UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_________to ________

Commission File Number: 0-10200

________________________________________

________________________________________

SEI INVESTMENTS COMPANY

(Exact name of Registrant as Specified in Its Charter)

Pennsylvania	23-1707341
State or Other Jurisdiction of Incorporation or Organization	I.R.S. Employer Identification No.

1 Freedom Valley Drive

Oaks, PA 19456

(Address of Principal Executive Offices and Zip Code)

610-676-1000

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $.01 per share	SEIC	The NASDAQ Stock Market LLC
		(The NASDAQ Global Select Market®)

Securities registered pursuant to Section 12(g) of the Act:

None

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.         Yes ☒   No  ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes  ☐    No  ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes  ☐   No  ☒

The aggregate market value of the voting common stock held by non-affiliates of the registrant was approximately $6.7 billion based on the closing price reported by NASDAQ on June 30, 2019 (the last business day of the registrant’s most recently completed second fiscal quarter). For purposes of making this calculation only, the registrant has defined affiliates as including all executive officers, directors and beneficial owners of more than 10% of the common stock of the registrant.

The number of shares outstanding of the registrant's common stock, as of the close of business on January 31, 2020:

Common Stock, $.01 par value 149,975,521

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the following documents are incorporated by reference herein:

1. The definitive proxy statement relating to the registrant’s 2020 Annual Meeting of Shareholders, to be filed within 120 days after the end of the fiscal year covered by this annual report, is incorporated by reference in Part III hereof.

SEI INVESTMENTS COMPANY

Fiscal Year Ended December 31, 2019

TABLE OF CONTENTS

		Page
PART I
Item 1.	Business.	2
Item 1A.	Risk Factors.	12
Item 1B.	Unresolved Staff Comments.	22
Item 2.	Properties.	22
Item 3.	Legal Proceedings.	22
Item 4.	Mine Safety Disclosures.	24
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	25
Item 6.	Selected Financial Data.	26
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	27
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	43
Item 8.	Financial Statements and Supplementary Data.	44
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	85
Item 9A.	Controls and Procedures.	85
Item 9B.	Other Information.	85
PART III
Item 10.	Directors, Executive Officers and Corporate Governance.	86
Item 11.	Executive Compensation.	86
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	87
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	89
Item 14.	Principal Accounting Fees and Services.	89
PART IV
Item 15.	Exhibits, Financial Statement Schedules.	90
Item 16.	Form 10-K Summary.	90

Page 1 of 93

PART I

Forward Looking Statements

This Annual Report on Form 10-K contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve certain known and unknown risks, uncertainties and other factors, many of which are beyond our control, and are not limited to those discussed in Item 1A, “Risk Factors.” All statements that do not relate to historical or current facts are forward-looking statements. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” "will," and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. In particular, these include statements relating to present or anticipated strategies, products and markets, future revenues, capital expenditures and uses, expansion plans, future financing and liquidity, personnel, and other statements regarding matters that are not historical facts or statements of current condition.

Any or all forward-looking statements contained within this Annual Report on Form 10-K may turn out to be wrong. They can be affected by inaccurate assumptions we might make, or by known or unknown risks and uncertainties. Many factors mentioned in the discussion below will be important in determining future results. Consequently, we cannot guarantee any forward-looking statements. Actual future results may vary materially.

We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. You are advised, however, to consult any further disclosures we make on related subjects in our filings with the U.S. Securities and Exchange Commission (SEC).

Item 1. Business.

Overview

SEI is a leading global provider of technology-driven wealth and investment management solutions. We deliver comprehensive platforms, services and infrastructure – encompassing investment processing, investment operations and investment management – to help wealth managers, financial advisors, investment managers, institutional and private investors create and manage wealth.

As of December 31, 2019, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages, advises or administers $1.0 trillion in hedge, private equity, mutual fund and pooled or separately managed assets, including $352.0 billion in assets under management and $683.3 billion in client assets under administration. Our affiliate, LSV Asset Management (LSV), manages $107.5 billion of assets which are included as assets under management.

General Development of the Business

SEI has over 50 years of experience with developing innovative business solutions designed to help clients meet the challenges of managing personal and institutional wealth.

We began doing business in 1968 by providing computer-based training simulations for bank loan officers. We developed an investment accounting system for bank trust departments in 1972 and became a leading provider of investment processing outsourcing services to banks and trust institutions in the United States. Later, we broadened these outsourcing services to include a family of investment management products, as well as investment operations outsourcing services. We became a public company in 1981.

We have evolved these services into innovative, platform-based solutions and financial technologies. We have also expanded into global markets. Today, we serve approximately 11,300 clients in the United States, Canada, the United Kingdom, continental Europe, South Africa and East Asia.

In each of these markets, we have combined our core competencies – investment processing, investment management and investment operations – to deliver broader and more strategic solutions for clients and markets. Today, we offer a global wealth management platform for private banks and wealth services firms; a comprehensive platform for operating an investment advisory business; an Outsourced Chief Investment Officer (OCIO) platform for retirement plan sponsors and institutional investors; a total operational outsourcing platform for investment managers and a life and wealth platform for ultra-high-net-worth families.

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Mission and Strategy

SEI’s mission is to deliver innovative and comprehensive investment processing, investment management and investment operations platforms to help clients achieve lasting success. By strengthening our position as a global provider of these platforms, we seek to achieve earnings growth and increased shareholder value through these strategies:

Create broader solutions for wealth services firms. Wealth managers, financial advisors, investment managers and asset owners face increasing competitive pressures, ever-growing regulations and the need to replace aging legacy technologies. While addressing these industry demands, they also seek to expand services, offer differentiated solutions, improve efficiencies, reduce risk and better manage their businesses. Our comprehensive platforms, including financial technologies, outsourced investment processing and operations services, and investment management products, help wealth services firms better serve their clients and create opportunities to enable their success.

Help institutional investors manage retirement plans and operating capital. Retirement plan sponsors, as well as healthcare systems, higher education and other nonprofit organizations, strive to meet their fiduciary obligations and financial objectives while reducing business risk. Our OCIO platform delivers integrated solutions to help clients address objectives, reduce business risk, provide ongoing due diligence and increase operational efficiencies.

Support affluent individual investors in the management of their life and wealth goals. Investors demand a holistic wealth management experience that focuses on their unique life goals and provides them with an integrated array of financial services beyond traditional wealth management offerings. Our proprietary goal discovery process, comprehensive wealth advisory services and wealth management dashboard empower clients to confidently make more effective, impactful decisions and interact with their wealth.

Continue expanding our global footprint. Global markets present significant growth opportunities. We have evolved platforms and business models for the global wealth management marketplace, focusing on the needs of institutional investors, private banks, independent wealth advisers, investment managers, investment advisors and affluent individual investors.

Focus SEI’s business strategies on addressing converging markets and clients’ needs. Increasingly, the needs of wealth managers, investment managers, financial advisors, family offices and investors are converging, particularly among larger firms and investors. With our One SEI strategy, we are addressing the increasingly complex and progressively converging needs of markets and clients by leveraging existing and new SEI platforms and assets making them accessible to be combined for unique client-responsive solutions. We are modularizing larger wealth management and investment processing platforms into standalone components, enabling an unbundled approach to product delivery.

Business Model

We are guided by our business model’s fundamental principles in managing the company:

• Innovation. We believe our unique position in the industry – spanning financial technology, investment operations and investment management – facilitates product innovation to enable client success. We have over 50 years of experience with developing new categories of solutions that anticipate and address complex business challenges. We foster an open, collaborative culture and strive to nurture a talented and engaged workforce. We believe our commitment to driving growth through product innovation – targeting 8-10% of annual revenues for research and development – is a competitive advantage.

• Organic growth. We seek to grow organically by delivering enterprise-wide platforms to the markets we serve. We are growing the business through new-name sales, cross-sales and new platform delivery. We are also entering adjacent markets by delivering existing and new platforms. To expand capabilities or enable organic growth, we may also make strategic acquisitions or strategic investments in other firms.

• Client engagement. We strive to forge intimate and enduring client relationships, be a thought leader in the markets we serve, and craft “win-win” pricing models. We believe SEI’s long-lasting client relationships – some of which span decades – are fundamental to enhancing SEI’s financial strength.

• Enhanced financial strength. We focus on achieving long-term, sustainable revenue and earnings growth. We favor businesses and solutions that generate recurring revenues and predictable cash flows. We maintain a strong balance sheet and return capital to shareholders through stock purchases and paid dividends.

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Business Platforms

Investment Processing

We are a leading provider of investment processing platforms to wealth managers worldwide. Clients include institutional and private-client wealth managers, including banks, trust companies, independent wealth advisers, investment advisors, financial planners and other financial services firms. We primarily deliver investment processing services through two proprietary platforms: the SEI Wealth Platform^SM (the SEI Wealth Platform or SWP) and TRUST 3000®. Through our wholly-owned subsidiaries, we also provide business-process outsourcing services including custodial and sub-custodial services, and back-office accounting services.

SWP provides a global, unified and scalable platform for operating a wealth management business. This comprehensive platform includes investment processing and infrastructure services, and advanced financial technology to support wealth advisory, asset management and wealth administration functions. SWP also provides global wealth management capabilities including a 24/7 operating model, global securities processing, and multi-currency accounting and reporting. Built around a client-centric relationship model, SWP has an open architecture and supports workflow management and straight-through processing.

SWP is offered in Software as a Service (SaaS) or as Platform as a Service (PaaS) delivery modes. We began delivering SWP (PaaS) to private banks and independent wealth advisers in the United Kingdom in 2007, to banks in the United States in 2012, and to investment advisor clients in the United States in 2015. As of 2019, all investment advisor clients are operating on SWP.

The TRUST 3000 platform is a comprehensive trust and investment accounting system that provides securities processing and investment accounting for all types of domestic and global securities and support for multiple account types, including personal trust, corporate trust, institutional trust and non-trust investment accounts. This platform is delivered in SaaS or PaaS delivery modes.

Investment processing platforms include application and business-process-outsourcing services, professional services and transaction-based services. Revenues for these services are recognized in Information processing and software servicing fees on the accompanying Consolidated Statements of Operations.

Application and business-process-outsourcing revenues are earned from monthly fees for contracted SaaS and PaaS services. Revenues are based upon the type and number of investor accounts serviced or as a percentage of the market value of the clients’ assets processed. Professional services revenues are earned from contracted, project-oriented services, including client implementations. Transaction-based revenues are earned primarily from commissions earned on securities trades executed on behalf of clients through one of our investment processing platforms.

Investment Management

Our investment management platform consists of investment products including mutual funds, collective investment products, alternative investment portfolios and separately managed accounts. Investment products are used to construct an investment strategy tailored to meet the needs of different investors, taking into consideration their objectives and risk tolerances. Investors typically invest in a globally diversified portfolio that consists of multiple asset classes and investment styles.

Through our wholly owned subsidiaries, we serve as sponsor, administrator, transfer agent, investment advisor, distributor and shareholder servicer for many of these products. We distribute these investment products through investment advisory firms and other wealth managers. We also distribute investment products directly to institutional and individual investors.

Our investment management platform includes other consultative, operational and technology components tailored to the needs of a specific market. These components may include investment strategies, consulting services, administrative and processing services and technology tools. As an example, SEI’s investment management platform is an integral component of OCIO services offered to institutional investors, and SEI’s Turnkey Asset Management Program (TAMP) offered to investment advisors.

As of December 31, 2019, we managed $244.6 billion in assets including:

• $177.7 billion invested in fixed-income and equity funds and separately managed account programs;

• $58.2 billion invested in collective trust fund programs; and

• $8.7 billion invested in liquidity or money market funds.

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An additional $107.5 billion in assets is managed by our unconsolidated affiliate LSV, a registered investment advisor that specializes in value equity management for its clients.

Investment management revenues are earned primarily as a percentage of net assets under management. These revenues are recognized in Asset management, administration and distribution fees on the accompanying Consolidated Statements of Operations. Our interest in the earnings of LSV is recognized in Equity in earnings of unconsolidated affiliates on the accompanying Consolidated Statements of Operations.

Investment Operations

We are a leading global provider of investment operations outsourcing platforms to fund companies, banking institutions, family offices and both traditional and alternative investment managers worldwide. These platforms include business-processing-outsourcing services including fund and investment accounting, administration, reconciliation, global regulatory and compliance services (GRCS), investor servicing and client reporting. We also offer investment operations services to the family office market in the United States.

