SEI Investments Company (SEIC)

Research and Development

We are devoting significant resources to research and development, including expenditures for new technology platforms, enhancements to existing technology platforms, and new investment products and services. We spent approximately $117.5 million in 2008, $141.9 million in 2007, and $139.1 million in 2006, of which we capitalized approximately $56.2 million in 2008, $61.4 million in 2007, and $73.3 million in 2006 relating to the development of new technology platforms. Total research and development expenditures as a percentage of revenues were 11.9 percent in 2008, 13.9 percent in 2007, and 15.7 percent in 2006. All percentages exclude the revenues of LSV.

The majority of our research and development spending is related to building our Global Wealth Platform (GWP). GWP combines our proprietary applications with those built by third-party providers, and integrates them into a single technology solution, providing a common user experience. In order to achieve this, we developed enterprise technology architecture to support component acquisition, integration, operation, and communication. This integration supports straight-through business processing and enables the transformation of front, middle and back-office operations.

The solution will serve European and U.S. markets. GWP provides the technology platform for the business solutions now being marketed to private banks and independent wealth adviser organizations in the United Kingdom and continental Europe. The TRUST 3000^® platform does not meet certain requirements of European markets such as trade date reporting, trade date investment accounting, and multi-lingual reporting. In U.S. markets, we believe the demand for the advanced capabilities of the new platform will enable us to market our services to global wealth managers and existing clients in the Private Banks segment and improve the services we offer in the Investment Advisors segment.

GWP will eventually be used at some level by all business segments, except LSV. The front-end components will be used by us and by our clients to manage customer administration and portfolio management. The back-office components will streamline all investment-related activities and will eliminate manual processes and perform trade order execution and settlement activities.

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Research and Development

We are devoting significant resources to research and development, including expenditures for new technology platforms, enhancements to existing technology platforms, and new investment products and services. We spent approximately $141.9 million in 2007, $139.1 million in 2006, and $126.7 million in 2005, of which we capitalized approximately $61.4 million in 2007, $73.3 million in 2006, and $67.6 million in 2005 relating to the development of new technology platforms. Total research and development expenditures as a percentage of revenues were 13.9 percent in 2007, 15.7 percent in 2006, and 16.4 percent in 2005. The percentages in 2007 and 2006 exclude the revenues of LSV, which was consolidated into our financial statements beginning in January 2006.

System requirements to satisfy the needs of the financial services industry are complex, substantial and continually evolving for a number of reasons, including, increased trading volume, introduction of new investment alternatives, changes in technology, changes in laws and regulations, and increased competition. We believe service to existing and potential clients is enhanced by substantial investments to improve current software products and to develop new products and services for the financial services industry. Using a combination of SEI professionals and partner firms to accomplish the design, development, and enhancement of our software products, we will continue to emphasize the importance of research and development to enhance our competitive position in the industry.

A significant portion of our research and development spending is related to building our Global Wealth Platform. We anticipate this platform will be used by all of our business segments over time, except LSV, to manage all or most of their client processes. The

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Table of Contents

platform consists of various components, each offering different capabilities and provides straight-through business processing that integrates most front, middle and back-office operations. The front-end components will be used by our personnel to manage all middle-office operations and by clients to manage their client administration and portfolio management processes. The back-office components will streamline all investment related activities, eliminate many manual processes, perform trade order execution and securities settlement activities, and deliver improved client reporting.

We anticipate the Global Wealth Platform will enable an expanded presence in the European bank market. We believe the platform will improve our competitive position in the U.S. market, facilitate the transition of the U.S. bank market from GWTS to GWS, and enhance the client experience for our advisor clients.

Research and Development

FACE="Times New Roman" SIZE="2">We are devoting significant resources to research and development, including expenditures for new technology platforms, enhancements to existing technology platforms, and new investment products and services.
We spent approximately $141.9 million in 2007, $139.1 million in 2006, and $126.7 million in 2005, of which we capitalized approximately $61.4 million in 2007, $73.3 million in 2006, and $67.6 million in 2005 relating to the development of new
technology platforms. Total research and development expenditures as a percentage of revenues were 13.9 percent in 2007, 15.7 percent in 2006, and 16.4 percent in 2005. The percentages in 2007 and 2006 exclude the revenues of LSV, which was
consolidated into our financial statements beginning in January 2006.

System requirements to satisfy the needs of the financial services industry
are complex, substantial and continually evolving for a number of reasons, including, increased trading volume, introduction of new investment alternatives, changes in technology, changes in laws and regulations, and increased competition. We
believe service to existing and potential clients is enhanced by substantial investments to improve current software products and to develop new products and services for the financial services industry. Using a combination of SEI professionals and
partner firms to accomplish the design, development, and enhancement of our software products, we will continue to emphasize the importance of research and development to enhance our competitive position in the industry.

