Good morning. My name is Tabitha and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Broadridge First Quarter Fiscal Year 2019 Earnings Conference Call. After the speakers' remarks, there will be a question and answer Thank you. Mr.
Fobou, please go ahead.
Thank you, Tabitha. Good morning, everybody, and welcome to Broadridge's first quarter 2019 earnings call. Our earnings release and the slides that accompany this call may be found on the Investor Relations section of Broadridge.com. Joining me on the call are Rich Daley, our CEO Tim Gokey, our President and COO and our CFO, Jim Young. Before I turn the call over to Rich, a few standard reminders.
We will be making forward looking statements on today's call regarding Broadridge that involve risks, A summary of these risks can be found on the second page of the slide in a more complete description on our annual report on Form 10 K. We will also be referring to several non GAAP measures, which we believe provide investors with a more complete understanding of Broadridge's underlying operating results. An explanation of these non GAAP measures and reconciliations to their comparable GAAP measures can be found in the earnings Let me now turn the call
law.
Broadridge is off to a good start to fiscal year 2019. We reported solid first quarter results and announced an important deal to build end of this morning. First, I will begin with some quick highlights of our first quarter 2019 results.
Then,
and give you an overview of our operating results. Next, Jim will review our financials, and I will close with some parting words, including some thoughts on why I think the best is yet to come for broad There's lots to talk about, so let's get started. Broadridge reported solid 1st quarter total revenues rose 5 percent to $973,000,000, propelled by recurring revenue growth of 5 and a 30% increase in event driven revenues. Adjusted operating income rose 15% and more grew by 110 basis points. Adjusted EPS aided by a lower tax rate, and a higher sense.
We continue to see strong momentum in the marketplace. The sale to UBS that we announced last month. The building NextGen front to back Wealth Management Technology Platts one is a significant step. At our Investor Day last year, Tim and the team highlight the opportunity men can be a strong franchise business for Broadridge alongside governance and capital markets In addition, the size and scope is increasingly recognized as a transformation agent by the largest financial services firms in the world. Lastly, we remain on track to It's early, but I am pleased with how the beginning of the year has taken shape.
Tim and his team are well positioned and eager to take Broadridge into the future starting on January 2. So let me now turn the call over to Tim to share some of his thoughts about the UBS deal and to walk through the first quarter results.
Ritch, and good morning, everybody. Between signing a major strategic deal and delivering solid first quarter results, Broadridge is off to a good start for the because it's such an important milestone. I'd ask you to keep in mind three things as you think about the announcement that we will build a wealth management platform with UBS. First, this is a major milestone toward the creation of a wealth management franchise at Broadridge. 2nd, the decision by UBS to partner with Broadridge as the anchor client on the next generation technology platform for the wealth industry testament to Broadridge's status as the FinTech leader trusted by leading global Financial Services players to deliver enterprise wide technology transformation.
3rd, this is just the beginning. Wealth Management Industry is undergoing significant changes, and we think Broadridge is especially well positioned to help our clients adapt to meet those challenges Now for the details. UBS is the anchor client for the new Wealth Management through platform that we will build. The broader 12th management platform will be a next generation open solution that will enable UBS and others as they sign on to enhance advisor productivity, create a superior and drive enterprise level efficiencies by mutualizing investments in technology, Innovation And Security. The platform will bring together Broadridge's point capabilities across the front, middle and back office, along with other best in class capabilities from both UBS and other third parties into a single platform.
Broadridge's front to back solution will include a modernized adviser desktop, as well as order management, advisory, full back office functionality and integrated workflow across the entire enterprise to accelerate client onboarding and other key real time data fabric that enables connectivity to UBSs and third party applications. At our Investor Day last December, we said we thought we could build a 3rd Broadridge franchise in Wealth Management. To do that, we knew we would have to transition from a suite of point solutions to an integrated product sector across the wealth managers front, middle and back offices. I'm engaging with UBS as a major step toward that goal. Beyond the strategic benefits for Broadridge, the decision by UPS to partner with us to provide next generation and mission critical infrastructure is a powerful endorsement of our ability to deliver enterprise scale solutions for our client In the words of Todd And Airtel, Co President of UBS Global Wealth Management Broadridge is the only Fintech player with improving technology, scale and experience to deliver such a transformational solution.
That's a tremendous statement of confidence from an important client and key industry leader. Is also the direct result of the investment we have made in developing Platform Technologies in our Capital Markets franchise The data fabric and other capabilities we have built in developing a global post trade management platform are now evolving to power our wealth We made a strategic decision to invest in and develop new technology capabilities so that we can meet the needs of the large Financial Services players. And that investment continues to pay dividends. Finally, while the deal with UBS's exciting is only one step in building a long term growth engine for Broadridge And Wealth Management. We anticipate that 3U development through the platform, which will give us time to reach out to other major wealth managers.