As of December 31, 2019, we administered $683.3 billion in client assets for traditional and alternative investment fund products, including mutual funds, hedge funds and private equity funds. Revenues from these products are earned primarily as a percentage of net assets under administration, and are recognized in Asset management, administration and distribution fees on the accompanying Consolidated Statements of Operations.

Revenues for the processing of institutional separate accounts and separately managed accounts are generally earned on the number of investor accounts serviced. Assets associated with this separate account processing are not included in reported assets under administration. These revenues are recognized in Asset management, administration and distribution fees on the accompanying Consolidated Statements of Operations.

Business Segments

Business segments are generally organized around our target markets. Financial information about each business segment is contained in Note 12 to the Consolidated Financial Statements. Our business segments are:

Private Banks – provides outsourced investment processing and investment management platforms to banks and trust institutions, independent wealth advisers and financial advisors worldwide;

Investment Advisors – provides investment management and investment processing platforms to affluent investors through a network of independent registered investment advisors, financial planners and other investment professionals in the United States;

Institutional Investors – provides investment management and administrative outsourcing platforms to retirement plan sponsors, healthcare systems, higher education and other not-for-profit organizations worldwide;

Investment Managers – provides investment operations outsourcing platforms to fund companies, banking institutions, traditional and non-traditional investment managers worldwide and family offices in the United States; and

Investments in New Businesses – focuses on providing investment management solutions to ultra-high-net-worth families residing in the United States; developing internet-based investment services; developing network and data protection services; modularizing larger technology platforms into stand-alone components; entering new markets; and conducting other research and development activities.

The percentage of consolidated revenues generated by our business segments for the last three years was:

	2019		2018		2017
Private Banks	28	%	30	%	31	%
Investment Advisors	24	%	25	%	24	%
Institutional Investors	20	%	20	%	21	%
Investment Managers	27	%	24	%	23	%
Investments in New Businesses	1	%	1	%	1	%
	100	%	100	%	100	%

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Private Banks

We are a leading provider of global investment processing outsourcing platforms for financial intermediaries such as banks and trust institutions, independent wealth advisers and financial advisors worldwide.

We offer investment processing in both SaaS or PaaS delivery modes. SaaS clients outsource investment processing software services and information processing to SEI, but retain responsibility for back-office investment operations. PaaS clients outsource all the same functions and services as PaaS as well as outsource investment operations, including custody and safekeeping of certain assets, income collection, securities settlement and other back-office accounting activities.

In keeping with our One SEI strategy, we are bringing all of SEI’s assets and platforms to wealth managers in flexible and customizable ways, enabling them to access the collective power of SEI’s comprehensive platforms to solve their unique challenges and complex business opportunities. Clients operate their wealth management and trust businesses on our legacy solution, TRUST 3000, or on our comprehensive, modern solution, SWP. These platforms are offered as either single-platform solutions or in conjunction with standalone components of other SEI platforms and services to create unique solutions depending upon the needs of the client.

SWP offers advanced transformational capabilities across the entire range of wealth management processes, including those of large global wealth managers. SWP enables banks and wealth managers of all types to manage the growing complexity of their operations, replace legacy platforms, comply with complex regulations and make more effective use of capital by outsourcing wealth management processing or operational services.

Our TRUST 3000 and SWP clients sign long-term contracts. For TRUST 3000, clients have initial terms that are generally five to seven years in length. On our TRUST 3000 platform, at December 31, 2019, we had significant relationships with 61 bank and trust institutions in the United States. Our principal competitors for this business are:

• Fidelity National Information Services, Inc. (FIS);

• Innovest Portfolio Solutions, LLC;

• Charles Schwab & Co., Inc.; and

• Fidelity Investments.

Many large financial institutions develop, operate and maintain proprietary investment and trust accounting systems. We consider these “in-house” systems to be a form of competition.

On our SWP solution, at December 31, 2019, we had significant relationships with 53 signed banks, independent wealth advisers and other wealth managers located in the United Kingdom and the United States. Our principal competitors for this business, in addition to those named above, where there has been sector consolidation through acquisitions, are:

• Pershing LLC;

• FNZ UK Ltd.;

• Temenos Group AG;

• Avaloq;

• SS&C Technologies;

• Fiserv, Inc.; and

• other smaller technology firms.

We also consider “in-house” systems to be a form of competition.

This segment also offers investment management and distribution programs for banks, wealth managers and other financial services intermediaries globally. We also deliver customizable wealth management programs leveraging more than three decades of experience with manager research and advice, asset allocation advice and portfolio construction advice. These programs are flexible and provide a better solution at a lower cost of ownership and quicker speed to market through outsourcing. We can deliver active, factor-based and passively-managed solutions constructed on the principals of behavioral finance to give firms the ability to focus on their clients while implementing and maintaining consistent and efficient processes that help them grow their business and manage risk.

We have business relationships with 285 banks, wealth managers and other financial services intermediaries at December 31, 2019. Our definition of an asset management distribution client for this segment includes financial intermediaries who have exceeded a minimal level of customer assets invested in our investment products. With the growth of our business, the minimal level of customer assets which defines a "business relationship" is adjusted from time

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to time. Our business is primarily based on 98 asset management distribution clients who, at December 31, 2019, had at least $5.0 million each in customer assets invested in our programs. With primary focus on the markets of the United States, Canada, United Kingdom, continental Europe, Hong Kong and Singapore, we serve clients, and their clients, throughout the globe in six languages. The principal competitors for this business are:

• Russell Investment Group;

• BlackRock;

• discretionary portfolio managers; and

• various multi-manager investment programs offered by other firms.

We also consider “in-house” proprietary asset management capabilities to be a form of long-term competition.

Investment Advisors

We are a leading provider of investment management solutions throughout the United States to registered investment advisors, financial planners and life insurance agents, many of whom are registered with independent broker-dealers. These solutions include SEI’s investment management platform and investment processing platform and are generally offered on a bundled basis. We also help advisors manage and grow their businesses by providing them access to marketing support programs and practice management services which include, for example, workflow recommendations, succession planning advice, business assessment assistance and recommended management practices. We believe our integrated solution helps investment advisors reduce risk, improve quality and gain operational efficiency which allows them to devote more of their resources to acquiring new clients and achieving better outcomes for their existing clients.

Advisors are responsible for the investor relationship which includes creating financial plans, implementing investment strategies and educating and servicing their customers. Advisors may customize portfolios to include the SEI-sponsored mutual funds, separate account managers provided through our programs and third party mutual funds curated by our Investment Management Unit. Our wealth and investment programs are designed to be attractive to affluent or high-net-worth individual investors and small to medium-sized institutional retirement plans.

We continually evaluate and enhance our offering to meet the emerging needs of our advisors and their end clients. The enhanced service offerings enabled through SWP provide a more diverse range of back-office, front-office and client-facing investment processing and investment management capabilities. We completed the movement of all our clients onto SWP in 2019. With the movement complete, we will focus on further enhancements to SWP and recruiting new advisors.

We estimate we have business relationships with approximately 7,600 financial advisors at December 31, 2019. Our definition of a client for this segment includes financial advisors who have exceeded a minimal level of customer assets invested in our investment products. With the growth of our business, the minimal level of customer assets which defines a "business relationship" is adjusted from time to time. Our business is primarily based on approximately 2,300 investment advisors who, at December 31, 2019, had at least $5.0 million each in customer assets invested in our programs. Revenues are earned largely as a percentage of average assets under management.

The principal competition for our investment management products is from other active money managers, passive investment management sponsors, other turnkey asset management providers, mutual fund companies, custody service providers and the proprietary investment management programs of broker dealers. In the advisor distributor channel, the principal competitors include:

• AssetMark Investment Services Inc.;

• Brinker Capital;

• EnvestNet, Inc.;

• Fidelity Investments;

• TD Ameritrade;

• Charles Schwab & Co., Inc.; and

• other broker-dealers.

As we introduce SWP, we expect to more directly compete with custody service providers.

Institutional Investors

We are a leading provider of Outsourced Chief Investment Officer (OCIO) platforms for retirement plan sponsors, healthcare systems, higher education and other not-for-profit organizations globally. We have a broadly experienced team

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with specific expertise in defined benefit plans, defined contribution plans, endowments, foundations, balance sheet assets and other institutional asset pools.

Our clients benefit from solutions that combine the breadth of SEI’s investment management, advisory, and administration services. Depending on their needs, objectives, and risk tolerance, clients may elect to either retain control or outsource specific management functions. As a result, they are able to integrate SEI’s investment process, advisory services, and plan administration services into their existing best practices seamlessly. This approach is designed to address the investor’s specific risk-return requirements, reduce business risk, provide ongoing due diligence, and increase operational efficiency.

SEI’s open architecture investment management approach provides access to manager research, manager selection and monitoring, portfolio construction and discretionary management. Advisory services include scenario modeling and customization of an asset allocation plan that is designed to meet long-term objectives. Plan administration services include trustee, custodial, and benefit payment services.

We expect to continue our efforts to build a globally diversified institutional client base, provide our clients with value-added advice and discretionary services, and place increased emphasis on defined contribution and not-for-profit organizations fiduciary management sales opportunities.

Fees are primarily earned as a percentage of average assets under management calculated using the average of the four month ending balances preceding the billing date. At December 31, 2019, we had relationships with 474 institutional clients. The principal competitors for this segment are:

• boutique and large bank OCIO/fiduciary management firms;

• Mercer;

• Aon Hewitt;

• Willis Towers Watson; and

• Russell Investments.

Investment Managers

We are a leading global provider of investment operations outsourcing platforms to fund companies, banking institutions, family offices and investment managers, both traditional and alternative, worldwide. We provide investment organizations and asset owners with the advanced operating infrastructure that is critical to success in this highly competitive industry while also providing solutions to efficiently navigate a host of ever changing and increasingly complex business and regulatory challenges. Our comprehensive global operating platform and technological infrastructure provides clients with customized and integrated capabilities in the areas of:

• data and information management/analytics;

• investment operations;

• regulatory and compliance support;

• fund administration;

• fund accounting;

• investor reporting; and

• distribution support.

We work with a diverse and sophisticated group of alternative, traditional, and hybrid asset managers, including approximately one-third of the top 100 managers worldwide. We believe clients choose our full-service offering because of its flexibility, quality and ability to support their diverse business needs across multiple product types and structures, investment strategies and asset classes. Our investment manager clients manage assets in a variety of packaging types, including hedge funds, private equity and real estate funds, open-ended mutual funds, separate accounts, ETFs, UCITS and closed-end funds. For clients focused on the nearly $30 trillion U.S. retirement market who desire to manage assets within a collective investment trust, we offer trustee and investment management services in addition to the aforementioned administration services. Our platform also enables us to offer outsourcing services to a full spectrum of investment managers, accommodating the special needs of emerging and start-up managers all the way through to the most complex, multi-asset hybrid managers globally. Our advanced technology-driven operational platform enables managers to view their business in a comprehensive and integrated way, providing more insight and thus control over their business risks and results.

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We also provide an award-winning family office platform with a comprehensive suite of technology and technology-enabled services for ultra-high-net-worth families, their trusted advisors and the institutions that service the family office market.

Over the past few years, investors have faced multiple market disruptions and rising volatility, albeit in generally upward-trending broader markets. At the same time there has been an increased level of regulatory pressure focused on investor and data protection. Investment managers have responded with a range of innovative products designed to better align interests between managers and investors, manage volatility and downside risk, and many now offer alternatives to the pure long-only active investing strategies historically used in traditional markets. This can be accomplished in a standalone private or public fund vehicle or using our U.S. mutual fund and ETF series trust platform. We also offer a regulatory compliance platform that assists managers in adhering to the changing and increasingly demanding global regulatory environment. Additionally, as we believe that competitiveness will increasingly be based on capabilities other than just portfolio investment expertise, we offer managers solutions that help them gain scale and efficiency, run their businesses more intelligently through data analytics and online dashboards, and be more responsive to regulatory, investor and intermediary needs.

We will continue our efforts to add new asset managers, asset owners, family offices and private wealth advisors as clientele, grow our existing client relationships, expand into new markets and leverage SEI's new and existing platforms and solutions in both an integrated front-to-back and unbundled componentized fashion.

Contracts for fund administration outsourcing services generally have terms ranging from three to five years. Fees are primarily earned as a percentage of assets under management and administration. A portion of the revenues for this segment is earned as account servicing fees. At December 31, 2019, we had relationships with 520 investment management companies, alternative investment managers, family offices and private wealth advisors. Our competitors vary according to the asset class or solutions provided and include:

• State Street;

• BNY Mellon;

• Northern Trust;

• SS&C Technologies; and

• Citco.

