T. Rowe Price (TROW) official guidance

Looking ahead, we anticipate some sequential improvement in net flows in the fourth quarter, with outflows moderating from third quarter levels, but remaining elevated.

Based on the third quarter's average AUM, we continue to expect 2026 adjusted operating expenses, excluding carried interest expense, to be up 4%-7% over 2025's $4.6 billion.

The firm estimates that its effective income tax rate for the full year 2026, on a U.S. GAAP and adjusted basis, will be in the range of 23.5% to 25.5%.

The firm estimates that its effective income tax rate for the full year 2026, on a U.S. GAAP and adjusted basis, will be in the range of 23.5% to 25.5%.

What we've been doing, though, is having steps to be able to allow us to both invest behind our strategic priorities and maintain controllable expense growth in the low single-digits. We focused right now on 2026 and 2027.

We expect 2026 to be a record year for gross flows, reflecting strong interest in a broad range of our investment strategies.

We're anticipating building momentum in alternatives as OHA and our late-stage venture capability invest committed capital and continue to raise additional capital, and we begin to scale the T. Rowe Price Goldman Sachs Public Private strategies.

In fixed income, we're anticipating consistent and sustained net flows across a range of strategies and vehicles.

Finally, I'd note that despite the fact that our overall target date pipeline is up substantially, there's an air pocket in the late-stage pipeline, which would suggest that we'll see a lull in TDF flows in the second half.

We expect net flows in the second half of the year to be meaningfully more challenging than the first half, primarily due to a number of the things that you've cited.

I'll also kind of take the opportunity to share some perspective on the 2026 flow outlook. You know, flows have been volatile and difficult for us to predict, but our base case reflects continued pressure in equities, partially offset by inflows in target-date fund, and consistent with the previous comment, with a continued shift towards blend, steady growth in fixed income, and accelerating growth in alternatives.

Similar to recent years, in Q4, we anticipate increases in our long-term incentive compensation expense, reflecting the timing of our annual grants in December, and seasonally higher advertising and promotional and G&A expenses.

As we discussed last quarter, we developed a broad and ongoing expense management program that will allow us to continue investing in our future while keeping our controllable expense growth rate in the low single digits in 2026 and 2027.

Similar to recent years, in Q4, we anticipate increases in our long-term incentive compensation expense, reflecting the timing of our annual grants in December, and seasonally higher advertising and promotional and G&A expenses.

Similar to recent years, in Q4, we anticipate increases in our long-term incentive compensation expense, reflecting the timing of our annual grants in December, and seasonally higher advertising and promotional and G&A expenses.

At this point, our outlook for Q4 flows is weaker at the margin.

We continue to expect 2025 adjusted operating expenses, excluding carried interest expense, to be up 2%-4% over 2024's $4.46 billion.

This will result in a non-recurring charge of approximately $100 million in Q4, which will be excluded from our non-GAAP measures.

The firm estimates that its effective tax rate for the full year 2025 will be in the range of 23.0% to 26.0% on a U.S. GAAP basis, and 23.5% to 25.5% on an adjusted basis.

The firm estimates that its effective tax rate for the full year 2025 will be in the range of 23.0% to 26.0% on a U.S. GAAP basis, and 23.5% to 25.5% on an adjusted basis.