Franklin Resources, Inc. (BEN): Business Model Canvas [10-2024 Updated]
- ✓ Fully Editable: Tailor To Your Needs In Excel Or Sheets
- ✓ Professional Design: Trusted, Industry-Standard Templates
- ✓ Pre-Built For Quick And Efficient Use
- ✓ No Expertise Is Needed; Easy To Follow
Franklin Resources, Inc. (BEN) Bundle
In the competitive world of asset management, Franklin Resources, Inc. (BEN) stands out with its comprehensive business model that effectively integrates diverse investment options and robust client relationships. This blog post delves into the Business Model Canvas of Franklin Resources, highlighting key components such as partnerships, activities, and revenue streams that drive its success. Discover how this industry leader crafts personalized investment strategies and maintains a strong performance track record to meet the needs of various customer segments.
Franklin Resources, Inc. (BEN) - Business Model: Key Partnerships
Collaborations with financial advisors
Franklin Resources, Inc. (BEN) actively collaborates with a wide network of financial advisors to distribute its investment products. As of June 30, 2024, the company reported total sales and distribution fees of $1,013 million, which reflects an increase of 13% compared to the previous year. This growth is attributed to the strategic partnerships established with financial advisors who help market and sell Franklin's funds.
Strategic alliances with asset management firms
In 2024, Franklin Resources has formed strategic alliances with several asset management firms to enhance its investment offerings. Notably, the acquisition of Putnam Investments contributed approximately $430 million in operating revenues from January 1, 2024, through June 30, 2024. This acquisition is part of Franklin's strategy to expand its asset management capabilities and diversify its product lineup, which also includes equity, fixed income, alternative, and multi-asset funds.
| Partnership Type | Partner Firm | Revenue Contribution (2024) | Focus Area |
|---|---|---|---|
| Strategic Alliance | Putnam Investments | $430 million | Investment Management |
| Collaboration | Various Financial Advisors | $1,013 million | Distribution |
Partnerships for technology and data analytics
Franklin Resources has made significant investments in technology partnerships to enhance its data analytics capabilities. The company allocated $442.7 million for information systems and technology in the nine months ended June 30, 2024, which represents an 18% increase from the previous period. These investments are crucial for improving operational efficiency and delivering enhanced services to clients through advanced data analytics tools.
| Technology Investment Area | Investment Amount (2024) | Purpose |
|---|---|---|
| Information Systems | $442.7 million | Operational Efficiency |
| Data Analytics | Included in above | Client Services |
Franklin Resources, Inc. (BEN) - Business Model: Key Activities
Investment management and advisory services
Franklin Resources, Inc. provides comprehensive investment management and advisory services across various asset classes. As of June 30, 2024, the company's total assets under management (AUM) amounted to $1,646.6 billion, reflecting a 15% increase from $1,431.5 billion a year prior. The AUM breakdown by asset class is as follows:
| Asset Class | AUM (June 30, 2024, in billions) | AUM (June 30, 2023, in billions) | Percent Change |
|---|---|---|---|
| Equity | $595.0 | $458.0 | 30% |
| Fixed Income | $564.5 | $505.1 | 12% |
| Alternative | $254.5 | $257.2 | (1%) |
| Multi-Asset | $168.1 | $148.3 | 13% |
| Cash Management | $64.5 | $62.9 | 3% |
Investment management fees generated $5,056.0 million for the nine months ended June 30, 2024, compared to $4,818.5 million for the same period in the previous year, marking an increase of 5%. This growth is primarily attributed to the increase in average AUM and the acquisition of Putnam Investment Management.
Research and market analysis
Franklin Resources invests heavily in research and market analysis to support its investment strategies. The company reported investment management fees of $1,689.9 million from investment management services for the three months ended June 30, 2024, a 5% increase from $1,613.4 million for the same period in the prior year. The research team's insights drive portfolio allocation decisions and risk management, contributing to overall performance.
Additionally, Franklin's effective investment management fee rate, excluding performance fees, was 40.2 basis points for the three months ended June 30, 2024, reflecting a slight decrease from 42.0 basis points in the prior year. This adjustment is indicative of changing market dynamics and fee structures.
Client relationship management
Client relationship management is a critical component of Franklin's business model. The company reported sales and distribution fees of $1,013.0 million for the nine months ended June 30, 2024, an increase of 13% from $897.3 million for the same period in the previous year. This growth underscores Franklin's commitment to maintaining and expanding client relationships.
Furthermore, Franklin's shareholder servicing fees amounted to $162.3 million for the nine months ended June 30, 2024, compared to $115.5 million for the same period in the prior year, reflecting a robust increase of 41%. This emphasizes the company's focus on delivering excellent client service and enhancing client satisfaction.