Investments in New Businesses

The Investments in New Businesses segment represents other business ventures or research and development activities intended to expand our solutions to new or existing markets, including ultra-high-net-worth families who reside in the United States.

This segment also includes costs associated with other business and research initiatives, including internet-based investment services, network and data protection services, and the modularization of larger technology platforms into stand-alone components for the wealth management and investment processing markets.

The family wealth management solution offers flexible family-office type services through a highly personalized solution while utilizing a goals-based investment process.

The principal competitors for the family wealth solution are diversified financial services providers focused on the ultra-high-net-worth market.

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Research and Development

We continue to devote significant resources to research and development, including expenditures for new technology platforms, enhancements to existing technology platforms and new investment products and services. Our research and development expenditures for the last three years were:

(all dollar amounts in thousands)	2019			2018			2017
Research and development expenditures	$	163,008		$	159,084		$	155,252
Capitalization of costs incurred in developing computer software	$	34,074		$	44,221		$	61,043
Research and development expenditures as a percentage of revenues	9.9		%	9.8		%	10.2		%

Our research and development expenditures are included in Compensation, benefits and other personnel and Consulting, outsourcing and professional fees on the accompanying Consolidated Statements of Operations.

The majority of our research and development spending is related to adding capabilities to SWP, which combines business service processing with asset management and distribution services. SWP offers a client-centric, rather than an account-centric, process with model-based portfolio management services through a single platform. SWP utilizes SEI’s proprietary applications with those built by third-party providers and integrates them into a single technology platform. This integration supports straight-through business processing and enables the transformation of our clients’ wealth services from operational investment processing services to client value-added services.

SWP provides the technology infrastructure for the business solutions now being marketed and delivered to markets in the United States and the United Kingdom served by the Private Banks segment. SWP also provides the technology infrastructure for the business solutions now being marketed and delivered to markets in the United States served by the Investment Advisors segment. We believe the advanced capabilities of SWP will enable us to significantly extend and enhance the services we offer to clients and expand SEI’s addressable markets.

Marketing and Sales

Our business platforms are directly marketed to potential clients in our target markets. At January 31, 2020, we employed approximately 107 sales representatives who operate from offices located throughout the United States, Canada, the United Kingdom, continental Europe, South Africa, Asia and other locations.

Customers

In 2019, no single customer accounted for more than 10% of revenues in any business segment.

Personnel

At January 31, 2020, we had 3,724 full-time and 32 part-time employees. Employee unions do not represent any of our employees. Management considers employee relations to be generally good.

Regulatory Considerations

We conduct our operations through several regulated wholly-owned subsidiaries. These subsidiaries are:

• SEI Investments Distribution Co., or SIDCO, a broker-dealer registered with the SEC under the Securities Exchange Act of 1934 and a member of the Financial Industry Regulatory Authority, Inc., or FINRA;

• SEI Investments Management Corporation, or SIMC, an investment advisor registered with the SEC under the Investment Advisers Act of 1940 and with the Commodity Futures Trading Commission, or CFTC, under the Commodity Exchange Act;

• SEI Private Trust Company, or SPTC, a limited purpose federal thrift chartered and regulated by the Office of the Comptroller of the Currency;

• SEI Trust Company, or STC, a Pennsylvania trust company, regulated by the Pennsylvania Department of Banking and Securities;

• SEI Investments (Europe) Limited, or SIEL, an investment manager and financial institution subject to regulation by the Financial Conduct Authority of the United Kingdom;

• SEI Investments Canada Company, or SEI Canada, an investment fund manager that has various other capacities that is regulated by the Ontario Securities Commission and various provincial authorities;

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• SEI Investments Global, Limited, or SIGL, a management company for Undertakings for Collective Investment in Transferable Securities, or UCITS, and for Alternative Investment Funds, or AIFs, that is regulated primarily by the Central Bank of Ireland, or CBI;

• SEI Investments - Global Fund Services, Ltd., or GFSL, an authorized provider of administration services for Irish and non-Irish collective investment schemes that is regulated by the CBI; and

• SEI Investments - Depositary and Custodial Services (Ireland) Limited, or D&C, an authorized provider of depositary and custodial services that is regulated by the CBI.

• SEI Institutional Transfer Agent, Inc., or SITA, a transfer agent registered with the SEC under the Securities Exchange Act of 1934.

In addition to the regulatory authorities listed above, our subsidiaries are subject to the jurisdiction of regulatory authorities in other foreign countries. In addition to our wholly-owned subsidiaries, we also own a minority interest of approximately 38.9% in LSV, which is also an investment advisor registered with the SEC.

The Company, its regulated subsidiaries, their regulated services and solutions and their customers are all subject to extensive legislation, regulation and supervision that recently has been subject to, and continues to experience, significant change and increased regulatory activity. These changes and regulatory activities could have a material adverse effect on us and our clients.

The various governmental agencies and self-regulatory authorities that regulate or supervise the Company and its subsidiaries have broad administrative powers. In the event of a failure to comply with laws, regulations and requirements of these agencies and authorities, the possible business process changes required or sanctions that may be imposed include the suspension of individual employees, limitations on our ability to engage in business for specified periods of time, the revocation of applicable registration as a broker-dealer, investment advisor or other regulated entity, and, as the case may be, censures and fines. Additionally, certain securities and banking laws applicable to us and our subsidiaries provide for certain private rights of action that could give rise to civil litigation. Any litigation could have significant financial and non-financial consequences including monetary judgments and the requirement to take action or limit activities that could ultimately affect our business.

Governmental scrutiny from regulators, legislative bodies and law enforcement agencies with respect to matters relating to our regulated subsidiaries and their activities, services and solutions, our business practices, our past actions and other matters has increased dramatically in the past several years. Responding to these examinations, investigations, actions and lawsuits, regardless of the ultimate outcome of the proceeding, is time consuming and expensive and can divert the time and effort of our senior management from our business. Penalties, fines and changes to business processes sought by regulatory authorities have increased substantially over the last several years, and certain regulators have been more likely in recent years to commence enforcement actions or to advance or support legislation targeted at the financial services industry. We continue to be subject to inquiries from examinations and investigations by supervisory and enforcement divisions of regulatory authorities and expect this to continue in the future. We believe this is also the case with many of our regulated clients. Governmental scrutiny and legal and enforcement proceedings can also have a negative impact on our reputation, our relationship with clients and prospective clients, and on the morale and performance of our employees, which could adversely affect our businesses and results of operations.

We are subject to the USA PATRIOT Act of 2001, which contains anti-money laundering and financial transparency laws and requires implementation of regulations applicable to financial services companies, including standards for verifying client identification and monitoring client transactions and detecting and reporting suspicious activities. Anti-money laundering laws outside the United States contain similar requirements. We offer investment and banking solutions that also are subject to regulation by the federal and state securities and banking authorities, as well as foreign regulatory authorities, where applicable. Existing or future regulations that affect these solutions could lead to a reduction in sales of these solutions or require modifications of these solutions.

Compliance with existing and future regulations and responding to and complying with recent increased regulatory activity affecting broker-dealers, investment advisors, investment companies, financial institutions and their service providers could have a significant impact on us. We periodically undergo regulatory examinations and respond to regulatory inquiries and document requests. In addition, recent and continuing legislative activity in the United States and in other jurisdictions (including the European Union and the United Kingdom) have made and continue to make extensive changes to the laws regulating financial services firms. As a result of these examinations, inquiries and requests, as a result of increased civil litigation activity, and as a result of these new laws and regulations, we engage legal counsel and other subject matter experts, review our compliance procedures, solution and service offerings, and business operations, and

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make changes as we deem necessary or as may be required by the applicable authority. These additional activities and required changes may result in increased expense or may reduce revenues.

Our bank clients are subject to supervision by federal, state and foreign banking and financial services authorities concerning the manner in which such clients purchase and receive our products and services. Our plan sponsor clients and our subsidiaries providing services to those clients are subject to supervision by the Department of Labor and compliance with employee benefit regulations. Investment advisor and broker-dealer clients are regulated by the SEC, state securities authorities, or FINRA. Existing or future regulations applicable to our clients may affect our clients’ purchase of our products and services.

In addition, see the discussion of governmental regulations in Item 1A “Risk Factors” for a description of the risks that proposed regulatory changes may present for our business.

Available Information

We maintain a website at seic.com and make available free of charge through the Investor Relations section of this website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. We include our website in this Annual Report on Form 10-K only as an inactive textual reference and do not intend it to be an active link to our website. The material on our website is not part of this Annual Report on Form 10-K.

Item 1A. Risk Factors.

We believe that the risks and uncertainties described below are those that impose the greatest threat to the sustainability of our business. However, there are other risks and uncertainties that exist that may be unknown to us or, in the present opinion of our management, do not currently pose a material risk of harm to us. The risk and uncertainties facing our business, including those described below, could materially adversely affect our business, results of operations, financial condition, capital position, liquidity, competitive position or reputation, including by materially increasing expenses or decreasing revenues, which could result in material losses or a decrease in earnings.

Risks Related to Our Business and Industry

Our revenues and earnings are affected by changes in capital markets and significant changes in the value of financial instruments. A majority of our revenues are earned based on the value of assets invested in investment products that we manage or administer. Significant fluctuations in securities prices may materially affect the value of these assets and may also influence an investor’s decision to invest in and maintain an investment in a mutual fund or other investment products. Geopolitical events, market volatility, illiquid market conditions and other disruptions in the financial markets may make it extremely difficult to value certain financial instruments, particularly during periods of market displacement. Subsequent valuations of financial instruments in future periods, in light of factors then prevailing, may result in significant changes in the value of these instruments. As a result, our revenues and earnings derived from assets under management and administration could be adversely affected.

We are exposed to product development risk. We continually strive to increase revenues and meet our customers' needs by introducing new products and services as well as maintaining and improving our existing products and services. As a result, we are subject to product development risk, which may result in loss if we are unable to develop and deliver products to our target markets that address our clients' needs that are developed on a timely basis and reflect an attractive value proposition. The majority of our technology product development risk pertains to the evolution of the SEI Wealth Platform and our other technology platforms and our One SEI strategy. This strategy is designed to leverage our technology solutions and operational services in a single client offering. The SEI Wealth Platform through our One SEI strategy allows complex global financial institutions to consume multiple elements of our existing and new platforms and assets and operational servicing arrangements through a single engagement with us. This expanded strategy enhances the scope and scale and integration points of our existing platforms.

The development and introduction of new products and services in our asset management operations requires continued innovative efforts on our part and may require significant time and resources as well as ongoing support and investment. Substantial risk and uncertainties are associated with the introduction of new products and services, including the implementation of new and appropriate operational controls and procedures, shifting client and market preferences, the introduction of competing products or services and compliance with regulatory requirements. Indeed, product development in the asset management arena has had significant growth in newer areas where investment criteria and performance metrics have not yet been fully defined or developed, such as Environmental, Social and Governance, or

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“ESG” products, Sustainable Investing products, and Tax Harvesting programs. New products often must be in the market place for three or more years in order to generate track records required to attract significant asset inflows. A failure to continue to innovate to introduce successful new products and services or to manage effectively the risks associated with such products and services may impact our market share relevance and may cause our revenues and earnings derived from assets under management and administration to decline.

If we fail to develop new or enhanced products or services at an acceptable cost or on a timely basis or if our development strategies as a result of our One SEI strategy are not accepted by our clients, we may recognize significant financial losses. Further, if we fail to deliver products and services which are of sound, economic value to our clients and our target markets, or an inability to support the product in a cost-effective and compliant manner, we may face reputational damage and incur significant financial losses.

We are exposed to operational risks. Operational risk refers to the risk of loss, or of damage to our reputation, resulting from inadequate or failed processes or systems, from human factors or from external events (e.g., fraud, theft, legal and compliance risks, cyber-attacks or damage to physical assets). We may incur operational risk across the full scope of our business activities, including revenue-generating activities (e.g., sales and trading) and support and control groups (e.g., information technology, accounting systems and trade processing).

Our businesses are highly dependent on our ability to process and report, on a daily basis, a large number of transactions across numerous and diverse markets and asset classes in many currencies. Operational efficiency is modeled on defined and strict timelines which, when reliant on human intervention, present inherent risk. In the event of a breakdown or improper operation of systems, human error or improper action by employees or consultants, we could suffer significant financial loss, regulatory sanctions or damage to our reputation. Additionally, we may introduce new products or services or change processes or reporting, including in connection with new regulatory requirements, resulting in new operational risk that we may not fully appreciate or identify.

