stockrowWhat it does
Franklin Resources, now operating as Franklin Templeton, is a holding company for investment-management subsidiaries. Founded in 1947 and headquartered in San Mateo, it manages money for people and institutions rather than taking deposits or making consumer loans.
The company invests client assets in equity, fixed income, alternatives, multi-asset portfolios and cash-management strategies. In plain English, it builds and runs portfolios of shares, bonds, private credit, private equity, real estate, infrastructure and other investments, according to each product’s stated mandate. Clients can invest through mutual funds, closed-end funds, exchange-traded funds (ETFs), private funds, separately managed accounts, collective investment trusts and other vehicles.
Its specialist managers include brands such as Alcentra, Benefit Street Partners, Brandywine Global, Clarion Partners, ClearBridge Investments, Fiduciary Trust International, Lexington Partners, Putnam and Western Asset Management. It also provides sub-advisory services, meaning it manages portfolios for investment products sponsored by other companies.
Alongside investment management, Franklin Templeton provides or arranges fund administration, sales and distribution, shareholder servicing, trust and custody services, and technology-based portfolio tools. At September 30, 2025, it managed $1,661.2 billion of client assets. Its CEO is Jennifer M. Johnson.
How it makes money
Franklin Templeton has one operating segment: investment management and related services. Its main revenue source is investment-management fees, generally charged as a percentage of assets under management (AUM). This makes revenue recurring while a client mandate or fund remains in place, but the dollar amount moves with asset values, client subscriptions and withdrawals, the mix of products, and the fee rate on each mandate.
Investment-management fees were $7.0 billion in FY2025, representing 79.6% of revenue. The company charges different rates by asset class, investment vehicle and service level; fees on products sold outside the United States are generally higher than those on U.S. products. It may also earn performance fees from certain alternative strategies when contractual conditions are met.
It earns sales and distribution fees from selling sponsored fund shares, including upfront commissions and ongoing distribution fees. These were $1.5 billion in FY2025. Shareholder-servicing fees, $264.5 million in FY2025, principally cover transfer-agency work such as statements, transaction processing, customer service and tax reporting. Other revenue was $49.7 million.
The latest reported annual total was $7.0 billion of investment-management fees in FY2025; in Q3 FY2026, AUM reached a record $1.8 trillion. The company also earns fees for sub-advising products run under another sponsor’s brand and may waive or reduce management fees in some circumstances.
| Product or service | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Investment management fees | $7.0 billion | 79.6% | 2.34% |
| Sales and distribution fees | $1.5 billion | 16.8% | 6.78% |
| Shareholder servicing fees | $264.5 million | 3.02% | 15.4% |
| Other | $49.7 million | 0.57% | 9.23% |
Customers and how it sells
Franklin Templeton serves retail, institutional and high-net-worth investors worldwide. Its institutional clients include sovereign wealth funds, pension and defined-contribution plans, endowments, charitable foundations, healthcare systems and insurance companies. Its high-net-worth business also serves individuals, families and family offices, with trust, custody, estate-planning and tax-planning services available through Fiduciary Trust International.
The company reaches retail investors directly and through financial intermediaries, including broker-dealers, financial advisers, banks and similar providers. Institutional mandates are sourced through pension, defined-contribution and management consultants, direct sales, requests for proposals and existing-client relationships. Retail separately managed-account programs are sponsored by financial institutions.
Revenue is concentrated in the United States, which generated $6.6 billion, or 75.4% of FY2025 revenue. Luxembourg generated $1.3 billion, or 14.8%, reflecting its role in cross-border funds. Asia-Pacific generated $327.8 million, while Europe, Middle East and Africa excluding Luxembourg generated $279.0 million and the Americas excluding the United States generated $254.0 million.
The company reported clients in over 150 countries and an on-the-ground presence in over 30 countries in Q3 FY2026. It distributes some Luxembourg- and Ireland-domiciled funds across borders, while other international products are sold only in local markets.
| Region | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| United States | $6.6 billion | 75.4% | 4.03% |
| Luxembourg | $1.3 billion | 14.8% | 4.70% |
| Asia-Pacific | $327.8 million | 3.74% | 6.12% |
| Europe, Middle East and Africa, Excluding Luxembourg | $279.0 million | 3.18% | −8.76% |
| Americas excluding United States | $254.0 million | 2.90% | −5.22% |
Suppliers and costs
Franklin Templeton is a people, technology and distribution business rather than a manufacturer. It employs investment professionals, distribution teams, operations staff, technology personnel and compliance professionals; it had 9,800 employees in FY2025.
The company outsources various fund administration, technology, transfer-agency and other services to third-party providers. These providers may act as sub-agents or delegates, and the company also relies on external market-data, distribution and operational-service providers. It does not identify a sole-source supplier in the available information.
