Ladies and gentlemen, thank you for standing by, and welcome to the SEI Second Quarter 2015 Earnings Call. At this time all participant lines are in a listen-only-mode. And later there will be question-and-answer session. [Operator Instructions]. As a reminder today's conference is being recorded. I’d now like to turn the floor over to Al West, Chairman and CEO. Please go ahead.

Thank you and welcome everybody. All of our segment leaders are on the call as well as Dennis McGonigle, SEI's CFO, and Kathy Heilig, SEI's Controller. I'll start by recapping the second quarter 2015 and then I'm going to turn it over to Dennis to cover LSV and the investment in new business segment. And after that each of the business segment leaders will comment on the results for their segments. And then finally Kathy will provide you with some important companywide statistics. And as usual we will field questions at the end of each report. So let me start with the second quarter 2015. Second quarter earnings increased by 4% over a year ago. Diluted earnings per share for the second quarter of $0.51 represents a 6% increase from the $0.48 reported for the second quarter of 2014. We also reported a 6% increase in revenue from second quarter 2014 to 2015. Also during the second quarter 2015, our non-cash asset balances under management increased by $5 billion. SEI's assets grew by $2.8 billion and LSV's assets grew by $2.2 billion. Finally during the second quarter 2015 we've repurchased 1.3 million shares of SEI stock at an average price of $48 per share. That translates to over 61 million of stock repurchases during the quarter. Now turning to sales, our net new revenue sales during the quarter were strong. Of the $45.2 million of net new sales events we generated, $32 million are recurring revenues. The large amount of revenue sales during the quarter includes the net revenue increase we expect from the sale of a large U.S. bank. Each of the segments heads will address their second quarter sales results and Joe Ujobai will also cover our sale of a large U.S. bank. We continue to make investments…

Thanks, Al. Good afternoon, everyone. I will cover the second quarter results for the investments in new business segments, discuss the results of LSV Asset Management and discuss a couple items of note for the company during the quarter. During the second quarter of 2015, the investments in new business segment continued its focus principally on two areas, the ultrahigh net worth investors and the continued development of a web-based investment services offering, coupled with the use of mobile technologies. During the quarter the investments in new business segment incurred a loss of $3.4 million, which compares to a $3.3 million loss during the second quarter of 2014. There has been no material change in this segment. Regarding LSV, our earnings from LSV represent our 39.3% ownership interest during the second quarter. LSV contributed approximately $38.3 million in income to SEI during the quarter. This compares to a $34.5 million contribution for the second quarter of 2014. During the quarter asset balances at LSV grew by approximately $2.2 billion due to increased market valuation, and net positive cash flow. Revenue at LSV for the quarter was approximately $117 million of which little over 10% was performance related fees. One item I wanted to mention that occurred during the quarter was an approximately $1 million charge we took to fully write-down our investment in Galpo [ph]. We no longer carry any remaining value for this investment. I also wanted to let you know that there is a possibility that we will be accelerating by one year divesting of a tranche of equity options. If so this would result in an increase of approximately $2.5 million in option expense spread over the third and fourth quarters of 2015 with a reduction of a similar amount in 2016. I will now take any questions you have.

[Operator Instructions]. Our first question comes from the line of Chris Donat. Your line is open.

Hey, Dennis. Thanks for taking my question. Just on the acceleration of the options can you give us, tell us what drives that and when you expect to make that decision? Is it sort of a function of the large contract you signed or is it something else going on?

No, I mean our options vest on specific earnings targets and so as our estimates around when we expect to achieve those earnings targets change then we make a change in the amortization life of the option expense and so we just have one tranche of options that were granted in prior years that we think might move up a year. It really has nothing to do with…

Understood, okay thanks.

You are welcome.

Next question comes from the line of Chris Shutler. Your line is open.

Hey Dennis how are you?

Good Chris, yourself.

Good. Could give us the flow number for the quarter?

The flow of assets?

LSV, the breakout of market appreciation versus net inflows.

Sure they were $500 million of net cash flow, positive net cash flow, about $1.7 billion of market appreciation.

All right great. And then just want to confirm you said the performance fees were 10%?

Little over 10% yeah.

Okay great, thank you.

You are welcome.

There are no further questions in queue.

