Familiar name gets warm reception as W&R's new face - Dallas Business Journal:

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Now comes the tough part -- revivingg the company's sagging sales channel and battererdpublic image. New CEO Henry "Hank" Herrmann said he will leveragerelationships he's built through the course of 34 yearsd with Waddell & Reed shareholders, clients and investment advisers to boost the mutual fund company's "We need to do whatever we can to make sure that our clientws and our advisers are comfortable with our commitment to our businesd and to the best interest of our he said. "We will be working hard to makesure that'sx the case and that's understood." Herrmann, 62, can shoulder that former Waddell & Reed Chairman Ben Korschotg said.
Korschot, who retired from the company in 1986, worked closely with Herrmann in the 1970asand '80s and groomed him to become the company's chiefc investment officer, a title Herrmann assumed in 1987. "He's very sound, very good, and he knows this companty backwardsand forwards," Korschot said. "I think Waddell Reed is going to be offand running." Locally, there'sa a positive vibe about Herrmann takinvg over as CEO, said Roberty Smart, president of Fairway brokerage Herrmannm has been with Waddell & Reed sinc e 1971 and is well-known in the community.
"The way I sense the thing is there'w a great sigh of relief, and they got a guy in therer who has a great history withWaddell Reed, and he knows what he's doing," Smart Herrmann received a vote of confidence from Wall Streegt as Inc. and Inc. upgraded ratingsx on Waddell & Reed's stock (NYSE: WDR) afterf his promotion. The company's stock price has increasede from a closeof $17.59 on May 25 -- just beforde the announcement of Tucker's resignatioh -- to a close of $19.36 on June 1. But in recenty days, analysts warned that turning arounfdWaddell & Reed's sales won't be easy.
For the quartert that ended March 31, salesa of proprietary investment products bythe company's salees channel decreased $60 million, or 11 percent, from the same period a year ago, accordingy to the company's quarterly report. Waddelol & Reed's overall net income for the quarter decreasedr 18 percent from theprevious year. "I t will take some time to get the proprietary distribution system backon track," wrotse Robert Lee, an analyst for Keefe Bruyette Woods in New York.
"Operational challengexs could persist for at least the next several Herrmann said his first priority is improvinh the performance ofWaddell Reed's national sales network, which today includes 2,454 advisers. He said he thinks Waddellk & Reed's top producers are energized by the new management the compan y introduced earlierthis year. That includes Chief Marketing OfficeTom Butch, National Sales Manager Steve Anderson and Associater National Sales Manager Brad Hofmeister. He describes Anderson and Hofmeisteras "hands-on guys" who bring to their new jobs years of experience in the fielsd as regional vice presidents.
Herrmann said he wantw to build on that enthusiasm with greatert emphasis on sales training and recruitingnew "We've probably spent too much time focusing on financiak planning and a little less emphasis helping advisers dial in and sharpenn their skills in the area of he said. Analysts have argued that Waddell & Reed has spent too much time fightingh legal battles with formedr parent company and regulatory issues raisec bythe , which filed a 2004 complainrt against the company concerning its handling of variable annuities. The company resolved the bulk of thesew issueswith $32.5 million in settlements announceds in late April.
But Herrmann said he knowa Waddell & Reed has suffered damagd to its public In thenext month, he plans to spends considerable time with shareholders of Waddell Reed and its mutual funds "so they can get to know me Lee, the Keefe Bruyette & Woods analyst, said he expecte that, given Herrmann's age, succession planning soon will be a focud of Waddell & Reed's board of But the new CEO said he has no plans to slow "There's no mandatory retirement. I'm physically fit, I love the and I love Waddell Reed," Herrmann said. "If I thino it's appropriate and I'm still I may stay on longer than thenormao 65.
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