The continued evolution of wealth management will put pressure on the 3. And a broader wealth management platform will present a compelling value proposition for firms that need to increase capability and reduced the cost and complexity of the technology and operations. Now let's turn to Slide 6 to review both our ICS and GTO segments, and we also benefited from strong throughput proxy activity. Most importantly, with 1 quarter in the books, we are on track to achieve our full year guidance. I'll begin my with closed sales.
Closed sales were $18,000,000 in the first quarter, down from $23,000,000 last year. Keep in mind that we reported an exceptionally strong 4th quarter sales number with a meaningful part of that activity coming late in the quarter, which resulted in a fairly quiet start to the year. As always, the timing of major deals also plays a role in quarter over quarter comparisons. With the signing of the UBS deal, which was not a first quarter event, we feel good about where we are year to date a closed sales perspective. Our communications, ICS recurring fee revenues rose 14% of which a base contributor with mutual fund and ETF intra We also continue to we made in FY18.
Customer communications revenues, as expected, declined from FY18 level, Gement driven revenues were a big part of the ICS results for the quarter. We saw 1 of the largest Mutual fund complexes go up for proxy in the first quarter, which helped drive the significant growth in the event driven mutual fund proxy revenues. That made you hope behind we do not expect to see a similar level of activity in the remainder of the year. Now let's turn to our GTO segment, which reported another strong quarter. And a growth of professional services revenues.
Equity trading volumes across our platform increased by 19% and fixed income trades were up 4%, both of which contributed to our growth. Remains the biggest driver of GTOs growth and we're working through our healthy backlog to turn our recent sales performance into revenue. We continue to make progress in onboarding several large clients and are making good against our delivery commitments. With our ability to build and deliver complex global technology platforms for leading financial services firms over the last few years. Executing against these commitments.
Next, I want to provide an update on recent regulatory events As you recall, in June, charge issuers to distribute critical mutual fund disclosures, as well as comments on how to modernize the design and delivery of these disclosures That comment period ended on October 31. Broadridge was pleased to share our data and comments and we look forward any next steps to commission to size is appropriate. For our part, we're confident in the value proposition we provide for the industry By investing in digital technology, we've already reduced by 40%. The total unit cost to distribute these important regulatory communications to beneficial holders, including paper postage and fees over the past 10 years. Creating more than $400,000,000 annual savings for the industry in 2018.
The total unit cost of these communications to beneficial mutual fund shareholders were delivered by Broadridge, including the regulated fees, is 25 dollars lower than the same communications to registered shareholders for fees or unrate related. Keep in mind, this includes significantly higher complexity than we and our broker clients incur for beneficial shareholders in integrating holdings data across funds. Addressing managed accounts and protecting the security of this highly sensitive account information. Going forward, continued growth can create 100 of 1,000,000 of additional annual industry savings. By applying the full scope of our capabilities, we can continue to raise the level of engagement for fund shareholders, while simultaneously reducing their costs.
That's exciting for us and we think is compelling for our clients, for funds and for the commission. There's also SEC roundtable event scheduled for next week to discuss the full range of proxy related topics. As in line roundtable bring together gives you participants and can be a helpful source of new ideas, but they are not part of any formal right short process. We are always eager to engage with the SEC and others and how Broadridge can use technology to decrease costs and increase retail hold engagement. So we're looking forward to presenting at the roundtable to highlight how Broadridge and the brokerage industry have a best to get and can continue to invest together to better engage and inform investors while driving down the cost of communication is.
So to sum up, Broadridge is off to a good start in 2019. The UBS deal is a major step forward in building a wealth management franchise and an important validation of the team's strategy to focus on that segment. Broadridge reported solid first quarter results with ICS continuing to benefit from strong underlying growth and GTO continue to grow at a steady pace. We are on track to achieve our full year financial guidance and on track to achieve the 3
for the long
and Rich, you've been a tremendous leader for our entire company and a great friend and mentor to meet personally over the past 8 years. Broadridge is in a strong position with a great culture and an exciting future ahead of us. That is a direct result of your leadership and Fisher. So thank you for that and thank you for agreeing to stay on in your new role as Executive Chairman. Now let's go to
Thanks, Tim, and good morning, everyone. Before reviewing our first quarter results, I'll make a few call outs. First, well, UBS win when reported will increase our backlog meaningfully. While the development work to stand up platform will be a use Our growing backlog gives us tax, a strong operating performance was boosted rate from the 30 points of our 46 percent adjusted EPS growth. 3rd, the new revenue recognitions Andrew, or ASC 606.
