<PAGE>
 
   As filed with the Securities and Exchange Commission on October 16, 1998.
                                                    Registration No. 333-
--------------------------------------------------------------------------------
 
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                             --------------------
                                        
                                   FORM S-8

                       REGISTRATION STATEMENT UNDER THE
                            SECURITIES ACT OF 1933

                        WADDELL & REED FINANCIAL, INC.
            (Exact Name of Registrant as Specified in Its Charter)

                DELAWARE                                  51-0261715
    ---------------------------------                ---------------------
     (State or Other Jurisdiction of                   (I.R.S. Employer
     Incorporation or Organization)                   Identification No.)

 
                               6300 LAMAR AVENUE
                             OVERLAND PARK, KANSAS
                                     66202
                                (913) 236-2000
 
         (Address of Principal Executive Offices, including Zip Code)

                             --------------------


            1998 EXECUTIVE DEFERRED COMPENSATION STOCK OPTION PLAN,
                1998 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN AND
                           1998 STOCK INCENTIVE PLAN
 
                           (Full Title of the Plans)

                             --------------------
 
               SHARON K. PAPPAS                          COPY TO:
        GENERAL COUNSEL AND SECRETARY                ALAN J. BOGDANOW
        WADDELL & REED FINANCIAL, INC.             HUGHES & LUCE, L.L.P.
               6300 LAMAR AVENUE               1717 MAIN STREET, SUITE 2800
         OVERLAND PARK, KANSAS  66202              DALLAS, TEXAS  75201
                (913) 236-2000                        (214) 939-5500

    (Name, Address, and Telephone Number,
    including Area Code, of Agent for Service)

                             --------------------

                        CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
 TITLE OF EACH CLASS       AMOUNT       PROPOSED MAXIMUM     PROPOSED MAXIMUM       AMOUNT OF
    OF SECURITIES          TO BE         OFFERING PRICE         AGGREGATE          REGISTRATION
  TO BE REGISTERED      REGISTERED/1/      PER SHARE/2/      OFFERING PRICE/2/         FEE
-------------------------------------------------------------------------------------------------
<S>                     <C>             <C>                  <C>                   <C>
Class A Common
Stock, $.01 par         16,300,000           $17.16            $279,708,000           $82,514
    value
-------------------------------------------------------------------------------------------------
</TABLE>

(1)  This registration statement also covers an indeterminate additional amount
     of shares of the Registrant's Class A Common Stock to be offered or sold
     pursuant to the antidilution provisions of the 1998 Executive Deferred
     Compensation Stock Option Plan, 1998 Non-Employee Director Stock Option
     Plan and 1998 Stock Incentive Plan.
(2)  Estimated solely for the purpose of calculating the registration fee on the
     basis of the average of the high and low price paid per share of the Class
     A Common Stock, as reported on the New York Stock Exchange on October 9,
     1998, in accordance with Rules 457(c) and (h)(1) promulgated under the
     Securities Act of 1933, as amended.
<PAGE>
 
                        WADDELL & REED FINANCIAL, INC.
                                        

                                297,174 SHARES
                             CLASS A COMMON STOCK
                                        

          Our stockholders identified below under the caption "Selling
Stockholders" may offer to sell up to 297,174 shares of our Class A common
stock.


          We have already issued to the selling stockholders the shares being
offered by the selling stockholders, or we will issue the shares being offered
by the selling stockholders prior to the sale of the shares.  This offering is
not part of the original issuance of the shares of Class A common stock.  We
will not receive any of the proceeds from the selling stockholder's sale of
their shares. The selling stockholders may offer the shares in transactions on
the New York Stock Exchange, in negotiated transactions, or through a
combination of these methods.  The selling stockholders may offer the shares at
prices relating to the prevailing market prices or at negotiated prices.


          The Class A common stock is quoted on the NYSE under the symbol "WDR."
On October 14, 1998 the last sale price of the Class A common stock, as reported
on the NYSE, was
$18.38 per share.

                     ------------------------------------
 
  Investing in the Class A common stock involves a high degree of risk.  You
  should purchase only if you can afford a complete loss.  See "Risk Factors"
                              beginning on page 4.
                                        
                     ------------------------------------

The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if the prospectus is
truthful or complete.  Any representation to the contrary is a criminal offense.

                     ------------------------------------

          You should rely only on the information contained in this document or
that we have referred you to. We have not authorized anyone to provide you with
information that is different from that contained in this Prospectus. The
selling stockholders may offer to sell, and seek offers to buy, shares of Class
A common stock only in jurisdictions where offers and sales are permitted. The
information contained in this Prospectus is accurate only as of the date of this
Prospectus, regardless of the time of delivery of this Prospectus or of any sale
of the Class A common stock.
 

                   This Prospectus is dated October 16, 1998.
<PAGE>
 
                             AVAILABLE INFORMATION
                                        
          The Company is subject to the informational reporting requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports and other information with the Securities
and Exchange Commission (the "Commission").  Reports, proxy statements,
information statements, and other information may be inspected without charge at
Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549-1004
and at the following regional offices of the Commission:  New York Regional
Office, Seven World Trade Center, Suite 1300, New York, New York 10048; and
Chicago Regional Office, Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60606.  Copies of such material may be obtained
from the Public Reference Room of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.  Information on the operation of
the Public Reference Section is available by calling the Commission at
1-800-SEC-0330.  Reports, proxy statements, information statements and other
information can also be inspected at the offices of the NYSE, 20 Broad Street,
New York, New York 10005.  The Commission maintains a Web site that contains
information filed with the Commission.  The Commission's Web site address is
http://www.sec.gov.

          The Company intends to furnish its stockholders with annual reports
containing audited financial statements and such other periodic reports as it
may determine to furnish or as may be required by law.

          The Company has filed with the Commission a Registration Statement on
Form S-8, (together with all exhibits thereto, the "Registration Statement")
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the shares of Class A common stock offered hereby.  This Prospectus
does not contain all information set forth in the Registration Statement.
Certain parts of the Registration Statement have been omitted in accordance with
the rules and regulations of the Commission.  For further information, reference
is made to the Registration Statement which can be inspected at the public
reference rooms at the offices of the Commission.

                                       2
<PAGE>
 
                      DOCUMENTS INCORPORATED BY REFERENCE
                                        
          The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, including any beneficial owner, upon the
written or oral request of such person, a copy of any or all of the documents
incorporated by reference herein (other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference into the information
that this Prospectus incorporates).  Requests should be directed to:

                        Waddell & Reed Financial, Inc.
                               6300 Lamar Avenue
                         Overland Park, Kansas  66202
                               Attn:  Secretary
                                (913) 236-2000

          The following documents previously filed with the Commission pursuant
to the Securities Act and the Exchange Act are incorporated herein by reference
and shall be deemed a part hereof:

          (a) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998;

          (b) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1998;

          (c) The description of the Registrant's Class A common stock contained
in the Registrant's Registration Statement on Form 8-A, (the "Form 8-A") filed
with the Commission on February 27, 1998, including any amendment or report
filed for the purpose of updating such description; and

          (d) All reports filed by the Registrant pursuant to Sections 13(a) or
15(d) of the Exchange Act, since the filing of the Form 8-A.

          All documents filed with the Commission by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering relating to this
Prospectus will be deemed to be incorporated by reference into this Prospectus
and to be a part hereof from the date of filing of such documents.  Any
statement incorporated or deemed to be incorporated by reference herein will be
deemed to be modified, replaced or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document that also is or is deemed to be incorporated by reference herein
modifies, replaces or supersedes such statement.  Any such statement so
modified, replaced or superseded will be deemed, except as so modified, replaced
or superseded, to constitute a part of this Prospectus.

                                       3
<PAGE>
 
                                 THE COMPANY

          We were founded in 1937 and are the third oldest mutual fund complex
in the United States, having introduced the United family of funds in 1940.  We
focus on selling investment products to middle income Americans through our
sales force.  We are the exclusive underwriter and distributor of 36 mutual fund
portfolios. 17 of these funds make up the United Group of Mutual Funds, 8 make
up the Waddell & Reed Funds, Inc., and 11 make up the Target/United Funds, Inc.
We also distribute underwritten variable annuities and life insurance products
of Torchmark Corporation to our customers.  We sell front-end loaded and
contingent deferred sales charge mutual fund products.

          We are a Delaware corporation with our principal offices located at
6300 Lamar Avenue, Overland Park, Kansas  66202 (telephone number 913-236-2000).

                                 RISK FACTORS

          You should carefully consider the following risk factors and warnings
before making an investment decision.  The risks described below are not the
only ones that we face.  Additional risks that we do not yet know of or that we
currently think are immaterial may also impair our business operations.  If any
of the following risks actually occur, our business, financial condition or
results of operations could be materially adversely affected.  In such case, the
trading price of our Class A common stock could decline, and you may lose all or
part of your investment.  You should also refer to the other information set
forth in this Prospectus.

          This Prospectus contains forward-looking statements.  These statements
refer to future events or our future financial performance.  In some cases, you
can identify forward-looking statements by terminology such as "may," "will,"
"should," "expects," "anticipates," "plans," "believes," "estimates,"
"predicts," "potential" or "continue" or the negative of such terms and other
comparable terminology.  These statements are only predictions.  Actual events
or results may differ materially.  In evaluating these statements, you should
specifically consider various factors, including the risks outlined below.
These factors may cause our actual results to differ materially from any
forward-looking statement.

