Growing
with purpose
AJ Bell plc
Annual Report and Financial Statements 30 September 2023
Growing
with purpose
At the heart of our business is a clear and
succinct purpose which drives everything
we do: to help people invest.
We want to make investing as easy as
possible for our customers. Our dual-
channel platform and our in-house range
of low-cost investment solutions help
people take control of their investments,
whether they do that on their own or with
the help of a financial adviser. Our offering,
combined with high service standards and
competitive charges, positions us well to
continue attracting new customers and
assets to our platform and further increase
our market share.”
Michael Summersgill
Chief Executive Officer
01 Our purpose
Strategic report
04 At a glance
06 Chair’s statement
10 Chief Executive Officer’s review
16 Market overview
20 Our business model
22 Our strategy to achieve our purpose
26 Key performance indicators
28 Stakeholder engagement
30 Section 172 statement
32 Responsible business
55 Non-financial and sustainability
information statement
56 Financial review
60 Risk management
63 Principal risks and uncertainties
69 Viability statement
Governance
72 Chair’s introduction
74 Board of Directors
78 Executive Committee
80 Corporate Governance report
88 Nomination Committee report
92 Audit Committee report
98 Risk & Compliance
Committee report
102 Directors’ Remuneration report
122 Directors’ report
125 Statement of Directors’
responsibilities
Financial statements
128 Independent auditor’s report
to the members of AJ Bell plc
134 Consolidated income statement
135 Consolidated statement
of financial position
136 Consolidated statement
of changes in equity
137 Consolidated statement
of cash flows
138 Notes to the consolidated
financial statements
164 Company statement
of financial position
165 Company statement
of changes in equity
166 Notes to the Company
financial statements
Other information
170 Consolidated unaudited
five-year summary
171 Glossary
172 Definitions
173 Company information
Find out how we are helping
people invest and more at
ajbell.co.uk
Our purpose
At the heart of our business is a clear and succinct purpose which drives everything we do:
To help people invest
We want to make investing as easy as possible for our customers to enable them to take
control of their finances and realise their financial goals.
What we do
Serving the needs of our customers
AJ Bell is one of the UK’s largest and best-regarded investment platforms. Whether through a financial adviser,
or managing your investments yourself, we offer a range of products to help you achieve your financial goals.
Full-service and simplified
platform propositions
Wide investment range
supplemented by in-house
investment solutions
First-class service model to
support our digital
propositions
Dual-channel platform
operating at scale in both
D2C and advised markets
Efficient operating model
enables us to keep costs
low for customers
Business model
See p20 and 21
How we do it
We make investing easier
Our company is built on a set of guiding principles that define the way we do business.
Our guiding principles
Principled
We act
with integrity
Knowledgeable
We know
our stuff
Straightforward
We simplify
the complex
Personal
We put
people first
Ambitious
We set high
standards
We want to provide our customers the easiest investment platform to enable them to take control
of their finances and realise their financial goals.
Our strategy
See p22 to 25
Sustainable
growth
Easy-to-use
platform propositions
Excellent
service
High staff
engagement
Creating sustainable value
Responsible propositions
Offering products and
services that are aligned
with our purpose.
Responsible employer
Developing and supporting our
people to help them achieve
their potential.
Supporting our
local communities
Playing a positive and
supporting role in our
local communities.
Environmental awareness
Minimising our impact on
the environment.
See more p36 to 38
See more p39 to 43
See more p44 and 45
See more p46 to 54
AJ Bell plc Annual Report and Financial Statements 2023 01
Strategic report
Governance
Financial statements
Other information
The platform offers a very good user experience,
it’s simple, the login process is easy and then
once you’re in, it’s easy to find my dashboard
for a top-level view of how I’m doing and then
take advantage of the premade investing
solutions. I have a feeling of control and
confidence that I didn’t have beforehand.
I feel like my money is safe and that I’m
on a reliable platform.”
Oonagh
AJ Bell customer
#FeelGoodInvesting
See more at ajbell.co.uk/group/feel-good-investing
Helping Oonagh invest for her
financial independence
Age: 52 years old
Mission: To achieve financial
independence
Oonagh, mother of three children, recently
started investing and chose AJ Bell as
her starting point. Attracted to the tax
efficiencies on offer, she contributes to her
ISA and SIPP each month. She wanted to
be a role model for her children in being
able to speak about investing, particularly
for her two girls. To her, financial
independence is being more confident
that she will be able to cover any big bills
that may arise in the future.
Oonagh chose AJ Bell for its ease of use
and is now enjoying the rewards of
investing with us.
Oonagh is a real AJ Bell customer sharing her
honest opinions.
Strategic report
Strategic report
00 At a glance
04 At a glance
00 Chair’s statement
06 Chair’s statement
00 Chief Executive Officer’s review
10 Chief Executive Officer’s review
16 Market overview
00 Market overview
20 Our business model
00 Our business model
00 Strategy in action
Our strategy to achieve
22
00 Key performance indicators
our purpose
00 Our strategic priorities and goals
26 Key performance indicators
00 Our key performance indicators
28 Stakeholder engagement
30 Section 172 statement
00 Stakeholder engagement
00 Section 172 statement
32 Responsible business
55
00 Responsible business
00 Financial review
00 Risk management
56 Financial review
60 Risk management
00 Principal risks and uncertainties
63 Principal risks and uncertainties
00 Viability statement
69 Viability statement
Non-financial and sustainability
information statement
02 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 03
Our awards
Our propositions
Advised
At a glance
We make
investing easier
AJ Bell is one of the UK’s largest and best-regarded
investment platforms. Over 490,000 customers
currently trust us with their investments, and by
continuously striving to make investing easier,
we aim to help even more people take control
of their financial futures. We strive to deliver a
market-leading platform by combining low cost,
ease of use and excellent customer service.
AJ Bell is rated as ‘Excellent’ on independent
review site Trustpilot with a score of 4.8 out
of 5.0 from over 4,000 reviews, demonstrating
our continued strong customer service.
Performance in 2023
Total assets under administration1
Total customers1
£76.1bn
+10%
Revenue
£218.2m
+33%
491,402
+12%
Profit before tax (PBT)
£87.7m
+50%
1. Total assets under administration (AUA) and customers include non-platform customers
and AUA. See pages 26 and 27 for definitions of Alternative Performance Measures.
04 AJ Bell plc Annual Report and Financial Statements 2023
Top 100 Best Large Company to Work for in the UK
for 6 consecutive years
Money Marketing awards Provider of the Year
award for 2 consecutive years
Which? Recommended Platform provider
for 5 consecutive years
Citywire Growth shortlist winner: AJ Bell Asset
Management for the VT AJ Bell Adventurous Fund
Highlights
– Invested in our brand through our
new multi-channel advertising
campaign and five-year
partnership with the AJ Bell
Great Run Series.
– Launched our pension finding
service for new and existing
customers.
– Delivered excellent customer
service, with a high customer
retention rate of 95%.
– Achieved significant growth in
AJ Bell Investments with closing
AUM of £4.7 billion, up 68% in
the year.
Strategic report
Governance
Financial statements
Other information
Customers
159,256 +10%
2022: 145,371
AUA
£48.2bn +8%
2022: 44.8bn
D2C
Customers
317,276 +13%
2022: 280,281
AUA
£22.7bn +18%
2022: 19.3bn
Full-service
Established platform propositions
offering a wide range of investment
choice and functionality.
Simplified
Digital-only platform propositions
offering an easy-to-use, streamlined
service in the advised and D2C markets.
Investment solutions
A range of in-house funds and MPS
solutions which support our offerings
in both the advised and D2C market
segments.
Market opportunity
Total addressable market
~£3tn
Provides simple, transparent, low-cost investment management solutions
through advisers and direct to customers.
~£1tn
Curently held
on platforms
~£2tn
Off platform
A fast-growing platform market
£bn
716
473
308
986
912
+11%
CAGR
2012
2015
2018
2021
2022
We operate in a fast-growing investment
platform market. The long-term structural
drivers of market growth are strong, with around
two-thirds of our estimated £3 trillion target
addressable market not yet on a platform.
See Market overview p16
AJ Bell plc Annual Report and Financial Statements 2023 05
Chair’s statement
Maintaining
our focus
AJ Bell is a great business with a justifiable
reputation for innovation, customer focus
and a commitment to delivering real value
to customers and advisers.”
Fiona Clutterbuck
Chair
Strategic report
Governance
Financial statements
Other information
Dear shareholder
I am delighted to present my first Annual
Report as your new Chair.
Since my appointment on 1 May 2023,
I have spent time getting to know many
people across the business, as well as
having the pleasure of engaging with
some of our shareholders and other key
stakeholders, discussing both AJ Bell’s
business and the wider platform market.
It has been a really interesting and
informative period since joining, which
has reaffirmed my initial very favourable
impression of the people and the business.
I am very excited to lead the Board and
support the executive team in the goals
we have set ourselves.
I am pleased to report that we have
delivered a strong financial performance
during the year with PBT of £87.7 million.
Over the past 12 months customer
numbers increased by 50,813 to 491,402
and we delivered £4.1 billion of net
inflows, ending the year with total AUA
of £76.1 billion. This strong performance
demonstrates the resilience of our
business model during a challenging
year and continued uncertainties around
the UK economy. The Financial review
contains further information on this year’s
performance on pages 56 to 59.
As the uncertainties in the wider economy
continued into 2023, it created further
challenges for our customers, our people
and our wider stakeholders. As a Board we
were particularly mindful of this and so our
focus remained on the wellbeing of our
staff, while maintaining a high-quality,
value-for-money service to our customers
and delivering positive outcomes for all
our stakeholders.
Dividend per share since IPO
Pence
11.96
5.00
10.75
4.83
6.16
6.96
7.37
2019
2020
2021
2022
2023
Ordinary dividend
Special dividend
Our governance structure and cohesive
culture provide a solid framework for
achieving our long-term strategic goals.
The Board remains focused on delivering
AJ Bell’s purpose; to help people invest.
the coming year. Our pay and benefits
package introduced at the start of FY23
has also seen further enhancements to
base pay and pension contributions
for the coming year.
Culture, purpose and
stakeholder engagement
The Board plays a vital role in shaping and
embedding a strong and healthy culture
through promoting the core values and
principles of the Group and this continued
to be a focus throughout the year. We
welcomed the opportunity to engage with
our staff and shareholders in person again
this year, providing invaluable insight into
the operation and culture of our business.
I was delighted to be appointed as the
nominated Employee Engagement
Director in May, which has given me an
opportunity to refresh the Employee Voice
Forum (EVF).
During the year we also reviewed the
AJ Bell Way and our guiding principles;
challenging ourselves on their continued
alignment with our purpose and culture
following significant growth of the business.
It was encouraging to see the level of
engagement from our people and our
customers and advisers, affirming how
well our core values resonate with our key
stakeholders. Whilst the key elements of
our guiding principles remain relevant,
some refinements have been made to
simplify them and reflect the feedback
received to ensure they continue to be
embraced by our people on a day-to-day
basis.
Consideration of our wider stakeholders in
some of our key decisions in the year are
outlined in our Section 172 statement on
pages 30 to 31.
We recognise the importance of an
engaged workforce and it was pleasing
to see that this year’s staff survey showed
positive progress with an overall response
rate of 87%. Our people are at the heart of
our continued growth and success and so
how we motivate, reward and support
them is a key priority for the Board. The
introduction of the new free share award
scheme for all employees has been very
well received and we expect the level of
share ownership to increase further for
We have made good progress embedding
our Diversity and Inclusion framework. As
reported last year our primary focus was
on the senior management and talent
pipeline where I am pleased to see we
have already made positive steps on the
recruitment at executive level. The Board
will continue to monitor and challenge
progress on our initiatives for the wider
workforce where we expect to see further
improvements in the coming year.
Further details on our ESG-related
activities can be found in our Responsible
Business section on pages 32 to 54.
Board changes and
sucession
On 1 May 2023 I succeeded Baroness
Helena Morrissey as Chair. On behalf of
the Board, I would like to thank Helena for
her significant contribution to AJ Bell as
Chair and look forward to her continued
involvement through her consultancy role
where we are benefitting from her passion
and commitment to diversity and inclusion.
As previously announced when Andy
Bell stepped down from the Board in
September 2022, it was agreed that he
would have the right to nominate a
Non-Executive Director to represent his
interests on the Board whilst a significant
shareholder. This agreement was formalised
in July 2023 when we announced that
Les Platts would join the Board as Andy’s
Representative Director. I would like to
take this opportunity to formally welcome
Les to the Board and very much look
forward to working with him. Les’ in-depth
knowledge of the financial services sector
and AJ Bell in particular, will further
enhance the experience on the Board
and help us drive the future growth of
the Company.
During the year we resumed our search
for two new independent Non-Executive
Directors (NED), the first being a
replacement for Simon Turner who has
completed nine years’ service and will step
down from the Board once a successful
handover is complete. The Board is
extremely mindful of the importance of
having a diverse range of skills, experience
and perspective around the Board table
and so this was at the forefront of our
minds throughout the recruitment
process. I am pleased to report that since
the year end we have appointed Fiona Fry
as an independent Non-Executive Director
with effect from 7 December 2023. Fiona
will succeed Simon Turner, as Chair of the
Risk & Compliance Committee, subject to
regulatory approval. Fiona is a highly
experienced risk professional, having spent
the majority of her career at KPMG where,
as a partner she focused on financial
services regulation. Fiona sat on the UK
Board of KPMG for six years. She was
previously Head of investigations at the
Financial Services Authority (now the FCA).
Fiona is currently Chair of the Risk
Committee at Aviva Insurance Limited.
Our commitment to addressing both the
Parker Review recommendations and the
FCA diversity requirements remains a key
consideration as we continue our search
for a further independent NED to join
the Board in the coming year. Whilst
we are pleased with our progress, we
acknowledge there is still more to be
done to continue to drive greater diversity
at both Board and executive level.
Further details on Board changes can
be found in the Nomination Committee
report on pages 88 to 91.
Dividend
In line with our commitment to a progressive
dividend, the Board is pleased to announce
a final ordinary dividend of 7.25p per share,
reflecting the financial strength of the
business and strong capital position.
The final ordinary dividend will be paid,
subject to shareholder approval, at our
AGM on 30 January 2024, to shareholders
on the register at the close of business on
12 January 2024.
This brings the total ordinary dividend for
the financial year to 10.75p per share,
representing an increase of 46% on the
previous year.
06 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 07
Chair’s statement
Strategic report
Governance
Financial statements
Other information
Board priorities
Performance and resilience
I am very proud of the strong performance that the business has
delivered in 2023. However, I am acutely aware of the need to continue
growing the business, whilst at the same time managing our cost
base against a backdrop of significant macroeconomic uncertainty.
These are two key priorities in the coming year. I am also keen that
we continue to embrace the entrepreneurial culture which was
so much a hallmark of the business under Andy Bell’s leadership.
Performance such as that which the business has demonstrated this
year is only achievable if the business is resilient; technology plays a
very important role in embedding this resilience so this too will be a
focus for FY24.
Culture
AJ Bell has always justifiably prided itself on a strong cohesive culture.
In my first few months as Chair I have had the opportunity to experience
this first hand. Interactions with my colleagues across the business have
confirmed an open and transparent culture that permeates throughout
the whole organisation. Our role as a Board is to monitor how we
nurture this culture and ensure it remains a real strength as we
continue to grow.
One of the most important facets of the AJ Bell purpose-led culture has
been its extraordinary focus on doing the right thing for its customers.
We place good customer outcomes at the heart of everything we do,
with good value products, simple communications and strong
processes to support our customers.
The initial implementation of the Consumer Duty has been a key area
of focus for the Board and the business as a whole during the year, with
Simon Turner, our Chair of the Risk & Compliance Committee being
appointed as our designated Non-Executive Director Consumer
Duty Champion. Although we believe our culture is aligned with the
requirements of Consumer Duty, we are by no means complacent and
the Board’s focus during FY24 will be on maintaining oversight to ensure
the business is delivering good outcomes for its customers which are
consistent with the Duty.
Succession planning
The Board remains focused on maintaining good corporate governance
and ensuring these principles are embedded into our culture. I strongly
believe that diversity in all its forms leads to more productive and
balanced Board discussions, and maintaining a diverse and inclusive
Board is a key priority. This includes meeting our targets for gender
and ethnic diversity, whilst at the same time ensuring that all Board
appointments are made on merit.
As I have already mentioned, we are well progressed in our search for
two new independent NEDs. It will be important to ensure that our new
NEDs receive an appropriate induction, matched to their skills and
experience, together with the right level of support from the Board in
their first year. We will also be focusing on putting in place succession
planning for the Committee Chair roles.
Looking ahead
I have really enjoyed my first seven months
as AJ Bell’s Chair. First impressions are
of a committed, strong management
team, collaborative Board and strong
performance despite the wider economic
backdrop. I truly believe this is a great
business and I can see the growth
potential. Our dual-channel business
model is a real strength in the investment
platform market and with a focus on ease
of use and value for money, AJ Bell is
well-positioned to continue to attract
new customers and assets to the platform
and further increase our market share.
I am very grateful to the Board and all
those in the business who have helped
me over the first few months as part of
my induction and I am very much looking
forward to continuing to work with
them over the coming years.
AJ Bell is a financially strong business as
evidenced by a profitable, well-capitalised
and highly cash-generative business
model, and the Board remains confident
in the long-term prospects of the business.
Whilst the macroeconomic environment
remains challenging in the short term, it is
clear that the fundamental growth drivers
for the platform market remain firmly in
place and I look forward to working with
Michael, the executive team and the Board
to ensure the business takes advantage of
the growth opportunities that lie ahead.
Fiona Clutterbuck
Chair
6 December 2023
08 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 09
Chief Executive Officer’s review
A scalable platform
for growth
We are in a great position to maintain our growth
momentum and capitalise on the significant long-term
opportunities in our market by providing investors with
an easy-to-use, low-cost platform, supported by
excellent customer service.”
Michael Summersgill
Chief Executive Officer
Overview
We are pleased to report another strong
set of results for 2023, delivering organic
growth in customer numbers, AUA and
AUM, across both the advised and D2C
market segments. This growth, alongside
a record financial performance, demonstrates
the strength of our dual-channel platform
and diversified revenue model to deliver in
different market conditions.
In the five years since our IPO in December
2018 we have delivered the significant
growth that was expected, increasing our
share of the fast-growing platform market
each year, whilst also paying an increasing
ordinary dividend to shareholders. Our
focus on providing great value through our
high-quality products has led to nearly half
a million platform customers now trusting
us with their investments.
The investment platform market continues
to grow. Whilst we are winning new
business from our competitors within
the platform market, crucially we are still
growing the platform market by attracting
assets held off-platform in legacy products,
as investors seek the flexibility and control
that platforms offer. This growth is set to
continue with approximately two-thirds
of the estimated £3 trillion addressable
market currently held off-platform.
Our dual-channel model, serving both the
advised and D2C segments of the market,
enables us to capture assets across the
whole addressable market, whilst the
benefits of our scale, coupled with our
efficient operating model, enable us to
keep costs low for customers and invest
in our platform with a focus on ease of
use. Together with our market-leading
customer service levels, these factors have
been key to our success to date and ensure
we are positioned at the forefront of the
platform market to capitalise on the
significant long-term growth opportunities.
Strategic report
Governance
Financial statements
Other information
Q&A
with Michael Summersgill
Q It has now been five years since AJ Bell’s IPO.
How do you reflect on this time?
We have achieved significant organic growth in customers and AUA, in
line with the strategy set out to investors at the time of the IPO. Over
this period, platform AUA has increased by 84% to £70.9 billion and
platform customers have risen by 160% to 476,532. This growth has
been organic and hasn’t required shareholder capital, in fact we have
paid £147.5 million in dividends since the IPO.
Key to this growth has been investing in our platform propositions
whilst consistently delivering excellent service to our customers, as
reflected by our recognition as the Which? Recommended Investment
Platform provider for five consecutive years and our market-leading
Trustpilot score of 4.8-stars.
This service would not be possible without the dedication of our people.
Culture and employee engagement have always been key strengths of
the business, and we have maintained this as we continued to grow,
achieving a 3-star accreditation in the Best Companies to Work For
survey every year since we listed.
Looking ahead to the next five years, I am confident we will deliver on
the significant growth opportunities our market continues to present.
Q How will your platform products drive growth?
I expect AJ Bell and Investcentre, our well-established full-service
platform propositions, to continue to be the core drivers of growth.
Alongside this, our new simplified products represent a key area of our
growth strategy. Dodl, our simplified D2C platform proposition, is aimed
at less-experienced investors. Given the success we have seen on our
D2C brand work in 2023, we have decided to revitalise Dodl in FY24, so
that it is brought much closer to our core AJ Bell branding and delivers
an optimised marketing approach. We are confident in the high-quality
customer outcomes the product delivers and this change will help to
maximise future growth.
We continue to develop Touch, our simplified advised product.
This will expand our offering for advisers, helping them to cater for
clients looking for a digital service model. We completed a closed beta
launch in the year and plan to deliver the initial proposition to market
during 2024.
Q How will you maintain a strong culture?
Maintaining a strong, purpose-led culture is key for me. Our guiding
principles are an important tool in fostering the right culture, having
been first established around 10 years ago. We have revisited them
this year to ensure they continue to reflect who we are as a business.
This involved stakeholder engagement which highlighted how
deep-rooted our guiding principles are. We have made some changes
which are a refinement of the existing framework that has served us
well, rather than a fundamental change. These refreshed guiding
principles have been embraced by our people who continue to apply
them in their roles each day.
Employee share ownership is ingrained in our culture, ensuring staff
share in the success of the business. The introduction of our annual
all-employee free share scheme will facilitate a continuation of this
culture, with the first awards having been made in January 2023.
Our platform provides
customers with the flexibility
to choose from a broad
range of investment options,
enabling them to respond to
changing market dynamics.”
The current macroeconomic environment
has presented challenges for investors and
advisers, with high inflation leading to
higher interest rates. These conditions
have impacted consumer confidence and
led to stronger demand for cash savings
products. We expect these conditions
to persist in the short term, however
the versatility of our open-architecture
platform enables us to continue to grow
across a range of market conditions,
as demonstrated in recent years.
Our platform provides customers with the
flexibility to choose from a broad range
of investment options, enabling them to
respond to changing market dynamics.
In the higher interest rate environment,
we have seen increased demand for
government bonds and money market
funds. Separately, our Cash savings hub
has provided a convenient option for
customers seeking higher returns on
their cash savings.
Platform customers
476,532
+12%
Platform AUA
£70.9bn
+11%
10 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023
11
Chief Executive Officer’s review
Strong performance
Our platform delivered growth of over
50,000 customers in the year, increasing
total platform customers by 12% to
476,532 (FY22: 425,652). Our low-cost
products position us well at a time when
customers are increasingly looking for
value. Demand has been strong from D2C
customers, supported by the investments
in our brand and improved mobile app
functionality. We maintained our excellent
service levels throughout this period, as
evidenced by our high customer retention
rate of 95.2% (FY22: 95.5%).
The strength of our open-architecture
platform, offering customers a wide range
of investment options, was demonstrated
as we delivered over £4 billion of net
inflows. This contributed to an 11%
increase in platform AUA which ended the
year at £70.9 billion (FY22: £64.1 billion).
Our investments business achieved
another year of significant growth, with
total AUM increasing by 68% to £4.7 billion
(FY22: £2.8 billion).
The strong demand has been fuelled
by our excellent long-term investment
performance, with all six of our multi-asset
growth funds being placed in the top
quartile of returns when compared to
their Investment Association peers over
the last five years.
Our diversified revenue model has
enabled us to deliver a record financial
performance whilst also investing in
long-term initiatives to support future
growth. Revenue increased by 33% to
£218.2 million (FY22: £163.8 million),
largely driven by growth in platform AUA
and higher rates of interest generated
on cash balances held on the platform.
We have been mindful of the need to share
the benefits of higher revenue margins
across all our stakeholders. For customers
we have kept our prices low, paid a
competitive interest rate on their cash
balances and invested in our propositions;
for our people we have improved our
pay and benefits package in response
to the rising cost of living; and for our
shareholders our investments in brand
and propositions position us to continue
to increase our market share, whilst once
again increasing our ordinary dividend.
Business
update
Advised
Advised customers
159,256 +10%
Advised AUA
£48.2bn +8%
Our advised business has performed
resiliently during a challenging period
for the market, delivering a 13,885
increase in customer numbers and
£3.4 billion increase in AUA. This
increase was driven by net AUA inflows
of £1.9 billion (FY22: £3.3 billion)
and £1.5 billion of favourable market
movements (FY22: £4.3 billion of
adverse market movements). Net AUA
inflows were 42% lower than prior year
as a result of a moderation in transfer
activity as advisers and their clients
exercised more caution in the face
of ongoing uncertainty in the
macroeconomic environment.
We have continued to develop our
full-service advised proposition,
Investcentre, with a focus on ease
of use. This included new dealing
functionality which allows advisers
to make one-off investments using
their customers’ model portfolio
asset allocation, helping to avoid
any unnecessary friction when
adding money to portfolios. We have
also made significant progress on
enhancements to the onboarding
journey, due to be rolled out in the first
half of FY24, delivering an improved
interface mapped to the advice process
which streamlines the new business
process for advisers.
In the higher interest environment a
number of customers are looking for
cash-like returns, whilst maintaining the
benefits of remaining in their existing
tax wrappers and having the flexibility
to easily invest in other assets again at
a time of their choosing. To support
advisers in servicing those customers,
we launched the AJ Bell Investments
Money Market MPS in November.
This product is at a market-leading
low-price with no management fees and an
ongoing charges figure (OCF) of just 10bps.
We engage with advisers through a range
of events and technical support every year.
We continued our ‘on and off the road’
seminars, and hosted our flagship
Investival conference in November,
which was attended by over 400 financial
professionals. This regular communication
with advisers allows us to forge strong
relationships and earn their trust as a
platform provider.
D2C
D2C customers
317,276 +13%
D2C AUA
£22.7bn +18%
Our D2C business has delivered a strong
performance, with a 36,995 increase in
customer numbers and a £3.4 billion
increase in AUA. This increase was driven
by net inflows of £2.3 billion (FY22:
£2.5 billion), with over 95% of these net
inflows into tax-wrappers and dealing
accounts, and £1.1 billion of favourable
market movements (FY22: £2.7 billion
of adverse market movements).
At the start of the year we retired the
Youinvest sub-brand, renaming our
full-service D2C platform as AJ Bell.
This change has helped to drive the
strong growth in the year by simplifying
the journey for new customers, and
improving the effectiveness of our
direct marketing activity.
We have continued to focus on making the
customer journey easier and have rolled
out multiple enhancements to the AJ Bell
platform. In November, we introduced the
ability to purchase a select list of gilts
online in response to increased demand
for those instruments in the higher-
interest-rate environment. We also
delivered our pension finder service
for new and existing customers.
Following the increases in the UK base
rate throughout the year, we raised the
rates we pay to customers on cash held
on the platform. Early in 2024, we will be
introducing a higher interest rate on cash
held in SIPP drawdown, reflecting the fact
that these customers often hold more of
their portfolio in cash to fund their
Strategic report
Governance
Financial statements
Other information
As part of our review of the AJ Bell Way,
we have refreshed some of our guiding
principles and relaunched these to staff
across the business, further details of
which can be found in our Responsible
Employer section on page 39.
Our apprenticeship programmes
continue to be a huge success, with
this year’s intake of 34 new digital and
investment apprentices being the
largest cohort since it was launched
in 2017. We were also pleased to
have been recognised as the ‘Large
Employer of the Year’ at the North West
Apprenticeship Awards. In addition, our
commitment to developing our internal
talent pipeline was recognised with
an ‘Outstanding’ Ofsted rating
following their inspection of our Talent
Development Programme which upskills
and develops our Team Leaders and
Managers through apprenticeships.
We launched the AJ Bell Futures
Foundation at the start of the year to
develop long-term partnerships with
our local communities. It has been
great to see staff participating in
volunteering activities with both of our
partner charities, Smart Works and
IntoUniversity, as well as taking up the
chance to nominate local charities for
donations. Further information on the
work of the Foundation can be found in
our Responsible Business report on
page 45.
We recognise the significant opportunities
that artificial intelligence presents for us to
increase our efficiency as a business as
well as the risks it presents for customer
security. In June, we dedicated engineering
and business resources to execute an
artificial intelligence hackathon, building
several innovative proofs of concepts.
The output of this process was very
encouraging, with lots of initiatives
discussed and many ideas generated
which we will consider adopting in
the future. We will embrace artificial
intelligence, with the focus initially on
internal, non-customer-facing operations,
as part of our efforts to continually
improve operational efficiency.
People and culture
As our business continues to grow, it
is important that we maintain a strong
culture, along with our high levels of staff
engagement and wellbeing. It is therefore
pleasing to have once again achieved
a 3-star accreditation in the ‘Best
Companies to Work For’, and to be
recognised as one of the top 20 large
companies to work for in the UK.
At the start of FY23 we introduced several
enhancements to our pay and benefits
package, representing an increase in staff
costs of over 10%, including our new free
share award scheme for all employees.
We remained mindful of the impact of
the continuing cost-of-living pressures
on our people when considering
employee benefits for the forthcoming
year. A number of additional enhancements
to our pay and benefits package were
made, including an average increase in
base pay of 5.8% and a further uplift in
pension contributions.
short-to-medium term retirement plans,
as well as higher rates for SIPP and ISA
customers with large cash balances.
We provide high-quality investment
content for our D2C customers, covering
the latest market trends. In May, we made
our weekly Shares magazine free for all
D2C customers, and our weekly Money
& Markets and Money Matters podcasts
provide further market information and
expert analysis to support our customers
in navigating their investment decisions.
Investments
AUM
£4.7bn +68%
Our investments business offers a range
of simple, transparent investment solutions
at a low cost. In a market where many
asset managers are suffering persistent
net outflows, the strong performance
and low-cost nature of our multi-asset
investment solutions continue to attract
new assets in both the advised and
D2C markets.
The growth has been particularly strong
from advised and external platform
customers who value the long-term track
record of performance our investments
have delivered.
Customer services and
technology
We provide a high-quality service to our
customers, with over 95% of customer
calls in the year answered within 20
seconds. This excellent service is reflected
in our 4.8-star Trustpilot score, as rated
by our D2C customers, and our 95.2%
platform customer retention rate.
We continue to invest in our technology
to deliver a great customer experience.
Our secure and scalable platform has been
designed to facilitate growth and drive
operational gearing, utilising a hybrid
technology model which allows us to build
adaptable, easy-to-use interfaces. During
the year, we have continued to invest in
the resilience of our platform through
further investment in our cyber security
and disaster recovery capabilities. In
addition, we have increased the resource
in the change teams in order to improve
the speed at which we deliver further
enhancements to our platform
propositions.
12 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023
13
Chief Executive Officer’s review
Investing for long-term
growth
We continue to innovate and invest in our
products with a focus on ease of use.
A significant proportion of our addressable
market sits in legacy pension products.
Most adults have several employers during
their career, and subsequently accumulate
a number of different pension pots which
can be inefficient to manage separetely.
Our free pension finding service, which is
now live for new and existing customers,
has proved popular with customers trying
to track down and consolidate pension
pots. In FY24, we will launch our new
ready-made pension product that
consolidates a customer’s pension into
a simple product, offering an investment
range of four AJ Bell growth funds with
a transparent all-in charging structure
starting from 45bps. The streamlined
nature of this product will reduce barriers
for customers who are less confident in
managing their own investments and
provides an enhanced journey for new
customers opening a pension with us
in the future.
Why invest
in AJ Bell?
Our product philosophy of utilising
our scale to keep charges low for our
customers ensures we continue to provide
excellent value for money. We reduced a
number of charges across our full-service
propositions in the second half of FY22
and are committed to continually
reviewing our customer charges
as we grow.
Trust and brand awareness are key drivers
of a new customer’s decision when
choosing an investment platform. We have
built a brand which is highly trusted by our
customers, and this year, we commenced
our multi-year strategy to enhance brand
awareness and to continue increasing our
share of the growing platform market. This
strategy was kick-started with our ‘feel
good, investing’ multi-channel advertising
campaign, alongside our new five-year
partnership as the title sponsor of the
Great Run Series.
Regulatory developments
There are a number of ongoing regulatory
developments that will impact customers
in our market and we continue to engage
proactively with Government and
regulators on their behalf.
We were well prepared for the
implementation of the new Consumer
Duty which came into force at the
end of July. We are supportive of this
development and believe it will be positive
for consumers, with an increased focus
on value for money and ensuring good
customer outcomes.
It is disappointing the new Duty does not
yet apply to legacy schemes, as the FCA
has recently stated savers in older schemes
may be at greatest risk of poor value
for money.
We are continuing to work with the
Government and the FCA on their review
of the boundary between advice and
guidance, and their exploration of new
ways to offer support and guidance to
consumers. We believe any new rules
should be applicable to new and existing
D2C customers and enable firms to deliver
solutions that meet the needs of their
customer cohorts. An overly prescriptive
approach would stifle innovation and risk
poor customer outcomes.
ISAs should be a simple, easy-to-use
tax-efficient savings vehicle but we now
have six variations of ISAs, all aiming to
cater for slightly different customer needs,
with complicated rules.
We have been campaigning for the
Government to simplify ISAs by creating
a single ISA solution that is easy for
consumers to understand and will
encourage them to invest more. Whilst
some relaxations were announced in the
Autumn Statement such as allowing
people to subscribe to more than one of
the same type of ISA each year, we think
this was a missed opportunity to launch
a wider consultation with the aim of
simplifying ISAs and helping people
to invest. Whilst significant change may
take some time to achieve, our proposals
have been received well both by
government and the industry, so we
will continue to campaign for further
change in this area.
Strategic report
Governance
Financial statements
Other information
As we have seen this year, our
versatile platform offering
enables us to continue to
deliver robust growth in these
conditions and the long-term
structural drivers of growth in
the UK platform market
remain strong.”
Executive Committee
changes
Bruce Robinson stepped down from his
role as Company Secretary and Group
Legal Services Director, and as a member
of the Executive Committee, at the end of
September 2023. I would like to thank
Bruce for his exceptional service over the
last 11 years at AJ Bell and look forward to
continuing to work with him in his new
role as an Executive Consultant.
Following this, I am pleased to report the
internal promotion of Kina Sinclair to the
role of Group Legal Services Director and
as a member of the Executive Committee
with effect from 1 October 2023. Kina
joined AJ Bell in July 2018 and brings
extensive knowledge of the business
alongside her broad commercial law
expertise.
As part of the succession plan for Bruce,
we have separated the Company Secretary
role and are pleased to announce the
appointment of Olubunmi Likinyo as
Company Secretary with effect from
1 October 2023.
Following the year end Kevin Doran,
Managing Director of D2C and
Investments, informed the business of
his decision to leave. He will therefore be
departing AJ Bell in the new year. Kevin
has helped us to build a terrific investment
business and I would particularly like to
thank him for his work in this part of the
business. I am pleased to announce that
Charlie Musson, our Chief Communications
Officer, has taken over as Acting Managing
Director D2C. Having worked with Charlie
for many years, I look forward to working
with him in his new role as we continue to
drive our D2C platform propositions
forward.
Outlook
Investment platforms play a hugely
important role in helping individuals
to take control of their long-term
investments. At AJ Bell, we operate a
scalable platform that provides a high-
quality, trusted service to our customers.
Our continued investment in our advised
and D2C platform propositions means we
are well equipped and ready to serve both
existing platform customers and new
customers seeking to invest in the future.
In the short term, the macroeconomic
environment will continue to present some
headwinds. However, as we have seen
this year, our versatile platform offering
enables us to continue delivering robust
growth in these conditions and the
long-term structural drivers of growth
in the UK platform market remain strong.
Our aim remains to continue increasing
our share of the platform market, which
for many years has grown quicker than
the broader financial services sector.
Our diversified revenue model means we
are well placed to succeed in different
macroeconomic conditions. Our
philosophy remains to continually
re-invest the benefits of our scale to drive
long-term growth, ensuring that we offer
a great value proposition to customers
whilst investing in our brand, technology
and people at the levels required to deliver
on our long-term growth ambitions.
As a final point, I would like to thank
all of our staff; without their ongoing
commitment and quality of work our
continued success would not be possible.
Michael Summersgill
Chief Executive Officer
6 December 2023
Our market
Our propositions
Our customers
Our people
Our business model
Quality of earnings
Cash generation
See our investement case at
ajbell.co.uk/group/investor-
relations/investment-case
A significant market
opportunity
£3tn
Award-winning
advised and D2C
platform
95.2%
A growing base of
loyal high-quality
customers
50,813
Total addressable market
Customer retention rate
Net new customers in 2023
Highly engaged staff
providing excellent
service
Top 20
Best Companies ranking
A profitable and
scalable platform
A diversified mix
of revenue types
40.2%
2023 PBT margin
£218.2m
2023 total revenue
Highly cash generative
with a progressive
dividend policy
19 years
of successive ordinary
dividend growth
14 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023
15
Market overview
Well-positioned to capture
growth opportunities
Strategic report
Governance
Financial statements
Other information
Addressable market
Long-term structural growth drivers
The UK investment platform market forms
part of the broader UK savings and
investment industry. Across the industry,
trillions of pounds of assets are held by
individuals in products such as pensions,
ISAs, general investment accounts, bonds
and cash savings.
Historically, most individuals in the UK held their savings and
investments in products offered by banks, building societies,
investment managers, pension schemes, stockbrokers and life
insurance companies. A significant proportion of the overall
market continues to be held off-platform.
Investment platforms are increasingly attracting assets
previously held in legacy products, driven by the improved
customer outcomes they can deliver such as the ability to
manage investments easily in one place, increased flexibility
and investment choice, and often lower charges. As a result,
there is an established trend of non-platform assets gradually
moving into the platform market. This trend is expected
to continue.