Our first quarter results reflect the adoption of the new revenue accounting standard. The accounting impact on recurring fee revenue growth from ASC 606 was modestly negative in the first quarter. Overall, we expect the new standard and we have provided some data today that should help you to The strong that was anticipated in our guidance. Looking ahead to the 2nd quarter, we expect a 40% to 50% decline in event driven activity as we lap an exceptionally strong quarter in the prior year. Our full year outlook for event driven revenue has remained unchanged.
As we continue to expect that 2019 event driven revenues will be 10% to 20% below the record 2018 levels. 5th, final guidance. With this good start to the year, we reaffirm our fiscal year 2019 guidance. As we move to Slide 7, let me expand a bit on the new accounting standards impacts on Broadridge's recurring fee and event revenue. First, we expect the full year impact from this accounting change to be neutral to recurring fee revenue growth second, In the first quarter, growth.
In the second quarter, we expect a modestly positive impact. 3rd, the most significant impact will be in the 3rd and 4th quarter we expect actions will no longer 18 under ASC 606 by quarter, by revenue type and by segment to illustrate the expected impact this new standard. You can find these pro form a views on pages 1516 in the appendix of this presentation. This may be particularly helpful in calibrating the quarterization of your estimates. 4th, the new standard similarly impacts event revenue, But given the inherent volatility of event revenue, we don't believe it is helpful to assess event or total revenue growth using the pro form a VA.
Now let's of the revenue drivers, starting with total revenues. Total revenues grew 5% to $973,000,000, with growth across the board in recurring fee revenues, event driven and distribution. Event driven activity was very strong in the first quarter, writing 30 percent to $77,000,000 with a large mutual fund proxy contributing to this growth. Recurring revenues grew 5% in the quarter. Organic revenue growth contributed 4 points to growth.
Onboarding of new business or closed sales as shown here was the largest contributor. An additional point of growth came from acquisitions made in our ICS segment in fiscal 2018. Finally, the impact from the new revenue recognition standard was negative one point to recurring revenue growth
in the quarter.
Turning to Slide 8. Adjusted operating income rose 15% to $123,000,000 in the 1st fiscal quarter of 2019. Growth was driven by higher organic recurring in event driven fee revenues and the favorable margin profiles of trades and event revenue. This strong growth translated into 100 and 10 basis to margin expansion dollars to $0.79 a share in the first quarter. Approximately $0.09 or 17 points of growth came from the strong growth and operating performance with the balance coming from a lower tax provision.
Broadridge's effective tax rate fell to 14% the first quarter from 33% last year, the lower tax provision was a result of 2 factors. First, the full benefit of the lower corporate tax rate from the Tax Act, which was not in effect a year ago. Excluding the ETB, our reported tax rate was 22%. The impact of our higher ETB in the first quarter. The ETB was $7,000,000 in the first quarter, up from 1,500,000 year ago.
We continue to estimate that our full year ATB will be $25,000,000, down from $41,000,000 in 2018. Excluding the excess tax benefit, which can swing significantly from both the current period in the prior adjusted EPS growth was 40% line. I will now discuss the first quarter performance of ICS and GTO segments. Our ICS total revenues rose 5 percent to $766,000,000 in the first quarter, driven by higher event driven recurring fee into a lesser expense distribution revenues. ICS recurring fee revenues rose 4 percent to $347,000,000, which included two points from acquisition made in fiscal 2018.
Event driven revenues rose $18,000,000 to $77,000,000, Event driven strength helped to drive a nice pickup in the ICS segment margins. ICS earnings before taxes rose 29 to $59,000,000, mainly from the elevated levels of event driven activity. The GTO business continued to perform well. GTO recurring revenues rose percent organically to $228,000,000. The largest contributor to organic growth was internal growth with equity trading volumes.
Also, new revenue additions from sales maintain a healthy pace as broader continues to first quarter, and that was again the case in fiscal 2019. Broadridge generated free cash flow of negative $111,000,000 in the first In the quarter, Broadridge invested $16,000,000 in capital expenditures and returned $42,000,000 to shareholders in the form of the quarterly dividend. We did not undertake any share repurchase activity in the first quarter. Let's turn to guidance Page 11. Our fiscal year 2019 guidance is unchanged.
We continue to expect in total revenue growth to be in the range of 3% to 5%. We expect our adjusted operating income margin to be approximately 16.5 percent, up about 60 basis points from fiscal 2018. We expect adjusted EPS growth to be 9% to 13%. We expect free cash flow to be in $85,000,000 to $225,000,000, which we expect will include the UBS Wealth sale announced in October Finally, as you think about Q2, please note that we expect event revenues to be down sequentially and year over year. And accordingly, we expect that earnings will be down significantly, both sequentially and year over year.
So to sum up, we are off to a good start to fiscal 2019 and we remain on track to deliver our full year guidance. And importantly, we are also on track to meet our current time. I too want to express my thanks to Rich. Rich, I will be forever grateful for your leadership, your partnership and your mentorship it has been an absolute privilege.