Franklin Resources, Inc. (BEN) - Business Model: Key Resources
Skilled investment professionals
Franklin Resources, Inc. employs approximately 8,800 employees as of June 30, 2024, with a significant number being investment professionals. The firm has a diverse team comprising over 700 investment professionals globally, including portfolio managers, analysts, and economists. This skilled workforce is essential for navigating complex financial markets and developing investment strategies that meet client needs.
Proprietary technology platforms
Franklin Resources has invested significantly in technology, with a reported $254.4 million in amortization of intangible assets for the nine months ended June 30, 2024. This includes proprietary technology platforms that enable enhanced client engagement and operational efficiency. The firm's technology infrastructure supports investment management, risk assessment, and regulatory compliance, facilitating better decision-making and improving service delivery.
Strong brand recognition and reputation
As of June 30, 2024, Franklin Resources reported total assets under management (AUM) of $1,646.6 billion, reflecting a 15% increase from $1,431.5 billion the previous year. The company's strong brand recognition is underscored by its long-standing history in the investment management industry since 1947. This reputation attracts clients and retains existing ones, as evidenced by $236.5 billion in long-term inflows for the nine months ended June 30, 2024, despite $237.8 billion in long-term outflows during the same period.
| Key Resource | Details |
|---|---|
| Employees | Approximately 8,800 total employees, with over 700 investment professionals |
| Technology Investment | $254.4 million amortization of intangible assets (Nine months ended June 30, 2024) |
| Total AUM | $1,646.6 billion (as of June 30, 2024) |
| Long-term Inflows | $236.5 billion (Nine months ended June 30, 2024) |
| Long-term Outflows | $237.8 billion (Nine months ended June 30, 2024) |
Franklin Resources, Inc. (BEN) - Business Model: Value Propositions
Diverse investment options across asset classes
Franklin Resources, Inc. (BEN) offers a wide range of investment products across multiple asset classes. As of June 30, 2024, the company's assets under management (AUM) were distributed as follows:
| Asset Class | AUM (in billions) | Percentage Change from 2023 |
|---|---|---|
| Equity | $595.0 | 30% |
| Fixed Income | $564.5 | 12% |
| Alternative | $254.5 | (1%) |
| Multi-Asset | $168.1 | 13% |
| Cash Management | $64.5 | 3% |
| Total | $1,646.6 | 15% |
These figures demonstrate Franklin's ability to cater to diverse investor needs, offering products that range from traditional equity and fixed income to alternative investments and cash management solutions.
Commitment to long-term client success
Franklin Resources emphasizes its commitment to long-term client success through consistent performance and service excellence. The company reported a net income attributable to Franklin Resources, Inc. of $174.0 million for the three months ended June 30, 2024, compared to $227.5 million in the same period of the previous year, reflecting a decrease of 24%.
Additionally, the adjusted net income for the same quarter was $326.4 million, maintaining stability compared to $326.1 million in the previous year. This focus on delivering value over time strengthens client relationships and fosters loyalty.
Strong performance track record
Franklin Resources has a strong performance track record, particularly in its investment management fees, which increased by $76.5 million and $237.5 million for the three and nine months ended June 30, 2024, respectively. This was primarily driven by a 15% increase in average AUM.
The company's operating revenues totaled $2,122.9 million for the three months ended June 30, 2024, marking an 8% increase from $1,969.0 million in the same period of the previous year. These metrics highlight Franklin's ability to deliver strong financial results while managing diverse investment portfolios effectively.
Franklin Resources, Inc. (BEN) - Business Model: Customer Relationships
Personalized investment strategies
Franklin Resources, Inc. (BEN) emphasizes personalized investment strategies tailored to individual client needs. As of June 30, 2024, the company reported total assets under management (AUM) of $1,646.6 billion, with significant contributions from various asset classes:
| Asset Class | AUM (in billions) | Year-over-Year Change (%) |
|---|---|---|
| Equity | $595.0 | 30% |
| Fixed Income | $564.5 | 12% |
| Alternative | $254.5 | (1%) |
| Multi-Asset | $168.1 | 13% |
| Cash Management | $64.5 | 3% |
| Total | $1,646.6 | 15% |
The increase in AUM reflects the company's commitment to providing customized solutions that meet the evolving needs of its clients, particularly in the equity and fixed income segments.
Ongoing client education and support
To maintain strong client relationships, Franklin Resources invests in ongoing education and support. The company’s effective investment management fee rate was 40.2 basis points for the three months ended June 30, 2024, down from 42.0 basis points in the previous year, indicating a focus on maintaining competitive pricing while enhancing client education efforts.