POTENTIAL ADVERSE EFFECTS ON OUR BUSINESS FROM A DECLINE IN SECURITIES MARKETS

          Our results of operations are affected by certain economic factors,
including the level of the securities markets.  The United States securities
markets performed well for the last five years and the first half of 1998.  This
performance attracted a substantial increase in the investments in these
markets, which benefited us and the funds.  The United States securities markets
have, however, been highly volatile.  Most equity market indices have declined
significantly since July 1998.  In recent months the United States mutual fund
industry experienced net redemptions for the first time in several years.  If
there is (1) a further decline in the securities markets (2)  a failure of the
securities markets to return to prior levels or to sustain the levels of growth
achieved prior to July 1998 or (3) continued or additional short-term volatility
in the securities markets, 

                                       4
<PAGE>
 
there could be an adverse effect on our business. This could adversely and
materially affect the market price of the Class A common stock.

          Because our revenues are largely based on the value of the assets that
we manage, a decline in the value of these assets would adversely affect our
revenues.  Our growth is dependent to a significant degree upon the ability of
the funds to attract and retain mutual fund assets.  This may be difficult if
there is an adverse economic environment.  Our growth rate has varied from year
to year, and we cannot assure you that our recent growth rates will continue.

POTENTIAL ADVERSE EFFECTS ON OUR BUSINESS IF THE FUNDS' PERFORMANCE DECLINES

          In order for us to succeed, the funds must have good investment
performance.  Good performance generally leads to (1) selling more shares in our
funds, which results in higher revenues; (2) fewer owners of shares in the funds
redeeming those shares and (3) us obtaining additional private institutional
accounts, for which we may act as a subadvisor.  If the funds have poor
investment performance, this generally leads to (1) selling less shares in our
funds; (2) more owners of shares in the funds redeeming those shares and (3)
private institutional accounts being withdrawn from us, with corresponding
decreases in our revenues.  If the funds do not perform well, this could
adversely and materially affect the market price of the Class A common stock.


OUR CONTRACTS CONTAIN TERMINATION PROVISIONS AND RENEWALS RISKS

          A substantial majority of our revenues are derived from investment
management agreements with the funds that are terminable on 60 days' notice.  In
addition, the disinterested members of each fund's board or its shareholders
must annually approve and renew each investment management agreement.  If the
board or shareholders of a significant number of the funds vote to terminate or
not renew the agreements, this could have a material adverse effect on our
business, financial condition and results of operations.

DIFFICULTIES IF WE CANNOT RECRUIT AND RETAIN KEY PERSONNEL AND SALES FORCE

          Our future success depends to a substantial degree on our ability to
attract and retain qualified personnel to conduct our business.  There is a
great deal of competition for qualified fund managers, investment analysts and
financial advisers, and this competition has increased in recent periods due to
the growth of the mutual fund management industry.  We anticipate that it will
be necessary for us to add fund managers and investment analysts, and we have
adopted a strategy intended to attract and retain fund managers and investment
analysts.  We cannot assure you, however, that we will be successful in our
efforts to recruit and retain the required personnel.

          We are currently dependent on our sales force to sell our mutual fund
and other investment products.  Our future growth will be directly affected by
the quality and quantity of financial advisers we are able to successfully
recruit and retain.

                                       5
<PAGE>
 
WE HAVE COMPETITORS WITH GREATER RESOURCES

          The mutual fund distribution and service and investment management
industries are very competitive and are undergoing substantial consolidations.
Many organizations in these industries are attempting to market to and service
the same clients as we are.  These organizations offer mutual fund investments
and services and a wide range of other financial products and services.  Many of
our competitors have more products and product lines, services and may also have
substantially greater assets under management and financial resources.  Many
larger mutual fund complexes have developed relationships with brokerage houses
with large distribution networks, which may enable these fund complexes to reach
broader client bases.

WE MAY HAVE DIFFICULTIES IN EXECUTING OUR ACQUISITION STRATEGY

          We have no history of finding, acquiring or integrating other
companies.  We cannot assure you that we will (1) find suitable acquisition
candidates at acceptable prices, (2) have sufficient capital resources to
realize our acquisition strategy, (3) be successful in entering into definitive
agreements for desired acquisitions or (4) successfully integrate acquired
companies.  We also cannot assure you that any such acquisitions, if
consummated, will be advantageous to us.

WE MAY NOT SUCCESSFULLY IMPLEMENT OUR NEW INFORMATION SYSTEMS

          Some of our key information technology systems were developed solely
to handle our particular information technology infrastructure.  We are in the
process of implementing new information technology and systems.  We are
implementing these new systems both internally and through outsourcing the data
processing portion of our shareholder service functions.  We believe that these
new systems could facilitate the acquisition and integration of other mutual
fund companies.  We cannot, however, assure you that we will be successful in
implementing the new information technology and systems or that the
implementation of these systems will be completed in a timely manner or within
our budget.

RISKS RELATING TO YEAR 2000 PROBLEMS MAY ADVERSELY AFFECT OUR BUSINESS

          Some computers, software, and other equipment include computer code in
which calendar year data is abbreviated to only two digits. As a result, some of
these systems will not operate correctly after 1999 because they may interpret
"00" to mean 1900, rather than 2000 - widely known as the "Year 2000 Problem."
These problems are likely to increase in frequency and severity as the year 2000
approaches. The Year 2000 Problem affects some of our computers, software and
other equipment. If we fail to properly recognize and address the Year 2000
Problem in our systems, our business, financial condition and results of
operations could be materially and adversely affected.

          We believe that we have identified most of the major computers,
software and other equipment used in connection with our internal operations
that must be modified, upgraded or replaced to minimize the possibility of a
material disruption to our business. We have commenced

                                       6
<PAGE>
 
the process of modifying, upgrading and replacing major systems that have been
assessed as adversely affected, and we expect to complete this process before
the occurrence of any material disruption of our business. We have commenced the
process of identifying other computers, software and other equipment that may be
affected by the Year 2000 Problem, and determining whether remedial action is
needed. We expect to complete this process by the second quarter of 1999, and we
estimate that the total costs of this effort will be $4.2 million for the four
year period ending December 31, 1999.

          The Year 2000 Problem also affects some of our customers and major
suppliers of computers, software, and other equipment. We have discussed the
Year 2000 Problem with some of these customers and suppliers, but we cannot
guarantee that they will resolve any or all Year 2000 Problems. If our customers
and suppliers fail to resolve Year 2000 Problems, our business could be
materially disrupted.

OUR FINANCIAL ADVISERS COULD MISUSE MONEY AND INFORMATION

          Our financial advisers handle a significant amount of money and
financial and personal information for people that invest in the funds and for
people that purchase other investment and insurance products from us. Although
we have implemented a system of controls to minimize the risk of misuse of such
money and information, we cannot assure you that these controls will be
adequate. We also cannot assure you that we can prevent taking or misuse of
money or information. In the event of any taking or misuse, we could have
liability and could also be subject to regulatory sanctions. Although we believe
that we are adequately insured against such risks, we cannot assure you that
such insurance will be maintained or that it will be adequate to meet any future
liability.

POTENTIAL ADVERSE EFFECT ON CLASS A COMMON STOCK SHARE VALUE FROM DISPARATE
VOTING RIGHTS OF CLASS A COMMON STOCK AND CLASS B COMMON STOCK

          The holders of our Class A common stock and the Class B common stock
have identical rights except that:

          .  holders of Class A common stock have one vote per share while
             holders of Class B common stock have five votes per share;
          .  holders of Class A common stock cannot vote on any alteration of
             the powers, preferences or special rights of the Class B common
             stock that would not adversely affect the Class A common stock; and
          .  holders of Class B common stock cannot vote on any alteration of
             the powers, preferences or special rights of the Class A common
             stock that would not adversely affect the Class B common stock.
 
          For example, holders of one class of common stock could not vote on
proposals to:

          .  decrease the voting power of the other class of common stock;
          .  decrease the right of the other class of common stock to receive
             dividends; or

                                       7
<PAGE>
 
          .  diminish the rights of the other class of common stock in
             liquidation.

Investors or any potential future purchaser of our shares could view the
superior voting rights of the Class B common stock to have value, which could
adversely affect the value of the Class A common stock.  The existence of two
separate classes of common stock could result in less liquidity for either class
of common stock than if there were only one class of common stock.

WE MAY NOT PAY DIVIDENDS; OUR HOLDING COMPANY STRUCTURE MAY LIMIT OUR AVAILABLE
CASH FOR DISTRIBUTION

          Our Board of Directors currently intends to declare quarterly
dividends on both the Class A common stock and the Class B common stock. Our
Board of Directors has discretion over declaring and paying dividends. Whether
or not the Board of Directors decides to pay dividends, and the amount of such
dividends, will depend on many factors, including:

          .  general economic and business conditions;
          .  our strategic plans;
          .  our financial results and condition;
          .  contractual, legal, and regulatory restrictions on the payment of
             dividends by us or our subsidiaries; and
          .  such other factors as the Board of Directors may consider to be
             relevant.

          We are a holding company, and, as such, our ability to pay dividends
is subject to the ability of the our subsidiaries to provide us with cash. We
cannot assure you that our initial quarterly dividend level will be maintained
or that we will pay any dividends in any future period.