The breadth and range of operational risk are such that the types of mitigating activities are wide-ranging. Examples of activities include:

• continuous enhancement of defenses against cyber-attacks;

• use of legal agreements and contracts to transfer and/or limit operational risk exposures;

• due diligence;

• implementation of enhanced policies and procedures;

• technology change management controls;

• exception management processing controls; and

• segregation of duties.

The primary responsibility for the management of operational risk is with the business segments; the business managers maintain processes and controls designed to identify, assess, manage, mitigate and report operational risk. Oversight of operational risk is provided by the Operations Risk Committee, legal entity boards and committees and senior management. This governance structure may not adequately assess or address operational risk, which could lead to significant financial loss and reputational harm.

We are dependent upon third-party service providers in our operations. In connection with our ongoing operations, we utilize the the services of third-party suppliers, which we anticipate will continue and may increase in the future. These services include, for example, outsourced development, processing and support functions, and other professional services. Our risk-based approach to managing exposure to these services includes the performance of due diligence, implementation of service level and other contractual agreements, consideration of operational risks and ongoing monitoring of third-party suppliers’ performance. Our third-party risk management strategy includes the adoption of appropriate risk management controls and practices through the supplier management life cycle, including, but not limited to, assessment of information security, service failure, financial stability, disaster recoverability, reputational risk, contractual risk and safeguards against corruption.

We also serve as the investment advisor for many of the products offered through our investment management programs and utilize the services of investment sub-advisers to manage the majority of these assets. A failure in the performance of our due diligence processes and controls related to the supervision and oversight of these firms in detecting and addressing conflicts of interest, fraudulent activity, noncompliance with relevant securities and other laws and regulations could cause us to suffer financial loss, regulatory sanctions or damage to our reputation.

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Our broader third-party relationships include: financial counterparties; financial intermediaries such as clearing agents, exchanges and clearing houses; vendors; regulators; and providers of critical infrastructure. Third parties are sources of cyber security risk to us, particularly when their activities and systems are beyond our own security and control systems. A cyber-attack, information breach or loss, or technology failure of a third party could adversely affect our ability to effect transactions, service our clients, manage our exposure to risk or expand our businesses. As a result, we engage in regular and ongoing due diligence of third parties with an enhanced focus on those third parties deemed critical, such as custody, payments, and clearing, or significant shared services, such as information technology, or other activities that expose us to significant financial or reputational risk.

Third-party financial entities and technology systems upon which we rely are becoming more interdependent and complex. For example, in recent years, there has been significant consolidation among clearing agents, exchanges and clearing houses and increased interconnectivity of multiple financial institutions with central agents, exchanges and clearing houses. This consolidation and interconnectivity increases the risk of operational failure, on both individual and industry-wide basis, as disparate complex systems need to be integrated, often on an accelerated basis. A failure by a third-party product or service provider may impair our ability to provide contractual services to our clients on a timely basis to process transactions for our clients accurately, or to meet our regulatory obligations.

If a third-party service provider is unable to provide services, we may incur significant costs to either internalize some of these services, find a suitable alternative, or to compensate our clients for any losses that may be sustained as a consequence of the actions or inactions of our third-party services providers. In the event of a breakdown or improper operation of our or a direct or indirect third-party’s systems or processes or improper or unauthorized action by third parties, including consultants and subcontractors or our employees, we could suffer financial loss, an impairment to our liquidity position, a disruption of our businesses, regulatory sanctions or damage to our reputation.

We are dependent on third-party pricing services for the valuation of securities invested in our investment products. The majority of the securities held by our investment products are valued using quoted prices from active markets gathered by external third-party pricing services. Securities for which market prices are not readily available are valued in accordance with procedures applicable to that investment product. These procedures may utilize unobservable inputs that are not gathered from any active markets and involve considerable judgment. If these valuations prove to be inaccurate, our revenues and earnings from assets under management could be adversely affected.

We are dependent upon third-party approvals. Many of the investment advisors through which we distribute our investment offerings are affiliated with independent broker-dealers or other networks, which have regulatory responsibility for the advisor’s practice. As part of the regulatory oversight, these broker-dealers or networks must approve the use of our investment products by affiliated advisors within their networks. Failure to receive such approval, or the withdrawal of such approval, could adversely affect the marketing of our investment products.

Our earnings and cash flows are affected by the performance of LSV. We maintain a minority ownership interest in LSV which is a significant contributor to our earnings. We also receive partnership distribution payments from LSV on a quarterly basis which contribute to our operating cash flows. LSV is a registered investment advisor that provides investment advisory services to institutions, including pension plans and investment companies. LSV is a value-oriented, contrarian money manager offering a deep-value investment alternative utilizing a proprietary equity investment model to identify securities generally considered to be out of favor by the market. Volatility in the capital markets or poor investment performance on the part of LSV, on a relative basis or an absolute basis, could result in a significant reduction in their assets under management and revenues and a reduction in performance fees. Consequently, LSV's contribution to our earnings through our minority ownership as well as to our operating cash flows through LSV's partnership distribution payments could be adversely affected.

We may be unable to fully capture the expected value from acquisitions, divestitures, joint ventures, minority stakes or strategic alliances. In connection with past or future acquisitions, divestitures, joint ventures, minority stakes or strategic alliances, we face numerous risks and uncertainties combining, transferring, separating or integrating the relevant businesses and systems, including the need to combine or separate accounting and data processing systems and management controls and to integrate relationships with clients, trading counterparties and business partners. In the case of joint ventures and minority stakes, we are subject to additional risks and uncertainties because we may be dependent upon, and subject to liability, losses or reputational damage relating to systems, controls and personnel that are not under our control.

In addition, conflicts or disagreements between us and any of our joint venture, strategic or minority partners may negatively impact the benefits to be achieved by the relevant venture.

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There is no assurance that any of our acquisitions or divestitures will be successfully integrated or disaggregated or yield all of the positive benefits anticipated. If we are not able to integrate or disaggregate successfully our past and future acquisitions or dispositions, there is a risk that our results of operations, financial condition and cash flows may be materially and adversely affected.

Certain of our business initiatives, including expansions of existing businesses, may bring us into contact, directly or indirectly, with individuals and entities that are not within our traditional client and counterparty base and may expose us to new asset classes and new markets. These business activities expose us to new and enhanced risks, greater regulatory scrutiny of these activities, increased credit-related, sovereign and operational risks, and reputational concerns regarding the manner in which these assets are being operated or held.

Growth of our business could increase costs and regulatory risks. Providing a platform for new businesses, integrating acquired businesses, and partnering with other firms involve a number of risks and present financial, managerial, and operational challenges. We may incur significant expenses in connection with further expansion of our existing businesses or in connection with strategic acquisitions or investments, if and to the extent they arise from time to time. Our overall profitability would be negatively affected if investments and expenses associated with such growth are not matched or exceeded by the revenues that are derived from such investment or growth. Expansion may also create a need for additional compliance, risk management and internal control procedures, and often involves the hiring of additional personnel to monitor such procedures. To the extent such procedures are not adequate to appropriately monitor any new or expanded business, we could be exposed to a material loss or regulatory sanction.

Moreover, to the extent we pursue strategic acquisitions, we may be exposed to a number of risks, including additional demands on our existing employees; additional or new regulatory requirements, operating facilities and technologies; adverse effects in the event acquired goodwill or intangible assets become impaired; and the existence of liabilities or contingencies not disclosed to or otherwise known by us prior to closing a transaction. These risks could result in decreased earnings and harm to our competitive position in the investment management industry.

Consolidation within our target markets may affect our business. Merger and acquisition activity within the markets we serve could reduce the number of existing and prospective clients or reduce the amount of revenue and earnings we receive from retained clients. Consolidation activities may also cause larger institutions to internalize some or all of our services. These factors may negatively impact our ability to generate future growth in revenues and earnings.

The departure of the United Kingdom from the European Union could negatively affect our business, results of operations and operating model. It remains highly uncertain how the departure of the United Kingdom from the European Union (EU), which is commonly referred to as “Brexit,” will affect financial services firms that conduct substantial operations in the EU from legal entities that are organized in or operating from the United Kingdom. The United Kingdom exited the EU on January 31, 2020, and a transitional period up to December 31, 2020 is in effect. The deadline for agreeing an extension to this transition period is June 30, 2020. In the event no such extension is agreed, a new trade deal (including financial services regulation) between the United Kingdom and EU will be agreed and take effect from January 1, 2021, or there will be a “no-deal” Brexit at that time. In addition, Brexit has created an uncertain political and economic environment in the United Kingdom, and may create such environments in other EU member states. Political and economic uncertainty has in the past led to, and the outcome of Brexit could lead to, declines in market liquidity and activity levels, volatile market conditions, a contraction of available credit, changes in interest rates or exchange rates, weaker economic growth and reduced business confidence all of which could adversely impact our business. Given the potential negative disruption to regional and global financial markets, and depending on the extent to which we may be required to make material changes to our EU operations beyond those currently planned, our results of operations and business prospects could be negatively affected.

Risks Related to Our Technology

We are exposed to data and cyber security risks. Like other global financial service providers, we experience millions of cyber-attacks on our computer systems, software, networks and other technology assets on a daily basis. Cyber security and information risks for financial institutions have significantly increased in recent years in part because of the proliferation of new technologies, the use of the internet and mobile telecommunications technologies to conduct financial transactions, and the increased sophistication and activities of organized crime, hackers, terrorists and other external extremist parties, including foreign state actors, in some circumstances as a means to promote political ends. In addition to the growing sophistication of certain parties, the commoditization of cyber tools which are able to be weaponized by less sophisticated actors has led to an increase in the exploitation of technological vulnerabilities. Any of these parties may also attempt to fraudulently induce employees, customers, clients, vendors or other third parties or users of our systems to disclose sensitive information in order to gain access to our data or that of our employees or clients. Cyber

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security and information security risks may also derive from human error, fraud, or malfeasance on the part of our employees or third parties, including third-party providers, or may result from accidental technological failure. In addition, third parties with whom we do business, their service providers, as well as other third parties with whom our customers do business, are sources of cyber security risks, particularly where activities of customers are beyond our security and control systems. There is no guarantee that the measures we take will provide absolute security or recoverability of our systems or our data or that of our clients given the techniques used in cyber-attacks are complex and frequently change, and may not be able to be anticipated. Like other financial service providers, we have established and continually evaluate strategies designed to protect against threats and vulnerabilities containing preventive and detective controls including, but not limited to, firewalls, intrusion detection systems, computer forensics, vulnerability scanning, server hardening, penetration testing, anti-virus software, data leak prevention, encryption and centralized event correlation monitoring.

A successful penetration or circumvention of the security of our systems or the systems of a vendor, governmental body or another market participant could cause serious negative consequences, including:

• significant disruption of our operations and those of our clients, customers and counterparties, including losing access to operational systems;

• misappropriation of our confidential information or that of our clients, counterparties, employees or regulators

• damage to our technology infrastructure or systems and those of our clients, and counterparties;

• inability to fully recover and restore data that has been stolen, manipulated or destroyed, or to prevent systems from processing fraudulent transactions;

• violations by us of applicable privacy and other laws;

• financial loss to us or to our clients, counterparties or employees;

• loss of confidence in our cyber security measures;

• dissatisfaction among our clients or counterparties;

• significant exposure to litigation and regulatory fines, penalties or other sanctions; and

• harm to our reputation.

Any of the foregoing factors could expose us to liability for damages which may not be covered by insurance; but may result in the loss of customer business, damage our reputation, subject us to regulatory scrutiny or expose us to civil litigation. In addition, the failure to upgrade or maintain our computer systems, software and networks, as necessary, could also make us susceptible to breaches and unauthorized access and misuse. We may be required to expend significant additional resources to modify, investigate or remediate vulnerabilities or other exposures arising from data and cyber security risks. Furthermore, even if not directed at us specifically, attacks on other financial institutions could disrupt the overall functioning of the financial system. As a result of the importance of communications and information systems to our business, we could also be adversely affected if attacks affecting our third-party service providers impair our ability to process transactions and communicate with clients and counterparties.

Given our global footprint and the high volume of transactions we process, the large number of clients, partners, vendors and counterparties with which we do business, and the increasing sophistication of cyber-attacks, a cyber-attack, or an information or security breach could occur and persist for an extended period of time without detection. We expect that any investigation of a cyber-attack would be inherently unpredictable and that it would take time before the completion of any investigation and before there is availability of full and reliable information. During such time we would not necessarily know the extent of the harm or how best to remediate it, and certain errors or actions could be repeated or compounded before they are discovered and remediated, all or any of which would further increase the costs and consequences of a cyber-attack.