Thanks, Jim. This is my 47th and last earnings call as CEO of Broadridge. I'm delighted that board and work with Tim on specific issues, which I have a true adoption and working to engage when I focus less on the day to day management of the company and more on value propositions to evolve the governance marketplace to create opportunities our business and to improve the effectiveness and efficiency of the process
for
brokers issuers, funds, and regulators. I strongly believe both as an associate and a shareholder that the best is yet to come for Broadridge. The truth is that I am more excited about the future of our company today then when I sat down in my extra bedroom, 30 odd years ago, business. Is driven in part CEO, my confidence also comes as I look further ahead, where I see clear and tangible growth opportunities for Broadridge in governance, Capital Markets And Now Wealth Management. We have the right strategy the right products and the right investments to ensure that we can deliver value to our clients today more value tomorrow and even more value in 5 years.
We also have in Tim Gokey, the right next CEO and a strong and deep management team to lead our company to that next level of growth. There is another less tangible reason why I think Broadridge is well positioned for the future. One of the great lessons over the long term. Never underestimate the power of engaged associates. At Broadridge, The Coremont culture is the service profit chain, through which highly engaged associates deliver superior service generate strong business to serve clients well and to create real and sustainable competitive advantage and value.
Broadridge on Stanzas, and we are committed to a culture of service and performance. We strive to be an employer of choice and are passionate about creating an environment in which every associate can thrive, building knowledge in skills and be rewarded for doing so. We do this in a way that puts the client first We view every client as a 100 year client, and client satisfaction is the common metric against which every one of our more than 10,000 associates is compensated. That focus on delivering value is recognized by our which in turn creates greater loyalty and willingness to do more business time, you think about the importance of a 97% plus retention rate, or you consider what growth rate to put in your model. Remember, that beneath those numbers lies a collective focus on serving our clients by our associates.
I know Tim shares my passion for this subject, which is a key reason why he is such a strong leader. Another fact driving my optimism about Broadridge is more tangible. Thing. 1 of my great satisfaction as CEO has been the increase in Broadridge's level of investment and products and people over the last few years. I've seen all too often the negative impact that comes from placing too big a focus on maximizing short term results not at Broadridge.
We have invested in assets. We have invested in our products as well as we have built our capital markets franchise base and broadened the suite of services we offer to our governance and global post trade management platform and extending our data services and enhanced content for regulatory reporting in digital in identifying unique network opportunities in areas like fixed income have clearly positioned us in our clients' minds as an important and long term player who they can rely on. Some of our investments Not all of our investments will be successful, but all are important. They will drive the innovation and capabilities that will fuel our future growth and they are clear signal to our clients that Broadridge will stand behind its solutions and continue to adapt and evolve to meet their critical needs going forward. Our focus on building a strong and client focused culture and our capacity to invest shareholder money today against future growth, track record of execution leaves me more optimistic than ever about Broadridge's growth prospects.
I am looking forward to watching Tim and the team deliver on that opportunity. As always, I want to thank our associates for the work they do. And our success. CEO, many people told me that dealing with analysts and investors would be among the most frustrating parts of my job. To the contrary I found it to be one
of the most
engaging. Working with the street has made me a better manager and help me sharpen my points with you on Broadridge's value proposition. On a personal level, I enjoyed my interactions with analysts investors over the past decade plus. So thank you. The work you do is important for us and for our shareholders.
Questions. First question comes from the line of David Toby with Evercore.
Thanks, Dave.
December quarter now that event driven is actually expected to decline sequentially. Could you help us dimension this? Clearly, event was much better than expected in the September quarter. How should we be thinking about the December quarter in terms of revenue and impact?
Yes. Event driven, if it's going to be down off of an awfully big of last year. That'll certainly put pressure on, total revenues for the quarter. We would expect those to contract somewhat off of last year's results. And then that in turn will, drive the, contraction, both sequentially and year over year in earnings.
Okay. Do you want
to mention that at all?
Dave, I mean, down over the last year. Obviously, we're much more oriented towards our full year guidance, just given the volatility and event, want to make sure you were aware of that But you can think of revenues down in the, single digit to low double digit growth rates. Got it.
Just as a quick follow-up, where do you stand with the onboarding of the largest equity and fixed income trade process in client that you've signed?
Hi, Dave. It is Tim Gokey. That project is continue to proceed very well. It has a number of phases. It will not affect revenue this year.
It will begin to affect revenue next year.
Understood. Thank you very much.
Yes. And Dave, that's part of that confidence I talk about about that revenue backlog. And as we look forward to the future and yet have all these great investments that are continuing to generate new activities. Got it. Thank you.