The total addressable market for platforms is currently
estimated to be worth approximately £3 trillion. With only
one-third of this currently held on platforms there is a
significant long-term growth opportunity for investment
platforms.
UK platform market
The platform market is currently worth close to £1 trillion, with
around two-thirds held on adviser platforms and the remainder
held on D2C platforms.
The market has grown significantly over the last decade, with
total AUA having trebled from £0.3 trillion in 2012. The advised
and D2C segments of the market have both grown at similar
rates during that period, driven by long-term structural growth
drivers and an overriding theme of individuals taking greater
personal responsibility for their financial futures.
AJ Bell is one of only a few platforms operating at scale in both
the advised and D2C market segments. Our dual-channel
business model ensures that we are positioned to capture
assets from the whole addressable market, irrespective of
whether they are self-managed or using the support of a
financial adviser. This maximises our opportunity to capture an
increasing share of the assets flowing into the platform market,
driving further market share gains over the long term.
A fast-growing platform market
£bn
+11%
CAGR
693
205
716
224
488
492
763
233
530
800
246
554
570
170
400
434
132
302
473
145
329
308
94
214
363
117
247
986
317
669
912
287
625
The long-term drivers that are shaping our industry and driving new growth opportunities.
Demographics
Technology
UK state pension age is due to reach
67 by 2028
The UK’s ageing population and increased life expectancy
have led to an increase in state retirement age, causing
people wishing to retire earlier to be increasingly reliant
on their private pensions and savings. This is driving
people to be more actively engaged with their savings
and investments from an earlier age.
Structural shift from non-platform
providers to platforms
Technological innovation has made the investment
platform market more accessible to a broader range of
retail investors who are increasingly looking for simple,
intuitive products to help them achieve their long-term
financial goals.
Government policy
Financial
The workplace pension participation
rate in the UK has increased from 47%
to 79% since 2012
There is an increasing requirement for individuals to
take greater personal responsibility for their retirement
provision, evidenced by the UK Government’s policies
in relation to pension freedoms, auto-enrolment and
tax-efficient savings and investments.
There are over 29 million members
of private-sector DC pensions in the UK
There is a growing awareness of the UK savings gap,
being the difference between the level of current savings
and that necessary to provide a reasonable standard of
living in retirement, and the impact of the shift away
from defined benefit to defined contribution pension
schemes.
AJ Bell’s market share
%
4.4
4.3
1.5
1.8
4.5
2.3
3.9
1.3
5.0
3.2
4.7
2.8
7.2
6.7
6.9
6.2
6.5
5.5
6.4
4.8
6.1
3.9
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Advised AUA
D2C AUA
Source: Platforum UK Adviser Platforms (November 2022); Platforum UK D2C Market Overview (February 2023).
Advised
D2C
16 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023
17
Market overview
Key trends in
the investment
platform
market
We respond to market trends that
have the potential to impact our
business, ensuring we remain well-
positioned to continue capturing
growth opportunities.
Link to strategy
Sustainable
growth
Easy-to-use platform
propositions
Excellent
service
High staff
engagement
Economic uncertainty, higher
interest rates and cost-of-living
challenges
The recent period of elevated inflation has led to higher
interest rates and rising costs for many households.
This has put pressure on individuals, presenting a headwind for
inflows into the platform market as people prioritise day-to-day
expenditure over their longer-term investments.
Higher interest rates have also impacted the platform market
in different ways:
• Higher mortgage re-fix rates are affecting people’s ability
to make new contributions to their long-term investments.
• Equity valuations have fallen, whilst other asset classes have
become more attractive, with returns on cash providing
another headwind for investment platforms.
Our low-cost, easy to use platform propositions serve the
needs of both advised and D2C investors. This dual-channel
approach, which offers excellent value to customers, positions
us well to continue delivering net AUA inflows across the
platform. This was demonstrated in FY23 when we delivered
over £4 billion of net inflows, with both channels making
strong contributions, and we expect to see similar resilience
in net flows in FY24 and beyond.
Whilst there is pressure on new contributions, consolidation
of existing wealth continues to be a key driver of inflows to
our platform. This has been a significant contributor to new
business for many years as customers and advisers consolidate
pensions and other investments held across multiple providers
into one place. This activity is expected to continue driving
strong inflows and is not dependent on new contributions,
so is less impacted by the uncertain market backdrop.
Our open-architecture platform provides investment options
across a wide range of instruments and asset classes, which
has been increasingly important for our customers in the last
year. The higher rate interest environment has caused many
investors to rebalance their portfolios, with fixed income
instruments such as money market funds and gilts proving
increasingly popular throughout FY23. Our Cash savings hub
also provides another option for our D2C customers who want
to earn highly-competitive interest rates on their cash from a
range of partner banks.
The availability of these different options on our platform has
enabled us to meet the changing investment needs of our
customers, and helped to attract and retain assets which
might otherwise have been saved or invested in cash products
outside the platform market.
With the inflationary environment driving higher interest rates,
our diversified revenue model has benefited from improving
revenue margins. We remain committed to sharing efficiency
gains with our customers.
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L
i
Strategic report
Governance
Financial statements
Other information
Changing competitor landscape
Evolving regulatory landscape
UK investment platforms are regulated by the FCA. The aim of
its regulation is to serve the public interest by improving the
way the UK financial system works and how firms conduct
their business.
In recent years the FCA has shifted towards outcomes-based
regulation, placing greater requirements on regulated firms
to evidence how they are delivering good outcomes.
An example of this is the new Consumer Duty, which became
effective on 31 July 2023. The Duty sets out new rules and
guidance designed to drive good outcomes for customers.
These outcomes relate to: products and services; price and
value; consumer understanding; consumer support.
The Consumer Duty represents a significant change in the
regulator’s expectations of regulated firms and platforms need
to ensure they comply with its requirements to deliver good
outcomes for customers.
We have a strong compliance culture geared towards positive
customer outcomes and regulatory compliance.
We maintain an open dialogue with the regulator and actively
engage with them on consultation papers and industry issues, as
well as performing regular horizon scanning internally to ensure
all regulatory change is anticipated and shared with the business.
The Consumer Duty marks a step change in the FCA’s expectations
of its regulated firms, and we are supportive of the increased
focus on positive customer outcomes. We have always been a
customer-centric business focused on delivering good outcomes,
however the new regulation provided an opportunity for us to
review everything we do through the Consumer Duty lens. This
work ensured that our products, communications and customer
service functions continue to deliver good customer outcomes,
whilst also providing comfort that customers receive fair value
given our low charges relative to the broader platform market.
This ingrained customer focus, providing low-cost, easy-to-use
products and accessible investment content, positions us well
to operate successfully in this new regulatory environment,
providing strong foundations to continue growing customers
and AUA over the long term.
Our product philosophy of utilising our scale to keep charges
low for our customers ensures we continue to provide excellent
value for money. We reduced a number of charges across our
full-service propositions in the second half of FY22 and are
committed to continually reviewing our customer charges
as we grow.
The platform market is an attractive market supported by
long-term structural growth drivers.
Leading platforms can attract and retain customers with high lifetime
values, driving significant recurring revenues. Serving these
customers via a scalable platform can deliver attractive profit
margins, once sufficient scale is reached.
These characteristics have attracted significant capital into the
market, driving a continual evolution in the competitive landscape.
In recent years, several new competitors have emerged, particularly
in the D2C market, all addressing the market differently with
innovative new propositions. In the advised market we are seeinig
increased levels of adviser consolidation.
This has resulted in differentiated approaches across the market to
pricing models, service offering, functionality, customer experience,
and the level of brand and marketing activity.
We continually monitor the competitive landscape to ensure we keep
up with the pace of change and that our propositions remain at the
forefront of the market.
We are a trusted provider offering an easy-to-use platform, which
offers broad functionality and award-winning service at a highly
competitive price. This combination has driven strong growth in
customers and AUA over many years, and our scale ensures we
have a profitable and sustainable business model.
The challenging market backdrop has made it more difficult for
newer entrants to achieve the scale necessary to achieve profitability,
and business models are under increasing pressure, evidenced by
reduced competitor recruitment and marketing activity.
By contrast, we have continued to perform strongly and increased
our market share again in the year. From a position of financial
strength, we are investing in our brand, our propositions and
our people to support our long-term growth ambitions.
Last year we launched Dodl, a simple, commission-free investment
app for retail investors which sits alongside our full-service
AJ Bell platform.
In FY23 we have continued to develop Touch, our simplified platform
for the advised market, which will similarly increase our footprint in
the advised market alongside AJ Bell Investcentre. We completed a
closed beta launch in the year and plan to deliver the initial
proposition to market during 2024.
The combination of full-service and simplified propositions, operating
in both the advised and D2C markets, gives us a strong competitive
position relative to both incumbent platforms and new entrants. This
will help us to deliver further growth in customers and AUA in FY24
and beyond.
Alongside the investment in our propositions, we significantly
increased our brand investment in FY23 to improve the overall
awareness of the AJ Bell brand with potential customers. Whilst it is
still too early to draw firm conclusions from this investment, the initial
signs are positive, and this was one of the contributory factors in the
solid performance of our D2C platform in the year. We are committed
to continuing our investment in brand in FY24.
These ongoing investments strengthen our competitive position
and support our ambition to continue capturing market share.
18 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023
19
Our business model
Focus on long-term
value creation
Strategic report
Governance
Financial statements
Other information
Resources and inputs
What we do
How we do it
Delivering value for...
Brand and reputation
With over 29 years of experience, we
have built a trusted brand through
our high-quality service and
platform propositions. We raise
brand awareness through a
combination of sponsorship,
PR, social media and referrals.
A well-invested
technology
infrastructure
We operate a hybrid technology
model whereby our platform user
interfaces are developed in-house,
whilst our core back-office systems
are outsourced to industry expert
software providers. This model
provides a number of benefits,
including the ability to build
adaptable, easy-to-use interfaces
and reduces the cost of regulatory
compliance.
People and culture
Our success is built on delivering a
high-quality service through the
skills and passion of our people.
Financial strength
We are a materially debt-free
business which holds sufficient
funds to more than meet our
regulatory capital requirements and
for supporting ongoing investment
in the business.
Serving the needs of our customers by making
investing easier
We provide full-service and simplified platform products operating in both the
advised and D2C markets.
P r o p o s i t i o ns and products...
A strategy to achieve our purpose
...our customers and their advisers
A strong, secure and trusted platform which enables them
to manage their long-term savings with easy-to-use
products at a low cost, whether directly or with the help
of a financial adviser.
Sustainable
growth
Excellent
service
£76.1bn
Assets under administration
d
e
s
i
v
d
A
A culture
that places
our customers
at the heart
of everything
we do
D
i
r
e
c
t
t
o
c
u
s
t
o
m
er
...that match our custo m e r s ’
n e e d s
Full-service and
simplified platform
propositions.
Wide investment range
supplemented by our
in-house investment
solutions.
First-class service
model to support our
digital propositions.
Dual-channel platform
operating at scale in both D2C
and advised markets.
Efficient operating model
enables us to keep costs low
for customers.
Easy-to-use
platform propositions
High staff
engagement
See Our strategy to achieve our purpose p22
Our capital allocation priorities
As we grow and scale effectively, we will continue to invest in
strategic initiatives to deliver long-term growth.
We aim to pay dividends to shareholders in line with our stated
dividend policy, with our annual total ordinary dividend equal
to approximately 65% of our full year profit after tax.
Surplus capital accrued over time, in excess of that required
for our regulatory capital purposes, will be returned to
shareholders periodically in the form of special dividends.
Driven by our revenue model
Our revenue model includes a mix of fixed fees, ad valorem
and transactional charges which provide a balance of inflation
protection and resilience in the face of economic and capital
market fluctuations. A significant portion of our revenues are
recurring, in the form of charges levied on an annual or other
recurring basis.
...our people
Our learning and development framework ensures we
support and develop our staff to allow them to fulfil their
potential and progress their careers. We reward our staff
through our competitive pay and benefits package.
3-star
Engagement (Best Companies survey accreditation)
…our shareholders
Our high customer retention rates and diversified revenue
model combine to yield predictable and sustainable revenue
streams from the business, which quickly convert into cash.
This supports our progressive dividend policy whilst
enabling us to invest in future growth.
10.75p
Total ordinary dividend per share
…our other stakeholders
We have a strong social conscience and support our
local community with a variety of charitable initiatives.
£441,000
Charitable donations
Underpinned by factors
that determine our
long-term growth:
Market trends
and opportunities
Stakeholders
Responsible business
Risk management
Governance
See more p18
See more p28
See more p32
See more p60
See more p72
20 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023
21
Our strategy to achieve our purpose
Sustainable
growth
We focus on organic growth, leveraging our
brand. We operate a highly cash generative
business model with diversified revenue streams
which enables us to perform in different
market conditions. We will scale the business
effectively, utilising our dual-channel single-
operating model and our optimised hybrid
technology model that blends in-house and
third-party software.
Progress
• Investment in our brand with the commencement of our
‘feel good, investing’ multi-channel advertising campaign,
alongside our new five-year partnership as the title sponsor
of the Great Run Series.
• Total revenue increased by 33% to a record £218.2 million,
driven by our diversified revenue streams.
• Delivered a record PBT of £87.7 million, up by 50%.
Future focus
To grow the platform business by increasing brand awareness
and implementing a cost-effective distribution strategy.
To continue implementing solutions to deliver operational
efficiencies in the business.
Performance measures
• Revenue
• Revenue per £AUA
• Profit before tax
• PBT margin
• Diluted EPS
Principal risks
• Strategic risk
• Operational risk
• Financial risk
Scale with purpose
We agreed a new five-year partnership with the
Great Run Series. The series was a great success
in 2023, with a total of 169,000 participants,
452,000 spectators, and 4.7 million TV viewers.
Brand recall of participants post-event averaged 93%,
compared to 38% pre-event.
Strategic report
Governance
Financial statements
Other information
Easy-to-use
platform
propositions
We develop our products with a focus on
ease of use, service and price. Our solutions
are accessible via mobile and web, with
comprehensive functionality and intuitive
customers journeys. We provide helpful
content to support customers on their
investment journey.
Progress
• Our free pension finding service is now live for new and
existing customers.
• We have implemented new dealing functionality which
allows advisers to make a one-off investment using their
customers’ model portfolio asset allocation.
• The development of Touch, our simplified mobile-led
proposition for advisers, is ongoing with a closed beta
launch completed in the year.
Future focus
To further improve the customer journey to ensure we are
the easiest platform to use, considering the evolving
needs of our customers.
Performance measures
• Number of retail customers
• AUA
Principal risks
• Strategic risk
• Operational risk
• Financial risk
Innovation with purpose
Our free pension finding service is now live for new
and existing customers, simplifying the pension
consolidation journey by finding a customer’s
previous pensions and consolidating them it into
an AJ Bell SIPP.
In FY24, we will launch our new ready-made pension
product that consolidates a customer’s pensions into
a simple product, offering an investment range of
four AJ Bell growth funds with a transparent all-in
charging structure ranging from 45bps to 60bps.
22 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 23
Our strategy to achieve our purpose
Excellent
service
We offer a first-class customer service through
our knowledgeable, helpful and responsive staff,
and deliver a secure and resilient platform which
customers and advisers can rely on.
Progress
• Excellent customer retention rate of 95.2%.
• Achieved a Trustpilot score of 4.8-stars.
• Recognised as the Which? Recommended Investment
Platform provider for the fifth consecutive year.
Future focus
To continue to deliver a first-class customer service.
To develop the investment platform to ensure
it is scalable, adaptable, resilient and secure.
Performance measures
• Customer retention rate
Principal risks
• Strategic risk
• Operational risk
• Financial risk
Excellence with purpose
AJ Bell is here to help – whether it’s over the phone,
email or webchat, our friendly team will always be
straight-talking and transparent.
Our high-quality service, with over 95% of customer
calls in 2023 answered within 20 seconds, is reflected
in our market-leading 4.8-star Trustpilot score.
I have not had a bad experience in around 20
years as a customer. When I phone the help desk,
people are always helpful. That doesn’t happen
with a lot of help desks, or customer services.”
Tony, AJ Bell customer
Strategic report
Governance
Financial statements
Other information
High staff
engagement
We strive to promote an inclusive culture
where our people feel valued, respected as
individuals, and empowered to succeed in
their chosen career path. Our strong employer
brand and culture enable us to attract and
retain quality staff. We focus on personal
growth to develop and support our people
and help them achieve their potential.
Progress
• Achieved a 3-star accreditation in the Best Companies
survey for the sixth consecutive year.
• Recognised as Large Employer of the Year at the
North West Apprenticeship Awards.
• Our Talent Development Programmes were rated
‘Outstanding’ by Ofsted.
• Enhanced our pay and benefits package, including first
award of the new free share scheme for all employees
and increases to base pay and pension contributions.
Future focus
To continue to focus on staff engagement and
development, promoting our culture whilst enhancing
our employer brand.
Performance measures
• Best Companies score
Principal risks
• Strategic risk
• Operational risk
Engagement with purpose
Our Talent Development Programme (TDP) offers
those future Team Leaders and Managers at AJ Bell
the opportunity to obtain an approved management
qualification and put the skills they have learned
into practice. Programmes such as these were a key
contributor to over 180 internal promotions for our
people during the year. One of those promotees was
Emma, who joined the programme in 2020 and is
now Head of Strategic Planning and Governance.
It’s now been three years and four promotions
later and there’s no doubt I’ve used what I learnt
in the TDP – from building a team of ten from
scratch to now leading a project management
team, I’m constantly finding new ways to use
the different modules and lessons.”
Emma, AJ Bell employee
24 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 25
Key performance indicators
How we
performed
We use selected key performance
indicators (KPIs) to monitor progress
against our strategy.
These are the primary KPIs which we use to measure
strategic progress. Our KPIs are reviewed annually in
relation to the strategic objectives of the Company
through our business planning process and have
been linked to the relevant strategic drivers.
Link to strategy
Sustainable
growth
Easy-to-use platform
propositions
Excellent
service
High staff
engagement
Strategic report
Governance
Financial statements
Other information
Number of retail customers
491,402
440,589
382,754
295,305
232,066
+12%
Movement
2022 to 2023
Revenue
£m
104.9
126.7
218.2
145.8
163.8
Diluted EPS
p
9.47
7.47
10.67
11.35
16.53
+46%
Movement
2022 to 2023
+33%
Movement
2022 to 2023
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
Why this is important
The number of retail customers is the number that have at least
one funded account with an AJ Bell product at 30 September 2023.
The number of retail customers can be used as a measurement
to determine the success of our propositions, customer service
and marketing.
Why this is important
Our revenue is the total income generated by the Group’s
activities, comprising recurring ad valorem, recurring fixed and
transactional revenue.
Why this is important
Diluted EPS represents profit after tax divided by the weighted
average number of shares and unexercised options in issue
during the period.
Revenue provides a measurement of the financial growth of
the Group.
EPS provides a measurement of profit per share to determine
the value created for shareholders.
AUA1
£bn
52.3
56.5
72.8
69.2
76.1
Customer retention rate
%
95.4
95.5
95.5
95.2
95.0
PBT margin
%
35.9
38.4
37.8
35.6
40.2
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
+10%
Movement
2022 to 2023
(0.3)ppts
Movement
2022 to 2023
+4.6ppts
Movement
2022 to 2023
Why this is important
AUA is the value of assets for which AJ Bell provides either
an administrative, custodial or transactional service.
AUA is a measurement of the growth of the business and is the
primary driver of ad valorem revenue, which is the largest
component of Group revenue.
Revenue per £AUA1
bps
21.9
23.9
22.2
22.6
29.8
2019
2020
2021
2022
2023
+7.2bps
Movement
2022 to 2023
Why this is important
The customer retention rate is the average number of funded
platform customers during the financial year that remain funded
at 30 September 2023.
Customer retention is a measurement of customer satisfaction.
Why this is important
PBT margin is calculated as PBT divided by total revenue.
PBT margin is a measurement of the efficiency of the Group’s
business model in converting revenue into profits.
PBT
£m
48.6
37.7
55.1
58.4
Best Companies survey score
87.7
3
3
3
3
3
+50%
Movement
2022 to 2023
None
Movement
2022 to 2023
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
Why this is important
Revenue per £AUA is the total revenue generated during the year
expressed as a percentage of the average AUA in the year.
Why this is important
PBT is the profit generated by the Group before Corporation Tax
is paid.
Revenue per £AUA provides a simple measurement to facilitate
comparison of our charges with our competitors.
PBT is a measurement of the financial performance of the Group.
Profits can be used to strengthen the capital base, invest within
the business or be returned to investors.
Why this is important
The Best Companies survey provides employers with honest,
in-depth feedback from employees covering a range of matters
such as leadership, wellbeing, pay and more.
The survey score accreditation reflects our level of employee
engagement, with a 3-star accreditation representing the
highest standard of workplace engagement.
1. Our KPIs include alternative performance measures (APMs), which are indicated with an asterisk. APMs are not defined by International Financial Reporting Standards (IFRS) and
should be considered together with the Group’s IFRS measurements of performance. We believe APMs assist in providing greater insight into the underlying performance of the
Group and enhance comparability of information between reporting periods. For definitions, see page 172.
26 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 27
Stakeholder engagement
Understanding what
matters to our stakeholders
We believe effective stakeholder engagement is a key element in
driving a successful, sustainable business, built for the long term.
Strategic report
Governance
Financial statements
Other information
We proactively engage with and listen to
our stakeholders to understand what is
important to them. By understanding our
stakeholders, we can factor into boardroom
discussions the potential impact of our
decisions on each stakeholder group and
consider their needs and interests.
This table sets out who our key
stakeholders are, the key reasons we
engage with them, the areas they have a
material interest in and a summary of how
we engaged in the year when considering
what is most likely to promote the success
of the Company.
Link to strategy
Sustainable
growth
Easy-to-use platform
propositions
Excellent
service
High staff
engagement
Our customers and their advisers
Our people
Our shareholders
Other stakeholders
Our customers include retail investors,
financial advisers and wealth management
companies. Our success is dependent on
our ability to understand our customers’
needs and develop appropriate products
to meet those needs.
Our people are at the heart of our success.
Our success is built on delivering a high-
quality service through the skills
and passion of our people who bring
our values to life across the business.
Our shareholders include both institutional
and retail investors, including AJ Bell
customers and employees.
Delivering on our long-term strategic
objectives is dependent on our
shareholders’ support
Other stakeholders represent the local
communities in which we operate, as well
as the wider environment, our suppliers
and our regulators. As a socially
responsible business, we believe we have
a responsibility to our local communities,
wider society and our suppliers.
We operate in a highly regulated
environment and engage with our
regulators constructively.
An investment platform for our customers and advisers that:
A working environment for our people that:
Our shareholders want to invest in a business that:
Our other stakeholders want us to:
is secure, reliable, and easy to use;
•
• provides a high-quality service at low cost; and
• helps them meet their long-term financial objectives.
• facilitates their engagement at all levels;
• provides them with development opportunities;
• promotes their physical and mental wellbeing;
• promotes diversity and inclusion;
• rewards them appropriately; and
• encourages flexible working practices.
Customer services and websites
We have ongoing customer and adviser engagement through calls,
meetings, organised events, newsletters, our website and other written
communications.
Surveys, staff communications and feedback
We engage regularly with our staff through our annual staff survey, the
appraisal process, our intranet site, Company presentations, leadership
lunches and our wellbeing programme.
Our proposition websites provide our customers and their advisers with
a range of tools to assist them to manage their investments.
Surveys
Customer and adviser surveys are conducted on an annual basis with
the results reviewed at Board level. Specific user groups perform
beta-testing to provide further insight and feedback. This engagement
and feedback inform the way in which we can best serve our customers
and their advisers.
Fiona Clutterbuck is our director responsible for employee engagement.
The Employee Voice Forum meets to discuss a variety of themes raised by
staff, with recent topics including staff retention and hybrid working.
Company share schemes
We continue to encourage employee share ownership through our BAYE
scheme and free share scheme for all employees, to engage our workforce
in the performance of the Company and to align employee and
shareholder interests.
AJ Bell Way review
We engaged with our customers, in both D2C and advised markets,
through group discussions and in-depth interviews in order to
understand how customers perceive our culture and what they think
of us as a business.
AJ Bell Way review
We held group discussions with 36 members of staff and hosted an online
survey in which all our people were invited to participate to give their views
on our existing purpose and guiding principles as part of the AJ Bell Way
refresh.
• Hosted a range of events for advisers including Investival and our ‘on
and off the road’ seminars.
• Excellent customer retention rate of 95.2% and Trustpilot score of
4.8-stars.
• Refreshed our AJ Bell Way and guiding principles.
• 3-star Best Companies survey accreditation.
• Improvements to our staff pay and benefits package.
• First award of the new all-employee free share scheme granted
• Launched our pension-finding service for new and existing
in January 2023.
customers.
• Closed beta launch completed for Touch, our simplified mobile-led
proposition for advisers.
• A record intake of 34 new digital and investment apprentices in the year.
• delivers on its investment case; and
• provides long-term sustainable returns.
• act as a responsible corporate citizen in all respects; and
• conduct our business with integrity.
Ongoing investor relations programme
Through our investor relations programme, which includes regular
trading updates, management roadshows, investor and analyst meetings,
attendance at investor conferences, and our AGM which all members of
the Board attend, we ensure that shareholder views are brought into the
boardroom and considered in our decision making.
The CEO and CFO, supported by the Investor Relations Director, met
with analysts and investors throughout the year. We also undertook an
externally-facilitated investor study to provide the Board with detailed
feedback on how the Company is viewed by investors.
During the year we appointed Les Platts as a Representative Director
for Andy Bell, as a signficant shareholder. Through Les we hope to gain
access to Andy’s experience as well as Les’ own in-depth knowledge of
AJ Bell and the financial services sector.
Our Remuneration Committee Chair, Margaret Hassall also consulted
with shareholders on proposed changes to Directors’ remuneration and
Non-Executive Director fees.
Corporate broker updates
Our corporate broker and sell-side analysts also provide us with valuable
feedback and market insight. Our corporate broker delivers updates on
market dynamics and representatives are regularly invited to attend Board
meetings.
• Reported our performance quarterly.
• 46% increase in our total ordinary dividend.
• All resolutions passed at the AGM with a majority of more than 97%.
Engaging with our suppliers
We maintain and develop our business relationships. In addition to our
due diligence processes, we ensure management have regular feedback
sessions with representatives from key suppliers. We ensure our payment
terms are fair and in compliance with payment practices.
Engaging with our regulators
Led by our Compliance Team, we regularly engage with the FCA and
DWP on consultation papers and industry issues. We actively seek to
lobby via public consultation and with policymakers where we see
unfairness or unnecessary complexity.
Engaging with our communities and wider society
This year, we launched AJ Bell Futures Foundation to develop long-term
partnerships in our local communities. We have committed to the
contribution of 0.5% of our profits to the foundation each year. As part of
this, we have already seen our staff participating in volunteering activities
with both of our initial partner charities, Smart Works and IntoUniversity.
• 30-day payment terms.
• Launch of AJ Bell Futures Foundation.
• £441,000 of charitable donations.
• 542 hours of staff volunteering.
• Donation of over 100 laptops and desktops to local
primary schools and community organisations.
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28 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 29
Section 172 statement
For the benefit
of our stakeholders
We set out some examples of how the
Board has had regard to the duties under
s172 when considering specific matters,
and how it has considered the interests of
our key stakeholders in those decisions.
Further detail on how the Board operates,
including the matters it discussed and
debated in the year, having regard to its
s172 duties, are contained within the
Corporate Governance report on
pages 80 to 87.
The Board seeks to understand and
carefully consider each of our key
stakeholders’ interests, priorities and views.
The Board recognises that each decision
will have a different impact and relevance
to each key stakeholder, and so having a
good understanding of their priorities is
important.
Where stakeholder priorities conflict,
the members of the Board exercise
independent judgement when balancing
those competing interests in order to
determine what it considers to be the most
likely outcome to promote the long-term
sustainable success of the Company.
Although the Board engages directly
with some stakeholders, engagement also
takes place at different levels within the
business. The output from engagement
below Board level is reported back to the
Board and/or Board Committees and helps
to inform both Board and other business-
level decisions.
Further information about how we engage
with our stakeholders and their needs can
be found on pages 28 and 29.
Section 172 of the Companies Act 2006
(s172) requires Directors to act in the way
they consider, in good faith, would be
most likely to promote the success of the
Company for the benefit of its shareholders
as a whole and, in doing so, have regard
(amongst other matters) to:
a. the likely consequences of any decisions
in the long term;
b. the interests of the Company’s employees;
c. the need to foster the Company’s
business relationships with suppliers,
customers and others;
d. the impact of the Company’s operations
on the community and environment;
e. the desirability of the Company
maintaining a reputation for high
standards of business conduct; and
f. the need to act fairly between
shareholders and the Company.
Principal decisions:
AJ Bell Way review
Process and key stakeholder considerations:
The AJ Bell Way is a key management and communications
tool split into four sections:
• Our purpose – ‘To help people invest’ – and what that means.
• Our guiding principles, which drive our purpose-led culture
and values.
• Our key stakeholders and how we create value for them.
• The business model and strategy we employ to deliver value
to our stakeholders.
As it was 10 years since its introduction, we undertook a review
this year to identify whether our purpose and guiding principles
remained relevant to the business. It also provided an opportunity
to reinforce to staff who our key stakeholders are, and how
everyone needs to play their role in delivering value to them.
With the support of an independent third-party consultancy,
we engaged with key stakeholder groups, principally our
people, our customers and financial advisers.
The outcome of the process reaffirmed how important and
deep-rooted our purpose and guiding principles are. Some
refinements were suggested to better represent the business
as it is today and align our ambitions for the future.
People
We engaged with our people through four discussion groups
with 36 members of staff, online surveys which responded to
targeted questions based on qualitative insights, and interviews
with all members of our ExCo.
The key aims of the review were to:
• Identify the extent to which our people were aware of,
and familiar with, our purpose and guiding principles.
• Identify whether the guiding principles resonated with
our people and positively influenced their behaviour.
• To determine if our guiding principles were still fit for
purpose and, if not, identify how best to improve them.
Customers and Advisers
The engagement with our customers and advisers involved
three group discussions with 20 customers (who were
representative of our customer base) and in-depth interviews
with representatives of five adviser firms that use our platform.
The key aim of the review was to understand how our
customers and advisers perceived our brand and what
they thought of how we operate as a business.
Shareholders
Embedding the AJ Bell Way helps us to ensure that we run our
business and make decisions that are aligned to the interests of
all of our stakeholder groups, which is key to driving longer
term sustainable value.
Further information about the review of the AJ Bell Way can be
found on page 28.
Strategic report
Governance
Financial statements
Other information
Use of interest income to benefit our different stakeholders
Customers
We considered the need to treat our customers fairly and, in
anticipation of the new Consumer Duty which took effect on
31 July 2023, the need to ensure our products delivered fair
value to our customers such that they shared in the benefit.
We were also mindful that we communicated information
about interest rates in a way which enabled our customers
to understand the impact of holding cash and that such
information was easy to find.
When doing so, we considered:
• Our aim of keeping the direct charges borne by our
customers for our services lower than they would otherwise
be, and providing our customers with a high level of benefits.
• The level of investment in our technology that is needed to
ensure we continually improve and evolve our propositions
and customer experience whilst ensuring the highest level of
protection of our customers’ assets.
• The impact of the retained interest rate revenue on total cost
to our customers for using our services and the impact on
the overall value of our products.
• The level of the interest rates paid on cash balances by other
investment platforms and those paid by banks in relation to
products with similar characteristics such as ‘easy access /
call accounts’.
• The ability for some of our customers to access higher rates
on fixed term deposits via our Cash savings hub and/or to
gain interest rate exposure inside their existing AJ Bell
products by investing in products such as gilts and money
market funds.
People
We considered the need to continue to invest in our people,
without whom we would not be able to deliver a high-quality
service to our customers. Delivering a fair reward package
that reflected increased cost-of-living pressures was a key
consideration in our pay and benefit award this year. We were
also keen to implement a further award of free shares to
all our eligible people in order to further improve alignment of
their interests with those of our customers and shareholders.
Our community
We considered the automatic benefit that would accrue to our
communities from the related increase in profitability. This
arises because of our commitment to contribute 0.5% of our
profit before tax to the AJ Bell Futures Foundation each year
for distribution to charitable causes. We also registered the
AJ Bell Futures Foundation as a charity to further embed
our commitment to supporting our local communities.
Process and key stakeholder considerations:
Our core purpose is to help people invest by facilitating the
conversion of cash into stocks, funds, and other asset types,
whilst also providing a service to the subsequent disinvestment
of those assets and withdrawal of cash as and when required
during the customer lifecycle. However, there are other points
in the customer lifecycle when assets may be held in cash, so
as an ancillary part of our services we facilitate the placement
of customers’ cash with third-party banks. As a result of
pooling the cash that we deposit with banks, we are able to
achieve a significantly higher gross rate of interest than our
customers would be able to earn individually if they held cash
in accounts with similar characteristics, particularly where it
can be accessed or used on call, without notice. We use the
related revenue to pay competitive interest rates to our
customers whilst also keeping our customer-facing charges
low. We also reinvest in our customer propositions for their
long-term benefit. The net interest income generated is
recognised as revenue and is a component of our overall
diversified revenue model.
As in the previous financial year, macroeconomic conditions
had both positive and negative impacts on our business and
our stakeholders during the year, including the further rapid
increases in the Bank of England base rate from 2.25% at the
beginning of the year to 5.25% by 30 September 2023. Whilst
net interest income in the year was partially offset by lower
levels of transactional revenues, overall it contributed to a
significant increase in revenue.
Consequently, the Board and Executive Management Team
had to decide how this increase in revenue would be used to
benefit all stakeholder groups. In making those decisions the
following factors were considered:
Shareholders
We considered the need to balance the short-term impact on
our shareholders of not retaining and distributing the additional
revenue to them against the longer-term benefit to all
stakeholders of re-investing in our propositions, workforce
and brand.
When doing so, we considered:
• The negative impact that the downward cycle of interest
rates to the historic low of 0.10% had on our revenue margin
and therefore shareholder returns and our desire to rebuild
revenue margins back to long-term normal levels.
• The indirect benefit for our shareholders in the longer-term
of using the additional interest rate revenue to reduce other
customer-facing charges and increasing the interest rates
payable on customer cash balances, both of which have a
positive impact on the attractiveness of our products and
our ability to retain existing customers and attract new
customers.
• The longer-term benefit for shareholders of increased
investment in the AJ Bell propositions and brand to better
enable us to continue to benefit from the long-term
structural drivers of growth in the UK investment
platform market.
30 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023
31
Responsible business
Growing our
business responsibly
We are committed to growing our business
responsibly. Being principled and acting with
integrity are at the heart of the AJ Bell Way,
creating a culture with responsible decision
making at its core. This was evidenced by the
achievement of our AA MSCI ESG rating for
the third successive year.”
Peter Birch
Chief Financial Officer
In this section
Responsible
propositions
Responsible
employer
Supporting our
local communities
Environmental
awareness
p36
p39
p44
p46
We are driven by our purpose – to
help people invest – and our product
propositions help to address the growing
societal need for individuals to take
personal responsibility for their financial
future by enabling people to take control
of their own investments, be that directly
or with the help of a financial adviser.
We seek to understand the social and
environmental factors which impact our
business the most and to respond in a way
that creates long-term sustainable value
for all our stakeholders. During the year,
we undertook an externally-facilitated
investor perception study in which we
obtained feedback from our shareholders
on the ESG factors which are most
important for our business. We used
the results of this to inform our financial
materiality assessment as detailed on
page 34. The assessment shows that
having responsible propositions, being a
responsible employer and having effective
governance are the most material areas
of ESG for AJ Bell.
As well as focusing on our material topics,
we also consider the impact we can have
on achieving a more sustainable future
for society. To support this ambition, we
have aligned our responsible business
strategy to the United Nations Sustainable
Development Goals. Businesses play a
key role in the global achievement of the
goals and we have identified the targets
towards which we believe we can have
the greatest impact.
During the year we have continued to
ensure that ESG is embedded in our
business strategy with a focus on our four
responsible business pillars: responsible
propositions, responsible employer,
supporting our local communities and
environmental awareness. We have
delivered great results across our pillars
this year, with key highlights including:
• Launching the AJ Bell Futures
Foundation, our new charitable
framework focused on supporting
people who have faced significant life
challenges to give them opportunities
to improve their life chances and find
a path to financial security.
• Achieving a 3-star Best Companies
score, the highest standard of workplace
engagement, for a sixth consecutive year.
• Supporting our people through the
rising cost of living by enhancing
our pay and benefits package.
• Developing an operational net zero
roadmap to understand the key steps
which would be required for our
business to achieve net zero.
We are pleased by the progress we
continue to make in these areas but
acknowledge the need for continuous
development and have set several
ESG-related objectives for the year
ahead in our business planning process.
Strategic report
Governance
Financial statements
Other information
How we govern our responsible business strategy
Board of AJ Bell plc
The Board is the decision-making body relating to ESG matters, taking ultimate responsibility and providing oversight
of management actions. The Board receives a bi-annual update on our responsible business strategy.
Audit
Committee
The Committee is
responsible for reviewing
ESG-related financial
information and
disclosures.
Risk & Compliance
Committee
The Committee is
responsible for ensuring
ESG-related risks are
effectively embedded in
risk management
frameworks and
risk reporting.
Remuneration
Committee
The Committee oversees
that remuneration policy
and practices are designed
to support our strategy
and promote long-term
sustainable success.
ESG
Forum
The NED forum performs
reviews and deep dives into
specific ESG topics and
reviews ESG objectives for
management. The forum
provides recommendations
to the Board.
ESG working group
Our cross-functional ESG working group is responsible for the co-ordination of day-to-day activities, ensuring we deliver on our
objectives, and for the consolidation of our responsible business approach. ESG-related information is reviewed by the working
group before being presented to the Board, its sub-committees or the NED ESG Forum.