While many of our agreements with partners and third-party vendors include indemnification provisions, we may not be able to recover sufficiently, or at all, under such provisions to adequately offset any losses. In addition, although we maintain insurance coverage that may, subject to policy terms and conditions, cover certain aspects of cyber and information security risks, such insurance coverage may be insufficient to cover all losses.

The cost of managing cyber and information security risks and attacks along with complying with new and increasingly expansive regulatory requirements could adversely affect our business.

We are exposed to systems and technology risks. Through our proprietary systems, we maintain and process data for our clients that is critical to their business operations. An unanticipated interruption of service may have significant ramifications, such as lost data, damaged software codes, or delayed or inaccurate processing of transactions. As a result, the costs necessary to rectify these problems may be substantial. Our continued success also depends in part on

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our ability to protect our proprietary technology and solutions and to defend against infringement claims of others. We primarily rely upon trade secret law, software security measures, copyrights and confidentiality restrictions in contracts with employees, vendors and customers. Our industry is characterized by the existence of a large number of trade secrets, copyrights and the rapid issuance of patents, as well as frequent litigation based on allegations of infringement or other violations of intellectual property rights of others. A successful assertion by others of infringement claims or a failure to maintain the confidentiality and exclusivity of our intellectual property may have a material adverse effect on our business and financial results.

Risks Related to Our Competitive Environment

Pricing pressure from increased competition and disruptive technology may affect our revenues and earnings. The investment management industry is highly competitive and has relatively low barriers to entry. In recent years, we have experienced, and continue to experience, pricing pressures from the introduction of new, lower-priced investment products and services and the growth of passive investing, as well as from competitor firms offering automated portfolio management and other services based on technological innovations. These new investment products and technological innovations available to both institutional and retail investors have led to a general trend towards lower fees in some segments of the investment management industry. We believe price competition and pricing pressures in these and other areas will continue as investors continue to reduce the amounts they are willing to pay and financial services firms seek to obtain market share by reducing fees or margins.

Over time, certain sectors of the financial services industry have become more concentrated, as institutions involved in a broad range of financial services have left businesses, been acquired by or merged into other firms, or have declared bankruptcy. Such changes could result in our remaining competitors gaining greater capital and other resources, such as the ability to offer a broader range of products and services and geographic diversity, or new competitors may emerge.

Our investment management platforms include investment management programs and back-office investment processing outsourcing services and are generally offered on a bundled basis. The breadth of our business solutions allows us to compete on a number of factors including:

• the performance of our investment products;

• the level of fees charged;

• the quality of our investment processing services;

• our reputation and position in the industry;

• our ability to adapt to disruptive technology developments or unforeseen market entrants; and

• our ability to address the complex and changing needs of our clients.

Increased competition on the basis of any of these factors could have an adverse impact on our competitive position resulting in a decrease in our revenues and earnings.

Our investment management business may be affected by the poor investment performance of our investment products or a client preference for products other than those which we offer or for products that generate lower fees. Poor investment returns in our investment management business, due to either general market conditions or underperformance (relative to our competitors or to benchmarks) by funds or accounts that we manage or investment products that we design or sell, affects our ability to retain existing assets and to attract new clients or additional assets from existing clients. This could affect the management and incentive fees that we earn on assets under administration or the commissions that we earn for selling other investment products. To the extent that our clients choose to invest in products that we do not currently offer, we will suffer outflows and a loss of management fees. Further, if, due to changes in investor sentiment or the relative performance of certain asset classes or otherwise, clients invest in products that generate lower fees, our investment management business could be adversely affected.

External factors affecting the fiduciary management market could adversely affect us. The utilization of defined benefit plans by employers in the United States has been steadily declining. A number of our clients have frozen or curtailed their defined benefit plans resulting in decreased revenues and earnings related to this market segment. We have also experienced increasing fee sensitivity and competition for certain fiduciary management services due to investor preferences toward lower-priced investment products including passive management approaches. The current growth strategies of our Institutional Investors segment include entering new global markets and placing greater emphasis on defined contribution and not-for-profit organizations fiduciary management sales opportunities. These strategies may not be successful in mitigating the impact of lower revenues and earnings caused by these external factors which could adversely affect our revenues and earnings.

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Risks Related to Our Legal, Regulatory and Compliance Environment

The financial services industry is subject to extensive regulation and changes in regulation will impact our business. Legal, regulatory and compliance risk includes the risk of legal or regulatory sanctions, material financial loss including fines, penalties, judgments, damages and/or settlements, or loss to reputation we may suffer as a result of our failure to comply with laws, regulations, rules, related self-regulatory organization standards and codes of conduct applicable to our business activities. This risk also includes contractual and commercial risk, such as the risk that a counterparty’s performance obligations will be unenforceable. It also includes compliance with anti-money laundering, anti-corruption and terrorist financing rules and regulations.

Our various business activities are conducted through entities which may be registered with or regulated by the SEC and CFTC as an investment advisor, a broker-dealer, a transfer agent, or an investment company, and with federal or state banking authorities as a trust company. Our broker-dealer is also a member of FINRA and is subject to its rules and oversight. In addition, some of our foreign subsidiaries are registered with, and subject to the oversight of, regulatory authorities primarily in the United Kingdom, Republic of South Africa, the Republic of Ireland, Canada and the Cayman Islands. Many of our clients are subject to substantial regulation by federal and state banking, securities or insurance authorities or the Department of Labor. Compliance with existing and future regulations, responding to and complying with recent regulatory activity affecting broker-dealers, investment advisors, investment companies and their service providers and financial institutions, and examination or other supervisory activities of our regulators or of the regulators of our clients, could have a significant impact on our operations or business or our ability to provide certain products or services.

We offer investment and banking products that also are subject to regulation by the federal and state securities and banking authorities, as well as foreign regulatory authorities, where applicable. Existing or future regulations that affect these products could lead to a reduction in sales of these products or an increase in the cost of providing these products.

In the United States, the Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001, imposes significant obligations on financial institutions to detect and deter money laundering and terrorist financing activity, including requiring banks, bank holding companies and their subsidiaries, broker-dealers, futures commission merchants, introducing brokers and mutual funds to implement anti-money laundering programs, verify the identity of customers that maintain accounts, and monitor and report suspicious activity to appropriate law enforcement or regulatory authorities. Outside the United States, applicable laws, rules and regulations similarly require designated types of financial institutions to implement anti-money laundering programs. Failure to implement comprehensive anti-money laundering programs across our globally-regulated businesses poses regulatory risk including fines for noncompliance.

We must comply with economic sanctions and embargo programs administered by the Office of Foreign Assets Control (OFAC) and similar national and multinational bodies and governmental agencies outside the United States, as well as anti-corruption and anti-money laundering laws and regulations throughout the world. We can incur higher costs and face greater compliance risks in structuring and operating our businesses to comply with these requirements. Furthermore, a violation of a sanction or embargo program or anti-corruption or anti-money laundering laws and regulations could subject us and our subsidiaries, and individual employees, to regulatory enforcement actions as well as significant civil and criminal penalties.

Our businesses are also subject to privacy and data protection information security legal requirements concerning the use and protection of certain personal information. These include those adopted pursuant to the Gramm-Leach-Bliley Act and the Fair and Accurate Credit Transactions Act of 2003 in the United States, the General Data Protection Regulation (GDPR) in the EU, and various other laws including, but not limited to, Canada’s Personal Information Protection and Electronic Documents Act and the Cayman Islands' Data Protection Law. Privacy and data security legislation is a priority issue in many states and localities in the United States, as well as foreign jurisdictions outside of the EU. For example, California enacted the California Consumer Privacy Act (CCPA) which broadly regulates the sale of the consumer information of California residents and grants California residents certain rights to, among other things, access and delete data about them in certain circumstances. Other states are considering similar proposals. Such attempts by the states to regulate have the potential to create a patchwork of differing and/or conflicting state regulations. Ensuring compliance under ever evolving privacy legislation, such as GDPR and CCPA, is an ongoing commitment which involves substantial costs, and it is possible that despite our efforts, governmental authorities or third parties will assert that our practices fail to comply with relevant regulatory standards.

Recent, well-publicized allegations involving the misuse or inappropriate sharing of personal information have led to expanded governmental scrutiny of practices relating to the use or sharing of personal data by companies in the United States and other countries. That scrutiny has in some cases resulted in, and could in the future lead to, the adoption of stricter laws and regulations relating to the use and sharing of personal information. These types of laws and regulations

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could prohibit or significantly restrict financial services firms from sharing information among affiliates or with third parties such as vendors, and thereby increase compliance costs, or restricting the use of personal data when developing or offering products or services to customers. These restrictions could inhibit our development or marketing of certain products or services, or increase the costs of offering them to customers.

The fees and assessments imposed on our regulated subsidiaries by federal, national, state and foreign regulatory authorities could have a significant impact on us. The frequency and scope of regulatory reform in the current regulatory environment may lead to an increase in fees and assessments resulting in increased expense, or an increase or change in regulatory requirements which could affect our operations and business.

Our investment management operations may subject us to fiduciary or other legal liability for client losses. Our fund and trust management and administration operations are complex activities and include functions such as recordkeeping and accounting, security pricing, corporate actions, compliance with investment restrictions, daily net asset value computations, account reconciliations, and required distributions to fund shareholders. Failure to properly perform operational tasks, or the misrepresentation of our services and products could subject us to regulatory sanctions, penalties or litigation and result in reputational damage, liability to clients, and the termination of investment management or administration agreements and the withdrawal of assets under our management.

In the management and administration of funds and client accounts, we use models and other tools and resources to support investment decisions and processes, including those related to risk assessment, portfolio management, trading and hedging activities and product valuations. Errors in the design, function, or underlying assumptions used in these models and tools, particularly if we fail to detect the errors over an extended period, could subject us to claims of a breach of fiduciary duty and potentially large liabilities for make-whole payments, litigation, and/or regulatory fines.

We are subject to litigation and regulatory examinations and investigations. The financial services industry faces substantial regulatory risks and litigation. Like many firms operating within the financial services industry, we are experiencing a difficult and continuously evolving regulatory environment across our markets. Our current scale and reach as a provider to the financial services industry; the increased regulatory oversight of the financial services industry generally; new laws and regulations affecting the financial services industry and ever-changing regulatory interpretations of existing laws and regulations, have made this an increasingly challenging and costly regulatory environment in which to operate. These examinations or investigations could result in the identification of matters that may require remediation activities or enforcement proceedings by the regulator. The direct and indirect costs of responding to these examinations, or of defending ourselves in any litigation could be significant. Additionally, actions brought against us may result in settlements, awards, injunctions, fines and penalties. The outcome of litigation or regulatory action is inherently difficult to predict and could have an adverse effect on our ability to offer some of our products and services or our ability to maintain operations in certain jurisdictions.

We are a holding company and, therefore, may not be able to receive dividends or other payments in needed amounts from our subsidiaries. We are organized as a holding company, a legal entity separate and distinct from our operating entities. As a holding company without significant operations of its own, our principal assets are the shares of capital stock of our subsidiaries. We rely on dividends and other payments from these subsidiaries to meet our obligations for paying dividends to shareholders, repurchasing our common stock and corporate expenses. Certain of our subsidiaries are subject to regulatory requirements of the jurisdictions in which they operate or other restrictions that may limit the amounts those subsidiaries can pay in dividends or other payments to us. No assurance can be given that there will not be further changes in law, regulatory actions, or other circumstances that could restrict the ability of our subsidiaries to pay dividends or otherwise make payment to us. Furthermore, no assurance can be given that our subsidiaries may be able to make timely payments to us in order for us to meet our obligations.

Risks Related to Our Business Generally

If our management fails to develop and execute effective business strategies, and to anticipate changes affecting those strategies, our results could suffer. Our business strategies significantly affect our results of operations. These strategies relate to:

• the products and services we offer;

• the geographies in which we operate;

• the types of clients we serve;

• the counterparties with which we do business; and

• the manner in which we deploy our capital resources to take advantage of perceived opportunity in the short and long-term.

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If management makes choices about these strategies and goals that prove to be incorrect, do not accurately assess the competitive landscape, the head winds and tailwinds affecting our business, or fail to address changing regulatory and market environments, then our growth prospects may suffer and our earnings could decline.

