like product sponsors on the platform were down a bit year-over-year and I was just wondering if that's part of any conscious effort of LPL's part to maybe reduce the number of offering or if it's just function of product sponsors dropping out for some reason.

Yes, I'm not sure the exact number you're referring to, so let me just speak at a macro level and then certainly Matt you add any color that you can around that, but I think if you look at the holistic landscape of product choice, right certainly as we think about the regulatory environment changing or potentially a fiduciary rule being offered you begin to have to look at the set of choices that you make, choice can create sometimes conflict and what we're trying to do is, make sure that we can maintain choice but also the manage the risk around that choice. And so instead of offering 150 different fund families you began to think about how you offer more procured or managed choice, such that you're still creating great choice in making sure that your advisors have access to the products and solutions they need to serve and support the investor, but that you can do it in a way that has a different risk profile and quite frankly has a much better way to manage that risk, so it's a healthy balance that we got to strike and work through and I do believe that's going be a macro trend in the independent marketplace as we move forward and some of that maybe occurring already in the macro marketplace, but I do think that's a general trend, but I can't speak to the exact number you're referring to.

Okay, appreciate the color. Thanks so much.

Thank you. Our next question will come from the line of Ken Worthington with JPMorgan. Please proceed.

First, you guys reported LPL's to ties with I think large number of these turnkey asset management platforms including like investment in others. And it seems to me, it feels like you're in sourcing services for your advisors that maybe was previously outsourced through these [indiscernible]. Can you talk about little bit about what you're doing here and maybe what's the opportunity is for LPL?

I think, it's the same premise that I was just describing as you think a world where you're trying to be more thoughtful about the choice that you provide and the value it creates in exchange for the risk that it creates, I think you get back to this notion of what is the right amount of curated choice that ensures that your advisors have the capabilities they need to meet their clients need and that's all that we are doing. We had a number of different third-party asset managers that were part of our advisory platform and what you see us doing is just is assessing those that we had very little, little assets with that it didn't create a whole lot of value at the end of the day in exchange for the risk that they created in terms of making them part of program. So what you see us doing is just getting down to a smarter number of third-party asset managers or TAMs that participate on our advisory platform and that's all that we've done and I think if you look at the overall assets on our advisory platform, these third-party asset managers make up a much, much smaller proportion or percentage of the overall advisory assets. So the significance of that or the upside of that is not great. It's actually more just about being smarter about how you offer choice and being able to execute and support those sets of choices and manage the risk.

Okay, makes total sense. I think Connor may have asked this, I'm not quite sure. I'm going to try it anyway. Other revenue was up a bunch this quarter $19 million, I guess $10 million last year. I believe like $1 million of that was from bunch of the departures. What was the driver of the rest of the bump and is it recurring?

So you the $1 million correct. The rest of it is the mark-to-market on the advisors deferred comp and that's offset in the commission and advisory expense. So it doesn't fall at the bottom line, just mark-to-market noise. So if you're thinking about, I'd look at Q4 is a better indicator of that item, just knowing you can move up and down with the market.

Okay, awesome. Thank you very much.

Thank you. Our next question will come from the line of Chris Shutler with William Blair. Please proceed.

It sounds like you expect to have client works fully rolled out by the end of the year, so that I guess would imply the branch net will gone by the end of the year, is that right and what kind of cost could we see fall out of the P&L as a result?

So I think that you're right, we're going through the change management curve in terms of helping advisors move from branch net to client works and I think to the extent that we're completely ready to transition everyone off of branch net onto client works. Certainly that creates an opportunity for simplicity in terms of managing systems and support of those overall systems. With respect to the economic gain associated with that, I'm not sure how material that is and I don't have optics on that today. At the end of the day, some of what you're retiring is being replaced by new systems and new hardware and things of that nature. So I'm not sure that there is great financial windfall associated with that. At the end of the day that's more about creating much, much better functionality for advisors and the upside that we get from that comes creating a better experience for them more efficiency in their practices, which ultimately is rewarded with giving them more time to grow their practice. So that's kind of how to think about that trade financially, if you will. And I think with respect, when is branch net completely gone. I don't know that we have an exact date on when that's officially retired but think where the advisors are spending 95%, 99% of their time, we would yes like to have them using client works by the end of the year almost exclusively.

Okay, thanks and then I guess in a big scheme of things it's relatively small, but we saw there was a bank client departure that occurred this month and supposedly according to press reports at about $1 billion of wealth management assets. Just curious in that instance, was it driven by the LPL or the bank and probably more importantly if you go back to, well you talked about last quarter and this is additional departure. Where are you in the process of kind of evaluating your less profitable relationships?