Executive responsibility
The CFO has the delegated authority from the Board to manage our responsible business strategy and is accountable
for its delivery. Executive Committee members are allocated specific ESG-related objectives in their business areas,
aligned to our strategy.
Our approach to responsible business
We behave in a responsible manner
with a focus on our propositions, our
people, our communities and the
environment. We believe this is
important for the long-term
sustainability of our business.
The Board is responsible for the
conduct of AJ Bell’s business and the
development of its strategy, as well as
promoting the long-term sustainable
success of the business. This includes
both how we embed our approach to
behaving responsibly across the
business and promote a healthy
corporate culture. The Board provides
oversight and has elected Peter Birch,
Chief Financial Officer, as the Executive
Director responsible for our approach
to responsible business.
Individual objectives have been assigned
to Executive Committee members and
a cross-functional ESG working group
exists for the co-ordination of day-to-day
activities. This structure allows us to fully
embed ESG across our existing business
strategy. Our NED ESG forum enables the
Board to provide more focused input into
specific areas.
In 2023, the Board received bi-annual
ESG updates. Details of the oversight
provided by the Board sub-committees
is disclosed in the Governance section
of this Annual Report.
See footnote 1.
We administer over £70 billion
of assets for our customers’
financial futures.
In the year our customers
withdrew over £960 million of
pension funds for their retirement
and just under 1,500 customers
used their Lifetime ISAs towards
purchasing a first home.
1.
The use by AJ Bell plc of any MSCI ESG research LLC or its affiliates (“MSCI”) data, and the use of MSCI logos, trademarks, service marks or index names herein, do not constitute
a sponsorship, endorsement, recommendation, or promotion of AJ Bell plc by MSCI. MSCI services and data are the property of MSCI or its information providers, and are
provided ‘as-is’ and without warranty. MSCI names and logos are trademarks or service marks of MSCI.
32 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 33
Strategic report
Governance
Financial statements
Other information
Responsible business
Materiality approach to ESG
In order to remain successful in the long
term, an understanding of our most
material ESG topics is essential to inform
company strategy, targets and reporting.
In our initial assessment, we have taken a
financial materiality approach, considering
the factors which may generate risks or
opportunities that have a significant
influence on future cash flows. In doing
so we considered the International
Sustainability Standards Board’s (ISSB) IFRS
Sustainability Disclosure Standards, which
the UK Government has confirmed its
intention to adopt.
We identified 13 ESG factors of material
importance to our business, with reference
to SASB, our MSCI ESG rating factors and
investor feedback. We then assessed each
area by impact on the Group’s cash flow.
To help inform our assessment, as part of
an investor-perception study we sought
feedback from our investors on which
ESG factors they consider most important.
Our results are presented in the chart on
this page.
This assessment highlights that having
responsible propositions, being a
responsible employer, and having effective
governance are our most material areas of
ESG. In relation to environmental factors,
the nature of our business model means
that our impact is relatively low, but it is
important for us to ensure that customers
have accurate and complete information
to use in making investment decisions.
We will review our materiality assessment
each year, adjusting our approach as
standards and best practice evolve, and
to ensure we are regularly reporting on
the most relevant ESG issues.
Material topic
Low
Medium
High
Responsible propositions
Impact on business
Responsible business area
Material issues
UN SDG targets
Data privacy and security
Employee engagement, health & wellbeing
Talent development
Systemic risk management
Corporate governance
Transparent customer information
Corporate behaviour
Diversity and inclusion
Responsible investment
Social advocacy
Operational emissions
Local communities
Financed emissions
Environment
Social
Governance
Definitions
Data privacy and security: Addressing the management of risks related to the collection, retention,
and use of sensitive, confidential user data and the resilience of IT infrastructure to cyber-attacks.
Employee engagement, health & wellbeing: Ensuring our employees are paid fairly, engaged at all
levels and the provision of a healthy and safe working environment including support of their physical
and emotional wellbeing.
Talent development: Ensuring the Group has the ability to attract new people as well as retain and
develop a highly skilled workforce.
Systemic risk management: Managing the risks arising from large-scale weakening or collapse of
operational systems upon which the business depends.
Corporate governance: Having an effective system of rules, practices and processes by which a
company is directed and controlled.
Transparent customer information: Providing adequate and clear information about our products and
services to support our customers in navigating their investment decisions.
Corporate behaviour: Overseeing and managing business ethics issues such as fraud, corruption,
executive misconduct and negligence.
Diversity and inclusion: Ensuring our culture, hiring and promotion practices embrace the building of
a diverse and inclusive workforce throughout the organisation that reflects the local communities in
which we operate and our customer base.
Responsible investment: Integrating environmental, social and governance considerations into the
management of our investment products and the investments we offer on our platform, and the
provision of data and content to support customers in making responsible investment decisions.
Social advocacy: Includes lobbying efforts with public policy makers and investment in initiatives to
advance societal issues, such as reducing the gender investment gap.
Operational emissions: Minimising our operational carbon footprint. This includes both direct
emissions and indirect emissions in our value chain.
Local communities: Supporting the economic development of our community and preserving the
local environments in which we operate.
Financed emissions: Minimising the carbon footprint associated with our AJ Bell Investments funds
and MPSs.
Responsible employer
Who it impacts
Customers and their advisers, wider society,
shareholders.
Why it is important
Our aim is to make investing easier and empower
people to invest for their financial future.
In fulfilling our role in society it is pivotal that we
offer propositions which enable more people
to invest.
• Transparent
customer
information
• Responsible
investment
• Data privacy and
security
• Systemic risk
management
• Social advocacy
Who it impacts
Employees, shareholders.
Why it is important
Our success is built on delivering a high-quality
service through the skills and passion of our
people, who bring our values to life across
the business.
• Employee
engagement,
health and
wellbeing
• Talent
development
• Diversity and
inclusion
4.4
13.2
5.5
3.8
5.5
4.4
10.2
Supporting our local communities
Who it impacts
Local communities, shareholders.
Why it is important
We have a strong social conscience and are
committed to making a positive contribution
to the communities in which we operate.
• Local
communities
• Social advocacy
3.8
5.5
4.4
10.2
Environmental awareness
Who it impacts
Customers and their advisers, wider society,
shareholders.
Why it is important
We recognise the importance of societal action
to reduce global emissions and are committed to
playing our part.
• Operational
emissions
• Financed
emissions
13.2
Our contribution to the United Nations Sustainable Development Goals (UN SDGs)
Key to UN’s Sustainable Development Goals (SDGs) targets
In addition to the financial materiality
assessment, we have also considered
how our business can impact wider
society. There are 17 UN SDGs that form
a shared global agenda to achieve a
better and more sustainable future for
all. We support the UN SDGs and this
year undertook a review to establish the
goals on which our responsible business
strategy has the greatest impact.
This review included a workshop held
with senior management from across
the business to better understand each
of the goals and their targets, and
discuss where we believe we can
have the most significant impact.
This identified five key targets which
we have mapped to our responsible
business strategy.
3.8:
4.4:
Achieve universal health coverage, including financial risk protection, access to quality essential health-care services and access to safe, effective,
quality and affordable essential medicines and vaccines for all.
By 2030, substantially increase the number of youth and adults who have relevant skills, including technical and vocational skills, for employment,
decent jobs and entrepreneurship.
5.5:
Ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic and public life.
10.2: By 2030, empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or
economic or other status.
13.2: Integrate climate change measures into national policies, strategies and planning.
34 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 35
Responsible business
Responsible
propositions
Trustpilot score
4.8-star
(FY22: 4.6-star)
Strategy
We offer products and services
aligned to our core purpose – to
help people invest. We do this in
a way that helps our customers
to achieve their financial goals,
whether self-directed or with the
support of an adviser. We also
provide options for customers to
invest responsibly on our platform
and are responsible stewards of the
investments we manage on our
customers’ behalf.
2023 highlights
• Implemented the FCA’s new
Consumer Duty requirements.
• Strong engagement in our Money
Matters by AJ Bell initiative.
Our focus on helping people to invest guides our product
philosophy; ensuring we offer accessible investing
solutions designed to help our customers to achieve
their long-term financial goals.
We report our approach to offering responsible
propositions in three strands: accessibility, product
offering, and customer security.
Accessible solutions
We believe in making investing accessible. Our low-cost,
easy-to-use propositions cater for a broad range of
investors. We produce content to educate more people
about investing.
Product offering
Our high-quality propositions offer products with a
long-term focus. We provide solutions to facilitate
sustainable investing and are responsible stewards of
the investments we manage on our customers’ behalf.
Customer security
We protect our customers’ data through robust
information security control. We campaign on behalf
of our customers where we see unfairness and
overcomplex regulations.
Strategic report
Governance
Financial statements
Other information
Accessible solutions
Making investment easier
At AJ Bell, we believe in making investing
accessible, whether investing directly or
with the help of a financial adviser. Our aim
is to help our customers to achieve their
financial goals and promote a better
understanding and awareness of
investment choices that ultimately deliver
good outcomes for our customers.
The FCA’s new Consumer Duty
requirements came into force at the end of
July, aimed at setting higher expectations
for the standards of consumer protection
across financial services. Our ingrained
focus on delivering good outcomes for
our customers meant that we were
well prepared for the implementation,
identifying no significant changes to
our business model or processes.
We provide educational investment
content to our customers and their
advisers through our weekly Shares
magazine, podcasts, online resources
and adviser events, providing market
information and expert analysis to
support our customers in navigating their
investment decisions. Our new ‘learn to
invest’ section of our D2C site provides
customers with a wide range of resources
from investing essentials to in-depth guides.
Our range of full-service and simplified
platform propositions ensure we are
well placed to support a wide range of
investors with different levels of wealth
and investment experience. Our simplified
proposition, Dodl, broadens our reach to
a new generation of investors across the
D2C segment. Dodl is a commission-free
service, aimed at younger, less-
experienced investors, offering
a simplified investment range and is
amongst the best-value investment
platforms in the market. Touch, due to
launch in 2024, is a mobile-focused
platform service that will broaden our
offering to financial advisers and help
them serve a wider base of clients.
Product offering
Our platform product philosophy
We provide mainstream products that we
believe will help our customers manage
their investments for the long term.
Our core products are SIPPs, ISAs and
Dealing Accounts. SIPPs and ISAs enable
customers to invest for the long term in a
government-approved, tax-advantageous
way and we also offer variations of these
products, such as the Lifetime ISA and
junior products, ensuring that we cater for
a wide range of customer requirements.
We offer an open-architecture platform
with investment solutions from market-
leading providers and our own AJ Bell
Funds and MPS, which cater for a wide
range of risk appetites. Through our
products, customers can buy, sell and hold
a broad range of investments including
shares, collective investments and other
instruments traded on the major stock
exchanges around the world.
Facilitating responsible
investment
We help to enable our customers
undertake responsible investing
through our investment options, data
and content.
As an execution-only investment
platform, we provide customers with
access to a diverse range of investment
options that allows them to diversify
and respond to ESG-related risks, as
they deem appropriate, whilst providing
them with information to help
customers assess the ESG factors of
investments.
Responsible investing guide
Customers can access a free
guide to responsible investing via
the ‘learn to invest’ section of our
website, providing an overview
of responsible investment
strategies.
Favourite funds filter
Customers can filter our
‘Favourite funds’ list to view only
funds which have a focus on
responsible investment or
sustainability.
Sustainability ratings
Customers can view and filter
by Morningstar’s Sustainability
Rating when researching funds,
ETFs and investment trusts on
our platform. This rating enables
investors to evaluate funds based
on the sustainability profile of
their underlying holdings.
AJ Bell Responsible
Growth fund
We offer a well-diversified fund
favouring companies with strong
ESG credentials. The fund
provides a low-cost, easy-to-
understand responsible investing
option for both our advised and
D2C customers.
Responsible Managed
Portfolio Service
This provides financial advisers
with a highly competitive ESG
solution for their clients. We
offer six responsible portfolios,
offering varying degrees of risk
for clients who want to achieve
long-term capital growth
through ethical investing.
Our research shows that, on average,
women in the UK have less than half
the level of savings and investments
than men do, equating to an estimated
£1.65 trillion gender investment gap.
We are seeking to help change this
through Money Matters by AJ Bell,
which aims to empower women
with the confidence to start their
investing journey.
The initiative publishes a regular podcast
and articles with content focused on
encouraging women to engage with
investing. Our latest ‘Financial Wobbly
Bits’ report provides a unique insight
into the financial pitfalls that
disproportionately affect women.
In addition, we hosted multiple
free-to-attend in-person and
virtual events including a
programme of events aimed
at females within AJ Bell.
It has been pleasing to see the
increasing engagement in the year,
with over 45,000 podcast downloads,
up 29% on FY22, and a 355% increase
in social media following.
Further information on all our articles,
podcasts, reports and events can be found at
ajbellmoneymatters.co.uk
36 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 37
Regular phishing testing is conducted to
ensure our staff not only know how to
identify an attack, but also respond in a
timely and effective manner. A positive
security culture is encouraged from the
top of the organisation, starting with the
Board, to every member of staff. We
encourage open and active dialogue with
security from all areas of the business to
ensure our controls remain effective and
enhance the safety of our customers
and data.
Campaigning on behalf of
retail investors
We actively seek to lobby the Government
and regulators via public consultation
and with policymakers where we see
unfairness or unnecessary complexity.
Our focus is always on campaigning for
simplicity and good customer outcomes.
During the year we have consulted with
the regulator on a number of matters
including ISA simplification and the
boundary between advice and guidance;
further information has been included
in our CEO’s review on page 14.
Tax transparency
We are committed to conducting
our tax operations in a clear and
transparent manner, both in paying
and collecting taxes.
We aim to comply with all tax
legislation, including reporting,
filing and payment obligations.
Responsible business
Integration of ESG into our
investment management
We integrate stewardship considerations
throughout our investment management
processes in various ways, both in our
dedicated set of responsible portfolios,
which are managed with an ESG mandate,
and in our standard range of portfolios.
The investment policy statements for all
our discretionary mandates contain a
dedicated section detailing how, and the
extent to which, stewardship and ESG
considerations should be factored into
our investment management activities.
This allows us to deliver for our customers
by acting as responsible stewards of
the investments that we manage on
their behalf.
For our responsible range of managed
portfolios, we operate within a consistent
framework to ensure that ESG credentials
are embedded. Where possible, we
invest in ETFs that track an MSCI Socially
Responsible Index (SRI), which gives a wide
range of norms and values-based screens
and exclusions. This ensures that we target
our investment in companies with higher
ESG rankings, whilst seeking to minimise
ESG controversy. A series of exclusions
removes companies from certain
industries, such as tobacco, controversial
weapons, and adult entertainment. Then,
a ‘best-in-class’ ranking system means
that, for the remaining companies, ESG
credentials are factored into relative index
weights, alongside market capitalisation.
This multi-layered approach ensures
that customers can feel confident that
ESG principles are consistently being
considered within the investment process.
In our standard range of portfolios, we will
prioritise more responsible funds where it
is the better choice, based on our usual
selection criteria, relative to standard
options in the market. Before inclusion in
any of our portfolios, a key component of
investment analysis is the robustness and
sustainability of the management team
and the strength of their governance
process. It is our policy to only invest
in products offered by managers who
comply with the principles outlined in the
UK Stewardship Code, or who can provide
a robust explanation as to why they do
not comply.
It is important that consumers can trust
sustainable investment products and we
welcome regulation aimed at clamping
down on unsubstantiated sustainability-
related claims. We regularly review our
product literature to ensure it meets the
test of being fair, clear and not misleading
and we are reviewing the FCA’s Sustainability
Disclosure Requirements and investment
labels package of measures to ensure we
meet the new requirements.
Customer security
Information security
We hold significant amounts of data
relating to our customers, products, and
business. We recognise that protecting this
information is critical to the success of our
business and the safeguarding of our
customers. We adopt the principle of
‘defence in-depth’ to provide multiple
layers of protection for critical information
and systems. This ensures that there are
multiple controls and processes ensuring
protection is both robust and resilient.
Our security processes are aligned with
industry best practice including ISO 27001
and the US National Institute of Standards
and Technology Cyber Security
Framework.
Information and cyber security threats
are continually evolving. To enable our
security teams to stay up to date, we
leverage external threat intelligence to
understand who might be targeting
the Company and our customers. This
capability assesses the techniques and
tactics used by attackers and helps ensure
our controls are appropriate. We combine
this capability with regular collaboration
and sharing with industry groups and
regulators to understand the threats across
the sector. To ensure our security
teams’ skills remain current with attacker
techniques, we invest in regular training
and development for staff, working
towards industry-recognised
qualifications.
We recognise that technology-enabled
crime can happen at any time of day and
as such operate 24/7 monitoring, provided
by a Security Operations Centre. This
capability monitors our systems and
controls for any anomalies or alerts and
ensures they are immediately investigated
by security experts. Our products and
platforms have security ‘baked in’ by
virtue of a Secure Software Development
Lifecycle. This ensures that security is
considered as part of every stage of
technology deployment, from design and
procurement through to implementation
and maintenance. Our systems are
regularly tested by accredited third-party
Ethical Hackers who undertake
penetration testing exercises to ensure
our systems are resistant to attack.
This, combined with a process of
continuous review and testing, ensures
that our controls are always improving
to enhance the security of our critical
systems and data.
We recognise that our staff are our most
valuable asset when it comes to protecting
critical information and systems. All staff
undergo security training, and we provide
regular advice and guidance to staff via all
staff updates and intranet blogs.
Strategic report
Governance
Financial statements
Other information
Responsible
employer
Best Companies score
3-star
(FY22: 3-star)
Percentage of staff female
38%
(FY22: 39%)
Percentage of staff
ethnic minorities
20%
(FY22: 16%)
Staff with AJ Bell
share interests
75%
(FY22: 52%)
Strategy
We will develop and support our
people to help them achieve their
potential. We will strive to ensure our
staff are actively engaged. Our
strong employer brand and culture
will enable us to attract and retain
a diverse and talented workforce.
2023 highlights
• Maintained our 3-star
accreditation in the Best
Companies survey.
• Improved the diversity of
our senior management.
Our people are at the heart of our continued growth and
success. We take pride in their career development, and we
support and empower them to drive the business forward.
We focus on creating a highly collaborative
culture where people feel motivated,
valued and supported.
Our guiding principles, alongside our
simple purpose, are a key tool in fostering
the right culture in the business, driving
responsible behaviour and ensuring that
staff are fully engaged with our strategy
and goals. As part of the AJ Bell Way, the
existing guiding principles had been
around for over 10 years, so during the
year we undertook a process to revisit
them, ensuring they continue to reflect
who we are as a business and are aligned
to our ambitions.
As part of this process we held several
workshops, engaging our staff, as well as
some of our customers and advisers,
with feedback from these sessions used
to inform an all-staff survey. The results
showed that we have a positive, deep-
rooted culture, but some of the language
used in our existing principles could
be refreshed to ensure they remain
meaningful to our people. We have
therefore updated our principles, as
set out opposite.
These refreshed guiding principles have
been communicated and embedded
across the business to enable our people
to apply them in their roles each day.
Our guiding principles
Principled
We act with integrity
Knowledgeable
We know our stuff
Straightforward
We simplify the complex
Personal
We put people first
Ambitious
We set high standards
38 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 39
Responsible business
Employee engagement
Our staff engagement framework focuses
on the eight measures used within the Best
Companies survey. Best Companies is an
independent workplace engagement
specialist that works with organisations
to measure, improve and recognise
workplace engagement and compile
the ‘Best Companies to work for’ list.
We were delighted to make it into the top
20 of the 100 Best Companies list and
maintain our position in the top five
financial services companies in the UK,
keeping our status as a 3-star company,
the highest star accreditation Best
Companies award, for the sixth
consecutive year. This achievement is
testament to our ongoing commitment
to invest in our people and to the positive
culture we have built.
Our engagement results in relation
to both staff wellbeing and support from
managers remain high and are above the
average score relative to other companies
that received the highest 3-star rating. This
reflects our continued focus on supporting
employee wellbeing and highlights the
strength of our managers.
We recognise the importance of a highly
engaged workforce and look to continually
evolve our approach.
3-star accreditation
for six consecutive
years
Overall engagement
response rate
87%
(FY22: 86%)
AJ Bell employee wellbeing
2023
5.89
5.59
0
7
(AJ Bell FY22: 5.95)
AJ Bell
3-star companies
During the year our new Chair, Fiona
Clutterbuck, replaced Helena Morrissey
as our director responsible for employee
engagement, supported by our other
Non-Executive Directors. The forum has
discussed a variety of themes raised
by staff, including our Employee Value
Proposition, staff retention, hybrid working
and executive remuneration. Our hybrid
working policy provides our staff with a
blend of working at home and working
in the office, in a way that balances the
needs of the business, their teams and
themselves, as well as ensuring we retain
our unique AJ Bell culture.
Staff events
Social activities form an important part of
our culture and we offer our people a wide
range of events, including our monthly
socials, summer party, and Christmas
party; which was attended by over 700
of our people.
Our leadership lunches have continued
to be popular, providing an opportunity
to learn more about our senior
management team and their areas of
the business. In addition to this, we have
published a number of interviews in
conversation with members of our
Executive Committee on our intranet
throughout the year, enabling staff to gain
a greater insight into their focus areas and
business performance.
Our pay and benefits package
We conducted a full review of our pay and
benefits offer last year, which resulted in
several enhancements to our package for
employees, effective from the beginning
of FY23. The changes included an average
pay increase of over 7%, a new annual free
share award for all employees with awards
worth up to £2,000, increases to our
matched employer pension contribution
levels, as well as a number of wellbeing
initiatives including increased holiday
entitlements, enhanced paternity pay
and a new health cash plan.
Employee share ownership is embedded
in our culture and ensures our workforce
continues to share in the long-term
success of the company. 75% of our
people owned shares or share options in
AJ Bell as at 30 September 2023 (52% as at
30 September 2022) following the
introduction of our new permanent
free share scheme for all employees,
the first award of which was issued in
January 2023.
In the current environment of continuing
cost-of-living pressures, we have made
further enhancements to our pay and
benefits package for FY24, including an
average increase in pay of over 5% and
a further uplift in pension contributions.
Employee Voice Forum
Meaningful staff engagement is key to
realising our strategic objectives. Our
Employee Voice Forum (EVF) was created
in 2019 to support engagement between
staff and the Board as we grow the
business. Made up of staff representatives
from across the business it is responsible
for gathering ideas and suggestions from
staff on a range of topics to ensure their
voice is heard and considered within the
Board’s decision-making process.
Strategic report
Governance
Financial statements
Other information
Talent management
The quality of our people and building
a robust and diverse talent pipeline for
the future is essential to delivering our
long-term growth strategy. Our aim,
therefore, is to attract and retain talent
across the business and provide them with
opportunities for personal growth that will
help us to deliver our goals and them to
fulfil their potential.
We encourage our staff to invest in their
personal growth, career, and future with
AJ Bell, taking ownership of their own
personal and professional development.
Our in-house Learning & Development
Team provides extensive training and
support to enable our staff to enhance
and broaden their skills.
Talent programmes
We have two well-established Talent
Development Programmes which look to
develop staff identified as being potential
future team leaders and managers at
AJ Bell. It enables those successfully
completing the programme to obtain
an approved management qualification
and the opportunity to put the skills they
have learned into practice to help further
their career.
Our apprenticeship employer provider
status enables us to offer these
programmes, delivering a bespoke,
high-quality programme in-house by our
qualified Learning & Development Team.
This status is recognised by the Chartered
Management Institute, Education Skills
Fund Agency and Ofsted. We were
delighted this year to receive an
‘Outstanding’ Ofsted grading for these
Talent Development Programmes.
We also run a Senior Management Talent
Development Pathway which is specifically
tailored to develop those high performing
employees who wish to progress to Head
of Department, Director and executive-
level roles across the business.
To add structure and clarity to those
looking to progress, we have also worked
with managers and heads of department
to create Career Pathways in various teams
and business areas. The pathways are a
framework setting out the typical career
pathway in each team, depending
on whether people want to take a
management route or a technical
specialist route.
Our commitment to developing and
supporting our people to achieve their
potential is evidenced by over 180 of our
people being promoted internally during
the year.
Case study:
Apprenticeships
We continue to strengthen our
Investment Operations Specialist and
Digital Apprenticeship programmes,
for which we were awarded the ‘Large
Employer of the Year’ at the North West
Apprenticeship Awards.
in our Operations and Customer
Services departments over the course
of their programme. They also study for
the Chartered Institute of Securities &
Investments’ Investment Operations
Certificate.
This year we launched the new AJ Bell
Academy, an initiative which aims to
create a greater sense of community
for our apprentices and showcase
what we have to offer as an employer.
We recently welcomed the 100th
apprentice to join our scheme since
it began in 2017 as part of this year’s
intake of 34 new apprentices – the
largest intake to date.
With our Investment Operations
Specialist apprenticeship programme,
learners gain a wide understanding of
the business by rotating around teams
Our Digital Apprenticeship Programme
is a learning pathway in our Technology
Services Department. Over the course
of their four-year programme they also
study at Manchester Metropolitan
University for a Digital Technology
Solutions BSc with Honours. We were
pleased to congratulate our first cohort
of digital apprentices who graduated
this year and look forward to
continually supporting them as they
embark on their next steps in their
careers with us.
Internships
Our six-week investments internship is a
great way for candidates to boost their
career prospects. This year we welcomed
12 interns to the business who were
tasked with two projects: to improve the
automation, efficiency and transparency of
our investments factsheets, and automate
the process of answering due diligence
questionnaires using an internal large
language model.
Working as a team, the interns produced
great results which were presented to the
Investments Team within AJ Bell, with the
intention for these processes to now be
developed for use in our business-as-usual
activities.
40 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 41
Responsible business
Diversity and inclusion
At AJ Bell, we value diversity and a culture
that attracts, values and retains people
from all backgrounds, regardless of age,
caring responsibilities, disability, ethnicity,
gender, religion or sexual orientation. We
strive to promote an inclusive workforce
where our people feel valued, respected
as individuals, and empowered to succeed
in their chosen career path.
Our commitment to diversity and
inclusion is a continuous process and
our framework aims to help us better
understand diversity in the context of
our business and the wider industry.
The framework centres around four
key components, with three overarching
objectives.
Our framework
Demographic diversity
Our workforce is diverse and
represents the society it serves.
Cognitive diversity
We recognise, encourage and
acknowledge diverse views and
perspectives.
Inclusive practices
and policies
Inclusive leadership
and behaviour
Our people policies and practices ensure we are an inclusive employer that
values and enables diversity.
Demographic diversity
Our framework aims to recognise and
acknowledge demographic diversity,
in order to maximise the benefits of a
demographically diverse workforce.
We seek to achieve this by focusing on
both gender and ethnic diversity in our
senior management team and wider
workforce, with the target that
our workforce demographic is
representative of the society in
which we operate.
We have set a number of five-year
desired outcomes and interim
milestones to measure progress
against this target.
Our workforce as at 30 September 2023
Gender
Male
Female
Board of Directors
Ethnicity
White
All other ethnic groups
Board of Directors
(6) 67%
(3) 33%
(9) 100%
2022: (6) 67% / (3) 33%
2022: (9) 100% / (0) 0%
Other senior management2
Other senior management2
(18) 78%
(5) 22%
(19) 83% (4) 17%
2022: (19) 86% / (3) 14%
Total employees3
2022: (20) 91% / (2) 9%
Total employees3
(845) 62%
(528) 38%
(1,036) 80% (251) 20%
2022: (721) 61% / (452) 39%
2022: (779) 84% / (152) 16%
UK benchmark4
UK benchmark4
49%
51%
81%
19%
2022: 49% / 51%
2022: 86% / 14%
Total number of
employees 20231
1,373
(FY22: 1,173)
1. Additional employee data is provided within note 7 which shows the average position during the year.
2. Other senior management is defined as an employee who has responsibility for planning, direction or
controlling the activities of the Group, or a strategically significant part of the Group, other than the
Board of Directors.
3. Ethnicity data has not been disclosed by 7% of employees.
4. Gender and ethnicity benchmark data is as per the UK (2021) census.
The ethnic diversity of our wider workforce
is representative of the society we operate
in, and our percentage of employees from
ethnic minorities is slightly higher than the
UK average.
We have focused on improving the
diversity of our senior management
population through activities including
targeted recruitment, talent programmes
and succession planning. We are pleased
to report improvements in our ethnic and
gender diversity at this level with two new
appointments made in the year.
Our most recent gender pay report, which
we publish annually, details our approach
to supporting a diverse and inclusive
workplace. We are pleased that our mean
gender pay figure improved this year,
and our difference in median gender
pay remains one of the lowest in the
investment platform sector, reflecting the
progress we are making in addressing the
gender profile of our workforce, which,
in common with most financial service
companies, has traditionally seen a higher
proportion of men in senior and higher-
paying roles than women.
We remain confident that men and women
are paid equally for doing equivalent jobs
across our business and we are pleased to
see the continued progress we are making.
Our recruitment approach also actively
seeks to address the traditional imbalance
of men working in tech roles with targeted
campaigns for women, including the use
of gender decoders in adverts. In support
of these campaigns we regularly speak at
industry events such as the Manchester
Tech Festival and Reframe Women in Tech.
Through actions such as these we are
confident that we are building a pipeline
of future female talent in tech.
These steps, together with other initiatives
such as ensuring a balance of women
and ethnically-diverse participants on
our internal development programmes
for Team Leaders, Managers and Senior
Managers, and providing opportunities for
coaching and mentoring, mean we can be
confident that we are continuing to build
a strong diverse talent pipeline for more
senior roles in the future.
Strategic report
Governance
Financial statements
Other information
Cognitive diversity
The framework also focuses on cognitive
diversity, the diversity of thought, with
the aim to maximise the benefits that a
cognitively-diverse leadership team brings.
We believe that diversity of thought can
increase team performance, bringing
together different perspectives to improve
the way that challenges and opportunities
are addressed.
Our approach to cognitive diversity
reflects external research which suggests
two components that underpin the
potential for and realisation of diversity
of thought:
• Group composition: the inherent
potential of individual group members
to think differently from each other,
which may be based on experiences,
beliefs and the way they prefer to
address problems.
• Group culture: the attitudes, practices
and group dynamics that influence
whether individual group members
are open to unreservedly sharing their
thoughts and whether they actively
attend to the perspectives of others.
This year, members of our Executive
Committee and Board performed a
cognitive diversity assessment which
showed we have strong cognitive diversity
in our leadership team, and we hosted a
number of events during Neurodiversity
celebration week, an initiative that
challenges stereotypes and
misconceptions about neurological
differences. Understanding neurodiversity
in more detail and how other people think
and interpret situations allows our staff
to understand their colleagues better,
enabling them to work more effectively
together. We also provided staff with
training to raise awareness and
understanding of cognitive diversity,
utilising the DiSC assessment model.
Inclusive practices and policies
We are committed to having fair policies
and practices in place that value a diverse
workforce and enable it to thrive.
We are focused on ensuring diversity is
reflected on our talent programmes,
succession plans and promotions, and
where there are any gaps we will take
proactive steps to address these. We also
ensure that diversity and inclusion are
embedded across our existing HR policies,
including the Diversity and Inclusion Policy
contained within our Employee Handbook.
To monitor the effectiveness and
implementation of these policies, we
review a range of data including external
advocacy scores, employee engagement
scores and feedback from our EVF.
Inclusive leadership
and behaviours
We recognise the importance of
demonstrating inclusive behaviours from
the top down to strengthen our inclusive
culture, ensuring that senior management
are strong advocates of the framework.
We achieve this by providing training to
managers to ensure that they understand
the benefits of having an inclusive culture
where diversity is valued and enabled, as
well as setting appropriate objectives for
all managers, principally focused on
driving positive behaviours.
Promoting health and
wellbeing
We place a great deal of importance on
the health and wellbeing of our staff,
investing in a wide range of support that
we continually review.
This year we introduced the health cash
plan for all employees, providing cash back
to cover costs such as dental, physiotherapy
and optical bills. We provide free flu jabs
for staff and an on-site AJ Bell gym at our
Manchester office with Personal Trainers
who run daily group classes for staff.
Staff in our London and Bristol offices are
provided with free local gym membership.
In addition to daily classes, our on-site
Personal Trainers provide a range of
services including free private health checks
and numerous fitness-based initiatives
throughout the year focused on providing
nutritional and exercise-based education.
As the new title partner of the Great Run
Series we gave staff the opportunity to
participate in any of the six Great Run
Series events in Glasgow, Newcastle,
Manchester, Birmingham, Bristol and
Portsmouth, as well as the opportunity
to take part in the AJ Bell World Triathlon
Series through our ongoing sponsorship of
the event. It was pleasing to see over 130
of our staff take part in the Great Run
events, which bring both physical and
mental wellbeing benefits.
We have a number of Wellbeing
Ambassadors across the business who
are trained in mental health first aid and
are available to support colleagues that are
experiencing mental health issues. This is
further complemented by our Employee
Assistance Programme, which gives our
people access to independent confidential
advice and support should they need it.
During the year, we launched our AJ Bell
Family Wellbeing Network, which aims
to bring our employees together to offer
support and educate on important topics.
Topics so far have included working
parents’ peer advice and support,
miscarriage, and domestic violence.
Anti-bribery and corruption
We are committed to maintaining
high legal, ethical and moral
standards. This is evidenced by our
guiding principles, which define our
business and inform everything we
do. We conduct all our business in
an honest and ethical manner, and
we have zero-tolerance of bribery
and other corrupt activities. We are
committed to acting professionally,
fairly and with integrity in all
business dealings and relationships.
AJ Bell maintains a number of
policies and procedures to help
guard against bribery and
corruption. This includes an
anti-bribery and corruption policy,
and policies and procedures on
whistleblowing, fraud and anti-
money laundering, market abuse
and gifts and hospitality.
All policy and guidance statements
are available on our intranet and are
updated periodically. Staff are also
required to undertake mandatory
training, including regular refresher
training, to raise staff awareness and
ensure they fully understand what is
required of them.
Human rights and
modern slavery
AJ Bell has an important role to play
in supporting human rights and we
have policies and governance
processes in place to mitigate risks.
We have a zero-tolerance approach
to slavery and human trafficking of
any kind, and we are committed to
acting ethically and with integrity in
all our business dealings and
relationships. We implement and
enforce effective systems and
controls to ensure modern slavery
is not taking place. This approach
applies to our own business, all
persons working for us or on our
behalf in any capacity, and to all our
supply chains. In accordance with the
Modern Slavery Act 2015 we publish
our Modern Slavery statement on our
website, and this sets out the steps
that we have taken and our ongoing
commitment to this important topic.
As part of our zero-tolerance
approach, and to increase awareness
of modern slavery and human
trafficking, our Risk and Compliance,
HR and Procurement staff are
required to complete mandatory
training. All other members of staff
have the opportunity to enrol on the
training voluntarily.
42 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 43
Responsible business
Supporting our
local communities
Charitable donations
£441,000
(FY22: £299,000)
Staff volunteering
542 hours
(FY22: 456 hours)
Strategy
We have a strong social conscience
and are committed to making a
positive contribution to the
communities in which we operate.
2023 highlights
• Launched and embedded the
AJ Bell Futures Foundation.
• Became the title partner of the
AJ Bell Great Run Series.
We ensure that our communities share in our business
success and the passion of our people.
At AJ Bell we have a strong social
conscience and encourage our staff to
give something back through charitable
and voluntary activities.
We are proud of the great work they do
to give back to our local communities
and support them through paid time
off for volunteering, which this year has
included volunteering for a range of local
charities such as Cash for Kids and Wood
Street Mission and working with our
AJ Bell Futures Foundation partner
charities, Smart Works and IntoUniversity.
Through our matched fundraising we
donate 50p for every £1 raised for charity
by staff, up to a maximum of £100 per
person and £500 per group activity.
University of Salford
partnership
We continued to build our partnership
with the University of Salford, supporting
students completing an undergraduate
computing degree. We provided real-
world challenges for the university’s
annual ‘HackCamp’, a module where
students collaborate to solve issues
experienced in business.
We also agreed to sponsor the ‘AJ Bell
Technology Award’ for another three
years, awarded to the best-performing
students across the university’s computing
degrees. The winners of the awards were
invited to our Manchester office to meet
our Technology Team and see first-hand
the crucial role technology plays in our
business. We are proud to sponsor
these awards and to help build the next
generation of technology talent in
our local community.
Strategic report
Governance
Financial statements
Other information
AJ Bell Futures Foundation
To develop more deep-rooted,
long-term partnerships in our
communities, this year we created
a new charity, the AJ Bell Futures
Foundation.
The core aim of the charity is to help
people into a position where they can
invest in their futures, with activities
focused on supporting people who
have faced significant life challenges to
give them opportunities to improve
their life chances and find a path to
financial security.
We have committed to provide 0.5%
of PBT to the foundation annually, to
be distributed to selected charitable
organisations that empower people to
take control of their future, through
initiatives focused on self-advancement.
The trustees of the Charity include
our Chief Financial Officer, Chief
Communications Officer and HR
Director, as well as two AJ Bell
employees who were selected
following an application process
which was open to all staff.
Case study:
AJ Bell Great Run Series
In January, we announced our new
five-year sponsorship as the title
partner of the AJ Bell Great Run
Series. The partnership includes the
flagship Great North Run, the world’s
largest half marathon and the UK’s
biggest running event, as well as the
other events staged in Glasgow,
Manchester, Birmingham, Bristol
and Portsmouth.
These fantastic mass-participation
community events can have a
positive effect on participants’
physical health and mental
wellbeing, as well as raising crucial
funds for charities. In 2023, over
160,000 people took part in the
runs, raising an estimated total of
£25 million for a range of charities.
We are proud to support an event
which has such a significant impact
on our local communities.