Thank you, Dennis. And I am going to turn it over to Joe Ujobai to discuss our Private Banking segment.

Thank you, Al. As you all know we have focused our sales efforts on securing a large U.S. SEI wealth platform client. This is important to future market acceptance and continued progress towards scale. It’s with great pride today I am announcing that Wells Fargo Bank will adopt the SEI wealth platform. SEI and Wells Fargo have an extensive history as partners that spans over 40 years. Wells Fargo was one of the earliest adopters of SEI’s leading industry solution, TRUST 3000 and that’s grown their wealth management business on TRUST for four decades. Wells Fargo, one of the largest U.S. wealth managers will join over 30 signed clients committed to utilizing the SEI wealth platform as the core infrastructure to power and grow our modern wealth management business. Client confidentiality prevents me from discussing details of any single agreement. However I will share some elements of the Wells Fargo sale. In late June they signed a long-term SWP contract and implementation agreement. Wells Fargo selected the SEI Wealth platform to support the future of wealth management. Wells Fargo will consume SWP in a Software-as-a-Service model. In delivering SWP to Wells Fargo we will now offer two business models to the marketplace; software-as-a-service generally for the largest firms and full service outsourcing to other market segments. As this is the first large SWP client we expect a multi-year conversion due to the scale and technological integration work required. In the meantime we will earn one time revenue of professional services related to the project and custom programming. The commercial agreement is in line with other SWP relationships and our win-win pricing model. Turning to second quarter financials for the private banking segment; quarterly revenue of $115 million was up slightly from the year ago quarter and up 3% compared to…

Your first question comes from the line of Glenn Greene.

Hi, Joe. Good afternoon and congratulations on the Wells Fargo win.

Thanks, Glenn.

I'm going to ask a question, I'm not sure how you going to answer it. But so, if I think about the net sales in the quarter, the $29 million, $14 million incremental, obviously a big part of that is the large bank win. Is it all encompassing or is it sort of like come on as they take on more modules or take on more assets, I guess what I'm getting at is I’m surprised it’s not bigger and am I not thinking about that, right?

Okay. So let me just take you through how we calculate sales events. So as a current client is to move to the SEIC platform, we would count it as a net sale. So we would take the revenue that they have on TRUST 3000 till yesterday, the annual revenue they have or they currently pay us on TRUST 3000 and we only count as an additional revenue that they contracted for as net sales revenue.

Okay.

Does that make sense to you? So the $29 million we announced as sales revenue for the segment, $14 million of that is net recurring. So that would include sort of above and beyond what a client would currently pay us on TRUST 3000, so that's annual new revenue to us. And we also announce $30 million in non-recurring revenue.

Okay and that $14 million incremental is it fair to say that that's kind of like like-for-like services going from TRUST 3000 to SWP and it's not necessarily a new book of business at that client?

It's combination of things. So it's -- we talked a lot about sort of the leverage, that profitability or levels of fees for SWP, which includes a better sort of core infrastructure, global space [ph] to processing those things. It would also include some new services around advisor, kind of experiences and it could potential include new books of business, and again I can't disclose specifics but generally this is moving Wells Fargo current book of business from TRUST to the new platform.

Okay and the $13 million non-recurring professional fees, is that all specific to Wells or is this a few clients?

Yeah, again, not easy -- that $13 million was for the whole segment. But largely tied to the Wells relationship.

Okay, and then the pipeline beyond Wells, or would there been any change or movement in the last quarter?

Guys give me a break, can I enjoy this for one day at least?

Congratulations, it's terrific. I don't want to…

I think as I said this is a great canvas [ph] for us and certainly validates the opportunity. The pipeline is strong and we continue to be very active in the market.

Great, thanks Joe.

Next question comes from the line of Robert Lee. Your line is open.

Good afternoon and congrats Joe. I have just two quick questions. Can you just refresh, at least my memory on the difference between the different, the slot -- difference kind of levels of service on SWP. You kind of mentioned Wells was taking for their [ph] software or not. But just refresh our memory on the difference in the two usages.

So software-as-a-service, think of that like as a modern ASP. So we host the technology and host the software here at SEI. It's more -- in some ways it’s more modern than ASP because it's easier -- will be easier for the client to get access to their data than has traditionally been TRUST 3000, be easier for them to interface, it will be easier for them to right applications on top of SWP than historically has been for TRUST. But they run their operation. The other model would be all of that plus we run the operation.