We Could Be Adversely Affected By Changes in Regulation

          Our investment management business is subject to extensive regulation
in the United States, primarily at the Federal level, including regulation by
the Commission. Changes in laws or regulations, or in governmental policies,
could materially and adversely affect our business and operations.

PROVISIONS IN OUR CERTIFICATE OF INCORPORATION, BYLAWS AND DELAWARE LAW COULD
DETER TAKEOVER ATTEMPTS

          Our Board of Directors may issue shares of preferred stock and may
determine the price, rights, preferences, privileges and restrictions, including
voting and conversion rights, of these shares of preferred stock. These
determinations may be made without any further vote our action by our
stockholders. The rights of the holders of Class A common stock will be subject
to, and may be adversely affected by, the rights of the holders of any preferred
stock that may be issued in the future. The issuance of preferred stock may make
it more difficult for a third party to acquire a majority of our outstanding
voting stock.

                                       8
<PAGE>
 
          Some provisions in our Certificate of Incorporation and Bylaws and of
Delaware law could also delay, prevent, or make more difficult a merger, tender
offer, or proxy contest involving our Company, including:

          .  With certain exceptions, Section 203 of the Delaware General
             Corporation Law restricts certain mergers and other business
             combinations between us and any holder of 15% or more of our voting
             stock;
          .  the prohibition of actions by stockholders without a meeting,
             unless our Board of Directors otherwise approves;
          .  our Board of Directors is divided into three classes, each of which
             serves for a staggered three-year term; and
          .  after Torchmark Corporation ceases to beneficially own at least a
             majority of the voting power, incumbent directors may not be
             removed without cause.

                                       9
<PAGE>
 
           CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

          This Prospectus contains or incorporates by reference certain forward-
looking statements. These statements involve known and unknown risks,
uncertainties and other factors that may cause our or our industry's actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, those listed under "Risk Factors" and elsewhere
in this Prospectus.

          In some cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "expects," "anticipates," "plans,"
"believes," "estimates," "predicts," "potential" or "continue" or the negative
of such terms or other comparable terminology.

          Although we believe that the expectations reflected in the forward-
looking statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements.

          Moreover, neither we nor any other person assumes responsibility for
the accuracy and completeness of any such forward-looking statements. We are
under no duty to update any of the forward-looking statements after the date of
this Prospectus to conform such statements to actual results.

                                       10
<PAGE>
 
                              SELLING STOCKHOLDERS
                                        
          The table below sets forth information with respect to the beneficial
ownership of the Class A common stock of Waddell & Reed Financial, Inc. (the
"Company") by the selling stockholders immediately prior to this offering and as
adjusted to reflect the sale of shares of Class A common stock pursuant to the
offering.  None of the selling stockholders own in excess of one percent (1%) of
the outstanding Class A common stock of the Company.  All information with
respect to the beneficial ownership has been furnished by the selling
stockholders:

                                           Class A common stock
                      Relationship with         Owned as of        Shares to
            Name          Company           September 30,  1998    Be Sold(1)
            ----      -----------------     -------------------    ----------
 
 Keith A. Tucker      Chairman of the             248,697            97,174
                      Board, Chief
                      Executive Officer &
                      Director
 
 Henry J. Herrmann    President, Chief            185,000           110,000
                      Investment Officer,
                      Treasurer & Director
 
 Robert L. Hechler    Executive Vice              130,000            90,000 
                      President, Chief                     
                      Operating Officer &
                      Director                                     ----------
                                                                     297,174
 
 
-------------
(1)  Shares to be sold pursuant to this Prospectus consist of restricted stock
     which, in the case of Mr. Tucker, vests in four increments of 25% each
     commencing on May 1, 1998, and on each of the three anniversaries
     thereafter, and, in the case of Messrs. Herrmann and Hechler, vests in
     three equal installments commencing on March 4, 2000 and on each of the two
     anniversaries thereafter.


                                 PLAN OF DISTRIBUTION

          The Class A common stock being offered by the selling stockholders
pursuant to this Prospectus may be sold from time to time by the selling
stockholders, or by pledgees, donees, transferees or other successors in
interest, regardless of whether such successors in interest are successors in
interest with respect to the shares. Such sales may be made on one or more
exchanges or in the over-the-counter market, or otherwise at prices and on terms
then prevailing or at prices related to the then-current market price of the
Class A common stock, or in negotiated transactions. In addition, any securities
covered by this Prospectus which qualify for sale pursuant to Rule 144 under the
Act may be sold under either of such rules rather than pursuant to this
Prospectus.

          In effecting sales, brokers or dealers engaged by the selling
stockholders may arrange for other brokers or dealers to participate. Brokers or
dealers will receive commissions or discounts from selling stockholders in
amounts to be negotiated immediately prior to the sale. The selling stockholders
and agents who execute orders on their behalf may be deemed to be underwriters
as that term is defined in Section 2(11) of the Act and a portion of any
proceeds or sales discounts, commissions or other compensation may be deemed to
be underwriting compensation for purposes of the Act.

                                       11
<PAGE>
 
                                USE OF PROCEEDS

          The Company will not receive any proceeds from this offering.


                                 LEGAL MATTERS

          The validity of the shares of Class A common stock offered hereby will
be passed upon for us by Hughes & Luce, L.L.P., Dallas, Texas.


                                 EXPERTS

          The Consolidated Financial Statements of the Company as of December
31, 1996 and 1997, and for each of the years in the three-year period ended
December 31, 1997 incorporated by reference into this Prospectus have been so
included in reliance on the report of KPMG Peat Marwick LLP, independent
certified public accountants, appearing elsewhere herein, and upon the authority
of said firm as experts in accounting and auditing.


                                INDEMNIFICATION
                                        
          The Company's Certificate of Incorporation provides that each person
who was or is threatened to be made a party to or is involved in any action,
suit or proceeding by reason of the fact that he or she, or a person of whom he
or she is the legal representative, is or was a director or officer of the
Company or is or was serving at the request of the Company as a director or
officer of another company, partnership, joint venture, trust or other
enterprise, will be indemnified and held harmless by the Company to the fullest
extent authorized by the Delaware General Corporation Law as the same exists or
may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Company to provide broader
indemnification rights than said law permitted the Company to provide prior to
such amendment), against all expense, liability and loss reasonably incurred or
suffered by such person in connection therewith and such indemnification shall
continue as to a person who has ceased to be a director or officer and shall
inure to the benefit of his or her heirs, executors and administrators.

          The Delaware General Corporation Law permits Delaware corporations to
include in their certificates of incorporation a provision eliminating or
limiting director liability for monetary damages arising from breaches of their
fiduciary duty.  The only limitations imposed under the statute are that the
provision may not eliminate or limit a director's liability (i) for breaches of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or involving intentional misconduct or known
violations of law, (iii) for the payment of unlawful dividends or unlawful stock
purchases or redemptions, or (iv) for transactions in which the director
received an 

                                       12
<PAGE>
 
improper personal benefit. In addition, directors and officers are insured, at
the Registrant's expense, against certain liabilities which might arise out of
their employment.

          Under Section 145 of the Delaware General Corporation Law, a
corporation may indemnify a director, officer, employee or agent of the
corporation against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him or her if he
or she acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the corporation and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful.  In the case of an action brought by or in the right of a
corporation, the corporation may indemnify a director, officer, employee or
agent of the corporation against expenses (including attorneys' fees) actually
and reasonably incurred by him or her if he or she acted in good faith and in a
manner he or she reasonably believed to be in the best interests of the
corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless a court finds that, in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses as the court shall deem proper.

                                       13
<PAGE>
 
                                                    297,174 SHARES

                                            WADDELL & REED FINANCIAL, INC.

                                                 CLASS A COMMON STOCK
 
                                                     ------------

                                                      PROSPECTUS

                                                     ------------
 
  TABLE OF CONTENTS
 
                                        Page
                                        ----
Available Information                      2
Documents Incorporated by Reference        3
The Company                                4
Risk Factors                               4
Cautionary Statement Concerning           10
 Forward-Looking Statements           
Selling Stockholders                      11
Plan of Distribution                      11
Use of Proceeds                           12
Legal Matters                             12
Experts                                   12
Indemnification                           12

                                                    October 16, 1998
<PAGE>
 
                                 PART II

              INFORMATION REQUIRED IN THE REGISTRATION STATEMENT


ITEM 3.  INCORPORATION OF DOCUMENTS BY REFERENCE.

     The following documents heretofore filed with the Securities and Exchange
Commission (the "Commission") by Waddell & Reed Financial, Inc. (the
"Registrant" or the "Company") are incorporated by reference in this
Registration Statement:

     (a) The Registrant's Rule 424(b) Prospectus, as filed under the Securities
Exchange Act of 1933, as amended (the "Securities Act"), Registration Statement
No. 333-43687;

     (b) The Registrant's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998, as filed under Section 13(a) of the Securities Exchange Act of
1934, as amended (the "Exchange Act");

     (c) The Registrant's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998, as filed under Section 13(a) of the Exchange Act;

     (d) The description of the Registrant's Class A common stock, par value
$.01 per share (the "Common Stock"), contained in the Registrant's Registration
Statement on Form 8-A, (the "Form 8-A") filed with the Commission on February
27, 1998, including any amendment or report filed for the purpose of updating
such description; and

     (e) All reports filed by the Registrant pursuant to Sections 13(a) or 15(d)
of the Exchange Act, since the filing of the Form 8-A.