Official charity partner
As title partner, we nominated MIND
as the official charity partner of this
year’s Great Run Series. MIND is
a charity that provide advice and
support to empower anyone
experiencing a mental health
problem as well as campaigning to
improve services, raise awareness
and promote understanding.
Through this partnership, over
£700,000 was raised for MIND by
participants in the run series.
~£25m
Raised for charities by
participants in the run series
Principal charity partners
To select our first principal partner
charities, we evaluated a number
of potential organisations considering
the objectives and mission of the
Foundation and sought input from our
staff on which ones we should support.
Our first charity partners are Smart
Works, which exists to give women the
confidence they need to reach their full
potential and secure employment, and
IntoUniversity, which supports young
people from disadvantaged areas to
build their capabilities and access the
opportunities that can better their lives.
Each of our partner charities received
donations of £100,000 in the year.
This enabled Smart Works to open a
brand-new Greater Manchester centre
and since May they have supported
199 women with their coaching and
clothing service, helping women to
secure employment and change the
trajectory of their lives.
IntoUniversity opened a new Salford-
based learning facility centre within
three miles of our Manchester office
and delivered the programmes
supported by our Future Pathways
partnership to over 20,000 young
people nationwide – 900 of which
were fully funded directly by
our donation.
It has been great to see staff volunteer
over 200 hours of time with our charity
partners, as well as raising additional
donations by taking part in fundraising
events such as the ‘Cycle for Smart
Works’ challenge.
Staff nominated causes
The Foundation ringfences 10% of its
funds each year for staff-nominated
causes, aligned to the aims of the
charity. It has been pleasing to see staff
taking up this unique opportunity and
as a result we have donated over
£25,000 to 32 staff-nominated causes.
44 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 45
Strategic report
Governance
Financial statements
Other information
The energy efficiency across our offices
remains continually under review, from
lighting and water usage to investing in
more efficient IT equipment and the use of
video conferencing facilities. Throughout
the business we recycle 100% of our
confidential waste. In addition, none of the
waste from our Manchester head office
goes to landfill, with waste sorted off-site
in a waste recovery facility to be recycled
or used to create refuse-derived fuel.
We continue to make progress on our aim
to reduce paper usage across our offices.
Over a number of years we have reviewed
the use of paper across our offices and
have made several improvements to our
own processes to reduce the reliance on
paper, including our communications with
customers and documentation associated
with our advised platform. This year, we
completed the transition of payslips for
our Investcentre customers to online
availability, providing a more efficient
service for our customers whilst also
reducing our environmental impact.
Our local environment
We ran several initiatives focused on
improving our local environment, giving
our staff the chance to make a difference
to the communities in which they live.
We continued our partnership with City
of Trees, a charity that plants trees and
restores woodlands in Greater Manchester.
Through this, our staff were involved in
volunteering days which included a
range of activities from tree planting to
woodland management.
In March, teams across the business took
to the streets in our local communities to
litter pick on behalf of the Great British
Spring Clean. In total, our people collected
47 bags of litter over a combined 283 hours.
To help reduce electronic waste and
support the education of local children,
our Technology Team refurbished and
donated over 100 laptops and desktops to
local primary schools and community
organisations.
Case study:
Carbon offsetting
We recognise that there is more that
we can do to reduce our emissions.
Alongside the adoption of initiatives
to reduce our carbon emissions, we
have again partnered with Carbon
Footprint Limited to invest in
overseas projects and offset our
Scope 1 and 2 carbon emissions
for 2022.
We have chosen to support the
distribution of improved cooking
stoves in India. The purpose of the
project is to facilitate clean cooking
practices and reduce health risk due
to indoor air pollution along with
household drudgery amongst
families living below the poverty
level in villages of Maharashtra. By
supporting this project we continue
to be carbon neutral for the fourth
consecutive year.
Responsible business
Environmental
awareness
Operational emissions
per FTE (Scope 1 & 2)
0.29 tonnes
(FY22: 0.34 tonnes)
Operational emissions
per customer (Scope 1, 2 & 3)
0.021 tonnes
(FY22: 0.024 tonnes)
Operational emissions
(Scope 1, 2 & 3)
10,217 tonnes
(FY22: 10,476 tonnes)
Strategy
We seek to minimise waste and our
impact on the environment. We
assess the impact that climate
change could have on our business
and respond to those risks and
opportunities.
2023 highlights
• Built on our first TCFD report
to further comply with the
recommended disclosures.
• Developed an operational net
zero roadmap.
At AJ Bell, we recognise the importance of societal action
to reduce global emissions and are committed to playing
our part.
Following the publication of our first
set of Task Force for Climate-related
Financial Disclosures (TCFD) framework-
aligned disclosures in FY22, our focus
this year has been on deepening our
understanding of the impact our
operations have on the environment
across our Scope 1, 2 and 3 emissions
and assessing the steps we need to take
to deliver the carbon reductions required
to reach net zero emissions.
As over 85% of our total operational
emissions relate to the indirect emissions
generated in the goods and services
we purchase from our suppliers, our
achievement of net zero will be
dependent on our suppliers setting and
delivering carbon reduction targets.
As such, we are undertaking a process
to assess the feasibility of near- and
long-term Scope 3 net zero targets
through engagement with our
supply chain.
Further details of the work we have done
regarding operational net zero are set out
on page 49, in the targets section of our
TCFD report.
In relation to our execution-only platform,
our role is restricted to making different
investment options and information
available to customers, with the ultimate
decision on responsible investing being in
the hands of the customer. For our AJ Bell
Funds and MPS portfolios, our role is
similarly to respond to customer appetite,
whilst providing the option for them to
prioritise responsible investing.
Environmental initiatives
We continue to operate our hybrid working
model, providing our staff with a blend of
working at home and working in the
office. This has reduced our total CO2e
emissions, due to lower emissions
associated with employee commuting and
office capacity requirements, whilst taking
into account the increased emissions
generated by employees working
from home.
As part of our commitment to encourage
more sustainable travel, we operate a
Season Ticket Loan Scheme which
provides employees with an interest-free
loan to pay for annual season tickets for
bus, train and tram travel to our offices.
In addition, we also offer a Bike Loan
Scheme which allows employees to take
an interest-free loan of up to £1,000 to
pay for a new bike.
46 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 47
Responsible business
Climate-related Financial Disclosures
At AJ Bell, we recognise the importance of societal action to
reduce global emissions and are committed to playing our
part in the transition to a lower-carbon economy.
Our approach
Climate change is one of the most
significant global challenges we face
today. It is a critical issue impacting all
our stakeholders and wider society.
We are pleased to present our second
report on climate-related disclosures,
aligned to the Task Force on Climate-
related Financial Disclosures (TCFD)
Recommendations and Recommended
Disclosures.
Governance
Strategy
Risk
management
Metrics and
targets
During the year, we have focused on
further integrating the recommendations
into our internal governance, risk and
reporting processes, as well as seeking
to increase compliance with areas of the
recommended disclosures we did not
fully comply with in last year’s report.
This included extending the measurement
of the impact of our investments
portfolios to include our MPS portfolios
and developing an operational net zero
roadmap to identify the steps we would
need to take to reach net zero.
We are pleased with the progress we
have made in the year, whilst recognising
the need for continuous development.
We highlight in this report some areas
where we want to make further progress,
and where more work is required to fully
comply with the TCFD Recommendations
and Recommended Disclosures.
The report is structured around the
four pillars of the TCFD framework:
governance, strategy, risk management,
and metrics and targets. Our disclosures
have also been informed by the
accompanying financial sector guidance
as well as the TCFD’s other relevant
guidance materials.
Climate-related data
and methodological
challenges
We have used climate-related
data to monitor our exposure to
identified climate-related risks
and measure the climate-related
metrics included within this
report. This data has been
supplied by multiple third-party
providers as detailed in the report,
and we have placed reliance on
the accuracy of the data provided.
We have observed gaps relating to
the availability of data, and lack of
industry alignment on scenario
analysis and Scope 3 emission
calculation methodologies, and
expect future iterations of this
report to build on our experience
to strengthen metrics and
methodologies.
Strategic report
Governance
Financial statements
Other information
TCFD compliance statement
As required by paragraph 8(a) of Listing Rule 9.8.6R, we set out in the table below our statement of compliance with the TCFD
Recommendations and Recommended Disclosures.
Where disclosures have been partially omitted, we have detailed the reasons for not including such disclosures, the steps we are taking
in order to be able to make those disclosures in the future, and the timeframe in which we expect to be able to make those disclosures.
Key: Disclosure level
Full
Partial
Omitted
TCFD recommendation
Status
Governance: Disclose the organisation’s governance around climate-related risks and opportunities.
a) Describe the Board’s oversight of climate-related risks and
opportunities.
We have reported how the Board and its Committees oversee
our climate-related risks and opportunities on page 50.
b) Describe management’s role in assessing and managing
climate-related risks and opportunities.
We have reported management’s roles and responsibilities in
assessing and managing climate-related risks on page 50.
Strategy: Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy
and financial planning where such information is material.
a) Describe the climate-related risks and opportunities the
organisation has identified over the short, medium, and
long term.
b) Describe the impact of climate-related risks and
opportunities on the organisation’s businesses, strategy,
and financial planning.
c) Describe the resilience of the organisation’s strategy, taking
into consideration different climate-related scenarios,
including a 2°C or lower scenario.
We have disclosed the climate-related risks identified over the
short, medium, and long term on pages 50 and 51.
We have detailed the financial impact and our strategic response
for each risk identified on page 51.
We have performed initial scenario analysis over our identified
risks, details of which have been disclosed on page 51. This year
the focus has been on qualitative analysis whilst we continue to
explore approaches to quantitative analysis for future reports.
Risk management: Disclose how the organisation identifies, assesses, and manages climate-related risks.
a) Describe the organisation’s processes for identifying and
assessing climate-related risks.
b) Describe the organisation’s processes for managing climate-
related risks.
c) Describe how processes for identifying, assessing, and
managing climate-related risks are integrated into the
organisation’s overall risk management.
Our approach to the identification, assessment and management
of climate-related risks is integrated into our Group risk
management framework, further details of which are disclosed
in our Risk management report on pages 60 to 62.
Climate-related risks, controls and Key Risk Indicators (KRIs) are
mapped to the ESG risk appetite category and reviewed at the
ESG working group, Risk Management Forum, Executive Risk
Committee and Risk & Compliance Committee.
We have recognised an ESG-related principal risk and
uncertainty, which includes climate-related risks. Further
information is provided on page 63.
Metrics and targets: Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where
such information is material.
a) Disclose the metrics used by the organisation to assess
climate-related risks and opportunities in line with its strategy
and risk management process.
We split our metrics by the impact of our operations and the
impact of our investments. We have reported the metrics on
pages 52 and 53.
b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3
greenhouse gas emissions, and the related risks.
c) Describe the targets used by the organisation to manage
climate-related risks and opportunities and performance
against targets.
We have disclosed our Operational Scope 1, 2 and 3 emissions
on page 52. We have disclosed our AJ Bell Investments Scope 3
emissions for our Funds and MPS portfolios on page 53.
We have undertaken a project to set operational net zero aligned
targets and develop a roadmap to achieve these. The roadmap
has highlighted further work which is required to assess the
feasibility of the targets before we commit to them, as detailed
on page 54. We expect to be fully compliant in FY24.
48 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 49
Responsible business
Governance
Climate governance is captured in our Responsible Business governance framework, as detailed on page 33.
Board oversight of climate-related risks and opportunities
The Board is responsible for the conduct of our business and the development of its strategy, as well as promoting the long-term
sustainable success of the business. This includes our strategy relating to climate-related risks and opportunities.
The Board has delegated specific powers, duties and decision-making responsibilities to its five main committees as set out in our
Corporate Governance Report on pages 84 and 85. The Risk & Compliance Committee and Audit Committee have oversight
responsibility for aspects of our approach to managing climate-related risks and opportunities, as set out below.
Board Committee
Responsibility
Activity in FY23
AJ Bell plc Board
Risk &
Compliance
Committee
The Board is responsible for the conduct of our business and the
development of its strategy, as well as promoting the long-term
sustainable success of the business. This includes our strategy
relating to climate-related risks and opportunities.
The Committee is responsible for ensuring that climate risk is
effectively embedded in risk management frameworks and risk
reporting and understanding how climate change poses a threat
to the organisation.
• Reviewed bi-annual management progress
updates on our Responsible business
strategy including TCFD.
• Reviewed climate-related risk assessments
and scenario analysis.
Audit Committee The Committee is responsible for scrutinising climate-related
• Reviewed the Group’s TCFD disclosures.
financial information and disclosures, applying the same process
and quality assurance methods as for financial information.
Further information on the activities of the Board and its Committees during the year is provided in the Governance section of this
report from pages 72 to 125.
Management’s role in assessing and managing climate-related risks and opportunities
The CFO has the delegated authority from the Board to manage our ESG strategy, including our climate-related risks and opportunities.
The CFO is supported by our cross-functional ESG working group for the consolidation of our approach and co-ordination of day-to-
day activities.
In addition to review from the ESG working group, the identified climate-related risks and opportunities were governed in line with our
risk management framework, which included review and challenge of climate-related risk assessments and scenario analysis by the
Risk Management Forum and Executive Risk Committee ahead of being presented to the Risk & Compliance Committee.
Relevant processes and responsibilities are embedded into our Finance, Risk and Operational functions.
Strategy
Climate-related risks and opportunities
To ensure our strategy adequately responds to climate-related risks and opportunities, we have performed an assessment of our
exposure to a range of climate-related risks and opportunities, including both the physical and transitional risks of climate change.
Physical risks are caused by changes in the climate and can be event driven (acute) through the increased frequency and severity of
extreme weather events such as hurricanes or floods, or result from longer-term shifts in climate patterns (chronic) such as rising sea
levels or chronic heat waves.
Transitional risks are caused by the adjustment towards a net zero economy, which will involve significant changes to policy, technology,
law, and investor and consumer attitudes.
We assessed the risks and opportunities over the short term (5 years), medium term (10 years) and long term (30 years).
To help inform the assessment of the identified climate-related risks and opportunities, we have considered their potential impacts under
different transition pathways using climate scenario analysis. These scenarios are not predictions of climate-related outcomes but are
used as hypothetical scenarios to aid our understanding of the impact that climate change could have on our business.
We selected three scenarios based on those constructed by the Network for Greening the Financial System (NGFS) (Phase III). Many
central banks, including the Bank of England, carry out assessments based on NGFS scenarios. We have intentionally selected three
contrasting scenarios; one representing a smooth and orderly transition, one involving heightened transition risks due to a disorderly
transition, and a third which incorporates more extreme physical risks due to a lack of climate-related policy.
Our climate scenario analysis has been primarily qualitative in nature. We view this as an iterative process and will look to build on our
assessment in future years so that it can further inform our strategy and risk assessment.
Strategic report
Governance
Financial statements
Other information
Scenario
Temperature rise
Description
Net Zero 2050
1.4°C
Delayed Transition 1.6°C
Current Policies
3°C+
An ambitious scenario which limits global warming to 1.4°C. Climate policies are assumed to be
introduced early on, gradually becoming more stringent.
This scenario assumes global emissions do not decrease until 2030. Climate policies are delayed
leading to higher transition and physical risks than Net Zero 2050.
A scenario of low ambition assuming only those climate policies currently implemented are made.
Transition risks are not as high as a disorderly transition but there are severe physical risks.
We have summarised each of the climate-related risks identified below, including the potential impact of these risks and our strategic
response. Our responses to the risks identified also present opportunities for the business. For example, by offering responsible
investment solutions to our customers, we can reduce the risk of falling asset values impacting our revenue, whilst also providing
an opportunity to capitalise on changing consumer demand for these solutions.
Key
Unlikely
Possible
Likely
Risk
Definition
Potential impact
Probability
Short
term
Medium
term
Long
term
Strategic response
Reputational
(Transition)
Market
(Transition
and physical)
The risk that customers
are unhappy with the
level of responsible
investment options
available on our platform,
or the accuracy and
completeness of product
information.
The risk that customers
or stakeholders perceive
that our response to
climate change is
inadequate.
The risk that climate
change or the transition
to a lower-carbon
economy negatively
impacts the global
economy, and therefore
the value of assets on our
platform and in our range
of managed investment
solutions.
Customers direct capital
to alternative platforms.
We experience reduced
customer demand for our
responsible products and
potential litigation action.
1.4°C
1.6°C
3°C+
Assets with exposure
to climate-related risks
could face reductions
in value, impacting
customer returns and
our fee revenues.
1.4°C
1.6°C
3°C+
Policy,
legal and
regulatory
(Transition)
The risk that there is a
need to comply with
increasing legal,
regulatory, and
disclosure obligations.
Increased cost to the
business to meet the
requirements and / or
restrictions to product
offerings.
Chronic
(Physical)
The risk of longer-term
changes in climate
patterns such as flooding,
extreme weather and
higher temperatures
impacting our operations.
Increased cost to the
business due to risk of
flooding at our offices
or reduced employee
productivity.
1.4°C
1.6°C
3°C+
1.4°C
1.6°C
3°C+
• We provide a wide range of sustainable
investment options on our platform,
including in our managed investment
solutions.
• We review our AJ Bell Investments’
responsible product literature to ensure it
meets the test of being fair, clear and not
misleading.
• We are reviewing the FCA’s Sustainability
Disclosure Requirements and investment
labels package of measures, to ensure
we meet the new requirements.
• We embedded the TCFD recommendations
and are developing a plan to achieve
operational net zero by 2050.
• We offer a diverse range of investments on
our open-architecture platform, allowing
our customers to diversify and respond to
changing macroeconomic trends.
• We provide Morningstar’s Sustainability
Rating for funds available on our platform
and continue to review how we can make
climate-related information available.
• AJ Bell Investments offers responsible
investment solutions with an ESG specific
mandate.
• Our Risk and Compliance functions
conduct regular horizon scanning
and reviews regulatory publications
on an ongoing basis.
• We seek to comply with all climate-related
regulatory requirements through a
materiality lens, ensuring cost of
compliance is kept under control.
• Our hybrid working model provides
operational resilience to the potential
impact of flooding at our offices.
Metrics and targets
Our climate-related metrics focus on the impact our business activities have on the environment. We measure and report our impact
in two distinct categories:
1. The impact of our operations: This is the direct and indirect impact we have on the environment from our operations. We measure
and report our key metrics being our Scope 1, 2 and 3 greenhouse gas emissions, excluding category 15 investments, and our carbon
intensity metrics per customer and employee.
2. The impact of our investments: This is the impact we have on the environment through our AJ Bell Investments’ discretionary
managed investment solutions. We measure and report the carbon footprint and weighted average carbon intensity (WACI) of
our discretionary AUM.
50 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023
51
Responsible business
The impact of our operations
As a financial services business, our direct operational environmental impact is primarily from the emissions generated in running
our three offices in Manchester, London and Bristol, and the indirect emissions generated in our supply chain.
Our operational CO2e emissions
Emissions
Scope 1 and 2
Scope 1
Scope 2 (location-based)
Total Scope 1 and 2
Scope 3
1. Purchased goods and services
2. Capital goods
3. Fuel and energy-related activities
5. Waste generated in operations
6. Business travel
7. Employee commuting and working from home
Total Scope 3
Total Scope 1, 2 and 3
Intensity per FTE (Scope 1 and 2)
Intensity per customer (Scope 1, 2 and 3)
Energy usage
Energy consumption in the UK
2023
2022
Tonnes of CO2e
223
136
359
Tonnes of CO2e
8,649
278
71
2
221
637
237
128
365
8,722
666
74
2
100
547
9,858
10,111
10,217
10,476
0.29
0.021
0.34
0.024
kWh
1,541,468
1,588,747
We are pleased to report a 15% reduction in our total Scope 1 and 2 emissions intensity per FTE in the year as we focus on improving
energy efficiency across our offices.
The most significant driver of our Scope 3 emissions relates to the goods and services purchased in our supply chain. This year, we have
used supplier-specific data to calculate these emissions, where available, instead of using industry average figures, which has contributed
to the decrease observed year-on-year as our suppliers begin to engage with their own carbon reduction initiatives.
Methodology and boundary
The Greenhouse Gas (GHG) reporting period is aligned to the financial reporting year. The methodology used to calculate emissions is
based on the financial consolidation approach, as defined in The Greenhouse Gas Protocol: A Corporate Accounting and Reporting
Standard (Revised Edition).
Strategic report
Governance
Financial statements
Other information
Critical to good reporting is a well-defined reporting boundary which is consistently applied year-on-year. We have worked with
Accenture to review that the boundary for our operational GHG emissions reporting remains appropriate. We considered the following
Scope 3 categories to be out of the boundary of our reporting:
• 4. Upstream transportation and distribution – included in category 1, purchased goods and services.
• 8. Upstream leased assets – our leases consist of our offices and some computer and office equipment. The emissions generated
from the use of these assets are included within our Scope 1 and 2 emissions.
• 9-14. Downstream categories – we do not produce and distribute physical goods or operate any franchises.
• 15. Investments – we have reported the impact of our discretionary managed investment solutions in the impact of our investments.
The impact of our investments
We have extended the scope of our calculation this year to also include our MPSs, as well as our Funds.
We utilise the WACI and Carbon footprint as the key metrics for measuring the impact of our AJ Bell Investments Funds and MPSs on the
environment. We use these metrics as they represent our portfolio’s exposure to carbon-intensive companies.
WACI provides information on the level of Scope 1 and 2 emissions within our Funds and MPSs per million $ of revenue that is generated
by the underlying entities.
Carbon footprint represents the share of Scope 1 and 2 emissions generated by underlying holdings per million $ that is invested in our
Funds and MPSs.
Our investments’ carbon footprint emissions
Product
AJ Bell Funds
MPS
Our investments’ carbon intensity (WACI)
Product
AJ Bell Funds
MPS
Coverage of assets
Product
AJ Bell Funds
MPS
2023
Tonnes of CO2e per $m AUM
Not available
2022
114
2022
194
113
90
2023
159
138
Tonnes of CO2e per $m revenue
Not available
2023
% Total AUM
70%
55%
2022
68%
Not available
We are pleased to report a reduction in the WACI across our AJ Bell Funds during the year. Going forwards, we aim to continue to
increase the coverage of our financed emissions reporting through improvements to our data collection process.
The Group’s carbon footprint was calculated using an operational control approach. Under this approach, all entities and associated
assets over which the Group has 100% operational control are included under the organisation’s Scope 1 and 2 emission categories.
All other entities, over which the Group does not have 100% operational control, such as third-party processing sites and data centres,
are included in the organisation’s Scope 3 emissions along with all other indirect emissions associated with the organisation.
Methodology and boundary
We have defined our methodology in line with the Partnership for Carbon Accounting Financials (PCAF), the global emissions standard
for the financial industry as recommended by the TCFD supplemental guidance for asset managers. In line with the standard, we have
performed our calculation using the enterprise value including cash (EVIC) methodology.
We have chosen to report our operational Scope 1 and 2 emissions per FTE, and our operational Scope 1, 2 and 3 emissions per
customer as our intensity measures. We have used these measures as our Scope 1 and 2 emissions are primarily driven by our employees
working in our offices, whilst purchased goods and services represent 85% of our total Scope 1, 2 and 3 emissions with this spend
primarily driven by serving the needs of our customers.
We have calculated our Scope 1 and 2 footprint using primary energy use data, where available, and converted this using the official UK
Government conversion factors.
For Scope 3 purchased goods and services and capital goods, we have refined our methodology in the year by using actual supplier
emissions data, where available, from the most recent Carbon Disclosure Project (CDP) response dataset. Data gaps were supplemented
using industry average emissions contained within the Environmentally Extended Input Output database across total spend in the year.
We have not updated the prior year emissions to reflect the new supplier-specific methodology. We expect the accuracy of our Scope 3
category 1 and 2 footprint reporting to get better each year as more of our suppliers’ emissions data becomes available.
For employee commuting and working from home, we collected data from staff on their home working and travel arrangements and
have combined this with publicly available data to estimate the emissions.
Access to reliable climate-related data covering all underlying holdings is an industry-wide challenge. In calculating our footprint and
WACI, we currently have some data gaps, such as relating to sovereign bonds, and therefore we have reported a coverage percentage
which represents the proportion of total assets within our Funds for which we have sourced the required data, and which are therefore
included within our calculation. We will continue to monitor industry-wide developments for an aligned approach to quantifying
sovereign bonds’ financed emissions.
We have developed our calculation in FY23 by implementing a dual-layered approach to calculating the emissions on our investment
offerings. The first layer sources the relevant data from MSCI for those underlying equities within all AJ Bell Funds and MPSs. The second
layer of our calculation sources bond emission data relating to bond ETFs from Morningstar, our investment analysis provider, who perform
their own look-through to underlying, indirectly-held holdings. The calculation is based on our portfolio asset allocation as at 30 September
2023. We have placed reliance on the accuracy of data provided by both MSCI and Morningstar for the purposes of the calculation. MSCI
collect reported emissions, and where not reported have methodologies in place to estimate those emissions. For our calculation, 89% of
equities were based on reported emissions and 11% used MSCI estimates. Morningstar have performed look-through analysis of the ETFs,
up to 10 portfolios deep, and sourced the relevant fund level statistics from the Sustainalytics principal adverse impacts data. A coverage
statistic has been calculated by Morningstar given there are holdings for which the relevant underlying data has not been obtained or
estimated. Due to the volume of data, it is not practical to undertake an independent verification of either MSCI or Morningstar data.
52 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 53
Responsible business
Non-financial and sustainability information statement
Strategic report
Governance
Financial statements
Other information
We aim to comply with all areas of the Non-Financial Reporting requirements contained within sections 414CA and 414CB of the
Companies Act 2006. Information regarding non-financial matters is included throughout our Strategic report and the following table
summarises the policies and outcomes together with references to where further information can be found.
Reporting requirement
Some of our relevant policies and standards
Environmental matters
Employees
• Environmental Policy
• Employee Handbook
Where to read more in
this report about our impact
Environmental awareness
Responsible employer
Pages
46-47
39-43
• Health and Safety Policy
• Diversity and Inclusion Policy
• Recruitment and Selection Policy
• Hybrid Working Policy
• General Remuneration Policy
• Whistleblowing Policy
• Safeguarding Policy
Social
• Treating Customers Fairly
Supporting our local communities
44-45
• Charitable Giving in the Community
Policy
Human rights
• Human Rights Policy
Human rights and modern slavery
• Modern Slavery Statement
Anti-corruption and anti-bribery
• Anti-Bribery and Corruption Policy
Anti-bribery and corruption
43
43
• Anti-Money Laundering Policy
• Gifts and Hospitality Policy
• Market Abuse Policy
Climate-related financial disclosures
• TCFD report
Climate-related financial disclosures
48-54
Additional information
Business model
Principal risks and how they are managed
Non-financial KPIs
Where to read more in this report
Our business model
Principal risks and uncertainties
Key performance indicators
Pages
20-21
63-68
26-27
Operational net zero
During the year, we calculated proposed operational net zero targets aligned to the UK Government’s commitment to be net zero by
2050. Our draft targets were calculated using 2022 as our baseline emissions year and based on the Science Based Targets initiative’s
(SBTi) Net Zero standard.
Before committing to targets, we have undertaken a project to develop and quantify a high-level net zero roadmap, enabling us to
understand the near- and long-term carbon reduction initiatives we will need to undertake to achieve these targets.
Near-term initiatives (2023 – 2030)
Long-term initiatives (2030 – 2050)
Increase office energy efficiency
We will continue to review energy efficiency measures that
can be implemented across each of our offices.
Low carbon heating
Consider investing in green gas and heat electrification
from low-carbon sources at our offices.
Invest in renewable electricity in our offices
Transition towards 100% renewable electricity at all
of our offices.
Ongoing supplier engagement
Continue to collect and monitor suppliers’ emissions data
and require all suppliers to have made their own net zero
commitments.
Encourage sustainable commuting and working practices
Encourage employees to adopt renewable electricity and
sustainable travel options through workplace travel
initiatives and education.
Nature-based investments
Invest in nature-based solutions, such as tree planting,
to remove our residual 10% of carbon emissions.
Key supplier engagement
Collect emissions data from our largest suppliers and
encourage key suppliers to commit to their own net zero
commitments, whilst implementing processes to monitor
our suppliers’ progress against their targets.
Implement a sustainable procurement policy
Implement a sustainable procurement policy which
embeds climate factors into the supplier selection process.
Beyond value chain mitigation
Beyond value chain mitigation refers to mitigation action or investments outside of our value chain to contribute towards reaching
societal net zero. This can be achieved by continuing to offset our Scope 1 and 2 carbon emissions and through our ongoing
relationship with City of Trees to plant trees in our local community.
There are a number of risks and high level of uncertainty relating to the achievement of net zero and implementing this roadmap, in
particular related to our indirect supply chain emissions. Recognising the fact that purchased goods and services represent 85% of our
total emissions, we have not yet formally committed to the SBTi or submitted our targets for validation whilst we undertake an initial risk
assessment exercise with our key suppliers, engaging with them in order to understand their own carbon reduction targets and the
impact on the feasibility of our Scope 3 reduction targets.
Investments net zero
We will continue to monitor the development of net zero standards for financial institutions and seek to understand the impact of net
zero on our investments business as the business continues to grow.
54 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 55
Financial review
Strong financial
performance
The advantages of our dual-channel model and
diversified revenue streams enabled us to deliver a
record financial performance in the year.”
Peter Birch
Chief Financial Officer
Strategic report
Governance
Financial statements
Other information
Overview
Our dual-channel platform achieved
robust net inflows of £4.2 billion (FY22:
£5.8 billion) and customer growth of 12%
(FY22: 16%) in a challenging external
environment. Our ability to continue to
grow in those circumstances is testament
to the quality of our platform propositions.
Our diversified revenue model enabled us
to deliver a strong financial performance,
with revenue increasing by 33% to £218.2
million (FY22: £163.8 million) and PBT up
50% to £87.7 million (FY22: £58.4 million),
whilst investing in our people, propositions
and brand to ensure we are well placed to
achieve future growth.
Revenue
£218.2m
+33%
PBT
£87.7m
+50%
Business performance
Customers
Customer numbers increased by 50,813 during the year to a total of 491,402 (FY22: 440,589). This growth has been driven by our
platform propositions, with our advised customers up by 10% and our D2C customers increasing by 13%.
Our platform customer retention rate remained high at 95.2% (FY22: 95.5%).
Advised platform
D2C platform
Total platform
Non-platform
Total
Assets under administration
Year ended 30 September 2023
As at 1 October 2022
Inflows
Outflows
Net inflows / (outflows)
Market and other movements
As at 30 September 2023
Year ended 30 September 2022
As at 1 October 2021
Inflows
Outflows
Net inflows / (outflows)
Market and other movements
As at 30 September 2022
Year ended
30 September
2023
No.
Year ended
30 September
2022
No.
159,256
317,276
145,371
280,281
476,532
425,652
14,870
14,937
491,402
440,589
Advised platform
£bn
D2C platform
£bn
Total platform
£bn
Non-platform
£bn
44.8
5.0
(3.1)
1.9
1.5
48.2
19.3
4.3
(2.0)
2.3
1.1
22.7
64.1
9.3
(5.1)
4.2
2.6
70.9
5.1
0.2
(0.3)
(0.1)
0.2
5.2
Advised platform
£bn
D2C platform
£bn
Total platform
£bn
Non-platform
£bn
45.8
6.2
(2.9)
3.3
(4.3)
44.8
19.5
3.9
(1.4)
2.5
(2.7)
19.3
65.3
10.1
(4.3)
5.8
(7.0)
64.1
7.5
0.2
(2.2)
(2.0)
(0.4)
5.1
Total
£bn
69.2
9.5
(5.4)
4.1
2.8
76.1
Total
£bn
72.8
10.3
(6.5)
3.8
(7.4)
69.2
We achieved robust total net inflows of £4.1 billion (FY22: £3.8 billion), driven by our platform.
Total advised platform net inflows were £1.9 billion (FY22: £3.3 billion). The year-on-year reduction was driven by a fall in gross inflows to
£5.0 billion (FY22: £6.2 billion). There has been a moderation in transfer activity as advisers and their clients exercise more caution in the
face of ongoing uncertainty in the macroeconomic environment, whilst existing customer inflows into tax-wrapped products remained
stable. Advised outflows in the year increased to £3.1 billion (FY22: £2.9 billion).
Total D2C platform net inflows were £2.3 billion (FY22: £2.5 billion). Gross inflows increased to £4.3 billion (FY22: £3.9 billion) with the
increase driven by changes to the annual pension allowance, competitive dynamics and strong inflows from new customers supported
by the investments made in our brand. Outflows increased to £2.0 billion (FY22: £1.4 billion) as customers drew down on their
investments amidst the cost-of-living pressures.
Non-platform net outflows of £0.1 billion (FY22: £2.0 billion) were significantly lower than FY22 following the closure of the institutional
stockbroking business in the prior year.
56 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023
57
Financial review
Favourable market movements contributed £2.8 billion as global equity markets recovered some of the losses experienced in the
prior year, when adverse market movements contributed to a £7.4 billion reduction in AUA. This resulted in closing AUA of £76.1 billion
(FY22: £69.2 billion).
Assets under management
Advised
D2C
Non-platform
Total
Year ended
30 September
2023
£bn
Year ended
30 September
2022
£bn
2.5
1.3
0.9
4.7
1.7
1.0
0.1
2.8
Our range of funds and MPSs are highly valued by financial advisers, their clients and our retail customers. Total AUM closed at £4.7
billion (FY22: £2.8 billion), representing a 68% increase in the year. The growth has been particularly strong from our advised customers,
as well as a significant increase in AUM from customers investing via external third-party platforms.
Financial performance
Revenue
Recurring fixed
Recurring ad valorem
Transactional
Total
Year ended
30 September
2023
£000
Year ended
30 September
2022
£000
30,666
29,787
161,152
102,184
26,416
31,876
218,234
163,847
Revenue increased by 33% to £218.2 million (FY22: £163.8 million).
Revenue from recurring fixed fees increased by 3% to £30.7 million (FY22: £29.8 million), primarily due to higher pension administration
revenue from our advised platform customers.
Recurring ad valorem revenue grew by 58% to £161.2 million (FY22: £102.2 million). The key driver of this growth was the higher levels of
interest generated on cash balances held on the platform following increases to the market rates of interest in the year, combined with
elevated average cash balances in the first half of the year. Our economies of scale enable us to benefit from these interest rate rises
whilst also sharing them with our customers by paying a market-competitive rate on their cash balances. Further information on the
impact to revenue of changes to the UK base interest rate has been disclosed in note 25 to the consolidated financial statements.
Increased custody fee income as a result of higher average platform AUA also contributed to this revenue growth.
Revenue from transactional fees decreased by 17% to £26.4 million (FY22: £31.9 million). This decrease was due to lower dealing activity
levels in the current year, impacted by the macroeconomic environment.
Our overall revenue margin increased by 7.2bps to 29.8bps (FY22: 22.6bps).
Administrative expenses
Distribution
Technology
Operational and support
Total
Year ended
30 September
2023
£000
Year ended
30 September
2022
£000
25,928
40,317
65,769
14,998
32,706
57,162
132,014
104,866
Administrative expenses increased by 26% to £132.0 million (FY22: £104.9 million), in line with expectation, as we delivered our planned
investment in our people, technology and brand, whilst absorbing some one-off inflationary impacts and supporting sustainable growth.
Total staff costs increased by £9.9 million across the business driven by the roll out of a comprehensive new pay and benefits package
which took effect on 1 October 2022 and increased headcount to support our growth.
Distribution costs increased by 73% to £25.9 million (FY22: £15.0 million) as we executed our plans to increase investment in our brand.
This included our multi-channel ‘feel good, investing’ advertising campaign, and our new partnership as the title sponsor of the
AJ Bell Great Run Series.
Strategic report
Governance
Financial statements
Other information
Technology costs increased by 23% to £40.3 million (FY22: £32.7 million). This increase reflects investment in our proposition
development teams, as well as increases to our licensing and external hosting costs.
Operational and support costs increased by 15% to £65.8 million (FY22: £57.2 million). The higher costs were driven by an increase in
the average number of employees in order to support our continued growth, as well as the investment in our pay and benefits package
for staff. This was partially offset by lower dealing costs in the year as a result of reduced customer dealing activity.
The 26% total increase in the year reflects our investments, as planned, to deliver on our long-term growth plans. In FY24 we expect this
growth rate to moderate to around 15% as inflationary pressures settle and we benefit from the operational gearing inherent in our business
model, along with a focus on efficiency. The same factors are expected to result in lower levels of cost growth in the medium term.
Profitability and earnings
PBT increased by 50% to £87.7 million (FY22: £58.4 million) whilst PBT margin increased to 40.2% (FY22: 35.6%). The higher margin versus
the prior year reflects the higher revenue margin.
Corporation tax for the period has been calculated at a rate of 22.0%, representing the average annual tax rate for the year, as the
standard rate of UK corporation tax increased from 19.0% to 25.0% on 1 April 2023. Our effective rate of tax for the period was 22.2%
(FY22: 20.0%).
Basic earnings per share rose by 46% to 16.59 pence (FY22: 11.39 pence) in line with the increase to PBT. Diluted earnings per share
(DEPS), which accounts for the dilutive impact of outstanding share awards, also increased by 46% to 16.53 pence (FY22: 11.35 pence).
Financial position
The Group’s financial position remains strong, with net assets totalling £166.0 million (FY22: £133.4 million) as at 30 September 2023
and a return on assets of 41% (FY22: 35%).
Financial resources and regulatory capital position
Our financial resources are continually kept under review, incorporating comprehensive stress and scenario testing which is formally
reviewed and agreed at least annually.