Our growth and prospects also depend on management’s ability to develop and execute effective business plans to address these strategic priorities, both in the near term and over longer time horizons. Management’s effectiveness in this regard will affect our ability to develop and enhance our resources, control expenses and return capital to shareholders. Each of these objectives could be adversely affected by any failure on the part of management to:

• devise effective business plans and strategies;

• effectively implement business decisions;

• institute controls that appropriately address the risks associated with business activities and any changes in those activities;

• offer products and services that are appropriately priced, meet the changing expectations of clients and customers and are delivered in ways that enhance client satisfaction;

• allocate capital in a manner that promotes long-term stability to enable us to build and invest in market-leading technologies and products, even in a highly-stressed environment;

• adequately respond to regulatory requirements;

• appropriately address shareholder concerns;

• react quickly to changes in market conditions or market structures, or

• develop and enhance the operational, technology, risk, financial and managerial resources necessary to grow and manage our business.

Additionally, our Board of Directors plays an important role in exercising appropriate oversight of management’s strategic decisions, and a failure by our Board of Directors to perform this function could also impair our results of operations.

We may incur losses as our risk management and business continuity strategies, models and processes may not be fully effective in mitigating our risk exposures in all market environments or against all types of risk. We seek to monitor and control our risk exposure through a risk and control framework encompassing a variety of separate but complementary financial, credit, operational, compliance and legal reporting systems, internal controls, management review processes and other mechanisms. Our risk management process seeks to balance our ability to profit from our business activities, with our exposure to potential losses and liabilities. While we employ a broad and diversified set of risk monitoring and risk mitigation techniques, those techniques and the judgments that accompany their application cannot anticipate every economic and financial outcome or the specifics and timing of such outcomes. As our businesses change and grow, and the markets in which we operate evolve, our risk management strategies, models and processes may not always adapt with those changes. Some of our methods of managing risk are based upon our use of observed historical market behavior and management’s judgment. As a result, these methods may not predict future risk exposures, which could be significantly greater than the historical measures indicate. In addition, the use of models in connection with risk management and numerous other critical activities presents risks that such models may be ineffective, either because of poor design or ineffective testing, improper or flawed inputs, as well as unpermitted access to such models resulting in unapproved or malicious changes to the model or its inputs. Market conditions in recent years have involved unprecedented dislocations and highlight the limitations inherent in using historical data to manage risk. Thus, we may, in the course of our activities, incur losses.

Despite the business contingency, disaster recovery and security response plans we have in place, there can be no assurance that such plans will fully mitigate all potential risks to us. Our ability to conduct business may be adversely affected by a disruption in the infrastructure that supports our business and the communities where we are located, which are concentrated in the Philadelphia metropolitan area, London, and Dublin. This may include a disruption involving physical site access, cyber or information security incidents, terrorist activities, disease pandemics, catastrophic events, natural disasters, severe weather events, electrical outage, environmental hazard, computer servers, communications or other services we use, our employees or third parties with whom we conduct business.

Although we employ backup systems for our data, those backup systems may be unavailable following a disruption, the affected data may not have been backed up or may not be recoverable from the backup, or the backup data may be costly to recover, which could adversely affect our business.

Our businesses may be adversely affected if we are unable to hire and retain qualified employees. Our performance is largely dependent on the talents and efforts of highly-skilled people; therefore, our continued ability to compete effectively in our businesses, to manage our businesses effectively and to expand into new businesses and geographic areas

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depends on our ability to attract new talented and diverse employees and to retain and motivate our existing employees. Factors that affect our ability to attract and retain such employees include our compensation and benefits, and our reputation as a successful business with a culture of fairly hiring, training and promoting qualified employees. Declines in our profitability, or in the outlook for our future profitability, as well as regulatory limitations on compensation levels and terms, can negatively impact our ability to hire and retain highly-qualified employees.

Competition from within the financial services and technology industries and from businesses outside the financial services and technology industries for qualified employees has often been intense.

Changes in law or regulation in jurisdictions in which our operations are located that affect taxes on employees’ income, or the amount/composition of compensation, may also adversely impact our ability to hire and retain qualified employees in those jurisdictions. As a global financial services and technology company, we are subject to limitations on compensation practices (which may or may not affect our competitors) by regulators worldwide. These limitations, including any imposed by or as a result of future legislation or regulation, may require us to alter our compensation practices in ways that could adversely affect our ability to attract and retain talented employees.

Our operations depend on the competence and integrity of our employees and third-parties. Our ability to operate our businesses efficiently and profitably, and to offer products and services that meet the expectations of our clients, is highly dependent on the competence and trustworthiness of our employees and contractors, as well as those of third parties on which our operations rely, including vendors, custodians and financial intermediaries. Our businesses could be materially and adversely affected by a significant operational breakdown or failure, theft, fraud or other unlawful conduct, or other negative outcomes caused by poor judgement, human error or misconduct on the part of one of our employees or contractors or those of a third party on which our operations rely.

Changes in, or interpretation of, accounting principles could affect our revenues and earnings. We prepare our consolidated financial statements in accordance with generally accepted accounting principles. A change in these principles can have a significant effect on our reported results and may even retrospectively affect previously reported results (See Note 1 to the Consolidated Financial Statements for more information).

Changes in, or interpretations of, tax rules and regulations may adversely affect our effective tax rates. Unanticipated changes in our tax rates could affect our future results of operations. Our future effective tax rates could be adversely affected by changes in tax laws or the interpretation of tax laws. We are subject to possible examinations of our income tax returns by the Internal Revenue Service and state and foreign tax authorities. We regularly assess the likelihood of outcomes resulting from these examinations to determine the adequacy of our provision for income taxes; however, there can be no assurance that the final determination of any examination will not have an adverse effect on our operating results or financial position.

Currency fluctuations could negatively affect our future revenues and earnings as our business grows globally. We operate and invest globally to expand our business into foreign markets. Our foreign subsidiaries use the local currency as the functional currency. As these businesses evolve, our exposure to changes in currency exchange rates may increase. Adverse movements in currency exchange rates may negatively affect our operating results, liquidity, contract values and financial condition.

Changes in interest rates may affect the value of our fixed-income investment securities. We own Government National Mortgage Association (GNMA) mortgage-backed securities for the sole purpose of satisfying applicable regulatory requirements imposed on our wholly-owned limited purpose federal thrift subsidiary, SPTC. The valuations of these securities are impacted by fluctuations in interest rates. Interest rates during the past several years have remained relatively low. The effect of a rising interest rate environment may negatively impact the value of these securities and thereby negatively affect our financial position and earnings.

We are subject to financial and non-financial covenants which may restrict our ability to manage liquidity needs. Our $300.0 million five-year senior unsecured revolving credit facility (Credit Facility) contains financial and non-financial covenants. The non-financial covenants include restrictions on indebtedness, mergers and acquisitions, sale of assets and investments. In the event of default, we have restrictions on paying dividends and repurchasing our common stock. We have one financial covenant, the Leverage Ratio, which restricts the level of indebtedness we can incur to a maximum of 1.75 times earnings before interest, taxes, depreciation and amortization (EBITDA). We believe our primary risk is with the financial covenant if we were to incur significant unexpected losses that would impact the EBITDA calculation. This would increase the Leverage Ratio and restrict the amount we could borrow under the Credit Facility. A restriction on our ability to fully utilize our Credit Facility may negatively affect our operating results, liquidity and financial condition.

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We may become subject to stockholder activism efforts that each could cause material disruption to our business. Certain influential institutional investors and hedge funds have taken steps to involve themselves in the governance and strategic direction of certain companies due to governance or strategic related disagreements between such companies and such stockholders. If we become subject to such stockholder activism efforts, it could result in substantial costs and a diversion of management's attention and resources, which could harm our business and adversely affect the market price of our common stock.

We rely on our executive officers and senior management. Most of our executive officers and senior management personnel do not have employment agreements with us. The loss of these individuals may have a material adverse effect on our future operations.

We may incur losses as a result of unforeseen or catastrophic events, including the emergence of a pandemic, terrorist attacks, extreme weather events or other natural disasters. The occurrence of unforeseen or catastrophic events, including the emergence of a pandemic or other widespread health emergency (or concerns over the possibility of such an emergency), terrorist attacks, extreme terrestrial or solar weather events or other natural disasters, could create economic and financial disruptions, and could lead to operational difficulties (including travel limitations) that could impair our ability to manage our businesses.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

Our corporate headquarters is located in Oaks, Pennsylvania and consists of nine buildings situated on approximately 90 acres. We own and operate the land and buildings, which encompass approximately 524,000 square feet of office space and 34,000 square feet of data center space. We are currently expanding these facilities by constructing a tenth building of 104,000 square feet to be completed in the third quarter of 2020. We lease other offices which aggregate 286,000 square feet. We also own a 3,400 square foot condominium that is used for business purposes in New York, New York.

Item 3. Legal Proceedings.

Stanford Trust Company Litigation

SEI has been named in seven lawsuits filed in Louisiana courts; four of the cases also name SPTC as a defendant. The underlying allegations in all actions relate to the purported role of SPTC in providing back-office services to Stanford Trust Company. The complaints allege that SEI and SPTC participated in some manner in the sale of “certificates of deposit” issued by Stanford International Bank so as to be a “seller” of the certificates of deposit for purposes of primary liability under the Louisiana Securities Law or so as to be secondarily liable under that statute for sales of certificates of deposit made by Stanford Trust Company. Two of the actions also include claims for violations of the Louisiana Racketeering Act and possibly conspiracy, and a third also asserts claims of negligence, breach of contract, breach of fiduciary duty, violations of the uniform fiduciaries law, negligent misrepresentation, detrimental reliance, violations of the Louisiana Racketeering Act, and conspiracy.

The procedural status of the seven cases varies. The Lillie case, filed originally in the 19th Judicial District Court for the Parish of East Baton Rouge, was brought as a class action and is procedurally the most advanced of the cases. SEI and SPTC filed exceptions, which the Court granted in part, dismissing claims under the Louisiana Unfair Trade Practices Act and permitting the claims under the Louisiana Securities Law to go forward. On March 11, 2013, newly-added insurance carrier defendants removed the case to the United States District Court for the Middle District of Louisiana. On August 7, 2013, the Judicial Panel on Multidistrict Litigation transferred the matter to the Northern District of Texas where MDL 2099, In re: Stanford Entities Securities Litigation (“the Stanford MDL”), is pending. On September 22, 2015, the District Court on the motion of SEI and SPTC dismissed plaintiffs’ claims for primary liability under Section 714(A) of the Louisiana Securities Law, but declined to dismiss plaintiffs’ claims for secondary liability under Section 714(B) of the Louisiana Securities Law based on the allegations pled by plaintiffs. On November 4, 2015, the District Court granted SEI and SPTC's motion to dismiss plaintiffs' claims under Section 712(D) of the Louisiana Securities Law. Consequently, the only claims of plaintiffs remaining in Lillie are plaintiffs' claims for secondary liability against SEI and SPTC under Section 714(B) of the Louisiana Securities Law. On May 2, 2016, the District Court certified the class as being "all persons for whom Stanford Trust Company purchased or renewed Stanford Investment Bank Limited certificates of deposit in Louisiana between January 1, 2007 and February 13, 2009". Notice of the pendency of the class action was mailed to potential class members on October 4, 2016.

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On December 1, 2016, a group of plaintiffs who opted out of the Lillie class filed a complaint against SEI and SPTC in the United States District Court in the Middle District of Louisiana (“Ahders Complaint”), alleging claims essentially the same as those in Lillie. In January 2017, the Judicial Panel on Multidistrict Litigation transferred the Ahders proceeding to the Northern District of Texas and the Stanford MDL. During February 2017, SEI and SPTC filed their response to the Ahders Complaint, and in March 2017 the District Court for the Northern District of Texas approved the stipulated dismissal of all claims in this Complaint predicated on Section 712(D) or Section 714(A) of the Louisiana Securities Law. In both cases, as a result of the proceedings in the Northern District of Texas, only the plaintiffs’ secondary liability claims under Section 714(B) of the Louisiana Securities Law remain. Limited discovery and motions practice have occurred, including SEI and SPTC’s filing of a dispositive summary judgment motion in the Lillie proceeding. On January 31, 2019, the Judicial Panel on Multidistrict Litigation remanded the Lillie and Ahders proceedings to the Middle District of Louisiana.

On July 9, 2019, the District Court issued an order granting SEI’s Summary Judgment Motion to dismiss the remaining Section 714(B) claim in the Lillie proceeding and denying Plaintiffs’ Motion for Continuance of SEI and SPTC’s Motion for Summary Judgment pursuant to Rule 56(d).

On July 16, 2019, SEI and SPTC filed a Motion for Summary Judgment pursuant to Rule 56(d) in the Ahders proceeding to have the remaining Section 714(B) claim dismissed.