And Wells is going to run their own operation but use your software, right?

That’s correct.

Okay. And just in general one-time fees that often may accompany a conversion. Are those usually structured to pretty much offset your incremental expense related to kind of onboarding that client or is there -- just kind of curious how we should…

There are couple of things we do, we do provide with these large banks. Some of it has to do with the implementation and so what we find with the -- the client has an implementation agreement, which things like the project planning and somewhat around the conversion of the data and that's what's included in the agreement. We would expect overtime there would also be some custom programming work and we haven't signed that agreement yet with Wells Fargo.

Okay. And could you just remind us what, in addition to Wells, what the existing kind of backlog of conversions are. I know you mentioned you expect to suite again [ph] but after you get through those two and outside of Wells kind of what do you have in the -- already signed in the pipeline.

Yeah, I think we announced that the last quarter there was $5.7 million in the pipe -- in the backlog. And we will, after this weekend have converted about two-thirds of that. So there is still little left there than obviously we will overtime convert the Wells book.

Great, thanks for taking my questions.

Thanks.

The next question comes from the line of Tom McWilliams [ph].

Congrats Joe and everybody for signing that big deal. I'm sure that's…

Thanks, was fun [ph] to get it done.

I’m sure. Can you give us any insight Joe, like what [indiscernible].

Tom, I’m having a hard time understand you. You have a bad connection.

Yeah, I am not going to be able to fix it, I’m on a train. Can you hear me better?

No, we can't hear you very well, Tom.

All right, understood.

Your next question comes from the line of Chris Donat. Your line is open.

Hey, Joe congratulations. Just actually looking at the second quarter, one thing caught my attention was in -- on the full income statement, the information processing line increased by about $3 million from the first quarter. Is that represent anything non-recurring that was part of this large contract win or is this just sort of other non-recurring stuff that's tied to either SWP or just the broader private bank's business?

Yeah, it's with broader private banking business.

Okay. But is there any -- can we look at that as a leading indicator, like you had in the past, like a year ago when you had that $6 million one-time activity, or is this -- should I now look at in that kind of context?

Don't look at in that kind of context. We were busy actually closing this contract. So wasn’t a lot of revenue associated with this in the second quarter.

Okay all right. Yeah, it’s big win and we'll look for more details in the future I'm sure.

Thanks.

Next question comes from the line of Chris Shutler. Your line is open.

Hey, Joe good afternoon. The -- just kind of a follow-on to Glenn's question earlier, but is there any way to talk about the -- I mean this is the full potential of this relationship or are there more opportunities available down the road at a high level?

So I’ll talk generally about large banks. I think there is a lot of opportunities at large banks. We feel the SEI wealth platform because we think we can build, we have something that can span across all kinds of wealth management markets inside of very large firms. We have targeted some of our TRUST 3000 clients and so the first step is typically moving these accounts that are on TRUST on to the SEI Wealth Platform and providing a lot more value to our firms by giving them not only a much stronger underlying core infrastructure but also additional services around the front-end which could include putting few things like better experience for the advisors, more efficient tools for advisors, more efficient tools for portfolio managers, better end client services and so on and so on. So we think there are more services, this has better core infrastructure. There are more services we can provide to the banks so they can provide ultimately a much better experience for their workforce and for the end market and they can grow their business. There’s also an element of better control. There is pretty substantial workflow built into the platform, there is better risk control, there is better data security, there is better disaster recovery. So in most cases our first step is to go in with the current client and enhance what we have delivered for many, many years on TRUST 3000. And then the second step would be then to gather more books of business to get into other segments that the bank has. So this is really an example of our first big step into a very large wealth manager in the U.S.

Okay, great and then I heard you say that there’s mainly a SaaS technology sell but is there a potential either with Wells or other large banks to be doing more of the outsourcing functions back in their office type of stuff?

Yeah, the first of the clients we’ve been able to sell the whole process, so I think larger banks have a tendency to want to run operations themselves but certainly we saw on TRUST 3000 every time clients that bought us in the ASP version ultimately started buying some of our services, maybe not all of them in an outsourced. So that’s certainly is an opportunity for us as we go forward.