Total shareholder funds
Less: unregulated business capital
Regulatory group shareholder funds
Less: foreseeable dividends
Less: non-qualifying assets
Total qualifying capital resources
Less: capital requirement
Surplus capital
% of capital resource requirement held
Year ended
30 September
2023
£000
Year ended
30 September
2022
£000
166,037
133,394
(3,675)
(3,718)
162,362
129,676
(29,807)
(12,887)
119,668
(18,843)
(14,233)
96,600
(53,930)
(49,252)
65,738
222%
47,348
196%
During the year, we have continued to maintain a healthy surplus over our regulatory capital requirement and as at the balance sheet
date this was 222% (FY22: 196%) of the capital requirement.
We operate a highly cash-generative business, with a short working-capital cycle that ensures profits are quickly converted into cash.
We generated cash from operations of £120.5 million (FY22: £57.2 million) and held a significant surplus over our basic liquid asset
requirement during the period, with our year end balance sheet including cash balances of £146.3 million (FY22: £84.0 million).
Dividend
At half year, the Board declared an interim dividend of 3.50 pence per share (FY22: 2.78 pence per share). This was higher than would
have resulted from applying our stated interim dividend policy, to ensure that the growth in interim dividend more closely aligned with
the increase in financial performance during the current year.
The full year dividend policy of paying out 65% of statutory profit after tax remains unchanged and therefore the Board has recommended a
final dividend of 7.25 pence per share (FY22: 4.59 pence per share), resulting in a total ordinary dividend of 10.75 pence (FY22: 7.37 pence).
Peter Birch
Chief Financial Officer
6 December 2023
58 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 59
Risk management
A risk aware
approach
The maturity of our three lines of defence model is evidenced
well through the effective implementation of the Consumer
Duty, assisted in no small part by our purpose-led culture
that puts customer interests at its centre.”
Karen Goodman
Chief Risk Officer
Overview
As in all other regulated firms in our sector,
the business has experienced a year of
regulatory change. The most significant
has been implementation of the new
Consumer Duty. The business has now
shifted to the embedding phase of the
Consumer Duty through assessing, testing,
understanding and evidencing the
outcomes customers experience. Our use
of data forms a key foundation in how we
measure and monitor the outcomes
delivered to customers.
The further maturing of our risk
management framework and the three
lines of defence approach supports
effective ownership of risks and informs
the development of a risk-aware culture.
Risk management framework
The risk management framework supports the consistent and robust identification
and management of opportunities and risks across the Group.
Risk strategy
Risk appetite
R
i
s
k
g
o
v
e
r
n
a
n
c
e
Risk taxonomy
Risk reporting
Risk identification
Combined assurance model
(CAM)
Risk assessment and
management
Policy governance framework
Risk & control self-
assessment (RCSA)
Internal capital adequacy
and risk assessment (ICARA)
R
i
s
k
c
u
l
t
u
r
e
The sections on the following pages provide more detail on the component parts
of the Group’s risk management framework.
Strategic report
Governance
Financial statements
Other information
Tone
from the
top
The Board sets the tone from the top, in promoting a strong risk culture. The Executive
Committee (ExCo) member must instil a strong risk culture in their functional area and
ensure that the policy is effectively and constantly applied within their area of responsibility.
Individual
accountability
Senior Management Certification Regime
Certified Roles
Consumer Duty Outcomes
Risk culture
We promote a risk culture
that encourages ownership
of and management of
risk. Risk management
is the responsibility
of everyone.
Open communication
and challenge
Employees are empowered to raise risks and highlight
any concerns.
Performance and
incentives
Competent risk management must be reflected in
employee objectives.
The second line of defence (Risk
Team) takes responsibility for
communicating, educating and
advising on the risk management
framework, developing and
implementing computer-based
training (CBT) risk training
and risk-focused cultural
improvement initiatives.
The Risk Team carries out
ongoing risk cultural
improvement initiatives to
improve risk awareness across
the Group, such as risk workshops
and risk lunch and learn sessions.
The Chief Risk Officer (CRO)
provides an annual assessment of
the effectiveness of the Group’s
risk management framework
and Risk Team to the Risk &
Compliance Committee (R&CC).
Risk strategy
The risk strategy is aligned with
the Group’s high level risk appetite
statement, which represents:
‘The amount and type of risk it is
prepared to take in the context of its
business model and in the course of
achieving its strategic objectives. The
Group takes a measured and balanced
approach to determining where
to pursue risk in return for value,
in accordance with the Group’s
capability and capacity to identify,
report and manage risks.’
This statement recognises that for
the business to grow and achieve its
strategic aspirations, and deliver good
outcomes for its customers, effective
risk management is essential.
Risk governance
The Board is ultimately responsible
for the Group’s risk management
framework but has delegated
certain responsibilities to the
R&CC, a sub-committee of the Board.
The Group operates a ‘three lines
of defence’ approach to managing
risks across the Group.
The three lines of defence model is
a recognised approach for providing
structure for the identification and
assessment of risk and testing the
control environment. Used widely
across the industry, the model
provides for a clear delineation of
responsibilities for all functions to
help ensure that risk management is
effective and embedded across the
Group. This is represented in the
governance structure shown below.
Board of AJ Bell Plc
Risk & Compliance Committee
of AJ Bell Plc
Audit Committee
of AJ Bell Plc
Executive Risk Committee
Risk Management Forum
2nd Line
of Defence
In-house assurance
function
3rd Line
of Defence
Independent
assurance protections
Risk and Compliance
Function
Internal Audit
1st Line
of Defence
Policies and procedures
and Quality Audit
(QA) function
QA, risk identification,
risk registers, risk
reporting, risk forums
AJ Bell plc
Management
policies, procedures
and limits
Principal components of AJ Bell combined assurance framework
60 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 61
Risk management
Principal risks and uncertainties
Strategic report
Governance
Financial statements
Other information
Risk taxonomy
The risk taxonomy details the key areas of risk that the Group is exposed to. These
can be grouped into five Tier 1 risk appetite categories and eighteen Tier 2 ‘sub-
level’ risk appetite categories. Each Tier 2 sub-level risk appetite category has a
defined risk appetite and a risk appetite statement. These are approved by Board
and form the risk appetite framework. This is represented in the diagram below.
Strategic
Financial
Operational
Operations
Conduct
Financial Crime,
Legal &
Regulatory
Tier 1
Tier 2
Risk appetite
The objective of the Group’s risk appetite
framework is to ensure that the Board and
senior management are properly engaged
in agreeing and monitoring the Group’s
appetite for risk and setting acceptable
boundaries for business activities and
behaviours. The risk appetite categories
are reviewed by the Risk Management
Forum (RMF), Executive Risk Committee
(ERC), R&CC and approved by the Board
on an annual basis in line with the Internal
Capital Adequacy and Risk Assessment
(ICARA) and the Group Business Planning
Process (BPP). Accordingly, the risk
appetite is reviewed and updated in line
with the Group’s evolving strategy,
operating model, financial capacity,
business opportunities, regulatory
constraints and any other internal or
external factors. Key risk indicators (KRIs)
are mapped to the risk appetite categories,
with KRI tolerances aligned to risk appetite.
The KRIs and tolerances are subject to an
annual approval process by ERC, R&CC
and ultimately by the Board.
Risk identification
The Group adopts a top-down and a
bottom-up approach to the identification
of risks. The ExCo and the Board have
identified the principal risks and
uncertainties (PR&U) that could impact
the ability of the Group to meet its
strategic objectives. In addition, the Group
maintains a ‘bottom-up’ operational Group
risk register, which are mapped to the
Group’s Tier 2 risk appetite categories.
Risk assessment
and management
All of the risks included in the Group risk
register are scored according to probability
and impact and assessed on an inherent
basis (before the impact of controls) and
on a residual basis (after the impact of
controls). Where risks are classed as outside
the Group’s risk appetite, actions must be
taken to bring the risk back within appetite.
Risk and control
self-assessment (RCSA)
The Group’s bottom-up assessment of risk
is managed through the RCSA process
which supports a comprehensive
understanding of risks and controls in
place at the operational and business
process level. Through regular self-review
of the risks and associated controls, and
oversight and escalation of issues as
necessary, the RCSA process enables the
risk and control owners to identify any
omissions in the risk environment and to
close any control gaps or weakness as
necessary. RCSAs are completed on an
ongoing basis with a formal annual RCSA
attestation provided by RMF members in
conjunction with risk owners.
In addition, the strength of the controls is
considered by the Risk & Compliance and
Internal Audit teams as part of reviews they
carry out under their respective monitoring
programmes. Any discrepancies between
their assessments and the risk and control
owner’s self-assessment are documented
in the reports to ExCo members and the
CRO, together with any actions
recommended to improve those controls
to ensure the risk remains or is brought
back within appetite.
Combined assurance
model (CAM)
Internal Audit is responsible for ownership
of the CAM. The purpose of the CAM is
to coordinate the coverage of risk and
control assurance activities across the Group.
An assessment is made and documented
in the CAM by the second (Risk &
Compliance) and third (Internal Audit) lines
of defence as to the degree of coverage and
level of assurance provided by their reviews
and related work on the documented
business processes and corresponding
controls. The CAM also assists in the
preparation of the respective annual Risk,
Compliance and Internal Audit plans.
Risk reporting
Risk reporting is included in the Group’s
CRO report which is presented to ERC and
R&CC. This includes details of underlying
KRIs mapped to the risk appetite
categories and the PR&U; a summary
of all the Group’s risks and controls;
breaches; risk events and emerging risks.
Similarly, lower-level risk reporting is
produced and reviewed at the RMF and
the relevant departmental risk forums.
Policy governance
framework
The policy governance framework
incorporates a central register of policies
including approval categorisation of
policies, review and standardisation of
policies, policy awareness training, policy
attestation and ongoing monitoring of the
embedding of policies.
Internal capital adequacy
and risk assessment (ICARA)
The Group conducts an ICARA process to
ensure that it has appropriate systems and
controls in place to identify, monitor and,
where proportionate, reduce all potential
material harms that may result from the
ongoing operation of its business. The
Group reviews material harms across the
entirety of the Group’s risk appetite
categories and important business services
(identified as per the Group’s operational
resilience framework).
Underpinning the Tier 1 risk appetite
categories are the Tier 2 sub-level risk
appetite categories. Each Tier 2 sub-level
risk appetite category has a defined risk
appetite and a risk appetite statement.
These are approved by Board and form
the risk appetite framework.
Strong risk
mitigation process
The Board is committed to a continual process
of improvement and embedment of the risk
management framework within the Group.
This ensures that the business identifies both
existing and emerging risks and continues to
develop appropriate mitigation strategies.
Residual risk direction
Increased
Stable
Decreased
Risk
Potential impact
Mitigations
The Board believes that there are a number of
potential risks to the Group that could hinder the
successful implementation of its strategy. These risks
may arise from internal and external events, acts
and omissions. The Board is proactive in identifying,
assessing and managing all risks facing the business,
including the likelihood of each risk materialising
in the shorter or longer term.
The principal risks and uncertainties facing the
Group are detailed below, along with potential
impacts and mitigating actions. The majority of the
Group’s principal risks and uncertainties’ residual risk
has remained stable, however the residual risk has
increased for information security and financial crime
due to the heightened threat landscape in these areas.
Strategic risk
Strategic risk
The risk that the Group fails
to remain competitive in its
peer group, due to lack
of innovative products
and services, increased
competitor activity,
regulatory expectations,
and lack of marketing focus
and spend to keep pace
with competitors.
Residual risk direction
ESG risk
The risk that
environmental, social and
governance factors could
negatively impact the
Group, its customers,
investors and the wider
community.
Residual risk direction
• Loss of competitive
advantage, such that AUA
and customer number
targets are adversely
impacted. This would
have a negative impact
on profitability.
• Reputational
damage as a result of
underperformance and /
or regulatory scrutiny.
• Environmental, physical
and transition risks
resulting from climate
change, which may
impact the Group and
our customers’ assets.
• Social risks, include
employee wellbeing and
diversity and inclusion.
• Governance risks,
including the risks
related to the Group’s
governance structures
being ineffective, which
could manifest in
governance-related
reputational and
conduct risks.
The Group regularly reviews its products against competitors, in relation to
pricing, functionality and service, and actively seeks to make enhancements
where necessary to maintain or improve its competitive position in line with
the Group’s strategic objectives.
The Group remains closely aligned with trade and industry bodies, and other
policy makers across our market. The use of ongoing competitor analysis
provides insight and an opportunity to adapt strategic direction in response
to market conditions.
The Group has established an ESG Working Group to manage all ESG-related
matters, including people- and social-related matters, as well as the Group’s
Task Force for Climate-related Financial Disclosures (TCFD). ESG-related strategic
objectives are incorporated in the Group’s Business Planning Process (BPP).
The Group is committed to creating an inclusive workplace and prioritising
employee wellbeing, to establish an environment where all employees feel
valued and supported. The Group’s Employee Voice Forum promotes health
and wellbeing in and outside of the office.
The Group has a robust governance framework.
62 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 63
StrategicESGConductPeopleCapitalCreditLiquidityMarketChangeData Financial Control Information Security Operational ResilienceProcessTechnology Third Party ManagementFinancial Crime Legal & Regulatory Principal risks and uncertainties
Risk
Potential impact
Mitigations
Risk
Potential impact
Mitigations
Strategic report
Governance
Financial statements
Other information
Operational risk
Change risk
The risk of potential
negative consequences
and uncertainties
associated with introducing
modifications, alterations,
or adjustments to
established processes
or systems.
Residual risk direction
Data risk
Data risk is defined as the
potential threats and
vulnerabilities that
can compromise the
confidentiality, integrity,
availability, and compliance
of sensitive or valuable data
within the Group and its
third-party suppliers.
This risk encompasses the
possibility of unauthorised
access, loss, theft,
alteration, or exposure
of data.
Residual risk direction
Financial control
environment risk
The risk that the financial
control environment is
weak. This includes the risk
of loss to the business, or
its customers, because of
either the actions of an
associated third party or
the misconduct of an
employee.
Residual risk direction
• Operational resilience
disruptions resulting from
crystallisation of change
risk may lead to financial
or regulatory penalties,
and reputational damage.
• Change can increase
costs if not delivered
within budget or
introduce complexity to
end users due to a lack of
compatibility with existing
systems.
• Reduced quality because
of a change can lead to
customer dissatisfaction,
rework, and additional
costs.
• An inability to deliver
change can result in
reputational damage to
the Group, making it
difficult to attract
customers and talent.
• Data breaches could
adversely impact
individuals’ data rights
and freedoms and could
result in fines / censure
from regulators, such as
the ICO and FCA.
• A data breach could result
in financial loss due to the
cost of investigating the
breach, notifying
impacted individuals, and
implementing
remediation measures.
• The Group could suffer
damage to its reputation,
eroding trust and making
it difficult to attract and
retain customers,
employees, partners,
and investors.
• Reputational damage
with regulators, leading
to increased capital
requirement.
• Potential customer
detriment resulting from
inadequate protection of
customer assets.
• Increased expenditure
in order to compensate
customers for loss
incurred.
All operational and regulatory change is prioritised, captured, and monitored
through the Operations sub-committee of ExCo.
Technical Change is prioritised, captured, and monitored within Technology
Services and through associated Committees.
Product Change is managed within the Product areas and overseen
by the corresponding Proposition Committee.
The Group monitors the adequacy of its data governance framework via the
Data Forum.
The Group has data protection policies and procedures, security controls
to protect data such as encryption, access controls and monitoring.
The Group educates employees about data security and the importance of
protecting sensitive data.
The Group conducts regular data audits to identify and address potential
security risks.
The Group’s Data Protection Officer / CRO provides an assessment of the
adequacy of the Group’s data protection framework as part of the annual
DPO report.
The Group’s financial control and fraud prevention policies and procedures
are designed to ensure that the risk of fraudulent access
to customer or corporate accounts is minimised.
Anti-fraud training is provided to all members of staff who act as first line
of defence to facilitate early detection of potentially fraudulent activity.
Strong technology controls are in place to identify potential money laundering
activity or market abuse.
Operational risk continued
Information
security risk
The risk of a vulnerability in
the Group’s infrastructure
being exploited or user
misuse that causes harm
to service, data and / or
an asset causing material
business impact.
Residual risk direction
Operational
resilience risk
The risk that the Group
does not have an adequate
operational resilience
framework to prevent,
adapt to, respond to,
recover from and learn
from operational
disruptions.
Residual risk direction
Process risk
The risk that, due to
unexpectedly high volumes,
the Group is unable to
process work within agreed
service levels and / or to an
acceptable quality for a
sustained period.
Residual risk direction
Technology risk
The risk that the design,
implementation and
management of
applications, infrastructure
and services fail to meet
current and future business
requirements.
Residual risk direction
• Information security
• The Group continually reviews its cyber security position to ensure that it
protects the confidentiality, integrity and availability of its network and the
data that it holds.
• A defence in depth approach is in place with firewalls, web gateway,
email gateway and anti-virus amongst the technologies deployed. Staff
awareness is seen as being a key component of the layered defences,
with regular updates, training and mock phishing exercises.
• Our security readiness is subject to independent assessment by a penetration
testing partner that considers both production systems and development
activities. This is supplemented by running a programme of weekly
vulnerability scans to identify configuration issues and assess the
effectiveness of the software patching schedule.
• The Group regularly assesses its maturity against an acknowledged security
framework, which includes an ongoing programme of staff training and
assessment through mock security exercises.
The Group has developed a comprehensive operational resilience framework,
under the direction of the Operations sub-committee of ExCo. The R&CC and
Board also provide oversight.
An annual operational resilience self-assessment document is reviewed by the
Board and R&CC. The Group’s Risk Team also provide a 2nd line of defence
review of the operational resilience self-assessment.
There is an ongoing programme to train staff on multiple operational functions.
Diversifying the workforce enables the business to deploy staff when high work
volumes are experienced. Causes of increased volumes of work, for example
competitor behaviour, are closely monitored in order to plan resource
effectively.
The Group focuses on increasing the effectiveness of its operational
procedures and, through its business improvement function, aims to improve
and automate more of its processes. This reduces the need for manual
intervention and the potential for errors.
The Group continues to implement a programme of increasing annual
investment in the technology platform. This is informed by recommendations
that result from regular architectural reviews of applications and of the
underpinning infrastructure and services.
Daily monitoring routines provide oversight of performance and capacity.
Our rolling programme of both business continuity planning and testing, and
single point of failure management, maintains our focus on the resilience of
key systems in the event of an interruption to service.
breaches could adversely
impact individuals’ data
rights and freedoms and
could result in fines /
censure from regulators,
such as the ICO and FCA.
• Failure to maintain or
quickly recover operations
could lead to intolerable
harm to customers and
the Group.
• The Group could suffer
damage to its reputation
eroding trust and making
it difficult to attract and
retain customers,
employees, partners,
and investors.
• Failure to maintain or
quickly recover
operations could lead to
intolerable harm to
customers and the
Group.
• Operational resilience
disruptions may lead to
financial or regulatory
penalties, and
reputational damage.
• A decline in the quality of
work would have a
financial impact through
increased operational
losses.
• Unexpectedly high
volumes coupled with
staff recruitment and
retention issues could
lead to poor customer
outcomes and
reputational damage.
• The reliance on evolving
technology remains
crucial to the Group’s
effort to develop its
services and enhance
products. Prolonged
underinvestment in
technology would affect
our ability to serve our
customers and meet
their needs.
• Failing to deliver and
manage a fit-for-purpose
technology platform could
have an adverse impact on
customer outcomes and
affect our ability to attract
new customers.
• Technology failures
may lead to financial or
regulatory penalties, and
reputational damage.
64 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 65
Principal risks and uncertainties
Risk
Potential impact
Mitigations
Risk
Potential impact
Mitigations
Operational risk continued
Operational risk continued
Strategic report
Governance
Financial statements
Other information
To mitigate the risk posed by third-party suppliers, the Group conducts
onboarding due diligence and monitors performance against documented
service standards to ensure their continued commitment to service, financial
stability and viability. Performance metrics are discussed monthly with
documented actions for any identified improvements.
This is supplemented by attendance at formal user groups with other clients of
the key suppliers, sharing experience and leveraging the strength of the user
base. Where relevant and appropriate, annual financial due diligence on critical
suppliers and on-site audits are also undertaken.
The Group’s customer focus is founded on our guiding principles, which drive
the culture of the business and ensure customers remain at the heart of
everything we do. Training on the importance and awareness of the delivery
of good customer outcomes is provided to all staff on a regular basis.
The Group continues to focus on enhancements to its framework, in relation
to the identification, monitoring and mitigation of risks of poor customer
outcomes, and to its product management process to reduce the potential
for customer detriment.
All developments are assessed for potential poor customer outcomes, and
mitigating actions are delivered alongside the developments as appropriate.
The Group implemented the Consumer Duty in July 2023 which provides
higher and clearer standards of consumer protection.
The Group has improved its recruitment processes to attract the best people
possible to join the Group.
The Group undertakes a staff engagement survey at least annually and uses this
feedback to address any areas for improvement to ensure staff engagement
remains high.
The Group conducts regular reviews of its employee benefits package to
ensure it is competitive.
The Group operates a talent development programme.
Third-party
management risk
The risk that a third-party
provider materially fails to
deliver the contracted
services.
Residual risk direction
Conduct/Consumer
Outcomes risk
The risk that the fair
treatment of customers is
not central to the Group’s
corporate culture.
Residual risk direction
People risk
The risk that the Group fails
to attract, retain, develop
and engage employees
who are aligned to the
Group’s guiding principles.
Residual risk direction
• Loss of service from a
third-party provider could
have a negative impact
on customer outcomes
due to website
unavailability, delays
in receiving and / or
processing customer
transactions or
interruptions to
settlement and
reconciliation processes.
• Financial impact through
increased operational
losses.
• Regulatory fine and /
or censure.
• Poor conduct could have
a negative effect on
customer outcomes.
• Reputational damage
resulting from poor levels
of customer service.
• The Group may be
adversely affected,
including regulatory
censure or enforcement.
• Difficulties in recruiting
the right people to work
for the Group.
• Existing employees who
are not motivated, do not
perform well and may
leave the Group.
• Talented employees who
are not appropriately
developed and / or have
limited opportunities to
progress are likely to
leave the Group.
• Resource shortfalls
may impact quality and
service and could lead to
poor service / consumer
outcomes and
reputational damage.
Financial crime risk
The risk of failure to protect
the Group and its
customers from all aspects
of financial crime, including
anti-money laundering,
terror financing,
proliferation financing,
sanctions restrictions,
market abuse, fraud,
cyber-crime and the
facilitation of tax evasion.
Residual risk direction
Legal and
regulatory risk
The risk that the Group fails
to comply with regulatory
and legal standards.
Residual risk direction
Investment risk
Risk of failures surrounding
the investment activities
carried out by AJ Bell
Investments (AJBI).
The risks specific to
the AJBI entity include
operational, reputational
and conduct risks
Residual risk direction
• The Group may be
adversely affected,
including regulatory
censure or enforcement,
if we fail to mitigate the
risk of being used to
facilitate any form of
financial crime.
• Potential customer
detriment as customers
are at risk of losing funds
or personal data, which
can subject them to
further loss via other
organisations.
• Fraudulent activity
leading to identity fraud
and / or loss of customer
holdings to fraudulent
activity.
• The Group could suffer
damage to its reputation,
eroding trust and making
it difficult to attract and
retain customers,
employees, partners,
and investors.
• Regulatory censure
and / or fines, including
fines from the FCA
and Information
Commissioner’s
Office (ICO).
• Related negative publicity
could reduce customer
confidence and affect
ability to generate new
inflows.
• Poor conduct could have
a negative impact on
customer outcomes,
impacting the Group’s
ability to achieve strategic
objectives.
• Outflows or loss of assets
under management as a
result of underperformance
or reputational damage.
• Compensation required
to cover operational
losses, such as trading
errors.
• Potential customer
detriment resulting from
inadequate governance
arrangements.
Extensive controls are in place to minimise the risk of financial crime.
Policies and procedures include: mandatory financial crime training in
anti-money laundering and counter-terrorist financing, fraud, market abuse
and the Criminal Finances Act for all employees to aid the detection, prevention
and reporting of financial crime. The Group has an extensive recruitment
process in place to screen potential employees.
The Group actively maintains defences against a broad range of likely attacks
by global actors, bringing together tools from well-known providers, external
consultancy and internal expertise to create multiple layers of defence. The
latter includes intelligence shared through participation in regulatory, industry
and national cyber security networks.
The Group maintains a strong compliance culture geared towards positive
customer outcomes and regulatory compliance.
The Group performs regular horizon scanning to ensure all regulatory change
is detected and highlighted to the Group for consideration.
The Group maintains an open dialogue with the FCA and actively engages with
them on relevant proposed regulatory change.
The Compliance function is responsible for ensuring all standards of the
regulatory system are being met by the Group. This is achieved by implementing
policies and procedures across the business, raising awareness and developing
an effective control environment. Where appropriate, the Compliance
Monitoring Team conducts reviews to ensure compliance standards have
been embedded into the business.
The Group maintains robust Investment Governance arrangements
for decision making in relation to the AJBI products and services. The
performance of AJBI products and services is monitored on an ongoing
basis for alignment with customer expectations and mandates, including
through dedicated committees and by the independent 2nd line of defence
Investment Risk function.
Enterprise risks are reviewed and monitored through AJBI’s Department Risk
Forum, with escalation routes to the Investment Proposition Committee (IPC)
and Risk & Compliance Committee.
Consumer Duty Evidential MI is monitored and reported up through the IPC
and Operational Committee.
Any trading undertaken on the AJ Bell Funds or in model portfolios is subject
to a number of internal controls to minimise the risk of any operational losses.
66 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 67
Principal risks and uncertainties
Viability statement
Strategic report
Governance
Financial statements
Other information
Risk
Potential impact
Mitigations
Financial risk
Credit risk
The risk of potential
failure of clients, market
counterparties or banks
used by the Group to fulfil
contractual obligations.
Residual risk direction
• Unintended market
exposure.
• Customer detriment.
The Group’s credit risk extends principally to its financial assets, cash balances
held with banks and trade and other receivables. The Group carries out initial
and ongoing due diligence on the market counterparties and banks that it uses,
and regularly monitors the level of exposure.
The Group continues to diversify across a range of approved banking
counterparties, reducing the concentration of credit risk as exposure is spread
over a larger number of counterparties. The banks currently used by the Group
are detailed in note 25 to the consolidated financial statements.
With regard to trade receivables, the Group has implemented procedures that
require appropriate credit or alternative checks on potential customers before
business is undertaken. This has minimised credit risk in this area.
The Group will maintain its existing strategy of diversification to ensure
acceptable exposure across a wide range of well-capitalised banks with
appropriate credit ratings.
It will continue to regularly monitor its level of exposure and to assess the
financial strength of its banking counterparties.
• Adverse effect on
customer transactional
activity or ad valorem
fees generated
from assets under
administration from
which the Group derives
revenue. Sensitivities
for interest rate and
market movements are
shown in note 25 to the
consolidated financial
statements.
The Group’s products are targeted at UK residents. We do not do business
in any other countries and have relatively few customers outside the UK.
However, in the event that the economy falls back into a prolonged recession,
this may impact contribution levels and confidence generally in the savings and
investment markets. The Directors believe that the Group’s overall income
levels and in particular the balance between the different types of assets and
transactions from which that income is derived, provide a robust defensive
position against a sustained economic downturn.
Revenue from retained interest income is derived from the pooling of customer
cash balances.
The Group has a variety of transactional and recurring revenue streams, some
of which are monetary amounts while others are ad valorem. This mix of
revenue types helps to limit the Group’s exposure to interest rate fluctuations
and capital market fluctuations.
• Reputational damage.
• Potential customer
detriment.
• Financial loss.
• Unable to meet
obligations as they
fall due.
The Group has robust systems and controls and monitors all legal entities
to ensure they have sufficient funds to meet their liabilities as they fall due.
The Group continues to monitor trade settlement on both an intra-day and
daily basis.
The Group continues to be a highly cash-generative business and to maintain
sufficient cash and standby banking facilities to fund its foreseeable trading
requirements.
Market risk
The risk that a significant
and prolonged capital
market or economic
downturn has an adverse
effect on customer
confidence, asset values
and interest rates.
Residual risk direction
Liquidity risk
The risk that the Group
suffers significant
settlement default or
otherwise suffers major
liquidity problems or issues
of liquidity deficiency
which severely impact
on the Group’s reputation
in the markets.
The risk that the Group
does not have available
readily realisable financial
resources to enable it to
meet its obligations as
they fall due or can only
secure such resources
at excessive cost.
Residual risk direction
The Board have identified a number of
potential management actions that could
be taken, the action selected would be
dependent upon the nature of the scenario.
The results have confirmed that the Group
would be able to withstand the adverse
financial impact of these three scenarios
occurring simultaneously over the
four-year assessment period. This
assumes that dividends are paid in line
with the recommendation made in the
30 September 2023 annual report and with
the Group dividend policy on a forward-
looking basis. During the period, the
Group continues to retain surplus financial
resources over and above its regulatory
capital and liquidity requirements, with
or without any management remediation
actions.
The Group’s strategy and four-year
financial forecasts were approved by the
Board in September 2023. The Directors
confirm that they have a reasonable
expectation that the Group will be able
to continue in operation and meet its
liabilities as they fall due over the four-year
period ending September 2027.
In accordance with provision 31 of the UK
Corporate Governance Code 2018, the
Board has assessed the viability of the
Group, considering a four-year period to
September 2027. The Board considers a
four-year horizon to be an appropriate
period to assess the Group’s strategy and
its capital requirements, considering the
investment needs of the business and the
potential risks that could impact the
Group’s ability to meet its strategic
objectives.
This assessment has been made
considering the Group’s financial position
and regulatory capital and liquidity
requirements in the context of its business
model, strategy and four-year financial
forecasts and in consideration of the
principal risks and uncertainties, as
detailed in the Strategic report on
pages 63 to 68. The principal risks and
uncertainties are those that may adversely
impact the Group based on its business
model and strategy and are derived from
both the Group’s business activities and
the wider macroeconomic environment
in which the Group operates but does
not control.
As an FCA-regulated entity, as part of
its Internal Capital and Risk Assessment
(ICARA) the Group is required to use stress
testing of the business model and strategy
to identify whether it holds sufficient own
funds and liquid assets. Forward-looking
hypothetical stress testing scenarios have
been determined by considering potential
macroeconomic and idiosyncratic events
that would have a significant adverse
impact on the Group’s ability to generate
profits, and therefore maintain the existing
levels of own funds and liquid assets, over
the business planning period.
The Board-approved four-year financial
forecast assumes the business continues
to grow customer numbers and AUA
through investment in our brand, product
propositions, technology and people. The
financial forecasts assume that the Bank of
England base interest rate has peaked,
gradually falling throughout the forecast
period, in line with market projections.
There are no significant market
movements in underlying asset values
based on the position at the point the
projections were approved by the Board.
The Board has considered the potential
impact of three stress test scenarios, which
cumulatively represent a severe, remote
but plausible scenario:
1) Macroeconomic (Market risk) – a
significant reduction in equity market
values, based on the 2008-09 global
financial crisis. Asset values fall by 40%
in year one, recovering to 20% below the
level they were prior to the fall in year
two, and remain flat in years three
and four.
2) Macroeconomic (Market risk) – Bank
of England base interest rate reduced
to 0.50% throughout the assessment
period, leading to a lower interest rate
retained on customer cash balances.
3) Idiosyncratic (Technology risk,
Third-party management risk) –
prolonged IT issues with key operating
software suppliers cause significant
damage to AJ Bell’s service and
reputation, which results in a reduction
in customers. Following year one the
Group incurs development and license
costs to upgrade or replace key
components of the platform software,
with service levels and net inflows
returning to normal in year three.
Capital risk
The risk that the Group
does not maintain
sufficient capital
resources to cover
unexpected losses.
Residual risk direction
• Inability to cover
unexpected losses.
• Additional regulatory
scrutiny and potential
increased regulatory
capital resource
requirements.
The Group adopts a cautious and controlled approach to managing its
capital risk.
The Group conducts an Internal Capital and Risk Assessment (ICARA)
process aligned with its risk management framework to identify, monitor
and mitigate harms.
Where harms cannot be mitigated, the Group holds capital to cover potential
unexpected losses (its capital resource requirement). The Group’s capital risk
appetite is to maintain its capital resources at least >125% more than the
Group’s capital resource requirement.
The Strategic report was approved by the
Board of Directors and signed on its behalf by:
Michael Summersgill
Chief Executive Officer
6 December 2023
68 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 69
Strategic report
Governance
Financial statements
Other information
In around 20 years I’ve not had a bad experience.
The platform is easy to get on with. When I
phone the help desk, people are always helpful.
That doesn’t happen with a lot of help desks
or customer services. It makes you feel good
knowing that you’re giving the best financial
situation to your children and your grandchildren.”
Tony
AJ Bell customer
#FeelGoodInvesting
See more at ajbell.co.uk/group/feel-good-investing
Helping Tony invest for his family
Age: 69 years old
Mission: To be tax efficient and save for
his grandchildren
Tony is a retired NHS consultant and has
been a customer with us for around 20
years. His main investment goals are to
be tax efficient and provide compound
returns for his grandchildren.
Tony enjoys saving money for his family
and believes that anybody can invest.
Tony reflects on his long-standing
experience as a valued AJ Bell customer.
Tony is a real AJ Bell customer sharing his
honest opinions.
Governance
72 Chair’s introduction
74 Board of Directors
78 Executive Committee
80 Corporate Governance report
88 Nomination Committee report
92 Audit Committee report
Risk & Compliance
98
Committee report
102 Directors’ Remuneration report
122 Directors’ report
125 Statement of Directors’
responsibilities
70 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023
71
Chair’s introduction
This has been another year of change as
we continue to build out our corporate
governance structure to support the
long-term sustainable growth and success
of the business for the benefit of our
shareholders and other stakeholders.”
Fiona Clutterbuck
Chair
Dear shareholder
I am delighted to be writing as Chair of the Board to introduce
my first Corporate Governance report, having taken up the role
on 1 May 2023. Given my experience of having served on a
number of other listed company boards, and also having spent
my executive career in the financial services sector, I am well
aware of the importance of governance and engagement with
shareholders and other stakeholders. I have already had the
opportunity to meet with some of our shareholders, and it has
been very helpful to hear their views.
As a Board, we are committed to maintaining high standards of
corporate governance and a robust framework for the control
and management of AJ Bell in the best long-term interests of its
shareholders. I have highlighted a number of matters below
and further details of how we have discharged our corporate
governance responsibilities are set out later in this report.
Board and ExCo changes
The main changes at Board level during the year were my
appointment as Chair with effect from 1 May 2023 in succession to
Baroness Helena Morrissey and that of Les Platts as a Representative
Director for Andy Bell, our former CEO and co-founder. I would like
to take this opportunity to welcome Les back to the Board, with Les
having previously served on the Board for just over 13 years, initially
as a Non-Executive Director and latterly as independent Non-
Executive Chair, until he stepped down at the 2022 AGM. As a Board
we believe Les, who has detailed knowledge of the financial services
sector and AJ Bell, to be ideally placed to both represent Andy’s
interest and make a valuable all-round contribution to discussions
around the boardroom table. I would also like to take this opportunity
to thank Helena for her significant contribution as Chair and look
forward to her continued involvement through her consultancy role
supporting our Money Matters initiative aimed at encouraging more
women to take control of their finances and invest in their future.
Following these changes, at least half of the Board, excluding
the Chair were Non-Executive Directors who were considered
independent. Whilst Board appointments in the year did not
meet all the FCA targets, by year end there remained 33% female
representation on the Board and two out of the four senior Board
positions were held by women. We resumed our search for two
new independent Non-Executive Directors in May this year with
a clear commitment of addressing these targets. I am pleased to
report that since the year end we have appointed Fiona Fry as an
independent Non-Executive Director with effect from 7 December
2023. Fiona will succeed Simon Turner, as Chair of the Risk &
Compliance Committee, subject to regulatory approval. Fiona is a
highly experienced risk professional who brings with her a wealth
of financial services and regulatory experience and I look forward
to welcoming her to the Board in due course. Our commitment to
both the Parker Review recommendations and the FCA diversity
requirements remain a key consideration as we continue our search
for a further independent NED to join the Board in the coming year.
At executive level, we are pleased to report the internal promotion
of Kina Sinclair to the role of Group Legal Services Director and as a
member of the ExCo with effect from 1 October 2023 in succession
to Bruce Robinson, who stepped down from the ExCo at the end of
September 2023. Kina, who has been with us for five years, as Senior
In-House Legal Counsel, has in-depth knowledge of our business
and culture, so was ideally placed to take on the role. I would like
to take this opportunity to congratulate Kina on her promotion.
As part of the succession plan for Bruce, who was also our
Company Secretary, we decided to split the Group Legal Services
Director and Company Secretary roles and this led to the
appointment of Olubunmi Likinyo (Bunmi) as Company Secretary
with effect from 1 October 2023, who I would also like to
welcome. Bunmi joins us from Nationwide Building Society.
Further details are set out in the Nomination Committee report
on pages 88 to 91.
Our people
I succeeded Helena as our nominated Employee Engagement
Director and took over the role of Chair of our Employee Voice
Forum. I am supported by our Non-Executive Directors, who also
attend meetings from time to time. Topics discussed during the
year included executive pay and career progression, our Employee
Value Proposition and the impact of hybrid working. Following the
meetings, feedback was provided to the Board and ExCo.
We took the opportunity to review our hybrid working policy
during the year, which included obtaining feedback from our
people, with particular focus on whether there had been a decrease
in engagement levels. Although we made some minor changes in
response to the feedback received, the overall outcome supported
our current approach. This is something that we will keep under
review, as having an engaged workforce providing a high-quality
service to our customers and their advisers is critical for the
long-term sustainable success of the business.
Mindful of the impact of the continuing cost-of-living pressures,
we followed up on the changes we made to our pay and benefits
for members of the wider workforce last year, when we awarded
our highest ever increase in base pay. Enhancements this year, in
addition to an average increase in base pay of 5.8%, included a
further free share award for all eligible staff of up to £2,000 under
our HMRC-approved Buy as You Earn plan and the further uplift in
pension contributions.