Your next question comes from the line of Darren Peller with Wolfe Research. All
right, guys. Thanks. Rich, I'll say the same. It's going to we're going to miss out on you on these calls, but thanks for everything. Guys, let me just, start off when I look at the overall growth profile and we back out the event driven, I mean, obviously higher trading levels and activities still contributing a lot.
I mean, first of all, can you give us some color on your thoughts on that first in terms of the position growth potential and sustainability around that and what you're seeing in the market and what you expect And then secondly, if we were to just look at the recurrent revenue side, either segment, was there anything that surprising you to the upside or downside in terms of the growth rates of either one of them? I mean, it looks like they're more or less in line with what you had guided, but I'd be curious to hear if there's any puts and takes or positives or negatives on each.
Darren, this is Jim. Can you
just repeat that last part the last part of
your question.
Just if we look at pure recurrent revenue, putting aside the event driven revenue, which obviously had a massive swing just purely event or recurrent revenue rather, the 4% growth in the ICS, I mean, was there anything around that in particular that would have that surprised you either direction?
Sure. So as you said, I would say the recurring revenue growth, I think the call outs are one for us. We're very focused on that sales additions number. And when you get 7 points of growth, coming from sales. That's right in the zip code of where we want to be.
So that's very much in line as we can do that. Sales We continue to think on an absolute basis, our revenue additions will grow throughout the year. That's the model of the backlog that Rich was just referring to. So that very much in line, really no call out on losses, been pretty steady, especially with the communications business impact on that number. As you get to as you can see, there were ins and outs between the two segments where you had strong internal growth coming from the GTO side, largely trade driven, offset by some communications related volumes in ICS.
Now it's early in the year, but obviously we like to see continued high single digit growth in the interim stock growth. 14 percent equity stock record growth is great, but it's the 1st quarter, it's a tiny quarter, but I'll take that over the alternative. So we're comfortable there. So as we look at this, internal growth is always going to have puts and takes. And so sort of, we've always thought long term a neutral to one point type of contribution is, is healthy.
So we're right on track for that type of contribution this year. As always, we're going to come down our ability to onboard sales throughout the year and increasingly
Okay, all right. That's helpful. Let me just follow-up on the UBS side, again, a very large and incremental win for from a booking standpoint. I guess I'm just curious if you can give us a little bit more color on what this is that you're really going to be able to like how are you going to build around this? What's the potential for using this as the base you mentioned and then adding incremental clients to it over time.
I know you've talked a lot about Wealth as an opportunity for a long time now. I'm just curious what this does change that if anything?
Sure, Darren. It is Tim Gokey. And, as you know, we think the opportunity in wealth is that the industry is changing quite a bit. It is creating a lot of needs for brokerage industry, particularly the top 25 broker dealers. And there's no real scale technology player the wealth industry.
And so as people think about evolving their technology, during the position of either having to build it themselves or of buying a bunch point solutions and having to integrate those together and keep them in synchrony with each other and make them work. And that is very expensive. And so we think the opportunity over time to build an ecosystem. And not everyone's going to want to do a transformation the way UBS is, but to build an ecosystem over time, we can buy a part, but the more you buy, the better it is because it all works together already and it's already integrated. As we talk to people in the industry about that value proposition we get very, very positive feedback.
So with this UBS announcement, obviously, we've had a lot of interest terms of transformational conversations, those conversations are long and the timing is difficult, but the real benefit is that with this investment, we'll be able to bring all of our different solutions, closer together so they interoperate and that should help sales across our entire sleeve.
Okay. All right.
Just last quick one and I'll turn it back to the queue. But, Jim, the customer communication side, I mean, are you still on track for after those couple of clients go their way and you anniversary that to be able to grow that business in the low single digits again?
Yes. So Darren, we had talked about our expectation for this year, contraction again for that business. We remain optimistic about our ability to sell our way into growth we burn off some of these losses, the market opportunity remains large. But as we think back to kind of our goals in of achieving synergies. We've done that and are going to exceed that.
And then that second pillar that we're really tackling is is winning larger in house deals. And that's still in progress, although we've been meeting our sales plans out of the gate. So goal is to convert that And then similarly, we think we can get this back to a point of low single digit growth with the longer term goal of really making this a strong digital play.
Your next question comes from the line of Peter Heckmann with Davidson.
Hey, good morning, everyone. Just following up on UBS, a real important anchor client. In terms of talking about the total investments there. Have you quantified that number and we'd be anticipate partnering with anyone? I know you have a number of point solutions right now.
But in terms of areas like portfolio reporting rebalancing, are you really looking to build your own or rely some partnerships?
