Waddell & Reed Financial, Inc., (WDR) recently reported Q2 2019 results that were not too bad on a sequential basis. The company reported a 4% sequential rise in revenue to $270.2M and furthermore the company is controlling expenses. Operating margins increased 160 bps to 15.3%. The bottom line also showed some strength with diluted GAAP EPS increasing $0.03 on a sequential basis. However, on a year-over-year the business showed deterioration with both the top line and bottom line decreasing. Revenue was down $25.3M and EPS fell $0.10 relative to Q2 2018. Operating margins were 440 bps lower. Despite the slight sequential improvement relative to longer term trends, Waddell & Reed continues to face headwinds due to industry shifts from active to passive funds, and company specific issues regarding poor fund performance. Waddell & Reed’s AUM declined another ~8.6% to $71.9B on a year-over-year basis. The current yield of ~6.4% is tempting. But one must bear in mind that the dividend was cut in 2018 and AUM continues to exhibit a declining trend. Hence, I believe that an investment here remains risky.