Strategic report
Governance
Financial statements
Other information
I am pleased to be able to report that we retained our 3-star Best
Companies rating, this year, making it into the top 20 of the 100
Best Companies list and maintaining our position in the top five
financial services companies in the UK. This achievement is
testament to our ongoing commitment to invest in our people
and to the positive culture we have built.
Further details on the above are set out in our Responsible
Business report on pages 39 to 43.
Our customers
Our purpose and our strategy has always put our customers and
their advisers at the heart of our business and the Board always
considers their needs and the impact on them of everything we
do. As a consequence, the Board is supportive of the introduction
of the new Consumer Duty, which is intended to set higher and
clearer standards of consumer protection across financial services
and requires firms to put the needs of their customers first.
The initial implementation of the Consumer Duty has been a key
area of focus for the Board and the business as a whole during
the year. The Chair of our Risk & Compliance Committee,
Simon Turner, was appointed as our designated Non-Executive
Director Consumer Duty champion, whose role is to ensure the
Consumer Duty is discussed regularly at Board level. Although
we believe our culture is aligned with the requirements of the
Consumer Duty, we are by no means complacent, and the Board’s
focus during FY24 will be on maintaining oversight to ensure the
business is delivering good outcomes for its customers which
are consistent with the Duty.
Environmental, social and governance (ESG)
We established the AJ Bell Futures Foundation, a charitable
initiative with the initial focus on helping support disadvantaged
people access opportunities, partnering with two charities during
the year, Smart Works and IntoUniversity. The initiative was
launched as part of AJ Bell, with the Board committing to donate
0.5% of profits before tax to the foundation each year. During the
year we decided to further embed this initiative by establishing a
registered charity to carry it on which resulted in the registration
of the AJ Bell Futures Foundation as a charitable incorporated
organisation on 12 September 2023.
We have calculated proposed carbon reduction targets aligned to
the UK Government’s commitment to be Net Zero by 2050. Before
committing to these targets, we have made good progress in
developing a transition plan to understand the near and long-term
carbon reduction initiatives we will need to undertake to achieve
these targets.
Further details of our ESG-related activities are set out in the
Responsible Business report on pages 32 to 54.
Conclusion
I would like to thank all of our people for the contribution they
have made during the year, which has enabled us to continue to
provide an excellent level of service to our customers and their
advisers for the benefit of all of our stakeholders in what have
been challenging macroeconomic times.
Fiona Clutterbuck
Chair
6 December 2023
Compliance with the UK
Corporate Governance Code
I am pleased to report that, having considered the provisions
of the UK Corporate Governance Code 2018 (the ‘UK
Code’), the Board is satisfied that we have complied with the
UK Code throughout the financial period which ended on
30 September 2023.
The UK Corporate Governance Code 2018 is available
on the Financial Reporting Council website at frc.org.uk.
Details of how we have applied the main principles of the
UK Code and further information can be found as follows.
1. Board leadership and
Company purpose
Information on the Company’s Board and Senior Leadership
Team, an overview of the work undertaken to promote the
long-term success of the Company and how the Board has
considered stakeholders’ interests.
See more p80 to 83
2. Division of responsibilities
Information on the governance framework of the Group.
See more p84 and 85
3. Composition, succession
and evaluation
Overview of the composition of the Board and evaluation
process together with the report from the Nomination
Committee on its work during the year on Board and Senior
Executive composition and succession planning.
See more p86
4. Audit, risk and internal control
Overview of the framework for oversight of the Group’s
financial reporting and risk management and internal
controls, together with the reports from the Audit
Committee and Risk & Compliance Committee
on the work undertaken during the year.
See more p87
5. Remuneration
Report from the Remuneration Committee on overseeing
the Group’s remuneration policies and practices, performance
outcomes and Annual Report on Remuneration.
See more p87
72 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023
73
Board of Directors
Committed to the
highest standards
Fiona Clutterbuck
Chair
N
R
C
Strategic report
Governance
Financial statements
Other information
Michael Summersgill
Chief Executive Officer
D
Peter Birch
Chief Financial Officer
D
Roger Stott
Chief Operating Officer
Board changes in 2023
With effect from 1 May 2023, Fiona Clutterbuck was appointed
as Chair of the Board, replacing Baroness Helena Morrissey.
Les Platts has been appointed as a non-independent
Non-Executive Director, to represent Andy Bell’s interests,
as a major shareholder, effective from 13 July 2023.
Company Secretary changes in 2023
Olubunmi Likinyo joined as Company Secretary, effective from
1 October 2023.
N Nomination Committee
A Audit Committee
D Disclosure Committee
R Remuneration Committee
C Risk and Compliance Committee
Committee Chair
Appointed: May 2023
Appointed: October 2022
Appointed: July 2022
Appointed: October 2021
Skills and expertise:
Fiona is currently a Non-Executive Director
of Sampo plc and the Co-operative Bank.
Fiona has extensive corporate governance
skills and experience, and a keen focus on,
and understanding of, good customer
outcomes.
In her non-executive career Fiona was
previously a Non-Executive Director of
Hargreaves Lansdown plc, the Chair of
Paragon Banking Group plc and Senior
Independent Director at M&G plc. Fiona
was also a Non-Executive Director of
W.S. Atkins until its acquisition in 2017.
During her executive career Fiona qualified
as a barrister and had extensive corporate
finance experience, having held roles as
Head of Strategy, Corporate Development
and Communications at Phoenix Group
plc, having previously held investment
banking roles with ABN AMRO Investment
Bank plc, HSBC Investment Bank plc and
Hill Samuel Bank Limited.
Other appointments:
• Non-Executive Director of the
Co-Operative Bank plc, the
Co-Operative Bank Finance plc, and
the Co-Operative Bank Holdings Limited
• Non-Executive Director of Sampo plc
Skills and expertise:
Michael has played an integral role in
AJ Bell’s successful growth since joining
the Board in 2011. He brings clear strategic
leadership and has a deep understanding
of the Company’s business model and
operations.
Michael joined AJ Bell in 2007 and was
appointed as CFO in 2011. His role
broadened from 2014 onwards, when
he began to take on responsibility for
the Group’s operational functions. In his
time as CFO Michael led a number of key
change initiatives, helping to develop
AJ Bell into one of the UK’s leading
investment platform businesses. Michael
became Deputy CEO in 2021, a role in
which he focused on developing the
Group’s strategy and organisational
structure. He was appointed as CEO
in October 2022.
Michael studied Economics at the
University of Sheffield, completed the
Transition to General Management
programme at INSEAD and is a Fellow
of the Association of Chartered Certified
Accountants.
Skills and expertise:
As CFO, Peter has responsibility for the
financial management of the business and
for leading engagement with the Group’s
key shareholders.
Skills and expertise:
Roger joined AJ Bell in July 2008, having
qualified as a Chartered Accountant with
KPMG in 1990 and then moved on to hold
a number of senior in-house finance roles.
Peter joined AJ Bell in July 2022 from
Deloitte LLP (‘Deloitte’) where he was
a financial services audit and assurance
partner. Peter joined Deloitte in 1999
and qualified as a Chartered Accountant in
2002. He became a partner in 2011 and
was the lead audit partner for several large
listed financial services organisations. He
also led Deloitte’s financial services audit
and assurance practice in the regions from
2017 to 2021.
Peter studied History at the University
of Durham and is a Fellow of the Institute
of Chartered Accountants of England
and Wales.
Roger has extensive experience within the
financial services sector as a result of
having specialised in retail stockbroking
for over 20 years with a number of firms.
During his time at AJ Bell he has held a
wide range of roles, including Group
Finance Director and Chief Risk Officer.
He was appointed to his current role as
Chief Operating Officer in October 2021.
This includes responsibility for maintaining
the excellence and resilience of AJ Bell’s
operations incorporating Customer
Services, Operations and HR together
with delivery of related key projects and
resolution of technical issues in support
of the Group’s strategy.
He is also responsible for the management
of AJ Bell’s white label third-party SIPP
relationships.
He brings an in-depth knowledge of the
financial and operational activities of the
business and its risk management and
related governance practices.
Board gender diversity
Board tenure
Board composition
3
1
1
6
7
1
1
4
3
Male
Female
0-4 years
5-8 years
9+ years
Chair
Executive Directors
Non-Executive Directors
Non-Independent Non-Executive Director
74 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023
75
Board of Directors
Strategic report
Governance
Financial statements
Other information
Evelyn Bourke
Independent Non-Executive
Director and Senior Independent
Director
N
A
C
Eamonn Flanagan
Independent Non-Executive
Director
Margaret Hassall
Independent Non-Executive
Director
N
A
R
N
A
D
R
Simon Turner
Independent Non-Executive
Director
R
C
Les Platts
Non-independent
Non-Executive
Director
Olubunmi Likinyo
Company Secretary
Appointed: July 2021
Appointed: March 2018
Appointed: September 2021
Appointed: July 2014
Appointed: July 2023
Appointed: October 2023
Skills and expertise:
Evelyn is a qualified actuary and has an
MBA from London Business School.
Latterly, in her executive career, Evelyn was
Group CEO at Bupa Group from 2016 to
2020. She was Group CFO at Bupa from
2012. Prior to that, she had senior
positions with other companies such as
CEO of Heritage Business at Friends Life
Group, CFO of Friends Provident, CFO of
Standard Life Assurance and Principal at
Tillinghast Towers Perrin. She previously
served as Non-Executive Director of the
Children’s Mutual and IFG plc.
Other appointments:
• Non-Executive Director of Marks and
Spencer Group, and Chair of Audit
Committee
• Non-Executive Director of Bank of
Ireland Group plc, Chair of Audit
Committee, member of Risk Committee,
Nomination Committee and
Sustainability Committee
• Non-Executive Director of Admiral
Group plc, and Chair of Remuneration
Committee
• Trustee of The Ireland Fund of
Great Britain
Skills and expertise:
Eamonn is a Fellow of the Institute of
Actuaries, having qualified at Royal
Insurance before moving to a leading
investment bank where he was latterly
appointed Director and Head of European
Insurance. He then co-founded Shore
Capital Markets, a well-respected
investment bank, where he was
appointed as Director.
As an analyst, Eamonn gained considerable
experience analysing the business and
financial models of companies across
financial services. This period provided
Eamonn with the opportunity to observe
how financial services companies
responded to changes in regulation,
market conditions and strategic focus
whilst also delivering strong customer
outcomes.
This experience has proven to be
invaluable in his role as Non-Executive
Director of AJ Bell, since he joined the
Board in March 2018, and in his roles as
Chair of both the Audit Committee and
the Disclosure Committee.
Other appointments:
• Non-Executive Director of R&Q
Insurance Holdings Ltd
• Non-Executive Director of Chesnara plc,
Movestic Livforsakring AB and Non-
Executive Chair of Movestic Fonder AB
Skills and expertise:
Margaret is an experienced Non-Executive
Director in the financial services industry
and brings a broad range of experience
developed across different industry
sectors, including financial services,
manufacturing and utilities.
Margaret spent seven years working for
Deloitte as a consultant and led the
financial services consulting business
for Charteris.
Margaret has also been engaged as Chief
Operations Officer or Chief Information
Officer for divisions within some of the
world’s largest banks, including Bank
of America Merrill Lynch, Barclays and
Royal Bank of Scotland, and is a former
Non-Executive Director of FTSE 250 listed
One Saving Bank (OSB) plc and AIM listed
Nucleus Financial Group plc.
Other appointments:
• Non-Executive Director of Kier
Group plc
N Nomination Committee
A Audit Committee
D Disclosure Committee
R Remuneration Committee
C Risk and Compliance Committee
Committee Chair
Skills and expertise:
Bunmi was appointed Company Secretary
in October 2023 and has responsibility for
the Group’s company secretarial function.
She provides advice and support to the
Board and its Committees on all aspects
of corporate governance and related
regulatory requirements.
She is a qualified Chartered Company
Secretary and governance professional
with over 20 years experience across
various listed companies and sectors.
Prior to joining the Company, she was
Deputy Company Secretary at Nationwide
Building Society and IG Group Holdings
plc. She also held senior company
secretarial positions at J Sainsbury plc
and Barclays plc. Bunmi is a Fellow of
the Chartered Governance Institute.
Skills and expertise:
During his executive career, Les, who was
a Chartered Accountant, spent 33 years
with Deloitte LLP where he was an audit
partner, the practice senior partner in the
North East and a UK board member. His
clients included FTSE 100 and FTSE 250
companies in a range of sectors and he
advised on strategic, financial, governance
and risk matters.
Previously in his non-executive career,
Les was a director of AJ Bell for just over
13 years, having joined the Board as an
independent Non-Executive Director in
2008 and then was Chair from 2014 until
he stepped down at the end of the 2022
AGM, having served in excess of the
nine-year limit under the UK Code. Les
was also a Director and Vice Chairman of
Leeds Building Society and the Honorary
Treasurer of Lancashire County
Cricket Club.
Les was appointed to the Board as a
Representative Director for Andy Bell,
the former Chief Executive Officer and a
co-founder of the Company, who together
with his connected persons, is the
Company’s largest individual shareholder.
As a consequence, Les is not considered to
be independent for UK Code purposes.
Skills and expertise:
Simon has impressive broad experience,
initially as a senior executive and,
subsequently, for 18 years as a
Non-Executive Director.
In his executive career, Simon was the
Managing Director of Philips Consumer
Electronics in the UK and Group Managing
Director at Dixons Retail for over ten years
with wide responsibility in the UK and
Europe. These roles have given him strong
insights into process change resulting in,
not just lower costs, but a much-improved
customer experience, and given him a
passion for improving customer service.
As a Non-Executive Director, he has
previously served on the Boards of
Yorkshire Building Society, where he
chaired the Remuneration Committee,
and Allied Irish Bank UK, where he was
Deputy Chair of the Risk Committee.
Simon also served on the Audit Committee
of both boards. This gave him strong
insights into all governance issues within
the financial services sector. Although not
a risk specialist by training, Simon has
strong insights into risk and risk
governance.
He has also served on the boards of
several international internet businesses
which has added to his knowledge of
both online and traditional marketing
and customer communications.
This, combined with his extensive
management experience, means that
Simon contributes widely to AJ Bell, with
a particular focus on digital marketing,
IT change and strategy.
Other appointments:
• Trustee of Cambridge Dial A Ride Ltd plc
76 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023
77
Executive Committee
The management expertise and experience
of each of the members of the Executive
Committee, other than the Chief Executive
Officer, Chief Financial Officer and Chief
Operating Officer, is set out below:
Strategic report
Governance
Financial statements
Other information
Billy Mackay
Managing Director, Advised
Kevin Doran
Managing Director, Direct to
Consumer and AJ Bell Investments
Karen Goodman
Chief Risk Officer
Mo Tagari
Chief Technology Officer
Liz Carrington
HR Director
Kina Sinclair
Group Legal Director
Billy worked for another major platform
provider before joining AJ Bell in June
2008. He has been involved in financial
services for over 35 years in a variety of
marketing and distribution roles. Billy is
responsible for AJ Bell Investcentre’s
development roadmap, marketing,
distribution, and adviser service
proposition and for the development and
distribution of AJ Bell Custody Solutions.
He is also responsible for AJ Bell’s
Platinum SIPP and SSAS products.
A great believer in lifelong learning he is
always looking for new ways to challenge
our strategy and approach to the
distribution of our advised propositions.
He has also led the development and
evolution of our industry leading adviser
conference and seminar framework.
With more than 25 years’ of investment
platform experience, he brings a deep
understanding of the UK advised platform
market and plays a key hands-on role in
developing and maintaining key adviser
relationships.
With over 20 years’ experience in the
investment industry, Kevin has spent the
majority of his career in the private
banking and asset management sectors,
undertaking roles in fund management
and product development before being
appointed as Chief Investment Officer at
a large UK private bank and then Head of
Strategy & Research for a major European
investment bank.
Joining AJ Bell in 2017, Kevin took on the
role as Managing Director at AJ Bell
Investments, leading the team responsible
for the asset management proposition and
working closely with both of the Group’s
platform propositions in the process,
including as project sponsor for the
launch of Dodl.
In 2022, Kevin was appointed Managing
Director of the D2C operations at AJ Bell,
including AJ Bell Media. Citing access to
capital markets as the greatest source of
social mobility after education, he has a
passion and desire to help people invest.
Executive Committee changes in 2023
Bruce Robinson stepped down from his role as Company Secretary and Group
Legal Services Director, and as a member of the Executive Committee, at the end
of September 2023. Effective from 1 October 2023, Kina Sinclair replaced Bruce as
Group Legal Director.
Following the year end, Kevin Doran informed the business of his decision to leave
and will be departing AJ Bell in early 2024. Charlie Musson, our Chief Communications
Officer, has taken over as Acting Managing Director D2C and as a member of ExCo.
See more p18
Karen is an experienced financial services
leader, with diverse and varied experience
of establishing and developing second and
third line of defence activities.
Karen’s comprehensive knowledge of the
financial services regulatory environment
was initially gained through Financial
Services Authority roles in conduct risk,
retail banking related thematic projects,
and the relationship supervision of a
portfolio of investment management firms.
This was then complemented by time
spent leading a regulatory assurance
team at PwC in Manchester, where she
supported organisations to mature and
develop their compliance and risk
capabilities.
More recently, Karen has spent five years
at Yorkshire Building Society, initially as
Head of the Compliance Monitoring
function and then as Director of
Compliance, roles which included holding
the money laundering reporting and data
protection officer responsibilities.
Karen is focused on engaging and
influencing key stakeholders, to maintain
a customer centric outlook which provides
the best outcomes for both customers
and the business.
Mo has 20 years of global industry
experience, predominantly within large
investment banks in London, Mumbai,
Hong Kong and Singapore.
Mo brings hands-on and in-depth
technical experience within the financial
services sector including building and
sustaining large, global, diverse teams
driving digital, engineering and cultural
transformation across multiple
business lines.
Mo started his career in Cambridge at
EMBL-EBI, leveraging his BSc in Genetics
and MSc in Software Engineering. Mo
moved into financial services in 2004 at
Morgan Stanley London, building out
platforms for a global operations user
base within Prime Brokerage which led
to opportunities in Mumbai and Hong
Kong where he built out and managed
the Securities Lending platform. He
subsequently moved to Singapore
as the APAC Head of Equity Finance and
Synthetics IT at Barclays Capital, before
returning to Hong Kong as the Head
of APAC Prime Brokerage Technology.
Immediately prior to joining AJ Bell,
Mo served as Asia CTO for Wealth
Management at JP Morgan Hong Kong.
Liz is a senior HR professional with over 20
years of generalist HR experience working
within the financial services sector.
Kina joined AJ Bell in July 2018 and was
appointed as Group Legal Services
Director in October 2023.
Liz is responsible for the development and
delivery of the HR strategy covering
the full employee lifecycle including
recruitment and selection, performance
and management, pay and benefits,
employee engagement and retention
and employer brand and culture.
Liz supports the Remuneration Committee
in ensuring that wider workforce
remuneration and related policies are
aligned with our culture and that these are
taken into account when determining
executive remuneration.
Having worked at AJ Bell for over 20 years
within HR, Liz has been instrumental in the
development and implementation of all HR
policies and practices. These have evolved
over time to support the Company’s
culture and to help strengthen levels of
staff engagement whilst also ensuring
compliance with current employment
law and governance requirements.
Liz has been the internal HR lead for a
number of significant business projects,
including supporting with the Company’s
IPO project and the development of a new
remuneration policy for executives, in
compliance with the Corporate
Governance Code.
Before joining AJ Bell, she began her
career at Addleshaw Goddard LLP and
spent time there upon qualification as a
commercial lawyer advising on a range
of disciplines across different sectors,
including financial services. Her
commercial law expertise is broad and
covers commercial contracts, technology,
data protection, outsourcing and
procurement.
Joining AJ Bell just before the IPO, Kina
was primarily responsible for providing
legal support across the business,
which included working closely with
key stakeholders to deliver the desired
outcomes for the business and customers.
Before being appointed as Group Legal
Services Director, Kina’s responsibilities
included supporting the Company
Secretary and she developed a more
in-depth knowledge of the business
and its internal corporate governance
structures, by attending and providing
support for Board and Executive
Committee meetings. This has
complemented her legal expertise and
role as a legal adviser for the business.
78 AJ Bell plc Annual Report and Financial Statements 2023
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Corporate Governance report
1. Board leadership and
Company purpose
An effective Board
The role of the Board is to provide effective and entrepreneurial
leadership of the Group for the purposes of promoting long-term
sustainable success, generating value for shareholders and
contributing to wider society.
The Board is responsible for leading and controlling the Group
and has overall authority for the management and conduct of
AJ Bell’s business, strategy and development. The Board is also
responsible for ensuring the maintenance of a robust system
of internal controls and risk management (including financial,
operational and compliance controls) and for reviewing the overall
effectiveness of the systems in place, as well as for the approval of
any changes to the capital, corporate and management structure
of the Group. The Board is collectively responsible to shareholders
for protecting their interests and promoting the long-term
sustainable success of the business.
At the heart of our business is a clear and succinct purpose: to
help people invest. We want to make investing as easy as possible
for our customers and their advisers and to enable our customers
to feel good investing and realise their financial goals. The
underlying values of our business are set out in our guiding
principles, which inform everything we do. Our strategic drivers
are the critical components that determine the success of our
strategy. They are: sustainable growth, easy-to-use platform
propositions, excellent service and high staff engagement.
Our purpose, guiding principles and strategy all define and
shape our culture.
The Board reviews strategy annually during a dedicated business
planning process with a view to promoting the long-term success
of the Group. During the course of the business planning process,
the Board reviewed our guiding principles in order to satisfy itself
that they remained relevant to our purpose and culture, which
included obtaining input from our customers, their advisers and
our people. The outcome was that we refined and refreshed our
guiding principles but did not make any substantive changes.
One of the ways in which we monitor our culture is by using a
culture dashboard which identifies the core characteristics of our
culture and sets a benchmark for enabling the Board to monitor
future changes. The dashboard, which is presented to the Board
bi-annually, was further refined during the year. This included
the incorporation of metrics for monitoring Consumer Duty
embedment, the impact of hybrid working, our employer
advocacy scores compared to local recruitment competitors
as well as the introduction of additional assurance measures.
The Board oversees the setting of objectives for the members of
the ExCo which are aligned with the Group’s high-level strategy
and long-term vision and monitors progress with their delivery
at Board meetings during the course of the year.
There are certain powers and financial limits sitting alongside
those powers, which are reserved to the Board because their
exercise is considered to be of overriding importance and
significance to the Group. Those reserved powers, details of
which are set out on the website at ajbell.co.uk, are reviewed
each year by the Board. No material changes were made to
the reserved powers this year.
Although a wide range of the Board’s powers and authorities are
delegated to the CEO, the Board retains ultimate responsibility and
authority for their exercise. Each member of the Board acts in a
way which they consider to be in the best long-term interests of
the Group and in compliance with their duties under sections
170 to 177 of the Companies Act 2006.
All of the members of the Board are expected to attend all
meetings of the Board, the Board Committees on which they
serve and the AGM, either in person or remotely. If any member
of the Board is not able to attend a meeting, they are given
the opportunity to provide feedback on the matters under
consideration via the chair of the relevant body in advance of
the meeting. They are also expected to devote such time to the
affairs of the Group as is necessary to enable them to perform
their duties as Directors. The Company Secretary attends all
meetings as secretary to the Board. Other members of the senior
management team, external advisers and industry experts are also
invited to attend Board meetings to present items of business and
provide insights into strategic issues and relationships. This also
affords the Board the opportunity to both give and receive
stakeholder feedback directly.
The Board had seven scheduled meetings this year, plus two
dedicated business planning meetings. The Board arranges
additional meetings as and when required, which resulted in
four more meetings being held this year to consider additional
business, including the Consumer Duty, the appointment of the
Chair and the Representative Director together with the outcome
of the Competitive Tender Process for our 2025 audit.
In addition to engagement through our Employee Voice Forum,
members of the Board also engaged with our people by attending
two knowledge sharing / networking events, our annual managers’
day, lunchtime briefings and other staff social events and sitting in
on some day-to-day business meetings. These activities provide the
Board with valuable insights into the operation and culture of the
business, which has a positive impact on the quality of discussions
at Board meetings and decision-making generally.
Member
Fiona Clutterbuck1
Helena Morrissey2
Role
Chair
Chair
Evelyn Bourke
Senior Independent Director
Eamonn Flanagan
Non-Executive Director
Margaret Hassall
Non-Executive Director
Simon Turner
Non-Executive Director
Michael Summersgill
Chief Executive Officer
Roger Stott
Peter Birch
Les Platts3
Chief Operating Officer
Chief Financial Officer
Representative Director
Eligible / attended
meetings
(including ad hoc
meetings)
5/5
8/8
13/114
13/13
13/13
13/13
13/13
13/125
13/13
4/26
1. Fiona Clutterbuck joined the Board on 1 May 2023.
2. Helena Morrissey stepped down from the Board on 30 April 2023.
3. Les Platts joined the Board on 13 July 2023.
4. Evelyn Bourke was unable to attend an ad hoc meeting arranged at short notice
and an ad hoc meeting due to a bereavement.
5. Roger Stott was unable to attend an ad hoc meeting arranged at short notice.
6. Les Platts was unable to attend a meeting due to a prior commitment and an ad
hoc meeting arranged at short notice.
For meetings where members were unable to attend, members
provided input ahead of those meetings via the Chair.
Strategic report
Governance
Financial statements
Other information
Our purpose
Our strategy
Our guiding principles
We help people to invest
Sustainable growth
We want to make investing as easy as
possible for our customers to enable
them to take control of their finances
and realise their financial goals.
Easy-to-use platform
propositions
Excellent service
High staff engagement
Principled
Knowledgeable
Straightforward
Personal
Ambitious
Our culture
Our purpose, guiding principles and strategy all define and shape our culture. The underlying values of our business are set out
in our guiding principles, which inform everything we do.
What people say about the AJ Bell
culture is true. I think you can go to
other places and you might just be
another number. It’s definitely not the
case here.”
Owen Jenkinson
AJ Bell apprentice
All other significant commitments and potential conflicts of
interest which a Director may have are required to be disclosed
both before appointment and on an ongoing basis, and
arrangements are put in place, as and when it is considered
appropriate, to manage conflicts, including any which result from
significant shareholdings. Conflicts of interest are a standing
agenda item at each Board and Committee meeting. We refreshed
and updated our internal procedures governing conflicts of
interest during the year. Given the potential conflicts of interest as
a result of the Representative Director being a nominee of a major
shareholder, the Relationship Agreement between the Company
and Andy Bell makes provision for the management of any
conflicts which may arise.
Any additional external appointments require prior approval.
During the year the Nomination Committee approved new
external non-executive appointments for Helena Morrissey (one)
and Margaret Hassall (one), neither of which was considered to be
significant in terms of commitment or shareholding.
Except as stated in note 28 of this report, no Director has, or has
had, any material interest in any contract or arrangement with the
Group during the year.
The Group maintains what the Board considers to be appropriate
insurance cover in respect of legal action against the Directors.
The Board has delegated responsibility for the oversight of
whistleblowing to the Risk & Compliance Committee, with the
Chair of the Committee, Simon Turner, being our designated
Whistleblowing Director. Details of the related oversight
arrangements are set out in the Committee’s report on page 100.
The Group’s anti-bribery and corruption and modern slavery
policies were both reviewed during the year.
80 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 81
Corporate Governance report
Key Board activities
Topics discussed
Strategy
• Oversight of annual business planning process.
• Approval of the strategy for FY24.
• Consideration of current and future technology
initiatives.
• Review and approval of the product propositions
for AJ Bell.
• Analysis of recent developments in the advised and
D2C platform markets.
Performance
• Approval of final and interim dividend payments
in accordance with the Group’s dividend policy.
• Review and approval of revisions to the Group’s
financial controls policy.
• Oversight of financial performance against the
budget and market expectations.
• Quarterly reviews of performance against forecast.
Risk management
Relations with stakeholders
Our business strategy document, which is reviewed by the Board
each year as part of the annual business planning process, identifies
our key stakeholders with whom the business endeavours to
engage so the Board is aware of their views and can take them
into account as part of its decision-making processes.
m
ur custo
d their a d
O
n
a
e
s
r
v i s o r s
O
u
r
p
Our
stakeholder
groups
The Board has identified
four key stakeholder
groups
e
o
p
l
e
O
u
r
s
h
a
r
e
h
olders
O u r other
k e h olders
s t a
• Oversight of the implementation of the new Consumer
See more on our stakeholder engagement activities on pages 28 and 29.
Duty by 31 July 2023.
• Approval of the Group’s risk framework and appetite.
• Review and approval of the Group Risk Management
Policy.
• Challenge and approval of the Group’s ICARA.
• Receipt and review of CASS reports.
• Training provided by external firms on corporate
governance, CASS, the macroeconomic outlook,
and takeover code compliance.
• First annual review of compliance with the FCA’s
operational resilience requirements by 31 March 2023.
Culture and Governance
• Appointment of new Chair and Representative Director.
• Performance of internal evaluation of the Board and
its Committees.
• Engagement with staff via our Employee Voice Forum
and employee survey.
• Bi-annual review and refinement of our culture
dashboard.
• Annual review and updating of our corporate
governance structure.
• Review of our conflicts of interest procedures
• Annual review of our diversity policy.
• Annual review of anti-bribery and corruption policy
and modern slavery statement.
• Bi-annual update on ESG.
The Board recognises the importance and benefits of engaging
with shareholders and other stakeholders and has a strong history
of doing so. Our key stakeholders and the principal engagement
activities undertaken by, or on behalf of, the Board during the year,
are set out within the Strategic report on pages 28 and 29.
Workforce engagement
We reinvigorated our Employee Voice Forum during the year in
order to reinforce our positive culture and make it more inclusive.
The forum was chaired, since her appointment, by our new
Chair, Fiona Clutterbuck, previously having been chaired by her
predecessor, Helena Morrissey, both of whom were at the relevant
time our nominated Employee Engagement Director. The forum
compromises between 10 and 12 representatives from across the
business who gather ideas and suggestions from our people on a
specific topic that affects the Group. Topics discussed during the
year included executive reward, the impact of hybrid working, staff
retention and our Employee Value Proposition.
Following the meetings, feedback was provided to the Board and
ExCo. Details of any action agreed to be taken to address the
matters discussed are relayed to attendees at the next meeting of
the forum, as well as regular updates to our wider workforce via
our staff intranet.
Strategic report
Governance
Financial statements
Other information
An overview of our investor relations programme is detailed
below. As noted above, in addition to the formal IR programme,
the management team engages with analysts and investors
throughout the course of the year.
Calendar of events in FY23
Q1 • Head office site visit for investors and sell-side
analysts.
• Full-year trading update announced.
• Annual results announced.
• CEO and CFO annual results Q&A video
on website.
• Investor roadshow and analyst presentations,
both in-person and virtually.
• Annual Report published.
Q2 • Q1 trading update announced.
• Engagement with shareholders and proxy
advisers prior to AGM.
• Physical AGM with shareholders attending
in person and being able to ask questions
remotely in advance and directly during
the meeting.
Q3 • Q2 trading update announced.
• Externally-facilitated investor study
undertaken.
• Interim results announced.
• Investor roadshows (UK and US) and analyst
presentations, both in-person and virtually.
• CEO and CFO interim results Q&A video
on website.
• Shareholder engagement following the
announcement.
Q4 • Q3 trading update announced.
• Consultation with shareholders about
proposed changes to Director’s remuneration
and Non-Executive Director fees.
• Chair and Senior Independent Director
meeting with key institutional shareholders.
The Company’s website has a dedicated investor relations section
which includes details of AJ Bell’s investment case, along with the
Annual Report and Financial Statements, historical financial
reports and presentations, regulatory announcements, financial
calendar, analyst consensus and other important shareholder
information.
As well as the Employee Voice Forum, the Board and ExCo also
engaged with the wider workforce during the year via existing
channels, including our annual managers’ day as well as
leadership videos posted on our intranet and informal open
forums, such as lunch briefings with other members of our senior
management team. As referenced above, two knowledge-sharing
and networking events were held during the year, at which
a number of our people made back-to-back five-minute
presentations to the Board and ExCo on their roles within the
business. Once again, this proved to be a valuable engagement
event which the Board and ExCo will continue to build on
next year.
Whistleblowing arrangements are in place to enable our staff
to raise concerns in confidence. As reported above, the Risk
& Compliance Committee monitors the operation of the
whistleblowing arrangements, with the ability to escalate
matters to the Board if considered necessary.
Relations with shareholders
The Board is committed to proactive and constructive
engagement with the Company’s investors and is keen to ensure
that the views of shareholders are understood. The Board was
pleased this year to once again be able to welcome shareholders
in person to the 2023 AGM, as the AGM provides the Board with
an opportunity to communicate directly with, and answer
questions from, AJ Bell’s shareholders.
In addition to announcing regular trading updates to the market,
the Company has a comprehensive investor relations programme
which is focused on ensuring that the market, including sell-side
analysts, investors and proxy voting advisers, understand the
Company’s investment case, strategy and performance.
The CEO and CFO, supported by the Investor Relations Director,
met with analysts and investors throughout the year, both in
person and virtually, and presentations and recorded videos
were made available via our website, particularly following the
publication of the Company’s interim and full year results.
The Chair and other Non-Executive Directors were also available
to meet with shareholders as required.
Feedback is sought directly from analysts and investors after all
meetings. This feedback is shared with the Board on a regular
basis and is supplemented by frequent updates from our corporate
broker, Deutsche Numis Securities Limited (Deutsche Numis). This
provides the Board with insights into current market perceptions
of the business and wider platform market. Deutsche Numis also
shares its views with the Board on share price performance,
recent trading activity and changes to the composition of the
shareholder register.
This year, for the first time since our IPO in 2018, we undertook
an externally-facilitated investor study to provide the Board with
detailed feedback on how the Company is viewed by investors.
The study included interviews with 18 institutional investors,
including both current and former shareholders, representing
approximately 39% of the Company’s issued share capital. Investor
feedback was very positive overall. The interviews showed that
investors value AJ Bell’s dual-channel, organic growth approach
to the UK platform market, the long-term investments being made
in brand and technology, the strength of the management team
and the financial characteristics of the business whereby profit is
turned into cash quickly, supporting investment in the business
and increasing cash returns to shareholders.
82 AJ Bell plc Annual Report and Financial Statements 2023
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Corporate Governance report
2. Division of responsibilities
There is a clear division of responsibilities between the Chair,
Fiona Clutterbuck, who was considered to be independent upon
appointment, and the CEO, Michael Summersgill. This is set out in
writing in the respective terms of reference for the Chair and CEO
which have been approved and are reviewed annually by
the Board.
In July 2023, Les Platts was appointed as Andy Bell’s Representative
Director after the Company entered into the Relationship
Agreement. Under the Relationship Agreement, Andy, the former
Chief Executive Officer and a co-founder of the Company, who
together with his connected persons, is the largest individual
shareholder, has the right to nominate one Director for
appointment to the Board.
Following these changes, the Board comprised the Chair, four
independent Non-Executive Directors, one non-independent
Non-Executive Director and three Executive Directors, so there
was still at least half of the Board, excluding the Chair who are
considered independent Non-Executive Directors.
The Board believes the structure of the Board was appropriate
before those changes and remains so after them and that no
single individual or group dominates the decision-making process.
The Board is satisfied that the Chair and each of the Non-
Executive Directors devote sufficient time to their duties.
The terms and conditions of appointment of the Chair and each
of the Non-Executive Directors are available for inspection during
normal business hours at the Company’s registered office and
at the AGM for 15 minutes before and during the meeting.
Roles and responsibilities
Role of the Chair
The Chair is responsible for the leadership and overall
effectiveness of the Board. The Chair sets the agenda for
each meeting of the Board in conjunction with the Company
Secretary, in line with the annual worklist agreed by the
Board. The Chair manages the meeting timetable, promotes
open and effective discussion and challenge at meetings and
creates an environment in which all of the participants feel
comfortable. The Chair met regularly with the SID and
Non-Executive Directors and separately with the CEO
outside of formal meetings during the year.
Role of the Senior Independent
Director
The Senior Independent Director, Evelyn Bourke, provides a
sounding board for the Chair and, if necessary, acts as an
intermediary for the other Non-Executive Directors. The SID
is also available for communication with shareholders where
normal lines of communication via the Chair, CEO, CFO or
Investor Relations Director are not successful or where it is
considered more appropriate. The SID also leads the annual
appraisal of the Chair by the Non-Executive Directors.
Role of Executive Directors
The CEO, Michael Summersgill, is responsible for the
leadership and management of the business within the
scope of the authorities delegated to him by the Board.
The CEO must exercise those authorities to achieve the
strategic objectives set by the Board, implement Board
decisions and ensure that the Group complies with all of its
regulatory and legal obligations. The CEO is also responsible
for communicating the views of the senior management
team on business issues to the non-executive members
of the Board.
The role of the other Executive Directors who were
members of the Board during the year, the CFO, Peter Birch,
and COO, Roger Stott, is to add commercial and internal
perspectives to discussions at Board meetings and to
support the CEO in communicating the views of the senior
management team on business issues to the non-executive
members of the Board.
Role of Non-Executive Directors
The Non-Executive Directors, Evelyn Bourke, Eamonn
Flanagan, Margaret Hassall, Simon Turner and Les Platts, help
to set the strategy for the business, offer specialist advice,
constructively challenge the Executive Directors and
scrutinise the performance of the ExCo in relation to the
delivery of that strategy and the personal objectives which
are set for the individual members of the ExCo. They also
assist with the implementation of Board decisions and
compliance with the Group’s regulatory and legal
obligations.
The Representative Director, Les Platts, is a nominee,
appointed to represent and safeguard the interests of a major
shareholder and is not independent under the UK Code.