Okay.

Chris, this is Dennis. And I would add to that, that we, probably to a point of absorption [ph], the fact that these sale cycles are very long, as you can imagine in a very large institution trying to get them to absorb not only a significant technological change it’s going to take multiple years to implement but also to absorb a complete operational footprint change at the same time is in some situations a little bit too much to ask. So that’s one, I’d say, one of our learnings over those past two years in selling to these very large complex institutions and that we’re trying to address the entire enchilada. It’s -- we’re putting a little bit too much on the table for them to decide, so we’re having this option of a more ASP like, or software-as-a-service option for our clients, to those larger ones reduces the amount of change and the dynamic of change that we’re asking them to absorb. I view it as a very good thing that we have these two models, to operate.

Okay, thanks guys.

Yeah, I mean I agree with Dennis. I think we talked at length [ph] about this as a model and we’ll work real hard to deliver the platform in this model going forward to some of the big end of the market.

And our next question comes from the line of Glenn Greene. Your line is open.

Sorry Joe for the follow-ups. Just a few quick ones. Did you say the length of the contract, the timeline to convert it and then the third one would be is there a way to sort of frame the margin differential between the SaaS model and the outsourced model?

Sure, no, I didn’t really answer -- I didn’t say any of those things. So it’s a long term contract. So as part of this contract we’ve extended our TRUST 3000 relationship until we do the conversion. Then once we do the conversion there is a long term SWP contract and so I am very pleased with the length of the contract. And when you think about profitability, as you know we are very focused on overtime not only increasing the profitability of the SWP platform but also really more focused on increasing the profitability of the private banking segment back to the historical margins that we had and certainly winning and converting a large bank nature of Wells Fargo will be an important step towards that.

Okay, thanks, Joe.

We have a question from the line of Robert Lee. Your line is open.

Thanks, just a quick follow-up. Just curious Joe, you mentioned I guess that you re-contracted a couple of clients -- that was re-contracting on existing clients on SWP that were re-contracted. I am just curious, number one to make sure that I understood it correctly and then just curious since those were clearly some of your earlier clients how did kind of, if at all that kind of the pricing dynamics maybe changed on re-contracting, were they relatively unchanged, that kind of the -- did they become more or less asset based, just trying to think about what maybe changed from when you first started this or signed those clients on?

So we re-contracted two of our largest clients in the UK, and these were longer term clients and that have grown fairly substantially. And so I think what I was pleased with the re-contracts that we were able to secure and I think that again shows the overall satisfaction we have with those clients. They have grown their books of business. They have committed to continue to grow their business and we continue to see the asset based pricing model, a successful commercial model in the marketplace. And clients like the fact that it’s a win [ph] solution. We are able to, in some cases sell additional services to the clients. We see many of our clients in the UK are at sort of leading edge of the consolidation that’s occurring there. So that business continues to grow amongst the current clients. The current clients continue to grow their books of business.

I mean this maybe a general question. As a general rule I mean with the asset base pricing model, with your clients grew successfully, I mean are they generally almost like a mutual fund kind of thing, like break points that they had certain like asset levels, the incremental assets kind of fee rate kind of changed a little bit?

Yeah they are absolutely break points and they certainly, as they grow, they certainly come back and talk about creating additional break points as they -- but absolutely yes we do see more revenue as they grow their business.

Great, thanks for taking my question.

And there are no further questions in queue.

Thank you, Joe. Our next segment is Investment Advisors. Wayne Withrow will cover this segment. Wayne?

Thanks Al. During the second quarter we continued good cash flow momentum and had a very solid quarter of new advisor recruiting. Assets under management were $49.8 billion at June 30th, an 11% improvement from a year ago. During the quarter we had almost $1.2 billion of positive net cash flow. Revenues for the quarter were $77.8 million. This compared to $70 million for the second quarter of last year, an increase of 11%. Net cash flow was the largest driver of revenue growth. Market appreciation also helped somewhat even though we had slightly negative returns in the second quarter of 2015. Expenses for the quarter increased from the second quarter of last year, primarily due to an increase in direct costs and personnel cost associated with our asset growth and increased expenses associated with the SEI Wealth Platform. On the new business front we signed 162 new advisors. This brings our total for the year to 357 and our pipeline of prospects remains very strong. Moving on to the status of the SEI Wealth Platform, we continue to implement the learnings from our beta conversions and are in the middle of a large conversion through October 31st of this year. This will almost double the amount of advisor AUM on the platform and is the beginning of a larger advisor book migration on to the platform. After this conversion, we will begin looking for new revenue opportunities enabled by the platform. In summary net cash flow and new advisory recruiting were very positive for the quarter. Momentum for our existing business model remains strong and momentum is building for our migration to the SEI Wealth platform. I welcome any questions you may have.