Let me start with the second part of that question, first. Again as we said, I think we've challenged ourselves to become more seasoned at how we think about supporting and managing our clients and having much better metrics about those relationships and then making sure that we allocate and deploy resources around those relationships that tend to use our services more heavily and create and drive much more value for our clients, investors and shareholders. And so at the end of the day, you're going to get a situation where some clients aren't always aligned operationally maybe economically or strategically and you got to ultimately think about, what you do different about the relationship going forward and I think in some cases that might end up being situation where you separate from that client, that said it's not, we don't see that as a systemic effort that's going to create a significant amount of transition off the platform, but rather we'll handle that on a one-off basis and so as we season, our overall metrics and as we think about managing those relationships, I think it will put us in a good position of being smart about how to handle those one off scenarios as they come up. So don't look for some big bang in terms of some big transition that's going to create a step function change in that overall effort. I think on the second part of your question of course we win clients quarter-to-quarter and we lose some clients quarter-to-quarter as we've said, we maintain about 95% retention of our client, that said sometimes client separate from us in the case and in the reference of any specific institution required at least, we typically don't comment on those specific departures, but think about those as more just normal attrition. If that's helpful.

Makes sense. Thank you.

Thank you. Our next question will come from the line of Chris Harris with Wells Fargo. Please proceed.

So guys have made clearly a lot of changes to the platform along with pricing changes for various products. I'm just wondering where are we in the evolution of all that. Would you say most of the heavy lifting is been done at this point or? Could we still see quite of lot of changes to come as it relates to your business in your platform?

I think we always start from a strategic standpoint and we're constantly monitoring the environment, the competitive trends and assessing how we think about positioning ourselves best strategically to create value for advisors and for our shareholders and position us to win and as you go through those sets of considerations, certainly the pricing lever is one that we often consider as you said and I think your point to, your reference what we've done with MWP over the last couple of years is a great example of that. And I think as we think about moving forward, we continue to evaluate where we may still have opportunity of which to use pricing as a lever of which to drive growth then ultimately generate a return on any pricing adjustment that we would make. And so we will be thoughtful and disciplined about that approach and we continuously assess and monitor the marketplace which drives how we think about that.

Okay and quick follow-up question for Matt on expenses. You referenced you wanted to really focus on driving operating leverage this year. If we were in a position where we're getting multiple Fed rate hikes and you know let's hope that happens. But to the extent that happens, might that change your approach to expenses at all. I guess I'm just wondering if you guys might be inclined to invest a little bit more of that back in the business or is that perhaps not the case and it's really just a lot of that's going to fall at the bottom line.

I mean I think I just emphasize the near term. Right? I think we're comfortable with our guidance on core G&A, $710 million to $725 million. I think we are overly focused on the strategy of growing the business and executing with excellence and that executing in excellence includes delivering operating leverage. So we think that's extremely important it's part of our strategy and I just emphasize what we're comfortable with the spending that we prioritize this year and feel good about it.

All right thank you.

Thank you. Our next question will come from the line of Michael Cyrus [ph] with Morgan Stanley. Please proceed.

On your slide deck you mentioned redesigning investors statement, just curious what changes you or contemplating and also there is been some chatter in the industry about breaking out fees that are embedded in the [indiscernible] for robotics is that something you're considering or something that you may continue in future.

Yes, so on the first part of the question. That's right, we do continue to work on how to improve the investor experience. One of the ways that we see doing that certainly to improve how we communicate with those clients on a monthly basis through their statement and we do believe there is a great room for improvement across the industry relative to how we communicate with that advisor and help them understand sort of that life journey they have around their investments and how they relate to them, trying to achieve their goals and objectives and so we are going to go on a journey to improve and enhance that overall reporting which includes that statements which also includes ultimately enhancing the digital experience which they engage with us. And so the first step in that will be an enhancements to the statements that will be out directionally in the third quarter and so I think you'll see a variety of different changes that are going to occur on that and not to drill down into any of them specifically. It will be a pretty significant design of the statement all with respect to creating greater usability of it and readability and understanding on the part of the investor.

Okay and then on feature advisor. I think you had a partnership with [indiscernible] announced a year ago or so can you just update us on how that's progressing in terms of the rollout and the timeframe there, any sort of success factors you.

We call that guided well portfolios as how we branded it and it is an automated advice solution of which our strategy was to partner with them and then integrate the workflows into our overall systems both for operational efficiency and good risk management, hygiene and also a good experience for the advisor and the investor in using the tool. We've gone through multiple iterations of working through integration. We're in pilot right now with it and getting good feedback and learning's from that. Again our target rollout for that is directionally towards the end of this second quarter. So assuming we continue to progress on the trajectory that we see right now.

Great, thanks for taking my questions and disclosures.

Thank you. Ladies and gentlemen, this concludes our question-and-answer session for today. So now it's my pleasure to hand the conference back over to Dan Arnold. President and Chief Executive Officer for closing comments and remarks. Sir?