Distribution is an important cost area. Franklin Templeton receives sales and distribution fees from funds and pays much of that revenue to financial advisers and other intermediaries that sell fund shares. It says competition for access to those channels has increased its distribution costs. Other costs include compensation, technology, fund and portfolio administration, regulatory compliance, marketing and expenses associated with fundraising. In Q3 FY2026, the company said it was investing in AI data and security, while expecting AI-related spending to require controls because agents that continue to run can be costly.
- Revenue$8.8B
- Selling, general and administrative−$7.5B
- Other operating costs−$633.1M
- Operating income$604.1M
Competitive position
Franklin Templeton competes globally for client assets with investment-management companies, securities brokerages and investment banks, insurance companies, banks, hedge-fund firms and other financial institutions. Competition is based on investment performance, reputation, product range, service, innovation, distribution relationships and fees.
No individual competitor is named in the company’s business description or risk disclosures. The company says consolidation has created competitors with greater financial resources and broader distribution channels, while new investment managers and new products continue to enter the market. Broker-dealers and banks that distribute Franklin Templeton funds can also sell proprietary or competing funds. The company relies on third-party broker-dealers, banks, investment advisers and other intermediaries for much of its fund sales, so it does not control their recommendations to clients.
Its stated competitive assets include a broad mix across equity, fixed income, alternatives and multi-asset investing; multiple specialist brands; international distribution; and relationships with retail, wealth and institutional clients. Its current platform also spans public and private credit, while it offers several access formats, including ETFs, separately managed accounts and custom portfolios.
Our reading: Product breadth and specialist investment teams are a medium-strength moat because clients can choose among multiple strategies and vehicles, but competitors offer similar services and products. [item1; item1a]
Our reading: Distribution relationships are important but a limited moat because intermediaries can recommend competing or proprietary products and distribution access is contested. [item1; item1a]
Growth opportunities
Franklin Templeton’s growth initiatives center on gathering more client assets, expanding private-markets capabilities, broadening ETF and separately managed-account distribution, and offering investment solutions that combine public and private assets.
In Q3 FY2026, the company reported $18.4 billion of long-term net inflows, $63.3 billion of fiscal-year-to-date long-term net inflows and record AUM of $1.8 trillion. Its institutional backlog of won but unfunded mandates reached $28.6 billion, compared with $20.2 billion in Q2 FY2026. Funding these mandates would depend on clients completing their allocations.
Alternatives are a focus. Alternative AUM reached $294 billion in the quarter, and the company raised $10.3 billion in private markets during the quarter. It said fiscal-year-to-date private-markets fundraising had reached $33 billion and it expects to end FY2026 at about $40 billion. About 80% of its private-markets platform is fee-generating. The company also said its blended alternatives fee rate is about 65 basis points, ranging from 40 basis points to more than 100 basis points plus performance fees.
It is expanding client access through active ETFs, retail separately managed accounts and Canvas, its custom-portfolio platform. In Q3 FY2026, ETF AUM reached $75.6 billion, retail SMA AUM reached $187.6 billion and Canvas AUM reached $30.3 billion. The company also launched a preferred-partner program to extend Canvas tax-overlay capabilities. It is developing tokenized investment products and partnerships intended to expand access through digital-asset distribution channels.
- $8.4BFY2021
- $8.3BFY2022
- $7.8BFY2023
- $8.5BFY2024
- $8.8BFY2025
Structural risks
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Market-sensitive fee base. Investment-management fees depend primarily on AUM. Market declines, asset outflows and a move toward lower-fee products can reduce revenue and income.
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Investment performance and reputation. Weak relative investment performance can reduce sales and prompt client redemptions. Harm to the company’s reputation can lead clients to withdraw assets, terminate mandates or choose not to begin relationships.
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Distribution dependence. The company relies heavily on broker-dealers, banks, advisers and other intermediaries. These firms may recommend competitors’ products, reduce distribution, consolidate, or demand economics that increase distribution costs.
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Regulatory burden. The company operates across many jurisdictions and is subject to securities, fund, privacy, anti-money-laundering, sanctions, tax and other rules. Changes can add costs, restrict products or distribution, and create compliance obligations.
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Operational and third-party exposure. Fund operations require high-volume transaction processing, valuation, accounting, compliance and client servicing. Errors by personnel, vendors or delegates, including outsourced technology and transfer-agency providers, can disrupt operations, cause losses, sanctions or reputational damage.
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International exposure. Non-U.S. operations expose the company to exchange-rate changes, local market conditions, political and economic instability, and differing regulatory systems.
Bottom line
Our reading
Our reading: Franklin Templeton is a global, asset-light investment manager whose recurring fee base is tied to the size and mix of client assets, with distribution and specialist investment capabilities supporting that model. [item1; item7]
Our reading: Its main exposure is to investment results, market levels, client flows and third-party distribution, while private markets, ETFs, separately managed accounts and Canvas provide several routes for asset gathering. [item1a; call_prepared]
Our reading: The $28.6 billion won-but-unfunded institutional backlog and Q3 FY2026 positive flows show current commercial momentum, but neither removes the market and redemption sensitivity of AUM-based fees. [call_prepared; item1a]