Additionally, Franklin Resources reported:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Income (in millions) | $174.0 | $227.5 | (24%) |
| Earnings per Share (EPS) | $0.32 | $0.44 | (27%) |
| Adjusted Operating Income (in millions) | $424.9 | $476.8 | (11%) |
| Adjusted Operating Margin (%) | 25.7% | 30.5% | (4.8%) |
These figures reflect the impact of increased educational programs and support services aimed at enhancing client engagement and decision-making capabilities.
Regular performance reports and updates
Franklin Resources also prioritizes regular performance reporting and updates for its clients. The company’s reported operating revenues for the three months ended June 30, 2024, were $2,122.9 million, an 8% increase from $1,969.0 million in the prior year. This growth is indicative of the company’s robust reporting practices and client communication strategies.
| Revenue Source | Q3 2024 (in millions) | Q3 2023 (in millions) | Change (%) |
|---|---|---|---|
| Investment Management Fees | $1,689.9 | $1,613.4 | 5% |
| Sales and Distribution Fees | $358.3 | $304.0 | 18% |
| Shareholder Servicing Fees | $61.8 | $38.8 | 59% |
| Other | $12.9 | $12.8 | 1% |
| Total Operating Revenues | $2,122.9 | $1,969.0 | 8% |
This consistent growth in revenues illustrates Franklin Resources' dedication to transparency and accountability, ensuring that clients are well-informed about their investments and the overall performance of the firm.
Franklin Resources, Inc. (BEN) - Business Model: Channels
Direct sales through financial advisors
Franklin Resources, Inc. utilizes a network of financial advisors to facilitate direct sales of its investment products. For the nine months ended June 30, 2024, the company reported sales and distribution fees amounting to $1,013.0 million, which reflects an increase of 13% compared to the previous year.
The breakdown of sales-based fees for the same period was $180.9 million, up 18% year-over-year, demonstrating the effectiveness of its financial advisor channel in generating sales.
| Revenue Driver | Three Months Ended June 30, 2024 (in millions) | Three Months Ended June 30, 2023 (in millions) | Percent Change | Nine Months Ended June 30, 2024 (in millions) | Nine Months Ended June 30, 2023 (in millions) | Percent Change |
|---|---|---|---|---|---|---|
| Asset-based Fees | 294.6 | 251.0 | 17% | 832.1 | 743.7 | 12% |
| Sales-based Fees | 63.7 | 53.0 | 20% | 180.9 | 153.6 | 18% |
| Total Sales and Distribution Fees | 358.3 | 304.0 | 18% | 1,013.0 | 897.3 | 13% |
Digital platforms for client engagement
Franklin Resources has enhanced its digital engagement strategies, leveraging technology to connect with clients. The company reported an increase in operating revenues attributed to digital platforms, contributing to the overall operating revenue of $6,266.8 million for the nine months ended June 30, 2024, which is a 7% increase from the prior year. The effective investment management fee rate, which reflects the use of these platforms, was reported at 40.2 basis points for the three months ended June 30, 2024.
The firm’s investments in technology, particularly in digital platforms, have led to a notable increase in average assets under management (AUM). The average AUM for the three months ended June 30, 2024, was $1,632.6 billion, reflecting a 15% increase year-over-year.
Institutional partnerships for fund distribution
Institutional partnerships play a critical role in Franklin Resources' distribution strategy, allowing the firm to reach a broader client base. The company reported operating revenues from institutional partnerships contributing to its total investment management fees of $5,056.0 million for the nine months ended June 30, 2024, a 5% increase from the prior year.
The breakdown of operating revenues by geographic area highlights the importance of institutional partnerships, with the United States contributing $4,706.5 million of total operating revenues for the nine months ended June 30, 2024.
| Geographic Area | Nine Months Ended June 30, 2024 (in millions) | Nine Months Ended June 30, 2023 (in millions) |
|---|---|---|
| United States | 4,706.5 | 4,427.3 |
| Luxembourg | 904.7 | 812.4 |
| Asia-Pacific | 229.7 | 231.9 |
| Americas Excluding United States | 203.5 | 192.9 |
| Europe, Middle East and Africa Excluding Luxembourg | 222.4 | 198.8 |
Franklin Resources, Inc. (BEN) - Business Model: Customer Segments
Individual investors
Franklin Resources, Inc. serves individual investors through a variety of investment products, including mutual funds and retirement accounts. As of June 30, 2024, the total assets under management (AUM) for individual investors amounted to approximately $1,646.6 billion, with equity funds contributing $595.0 billion, fixed income funds $564.5 billion, and multi-asset funds $168.1 billion.
Institutional clients (e.g., pension funds)
Institutional clients, including pension funds and endowments, represent a significant segment for Franklin Resources. For the nine months ended June 30, 2024, institutional investment management fees reached $5,056.0 million, with sales and distribution fees from institutional clients totaling $1,013.0 million. The firm reported a significant increase in the average AUM from institutional clients, driven by enhanced service offerings and tailored investment strategies.