Our first question comes from the line of Chris Shutler. Your line is open.

Hey Wayne, how are you?

Good, Chris how are you?

Good. So it sounds like you're still on track for the 1031 conversion right?

That is correct.

Okay. And can you give us some sense, in the last quarter I asked this and you kind of deferred to this quarter. Can you give us some sense how many advisors or assets are going to be moving over?

The amount was somewhere north of $2 billion, I guess a significant number. And the number of advisors, perhaps the absolute number is not as large in the pack because we're moving much larger advisors this time. We're getting to that core book of business.

Okay, got you. And you mentioned again this next tranche of advisors once they do convert over you're going to start like for additional revenue opportunities. So how should we think about the timing of that. Do you think that you could start to see a noticeable amount of incremental revenue over the next year and year and half following that or how should we think about the potential there?

Yeah, I think over the next 12 months we are going to be ramping up the new revenue opportunities and subsequent to that point, I think it will start to become significant.

Okay and then lastly the -- can you give us a breakout of flows between new and existing advisors roughly?

Yeah, the flows from new advisors continue to outpace existing advisors. But existing advisors, as I just mentioned in my sales kick off meeting the existing advisors are catching up. I'd say we're kind of in maybe a 60-40 mix with new advisors leading the way.

All right great. Thanks a lot.

Your next question comes from the line of Chris Donat. Your line is open.

Yeah, hey Wayne thanks for taking my question. Just wanted to go back to the revenue options you talked about. Is that really what you talked about in prior investor days the doubling of the addressable market with SWP being the platform now and being an open architecture. Or is there something going on, on those revenue opportunities?

I think the revenue opportunities are two-fold. I think there was a chance, what we term a cut to the [ph] consolidation. So the chance for us to have clients bring additional non-FTI assets on the platform, that’s existing clients and that's one revenue opportunity. And the other revenue opportunity is just the whole new addressable market is going to open up where we are going to be able to go after the clients that we really haven’t been adequately equipped to go after in the past.

Okay. And so I might just add it’s a 12 month ramp up like to get your sales people in contact with those people, that's really all beginning after October 31, right?

That's correct.

Okay, got it. Thanks, Wayne.

We have no further questions in queue.

Thank you, Wayne. Our next segment is the Institutional Investor Segment. And I'm going to turn it over to Ed Loughlin to discuss this segment.

Thanks Al. Good afternoon everyone. I'm going to start with the financials for the quarter and then discuss sales activity. Revenues approaching $76 million for the second quarter increased 7% compared to the year ago period. New client funding and market appreciation during the period contributed to the increases. Currency changes during the period negatively impacted revenue. Quarterly profit of $39 million increased 10% compared to the second quarter of 2014. And margins for the period increased 1% to 52%. Ending asset balances increased to $78 billion on June 30. Net new client assets funded during the quarter were $1.5 billion and the backlog of committed but unfunded assets at quarter end was $1.3 billion. New client sales closed during the quarter were $1.7 billion and totaled $3.9 million year-to-date through June. We're pleased with the continued market acceptance of our Trustee directed outsourced solution and I'm happy to announce the signing of a new large corporate defined contribution fiduciary management client during the quarter. In closing we enjoy a strong pipeline and remain optimistic about the growth opportunities for the segment. Thank you very much and I'm happy to entertain any questions you may have.

[Operator Instructions]. Our first question comes from the line of Robert Lee.

Yeah, hey Ed, how are you?

Good Rob, how about yourself?

Good thanks. Just curious you mentioned, signing a large DC client. Can you maybe talk a little bit about specifically kind of at least the services you’ll be providing them, is it kind of putting your investment programs in place kind of pretty quickly or is it more of a kind of advisory service that hopefully you can get some of your programs in there overtime, just trying to get a sense of how those relationships work?