     All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, after the date of the filing of
the initial Registration Statement and any amendments thereto and prior to the
filing of a post-effective amendment to this Registration Statement which
indicates that all of the shares of Common Stock offered have been sold or which
deregisters all of such shares then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing of such documents (such documents, and the documents
enumerated above, being hereinafter referred to as "Incorporated Documents").

     Any statement contained in an Incorporated Document shall be deemed to be
modified, replaced or superseded for purposes of this Registration Statement to
the extent that a statement contained herein or in any other subsequently filed
Incorporated Document modifies, replaces or supersedes such statement.  Any
statement so modified, replaced or superseded shall not be deemed, except as so
modified, replaced or superseded, to constitute a part of this Registration
Statement.

                                      II-1
<PAGE>
 
ITEM 4.  DESCRIPTION OF SECURITIES.

     Not applicable.

ITEM 5.  INTERESTS OF NAMED EXPERTS AND COUNSEL.

     Not applicable.

ITEM 6.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.

     The Registrant's Certificate of Incorporation provides that each person who
was or is threatened to be made a party to or is involved in any action, suit or
proceeding by reason of the fact that he or she, or a person of whom he or she
is the legal representative, is or was a director or officer of the Registrant
or is or was serving at the request of the Registrant as a director or officer
of another company, partnership, joint venture, trust or other enterprise, will
be indemnified and held harmless by the Registrant to the fullest extent
authorized by the Delaware General Corporation Law as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Registrant to provide broader indemnification
rights than said law permitted the Registrant to provide prior to such
amendment), against all expense, liability and loss reasonably incurred or
suffered by such person in connection therewith and such indemnification shall
continue as to a person who has ceased to be a director or officer and shall
inure to the benefit of his or her heirs, executors and administrators.

     The Delaware General Corporation Law permits Delaware corporations to
include in their certificates of incorporation a provision eliminating or
limiting director liability for monetary damages arising from breaches of their
fiduciary duty.  The only limitations imposed under the statute are that the
provision may not eliminate or limit a director's liability (i) for breaches of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or involving intentional misconduct or known
violations of law, (iii) for the payment of unlawful dividends or unlawful stock
purchases or redemptions, or (iv) for transactions in which the director
received an improper personal benefit.  In addition, directors and officers are
insured, at the Registrant's expense, against certain liabilities which might
arise out of their employment.

     Under Section 145 of the Delaware General Corporation Law, a corporation
may indemnify a director, officer, employee or agent of the corporation against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him or her if he or she acted in
good faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of the corporation and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his or her conduct was
unlawful.  In the case of an action brought by or in the right of a corporation,
the corporation may indemnify a director, officer, employee or agent of the
corporation against expenses (including attorneys' fees) actually and reasonably
incurred by him or her if he or she acted in good faith and in a manner he or
she reasonably believed to be in the best interests of the corporation, except
that no indemnification 

                                      II-2
<PAGE>
 
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation unless a court finds
that, in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses as the court shall deem
proper.

ITEM 7.  EXEMPTION FROM REGISTRATION CLAIMED.
 
     Not applicable.
 
ITEM 8.  EXHIBITS.

              4.1  Specimen of Stock Certificate (filed as Exhibit 4.1 to the
                   Company's Registration Statement on Form S-1 (Commission File
                   No. 333-43687) and incorporated herein by reference).
              4.2  1998 Executive Deferred Compensation Stock Option Plan (filed
                   as Exhibit 10.10 to the Company's Quarterly Report on Form 
                   10-Q for the quarter ended March 31, 1998 and incorporated
                   herein by reference).
              4.3  1998 Non-Employee Director Stock Option Plan (filed as
                   Exhibit 10.9 to the Company's Quarterly Report on Form 10-Q
                   for the quarter ended March 31, 1998 and incorporated herein
                   by reference).
              4.4  1998 Stock Incentive Plan (filed as Exhibit 10.8 to the
                   Company's Quarterly Report on Form 10-Q for the quarter ended
                   March 31, 1998 and incorporated herein by reference).
             4.5*  Form of Option Exchange Mailing Documents
             5.1*  Opinion of Hughes & Luce, L.L.P.
            23.1*  Consent of Hughes & Luce, L.L.P. (contained in Exhibit 5.1
                   hereto)
            23.2*  Consent of KPMG Peat Marwick LLP
            24.1*  Powers of Attorney

     ----------------------
     *    Filed herewith
 
ITEM 9.    UNDERTAKINGS.

     (a) The Registrant hereby undertakes:

         (1) To file, during any period in which offers or sales are being made,
     a post-effective amendment to this Registration Statement:

             (i)   To include any prospectus required by Section 10(a)(3) of the
         Securities Act;

                                      II-3
<PAGE>
 
             (ii)  To reflect in the prospectus any facts or events arising
         after the effective date of the Registration Statement (or the most
         recent post-effective amendment thereof) which, individually or in the
         aggregate, represent a fundamental change in the information set forth
         in the Registration Statement;

             (iii) To include any material information with respect to the plan
         of distribution not previously disclosed in the Registration Statement
         or any material change to such information in the Registration
         Statement;

provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to or Section 15(d) of the Exchange Act
that are incorporated by reference in the Registration Statement.

         (2) That, for the purpose of determining any liability under the
     Securities Act, each such post-effective amendment shall be deemed to be a
     new registration statement relating to the securities offered therein, and
     the offering of such securities at that time shall be deemed to be the
     initial bona fide offering thereof.

         (3) To remove from registration by means of a post-effective amendment
     any of the securities being registered which remain unsold at the
     termination of the offering.

     (b) The Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in this Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.

     (c) Insofar as indemnification by the Registrant for liabilities arising
under the Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described in Item 6, or
otherwise, the Registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

     (d) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished

                                      II-4
<PAGE>
 
pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
Exchange Act; and, where interim financial information required to be presented
by Article 3 of Regulation S-X are not set forth in the prospectus, to deliver,
or cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.

                                      II-5
<PAGE>
 
                                   SIGNATURES

          Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Overland Park, State of Kansas, on October 16, 1998.

                                  WADDELL & REED FINANCIAL, INC.


                                    By: /s/ KEITH A. TUCKER
                                        -----------------------------
                                        Keith A. Tucker,
                                        Chairman of the Board and Chief
                                        Executive Officer

          Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.

<TABLE>
<S>                                    <C>                                     <C>
        /s/ KEITH A. TUCKER               Chairman of the Board, Chief         October 16, 1998
-----------------------------------      Executive Officer and Director
          Keith A. Tucker                (Principal Financial Officer)
 
       /s/ HENRY J. HERRMANN              President, Chief Investment          October 16, 1998
-----------------------------------     Officer, Treasurer and Director
         Henry J. Herrmann

       /s/ ROBERT L. HECHLER           Chief Operating Officer, Executive      October 16, 1998
-----------------------------------       Vice President and Director
         Robert L. Hechler

       /s/ MICHAEL D. STROHM              Principal Accounting Officer         October 16, 1998
-----------------------------------
         Michael D. Strohm

                 *                                  Director                   October 16, 1998
-----------------------------------
        Harold T. McCormick

                 *                                  Director                   October 16, 1998
-----------------------------------
         Louis T. Hagopian

                 *                                  Director                   October 16, 1998
-----------------------------------
           R. K. Richey

                 *                                  Director                   October 16, 1998
-----------------------------------
       Joseph L. Lanier, Jr.

                 *                                  Director                   October 16, 1998
-----------------------------------
         William L. Rogers
</TABLE> 

                                      II-6
<PAGE>
 
<TABLE> 
<S>                                                 <C>                        <C>
                 *                                  Director                   October 16, 1998
-----------------------------------
          James M. Raines

                 *                                  Director                   October 16, 1998
-----------------------------------
      George J. Records

                 *                                  Director                   October 16, 1998
-----------------------------------
      David L. Boren

                 *                                  Director                   October 16, 1998
-----------------------------------
      Joseph M. Farley

*By:   /s/ DANIEL C. SCHULTE                                                   October 16, 1998
    -------------------------------
           Daniel C. Schulte
           Attorney-in-fact
</TABLE>
                                        

                                      II-7
<PAGE>
 
                               INDEX TO EXHIBITS

     4.1     Specimen of Stock Certificate (filed as Exhibit 4.1 to the
             Company's Registration Statement on Form S-1 (Commission File No.
             333-43687) and incorporated herein by reference).
     4.2     1998 Executive Deferred Compensation Stock Option Plan (filed as
             Exhibit 10.10 to the Company's Quarterly Report on Form 10-Q for
             the quarter ended March 31, 1998 and incorporated herein by
             reference).
     4.3     1998 Non-Employee Director Stock Option Plan (filed as Exhibit 10.9
             to the Company's Quarterly Report on Form 10-Q for the quarter
             ended March 31, 1998 and incorporated herein by reference).
     4.4     1998 Stock Incentive Plan (filed as Exhibit 10.8 to the Company's
             Quarterly Report on Form 10-Q for the quarter ended March 31, 1998
             and incorporated herein by reference).
    4.5*     Form of Option Exchange Mailing Documents
    5.1*     Opinion of Hughes & Luce, L.L.P.
   23.1*     Consent of Hughes & Luce, L.L.P. (contained in Exhibit 5.1 hereto)
   23.2*     Consent of KPMG Peat Marwick LLP
   24.1*     Powers of Attorney


             -------------------
             *Filed herewith
[{"type": "S-8", "sequence": "1", "description": "FORM S-8", "secsgml_size_bytes": 55455}]
{"company-data": {"conformed-name": "WADDELL & REED FINANCIAL INC", "cik": "0001052100", "assigned-sic": "6211", "irs-number": "510261715", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-65827", "film-number": "98727057"}, "business-address": {"street1": "P O BOX 29217", "street2": "6300 LAMAR AVE", "city": "OVERLAND PARK", "state": "KS", "zip": "66202-4200", "phone": "9132362000"}, "mail-address": {"street1": "P O BOX 29217", "street2": "6300 LAMAR AVE", "city": "OVERLAND PARK", "state": "KS", "zip": "66202-4200"}}
As filed with the Securities and Exchange Commission on October 16, 1998.
                                                    Registration No. 333-
--------------------------------------------------------------------------------
 
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                             --------------------
                                        
                                   FORM S-8

                       REGISTRATION STATEMENT UNDER THE
                            SECURITIES ACT OF 1933

                        WADDELL & REED FINANCIAL, INC.
            (Exact Name of Registrant as Specified in Its Charter)

                DELAWARE                                  51-0261715
    ---------------------------------                ---------------------
     (State or Other Jurisdiction of                   (I.R.S. Employer
     Incorporation or Organization)                   Identification No.)