Yes, Pete, this is, Tim Gokey. We have definitely quantified the investment in extreme detail. And it was definitely a lot of the work that we have done with UBS to get to this point. I think because it is a multiyear build and because we are, partnering with them, I don't think you will see really measure more significant impacts on our cash flows as a result of this. It is a significant investment, but it's something that you'll see absorbed sort of within the business more broadly.
In terms of, the different components and which things we're building versus leveraging. I do think that with the advance of technology, the ability to have an open API driven texture allows people to really have the best of all worlds. So we are debt definitely going to be supplying some of the core components in the container and the data fabric. UBS is going to be built some components and we'll be integrating 3rd party components. And I think that creates a future for Wealth managers where they can really assemble a suite of things that interoperate because the integration framework is provided.
And so that's something we're very the top we think will play very well.
Renee, this is Rich. This goes to my comments, and I specifically put in the script about, I feel arguably best about the long term way we've run business and our focus on investing in the future. So a lot of what Tim is talking about is under his leadership things that we've been doing already. And so this platform that, Tim and the team, have presented and will execute against for UBS is so dramatic different than the company we started with over a decade ago and the offering we started with over a decade ago. And a good part of what to create a company this strong with opportunities going forward is strong across all of Broadridge.
That's
great. Thanks. And then just a follow-up on, can you just maybe outline and maybe there's not enough precedent to totally outline the timeline for the SEC review, the twin reviews of mutual fund fees and the overall property process. And long do you think that will take to play out? And then is there a way to kind of quantify the range of outcomes between cuts and fees and existing services new services with new fees, and show a reduction of cost.
Is there any way to quantify the range of from the SEC review?
Sure. Peter, it's Tim Gokey. When we went through this, just to talk about the range of what the timeline looks like, when we went through this previously The topic opened before 2010 when I arrived here and when I arrived here in 20 it was in full swing. The, faculty advisory committee that was appointed by New York Stock Exchange did a work over a few years. Then I went back to the SEC.
The final rules came in place in January 2004 So that was a 4 year process in that case. So these processes can go on. In this case, the SEC is looking for a comment whether they should even initiate a process. So we don't know whether there will be a process or not. So that is part of a part of what the discussion was.
And when you looked at the timeline around 30e3, but that was also a 3 to 4 year process. So a few things do tend to go on. In terms of quantification of the impact The and this was in our letter to the SEC that the total fees for, for the portion that they have asked for comment on that we invoiced last year was $150,000,000. So because only there could be some up or down on that $150,000,000. You could put your own percentages on that.
I will note that with the implementation of 30e3, we are expecting to see additional fees as we help the industry with a new notice feed. So I think, again, for us,
the real
goal here is to continue to apply digitization and to apply technology to improve the investor experience. And to reduce costs for the industry overall. And it's interesting because we can see very clearly before us probably the next five $100,000,000 of opportunity in annual savings for the industry, which is more than 3 times the fees that rated today. So we think that that power of continuing to take costs out across the entire ecosystem really demonstrates the value that we can create as player here.
If you go back to guys like you, with us from the very beginning, drawing the roadshow and when we spun, we had the potential roll out of notice and access for proxy. And lots of people were saying, oh, geez, is that, going to erode, the value of Broadridge and what does that mean to the future? And I was very confident then in saying that the opportunity to apply technology was going to make this process better all involved, right? I had no expectation that the evolution we went through would be as strong as it is. So let's put things in text.
Back then, as Tim pointed out, our value proposition today is very strong, but back then, the cost to service a street investor was because of all the additional work that needs to take place on the street side and the related was higher than the corresponding costs to service a registered account, which would be static list for the company. Now let's there's whether it be for equities or for funds that cost to service the communications of them is dramatically lower. I think Tim pointed out earlier, 25%, right? So it's a pretty nice place to be. Right?
To be going in picture, my analogy is as follows. Think about going into a budget need call it the biggest one in the world for the country, okay, where we went from 1,000,000,000,000 in deficit to 1,000,000,000 in surplus. That's what Broadridge has achieved in this process over the last decade. True recognition that it was more complicated, but that technology mattered, and we could probably drive cost out. We've driven cost out to the point where it is dramatically cheaper and will continue to be dramatically cheaper.
Then the people We're paying the bills or achieving the real opportunity and the thing that I'm excited to be doing as we go forward, let's now move this to the next phase dialogue of how do we make investors more knowledgeable, more engaged, participate more in governance, okay, And as Ken pointed out, we're going to do that all at a lower cost still. So we're really looking forward whether it be roundtables or these dialogues, all right? And this is in Ubers. We're proud of what we've done But the investments I talked about earlier position us, okay, as Tim showed to take this to the next level of cost savings But as importantly, to someone like Jay Clayton and his goals for retail engagement, we can lower the cost and raise the engagement levels with technology as we go forward. And let me be clear.
We're the only ones I see with the level of technology that we're rolling out right now despite some hearsay from other people.