Sure. Well again, you kind of know it’s relatively early for us, but what seems to be the driver that is resonating out in the market place is, there is a concern on the part of fund sponsors who are making sure they have a fiduciary coverage for their DC plans. So this particular client hired us as a fiduciary manager and they really wanted to improve the participant outcome. So the first thing would be a re-enrollment and that’s a practice that would really help to get the participants into a better investment framework, a better asset allocation that would be appropriate for them. So as part of that we’re streamlining the line-up. So we’re taking funds and putting those together into a proprietary if you will or white label types of fund. So simplifying that, putting all the U.S. options together in to one fund rather than multiple funds, so there’s less choices that a participant would have to make and in addition to that creating a proprietary target date funds. So overtime they will, what we believe that we will see a massive flow into these particular programs and I think the re-enrollment is kind of a key step in order to ensure that.

No, has the pricing for you guys in that type of thing, is it pretty similar to or different from kind of your more traditional business?

Well, it’s an asset base fee. Again I think it’s a little bit early to know exactly where that’s going to settle in. I think that we’re kind of looking at this as something that’s probably low double-digits that we will form that at.

Okay and I guess related to that, I mean obviously there is this, but you know you’ve talked in over the last couple of years about the traditional parts of your business kind of migrating up market, at least in terms of size and usually with that there is some maybe lower fees that you would expect to come from that. But so far at least doesn’t really feel like there’s been much overall pressure, at least in kind of calculating your fee rates, at least that seems that visible. I mean is that kind of, I'm not sure -- should we be expecting, particularly with things that you see there overtime asset growth may stay at a high level but there may be some moderation -- should be some moderation in kind of the fee rate per asset, I would assume so?

I think the biggest change Rob in the market place has been this whole idea of separation of our fee from the underlying manager’s fees, that is starting out in the larger end of the market. I think your observation about not much of the difference of our fee realization is a function of the larger clients who are paying a lower effective fee anyway because they had more assets and they were able to get the benefit of aggregation. So I think that that’s probably the bigger issue. We started out here on the defined contribution side with the larger pool of money, right away we’ll have to just kind of see where that goes as we go up and down the asset scale.

Great, thanks for taking my question.

Sure.

There are no further questions in the queue.

Thank you Ed. Our final segment today is investment managers. I am going to hand over to Steve Myer to discuss this segment. Steve?

Thanks Al. Good afternoon everyone. For the second quarter of 2015 revenues for the segment totaled $63.3 million, which was $4.8 million or 7.7% higher than our revenue in the second quarter of 2014. This quarter-over-quarter increase in revenue was primarily due to an increase in our asset balances along with new client funding across all products. Our quarterly profit for the segment of $25.1 million was approximately $0.1 million or 9.3% higher than the second quarter of 2014. Third party asset balances at the end of the second quarter of 2015 were $382 billion, approximately $9.8 billion or 2.6% higher as compared to our asset balances at the end of the first quarter of 2015. The increase in assets was primarily due to net positive cash flows of $10.3 billion, offset by a slight market depreciation of approximately $500 million. Turning to market activity, during the second quarter of 2015 we had a solid sales quarter. Net new business sales events totaled $7.3 million in annualized revenue during the quarter, which was diversified across all of our market segments. Touching on the market environment, we continue to see steady market activity. New products, new services and the evolution of needs in the global investment management industry will continue to drive change and provide a strong pipeline of growth for us. We do feel we are well positioned to drive growth from this opportunity. That concludes my prepared remarks and I will now turn it over for any questions you may have.

Our first question comes from the line of Robert Lee. Your line is open.

Great and good afternoon. Couple of questions, I mean last quarter I think you had talked about how you obviously had a lot of success in signing on clients and increasing recurring revenue. But there has been, I guess taken some time for some of those contracts to actually kind of come on board and I think last quarter you mentioned there was like a, I guess a -- I’ll call it backlog of $30 odd million revenue wise of signed clients that kind of haven't come on board yet, if I have the numbers right. So can you maybe just update us on if you were able to make a dent in that, where that kind of stands today?

