Exhibit 99.1

News Release

Waddell & Reed Financial, Inc. Reports Second Quarter Results

Overland Park, KS, Jul. 26, 2012 — Waddell & Reed Financial, Inc. (NYSE: WDR) today reported second quarter net income of $41.7 million, or $0.48 per diluted share, compared to net income of $47.4 million, or $0.55 per diluted share, during the first quarter of 2012 and net income of $50.0 million, or $0.58 per diluted share, during the same period last year.

The second quarter of 2012 included a pre-tax charge of $5.0 million ($3.1 million net of taxes, or $0.04 per diluted share) to general and administrative expenses to reflect an impairment of certain capitalized software development costs.  Our ongoing assessment and changes to our enterprise information technology infrastructure and software resulted in the decision to discontinue the usage of certain capitalized software.  Excluding the charge discussed above, general and administrative costs during the quarter would have been $20.0 million, net income $44.9 million, and earnings per diluted share $0.52.  We believe supplementing our discussion with these non-GAAP measures provides a more meaningful comparison to other periods.  A detailed reconciliation of non-GAAP measures to reported GAAP numbers is included in the table below.

Reconciliation to GAAP

Unaudited Condensed Statement of Income

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Operating revenues of $308 million rose 0.5% sequentially, while operating income of $68.5 million declined 5.8%.  Excluding the charge for the write-off (discussed above), operating income would have been $73.5 million, an improvement of 1.2% compared to the first quarter.  Our operating margin was 22.2% for the quarter.  Excluding the charge for the write-off (discussed above), our adjusted operating margin during the quarter was 23.9%, a 20 basis point improvement compared to the previous quarter.

Assets under management ended the quarter at $89 billion, or 5% below their high-water mark set at the end of the first quarter of 2012, as negative market action more than offset net inflows of $376 million during the quarter.

Business Discussion

Management commentary

“Our broad product set and balanced distribution model has once again proven beneficial to our shareholders,” said Hank Herrmann, Chairman and Chief Executive Officer of Waddell & Reed Financial, Inc.  “Our fixed income products continue to be well received by investors who remain careful and avoid equities.  Our financial advisors remain focused on promoting the benefits of long term goals and keeping their clients invested.”

Advisors channel

The stability of our Advisors channel across various market backdrops remains an important asset for us.  In an environment of volatility and investor caution, we continued to generate organic growth, and to maintain a good balance of sales among distribution channels and products.    Net inflows were $183 million compared to inflows of $158 million during the previous quarter and inflows of $25 million during the second quarter of 2011.   The channel’s redemption rate of 9.1% for the current quarter remains well below the industry’s average of approximately 25%.

Advisor productivity continued to increase, due in large part to our success with asset-allocation products.  Investors continue to favor fee-based solutions over point-of-sale commission-based sales.  Our financial advisors have been able to provide their clients with competitive solutions using our Managed Allocation Portfolio (MAP) suite of products.

Wholesale channel

Sales during the quarter were $3.9 billion, a decline of 13% compared to the previous quarter and 8% compared to the same period last year.  Inflows were $626 million during the current quarter, compared to $970 million during the previous quarter and $1.8 billion during the second quarter of 2011. The uncertainty surrounding both the global financial crisis and geopolitical landscape continues to adversely affect investor behavior.  Our broad product lineup affords an array of solutions ranging from fixed income to specialty equity funds.  A number of strategies are seeing meaningful daily sales with approximately a third of sales generated by Asset Strategy and a third by fixed income products.

Institutional channel

Sales of $567 million declined 13% sequentially, but increased 2% compared to the same period last year.  The quarter saw net outflows of $433 million, negatively impacted by the redemption of approximately $300 million from one account’s decision to reallocate their portfolio away from traditional asset class

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allocations.  The current quarter’s outflows compare to inflows of $175 million during the previous quarter and outflows of $125 million during the second quarter of 2011.

Management Fee Revenue Analysis

During the current quarter, average assets under management were $90.2 billion, unchanged sequentially and down 0.6% compared to the same quarter last year.

Compared to the previous quarter, revenues fell 0.5%; compared to the same period last year, revenues declined 3%.  Fee revenues declined at a greater rate than average assets under management due primarily to a mix-shift to lower fee products.  The effective fee rate for the current quarter was 59.9 basis points, compared to 60.2 basis points and 61.4 basis points in the first quarter of 2012 and second quarter of 2011, respectively.

Underwriting and Distribution Revenue and Expense Analysis

Advisors channel

The increase in revenues compared to the first quarter is due in large part to higher asset allocation fees as these products continue to account for an increasingly larger percentage of assets.  Higher sales commission revenues from variable annuity products also contributed to the increase in revenues.  Direct expenses rose in correlation with associated revenues, while indirect expenses remained largely unchanged.

Compared to the second quarter of 2011, revenues increased with higher asset allocation fees.  This increase was partly offset by lower sales commissions from variable annuity products, and to a lesser degree, lower financial planning fees.  Direct expenses grew with associated revenues.  Indirect expenses increased due to higher field office expenses associated with our electronic books and records initiative.

Wholesale channel

Sequentially, revenues and direct expenses remain relatively unchanged.  The increase in indirect expenses is largely due to higher marketing and support costs.

Compared to the same period last year, revenues declined with lower asset-based fees.  Direct expenses fell in correlation with associated revenues while indirect costs rose in large part due to higher advertising and compensation costs.