 
                               6300 LAMAR AVENUE
                             OVERLAND PARK, KANSAS
                                     66202
                                (913) 236-2000
 
         (Address of Principal Executive Offices, including Zip Code)

                             --------------------

            1998 EXECUTIVE DEFERRED COMPENSATION STOCK OPTION PLAN,
                1998 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN AND
                           1998 STOCK INCENTIVE PLAN
 
                           (Full Title of the Plans)

                             --------------------
 
               SHARON K. PAPPAS                          COPY TO:
        GENERAL COUNSEL AND SECRETARY                ALAN J. BOGDANOW
        WADDELL & REED FINANCIAL, INC.             HUGHES & LUCE, L.L.P.
               6300 LAMAR AVENUE               1717 MAIN STREET, SUITE 2800
         OVERLAND PARK, KANSAS  66202              DALLAS, TEXAS  75201
                (913) 236-2000                        (214) 939-5500

    (Name, Address, and Telephone Number,
    including Area Code, of Agent for Service)

                             --------------------

                        CALCULATION OF REGISTRATION FEE
-------------------------------------------------------------------------------------------------
 TITLE OF EACH CLASS       AMOUNT       PROPOSED MAXIMUM     PROPOSED MAXIMUM       AMOUNT OF
    OF SECURITIES          TO BE         OFFERING PRICE         AGGREGATE          REGISTRATION
  TO BE REGISTERED      REGISTERED/1/      PER SHARE/2/      OFFERING PRICE/2/         FEE
-------------------------------------------------------------------------------------------------
Class A Common
Stock, $.01 par         16,300,000           $17.16            $279,708,000           $82,514
    value
-------------------------------------------------------------------------------------------------
(1)  This registration statement also covers an indeterminate additional amount
     of shares of the Registrant's Class A Common Stock to be offered or sold
     pursuant to the antidilution provisions of the 1998 Executive Deferred
     Compensation Stock Option Plan, 1998 Non-Employee Director Stock Option
     Plan and 1998 Stock Incentive Plan.
(2)  Estimated solely for the purpose of calculating the registration fee on the
     basis of the average of the high and low price paid per share of the Class
     A Common Stock, as reported on the New York Stock Exchange on October 9,
     1998, in accordance with Rules 457(c) and (h)(1) promulgated under the
     Securities Act of 1933, as amended.
WADDELL & REED FINANCIAL, INC.
                                        

                                297,174 SHARES
                             CLASS A COMMON STOCK
                                        

          Our stockholders identified below under the caption "Selling
Stockholders" may offer to sell up to 297,174 shares of our Class A common
stock.

          We have already issued to the selling stockholders the shares being
offered by the selling stockholders, or we will issue the shares being offered
by the selling stockholders prior to the sale of the shares.  This offering is
not part of the original issuance of the shares of Class A common stock.  We
will not receive any of the proceeds from the selling stockholder's sale of
their shares. The selling stockholders may offer the shares in transactions on
the New York Stock Exchange, in negotiated transactions, or through a
combination of these methods.  The selling stockholders may offer the shares at
prices relating to the prevailing market prices or at negotiated prices.

          The Class A common stock is quoted on the NYSE under the symbol "WDR."
On October 14, 1998 the last sale price of the Class A common stock, as reported
on the NYSE, was
$18.38 per share.

                     ------------------------------------
 
  Investing in the Class A common stock involves a high degree of risk.  You
  should purchase only if you can afford a complete loss.  See "Risk Factors"
                              beginning on page 4.
                                        
                     ------------------------------------

The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if the prospectus is
truthful or complete.  Any representation to the contrary is a criminal offense.

                     ------------------------------------

          You should rely only on the information contained in this document or
that we have referred you to. We have not authorized anyone to provide you with
information that is different from that contained in this Prospectus. The
selling stockholders may offer to sell, and seek offers to buy, shares of Class
A common stock only in jurisdictions where offers and sales are permitted. The
information contained in this Prospectus is accurate only as of the date of this
Prospectus, regardless of the time of delivery of this Prospectus or of any sale
of the Class A common stock.
 

                   This Prospectus is dated October 16, 1998.
AVAILABLE INFORMATION
                                        
          The Company is subject to the informational reporting requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports and other information with the Securities
and Exchange Commission (the "Commission").  Reports, proxy statements,
information statements, and other information may be inspected without charge at
Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549-1004
and at the following regional offices of the Commission:  New York Regional
Office, Seven World Trade Center, Suite 1300, New York, New York 10048; and
Chicago Regional Office, Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60606.  Copies of such material may be obtained
from the Public Reference Room of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.  Information on the operation of
the Public Reference Section is available by calling the Commission at
1-800-SEC-0330.  Reports, proxy statements, information statements and other
information can also be inspected at the offices of the NYSE, 20 Broad Street,
New York, New York 10005.  The Commission maintains a Web site that contains
information filed with the Commission.  The Commission's Web site address is
http://www.sec.gov.

          The Company intends to furnish its stockholders with annual reports
containing audited financial statements and such other periodic reports as it
may determine to furnish or as may be required by law.

          The Company has filed with the Commission a Registration Statement on
Form S-8, (together with all exhibits thereto, the "Registration Statement")
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the shares of Class A common stock offered hereby.  This Prospectus
does not contain all information set forth in the Registration Statement.
Certain parts of the Registration Statement have been omitted in accordance with
the rules and regulations of the Commission.  For further information, reference
is made to the Registration Statement which can be inspected at the public
reference rooms at the offices of the Commission.

                                       2
DOCUMENTS INCORPORATED BY REFERENCE
                                        
          The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, including any beneficial owner, upon the
written or oral request of such person, a copy of any or all of the documents
incorporated by reference herein (other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference into the information
that this Prospectus incorporates).  Requests should be directed to:

                        Waddell & Reed Financial, Inc.
                               6300 Lamar Avenue
                         Overland Park, Kansas  66202
                               Attn:  Secretary
                                (913) 236-2000

          The following documents previously filed with the Commission pursuant
to the Securities Act and the Exchange Act are incorporated herein by reference
and shall be deemed a part hereof:

          (a) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998;

          (b) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1998;

          (c) The description of the Registrant's Class A common stock contained
in the Registrant's Registration Statement on Form 8-A, (the "Form 8-A") filed
with the Commission on February 27, 1998, including any amendment or report
filed for the purpose of updating such description; and

          (d) All reports filed by the Registrant pursuant to Sections 13(a) or
15(d) of the Exchange Act, since the filing of the Form 8-A.

          All documents filed with the Commission by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering relating to this
Prospectus will be deemed to be incorporated by reference into this Prospectus
and to be a part hereof from the date of filing of such documents.  Any
statement incorporated or deemed to be incorporated by reference herein will be
deemed to be modified, replaced or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document that also is or is deemed to be incorporated by reference herein
modifies, replaces or supersedes such statement.  Any such statement so
modified, replaced or superseded will be deemed, except as so modified, replaced
or superseded, to constitute a part of this Prospectus.

                                       3
THE COMPANY

          We were founded in 1937 and are the third oldest mutual fund complex
in the United States, having introduced the United family of funds in 1940.  We
focus on selling investment products to middle income Americans through our
sales force.  We are the exclusive underwriter and distributor of 36 mutual fund
portfolios. 17 of these funds make up the United Group of Mutual Funds, 8 make
up the Waddell & Reed Funds, Inc., and 11 make up the Target/United Funds, Inc.
We also distribute underwritten variable annuities and life insurance products
of Torchmark Corporation to our customers.  We sell front-end loaded and
contingent deferred sales charge mutual fund products.

          We are a Delaware corporation with our principal offices located at
6300 Lamar Avenue, Overland Park, Kansas  66202 (telephone number 913-236-2000).

                                 RISK FACTORS

          You should carefully consider the following risk factors and warnings
before making an investment decision.  The risks described below are not the
only ones that we face.  Additional risks that we do not yet know of or that we
currently think are immaterial may also impair our business operations.  If any
of the following risks actually occur, our business, financial condition or
results of operations could be materially adversely affected.  In such case, the
trading price of our Class A common stock could decline, and you may lose all or
part of your investment.  You should also refer to the other information set
forth in this Prospectus.