Well, I think if my list [ph] is correct, I think in the first quarter we're around $32 million and today we stand around $34 million. So what I would say is we've made a dent in the Q1 backlog, we made a dent there. But the good thing is that we continue to sell and as we continue to sell up market that backlog will be continually filled then with deals that we sold but have not yet funded. Our focus is not only to sell these deals but to fund them but I think the universal trend you are seeing, not just with me, not just with SEI but also with the market, these larger deals and as we go upstream market to these larger organizations, larger more complicated deals, they are going to take time. These are not simple products. These are not simple processes, this is not a simple transition. So what you'll see is, and I think one of the things we've seen, as you win these and it takes a while to implement, they don't implement all at once. There are phases, and those phases take a while. But conversely when you have either liquidation or a market downturn or client fund shutdown that typically happens pretty quickly. So you are constantly finding that balance there, but I’d say with the backlog it’s at a, what I feel comfortable balance right now. We're seeing new deals we are seeing a strong pipeline, movement in the pipeline. But then also we're seeing the backlog things come off. But as we sell things go on.

Sounds great and just maybe one more question, Steve. Margins in the segment kind of I guess last three quarter or really kind of last four-five quarters have really been trending up, been over 37 last three quarters. I know in the past you’ve kind of questioned that, at least I think you have kind of questioned that, kind of maybe mid 30s is a comfortable range just given the ongoing investment, you always have to make in the business. So should we be thinking that margins are kind of running around peak in that just kind of overtime as you have to continue to invest in the business, that those could come down a bit or is there -- or are we really on a new trajectory up as you continue to scale the business and maybe mid 30 is too conservative a margin for the segment?

Well, I'm trying to keep up with that as best I can. But what I'd say is the margin have trended up and that's a little bit of benefit of the business we have brought on as we’ve got larger deals is a little bit more scale, we are still -- we're very focused on managing our ongoing expenses. With that said we're also, as focused on continuing to build out, not just for good need [ph] that we see today. But more importantly where we see the market going and the need down the road. So we are in the process also continuing to building other platforms. I do expect that investment to continue. I do invest -- imagine that investment will uptick in certain quarters. So I think I said this in Q1 as well, I do think looking out we will see there is potential we’ll see a little choppiness in the margin. But again I do think, if I am using a gauge of the mid-30s I think that’s a good number to have in your mind. That does not mean that it could not go down below that, as we uptick investments nor it doesn’t mean that it’s going to go above that but if I was looking at a mean I would say that mid-30 is still the range I am targeting.

Great, thanks Steve. I appreciate taking my questions.

Sure, thanks, Rob.

There are no further questions in queue.

Thank you, Steve. I would like Kathy Heilig to give you a few companywide statistics now.

Thanks Al. Good afternoon everyone. I have some additional corporate information about this quarter. Q2 cash flow from operations was $78.9 million or $0.47 per share, which brings the year-to-date cash flow from operations to $156.8 million. The second quarter free cash flow was $62.4 million or $0.37 per share which brings year-to-date free cash flow to $124.8 million. Second quarter capital expenditures, excluding the capitalized software are $8.3 million and we would project approximately another $21 million in the second half of the year. The tax rate for the second quarter was 35.6% but we would expect the tax rate to turn slightly lower in the second half of the year as we file our tax returns and really true up our tax contingencies. We also would like to remind you that many of our comments are forward-looking statements and are based upon assumptions that involve risks and that the financial information presented in our release and on this call is unaudited. Future revenues and income could differ from expected results. We have no obligation to publicly update or correct any statements herein as a result of future development. You should refer to our periodic SEC filings for a description of various risks and uncertainties that could affect our future financial results. And now please feel free to ask any other further questions that you may have.

Our next question comes from the line of Alan Jones [ph]. Your line is open.

Hey guys, I have a couple of questions. First off congratulations on the Wells Fargo close, I know that’s been a long, long time coming and it’s great to hear the news.

Thank you.

And then just can you give me a sense for when the discussions on the Wells Fargo sort of deal started like, was that a five years ago sort of discussion, was that 10 years ago? I recall you guys talking about sort of the sales cycle for at least five years now and I am trying to get a sense for sort of how long that is in total?