On July 17, 2019, Plaintiffs filed a Motion for Reconsideration and/or New Trial as to the July 9, 2019 Ruling and Order (ECF 146) by the Honorable Brian A. Jackson denying a continuance of SEI’s Motion for Summary Judgment pursuant to Rule 56(d) in the Lillie proceeding. The Court denied Plaintiffs’ Motion and entered a Final Judgment in favor of SEI and SPTC on August 15, 2019.

On August 27, 2019, Plaintiffs-Appellants filed a Notice of Appeal to the United States Court of Appeals for the Fifth Circuit of the District Court's dismissal of the Lillie matter.

On November 20, 2019, Plaintiffs-Appellants filed a Motion in Support of the Notice of Appeal with the Fifth Circuit in the Lillie matter.

On January 17, 2020, SEI and SPTC timely filed their brief in opposition to the Plaintiffs-Appellants' motion for appeal in the Lillie Matter.

On January 24, 2020, the District Court issued an order granting SEI’s Summary Judgment Motion to dismiss the remaining Section 714(B) claim in the Adhers proceeding.

On February 7, 2020, Plaintiffs-Appellants filed their reply brief with the Fifth Circuit in the Lillie matter.

Another case, filed in the 23rd Judicial District Court for the Parish of Ascension, also was removed to federal court and transferred by the Judicial Panel on Multidistrict Litigation to the Northern District of Texas and the Stanford MDL. The schedule for responding to that Complaint has not yet been established.

Two additional cases remain in the Parish of East Baton Rouge. Plaintiffs filed petitions in 2010 and have granted SEI and SPTC indefinite extensions to respond. No material activity has taken place since.

In two additional cases, filed in East Baton Rouge and brought by the same counsel who filed the Lillie action, virtually all of the litigation to date has involved motions practice and appellate litigation regarding the existence of federal subject matter jurisdiction under the federal Securities Litigation Uniform Standards Act (SLUSA). The matters were removed to the United States District Court for the Northern District of Texas and consolidated. The court then dismissed the action under SLUSA. The Court of Appeals for the Fifth Circuit reversed that order, and the Supreme Court of the United States affirmed the Court of Appeals judgment on February 26, 2014. The matters were remanded to state court and no material activity has taken place since that date.

While the outcome of this litigation remains uncertain, SEI and SPTC believe that they have valid defenses to plaintiffs' claims and intend to defend the lawsuits vigorously. Because of uncertainty in the make-up of the Lillie class, the specific theories of liability that may survive a motion for summary judgment or other dispositive motion, the relative lack of discovery regarding damages, causation, mitigation and other aspects that may ultimately bear upon loss, the Company is not reasonably able to provide an estimate of loss, if any, with respect to the foregoing lawsuits.

SEI Capital Accumulation Plan Litigation

On September 28, 2018, a class action complaint was filed in the United States District Court for the Eastern District of Pennsylvania by Gordon Stevens, individually and as the representative of similarly situated persons, and on behalf of the

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SEI Capital Accumulation Plan (the “Plan”) naming the Company and its affiliated and/or related entities SEI Investments Management Corporation, SEI Capital Accumulation Plan Design Committee, SEI Capital Accumulation Plan Investment Committee, SEI Capital Accumulation Plan Administration Committee, and John Does 1-30 as defendants (the “Stevens Complaint”). The Stevens Compliant seeks unspecified damages for defendants’ breach of fiduciary duties under ERISA with respect to selecting and monitoring the Plan’s investment options and by retaining affiliated investment products in the Plan.

Although SEI believes its defenses against the plaintiff’s allegations were valid, the Company agreed to settle this matter in the very early stages of the litigation in order to avoid the high cost of protracted class-action litigation and internal distractions such cases bring. The written settlement agreement was submitted to the Court on July 26, 2019, and is a matter of public record. A Preliminary Approval Order approving the settlement agreement was issued by the Court.

A fairness hearing to approve the settlement agreement was held on December 18, 2019. The parties are currently waiting for the Court’s decision regarding the approval of the settlement agreement. The Company expects the financial impact of the settlement agreement to be immaterial.

Other Matters

The Company is also a party to various other actions and claims arising in the normal course of business that the Company does not believe are material. The Company believes that the ultimate resolution of these matters will not have a material adverse effect on the Company's financial position or the manner in which the Company conducts its business. Currently, the Company does not believe the amount of losses associated with these matters can be estimated. While the Company does not believe that the amount of such losses will, when liquidated or estimable, be material to its financial position, the assumptions may be incorrect and any such loss could have a material adverse effect on the Company's results of operations or the manner in which the Company conducts its business in the period(s) during which the underlying matters are resolved.

Executive Officers of the Registrant

Information about our executive officers is contained in Item 10 of this report and is incorporated by reference into this Part I.

Item 4. Mine Safety Disclosures.

None.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Price Range of Common Stock and Dividends:

Our common stock is traded on The Nasdaq Global Select Market® (NASDAQ) under the symbol “SEIC.” The following table shows the high and low sales prices for our common stock as reported by NASDAQ and the dividends declared on our common stock for the last two years. Our Board of Directors intends to declare future dividends on a semiannual basis.

2019	High		Low		Dividends
First Quarter	$	53.57	$	44.18	$	—
Second Quarter	58.43		49.91		0.33
Third Quarter	61.35		55.16		—
Fourth Quarter	67.14		55.42		0.35

2018	High		Low		Dividends
First Quarter	$	78.35	$	68.09	$	—
Second Quarter	75.38		60.99		0.30
Third Quarter	64.90		58.15		—
Fourth Quarter	61.54		42.27		0.33

According to the records of our transfer agent, there were 256 holders of record of our common stock on January 31, 2020. Because many of such shares are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.

For information on our equity compensation plans, refer to Note 7 to the Consolidated Financial Statements and Item 12 of this Annual Report on Form 10-K.    

ASSUMES $100 INVESTED ON JANUARY 1, 2015 & DIVIDENDS REINVESTED

FISCAL YEAR ENDED DECEMBER 31,

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Issuer Purchases of Equity Securities:

Our Board of Directors has authorized the repurchase of up to $4.178 billion worth of our common stock. Currently, there is no expiration date for our common stock repurchase program (See Note 7 to the Consolidated Financial Statements).

Information regarding the repurchase of common stock during the three months ended December 31, 2019 is:

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
October 1 – 31, 2019	200,000	$	60.16	200,000	$	186,662,000
November 1 – 30, 2019	450,000	62.95		450,000	158,333,000
December 1 – 31, 2019	625,000	65.28		625,000	117,530,000
Total	1,275,000	63.66		1,275,000

Item 6. Selected Financial Data.

(In thousands, except per-share data)

This table presents selected consolidated financial information for the five-year period ended December 31, 2019. This data should be read in conjunction with the financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this Annual Report on Form 10-K.

Year Ended December 31,	2019		2018		2017		2016		2015
Revenues	$	1,649,885	$	1,624,167	$	1,526,552	$	1,401,545	$	1,334,208
Total expenses	1,189,461		1,182,179		1,129,608		1,025,851		975,995
Income from operations	460,424		441,988		396,944		375,694		358,213
Other income, net	171,017		172,218		160,095		132,791		142,267
Income before income taxes	631,441		614,206		557,039		508,485		500,480
Income taxes	130,015		108,338		152,650		174,668		168,825
Net income	501,426		505,868		404,389		333,817		331,655
Basic earnings per common share	$	3.31	$	3.23	$	2.56	$	2.07	$	2.00
Shares used to compute basic earnings per common share	151,540		156,579		158,177		161,350		165,725
Diluted earnings per common share	$	3.24	$	3.14	$	2.49	$	2.03	$	1.96
Shares used to compute diluted earnings per common share	154,901		161,232		162,269		164,431		169,598
Cash dividends declared per common share	$	0.68	$	0.63	$	0.58	$	0.54	$	0.50
Financial Position as of December 31,
Cash and cash equivalents	$	841,446	$	754,525	$	744,247	$	695,701	$	679,661
Total assets	2,151,370		1,971,668		1,853,369		1,636,823		1,588,628
Shareholders’ equity	1,738,778		1,593,147		1,476,839		1,303,114		1,289,720

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

(In thousands, except share and per-share data)

This discussion reviews and analyzes the consolidated financial condition at December 31, 2019 and 2018, the consolidated results of operations for the years ended December 31, 2019, 2018 and 2017, and other factors that may affect future financial performance. This discussion should be read in conjunction with the Selected Financial Data included in Item 6 of this Annual Report and the Consolidated Financial Statements and Notes to the Consolidated Financial Statements included in Item 8 of this Annual Report.

Certain information contained in this discussion is or may be considered forward-looking. Forward-looking statements relate to future operations, strategies, financial results, expenditures and other uses of capital or other developments. Forward-looking statements are based upon estimates and assumptions that involve certain judgments, risks and uncertainties, many of which are beyond our control or are subject to change. Although we believe our assumptions are reasonable, they could be inaccurate. Our actual future revenues and income could differ materially from our expected results. We have no obligation to publicly update or revise any forward-looking statements.

Overview

Consolidated Summary

SEI is a leading global provider of technology-driven wealth and investment management solutions. We deliver comprehensive platforms, services and infrastructure – encompassing investment processing, investment operations and investment management – to help wealth managers, financial advisors, investment managers, institutional and private investors create and manage wealth. Investment processing fees are earned as monthly fees for contracted services, including computer processing services, software licenses and investment operations services, as well as transaction-based fees for providing securities valuation and trade-execution. Investment operations and investment management fees are earned as a percentage of assets under management, administration or advised assets. As of December 31, 2019, through our subsidiaries and partnerships in which we have a significant interest, we manage, advise or administer $1.0 trillion in hedge, private equity, mutual fund and pooled or separately managed assets, including $352.0 billion in assets under management and $683.3 billion in client assets under administration. Our affiliate, LSV Asset Management (LSV), manages $107.5 billion of assets which are included as assets under management.

Our Condensed Consolidated Statements of Operations for the years ended 2019, 2018 and 2017 were:

Year Ended December 31,	2019		2018			Percent Change*		2017		Percent Change
Revenues	$	1,649,885	$	1,624,167		2	%	$	1,526,552	6	%
Expenses	1,189,461		1,182,179			1	%	1,129,608		5	%
Income from operations	460,424		441,988			4	%	396,944		11	%
Net gain (loss) from investments	3,174		(325		)	NM		1,269		NM
Interest income, net of interest expense	15,952		12,752			25	%	6,276		103	%
Equity in earnings of unconsolidated affiliates	151,891		159,791			(5	)%	152,550		5	%
Income before income taxes	631,441		614,206			3	%	557,039		10	%
Income taxes	130,015		108,338			20	%	152,650		(29	)%
Net income	501,426		505,868			(1	)%	404,389		25	%
Diluted earnings per common share	$	3.24	$	3.14		3	%	$	2.49	26	%

* Variances noted "NM" indicate the percent change is not meaningful.

Significant Items Impacting Our Financial Results in 2019

Revenues increased $25.7 million, or 2%, to $1.6 billion in 2019 compared to 2018. Net income decreased $4.4 million, or 1%, to $501.4 million and diluted earnings per share increased to $3.24 per share in 2019 compared to $3.14 per share in 2018. We believe the following items were significant to our business results during 2019:

• Revenue from Asset management, administration and distribution fees increased primarily from higher assets under administration in our Investment Managers segment due to sales of new business and market appreciation. Our average assets under administration increased $80.2 billion, or 14%, to $635.8 billion during 2019 as compared to $555.6 billion during 2018.

• Information processing and software servicing fees in our Private Banks segment decreased by $10.4 million during 2019 due to previously announced client losses and decreased non-recurring fees.

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• Revenues in our Institutional Investors segment declined $11.2 million during 2019 due to acquisitions, plan curtailments and fee compression from increased competition related to the continued contraction of the U.S. corporate defined benefit market. Asset funding from new sales partially offset the decline in revenues.

• Our proportionate share in the earnings of LSV decreased by $7.9 million, or 5%, in 2019 due to lower assets under management from negative cash flows and lost clients. Market appreciation during 2019 partially offset the decline in LSV's average assets under management. Lower performance fees earned by LSV also negatively impacted our earnings.

• Our operating expenses were favorably impacted by cost containment measures implemented in late 2018 and early 2019. These expenses primarily consist of operational, technology and marketing costs and are mainly related to our solutions offerings as well as servicing existing and acquiring new clients. These operating expenses are primarily included in Compensation, benefits and other personnel costs on the accompanying Consolidated Statements of Operations.

• We capitalized $33.1 million in 2019 for SWP as compared to $43.4 million in 2018. Amortization expense related to SWP increased to $42.3 million during 2019 as compared to $39.9 million during 2018 due to continued development. The proportion of our expenses related to maintenance and support of SWP, which are not capitalized, has increased as compared to our costs related to development and enhancements eligible for capitalization.

