<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: FEBRUARY 10, 1999 COMMISSION FILE NO. 1-12785
NATIONWIDE FINANCIAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 31-1486870
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
ONE NATIONWIDE PLAZA
COLUMBUS, OHIO 43215
(614) 249-7111
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
<PAGE> 2
ITEM 5. OTHER EVENTS.
On February 10, 1999 Nationwide Financial Services, Inc. (NFS)
announced it is expanding its $20 billion investment management
business by establishing an investment management company that
will be led by Paul Hondros, an industry leader.
NFS's news release issued on February 10, 1999 regarding this
announcement is attached as an exhibit to this report and is
incorporated herein by reference.
The information contained in this Current Report on Form 8-K
contains certain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 with respect
to the results of operations and businesses of the Company. These
forward-looking statements involve certain risks and
uncertainties. Factors that may cause actual results to differ
materially from those contemplated or projected, forecast,
estimated or budgeted in such forward looking statements include,
among others, the following possibilities: (i) Nationwide
Corporation's control of the Company through its beneficial
ownership of approximately 97.8% of the combined voting power of
all the outstanding common stock and approximately 81.5% of the
economic interest in the Company; (ii) the Company's primary
reliance, as a holding company, on dividends from its subsidiaries
to meet debt payment obligations and the applicable regulatory
restrictions on the ability of the Company's subsidiaries to pay
such dividends; (iii) the potential impact on the Company's
reported net income that could result from the adoption of certain
accounting standards issued by the FASB; (iv) tax law changes
impacting the tax treatment of life insurance and investment
products; (v) heightened competition, including specifically the
intensification of price competition, the entry of new competitors
and the development of new products by new and existing
competitors; (vi) adverse state and federal legislation and
regulation, including limitations on premium levels, increases in
minimum capital and reserves, and other financial viability
requirements; (vii) failure to expand distribution channels in
order to obtain new customers or failure to retain existing
customers; (viii) inability to carry out marketing and sales
plans, including, among others, changes to certain products and
acceptance of the revised products in the market; (ix) changes in
interest rates and the stock markets causing a reduction of
investment income or asset fees, reduction in the value of the
Company's investment portfolio or a reduction in the demand for
the Company's products; (x) general economic and business
conditions which are less favorable than expected; (xi)
unanticipated changes in industry trends and ratings assigned by
nationally recognized statistical rating organizations or A.M.
Best Company; and (xii) inaccuracies in assumptions regarding
future persistency, mortality, morbidity and interest rates used
in calculating reserve amounts.
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit 99 News release of Nationwide Financial Services, Inc.
dated February 10, 1999
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NATIONWIDE FINANCIAL SERVICES, INC.
-----------------------------------
(Registrant)
Date: February 10, 1999 /s/ Mark R. Thresher
------------------------------------------
Mark R. Thresher, Vice President - Finance
and Treasurer (Chief Accounting Officer)
EXHIBIT INDEX
Exhibit No. Description
99 News release of Nationwide Financial Services, Inc. dated
February 10, 1999
<PAGE> 1
Exhibit 99
NEWS MEDIA CONTACTS:
John C. Millen
614-249-6348
Jeff Botti
614-249-6339
INVESTOR CONTACT:
Dan Amodeo
614-249-9039
February 10, 1999
For Immediate Release
NFS TAPS PAUL HONDROS, FORMER FIDELITY EXECUTIVE,
TO BUILD NEW INVESTMENT MANAGEMENT COMPANY
COLUMBUS, OHIO -- In a move to expand its $20 billion investment
management business, Nationwide Financial Services (NYSE: NFS) today announced
it is establishing an investment management company that will be led by Paul
Hondros, an industry leader.
"The addition of Paul Hondros and the formation of this new company represent a
giant step forward in efforts to strengthen our retirement savings franchise by
expanding our investment management capabilities," said Joseph J.
Gasper, NFS president and chief operating officer.
The new company, yet unnamed, will be headquartered in the Philadelphia area,
where it will operate as an independent arm of NFS. Hondros, who will be
president and chief executive officer of the new company, was formerly president
of Fidelity Investments' institutional services and retail groups and of Pilgrim
Baxter & Associates.
The new company will combine NFS' existing investment management operations
under one organization with its own brand. NFS' current investment management
operations consist of Nationwide Advisory Services, Inc. and Morley Financial
Services, Inc., which NFS acquired last May.
"Under Paul's leadership, this company will build on NFS' current investment
management operation by acquiring smaller companies and expanding the
distribution of our existing mutual funds," Gasper said.
--more--
<PAGE> 2
NFS/HONDROS--2
"The opportunity to be a part of NFS' aggressive investment management strategy
is exciting," Hondros said. "I have known and worked with NFS' core management
group for years, and I'm pleased to now join this team.
"NFS is a fast-growing and innovative company," Hondros said. "We have a unique
opportunity to build on an already solid investment management franchise that
has been delivering strong returns to its clients for decades. NFS also has one
of the country's strongest distribution systems, which can be leveraged to
better serve our customers."
In establishing the new company, Hondros will build a management structure to
execute NFS' investment management strategy, evaluate investment management
firms for acquisition, immediately seek to expand distribution, and develop a
brand.
Hondros also will integrate Nationwide Advisory Services and Morley Financial
Services into the new operation, and launch funds that complement Nationwide's
existing array of funds.
NAS, with $11 billion in assets under management, now offers 35 funds (15 retail
funds and 20 insurance funds), 18 of which are subadvised. Its flagship fund is
the $2.4 billion Nationwide Fund, a large cap blend fund managed by Charles S.
Bath. It carries Morningstar's 5-star rating.
Morley, based in Portland, is a leader in stable value funds, which seek greater
returns than money markets offer, but with even less risk than high-quality
bonds. Morley manages $8 billion in assets, mostly through the institutional
Morley Stable Value Fund and the new Morley Capital Accumulation Fund, one of
the country's first retail stable value mutual funds.
NAS and Morley operations will continue in Columbus and Portland, respectively.
Hondros began his career in the financial services industry in 1975 with SEI
Corporation, a Philadelphia-area provider of investment management software and
mutual fund services.
--more--
<PAGE> 3
NFS/HONDROS--3
He moved to Boston in 1990 to join Fidelity Investments, where he served as
president and chief operating officer of its Institutional Services Company,
whose assets grew from $25 billion to $130 billion during his five-year tenure.
He subsequently was picked to head up Fidelity's 7,000-employee Retail Group.
Hondros returned to the Philadelphia area in 1997 as president and chief
operating officer of Pilgrim Baxter & Associates, Ltd., an investment advisor.
NFS is the publicly traded holding company for the long-term savings operations
of the Nationwide Insurance Enterprise, a Columbus-based Fortune 500
organization engaged in diversified insurance and financial services. The
Enterprise had 1997 assets of $83 billion and revenues of nearly $23 billion.
NFS, with 1998 assets of nearly $75 billion and statutory premiums and deposits
of nearly $13 billion, is a major provider of fixed and variable annuities,
traditional and variable life insurance, pension plans, and other long-term
savings products.
Nationwide Life Insurance Company, NFS' principal operating subsidiary, is the
country's fifth largest life insurer by premiums and deposits and the 12th
largest when ranked by assets.
--30--