However, he is subject to the same duties and responsibilities
as the other Non-Executive Directors, including the duty
to exercise independent judgement and act in the way he
considers would be most likely to promote the success of
the Company for the benefit of its shareholders as a whole.
Board support and the role of the
Company Secretary
The Board and Board Committees receive accurate, clear
and up-to-date information in sufficient time for them
to review it before each meeting and are provided with
sufficient resources to discharge their respective duties.
The Directors have access to independent professional
advice at the Group’s expense, as well as to the advice and
services of the Company Secretary, who is available to advise
the Board on corporate governance matters.
The role of the Company Secretary is to ensure that all Board
and Board Committee procedures are complied with and
to advise on corporate governance and related regulatory
compliance. The Company Secretary is also responsible
for ensuring that Board and Board Committee members
receive clear and accurate information and papers in a timely
manner and that the minutes of meetings clearly record
the discussions held and the reasons for decisions.
Strategic report
Governance
Financial statements
Other information
Board Committees
Board
Nomination
Committee
Chair: Fiona Clutterbuck
Remuneration
Committee
Chair: Margaret Hassall
Audit
Committee
Chair: Eamonn Flanagan
Risk & Compliance
Committee
Chair: Simon Turner
Disclosure
Committee
Chair: Eamonn Flanagan
Chief Executive Officer
Executive Committee (ExCo)
Proposition
Committee
(PropCom)
Operational
Committee
(OpCom)
Finance & Treasury
Committee
(FTC)
Executive Risk
Committee
(ERC)
Investment
Committee
(IC)
The Board has five main committees: the Nomination
Committee, Remuneration Committee, Audit Committee,
Risk & Compliance Committee and the Disclosure Committee.
The terms of reference for each committee are available on
the Group’s website at ajbell.co.uk.
The chair of each Committee reports to the Board at each
Board meeting about the activities it has undertaken since the
last meeting. The independent Non-Executive Directors play
an important role in the operation of the Board Committees.
The Representative Director is not a member of any Board
Committee.
In addition, the Board has established a Non-Executive
Directors’ ESG forum. The role of the forum is to provide
insights and make recommendations to the Board on ESG
strategy generally and to the Audit Committee on ESG-related
risks and opportunities, including climate change, and also to
undertake periodic deep dives on ESG issues.
Details of the roles and responsibilities of the Committees,
other than the Disclosure Committee, are set out in the
respective Committee’s reports. The responsibilities of the
Disclosure Committee include the review and implementation,
on an ongoing basis, of the Group’s disclosure policy to ensure
it addresses our compliance with the Disclosure Guidance and
Transparency Rules, Listing Rules and Prospectus Rules and the
Market Abuse Regulation. It is also responsible for ensuring that
the disclosure policy is properly communicated within the
business. The Disclosure Committee meets as and when required.
The day-to-day management of the Group is delegated by
the Board to the CEO, who is supported by the ExCo, which he
chairs. The day-to-day management of operations is delegated
to the ExCo. The CEO and the ExCo exercise their respective
delegated responsibilities within the confines of the risk and
control framework set by the Board. We consider that this
simplified management structure more effectively enables
the Board to ensure that its governance responsibilities are
properly discharged.
The ExCo has five committees to which it sub-delegates the
below authorities:
• Executive Risk Committee (ERC), which has oversight
responsibility for all the assurance functions within
the Group, including regulatory compliance and risk
management, but excluding external and internal audit.
• Proposition Committee, which has oversight responsibility
for the management and distribution of our D2C and Advised
products.
• Operational Committee, which has oversight responsibility
for operations and people, including service quality,
resilience, efficiency, staff engagement, talent management,
employer brand and culture.
• Finance & Treasury Committee, which has oversight
responsibility for financial management, forecasting, market
disclosures, capital and corporate liquidity management,
financial controls and the management of cash funds held
on behalf of customers.
• Investment Committee (IC), which has oversight
responsibility for the management and distribution
of our investment products.
Bruce Robinson, our Group Legal Services Director and
Company Secretary stepped down from his role with effect
from 30 September 2023. It was decided that in order to better
support the changes in the structure of the Board and the ExCo
made during 2022, the Group Legal Services Director and
Company Secretary roles would be separated when Bruce
stepped down. The successor for the Group Legal Services
Director is an internal candidate, Kina Sinclair, our Senior
In-House Legal Counsel and for the Company Secretary
element is an external candidate, Olubunmi Likinyo.
84 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 85
Corporate Governance report
3. Composition, succession
and evaluation
The Board has established a Nomination Committee, which has
delegated responsibility for reviewing the leadership needs of the
business including Board composition, considering succession
plans for both Board and ExCo, selecting and appointing new
directors and considering the results of the Board effectiveness
reviews. More information on the work of the Nomination
Committee can be found on pages 88 to 91.
Succession planning
This falls within the scope of the responsibilities of the Nomination
Committee. This was a particularly busy year for the Committee
in light of the appointment of a new Chair, the Representative
Director, and changes at executive level. In addition, the
Committee also resumed its search for two new independent
Non-Executive Directors. Further details can be found within
the Nomination Committee report on pages 88 to 90.
Length of service of the Chair and
Non-Executive Directors
Under the provisions of the UK Code, the Chair should be
independent upon appointment when assessed against the
non-exhaustive circumstances likely to impair, or appear to impair,
independence set out in the UK Code. An assessment of the
independence of Fiona Clutterbuck against those criteria was
undertaken as part of her recruitment process and the Board
was satisfied that Fiona was independent upon appointment.
As reported last year, Simon Turner, the Chair of our Risk
& Compliance Committee, completed nine years in office
on 1 July 2023. Notwithstanding that, the Board requested that
Simon Turner remain in office in order to support the succession
process and handover of his role as Chair of the Risk & Compliance
Committee. Simon was subsequently re-elected at the 2023 AGM.
Evaluation of the performance of the Board
and Directors
The Chair considered having an externally-facilitated Board
evaluation undertaken during the year, but following discussions
with other members of the Board, concluded that it would
not be appropriate to do so in light of the recent changes in the
composition of the Board, including her appointment, and what
was at the time, the pending appointment of the Representative
Director and search for two new Non-Executive Directors. The
Chair concluded that it would be preferable for those changes to
be given the chance to become embedded before an evaluation
was undertaken, so the Chair intends to commission an
externally-facilitated Board evaluation in the first half of 2024.
As a consequence, an internally-led review of the Board and each
of its Committees was undertaken this year. This involved the
members and, where appropriate, other key individuals involved
in its workings, providing feedback to the chair of the relevant
governance body, online. The feedback provided was then
collated and the findings were presented by the chair of the
relevant body to its members for review and discussion. Following
discussion of the findings, where considered appropriate, actions
were agreed to address improvement opportunities which had
been identified, the implementation of which will be overseen by
the chair of the relevant governance body. Details of the outcome
of the reviews undertaken by each Committee were reported to
the Board.
The Chair evaluated the performance of the Non-Executive
Directors, and the Non-Executive Directors, led by the SID,
evaluated the performance of the Chair during the year.
Overall, the outcome of the reviews of the performance of the
Board, its Committees and each Director’s individual performance
was that the Board and its Committees operate effectively and
that each Director continues to contribute effectively and
demonstrate commitment to the role. The Board is operating
effectively as a unitary body amongst other things. The view is
held that the conduct of Board meetings promotes open and
constructive high-quality debate and the relationship between
Non-Executive Directors and executive management is effective.
Whilst the findings indicated that the Board was operating
effectively overall, the review identified the need to increase the
level of focus on the long-term composition of the Board along
with talent management and succession planning below Board
level. In addition, continuous improvements are to be made to
management reports and papers to ensure high quality and
relevant information flows to the Board. Opportunities should also
be sought for more Board engagement outside the boardroom
to include dinner discussions to continually build on the positive
relationships on the Board. Progress against these recommendations
will be reported in next year’s Annual Report.
Board induction, training and development
All Directors undertake a comprehensive formal induction
programme when they are appointed to the Board, which involves
meetings with the Chair, Executive Directors and other members
of the senior management team, the provision of background
reading and access to our electronic meeting system in respect
of certain past Board and Committee meetings. Further details
on the procedures for the appointment of new Directors and
succession planning can be found within the Nomination
Committee report on pages 88 to 90.
All Directors are kept informed of changes in relevant legislation
and regulations and changing financial and commercial risks. If
considered appropriate, external advisers or industry experts are
engaged to provide training for members of the Board. During the
year, the Board received external presentations on corporate
governance, CASS, the macroeconomic outlook, cybersecurity,
and takeover code compliance.
As part of their annual appraisal process, the personal and
professional development needs of the Executive Directors are
considered and agreed. During the annual appraisal process for
the Non-Executive Directors, the Chair reviews and agrees their
training and personal development requirements. Non-Executive
Directors are also encouraged to attend external seminars on
topics which they consider appropriate for their professional
development needs.
Re-election of Directors
All of the Directors are subject to annual re-election and intend to
submit themselves for re-election at the 2024 AGM.
Strategic report
Governance
Financial statements
Other information
4. Audit, risk and internal control
The statement of Directors’ responsibility for preparing the Annual
Report and Financial Statements is set out on page 125. Within
this, the Directors have included a statement that the Annual
Report and Financial Statements present a fair, balanced and
understandable assessment of the Group’s position and prospects.
The Board has delegated responsibility for the annual review of
the Group’s internal control systems to the Audit Committee,
assisted by the Risk & Compliance Committee (responsible for the
Group’s risk management framework). If you would like to read
more about the review and monitoring procedures, they can be
found within the Audit Committee report on page 95.
The Board has established an Audit Committee, the role of which
is to assist the Board in fulfilling its oversight responsibilities
by reviewing and monitoring the integrity of the financial and
narrative statements and other financial information provided to
shareholders, the Group’s system of internal controls, the internal
and external audit process and auditors and the processes for
compliance with related laws, regulations and ethical codes of
practice. If you would like to read more about the work of the
Audit Committee, please turn to the Audit Committee report on
pages 92 to 97.
With the support of the Audit Committee, the Board has reviewed
the 2023 Annual Report and Financial Statements and considers
that, taken as a whole, they are fair, balanced and understandable
and provide the information necessary for shareholders to assess
the Company’s position and performance, business model
and strategy.
For further information please refer to:
• details of the review work carried out by the Audit Committee in
relation to the 2023 Annual Report and Financial Statements on
pages 94 and 95, and
• the description of the business model and strategy for delivering
the objectives of the Group on pages 20 and 21.
Viability statement
The Directors have assessed the viability of the Group over a
period that exceeds the 12 months required by the going concern
provision. Details of that assessment are set out on page 69.
Risk management and internal controls
In accordance with the UK Code, the Board is required to monitor
the Group’s risk management and internal control systems on an
ongoing basis and carry out a review of their effectiveness. Details
of the Group’s ongoing process for identifying, assessing and
managing the principal risks faced by the Group are contained in
the risk management section on pages 60 to 62 together with
details of those principal risks and their related mitigating factors.
Whilst the Board retains overall responsibility for the Group’s
risk management and internal control systems, it has delegated
oversight to the Audit and Risk & Compliance Committees.
The Risk & Compliance Committee assists the Board in fulfilling its
oversight responsibilities, by reviewing and monitoring the Group’s
attitude to, and appetite for, risk and its future risk strategy, the
Group’s risk management framework, how risk is reported both
internally and externally and the processes for compliance with
related laws, regulations and ethical codes of practice and
prevention of financial crime. If you would like to read more about
the work of the Risk & Compliance Committee, please turn to the
Risk & Compliance Committee report on pages 98 to 101.
The Board confirms that, through the activities of the Risk &
Compliance Committee, a robust assessment of the principal risks
facing the Group, including those that would threaten its business
model, performance, solvency and liquidity has been carried out.
In accordance with the UK Code, the Board has also considered
the Group’s longer-term viability, which can be found within the
viability statement on page 69.
In satisfying the requirements to ensure that the Group has
adequate risk management and internal control systems, the
Audit Committee has:
• monitored the Group’s internal control systems on an ongoing
basis; and
• reviewed an annual effectiveness assessment of the Group’s
risk management and internal control systems.
5. Remuneration
Role of the Remuneration Committee
The Board has established a Remuneration Committee, which has
delegated responsibility for determining the policy for executive
remuneration and setting remuneration for the Chair of the
Board, CEO, other Executive Directors, members of the senior
management team, individuals who are classed as being material
risk takers and certain Risk and Compliance staff. When doing so,
the Remuneration Committee takes account of wider workforce
remuneration and related policies and the alignment of incentives
and rewards with culture. If you would like to read more about
the work of the Remuneration Committee, please turn to the
Remuneration Committee report on pages 102 to 105.
Remuneration policy
The Group’s remuneration policies and practices are designed
to support its strategic objectives and promote the long-term
sustainable success of the Company for the benefit of its
shareholders as a whole. A summary of how the Company
has complied with the remuneration requirements under the
UK Code, together with details of the work undertaken by
the Remuneration Committee during the year, is set out on
pages 106 to 110.
During the year no individual Director was involved in deciding
their own remuneration.
Annual General Meeting
The AGM will be held on 30 January 2024 at 12 noon at AJ Bell,
4 Exchange Quay, Salford Quays, Manchester, M5 3EE. We are
planning to hold the 2024 AGM as an open meeting with all
shareholders being invited to attend in person or by proxy. Further
details about how shareholders can attend the AGM, ask questions
and vote by proxy will be set out in the notice of the 2024 AGM.
As an additional means of engagement with our shareholders, a
video covering the key points from our 2023 annual results will be
published on our website at ajbell.co.uk/group/investor-relations
on 7 December 2023. In the video Chief Executive Officer, Michael
Summersgill, and Chief Financial Officer, Peter Birch, discuss our
business performance and financial results for the year ended
30 September 2023, as well as the outlook for 2024.
Fiona Clutterbuck
Chair
6 December 2023
86 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 87
Nomination Committee report
Fiona Clutterbuck
Chair of the Nomination Committee
Role and responsibilities
The Nomination Committee is responsible for reviewing the
leadership needs of the business to ensure it can continue to
succeed. This includes succession planning, making
recommendations to the Board in respect of appointments
to the Board, the Board’s Committees, the ExCo and the
chairmanship of the Board’s Committees. The Committee is
responsible for keeping the structure, size and composition
of the Board and those other governance bodies under
regular review, and for making recommendations to the
Board about any changes that are necessary, considering the
skills and expertise required to deliver the Group’s strategy.
The Committee is also responsible for overseeing the
development of a diverse pipeline for succession.
The Committee considers the balance of skills, knowledge
and experience on the Board and ExCo and the diversity
needed when determining the capabilities and time
commitment required for any new role. Succession plans
for Executive and Non-Executive Directors and senior
management, in particular for the key roles of Chair of
the Board and CEO, are considered by the Committee.
The role and responsibilities of the Committee are set out in
its formal terms of reference, a copy of which can be viewed
on the Group’s website, ajbell.co.uk.
Committee attendance
The Committee meets at least twice a year and may meet
at other times as agreed by the Chair or at the request of
another member of the Committee. During the year the
Committee had two scheduled meetings and 12 additional
ad hoc meetings.
Member
Position
Eligible / attended
meetings (including
ad hoc meetings)
Fiona Clutterbuck1 Chair from 1 May 2023
Evelyn Bourke
Senior Independent Director
Eamonn Flanagan Non-Executive Director
Margaret Hassall
Non-Executive Director
Helena Morrissey2 Chair up until 30 April 2023
6/6
14/14
14/123
14/134
8/45
1. Appointed to the Committee on 1 May 2023.
2. Stepped down from the Committee on 30 April 2023.
3. Eamonn Flanagan was unable to attend two ad hoc meetings arranged
at short notice.
4. Margaret Hassall was unable to attend an ad hoc meeting arranged
at short notice.
5. Helena Morrissey was unable to attend four ad hoc meetings arranged
at short notice.
For ad hoc meetings members were unable to attend, members
provided input ahead of those meetings via the Committee Chair.
88 AJ Bell plc Annual Report and Financial Statements 2023
Dear shareholder
As Chair of the Nomination Committee since my appointment on
1 May 2023, I am pleased to present the Committee’s report for
the year ended 30 September 2023.
It has been a busy year for the Committee, primarily in relation
to Board and senior management recruitment and succession
planning. During the first half of the year the main focus was on
my appointment as Chair, following Baroness Helena Morrissey’s
decision to step down once a successor had been recruited. Then
during the second half of the year the focus was on the renewal of
the search for two new independent Non-Executive Directors and
the appointment of a Representative Director for Andy Bell.
Further information about the activities of the Nomination
Committee is set out below.
Membership
Appointments to the Committee are made by the Board on the
recommendation of the Committee. They are for a period of up
to three years, which may be extended for two further periods of
three years provided the majority of the Committee members
remain independent.
At year end the Committee comprised four independent
Directors; myself, who became the Non-Executive Chair and
Chair of the Committee on 1 May 2023 in succession to Helena
Morrissey, Evelyn Bourke, the Senior Independent Director,
Eamonn Flanagan and Margaret Hassall, both of whom are
independent Non-Executive Directors.
The Company Secretary acts as Secretary to the Committee.
The CEO, other members of the senior management team and
external advisers are invited to attend the Committee’s meetings
by the Chair, as and when considered appropriate.
An annual review is conducted of the time required for Non-
Executive Directors to fulfil their responsibilities and compliance
with any applicable FCA requirements in relation to their total
number of directorships.
Board recruitment
Chair
The recruitment process for the Chair, was led by Evelyn Bourke,
our Senior Independent Director, with support from Warren
Partners, a firm of independent recruitment consultants with
no other connection to the Company or any individual director.
The search was conducted with regard to a range of skillsets,
experience and diversity criteria, which took account of the
profiles of the existing members of the Board. The search involved
the Committee reviewing long and short-lists of candidates,
including individuals put forward by Warren Partners and by
existing networks, who were vetted by Warren Partners. Interviews
were then conducted with a number of candidates, which
culminated in my appointment with effect from 1 May 2023. I also
became the designated Non-Executive Director for engagement
with the workforce.
I was previously a Non-Executive Director of Hargreaves
Lansdown plc, the Chair of Paragon Banking Group plc and
Senior Independent Director at M&G plc, and I am currently a
Non-Executive Director of Sampo plc and Co-operative Bank plc.
In my executive career, I was Head of Strategy, Corporate
Development and Communications at Phoenix Group plc, having
previously held banking roles with ABN AMRO Investment Bank
plc, HSBC Investment Bank plc and Hill Samuel Bank Limited.
Strategic report
Governance
Financial statements
Other information
Main activities during the financial year
The Committee met 14 times during the year and a summary of the work undertaken is presented below.
Oct1
Nov1
Dec1
Apr1
May1
Jun1
Jul
Sept
Activity
Board recruitment
Executive recruitment
Company Secretary recruitment
Board and ExCo succession planning
Committee structures
Committee governance
1. Two meetings were held in October, November, December, April, May and June.
The Committee recognised my skills and experience, including
focus on, and understanding of, good customer outcomes when
recommending my appointment. The Board was unanimous in its
decision to accept the Committee’s recommendation, confirming
I was an ideal Board leader who will help AJ Bell to capitalise on
the structural growth opportunities that exist in the investment
platform market.
Representative Director
In July 2023, Les Platts was appointed as Andy Bell’s
Representative Director after the Company entered into a
relationship agreement (Relationship Agreement) with Andy.
Les, a former senior partner at Deloitte, had previously served
on the Board for just over 13 years, initially as an independent
Non-Executive Director and latterly as Non-Executive Chair,
until he stepped down at the 2022 AGM.
Under the Relationship Agreement, Andy, the former Chief
Executive Officer and a co-founder of the Company, who
together with his connected persons, is the largest individual
shareholder, has the right to nominate one director for
appointment to the Board. After prior consultation with Andy
about the identity, qualifications and general suitability of Les
and engagement between the Committee and the FCA,
Andy nominated Les for appointment. The Committee then
recommended Les for appointment by the Board and the Board
unanimously accepted that recommendation. The Board
considers that Les’ in-depth knowledge of the financial services
sector generally, and of AJ Bell in particular, will further enhance
the experience of the Board and help support the future growth
of the Company for the benefit of all of our shareholders.
Following those changes, at year end the Board comprised the
Chair, four independent Non-Executive Directors, one non-
independent Non-Executive Director and three Executive
Directors, so there was at least half of the Board, excluding the
Chair who were considered independent Directors. Whilst this
meant that the Board still had 33% female representation and still
satisfied the FCA requirement for at least one of the Chair, CEO,
CFO or Senior Independent Director to be a woman, it was below
the FCA requirements for at least 40% of the Board to be women
and one member of the Board to be from a minority ethnic
background. As a consequence, addressing those issues remained
a key priority.
Independent Non-Executive Director recruitment
The search for two new independent Non-Executive Directors
resumed during the year, having been paused until after my
appointment. One of the Non-Executive Directors roles being a
replacement for Simon Turner and the other to ensure the balance
of independent NED’s following the appointment of Les Platts as
Representative Director. One of our key considerations from the
outset of the recruitment process had been to address the Parker
Review recommendations and the further reach of the FCA’s
diversity requirements.
The Non-Executive Directors search commenced in May 2023
and was led by myself as Chair. The process involved the
Committee taking the following steps:
• agreeing the skills, experience and knowledge required;
• approving the applicable role specifications;
• identifying and appointing an external recruitment consultant,
Per Ardua, an independent party with no other connection with
the Company or any individual director;
• Per Ardua preparing a long-list of potential external candidates,
which was supplemented by candidates recommended by
existing networks who were then vetted by Per Ardua;
• reviewing the long-list of candidate profiles and, with the
benefit of insights provided by Per Ardua, creating a shortlist
of diverse candidates for review;
• reviewing the shortlisted candidates and selecting those for
interview;
• conducting a two-stage interview process;
• selecting a preferred candidate for each role and obtaining
professional references;
• undertaking a final review for the purposes of confirming a
preferred candidate to the Board for appointment, based on a
unanimous decision by the Committee. This review included
a formal assessment of the independence of the candidate,
a review of potential conflicts of interest and other time
commitments.
We are pleased to report that since the year end, we have
appointed Fiona Fry as an independent Non-Executive Director
with effect from 7 December 2023. Fiona will succeed Simon
Turner, as Chair of the Risk & Compliance Committee, subject
to regulatory approval. Fiona is a highly experienced risk
professional, having spent the majority of her career at KPMG
where, as a partner she focused on financial services regulation.
Fiona sat on the UK Board of KPMG for six years. She was
previously Head of investigations at the Financial Services
Authority (now the FCA). Fiona is currently Chair of the Risk
Committee at Aviva Insurance Limited.
We are continuing our search for a further independent NED.
AJ Bell plc Annual Report and Financial Statements 2023 89
Nomination Committee report
Executive Committee and
Company Secretary
At a senior management level, the Committee has also been
busy, following the decision of Bruce Robinson, who performed
the joint role of Group Legal Services Director and Company
Secretary, to retire from the ExCo with effect from
30 September 2023.
In order to better support the changes in the structure of the
Board and the ExCo which were made the previous year, the
Committee approved the proposed separation of the Group
Legal Services Director and Company Secretary roles.
The executive team initially considered the suitability and
readiness of an internal candidate for the Group Legal Services
Director role under the current succession plan, Kina Sinclair.
This was followed by a formal interview process conducted by the
Executive Directors and HR Director, Liz Carrington, the outcome
of which was that Kina was put forward to the Committee as
the preferred candidate for the role. This led to the Committee
recommending to the Board that Kina be appointed as Group
Legal Services Director with effect from 1 October 2023, subject
to FCA approval of SMF3 director status, a recommendation which
was unanimously accepted by the Board.
Kina has been employed by AJ Bell since July 2018, latterly
as Senior In-House Legal Counsel. Since that time, she has
consistently demonstrated strong performance and has been
on the succession plan for Bruce for the past three years.
Furthermore, having supported Bruce with Company Secretarial
activities since joining the business, Kina has regularly attended
Board, ExCo and committee meetings.
An external recruitment process for the Company Secretary role
also commenced, which was led by our Chief Financial Officer,
Peter Birch, with support from DMJ Recruitment, a firm of
independent recruitment consultants with no other connection
with the Company or any individual director. The Committee
maintained full oversight throughout. The search involved the
preparation of a long-list of candidates by DMJ Recruitment,
which included individuals put forward by existing networks.
That list was then reduced to a short-list of candidates who had
initial interviews with members of the executive team, followed
by interviews with some of the members of the Committee,
before details of the preferred candidates were presented to the
Committee for review. This culminated with the appointment
of Olubunmi Likinyo (Bunmi), who joined the business on
18 September 2023 and took on the Company Secretary role
with effect from 1 October 2023. Bunmi previously worked at
Nationwide Building Society.
Following the appointments of Kina and Bunmi, the level of
gender and ethnic diversity across the senior management roles
is now 40%.
Reporting on gender or sex as at 30 September 2023
Men
Women
Not specified / prefer not to say
The Committee also reviewed both short-term contingency and
long-term succession planning for the members of the ExCo
during the year.
Composition of the Board Committees
I also joined the Nomination Committee, as Chair, the Risk &
Compliance Committee and Remuneration Committee with effect
from 1 May 2023, which were the only changes in the composition
of the Board Committees during the year.
Diversity
The Board believes it is important that both the Board and ExCo
are diverse in multiple dimensions. The Committee leads the
Board’s diversity and inclusion agenda and sets measurable
objectives for the Board and ExCo with the aim of continuously
improving diversity of thought and in turn, the quality of debate
and decision-making.
It is the Board’s policy for all appointments to be made on merit,
in the context of the skills, experience and knowledge which the
business requires to be effective. Selection processes take into
account the wider elements of diversity, with a view to ensuring
the composition of the Board and other governance bodies is
appropriately balanced to support the strategic direction of
the Group.
The information below is provided in compliance with new
reporting requirements under the Listing Rules, which apply to
accounting periods starting on or after 1 April 2022. The Company
is required to disclose in its Annual Report, certain diversity
metrics relating to the composition of its Board and executive
management, as well as its performance against three diversity
targets that have been set by the FCA. Information on gender /
sex and ethnicity is collected from the Board and executive
management at the recruitment stage.
As reported last year, the Board was committed to addressing the
Parker Review recommendations and FCA requirements in relation
to diversity as part of its recruitment and succession plans for FY23.
Whilst Board appointments in the year did not meet all the targets,
by year end 33% of the Board were women and two out of our four
senior Board positions were held by women. Since the year end
we have appointed Fiona Fry as a Non-Executive Director with
effect from 7 December 2023. Fiona will succeed Simon Turner,
as Chair of the Risk & Compliance Committee, subject to
regulatory approval bringing us closer to meeting our diversity
targets. We are continuing our search for a further independent
NED to join the Board. Our commitment to both the Parker
Review recommendations and further reach of the FCA diversity
requirements remain a key consideration for us during this process.
Number of
Board
members
Percentage of
the Board
6
3
—
67%
33%
—
Number
of senior
positions on
the Board
(CEO, CFO,
SID, and Chair)
Number in
executive
management
Percentage of
executive
management
2
2
—
7
2
—
78%
22%
—
Information on the gender balance of those in senior management and their direct reports is set out in the strategic report on page 42.
Strategic report
Governance
Financial statements
Other information
Reporting on ethnic background as at 30 September 2023
White British or other White (including minority-white groups)
Mixed Multiple Ethnic Groups
Asia / Asian British
Black / African / Caribbean / Black British
Other ethnic groups, incl. Arab
Not specified / prefer not to say
Whilst we recognise that there is still more that we need to do at
senior management level to improve diversity, it was encouraging
to see that with Kina’s appointment to the ExCo we will have both
33% female and minority ethnic representation on the ExCo. This
will remain a key area of focus, in particular, in relation to natural
succession changes, as and when they occur.
During the year the Committee reviewed and updated our existing
diversity policy in order to ensure that it still remained relevant to
the changing needs of the business. The objective of the policy is
to set out our commitment at Board level to improving diversity.
Information on the gender balance of those in senior management
and their direct reports is set out in the Strategic report on
page 42.
Re-election of Directors, independence
and time commitment
The Committee performed its annual review of the independence
of all Non-Executive Directors, with reference to their independence
of character and judgement and whether any circumstances or
relationships exist which could affect their judgement. The
Committee considered the circumstances set out in the UK
Code, which are likely to impair or could appear to impair the
independence of each Non-Executive Director.
On my appointment as Chair, I satisfied the independence criteria
set out in the UK Code.
Simon Turner completed nine years’ service on the Board on
1 July 2023. As reported last year, Simon agreed to remain in
office at the request of the Board, in order to support succession.
The Board has reviewed this position and is satisfied that his length
of service on the Board does not impact his independence to
carry out his role as a Non-Executive Director of the Company.
Simon will put himself forward for re-election at the 2024 AGM
and step down from the Board once a successful handover
is complete.
The Committee concluded that it considered each of the
Non-Executive Directors (other than the Representative Director,
Les Platts) to be independent under the UK Code. As an appointee
of a shareholder, the Representative Director is not considered
independent but contributes by providing a link to Andy Bell’s
experience as well as his own in-depth knowledge of AJ Bell and
the financial services sector. The Representative Director is not a
member of any Board Committee and following his appointment,
by year end at least half the Board, excluding the Chair were
independent Non-Executive Directors, in compliance with the
UK Code.
Number of
Board
members
9
—
—
—
—
—
Percentage of
the Board
100%
—
—
—
—
—
Number
of senior
positions on
the Board
(CEO, CFO,
SID, and Chair)
Number in
executive
management
Percentage of
executive
management
4
—
—
—
—
—
7
—
2
—
—
—
78%
—
22%
—
—
—
The Committee also considers that the appointment of an
additional independent NED will fully compensate for any
potential imbalance which may have arisen, or may in the future
arise, as a result of the appointment.
Prior to recommending the reappointment of the serving
Directors to the Board, the Committee also considered the time
commitment required and whether each reappointment would be
in the best interests of the Company. Detailed consideration was
given to each Director’s contribution to the Board and, where
applicable, it’s Committees, together with the overall balance
of knowledge, skills, experience and diversity.
Following that review, the Committee was satisfied that the Board
continued to be effective and has therefore recommended the
re-election of all of the members of the Board at the 2024 AGM.
Board and Committee evaluations
The Board undertook an internal self-assessment review of
performance during the year. The review found that the Board had
operated well during the year. The Committee also undertook an
internal self-assessment review of performance and reached the
same conclusion about the effectiveness of the Committee.
The other Board Committees also undertook self-assessment
reviews of performance during the year and details of the
outcomes are set out in their individual reports.
As noted within the Corporate Governance report, we will
conduct an externally-led Board evaluation in early 2024, which
is in line with the usual three-year cycle, after the recent Board
changes have had the chance to become embedded, to ensure
that we are still operating with maximum effectiveness.
Nomination Committee priorities for
2023/24
The main focus of the Committee for the year ahead will be
on oversight of the external Board evaluation and long-term
succession planning. This will be in addition to the regular
cycle of matters that the Committee considers each year and
the continuing focus at senior management level on the
development of a diverse talent pipeline.
Signed on behalf of the Nomination Committee:
Fiona Clutterbuck
Chair of the Nomination Committee
6 December 2023
90 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 91
Audit Committee report
Strategic report
Governance
Financial statements
Other information
Eamonn Flanagan
Chair of the Audit Committee
Role and responsibilities
The role of the Committee is to assist the Board in fulfilling
its oversight responsibilities by reviewing and monitoring the:
• integrity of the Group’s financial and narrative statements
and other financial information provided to shareholders;
• Group’s systems of internal controls;
• Group’s internal and external audit processes and
auditors; and
• Group’s processes for compliance with laws, regulations
and ethical codes of practice.
Full terms of reference for the Committee are reviewed
annually and are available on the Group’s website
ajbell.co.uk.
The Committee members receive regular training regarding
matters relevant to their role and responsibilities.
Committee attendance
The Committee meets at least four times a year at
appropriate intervals in the financial reporting and audit
cycle and otherwise as required. The Committee comprises
independent Non-Executive Directors.
Member
Position
Eamonn Flanagan Committee Chair
Evelyn Bourke
Senior Independent
Director
Margaret Hassall
Non-Executive Director
Eligible / attended
meetings
(including ad hoc
meetings)
5/5
5/41
5/5
1. Evelyn Bourke was unable to attend an ad hoc meeting due to a bereavement.
Dear shareholder
As Chair of the Audit Committee, I am pleased to present the
Committee’s report for the year ended 30 September 2023. The
report provides insight into our work over the year, and details
how we have discharged the responsibilities delegated to us by
the Board.
During 2023 the Committee continued to focus on its key
responsibilities of assisting the Board in monitoring the
preparation of the Group’s financial reporting statements, the
effectiveness of the internal controls and providing oversight and
governance around the integrity of the Group’s external and
internal audit processes, including assessing the independence
and objectivity of the external auditors.
As indicated last year, in 2023 the Committee has overseen the
transition from a fully outsourced to a co-sourced internal audit
model. Our new Head of Internal Audit has built out an Internal
Audit Team throughout the year and the new operating model is
now fully implemented. The Committee is pleased with how the
transition has progressed and the improvements driven by the
new in-house team, who have used co-sourced providers to help
ensure sufficient depth and breadth of expertise.
In addition, during the financial year, the Company commenced
and completed a formal tender process for the appointment of an
external auditor for the year ending 30 September 2025. This was
a carefully considered, managed and controlled process that was
overseen by the Committee. Following a recommendation by the
Committee, the Board approved PwC’s appointment as AJ Bell
plc’s external auditor for FY25. The Committee will oversee the
process to ensure a smooth transition between audit firms.
Looking ahead to next year, the Committee will also focus on our
preparations and response to the FRC’s proposed changes to
the Corporate Governance Code, particularly progress around
evidencing the effectiveness of our key internal controls and the
wider impact on our corporate reporting, whilst keeping abreast
of developing requirements.
Main activities during the financial year
The Committee has an annual cycle of work to ensure that all responsibilities are met over a calendar year. The Committee
met five times during the year. The list below summarises the key items considered by the Committee during the year ended
30 September 2023.
November
Financial reporting
• Review and approval of Annual Report and
External auditor
• Year end external auditor findings report
Governance
• Meeting with external auditor without
Executive Directors
• Meeting with internal auditor without
Executive Directors
• Annual meeting with CRO without
Executive Directors
• Annual meeting with CFO without
Executive Directors
• Recommendation to Board on external
auditor reappointment
• Review of Committee
annual agenda
• FRC consultation paper on the minimum
standard for audit committees
Accounts
• Assessment of Annual Report and
Accounts being fair, balanced and
understandable
• Statement of viability and going concern
• Review of investor presentation
• Review of results announcement
• Consideration of regulatory developments
January
Financial reporting
• Review of the limited assurance and
reasonable assurance reports in relation
to CASS
March
and audit opinion
• Review and approval
of management
representation letter
• FRC review update
• Confirmation of external auditor
independence
Internal audit and controls
• Plan for IT General Controls
• Internal Audit status update on closing
FY22 audit plan
• Internal Audit status update on FY23 audit
plan with heat map
• Introduce newly appointed Head of
Internal Audit
External auditor
• CASS findings report and opinion
Financial reporting
• Review of reporting timeline for 2023
• Review of key judgements and estimates
for the half-year
• Competitive Tender Process (CTP) FY25
proposal
External auditor
• Review of terms of engagement and fee
proposal
• Scope of the interim review
• FRC review findings
• Confirmation of external auditor
• Consideration of regulatory developments
independence
Internal audit and controls
• Update on IT General Controls
• Internal Audit status update on FY23
audit plan
• Progress update on transition to an
in-house Internal Audit function with
co-source support.
• Evaluation of external auditor
effectiveness and rigour survey
Further information on the activities of the Audit Committee is
provided below.
May
Membership
Membership of the Committee is reviewed annually by the Chair
of the Committee as part of its annual performance evaluation.
Recommendations for new appointments are considered by the
Nomination Committee, prior to Board approval.
The Board is satisfied that the Chair of the Committee has recent
and relevant financial experience, and the Committee as a whole
has competence relevant to the business sector in which the
Group operates. Biographical information on each member is
set out on page 76.
The Company Secretary is Secretary to the Committee. The Chief
Executive Officer, Chief Financial Officer, Chief Operating Officer,
Chief Risk Officer, Finance Director and other senior members
of the Finance Team and Legal Counsel are routinely invited to
attend Committee meetings. The external auditor attended all
meetings during the year. The Head of Internal Audit attended
three of the four core meetings during the year. However, a paper
was prepared and submitted for review to all four meetings.
The Chair has regular meetings with the Chief Financial Officer,
external audit partner and Head of Internal Audit to discuss key
audit-related topics ahead of each Committee meeting. In
addition, the Committee also meets privately with the external
audit partner and the Head of Internal Audit, at least once a year.
Financial reporting
• Review and approval of Interim Accounts
• Going concern assessment
• Review of results announcement
• CTP FY25 plan
• Consideration of regulatory developments
External auditor
• Interim review findings and review opinion
• Review and approval of management
Internal audit and controls
• Update on IT General Controls
• Internal Audit status update on the FY23
representation letter
audit plan
• Approval of terms of engagement and
• Review and approval of the Internal Audit
audit fee
Charter
• Confirmation of external auditor
• Progress update on the implementation of
independence
the in-house Internal Audit function
September
Financial reporting
• Review of key judgements and estimates
for year end
• Review of draft Audit Committee report
for year end
• CTP FY25 recommendation
• Consideration of regulatory developments
External auditor
• Review of FY23 audit plan
• External audit update
• Confirmation of external auditor
independence
Internal audit and controls
• Update on IT General Controls
• Internal Audit status update on the FY23
audit plan
• Review and approval of the Annual Internal
Audit plan for FY24
• Annual assessment of internal controls
Governance
• Annual Committee evaluation
• Annual review of Committee terms of
reference
• Annual review of non-audit services policy
• Review of FRC Quality Inspection Report
2022/23.
