> ## Content Index > Fetch the complete content index at: https://www.bullished.co/llms.txt > Use this file to discover other available public pages before exploring further. # Franklin Templeton Targets A 35% Margin As Cheaper Investment Products Gain Scale - URL: https://www.bullished.co/franklin-templeton-targets-a-35-margin-as-cheaper-investment-products-gain-scale-daa63baa/ - Published: 2026-11-06T17:31:41.000Z - Updated: 2026-11-06T17:31:41.000Z - Description: Private-market fundraising and back-office savings underpin the plan, while analysts press management on fees and reinvestment. - Author: Matteo Parrino - Tags: Earnings, BEN, Industry: Financials [Franklin Templeton](https://www.bullished.co/tag/ben/), which manages investments for individuals and institutions worldwide, raised its adjusted operating margin goal to 35% for the fourth quarter of fiscal 2029, Co-President and Chief Financial Officer Matt Nichols said on Friday’s earnings call. Management expects cheaper investment products to help lift profitability as they grow, alongside higher-fee private assets and continued expense savings. ## Cheaper Products Start Paying Their Way The new profitability target follows a fiscal year in which revenue grew faster than expenses. Franklin Templeton’s adjusted operating revenue rose 7.5% to $7.2 billion in fiscal 2026, while adjusted operating expenses increased 2.4% to $5.18 billion. Adjusted operating income rose 23% to $2.02 billion, producing a 28% adjusted operating margin, an expansion of 3.5 percentage points. The fourth quarter finished above that full-year margin. Adjusted operating revenue reached $1.88 billion, up 3.7% from the preceding quarter, and adjusted operating expenses fell 1.7% to $1.29 billion. Adjusted operating income increased 17.6% to $598.6 million, with a 31.8% margin. Nichols expects an adjusted operating margin of approximately 30% in fiscal 2027, assuming flat markets. That would meet the original five-year profitability goal two years ahead of plan. The asset manager earns most of its revenue from management fees, generally tied to the amount of money it oversees. Its investment vehicles include mutual funds, exchange-traded funds and separately managed accounts, spanning stocks, bonds and private assets. Lower-priced products can bring in assets without producing the same revenue per dollar managed as higher-priced strategies. Nichols said those cheaper businesses—including ETFs, Canvas and multi-asset solutions—have reached a scale at which additional assets improve companywide profitability. “Every dollar we're adding now is adding to the corporate margin,” he said. ## Private Assets Must Balance The Fees An analyst at Goldman Sachs questioned whether the shift toward ETFs, separately managed accounts and Canvas could leave Franklin Templeton’s overall fee rate stable. Private assets pull that rate upward; cheaper investment vehicles pull it downward. The fiscal 2026 effective fee rate, excluding performance fees, was 0.376%, compared with 0.375% a year earlier. Nichols said that after removing catch-up fees—fees collected for earlier periods—the rate was 0.374% in both years. Catch-up fees totaled approximately $18 million in the fourth quarter and $44 million for the year. Nichols expects the overall fee rate to stay stable over the next several years, all else equal. His case rests on private-market fundraising offsetting lower-fee growth, alongside a relatively stable mutual fund business. Chief Executive Officer Jenny Johnson raised the fiscal 2029 private-market fundraising goal to $150 billion from $100 billion. The company has raised approximately $66 billion since fiscal 2024, including $43.2 billion in private markets during fiscal 2026, across real estate, secondary private equity, private credit and venture strategies. Those targets assume organic growth rather than future acquisitions. Johnson expects fundraising of about $35 billion in fiscal 2027, with the outcome partly dependent on demand for collateralized loan obligations, investment vehicles holding pools of loans. Lexington’s flagship fund contributed about $11 billion in fiscal 2026 and is expected to continue fundraising into 2028. The wealth channel provides another route to higher-fee assets. Co-President and Chief Commercial Officer Daniel Gamba said wealth clients supplied 22% of private-market fundraising, with 34% of that coming from outside the United States. Franklin Templeton added 62 distribution outlets for alternatives in wealth during fiscal 2026. ## Bigger Targets For ETFs And Canvas Johnson also raised the fiscal 2029 ETF asset goal to $200 billion from $93 billion and