I read the transcript of the recent Third Quarter Earnings Conference. Had I been an analyst on the call, I would have asked the following questions of management. Perhaps at the next Earnings Conference…..

(1) Why not stop treasury stock purchases? In my view, treasury stock purchases usually represent an effort by the company to keep the price of the company’s stock from falling, often at the behest of large institutional shareholders. But if there are doubts as to the company’s business prospects, the price of the stock will fall anyway, and the money will have been wasted. During calendar 2006, 2007 and 2008, SEIC has purchased a total of 17.6 million shares at a cost of about $445 million or $25.28 per share. Based on yesterday’s closing price of $17.49 per share, shareholders have so far sustained a loss on those shares of $7.79 per share or a total of about $137 million.

(2) Why not direct free cash flow instead to pay down the borrowings necessitated by the mistaken investments made by the company’s sponsored money market funds? Those borrowings, which I estimate may be $250 million or more, represent a serious potential problem for the company (a) if interest rates rise over the next several years – a real possibility given the weak dollar and the exploding borrowing needs of the U.S. Treasury, and/or (b) if new competition begins to erode the company’s high margin lines of business – high margins always invite new players into the market.

(3) Why not use a realistic lifetime for amortization of the $225 million investment in the Global Wealth Platform? Fifteen years is far too long. Five years is the proper lifetime for software. Software companies with which I am familiar are continuously upgrading their product offerings, meaning in three to five years, their software applications are much better than the original. A fifteen year amortization causes SEIC not only to overstate its current earnings but to plant seeds of doubt in investors’ minds as to when the big “non-cash” charge will hit, just like what is happening in the second half of 2009 at SEIC for some of its older software.

(4) Why not sell or unwind the LSV partnership? Or at least explain in simple English what LSV is and how it makes sense, and why there is no better alternative. Partnerships are always fraught with problems, and are often difficult for shareholders to understand. Plus, shareholders wonder whether management really has the capability to direct the activities of the partnership, and if not, whether an LSV that SEIC management does not have control over can rise up to bite the company unexpectedly, something that may make investors a little leery of investing in SEIC.

(5) Why not eliminate the poison pill and the other measures at SEIC which, while advertised as giving management a stronger hand in determining what’s best for SEIC and its shareholders, actually are more likely to deter other firms from making offers to acquire SEIC? The real deterrent should be a lofty market price for the stock caused by superior management making superior business decisions. And at SEIC there is no lofty share price – yesterday’s closing price was only pennies different from the closing price of the stock five years ago, at the end of October of 2004, adjusted for splits.