Okay. Your next question comes from the line of Oscar Turner with SunTrust.
Hey, Oscar.
So another question, follow-up question on Wealth Management. I was wondering at a high level, can you provide And how you think about this new platform as revenue opportunity relative to the size of your wealth management business today?
For Oscar, this is Tim Gokey. We dimensioned our overall Wealth Management business when we spoke at our Investor Day last year on the order of $400,000,000. And This opportunity is definitely relevant in the context of that. We don't comment on individual contracts. And so I can't give a specific number, but it is definitely a relevant number.
I think what is more relevant is how it sets the stage for, other transformational opportunities like this and for increasing the sales of our overall, wealth management suite by bringing things more together. What management has been one of our faster growing areas over the past few years. We've had that revenue growth in that has been definitely in the above overall Broadridge and in the low low double digits. So we feel good about our ability to, grow this overall part of our business. And, when we're at an extra investor day to be be talking about the progress that we've made there.
Okay. Thank you. And second question is just on the other ICS segment within ICS. Can you provide any color on the organic growth in that sub segment this quarter? And then also color into what drove that strength seems to be, continue to be additive to growth and not really reliant or not reliant on trading levels, some of your other segments?
Oscar, this is Jim. Remember in that other area, you've got a lot of our data and analytics business that Tim talked about, that's been driving the lion's share of the growth of the organic piece of that. There obviously are some inorganic pieces in there. That's where we've added some additional data and analytics businesses, last year. As well as some investments in the issuer space, which has added, which has added growth to the, which has added to that area.
But if you look at sort of the organic piece of that, it really is a data and analytics story, which is terrific. That's an area of a real investment for us. So, that's the source.
And I'll just add on it. I'll just now add on to that, which is we are, very excited about the data analytics building business that we're largely serving the fund industry, but really serving asset management more broadly. There's a whole opportunity out there because today the data that asset managers need to, to manage their overall business the sales and product management, they have to stitch together different pieces from institutional channels from retail channels for North America from the rest of the world. And, the vision that Dale Swainter, our leader that has is is to really create that sort of universal data set that covers all of those and really saves large institutions a lot cost from trying to stitch those different pieces together. So we think that's a vision with, a lot of legs on it over time.
Okay. That's helpful. Thank you.
Your next question comes from the line of Chris Donat with Sandler O'Neill.
Good morning. Thanks for taking my questions. I wanted to ask one more on UBS for Tim, just in terms of thinking about how the milestones looked going forward, like how we can track success? Should we be thinking about looking for things like new partners joining the platform like other banks and brokers or completed pieces of it or expansion outside the United States. Just what sort of kind of qualitative things, should we expect as indicators of success?
That's a great question. Thank you very much for asking. I think always in, project of this nature, having those interim markers is important, having those that are externally available is, is more challenging. I think this is something we will definitely, keep you up to date on as we go through in terms of our progress. And the it is, I think, in terms of new partners, that is on the nature of what I mentioned in terms of the, people looking for transformational approach and those conversations are always long and complex and the timing of them is always hard.
Certainly, if we we were to announce an additional partner that would definitely be a very positive indicator. But if we don't announce one before this goes live, I wouldn't take that as an indication that we're not having success we want to because of what I said before about the, increase we expect in the sales of our individual point solutions that will become integrated.
Okay. That's helpful. And then for Jim, just in terms of the guidance that you gave in August for closed sales, at that point when you gave it, Did that incorporate UBS being signed? Or was that something that's kind of just in the broader mix?
Chris, this is Jim. Just a brief comment and Tim can add on, which is clearly, UBS didn't sneak up on us. So we had contemplated this type of deal in the year, but you always got to look at large deals that move or change shape or the like. So, all that we take into account, as we think about the full year, but obviously starting a year with this type of opportunity gives us better visibility, but we still long ways to go.
Okay. And Tim, just adding on to that, just as Jim said, given Given the timing of these things, how much do you think it is close and then it takes an additional entire year. So have to have some sort of discount factor in there, even when you think you're very close. What we do know is we feel very good about our overall pipeline the remainder of the year. We never really address sales guidance until it happens.
So we're not going to make any comments about that, but we feel solid about the year and this win certainly increases our confidence.
Okay. And then just wanted to give, my best wishes for Rich on the next phase here, but to also point out that now, Rich, you set the bar kind of lower for us analysts is being frustrating for Tim. I mean, we came in below, but
I meant what I said, Chris. I really enjoyed the interface and Look, we have and we'll continue to have great transparency We respect what you guys do. And, I thought it was terrific. So thank you.
All right. Take care, Jim. Better, great, and Tim and Tim, especially.
Thank you.
Your next question comes from the line of Patrick O'Shaughnessy with Raymond James.