Compensation and Related Expense Analysis

Lower earnings on portfolio manager deferred compensation plans, and to a lesser degree, lower payroll taxes, contributed to the sequential decline in costs.  The first quarter included severance charges and  an incentive compensation adjustment, which also contributed to the sequential drop in costs.

Compared to the second quarter of 2011, costs rose due to higher salary and related costs, and were partly offset by lower incentive compensation costs in the current year.

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General and Administrative Expense Analysis

Excluding the $5.0 million charge to write-off software capitalization costs, the slight increase in costs compared to the first quarter is due to higher advertising expenses as our programs resumed during the second quarter.  Compared with the second quarter of 2011, costs remained largely unchanged excluding the above mentioned charge.

Subadvisory Fees

Expenses declined 17% sequentially and 37% compared to the same period last year due to lower levels of subadvised assets under management.  Subadvised average assets under management were $5.0 billion in the current quarter, compared to $6.1 billion during the previous quarter and $8.2 billion during the second quarter of 2011.

Investment and Other Income/Loss

Investment and other income declined in both the sequential and year-over-year comparative periods due to lower gains recognized on the sale of available-for-sale securities and in our mutual fund trading portfolios.

Balance Sheet Information

As of June 30, 2012, cash and cash equivalents and investment securities were $505 million.  Long-term debt was $190 million and there was no short-term debt outstanding.

Stockholders’ equity was $572 million and there were 85.8 million shares outstanding.  During the quarter, we repurchased 945 thousand shares on the open market or privately at an aggregate cost of $29 million.

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Unaudited Consolidated Statement of Income

Underwriting and Distribution

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Changes in Assets Under Management

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Supplemental Information

Fund Rankings

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Earnings Conference Call

Stockholders, members of the investment community and the general public are invited to listen to a live Web cast of our earnings release conference call today, July 26th at 11:00 a.m. Eastern.  During this call, Henry J. Herrmann, Chairman and CEO, will review our quarterly results.  Live access to the teleconference will be available on the “Investor Relations” section of our Web site at www.waddell.com.  A Web cast replay will be made available shortly after the conclusion of the call and accessible for seven days.

Web site Resources

We invite you to visit the “Investor Relations” section of our Web site at www.waddell.com under the caption “Data Tables” to review supplemental information schedules.

Contacts

Investor Contact:

Nicole McIntosh, VP, Investor Relations, (913) 236-1880, nmcintosh@waddell.com

Mutual Fund Investor Contact:

Call (888) WADDELL, or visit www.waddell.com or www.ivyfunds.com.

Past performance is no guarantee of future results.  Please invest carefully.

About the Company

Waddell & Reed, Inc., founded in 1937, is one of the oldest mutual fund complexes in the United States, having introduced the Waddell & Reed Advisors Group of Mutual Funds in 1940. Today, we distribute our investment products through the Waddell & Reed Advisors channel (our network of financial advisors), our Wholesale channel (encompassing broker/dealer, retirement, registered investment advisors as well as the activities of our Legend subsidiary), and our Institutional channel (including defined benefit plans, pension plans and endowments and our subadvisory partnership with Mackenzie in Canada).

Through its subsidiaries, Waddell & Reed Financial, Inc. provides investment management and financial planning services to clients throughout the United States. Waddell & Reed Investment Management Company serves as investment advisor to the Waddell & Reed Advisors Group of Mutual Funds, Ivy Funds Variable Insurance Portfolios and Waddell & Reed InvestEd Portfolios, while Ivy Investment Management Company serves as investment advisor to Ivy Funds. Waddell & Reed, Inc. serves as principal underwriter and distributor to the Waddell & Reed Advisors Group of Mutual Funds, Ivy Funds Variable Insurance Portfolios and Waddell & Reed InvestEd Portfolios, while Ivy Funds Distributor, Inc. serves as principal underwriter and distributor to Ivy Funds.

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Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect the current views and assumptions of management with respect to future events regarding our business and industry in general.  These forward-looking statements include all statements, other than statements of historical fact, regarding our financial position, business strategy and other plans and objectives for future operations, including statements with respect to revenues and earnings, the amount and composition of assets under management, distribution sources, expense levels, redemption rates and the financial markets and other conditions.  These statements are generally identified by the use of such words as “may,” “could,” “should,” “would,” “believe,” “anticipate,” “forecast,” “estimate,” “expect,” “intend,” “plan,” “project,” “outlook,” “will,” “potential” and similar statements of a future or forward-looking nature.  Readers are cautioned that any forward-looking information provided by or on behalf of the Company is not a guarantee of future performance.  Actual results may differ materially from those contained in these forward-looking statements as a result of various factors, including but not limited to those discussed below.  If one or more events related to these or other risks, contingencies or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from those forecasted or expected.  Certain important factors that could cause actual results to differ materially from our expectations are disclosed in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2011, which include, without limitation:

·                                          The introduction of legislative or regulatory proposals or judicial rulings that change the independent contractor classification of our financial advisors at the federal or state level for employment tax or other employee benefit purposes;

·                                          The adverse ruling or resolution of any litigation, regulatory investigations and proceedings, or securities arbitrations by a federal or state court or regulatory body;

·                                          The loss of existing distribution channels or inability to access new distribution channels;

·                                          A reduction in assets under our management on short notice, through increased redemptions in our distribution channels or our Funds, particularly those Funds with a high concentration of assets, or investors terminating their relationship with us or shifting their funds to other types of accounts with different rate structures;

·                                          Our inability to implement new information technology and systems, or inability to complete such implementation in a timely or cost effective manner;