• Our effective tax rate during 2019 was 20.6% as compared to 17.6% during 2018. The increase in our effective tax rate was primarily due to reduced tax benefits from a lower volume of stock option exercise activity (See the caption "Income Taxes" later in this discussion for more information).

• We continued our stock repurchase program during 2019 and purchased approximately 6,225,000 shares at an average price of $55.96 per share for a total cost of $348.3 million.

Significant Items Impacting Our Financial Results in 2018

Revenues increased $97.6 million, or 6%, to $1.6 billion in 2018 compared to 2017. Net income increased $101.5 million, or 25%, to $505.9 million and diluted earnings per share increased to $3.14 per share in 2018 compared to $2.49 per share in 2017. We believe the following items were significant to our business results during 2018:

• Revenue growth was primarily driven by higher Asset management, administration and distribution fees from market appreciation and positive cash flows from new and existing clients throughout the majority of 2018. Market volatility and negative cash flows occurring during the fourth quarter 2018 negatively impacted our revenues from assets under management and partially offset our revenue growth. Our average assets under management, excluding LSV, increased $12.1 billion, or 6%, to $226.6 billion during 2018 as compared to $214.5 billion during 2017.

• Our average assets under administration increased $58.0 billion, or 12%, to $555.6 billion during 2018 as compared to $497.6 billion during 2017 primarily from positive cash flows from new and existing clients in our Investment Managers segment. Assets under administration were also positively impacted from our acquisition of SEI Archway during the third quarter 2017 which resulted in an increase in asset administration fees in our Investment Managers segment of $13.1 million during 2018.

• Information processing and software servicing fees in our Private Banks segment increased in 2018 primarily due to increased assets from new and existing clients processed on SWP; however, the adoption of new revenue recognition guidance in 2018 partially offset this increase. The impact of this new guidance reduced our revenues from research services provided by our brokerage subsidiary, SIDCO, with a corresponding reduction in our expenses related to our amounts paid under soft dollar arrangements reflected in Software royalties and other information processing costs.

• Our proportionate share in the earnings of LSV was $159.8 million in 2018 as compared to $152.6 million in 2017, an increase of 5%. The increase was primarily due to increased assets under management from LSV's existing clients due to market appreciation. The market volatility during the fourth quarter 2018 and lower performance fees partially offset the increase in our earnings from LSV.

• Our operating expenses, primarily personnel costs, across all of our business segments increased. These expenses primarily consist of operational, technology and marketing costs and are mainly related to our solutions offerings as well as servicing existing and acquiring new clients. In addition, our Investment Managers segment includes costs related to SEI Archway. These operating expenses are included in Compensation, benefits and other personnel costs on the accompanying Consolidated Statements of Operations.

• We capitalized $43.4 million in 2018 for SWP as compared to $51.4 million in 2017. Amortization expense related to SWP decreased to $39.9 million during 2018 as compared to $46.5 million during 2017 due to the adjustment to the estimated useful life of certain components and functionality of SWP effective in the fourth quarter 2017 (See Note 1 to the Consolidated Financial Statements).

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• During 2018, we placed into service an application developed for the Investment Managers segment. This new offering includes components that leverage upon the current infrastructure and add significant enhancements designed to aggregate, transact and process data. Amortization expense related to the application was $5.2 million during 2018.

• Stock-based compensation expense decreased by $12.6 million during 2018 primarily due to the increase in expense associated with the achievement of stock option vesting targets earlier than originally estimated in 2017.

• Our effective tax rate during 2018 was 17.6% and included the 21.0% corporate tax rate and other impacts from the Tax Cut and Jobs Act (the Tax Act). Our effective tax rate was 27.4% during 2017 and reflected the estimated impact of the Tax Act and included a net tax benefit of $12.4 million from the re-measurement of our deferred tax liability net of the tax associated with the deemed repatriation and withholding tax of our previously undistributed foreign earnings. In addition, the rate for both periods were favorably impacted by tax benefits from stock option exercise activity.

• We continued our stock repurchase program during 2018 and purchased approximately 6,744,000 shares at an average price of $60.02 per share for a total cost of $404.8 million.

Sensitivity of our revenues and earnings to capital market fluctuations and client portfolio strategy

The majority of our revenues are based on the value of assets invested in investment products that we manage or administer which are affected by changes in the capital markets and the portfolio strategy of our clients or their customers. The capital market conditions during 2019 were marked by a broad recovery following the steep correction during the fourth quarter of 2018. These market conditions had a net positive impact on our asset-based fees thereby increasing our base revenues. Additionally, changes in the portfolio strategy of our clients or their customers in response to the market volatility and growing industry trends towards passive investing resulted in asset flows into our lower margin products. Macroeconomic factors such as U.S. Presidential politics, trade relations between the United States and China, and mideast tensions, among others, could have significant influence on capital markets in 2020 and beyond. Any prolonged future downturns in general capital market conditions or long-term client portfolio strategies directing significant assets into lower margin products could have adverse effects on our revenues and earnings derived from assets under management and administration.

Impact to our revenues due to client losses

Client losses during 2019 and 2018 in our Private Banks and Institutional Investors segments have negatively impacted our revenue growth. For some of these clients, the negative impact to our revenues and earnings are expected to be fully recognized during the course of 2020.

Impact of Adopting Revenue Recognition Guidance

During 2018, we adopted new revenue guidance (ASC 606) which addresses the recognition of revenues from contracts with customers and impacted the presentation of certain revenues and expenses in our consolidated financial statements. ASC 606 is applied prospectively from January 1, 2018 and reported financial results for the prior comparable period were not revised.

ASC 606 did not change the accounting for the majority of our revenue arrangements and did not have a material impact to our consolidated financial statements. The impact from the adoption of ASC 606 to our financial results during 2018 was primarily related to research services provided to customers in soft-dollar arrangements by SIDCO, our broker-dealer subsidiary, and the deferral of incremental contract acquisition costs. Under the new revenue standard, fees received for research services by SIDCO were recorded net of amounts paid for the soft dollar arrangement. The amounts we paid under these arrangements were previously recorded as an expense. The impact of this change in presentation was a decline in both revenues and expenses of $16.7 million during 2018. There was no impact to our net income as a result of this change. The corresponding amount paid for soft dollar arrangements recorded as expense in 2017 was $14.6 million. Also under the new revenue standard, costs incurred to acquire client contracts were deferred and recognized over the expected client life. During 2018, we deferred $8.1 million in expenses related to sales commissions costs and incurred $2.8 million of amortization expense (See Note 3 to the Consolidated Financial Statements).

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Ending Asset Balances

This table presents ending asset balances of our clients, or of our clients’ customers, for which we provide management or administrative services through our subsidiaries and partnerships in which we have a significant interest.

Ending Asset Balances
(In millions)	As of December 31,
					Percent Change				Percent Change
	2019		2018				2017
Private Banks:
Equity and fixed-income programs	$	23,851	$	20,453	17	%	$	22,764	(10	)%
Collective trust fund programs	4		4		—	%	4		—	%
Liquidity funds	3,405		3,633		(6	)%	3,864		(6	)%
Total assets under management	$	27,260	$	24,090	13	%	$	26,632	(10	)%
Client assets under administration	25,801		20,226		28	%	22,980		(12	)%
Total assets	$	53,061	$	44,316	20	%	$	49,612	(11	)%
Investment Advisors:
Equity and fixed-income programs	$	67,895	$	55,395	23	%	$	61,908	(11	)%
Collective trust fund programs	4		7		(43	)%	5		40	%
Liquidity funds	2,887		5,948		(51	)%	2,414		146	%
Total assets under management	$	70,786	$	61,350	15	%	$	64,327	(5	)%
Institutional Investors:
Equity and fixed-income programs	$	84,291	$	78,765	7	%	$	87,587	(10	)%
Collective trust fund programs	83		79		5	%	78		1	%
Liquidity funds	1,746		2,234		(22	)%	2,937		(24	)%
Total assets under management	$	86,120	$	81,078	6	%	$	90,602	(11	)%
Advised assets	3,948		3,359		18	%	3,942		(15	)%
Total assets	$	90,068	$	84,437	7	%	$	94,544	(11	)%
Investment Managers:
Equity and fixed-income programs	$	—	$	89	NM		$	96	(7	)%
Collective trust fund programs	58,070		42,804		36	%	49,340		(13	)%
Liquidity funds	479		336		43	%	743		(55	)%
Total assets under management	$	58,549	$	43,229	35	%	$	50,179	(14	)%
Client assets under administration (A)	657,541		552,318		19	%	495,447		11	%
Total assets	$	716,090	$	595,547	20	%	$	545,626	9	%
Investments in New Businesses:
Equity and fixed-income programs	$	1,688	$	1,257	34	%	$	1,104	14	%
Liquidity funds	158		189		(16	)%	53		NM
Total assets under management	$	1,846	$	1,446	28	%	$	1,157	25	%
Advised assets	1,343		687		NM		49		NM
Total assets	$	3,189	$	2,133	50	%	$	1,206	77	%
LSV:
Equity and fixed-income programs (B)	$	107,476	$	96,114	12	%	$	107,690	(11	)%
Total:
Equity and fixed-income programs (C)	$	285,201	$	252,073	13	%	$	281,149	(10	)%
Collective trust fund programs	58,161		42,894		36	%	49,427		(13	)%
Liquidity funds	8,675		12,340		(30	)%	10,011		23	%
Total assets under management	$	352,037	$	307,307	15	%	$	340,587	(10	)%
Advised assets	5,291		4,046		31	%	3,991		1	%
Client assets under administration (D)	683,342		572,544		19	%	518,427		10	%
Total assets under management, advisement and administration	$	1,040,670	$	883,897	18	%	$	863,005	2	%

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(A) Client assets under administration in the Investment Managers segment include $50.8 billion of assets that are at fee levels below our normal full service assets (as of December 31, 2019).

(B) Equity and fixed-income programs include assets managed by LSV in which fees are based on performance only. The ending value of these assets as of December 31, 2019 was $2.5 billion.

(C) Equity and fixed-income programs include $6.0 billion of assets invested in various asset allocation funds at December 31, 2019.

(D) In addition to the numbers presented, SEI also administers an additional $13.1 billion in Funds of Funds assets (as of December 31, 2019) on which SEI does not earn an administration fee.

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Average Asset Balances

This table presents average asset balances of our clients, or of our clients’ customers, for which we provide management or administrative services through our subsidiaries and partnerships in which we have a significant interest.

Average Asset Balances
(In millions)	For the Year Ended December 31,
					Percent Change				Percent Change
	2019		2018				2017
Private Banks:
Equity and fixed-income programs	$	22,364	$	22,545	(1	)%	$	20,139	12	%
Collective trust fund programs	4		4		—	%	4		—	%
Liquidity funds	3,575		3,469		3	%	3,717		(7	)%
Total assets under management	$	25,943	$	26,018	—	%	$	23,860	9	%
Client assets under administration	23,467		22,697		3	%	21,397		6	%
Total assets	$	49,410	$	48,715	1	%	$	45,257	8	%
Investment Advisors:
Equity and fixed-income programs	$	63,071	$	62,223	1	%	$	57,475	8	%
Collective trust fund programs	5		5		—	%	5		—	%
Liquidity funds	3,504		2,782		26	%	2,380		17	%
Total assets under management	$	66,580	$	65,010	2	%	$	59,860	9	%
Institutional Investors:
Equity and fixed-income programs	$	82,506	$	84,743	(3	)%	$	82,377	3	%
Collective trust fund programs	80		75		7	%	84		(11	)%
Liquidity funds	2,278		2,611		(13	)%	2,995		(13	)%
Total assets under management	$	84,864	$	87,429	(3	)%	$	85,456	2	%
Advised assets	3,760		4,128		(9	)%	3,540		17	%
Total assets	$	88,624	$	91,557	(3	)%	$	88,996	3	%
Investment Managers:
Equity and fixed-income programs	$	—	$	99	NM		$	88	13	%
Collective trust fund programs	51,379		46,189		11	%	43,323		7	%
Liquidity funds	540		630		(14	)%	898		(30	)%
Total assets under management	$	51,919	$	46,918	11	%	$	44,309	6	%
Client assets under administration (A)	612,374		532,934		15	%	476,207		12	%
Total assets	$	664,293	$	579,852	15	%	$	520,516	11	%
Investments in New Businesses:
Equity and fixed-income programs	$	1,522	$	1,135	34	%