High-net-worth individuals
High-net-worth individuals (HNWIs) are targeted through customized wealth management services and private investment solutions. Franklin Resources reported that the average AUM for HNWIs has been growing steadily, with a notable increase in wealth management revenue. In the fiscal year 2024, the company generated an estimated $1,261.5 million in adjusted operating income, indicating strong demand for its high-net-worth services.
| Customer Segment | Assets Under Management (AUM) | Investment Management Fees | Sales and Distribution Fees |
|---|---|---|---|
| Individual Investors | $1,646.6 billion | $4,818.5 million | $897.3 million |
| Institutional Clients | $1,646.6 billion | $5,056.0 million | $1,013.0 million |
| High-Net-Worth Individuals | Growing AUM (exact value undisclosed) | Estimated $1,261.5 million | Not specified |
Franklin Resources, Inc. (BEN) - Business Model: Cost Structure
Compensation for investment professionals
The total compensation and benefits expense for Franklin Resources, Inc. for the nine months ended June 30, 2024, was approximately $2,890.3 million, reflecting an 8% increase from $2,667.7 million in the prior year period. For the three months ended June 30, 2024, this expense was $893.8 million, compared to $841.2 million in the same quarter of 2023.
Technology and infrastructure investments
Franklin Resources has reported that its expenses related to information systems and technology for the nine months ended June 30, 2024, amounted to $442.7 million, an 18% increase from $376.7 million in the previous year. For the three months ended June 30, 2024, these expenses were $156.6 million, up from $127.3 million in the comparable quarter of 2023.
Marketing and client acquisition expenses
For the nine months ended June 30, 2024, Franklin Resources incurred $1,366.2 million in sales, distribution, and marketing expenses, which is a 14% increase from $1,202.0 million in the prior year. In the three months ended June 30, 2024, these expenses were $481.1 million, up from $406.8 million in the same quarter of 2023.
| Cost Category | Q3 2024 ($ millions) | Q3 2023 ($ millions) | 9M 2024 ($ millions) | 9M 2023 ($ millions) |
|---|---|---|---|---|
| Compensation and Benefits | 893.8 | 841.2 | 2,890.3 | 2,667.7 |
| Technology and Infrastructure | 156.6 | 127.3 | 442.7 | 376.7 |
| Marketing and Client Acquisition | 481.1 | 406.8 | 1,366.2 | 1,202.0 |
Franklin Resources, Inc. (BEN) - Business Model: Revenue Streams
Management fees from assets under management
Franklin Resources, Inc. generates significant income through management fees derived from its assets under management (AUM). For the nine months ended June 30, 2024, the total investment management fees amounted to $5,056.0 million, reflecting a 5% increase from $4,818.5 million during the same period in 2023. This growth is primarily attributed to a 10% increase in average AUM, which rose to approximately $1,632.6 billion in 2024.
| Period | Investment Management Fees (in millions) | Average AUM (in billions) | Percent Change in Fees |
|---|---|---|---|
| Q3 2024 | $1,689.9 | $1,632.6 | 5% |
| Q3 2023 | $1,613.4 | $1,419.6 | - |
| 9M 2024 | $5,056.0 | - | 5% |
| 9M 2023 | $4,818.5 | - | - |
Performance fees based on fund performance
Performance fees are another crucial revenue stream for Franklin Resources, with fees totaling $308.2 million for the nine months ended June 30, 2024. This marks a decrease from $446.1 million in the same period of the previous year. The decline is primarily due to lower performance fees earned by alternative specialist investment managers and specific decreases related to Lexington Partners L.P. performance.
| Period | Performance Fees (in millions) |
|---|---|
| Q3 2024 | $56.6 |
| Q3 2023 | $125.9 |
| 9M 2024 | $308.2 |
| 9M 2023 | $446.1 |
Sales and distribution fees from financial products
The company also earns revenue through sales and distribution fees. For the nine months ended June 30, 2024, these fees totaled $1,013.0 million, compared to $897.3 million for the same period in 2023, representing a 13% increase. Asset-based fees specifically accounted for $832.1 million of this total, reflecting a 12% increase year-over-year.
| Period | Sales and Distribution Fees (in millions) | Asset-Based Fees (in millions) | Sales-Based Fees (in millions) |
|---|---|---|---|
| Q3 2024 | $358.3 | $294.6 | $63.7 |
| Q3 2023 | $304.0 | $251.0 | $53.0 |
| 9M 2024 | $1,013.0 | $832.1 | $180.9 |
| 9M 2023 | $897.3 | $743.7 | $153.6 |