doubled the Canvas goal to $100 billion from $50 billion. Both businesses had already approached their original targets in the second year of the plan. ETF assets ended fiscal 2026 at $84.6 billion, with $27.5 billion in net inflows. Active ETFs accounted for $37.2 billion in assets and more than half of ETF net inflows. Canvas, the company’s customized investment platform, doubled its assets over the year to $32.6 billion and drew $13.2 billion in net inflows. Johnson said its distribution partners exceeded 235, compared with 67 in fiscal 2023, while the number of financial advisers using it rose by more than 1,800 to over 2,900. The broader business ended fiscal 2026 with [$1.8 trillion](https://markets.ft.com/data/announce/detail?dockey=600-202610051700BIZWIRE%5FUSPRX%5F%5F%5F%5F20261001%5FBW473884-1&ref=bullished.co) under management and $84.1 billion in long-term net inflows, an improvement of more than $181 billion from fiscal 2025\. Fourth-quarter long-term net inflows were $20.8 billion, and mandates already won but not yet funded totaled $22 billion at year-end. Selling more capabilities to existing institutional customers is another part of the growth plan. Johnson said fewer than 10% of those clients currently work with more than one Franklin Templeton investment team. She expects the approximately 3% base-fee growth rate achieved in fiscal 2026 to continue, without assuming market gains. ## Savings Fund Another Investment Round The expense plan goes beyond cutting costs. Nichols estimated approximately $75 million in fiscal 2027 savings, but said reinvestment would be at least as substantial. Fiscal 2026 expenses already included $210 million in savings. Johnson pointed to the continuing work of integrating 18 acquisitions over six years, including office systems, customer relationship software and vendor contracts. “It takes years to really do the integration of the back office,” she said. Johnson plans to use productivity gains and expense discipline to fund artificial intelligence, investment operations and distribution. Nichols expects fiscal 2027 adjusted operating expenses excluding performance-fee compensation to be approximately $5.1 billion, in line with or slightly above fiscal 2026 levels, at the current asset level. Performance fees add another variable. Fourth-quarter performance fees were $94 million, compared with $74 million in the preceding quarter. Nichols expects $125 million in the first quarter of fiscal 2027, with 55% paid out in compensation, and elevated fees over the next several quarters from venture investments associated with prominent initial public offerings. The margin plan therefore combines growth, integration savings and investment-dependent fees. The approximately $75 million savings estimate is a funding source for further spending, rather than an equivalent reduction in the expense bill. Learn - [How To Read An Earnings Call Transcript: Start With Guidance, Then Find What's Missing →](https://www.bullished.co/learn/how-to-read-an-earnings-call/) How to read an earnings call transcript: check guidance first, look for dropped metrics, compare growth with last quarter, and watch hedged wording. ### Sources - [Franklin Templeton: Fiscal Q4 Earnings Snapshot | 9news.com](https://www.9news.com/article/syndication/associatedpress/franklin-templeton-fiscal-q4-earnings-snapshot/616-e811bc78-d461-4d0f-a0c2-00299474740f?ref=bullished.co) — Associated Press - [Franklin Templeton (BEN) Q4 Earnings and Revenues Beat Estimates](https://finance.yahoo.com/markets/stocks/articles/franklin-templeton-ben-q4-earnings-134001452.html?ref=bullished.co) — Yahoo Finance - [Here's What Key Metrics Tell Us About Franklin Templeton (BEN) Q4 Earnings](https://finance.yahoo.com/markets/stocks/articles/heres-key-metrics-tell-us-140002527.html?ref=bullished.co) — Yahoo Finance - [Is Rising AUM Altering The Investment Case For Franklin Templeton (BEN)?](https://finance.yahoo.com/markets/stocks/articles/rising-aum-altering-investment-case-070939805.html?.tsrc=rss&ref=bullished.co) — Yahoo Finance - [Franklin Templeton, Inc. to Announce Fourth Quarter and Fiscal Year Results on November 6, 2026 – Company Announcement - FT.com](https://markets.ft.com/data/announce/detail?dockey=600-202610051700BIZWIRE%5FUSPRX%5F%5F%5F%5F20261001%5FBW473884-1&ref=bullished.co) — Financial Times ### More on Franklin Templeton - [Franklin Templeton Earns Preliminary $380.1 Million Quarterly Profit As Expenses Fall 8%](https://www.bullished.co/franklin-templeton-earns-preliminary-380-1-million-quarterly-profit-as-expenses-fall-8-9c71d495/) [All Franklin Templeton (BEN) coverage →](https://www.bullished.co/tag/ben/)