          This Prospectus contains forward-looking statements.  These statements
refer to future events or our future financial performance.  In some cases, you
can identify forward-looking statements by terminology such as "may," "will,"
"should," "expects," "anticipates," "plans," "believes," "estimates,"
"predicts," "potential" or "continue" or the negative of such terms and other
comparable terminology.  These statements are only predictions.  Actual events
or results may differ materially.  In evaluating these statements, you should
specifically consider various factors, including the risks outlined below.
These factors may cause our actual results to differ materially from any
forward-looking statement.

POTENTIAL ADVERSE EFFECTS ON OUR BUSINESS FROM A DECLINE IN SECURITIES MARKETS

          Our results of operations are affected by certain economic factors,
including the level of the securities markets.  The United States securities
markets performed well for the last five years and the first half of 1998.  This
performance attracted a substantial increase in the investments in these
markets, which benefited us and the funds.  The United States securities markets
have, however, been highly volatile.  Most equity market indices have declined
significantly since July 1998.  In recent months the United States mutual fund
industry experienced net redemptions for the first time in several years.  If
there is (1) a further decline in the securities markets (2)  a failure of the
securities markets to return to prior levels or to sustain the levels of growth
achieved prior to July 1998 or (3) continued or additional short-term volatility
in the securities markets, 

                                       4
there could be an adverse effect on our business. This could adversely and
materially affect the market price of the Class A common stock.

          Because our revenues are largely based on the value of the assets that
we manage, a decline in the value of these assets would adversely affect our
revenues.  Our growth is dependent to a significant degree upon the ability of
the funds to attract and retain mutual fund assets.  This may be difficult if
there is an adverse economic environment.  Our growth rate has varied from year
to year, and we cannot assure you that our recent growth rates will continue.

POTENTIAL ADVERSE EFFECTS ON OUR BUSINESS IF THE FUNDS' PERFORMANCE DECLINES

          In order for us to succeed, the funds must have good investment
performance.  Good performance generally leads to (1) selling more shares in our
funds, which results in higher revenues; (2) fewer owners of shares in the funds
redeeming those shares and (3) us obtaining additional private institutional
accounts, for which we may act as a subadvisor.  If the funds have poor
investment performance, this generally leads to (1) selling less shares in our
funds; (2) more owners of shares in the funds redeeming those shares and (3)
private institutional accounts being withdrawn from us, with corresponding
decreases in our revenues.  If the funds do not perform well, this could
adversely and materially affect the market price of the Class A common stock.

OUR CONTRACTS CONTAIN TERMINATION PROVISIONS AND RENEWALS RISKS

          A substantial majority of our revenues are derived from investment
management agreements with the funds that are terminable on 60 days' notice.  In
addition, the disinterested members of each fund's board or its shareholders
must annually approve and renew each investment management agreement.  If the
board or shareholders of a significant number of the funds vote to terminate or
not renew the agreements, this could have a material adverse effect on our
business, financial condition and results of operations.

DIFFICULTIES IF WE CANNOT RECRUIT AND RETAIN KEY PERSONNEL AND SALES FORCE

          Our future success depends to a substantial degree on our ability to
attract and retain qualified personnel to conduct our business.  There is a
great deal of competition for qualified fund managers, investment analysts and
financial advisers, and this competition has increased in recent periods due to
the growth of the mutual fund management industry.  We anticipate that it will
be necessary for us to add fund managers and investment analysts, and we have
adopted a strategy intended to attract and retain fund managers and investment
analysts.  We cannot assure you, however, that we will be successful in our
efforts to recruit and retain the required personnel.

          We are currently dependent on our sales force to sell our mutual fund
and other investment products.  Our future growth will be directly affected by
the quality and quantity of financial advisers we are able to successfully
recruit and retain.

                                       5
WE HAVE COMPETITORS WITH GREATER RESOURCES

          The mutual fund distribution and service and investment management
industries are very competitive and are undergoing substantial consolidations.
Many organizations in these industries are attempting to market to and service
the same clients as we are.  These organizations offer mutual fund investments
and services and a wide range of other financial products and services.  Many of
our competitors have more products and product lines, services and may also have
substantially greater assets under management and financial resources.  Many
larger mutual fund complexes have developed relationships with brokerage houses
with large distribution networks, which may enable these fund complexes to reach
broader client bases.

WE MAY HAVE DIFFICULTIES IN EXECUTING OUR ACQUISITION STRATEGY

          We have no history of finding, acquiring or integrating other
companies.  We cannot assure you that we will (1) find suitable acquisition
candidates at acceptable prices, (2) have sufficient capital resources to
realize our acquisition strategy, (3) be successful in entering into definitive
agreements for desired acquisitions or (4) successfully integrate acquired
companies.  We also cannot assure you that any such acquisitions, if
consummated, will be advantageous to us.

WE MAY NOT SUCCESSFULLY IMPLEMENT OUR NEW INFORMATION SYSTEMS

          Some of our key information technology systems were developed solely
to handle our particular information technology infrastructure.  We are in the
process of implementing new information technology and systems.  We are
implementing these new systems both internally and through outsourcing the data
processing portion of our shareholder service functions.  We believe that these
new systems could facilitate the acquisition and integration of other mutual
fund companies.  We cannot, however, assure you that we will be successful in
implementing the new information technology and systems or that the
implementation of these systems will be completed in a timely manner or within
our budget.

RISKS RELATING TO YEAR 2000 PROBLEMS MAY ADVERSELY AFFECT OUR BUSINESS

          Some computers, software, and other equipment include computer code in
which calendar year data is abbreviated to only two digits. As a result, some of
these systems will not operate correctly after 1999 because they may interpret
"00" to mean 1900, rather than 2000 - widely known as the "Year 2000 Problem."
These problems are likely to increase in frequency and severity as the year 2000
approaches. The Year 2000 Problem affects some of our computers, software and
other equipment. If we fail to properly recognize and address the Year 2000
Problem in our systems, our business, financial condition and results of
operations could be materially and adversely affected.

          We believe that we have identified most of the major computers,
software and other equipment used in connection with our internal operations
that must be modified, upgraded or replaced to minimize the possibility of a
material disruption to our business. We have commenced

                                       6
the process of modifying, upgrading and replacing major systems that have been
assessed as adversely affected, and we expect to complete this process before
the occurrence of any material disruption of our business. We have commenced the
process of identifying other computers, software and other equipment that may be
affected by the Year 2000 Problem, and determining whether remedial action is
needed. We expect to complete this process by the second quarter of 1999, and we
estimate that the total costs of this effort will be $4.2 million for the four
year period ending December 31, 1999.

          The Year 2000 Problem also affects some of our customers and major
suppliers of computers, software, and other equipment. We have discussed the
Year 2000 Problem with some of these customers and suppliers, but we cannot
guarantee that they will resolve any or all Year 2000 Problems. If our customers
and suppliers fail to resolve Year 2000 Problems, our business could be
materially disrupted.

OUR FINANCIAL ADVISERS COULD MISUSE MONEY AND INFORMATION

          Our financial advisers handle a significant amount of money and
financial and personal information for people that invest in the funds and for
people that purchase other investment and insurance products from us. Although
we have implemented a system of controls to minimize the risk of misuse of such
money and information, we cannot assure you that these controls will be
adequate. We also cannot assure you that we can prevent taking or misuse of
money or information. In the event of any taking or misuse, we could have
liability and could also be subject to regulatory sanctions. Although we believe
that we are adequately insured against such risks, we cannot assure you that
such insurance will be maintained or that it will be adequate to meet any future
liability.

POTENTIAL ADVERSE EFFECT ON CLASS A COMMON STOCK SHARE VALUE FROM DISPARATE
VOTING RIGHTS OF CLASS A COMMON STOCK AND CLASS B COMMON STOCK

          The holders of our Class A common stock and the Class B common stock
have identical rights except that:

          .  holders of Class A common stock have one vote per share while
             holders of Class B common stock have five votes per share;
          .  holders of Class A common stock cannot vote on any alteration of
             the powers, preferences or special rights of the Class B common
             stock that would not adversely affect the Class A common stock; and
          .  holders of Class B common stock cannot vote on any alteration of
             the powers, preferences or special rights of the Class A common
             stock that would not adversely affect the Class B common stock.
 
          For example, holders of one class of common stock could not vote on
proposals to:

          .  decrease the voting power of the other class of common stock;
          .  decrease the right of the other class of common stock to receive
             dividends; or

                                       7
.  diminish the rights of the other class of common stock in
             liquidation.

Investors or any potential future purchaser of our shares could view the
superior voting rights of the Class B common stock to have value, which could
adversely affect the value of the Class A common stock.  The existence of two
separate classes of common stock could result in less liquidity for either class
of common stock than if there were only one class of common stock.

WE MAY NOT PAY DIVIDENDS; OUR HOLDING COMPANY STRUCTURE MAY LIMIT OUR AVAILABLE
CASH FOR DISTRIBUTION

          Our Board of Directors currently intends to declare quarterly
dividends on both the Class A common stock and the Class B common stock. Our
Board of Directors has discretion over declaring and paying dividends. Whether
or not the Board of Directors decides to pay dividends, and the amount of such
dividends, will depend on many factors, including:

          .  general economic and business conditions;
          .  our strategic plans;
          .  our financial results and condition;
          .  contractual, legal, and regulatory restrictions on the payment of
             dividends by us or our subsidiaries; and
          .  such other factors as the Board of Directors may consider to be
             relevant.