Al, this is Joe so Wells has been a client of ours for decades. So certainly as we’ve been developing the SEI Wealth Platform we have had numerous conversations with them over the years. But I would say that conversation really began in earnest about 18 months ago.

Got you, and then do you have other comparably sized sort of clients that are also maybe in like the 12 months range of that discussion or are you sort of just starting off really in earnest, like do you have other comparable clients and can you quantify that?

We have some really great market share with some really terrific large U.S. banks here and so we’re in variety of conversations. And the pipeline looks strong but it’s hard to predict when someone will make a final decision and sign a contract, but again I think this is a great catalyst for us and certainly other large organizations will take note of this.

Got you, thank you. And then I know this will come out in your 10-Q later but if you happen to have this handy, would you be able to provide -- in your 10-Q you provide a breakout of your private bank revenues by processing, asset management and transaction, would you happen to have that sort of in front of you that you can disclose. If not I can wait for the filing as well?

Yeah, you wait for the filing because the filing is going to occur in a couple of hours actually.

Okay perfect. And then the last question I had is just sort of a higher level maybe a more basic question but in your advisor and sort of institutional businesses what is the -- it sounds like you provide investment management services and so how do we think about the level of risk associated with underperforming. So for example if you have some sort of large caps, U.S. equities, funds, it sounds like you guys actually provide actively managed fund. How much risk is there -- how do we quantify or think about the risk around you having three or four years of underperformance in your funds. Or do you only solely provide passive strategies and products to those businesses?

This is Wayne. We don't look at it that sort of we provide active or passive investments. We're an active management shop but in the advisor segment we provide total business solutions of which the investments are just a component. So I would not look at us as a pure asset management play subject to sort of the the risk that you have in the pure asset management play. We provide technology, we provide costing [ph] we provide backlog with outsourcing, and we provide the investments all as part of the package. So our value proposition is all around the business solution for the advisors.

Got you, great. Thank. And then how about the pension on the institutional investors client side?

Yeah, this is Ed. If you were to think about our particular business, I mean we're really in the OCIO, the Outsource Chief Investment Officer. So we're not really selling products out to clients. Basically our client is buying us from a value proposition standpoint for the advice and the strategy work that we're going to do to align their particular portfolio with their corporate financials as well as their funded status. And then we're implementing the portfolio with probably 12 to 13 different asset classes, going from cash to alternative investments of all kind of sorts. So it's a pretty well diversified portfolio as you would imagine. There is always something doing well, there always something that's maybe not doing quite as well as something else. But in general we're meeting the clients' expectations. So it’s a pretty solid kind of sticky business.

Has there ever been a period in the past, I know I think this business is maybe about 15 or 20 years old now. Have there been periods in the past where you had maybe two or three years of disappointments for your clients as sort of created potential like risk of clients wanting to leave or switch providers.

Well, I mean I think there is always periods of time with performances and what you expect it to be. But I would say that our client retention is very, very high. I mean if you look at our particular business. And the reason that we see clients leaving varies by market. Many times in the corporate marketplace unfortunately we see some of these pension clients don't make it and they get taken over by the PVGC. Or we see maybe a merger that would occur. And we're on the shorter side of that merger. We're on the smaller company side. So the portfolio gets taken over by somebody larger. In the not for profit space sometimes you see new investment committee head that comes in and decides that they don't really want to outsource it anymore,. They want to be more involved in it. So it's more of a financial strain in the one situation, the corporate space or it's maybe the change of view point in the not-for-profit space.

Got it, great, thanks. Thank you Joe, Ed, Wayne. That answers my questions and I look forward to meeting you guys at the Investor Day this September.

That's great.

Great.

We have no further questions in queue.

Okay thank you. So ladies and gentlemen, we feel that the second quarter was solid. And we believe the SWP sale to Wells Fargo validates the large investment we've been making in SWP over the years. And looking ahead we intend to keep our focus on long-term growth in revenues and profits as always and we remain bullish about our opportunities. Before you go as a reminder, our Annual Investor Day is being held on Thursday, September 10 with a dinner the night before on Wednesday September 9 and I look forward to seeing you there. If you have any other questions that will be good time. You all have a great afternoon and thank you very much for your attention.

Ladies and gentlemen, that does conclude the conference for today. We do thank you for your participation and for using AT&T's executive teleconference service. You may now disconnect.