Hey, good morning and congratulations Rich. Maybe a question on the SEC comments that were filed. The ICI is proposing that the SEC allow funds to hire the vendors that fulfill their regulatory communications instead of the current infrastructure where the hiring decision is up to the broker dealers. Is that even a feasible alternative to the current infrastructure?
Hey Patrick, it's Tim. Thank you. Thank you very much for asking that question. And before I answer that, one thing I do want to say is that, we were, we were pleased that there were some important areas agreement between us and ICI in your letter. We both agree in the value to investors of summary content and how that can lead to a higher level of engagement.
And that's an important shared view. And we were pleased that, they recognized although it wasn't until deepened the report, but they recognized in their report that the total unit cost is lower on the beneficial side. And so, we're pleased with that. We were, I think we were a bit surprised with their proposed approach and we were surprised that, that they really chose to take on their broker dealer distribution partners. So a strong and I'll hit both of those.
So in terms of the approach of, of not having essential subscription party. Something like this was proposed by the Stock Transfer Association in 2010. At the beginning of the last process. And the, toxicity advisor committee looked at that in some detail and really, really to that it was not workable and that it would be disruptive I think the other surprise was, that the ICI, is sort of taking on their broker distribution partner, broker dealer distribution partners by first of all suggesting that they share their entire client list with the funds, that when they give those client lists over to funds, the mailing houses that the brokers remain responsible for the cyber risk and that the brokers would no longer be reimbursed for cost that they incurred on the Fund's behalf. So that was, in fact, surprising to us.
We don't think that's, that workable. But, but irrespective, our approach is, to really look forward to work with our front clients, our broker clients, to commission, to move things forward positively And as we've said, we believe that through technology, we can increase investor engagement. We can build on the 40% savings that we've already created in the past 8 years. And we see savings for the industry annual savings of another $500,000,000, which is more than three times the total piece today.
Great. That's very helpful. And then for my follow-up, I guess I should also ask a question about UBS. Was that when an open and competitive RFP process
Yes, Patrick, it was a very, very extended process with ourselves and a number of others, some others that are in our industry, some other technology firms that are not in the industry today, and UBS really looked very extensively. And I think this is one of the things that really pleases us is that after a an extensive process we've looked at, really everything that is out there and everything that's available that after that extensive process, they chose to partner that we were felt as a very strong endorsement of our track record, our capabilities and our strategy.
Great. Thanks so much.
Your next question comes from the line of Puneet Jain with JP Morgan. Hey,
thanks for taking my question. And I'm not going to ask about UBS now. So on closed sales, like, are you seeing any impact from the recent stock market weakness and overall uncertainty on pipeline and business, specifically in the GTO business there?
Suneet, hi, it's Tim. Thank you for asking. We really I think that obviously is helping our internal growth in terms of increased trading activity. But in terms of the conversations that we are having with with our clients and our prospects. They continue to see the need for ongoing transformation for neutralization.
And so our conversations remain really very strong. Great.
And then, on Slide 15th of the deck, like it seems like overall accounting adjustment was 59,000,000 understand recurring adjustment was about a point of headwind, but is it fair to say much of the remaining was related to, early recognition Vanguard proxy last year?
I would just comment. I think you're right to call out that it's event driven. And remember, had a convention where we would recognize the revenue about 30 days after after we had mailed it. And so that's what you're seeing is the change in sort of that assumption. It would have been recognized more immediately, it could be equity or mutual fund proxy over that takes effect, which is why I said, I don't think it's really all that valuable to do this comparison because depending on the month that a proxy event falls, change this.
And there's no seasonality, underlying seasonality to our event business. So that's what you're seeing. That's why I've chosen to focus on the recurring fee. Driver impact, just because the event there's really little to be learned from that.
And let me quickly ask there. So for the full year, you do not expect much revenue impact. Margin and EPS impact will also be minimal then.
Correct. All very minimal. Sort of even see that in last year's, at least from a revenue standpoint, pretty, pretty modest all in and we expect immaterial for the full year on revenue and earnings.
Got it. Thank you. And congrats on new roles, Rich and Tim.
At this time, there are no questions. I'll turn the call back over to Rich.
Okay. I told lettings today I got last word. I want to again thank everyone. It's really been a privilege for me. And I'm also ecstatic that I get to be part of the organization going forward, whether it be his Chairman or in an executive capacity to work with, in assisting Tim.
The potential for Broadridge transform our industry is greater today than it's ever been before. The opportunities in retail engagement that come from roundtables, the opportunities that that will have on governance going forward and capital mark hits, where we continue to grow in the importance of what we do every day and now unwell, really, really up tangible proof points that the best is yet to come from Broadridge. Again, thank you and choose to have a great day.
Thank you. That concludes this conference call. You may now disconnect.