          We are a holding company, and, as such, our ability to pay dividends
is subject to the ability of the our subsidiaries to provide us with cash. We
cannot assure you that our initial quarterly dividend level will be maintained
or that we will pay any dividends in any future period.

We Could Be Adversely Affected By Changes in Regulation

          Our investment management business is subject to extensive regulation
in the United States, primarily at the Federal level, including regulation by
the Commission. Changes in laws or regulations, or in governmental policies,
could materially and adversely affect our business and operations.

PROVISIONS IN OUR CERTIFICATE OF INCORPORATION, BYLAWS AND DELAWARE LAW COULD
DETER TAKEOVER ATTEMPTS

          Our Board of Directors may issue shares of preferred stock and may
determine the price, rights, preferences, privileges and restrictions, including
voting and conversion rights, of these shares of preferred stock. These
determinations may be made without any further vote our action by our
stockholders. The rights of the holders of Class A common stock will be subject
to, and may be adversely affected by, the rights of the holders of any preferred
stock that may be issued in the future. The issuance of preferred stock may make
it more difficult for a third party to acquire a majority of our outstanding
voting stock.

                                       8
Some provisions in our Certificate of Incorporation and Bylaws and of
Delaware law could also delay, prevent, or make more difficult a merger, tender
offer, or proxy contest involving our Company, including:

          .  With certain exceptions, Section 203 of the Delaware General
             Corporation Law restricts certain mergers and other business
             combinations between us and any holder of 15% or more of our voting
             stock;
          .  the prohibition of actions by stockholders without a meeting,
             unless our Board of Directors otherwise approves;
          .  our Board of Directors is divided into three classes, each of which
             serves for a staggered three-year term; and
          .  after Torchmark Corporation ceases to beneficially own at least a
             majority of the voting power, incumbent directors may not be
             removed without cause.

                                       9
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

          This Prospectus contains or incorporates by reference certain forward-
looking statements. These statements involve known and unknown risks,
uncertainties and other factors that may cause our or our industry's actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, those listed under "Risk Factors" and elsewhere
in this Prospectus.

          In some cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "expects," "anticipates," "plans,"
"believes," "estimates," "predicts," "potential" or "continue" or the negative
of such terms or other comparable terminology.

          Although we believe that the expectations reflected in the forward-
looking statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements.

          Moreover, neither we nor any other person assumes responsibility for
the accuracy and completeness of any such forward-looking statements. We are
under no duty to update any of the forward-looking statements after the date of
this Prospectus to conform such statements to actual results.

                                       10
SELLING STOCKHOLDERS
                                        
          The table below sets forth information with respect to the beneficial
ownership of the Class A common stock of Waddell & Reed Financial, Inc. (the
"Company") by the selling stockholders immediately prior to this offering and as
adjusted to reflect the sale of shares of Class A common stock pursuant to the
offering.  None of the selling stockholders own in excess of one percent (1%) of
the outstanding Class A common stock of the Company.  All information with
respect to the beneficial ownership has been furnished by the selling
stockholders:

                                           Class A common stock
                      Relationship with         Owned as of        Shares to
            Name          Company           September 30,  1998    Be Sold(1)
            ----      -----------------     -------------------    ----------
 
 Keith A. Tucker      Chairman of the             248,697            97,174
                      Board, Chief
                      Executive Officer &
                      Director
 
 Henry J. Herrmann    President, Chief            185,000           110,000
                      Investment Officer,
                      Treasurer & Director
 
 Robert L. Hechler    Executive Vice              130,000            90,000 
                      President, Chief                     
                      Operating Officer &
                      Director                                     ----------
                                                                     297,174
 
 
-------------
(1)  Shares to be sold pursuant to this Prospectus consist of restricted stock
     which, in the case of Mr. Tucker, vests in four increments of 25% each
     commencing on May 1, 1998, and on each of the three anniversaries
     thereafter, and, in the case of Messrs. Herrmann and Hechler, vests in
     three equal installments commencing on March 4, 2000 and on each of the two
     anniversaries thereafter.

                                 PLAN OF DISTRIBUTION

          The Class A common stock being offered by the selling stockholders
pursuant to this Prospectus may be sold from time to time by the selling
stockholders, or by pledgees, donees, transferees or other successors in
interest, regardless of whether such successors in interest are successors in
interest with respect to the shares. Such sales may be made on one or more
exchanges or in the over-the-counter market, or otherwise at prices and on terms
then prevailing or at prices related to the then-current market price of the
Class A common stock, or in negotiated transactions. In addition, any securities
covered by this Prospectus which qualify for sale pursuant to Rule 144 under the
Act may be sold under either of such rules rather than pursuant to this
Prospectus.

          In effecting sales, brokers or dealers engaged by the selling
stockholders may arrange for other brokers or dealers to participate. Brokers or
dealers will receive commissions or discounts from selling stockholders in
amounts to be negotiated immediately prior to the sale. The selling stockholders
and agents who execute orders on their behalf may be deemed to be underwriters
as that term is defined in Section 2(11) of the Act and a portion of any
proceeds or sales discounts, commissions or other compensation may be deemed to
be underwriting compensation for purposes of the Act.

                                       11
USE OF PROCEEDS

          The Company will not receive any proceeds from this offering.

                                 LEGAL MATTERS

          The validity of the shares of Class A common stock offered hereby will
be passed upon for us by Hughes & Luce, L.L.P., Dallas, Texas.

                                 EXPERTS

          The Consolidated Financial Statements of the Company as of December
31, 1996 and 1997, and for each of the years in the three-year period ended
December 31, 1997 incorporated by reference into this Prospectus have been so
included in reliance on the report of KPMG Peat Marwick LLP, independent
certified public accountants, appearing elsewhere herein, and upon the authority
of said firm as experts in accounting and auditing.

                                INDEMNIFICATION
                                        
          The Company's Certificate of Incorporation provides that each person
who was or is threatened to be made a party to or is involved in any action,
suit or proceeding by reason of the fact that he or she, or a person of whom he
or she is the legal representative, is or was a director or officer of the
Company or is or was serving at the request of the Company as a director or
officer of another company, partnership, joint venture, trust or other
enterprise, will be indemnified and held harmless by the Company to the fullest
extent authorized by the Delaware General Corporation Law as the same exists or
may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Company to provide broader
indemnification rights than said law permitted the Company to provide prior to
such amendment), against all expense, liability and loss reasonably incurred or
suffered by such person in connection therewith and such indemnification shall
continue as to a person who has ceased to be a director or officer and shall
inure to the benefit of his or her heirs, executors and administrators.

          The Delaware General Corporation Law permits Delaware corporations to
include in their certificates of incorporation a provision eliminating or
limiting director liability for monetary damages arising from breaches of their
fiduciary duty.  The only limitations imposed under the statute are that the
provision may not eliminate or limit a director's liability (i) for breaches of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or involving intentional misconduct or known
violations of law, (iii) for the payment of unlawful dividends or unlawful stock
purchases or redemptions, or (iv) for transactions in which the director
received an 

                                       12
improper personal benefit. In addition, directors and officers are insured, at
the Registrant's expense, against certain liabilities which might arise out of
their employment.

          Under Section 145 of the Delaware General Corporation Law, a
corporation may indemnify a director, officer, employee or agent of the
corporation against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him or her if he
or she acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the corporation and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful.  In the case of an action brought by or in the right of a
corporation, the corporation may indemnify a director, officer, employee or
agent of the corporation against expenses (including attorneys' fees) actually
and reasonably incurred by him or her if he or she acted in good faith and in a
manner he or she reasonably believed to be in the best interests of the
corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless a court finds that, in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses as the court shall deem proper.

                                       13
297,174 SHARES

                                            WADDELL & REED FINANCIAL, INC.

                                                 CLASS A COMMON STOCK
 
                                                     ------------

                                                      PROSPECTUS

                                                     ------------
 
  TABLE OF CONTENTS
 
                                        Page
                                        ----
Available Information                      2
Documents Incorporated by Reference        3
The Company                                4
Risk Factors                               4
Cautionary Statement Concerning           10
 Forward-Looking Statements           
Selling Stockholders                      11
Plan of Distribution                      11
Use of Proceeds                           12
Legal Matters                             12
Experts                                   12
Indemnification                           12

                                                    October 16, 1998
PART II

              INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3.  INCORPORATION OF DOCUMENTS BY REFERENCE.

     The following documents heretofore filed with the Securities and Exchange
Commission (the "Commission") by Waddell & Reed Financial, Inc. (the
"Registrant" or the "Company") are incorporated by reference in this
Registration Statement:

     (a) The Registrant's Rule 424(b) Prospectus, as filed under the Securities
Exchange Act of 1933, as amended (the "Securities Act"), Registration Statement
No. 333-43687;

     (b) The Registrant's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998, as filed under Section 13(a) of the Securities Exchange Act of
1934, as amended (the "Exchange Act");

     (c) The Registrant's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998, as filed under Section 13(a) of the Exchange Act;

     (d) The description of the Registrant's Class A common stock, par value
$.01 per share (the "Common Stock"), contained in the Registrant's Registration
Statement on Form 8-A, (the "Form 8-A") filed with the Commission on February
27, 1998, including any amendment or report filed for the purpose of updating
such description; and

     (e) All reports filed by the Registrant pursuant to Sections 13(a) or 15(d)
of the Exchange Act, since the filing of the Form 8-A.