Research and Development

We are devoting significant resources to research and development, including expenditures for new technology platforms, enhancements to existing technology platforms, and new investment products and services. We spent approximately $139.1 million in 2006, $126.7 million in 2005, and $95.0 million in 2004, of which we capitalized approximately $73.3 million in 2006, $67.6 million in 2005, and $37.0 million in 2004 relating to the development of new technology platforms. Total research and development expenditures as a percentage of revenues were 15.7 percent in 2006, 16.4 percent in 2005, and 13.7 percent in 2004. The percentage in 2006 excludes the revenues of LSV, which was consolidated into our financial statements beginning in January 2006.

System requirements to satisfy the needs of the financial services industry are complex, substantial and continually evolving for a number of reasons, including, increased trading volume, introduction of new investment alternatives, changes in technology, changes in laws and regulations, and increased competition. We believe service to existing and potential clients is enhanced by substantial investments to improve current software products and to develop new products and services for the financial services industry. Using a combination of SEI professionals and partner firms to accomplish the design, development, and enhancement of our software products, we will continue to emphasize the importance of research and development to enhance our competitive position in the industry.

A significant portion of our research and development spending is related to building our Global Wealth Platform. We anticipate this platform will be used by all of our business segments except LSV to manage all or most of their client processes. The platform consists of various components, each offering different capabilities and provides straight-through business processing that integrates most front, middle and back-office operations. The front-end components will be used by our personnel to manage all middle-office operations and by clients to manage their client administration and portfolio management processes. The back-office components will streamline all investment related activities, eliminate many manual processes, and perform trade order execution and securities settlement activities.

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Table of Contents

We anticipate the Global Wealth Platform will enable us to enter the European large bank market. We believe the platform will improve our competitive position in the U.S. market, facilitate the transition of the U.S. bank market from ASP to BSP services and enhance the client experience for our advisor clients. We plan to implement the new platform for a global private bank in 2007.

Research and Development

We are devoting significant resources to research and development, including expenditures for new technology platforms, enhancements to existing technology platforms, and new investment products and services. We spent approximately $126.7 million in 2005, $95.0 million in 2004, and $56.6 million in 2003, of which we capitalized approximately $67.6 million in 2005, $37.0 million in 2004, and $10.4 million in 2003 relating to the development of new technology platforms. Total research and development expenditures as a percentage of sales were 16.4 percent in 2005, 13.7 percent in 2004, and 8.9 percent in 2003.

System requirements to satisfy the needs of the financial services industry are complex, substantial and continually evolving for a number of reasons, including, increased trading volume, introduction of new investment alternatives, changes in technology, changes in laws and regulations, and increased competition. We believe service to existing and potential clients is enhanced by substantial investments to improve current software products and to develop new products and services for the financial services industry. Using a combination of SEI professionals and partner firms to accomplish the design, development, and enhancement of our software products, we will continue to emphasize the importance of research and development to enhance our competitive position in the industry.

A significant portion of our research and development spending is related to building our Global Wealth Platform. It is our intention for this platform to be used by all of our business segments to manage all of our client processes. The platform will consist of various components, each offering different capabilities and functionality, which will be integrated into a single platform that provides straight through business processing. It will handle most front, middle and back-office operations. The front-end components will be used by our Trust Company to manage all middle-office operations and by our clients to manage client administration and portfolio management. The back-office components will streamline all investment related activities, eliminate many manual processes, and perform trade order execution and securities settlement activities.

We expect the Global Wealth Platform to enable our entry into the large European bank market, improve our competitive position in the U.S. market, facilitate the transition of the U.S. bank market from ASP to BSP services and enhance the client experience for our advisor clients. We plan to first implement the new platform for global private banks that currently use our investment processing services. In 2006, our advisor clients will begin using a limited version of the front-end components to manage client administration.

Research and Development

We are devoting significant resources to research and development which include expenditures for new technology platforms, enhancements to existing technology platforms, and new investment products and services. We spent approximately $95.0 million in 2004, $56.6 million in 2003, and $53.6 million in 2002, of which we capitalized approximately $37.0 million in 2004, $10.4 million in 2003, and $3.3 million in 2002 relating to the development of new technology platforms. Total research and development expenditures as a percentage of sales were 13.7 percent in 2004, 8.9 percent in 2003, and 8.6 percent in 2002.

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System requirements to satisfy the needs of the financial services industry are complex, substantial and continually evolving because of a number of factors, including, increased trading volume, introduction of new investment alternatives, changes in technology, changes in laws and regulations, and increased competition. We believe service to existing and potential clients is enhanced by substantial investments to improve existing software products and to develop new products and services for the financial services industry. We will continue to emphasize the importance of research and development to enhance our competitive position in the industry. We use a combination of SEI professionals and partner firms to accomplish the design, development, and enhancement of our software products.

A significant portion of our research and development spending is related to building our Global Wealth Management Platform. This platform is comprised of two primary sub-components: Desktop and Global Investment Processing Platform. The Desktop component will be used by us and our clients as a front-end tool to manage client administration and portfolio management. The Global Investment Processing Platform will be the back-office tool that will streamline all investment related activities and will remove many manual processes as well as perform all order execution and settlement activities. The two platforms will be integrated into a single platform to handle most front, middle and back-office operations that will be used by all of our business segments.