     All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, after the date of the filing of
the initial Registration Statement and any amendments thereto and prior to the
filing of a post-effective amendment to this Registration Statement which
indicates that all of the shares of Common Stock offered have been sold or which
deregisters all of such shares then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing of such documents (such documents, and the documents
enumerated above, being hereinafter referred to as "Incorporated Documents").

     Any statement contained in an Incorporated Document shall be deemed to be
modified, replaced or superseded for purposes of this Registration Statement to
the extent that a statement contained herein or in any other subsequently filed
Incorporated Document modifies, replaces or supersedes such statement.  Any
statement so modified, replaced or superseded shall not be deemed, except as so
modified, replaced or superseded, to constitute a part of this Registration
Statement.

                                      II-1
ITEM 4.  DESCRIPTION OF SECURITIES.

     Not applicable.

ITEM 5.  INTERESTS OF NAMED EXPERTS AND COUNSEL.

     Not applicable.

ITEM 6.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.

     The Registrant's Certificate of Incorporation provides that each person who
was or is threatened to be made a party to or is involved in any action, suit or
proceeding by reason of the fact that he or she, or a person of whom he or she
is the legal representative, is or was a director or officer of the Registrant
or is or was serving at the request of the Registrant as a director or officer
of another company, partnership, joint venture, trust or other enterprise, will
be indemnified and held harmless by the Registrant to the fullest extent
authorized by the Delaware General Corporation Law as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Registrant to provide broader indemnification
rights than said law permitted the Registrant to provide prior to such
amendment), against all expense, liability and loss reasonably incurred or
suffered by such person in connection therewith and such indemnification shall
continue as to a person who has ceased to be a director or officer and shall
inure to the benefit of his or her heirs, executors and administrators.

     The Delaware General Corporation Law permits Delaware corporations to
include in their certificates of incorporation a provision eliminating or
limiting director liability for monetary damages arising from breaches of their
fiduciary duty.  The only limitations imposed under the statute are that the
provision may not eliminate or limit a director's liability (i) for breaches of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or involving intentional misconduct or known
violations of law, (iii) for the payment of unlawful dividends or unlawful stock
purchases or redemptions, or (iv) for transactions in which the director
received an improper personal benefit.  In addition, directors and officers are
insured, at the Registrant's expense, against certain liabilities which might
arise out of their employment.

     Under Section 145 of the Delaware General Corporation Law, a corporation
may indemnify a director, officer, employee or agent of the corporation against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him or her if he or she acted in
good faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of the corporation and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his or her conduct was
unlawful.  In the case of an action brought by or in the right of a corporation,
the corporation may indemnify a director, officer, employee or agent of the
corporation against expenses (including attorneys' fees) actually and reasonably
incurred by him or her if he or she acted in good faith and in a manner he or
she reasonably believed to be in the best interests of the corporation, except
that no indemnification 

                                      II-2
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation unless a court finds
that, in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses as the court shall deem
proper.

ITEM 7.  EXEMPTION FROM REGISTRATION CLAIMED.
 
     Not applicable.
 
ITEM 8.  EXHIBITS.

              4.1  Specimen of Stock Certificate (filed as Exhibit 4.1 to the
                   Company's Registration Statement on Form S-1 (Commission File
                   No. 333-43687) and incorporated herein by reference).
              4.2  1998 Executive Deferred Compensation Stock Option Plan (filed
                   as Exhibit 10.10 to the Company's Quarterly Report on Form 
                   10-Q for the quarter ended March 31, 1998 and incorporated
                   herein by reference).
              4.3  1998 Non-Employee Director Stock Option Plan (filed as
                   Exhibit 10.9 to the Company's Quarterly Report on Form 10-Q
                   for the quarter ended March 31, 1998 and incorporated herein
                   by reference).
              4.4  1998 Stock Incentive Plan (filed as Exhibit 10.8 to the
                   Company's Quarterly Report on Form 10-Q for the quarter ended
                   March 31, 1998 and incorporated herein by reference).
             4.5*  Form of Option Exchange Mailing Documents
             5.1*  Opinion of Hughes & Luce, L.L.P.
            23.1*  Consent of Hughes & Luce, L.L.P. (contained in Exhibit 5.1
                   hereto)
            23.2*  Consent of KPMG Peat Marwick LLP
            24.1*  Powers of Attorney

     ----------------------
     *    Filed herewith
 
ITEM 9.    UNDERTAKINGS.

     (a) The Registrant hereby undertakes:

         (1) To file, during any period in which offers or sales are being made,
     a post-effective amendment to this Registration Statement:

             (i)   To include any prospectus required by Section 10(a)(3) of the
         Securities Act;

                                      II-3
(ii)  To reflect in the prospectus any facts or events arising
         after the effective date of the Registration Statement (or the most
         recent post-effective amendment thereof) which, individually or in the
         aggregate, represent a fundamental change in the information set forth
         in the Registration Statement;

             (iii) To include any material information with respect to the plan
         of distribution not previously disclosed in the Registration Statement
         or any material change to such information in the Registration
         Statement;

provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to or Section 15(d) of the Exchange Act
that are incorporated by reference in the Registration Statement.

         (2) That, for the purpose of determining any liability under the
     Securities Act, each such post-effective amendment shall be deemed to be a
     new registration statement relating to the securities offered therein, and
     the offering of such securities at that time shall be deemed to be the
     initial bona fide offering thereof.

         (3) To remove from registration by means of a post-effective amendment
     any of the securities being registered which remain unsold at the
     termination of the offering.

     (b) The Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in this Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.

     (c) Insofar as indemnification by the Registrant for liabilities arising
under the Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described in Item 6, or
otherwise, the Registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

     (d) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished

                                      II-4
pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
Exchange Act; and, where interim financial information required to be presented
by Article 3 of Regulation S-X are not set forth in the prospectus, to deliver,
or cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.

                                      II-5
SIGNATURES

          Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Overland Park, State of Kansas, on October 16, 1998.

                                  WADDELL & REED FINANCIAL, INC.

                                    By: /s/ KEITH A. TUCKER
                                        -----------------------------
                                        Keith A. Tucker,
                                        Chairman of the Board and Chief
                                        Executive Officer

          Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
/s/ KEITH A. TUCKER               Chairman of the Board, Chief         October 16, 1998
-----------------------------------      Executive Officer and Director
          Keith A. Tucker                (Principal Financial Officer)
 
       /s/ HENRY J. HERRMANN              President, Chief Investment          October 16, 1998
-----------------------------------     Officer, Treasurer and Director
         Henry J. Herrmann

       /s/ ROBERT L. HECHLER           Chief Operating Officer, Executive      October 16, 1998
-----------------------------------       Vice President and Director
         Robert L. Hechler

       /s/ MICHAEL D. STROHM              Principal Accounting Officer         October 16, 1998
-----------------------------------
         Michael D. Strohm

                 *                                  Director                   October 16, 1998
-----------------------------------
        Harold T. McCormick

                 *                                  Director                   October 16, 1998
-----------------------------------
         Louis T. Hagopian

                 *                                  Director                   October 16, 1998
-----------------------------------
           R. K. Richey

                 *                                  Director                   October 16, 1998
-----------------------------------
       Joseph L. Lanier, Jr.

                 *                                  Director                   October 16, 1998
-----------------------------------
         William L. Rogers
II-6
*                                  Director                   October 16, 1998
-----------------------------------
          James M. Raines

                 *                                  Director                   October 16, 1998
-----------------------------------
      George J. Records

                 *                                  Director                   October 16, 1998
-----------------------------------
      David L. Boren

                 *                                  Director                   October 16, 1998
-----------------------------------
      Joseph M. Farley

*By:   /s/ DANIEL C. SCHULTE                                                   October 16, 1998
    -------------------------------
           Daniel C. Schulte
           Attorney-in-fact
II-7
INDEX TO EXHIBITS

     4.1     Specimen of Stock Certificate (filed as Exhibit 4.1 to the
             Company's Registration Statement on Form S-1 (Commission File No.
             333-43687) and incorporated herein by reference).
     4.2     1998 Executive Deferred Compensation Stock Option Plan (filed as
             Exhibit 10.10 to the Company's Quarterly Report on Form 10-Q for
             the quarter ended March 31, 1998 and incorporated herein by
             reference).
     4.3     1998 Non-Employee Director Stock Option Plan (filed as Exhibit 10.9
             to the Company's Quarterly Report on Form 10-Q for the quarter
             ended March 31, 1998 and incorporated herein by reference).
     4.4     1998 Stock Incentive Plan (filed as Exhibit 10.8 to the Company's
             Quarterly Report on Form 10-Q for the quarter ended March 31, 1998
             and incorporated herein by reference).
    4.5*     Form of Option Exchange Mailing Documents
    5.1*     Opinion of Hughes & Luce, L.L.P.
   23.1*     Consent of Hughes & Luce, L.L.P. (contained in Exhibit 5.1 hereto)
   23.2*     Consent of KPMG Peat Marwick LLP
   24.1*     Powers of Attorney

             -------------------
             *Filed herewith