92 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 93
Audit Committee report
Financial reporting
Financial statements
One of the core responsibilities of the Committee is to ensure the integrity of the Group’s financial reporting, which includes overseeing
the effectiveness of the financial control environment.
During the financial year, the Committee:
• reviewed the Interim and Annual Report and Financial Statements, and the results announcements and recommended approval by
the Board;
• reviewed the clarity and completeness of financial reporting disclosures;
• reviewed reports from management, considered all significant financial reporting judgements for the financial statements and
reviewed any related disclosures;
• assessed the application and appropriateness of significant accounting policies in the year; and
• reviewed the Group’s going concern assumptions and viability statement.
Accounting judgements and significant issues
The Committee assessed and challenged the appropriateness of the judgements and estimates applied by management in the
preparation of the Interim and Annual Report and Financial Statements. As part of its review, the Committee considered the following.
Area for consideration
Committee review and conclusion
Intangible assets and
impairment
Goodwill and Cash Generating
Units (CGUs)
Share-based payments
Provisions
The Committee reviewed management’s paper to support the carrying amount of intangible assets
held by the Group. The review is supported by Board-approved forecasts and the sensitivities
applied concluded that no impairment was required. The Committee was satisfied with the
conclusions.
The Committee considered the impairment review carried out by management. This included
assumptions on the underlying calculation of the value-in-use of the CGU tested for impairment.
The underlying cash flow assumptions are supported by Board-approved forecasts. The main
assumptions, discount rate and sensitivities are included within note 13 of the consolidated financial
statements. The Committee was comfortable with the assumptions and judgements made,
concluding that the carrying value of goodwill within the Financial Statements is appropriate.
The Committee reviewed the key assumptions used for the valuation of options granted under the
Company’s share-based incentive schemes, with particular reference to the earn-out arrangement
for Touch. The basis of accounting and disclosures made were also considered appropriate and
consistent with the external auditor’s findings. The Committee was satisfied that the assumptions
used, including the performance period over which fair values are recognised were appropriate.
The Committee reviewed management’s paper presenting the assumptions and calculation
methodologies applied in determining provisions. In addition to considering the appropriate
application of IFRS and the recognition principles, the Committee was satisfied that the procedures
performed by management to estimate and quantify provisions were sufficiently robust.
TCFD climate risk reporting
The Committee reviewed management’s plan and disclosures for reporting our net zero transition
and was satisfied with the proposals laid out.
The Committee also reviewed the Group’s TCFD climate risk disclosure responsibilities as part of its
review of the Annual Report process for FY23. This review ensured that the reporting met the key
statutory and regulatory obligations with clear ‘comply or explain’ disclosure.
These areas have been discussed with the external auditor to ensure that the Group makes appropriate judgements and provides the
required level of disclosure. Following consideration of the above, the Committee concluded that there are no items that should be
classified as significant or critical judgements in the context of the 2023 Annual Report and Financial Statements.
Strategic report
Governance
Financial statements
Other information
Going concern and viability
The Committee reviewed a detailed paper presented by
management setting out the assumptions underlying the going
concern assessment and viability statements. The paper covered
the Group’s expected future profitability, capital position and
liquidity. The Committee also considered additional stress test
scenarios covering a significant reduction in equity market values,
a reduction in interest income and an idiosyncratic stress relating
to a scenario whereby prolonged IT issues cause a reduction in
customer numbers. The Committee also considered management
actions that could be taken in the event that the modelled
scenarios crystallise.
The Committee recommended to the Board that it was appropriate
for the Group to adopt the going concern basis of accounting in
preparing the Annual Report and Financial Statements for the year
ended 30 September 2023 and that based on current information
they could make the viability statement on page 69.
Fair, balanced and understandable assessment
At the request of the Board, the Committee considered whether
the 2023 Annual Report and Financial Statements, taken as a
whole, are fair, balanced and understandable and provide the
information necessary for shareholders and other stakeholders
to assess the Group’s position and performance, business model
and strategy.
The Committee considered the procedures around the
preparation, review and challenge of the Annual Report and
Financial Statements; the information and reporting it received
from management and the external auditor; and the discussions
that took place during the year. The Committee also considered
the narrative sections of the reports to ensure there was
consistency in the information reported, that appropriate weight
had been given to both positive and negative aspects of business
performance and that key messages had been presented coherently.
Following its review, the Committee is satisfied that the Annual
Report and Financial Statements are fair, balanced and
understandable and provide the information necessary for
shareholders and other stakeholders to assess the Group’s
position and performance and has advised the Board accordingly.
The Directors’ statement on a fair, balanced and understandable
Annual Report and Financial Statements is set out on pages 125.
CASS
The Committee reviewed the reasonable assurance reports and
limited assurance reports in relation to CASS for all regulated
entities within the Group. The Committee also challenged
management as required on the content and procedures
surrounding those reports.
Internal controls
Together with the Risk & Compliance Committee, the Audit
Committee is responsible for monitoring and reviewing the
effectiveness of the Group’s internal control and risk management
systems. The Group’s systems of internal control and risk
management are designed to identify, evaluate and manage rather
than eliminate the risk of not achieving business objectives and
can only provide reasonable and not absolute assurance against
material misstatement or loss.
Through monitoring the effectiveness of its internal controls, the
Committee is able to maintain a good understanding of business
performance, key judgemental areas and management’s decision-
making processes.
During the financial year the Committee:
• reviewed the adequacy and effectiveness of the Group’s internal
controls and internal control systems;
• reviewed the adequacy and effectiveness of financial reporting;
• considered and approved the internal audit plan for the year;
• considered reports from the internal auditor and Head of
Internal Audit, challenged the robustness of findings and
agreed actions;
• monitored progress in management’s responsiveness to
resolving audit issues and control recommendations raised;
• reviewed and approved the internal controls and risk
management statements in the Annual Report and Financial
Statements.
The Committee is satisfied that the Group had appropriate
procedures in place throughout the year and to the date
of signing, which accord with the FRC guidance on risk
management, internal control and related financial and
business reporting.
The Board’s statement on internal control and risk management
can be found on pages 86 and 87.
Internal audit
Last year the Audit Committee approved the proposed move
to implement a co-sourced internal audit function during FY23.
A formal recruitment process commenced in May 2022
culminating in the appointment of a new Head of Internal
Audit, Paul Sleney, who joined in November 2022.
Following this appointment, the implementation of an in-house
Internal Audit function and transition to a co-sourced model
has progressed well with minimal disruption to the business.
The following should be noted:
• The target operating model for the in-house function was
achieved ahead of schedule and comprises a team of four
individuals. Following his appointment in November, the Head
of Internal Audit was joined by an IT Audit Manager (in January
2023), and a Senior Audit Manager and an Audit Manager
(both in June 2023). This newly formed team brings a wealth
of internal audit experience from across financial services
including skills and knowledge specific to the investment
management industry.
• From January 2023, the Head of Internal Audit implemented a
monthly reporting process to ExCo and members of the Audit
Committee. This report provides senior management with a
progress update on individual audit reviews and against the
annual plan, a status report on agreed management actions,
and any other matters arising or of note.
• An engagement letter for the provision of co-sourced internal
audit services with Deloitte was signed in January 2023,
superseding the previous outsource arrangement. An
arrangement with a second external firm, Mazars, is also in
place. Mazars will be used as a back-up co-source partner
where Deloitte is unable to provide support either through
a conflict of interest or lack of resource availability. An
engagement letter with Mazars was signed in June 2023.
94 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 95
Audit Committee report
The internal audit plan for the upcoming year is approved annually
in advance by the Committee. The annual internal audit plan
for FY24 was approved at the Audit Committee meeting in
September 2023. This plan was accompanied by a three-year
indicative plan designed to ensure all critical areas of the business
are covered over this period. However, this three-year plan
is overlaid by an annual risk assessment to determine the
prioritisation of the internal audit plan for the coming year.
From FY23 the internal audit reporting cycle is now aligned to that
of the Group’s financial year. The transition occurred seamlessly
following consideration and approval by the Committee in FY22.
During the year a programme of assurance reviews were
undertaken by Internal Audit which focused on areas such as
CASS, IT General Controls, User Access Management, Third Party
Supplier Management and Consumer Duty, amongst others.
The Committee reviews all internal audit reports in order to assess
the effectiveness of mitigating controls and proposed actions
by management to address any issues found. The Committee
tracks all management actions arising to completion.
The Committee met with the Head of Internal Audit without
management present and with management without the Head
of Internal Audit present. There were no significant issues raised
during these meetings.
Due to the close involvement of the Committee in the transition
to a co-sourced internal audit model, a formal review of the
effectiveness of the internal audit function was not undertaken
during the year. The Committee will perform a review of the
effectiveness of the internal audit function in the next financial
year, once a full cycle under the new operating model is complete.
External audit
Tenure
This is BDO’s fourth year as the Group’s external auditor following
a formal tender process during 2019 and subsequent appointment
at the 2020 AGM. Neil Fung-On has fulfilled the role of lead audit
partner for a fourth year.
The Committee confirms that the Group has complied with the
requirements of the Statutory Audit Services for Large Companies
Market Investigation (Mandatory Use of Competitive Tender
Processes and Audit Committee Responsibilities) Order 2014
for the financial year under review. Under these requirements
a tender for the external audit should be undertaken no later
than 2030, however, during the year the Company commenced
and completed a formal tender process for the 2025 audit, details
of which are included on the following page.
Oversight of external audit
The Committee oversees the relationship with, and work
undertaken by, the external auditor, BDO. The Committee’s
responsibilities include making a recommendation on the
appointment, reappointment and removal of the external auditor
and overseeing their effectiveness and independence. The
Committee assesses the qualifications, expertise, resources and
independence of the external auditor and the effectiveness of
the audit process.
During the year the Committee approved the audit plan,
the proposed audit fee and terms of engagement for 2023.
The Committee also reviewed and challenged reports from
BDO which outlined its risk assessments and audit plans,
together with audit findings and management responses.
The Chair of the Committee has regular contact with the external
audit partner outside of Committee meetings and without the
management of the business present.
The Committee considered the effectiveness of the audit process
and the external auditor’s performance as part of an annual
performance review. Feedback was sought from both Committee
members and key internal stakeholders and focused on the quality
and experience of the audit partner and key audit team, quality
of the audit delivery and the extent and nature of challenge
demonstrated by BDO in its work and interactions with
management. The Committee also considered the latest
FRC Audit Quality Review on BDO published in July 2023.
As reported in the prior year, the FRC Audit Quality Review (AQR)
Team undertook a review of the audit performed by BDO LLP of
the Group’s financial statements for the year ended 30 September
2021. The review concluded during the year and no additional
findings were raised from those highlighted in the draft report.
The Chair of the Audit Committee received a full copy of the
findings and has discussed these with BDO LLP. The Committee
has continued to have close dialogue with BDO throughout the
year to ensure actions taken have addressed the FRC’s findings.
Having considered the areas identified and changes made to the
audit strategy and approach both in the current and prior years,
the Audit Committee concluded that it was satisfied with the
response from the external auditor, that improvements had been
made to address audit quality and that the audit was effective.
Following the above review and the annual evaluation,
the Committee recommended to the Board a proposal
for reappointment of BDO as external auditor for the year
ending 30 September 2024, at the next AGM.
Non-audit fees
The Committee reviewed and approved the non-audit services
policy for the year. The policy is reviewed annually by the
Committee to safeguard the ongoing independence of the
external auditor and ensure compliance with the FRC’s Ethical
Standard.
The Committee recognises that there are often advantages in
using the external auditor to provide certain non-audit services
due to their knowledge of the business. In the event that BDO is
engaged to provide non-audit services, procedures are in place to
ensure that the provision of any such services does not impair the
external auditor’s independence and objectivity.
Prior to undertaking any non-audit service, external auditor
independence is considered together with the nature of the
services and fee levels relative to the audit. The approval of the
Committee must be obtained before the external auditor is
engaged to provide any permitted non-audit services. For
permitted non-audit services that are considered not to be
material, the Committee has pre-approved the use of the external
auditor for cumulative amounts totalling less than £25,000 on
the approval of the Chief Financial Officer and the Chair of the
Committee.
Strategic report
Governance
Financial statements
Other information
Fees for non-audit services paid to the external auditor should not,
in aggregate, exceed 70% or more of the average audit fees for the
preceding three years. Non-audit services for the current year are
well within these limits and represent 18% of the three-year
average statutory audit fee.
As part of the planning, half-year and full-year processes, the
Committee also received and reviewed an analysis of all non-audit
work provided by BDO in addition to the results of BDO’s own
independence confirmation checks.
During 2023, the external auditor undertook non-audit work in
relation to other assurance services for the review of the interim
results, CASS audit and profit verification work and was paid a total
fee of £175,000 (2022: £137,000). Analysis of the fees paid to BDO
during the current and prior year can be found in note 6 to the
financial statements.
The Committee is satisfied that the external auditor’s
independence has not been impaired by their provision of
non-audit services.
Competitive Tender Process (CTP)
During the year, a decision was made to commence a formal audit
tender process for the 2025 audit, to coincide with the rotation of
the current lead audit partner.
The Committee has overseen the formal tender exercise which
has been conducted in accordance with the FRC’s Best Practice
Guide to Audit Tendering. The process was designed to be
transparent, effective and efficient in order to provide participating
firms an equal opportunity to tender for the provision of their
services. Prior to the tender, the participating firms had been
given equal opportunity to meet with key members of senior
management and the Finance Team to ensure they had a good
understanding of the business.
Following a comprehensive review and a series of follow up
discussions with the two strongest candidates, the Committee
concluded that PwC had a strong team proposition, good
knowledge of AJ Bell’s business and the sector’s key risks,
significant audit expertise within the sector, a good reputation
and other features which demonstrated their commitment to
providing a high-quality, focused audit.
The Committee reported to the Board in September 2023 and
recommended that PwC be appointed as AJ Bell plc’s external
auditor for the financial year ending 30 September 2025, subject
to shareholder approval. The Committee will oversee the
implementation of a detailed transition plan and an update
will be provided in next year’s report.
Committee evaluation
As described in more detail on page 86 an internal evaluation
of the Board and its Committees was undertaken during the
year as required by the UK Corporate Governance Code. The
Committee also conducted its own annual effectiveness review
in September 2023, which confirmed the Committee continues
to be effective in fulfilling its role and remains independent.
Audit Committee priorities for 2023/24
As well as considering the standing items of business, the
Committee will focus on the following key areas during the
forthcoming year:
• evolution of the disclosures and targets for the Group’s ESG
strategy, including transition plan to net zero and TCFD targets;
• considering the impact and timing of the FRC’s proposed
changes to the Corporate Governance Code and any other
regulatory changes or implications, including any future
reporting of the effectiveness of internal controls; and
• overseeing the transition of the external auditor for FY25.
The main elements of planning for the tender process began
in March 2023 when the proposed process was approved by the
Committee. The Committee regularly received and commented
on the main materials prior to these being issued to the
participating firms.
Signed on behalf of the Audit Committee:
Eamonn Flanagan
Chair of the Audit Committee
6 December 2023
As an initial step, a detailed desktop review process was
undertaken, which considered the credentials of a number of
eligible firms against a range of criteria, including an assessment
of the depth of knowledge and experience in the financial services
sector, the firm’s geographical reach, analysis of the firm’s current
and recent audit clients in our sector, review of the FRC’s Audit
Quality Inspection reports on each firm and consideration of our
experience of the firms in recent engagements. Following this
review, the Committee agreed that three firms should be issued
with a Request For Proposal (RFP). Evaluation criteria, in line with
FRC guidance, were established and agreed for the process and
a scorecard was used to appraise each firm. A meeting of the
Committee was convened in early September specifically to
receive and consider presentations from the three audit firms
participating in the final stage of the audit tender. The Committee
used the meeting to challenge and question each of the audit
firms to ensure that the preferred firm would provide the highest
quality, most efficient and effective audit and would be the best
fit for AJ Bell.
96 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 97
Risk & Compliance Committee report
Dear shareholder
As Chair of the Risk & Compliance Committee, I am pleased
to present the Committee’s report for the year ended
30 September 2023.
During the year, the Committee considered a wide range of
existing and emerging risk and compliance matters. Key areas
of focus included:
• implementing the Consumer Duty, and ensuring that the Group
provides good outcomes for our customers;
• overseeing the effectiveness of the Group’s Risk Management
Policy, including the Group’s risk appetite categories, principal
risks and uncertainties (PR&U) and key risk indicators (KRIs) and
tolerances;
• operational resilience and the Group’s resilience to cyber attacks;
• risk assessments on the cost-of-living pressures and the
potential impact on the Group’s customers and the Group, and
the risks arising from the collapse of the Silicon Valley Bank (SVB);
• Internal Capital and Risk Assessment (ICARA) and the potential
impacts of severe economic scenarios on the Group’s business
model and strategy;
Simon Turner
Chair of the Risk & Compliance Committee
Role and responsibilities
The role of the Committee is to assist the Board in fulfilling
its oversight responsibilities by reviewing and monitoring:
• the Group’s attitude to and appetite for risk and its future
risk strategy;
• the Group’s risk management framework;
• how risk is reported both internally and externally; and
• whistleblowing across the Group;
• the processes for compliance with laws, regulations and
ethical codes of practice and prevention of financial crime.
• financial crime prevention, including overseeing the effectiveness
of fraud controls; and
The role and responsibilities of the Committee are set out in
formal terms of reference, a copy of which can be viewed
on the Group’s website ajbell.co.uk.
More detail on the Group’s approach to managing risk is
detailed in the risk management framework section of the
Annual Report.
Committee attendance
The Committee has four scheduled meetings a year, plus
one dedicated ICARA meeting and may meet at other times
as agreed by the Chair or as requested by another member
of the Committee. The Committee comprises independent
Non-Executive Directors.
• regulatory horizon scanning for matters impacting the platform
sector and asset management sector.
The Committee receives regular training from subject matter
experts; this year it has received Consumer Duty, operational
resilience, cyber security, financial crime and Senior Managers
Regime training, in order to ensure its knowledge of these areas
is appropriate.
The Committee concluded that the Group continues to have
strong discipline in the management of both emerging and
existing risks. The Committee’s work continues to help support
the Group in reviewing the amount and type of risk it is prepared
to take or hold in the context of its business model and in the
course of achieving its strategic objectives.
Member
Position
Simon Turner
Committee Chair
Evelyn Bourke
Senior Independent
Director
Fiona Clutterbuck1 Non-Executive Director
(Chair from 1 May 2023)
Helena Morrissey2 Non-Executive Director
(Chair to 30 April 2023)
1. Appointed to the Committee on 1 May 2023.
2. Stepped down from the Committee on 30 April 2023.
3. Helena Morrissey was unable to attend a scheduled meeting
due to a prior commitment.
Eligible / attended
meetings
(including ad hoc
meetings)
5/5
5/5
3/3
2/13
Further information on the activities of the Committee is
provided below.
Membership
Membership of the Committee is reviewed annually by the
Chair of the Committee as part of its annual performance
evaluation. Recommendations for new appointments are
considered with the Nomination Committee, prior to Board
approval.
The Company Secretary is the Secretary to the Committee. The
Chief Executive Officer, Chief Financial Officer, Chief Operating
Officer, Chief Risk Officer, Finance Director, Head of Risk and
other members of the senior management team are routinely
invited to attend Committee meetings.
Strategic report
Governance
Financial statements
Other information
Main activities during the financial year
The Committee has an annual cycle of work to ensure that all responsibilities are met over a financial year. The Committee
met five times during the year. The list below summarises the key items considered by the Committee during the year ended
30 September 2023.
November
Risk management framework
• Review and approval of risk appetite
categories and statements
• Conduct and customer outcomes
Operational resilience
• Operational resilience deep dive and
training
• Cyber security deep dive, including
ransomware briefing
Risk reporting
• Review of the CRO report
• Review and approval of the KRIs linked to
risk appetite categories and PR&U
• Review of conduct risk reporting
March
Operational resilience
• Operational resilience update, including
review of self-assessment and 2nd line review
Risk reporting
• Review of the CRO report
• Review of KRIs linked to risk appetite
categories and PR&U
• Review of conduct risk reporting
• Review of information security reporting
Client money and assets
• Review of the client money and assets
report
May
Risk management framework
• Review and approval of the Group Risk
Management Policy
Operational resilience
• Operational resilience deep dive
• Cyber security deep dive
• Review of information security reporting
• Review of financial crime reporting
Whistleblowing
• Review and approval of the annual
whistleblowing report
Client money and assets
• Review of the client money and
assets report
Risk assessment
• Review of cost-of-living risk assessment
and any potential impact on customers
and the Group
ICARA
• Review of ICARA document, including
liquidity risk assessments, recovery
planning and the wind-down plan
Regulatory items
• Review of risk sections in annual report
• Regulatory horizon scanning
Executive performance and risk taking
• CRO year-end report
Risk assessment
• Review of banking crisis (Silicon Valley
Bank fallout) and any potential impact on
the Group
ESG and TCFD
• Review of the material risks and
opportunities and climate scenarios
Financial crime
• Review of annual report by the Money
Laundering Reporting Officer
• Fraud controls
• Financial crime training
Data protection
• Review of annual report by the Data
Protection Officer
ICARA
• Review of process and timetable
Regulatory items
• Review of Consumer Duty progress
Executive performance and risk taking
• CRO mid-year report
Risk reporting
• Review of the CRO report
• Review of KRIs linked to risk appetite
categories and PR&U
• Review of conduct risk reporting
• Review of information security reporting
• Review of financial crime reporting
Client money and assets
• Review of the client money and assets
report
ICARA
• Review of process and annual summary of
liquidity management
Regulatory items
• Review of risk sections in half-year report
• Review of Consumer Duty progress
• Transfers out project update
• Regulatory horizon scanning
July
ICARA
• Review and challenge of material harms,
liquidity and stress testing
Risk reporting
• Review of the CRO report
• Review of KRIs linked to risk appetite
Regulatory items
• Review of Consumer Duty progress
• Senior Managers Regime responsibilities
categories and PR&U
training
September
Risk management framework
• Review and approval of the annual risk and
Combined assurance model
• Review of assurance (including control
ICARA
• Review and approval of material harms,
compliance plan
effectiveness review)
liquidity and stress testing
Operational resilience
• Disaster recovery deep dive
Risk reporting
• Review of the CRO report
• Review of KRIs linked to risk appetite
categories and PR&U
• Review of Consumer Duty Evidential MI
• Review of information security reporting
• Review of financial crime reporting
Client money and assets
• Review of the client money and assets
report
ESG and TCFD
• Review of climate scenario analysis
Financial crime
• Review of fraud controls
Regulatory items
• Review of risk sections in annual report
• Transfers out project update
• Regulatory horizon scanning
Executive performance and risk taking
• CRO pre-performance year end report
Committee evaluation
• Annual Committee evaluation
98 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 99
Strategic report
Governance
Financial statements
Other information
Executive performance and risk taking
The Committee reviews any relevant events where material
failures or poor performance contributed to, or failed to prevent,
the crystallisation of risk. Any such matters are referred to the
Remuneration Committee for consideration of adjustment to
annual bonus awards, where appropriate. No incidents and issues
arose in the year due to disregard of risk management practices,
misconduct or excessive risk taking.
Committee evaluation
The Committee conducted its own annual effectiveness review in
September 2023, which confirmed the Committee is operating
effectively.
Risk & Compliance Committee priorities
for 2023/24
The Committee will continue to focus on any emerging risks that
may materialise. A key area of focus over the next financial year is
likely to be monitoring the embedding of the Consumer Duty as
well as reviewing improvements to the Group’s fraud controls.
Signed on behalf of the Risk & Compliance Committee:
Simon Turner
Chair of the Risk & Compliance Committee
6 December 2023
Risk & Compliance Committee report
Key areas of focus
Regulatory items
The Committee has reviewed key regulatory initiatives, with the
main focus this year being the Group’s implementation of the
Consumer Duty requirements. The Committee reviewed the
changes across the four key Consumer Duty outcomes, including
product proposition reviews and assessments of value in order to
ensure that products performed as expected, provided value and
generated good outcomes for customers. The Committee has
also reviewed the revised Consumer Duty Evidential Management
Information. The Committee also receives regulatory horizon
scanning and exercises oversight of other key regulatory initiatives,
such as the Group’s progress on reducing transfer out times.
Risk management framework
The Chief Risk Officer (CRO) provided her annual assessment of
Risk and Compliance functions in September 2023 and confirmed
good progress had been made with the delivery of both the
Risk and Compliance plans over the previous financial year. The
Committee approved the annual Risk and Compliance plans in
September 2023. The Committee conducted its annual review of
the Group Risk Management Policy in May 2023 and approved the
Policy with minor amendments.
The risk appetite categories and the PR&U are reviewed annually
after the Board strategy and budget have been approved and the
appropriate KRIs and tolerances are then set. The associated KRIs
and tolerances are monitored at each Committee meeting.
Risk reporting
Risk reporting is included in the Group’s Quarterly CRO report.
This includes details of underlying KRIs mapped to the risk
appetite categories and the PR&U, a summary of all the Group’s
risks and controls, breaches, risk events and emerging risks.
Risk assessment
The Committee periodically receives topical risk assessments
for review. In FY23 these have included a risk assessment on the
impact of the cost-of-living pressures and the potential impacts
on the Group’s customers. The Committee has also reviewed a
risk assessment on the risks arising from the collapse of the
Silicon Valley Bank (SVB).
Combined Assurance Model
The purpose of the Combined Assurance Model (CAM) is to
monitor the consistency of approach, completeness of coverage
and co-ordination of activities of the Risk, Compliance and
Internal Audit functions. All of the Group’s risks and controls are
recorded in the Group’s risk register. Each business area is
responsible for performing a Risk and Control Self-Assessment
(RCSA), reviewing this assessment on an ongoing basis and
providing an annual RCSA attestation. Depending on this
assessment, the business area will determine whether action is
required to improve the controls to ensure the relevant risk is
brought back or remains within appetite. The second (Risk and
Compliance) and third (Internal Audit) lines of defence then
co-ordinate their assurance activities across the key areas of risk
across the Group. The assurance output has been reviewed by the
Committee, in conjunction with the Audit Committee, over the
course of the financial year. The annual risk and compliance plans
are reviewed and approved taking into consideration the findings
from the CAM.
Operational resilience
The Group has tracked initiatives to further improve the Group’s
operational resilience, including improving the Group’s disaster
recovery capabilities. The Committee received annual training that
was supplemented by external insight. In respect of key cyber
threats, the Committee reviewed information from internal subject
matter experts on the strength of corresponding key controls.
The Committee also sought assurance and cyber security threat
testing from third-party cyber security companies to ensure
the Group’s cyber defences are working appropriately.
Whistleblowing
The Group promotes a culture of openness with its employees
and where there are concerns, encourages them to utilise the
various means available to speak up. The Group recognises that
employees may not feel comfortable reporting their concerns
through an internal channel and therefore provides access to an
external whistleblowing service. A formal whistleblowing policy is
in place which is reviewed annually by the Committee alongside
the annual whistleblowing report for consideration.
The Chair of the Committee has been appointed as the
whistleblowing champion and will be responsible for the
overseeing the integrity and effectiveness of the regime.
Client money and assets
The Committee reviews a quarterly client money and assets
(CASS) report, which details the effectiveness of systems and
controls for CASS and progress on the ongoing initiatives to
automate and improve the Group’s CASS processes.
ESG and TCFD
The Committee has reviewed the Group’s material climate-related
risks and opportunities and climate-related scenario analysis.
Financial crime
The Committee received and reviewed its annual report from the
Money Laundering Reporting Officer (MLRO) in March 2023 which
confirmed the Group’s anti-money laundering and fraud controls
are adequate. The Group is devoting additional resource to further
improve its fraud control environment. The Committee monitors
the effectiveness of the Group’s anti-money laundering and fraud
systems as part of its quarterly risk reporting.
Data protection
The Committee received and reviewed the annual report from the
Data Protection Officer (DPO) in March 2023. A Data Forum is in
place to oversee the ongoing maturity of the data protection and
privacy framework.
ICARA
The Group has conducted ICARA scenario workshops with
subject matter experts (SMEs) from across the Group to assess the
material harms that the Group and its customers may be exposed
to. Non-Executive Director meetings have been held with SMEs
to assist in the review and challenge process. The Committee
convened in July to review and challenge the output, with the
revised output being subject to further review and challenge by
the Committee in September. The Committee has also reviewed
stress testing, recovery planning and wind-down planning
assessments.
100 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 101
Directors’ Remuneration report
Annual statement by the Chair of the Remuneration Committee
Margaret Hassall
Chair of the Remuneration Committee
Committee attendance
The Committee meets at least twice a year and may meet
at other times as agreed by the Chair or at the request of
another member of the Committee.
Member
Position
Margaret Hassall
Committee Chair
Fiona Clutterbuck1 Non-Executive Director
(Chair from May 2023)
Eamonn Flanagan Non-Executive Director
Simon Turner
Non-Executive Director
Eligible / attended
meetings
(including ad hoc
meetings)
5/5
3/3
5/5
5/5
1. Fiona Clutterbuck was appointed to the Committee on 1 May 2023.
The Company Secretary is Secretary to the Committee. The
Chief Executive Officer, Chief Financial Officer, HR Director
and our external advisers, Deloitte, are also routinely invited to
attend Committee meetings. No Director was present during
the meeting where their own remuneration was discussed.
Dear shareholder
On behalf of the Board, I am pleased to present the Directors’
Remuneration report for the year ended 30 September 2023.
This report includes a summary of the current Directors’
Remuneration Policy approved at the 2023 AGM, details of the
approach to the implementation of that Policy for the 2024
financial year and the Annual Report on Remuneration, detailing
the amounts earned in respect of the 2023 financial year.
Remuneration Policy
Our current Directors’ Remuneration Policy was approved at the
2023 AGM with over 98% of votes in favour. A summary of this can
be found on page 121.
The Policy is based on the following principles:
Alignment with
our culture and
growth strategy
Supporting
talent attraction
and retention
Simple and
transparent
• Aligned with our purpose, principles and
strategy, promoting our culture and
long-term sustainable value creation.
• Executives and wider workforce to share
the growth in value of the Company
through equity participation.
• Market-competitive base salaries and
benefits which reflect the size and
complexity of the business and the calibre
and experience of individuals in each role.
• To recognise and reward strong
performance and individual contribution,
with an appropriate proportion of
package linked to financial and
non-financial performance.
• Approach to reward that is well understood.
• A single, Executive Incentive Plan (EIP) for
Executive Directors and the Executive
Committee which is designed to promote
long-term, sustainable value creation.
Good
governance
and risk
management
• Following good corporative governance
and regulatory requirements.
• In line with the Company’s risk appetite
and risk management framework.
Since our IPO in December 2018, we have operated a single
incentive plan for executives, the EIP, which is still considered
appropriate based on the nature of our business model where a
high proportion of operating profit is converted into cash in the
year that it is generated.
The performance measures set for the EIP awards are based on a
balanced scorecard of financial and non-financial measures linked
to the KPIs and strategy of the business, with the primary focus
being on the drivers of long-term value, such as growth in (AUA)
and customer retention rates.
Performance is assessed over a single financial period but with the
deferral of the vesting of a significant proportion of the awards
(60% in the case of Executive Directors). The balanced scorecard
and deferred awards promote and reward long-term sustainable
Group performance. The intrinsic nature of the metrics included
in the balanced scorecard promotes behaviours supportive
of long-term goals and a sustainable, successful business.
Furthermore, deferred awards are also subject to a robust
performance underpin which is linked to the underlying
performance of the Group, risk management, conduct and
compliance which is assessed over the three-year deferral period.
Under the EIP no cash bonuses are paid. Instead, both annual and
deferred awards are delivered in shares, thus aligning shareholder
and Director interests. EIP awards are granted at the start of the
financial year, with the number of shares granted based on the
share price at the date of grant. This means that Executives are
exposed to the impact of any movement in the share price over
the performance period, upwards or downwards.
Strategic report
Governance
Financial statements
Other information
We consider that this exposure, together with our clear and robust
framework for setting targets and for measuring and assessing
performance objectively, ensures we reward executives
appropriately for both their own contribution and the
performance of the Group. The Committee retains the discretion
to override mechanical assessment ratings if they consider them
to have resulted in inappropriate award outcomes and has,
on occasion, exercised such discretion. When exercising its
discretion, the Committee takes into account a report from
the Chief Risk Officer on whether it has been identified that
any undue risk has been taken to achieve objectives.
The performance graph and historical Chief Executive Officer
(CEO) remuneration outcomes on page 119 demonstrate that
the EIP has been successful in rewarding long-term sustainable
Company performance.
Board and senior management
remuneration for the year ending
30 September 2024 (FY24)
As set out in last year’s Annual Report, our Board and executive
pay positioning is well below the market average, whilst our
business has grown significantly in both size and complexity since
our IPO in 2018. Our pay positioning has become increasingly
challenging in recent years when recruiting at both Board and
Executive Committee level.
One of AJ Bell’s top priorities is to attract and retain talent in key
areas of the business to ensure that we can continue to grow
successfully in a highly competitive market. As described last
year, to address this issue we proposed moving the executive
remuneration packages to a more competitive level in a balanced
and prudent way, consistent with our reward principles. As a result,
when determining appropriate Board and executive remuneration
packages for FY24, we considered a number of factors, including
the performance of individuals in their role, changes to the scope
of the roles, business performance and the pay review for the
wider workforce alongside the competitiveness of our packages
against the market. Details of the key changes made are shown
below, which took effect from the start of our new financial year
on 1 October 2023.
Chief Financial Officer (CFO) base pay
• Peter Birch joined the business on 1 July 2022, bringing with
him extensive knowledge of the UK financial services sector
including the investment platform market. His base salary on
appointment was £310,000. This figure was agreed by the
Committee in November 2021 (Peter’s appointment was
announced on 2 December 2021) when the CFO recruitment
process had highlighted that the previous CFO package was
insufficient to attract the desired quality of candidate for
the role.
• Peter Birch did not receive a base salary increase for FY23.
Between November 2021 when Peter’s base salary level was
agreed and September 2023, cumulative UK CPI inflation was
20.1%, therefore the base salary level set on appointment had
fallen significantly in real terms.
• Peter’s base salary for FY24 has been increased from £310,000
to £385,000 (up 24%), which still positions the CFO pay around
the lower quartile compared with FTSE 250 financial service
companies (excluding banks).
• This increase reflects both the inflationary environment since
the announcement of Peter’s appointment, as well as his strong
personal performance and contribution to the business since
joining AJ Bell. Furthermore, it recognises the increased scope
and responsibilities of his role, having assumed responsibility for
our Treasury function during FY23 and our HR function with
effect from January FY24.
• Due to the level of increase being >20%, consideration was
given by the Committee to taking a phased approach over two
or more years. However, it was agreed that this base fee more
accurately reflects the current responsibilities of the role and
Peter’s strong performance. It was also acknowledged that a
phased approach may present a retention risk and would not
sufficiently address the below market base salary positioning.
• The FY24 increase in base for the CFO reflects a more
appropriate pay level relative to that of a CFO in a regulated
FTSE 250 financial services business and also compared to
publicly listed direct competitors of AJ Bell.
• The Committee also considered consistency of approach with
individuals below Board. The level of increase proposed is
within the range proposed for other high performing
employees who will receive an increase above the standard.
CEO and Chief Operating Officer (COO) base pay
To reflect strong performance in role, the committee approved a
5% increase for the CEO and COO. Whilst this is below the average
base pay increase for the wider workforce, which is just under 6%,
the Committee felt this was appropriate when considering overall
executive remuneration.
Maximum Executive Incentive Plan (EIP)
opportunities for FY24
Our current Remuneration Policy, approved at the January
2023 AGM, introduced changes to executives’ variable reward
opportunity, with a higher award opportunity introduced
alongside more stretching performance targets. Given the
continued strong performance of the business, the increased
maximum incentive opportunity of 270% of the salary for the CEO
and 250% of salary for the CFO and COO will apply for FY24. The
on-target vesting will reduce from 67% to 50% of maximum from
FY24 which broadly maintains the current on-target value of the
annual and deferred award as a percentage of salary.
Consistent with the commitment made last year, the Committee
has reviewed the FY24 performance measures (taking into account
market conditions) with a focus on setting targets for the
executives which are sufficiently stretching in light of the
changes made to the EIP maximum award opportunity.
Impact on total remuneration
The Committee has also reflected on the impact of the above
increases on the value of total remuneration packages. Compared
to FTSE 250 financial services business (excluding banks) the total
remuneration for each of our Executive Directors will continue
to be positioned at or below lower quartile. The Committee
therefore intends to keep this under review in future years so that
our remuneration packages remain appropriate to help us retain
and attract the calibre and experience of individuals needed to
deliver the Group’s growth ambitions.
The Committee believes that the above changes are consistent
with our aim to reward appropriately for strong long-term
performance and are, therefore, in the best interest of the
Company’s shareholders.
102 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 103
Directors’ Remuneration report
Annual statement by the Chair of the Remuneration Committee
EIP outcomes for FY23
During a year in which macroeconomic uncertainty impacted
market values and investor confidence, our dual-channel business
model and diversified revenue streams have combined to enable
us to deliver another year of sustainable growth. We achieved a
record set of financial results with revenue increasing by 33% to
£218.2 million, and PBT up to £87.7 million, representing a 50%
year-on-year growth rate. Furthermore, these results have been
delivered through organic growth in customer numbers and
strong underlying AUA inflows through our platform propositions.
Pay progression, to bring people closer to or at the median, is an
area of focus for the business and we continue to monitor levels
of pay against market data, particularly in light of increasing
competition in the local recruitment market. The average salary
increase for FY24 was just under 6%, with enhanced increases for
approximately 17% of staff, where their pay may have fallen below
appropriate levels or in recognition of high performance. An
additional 1% employer pension contribution uplift has also been
awarded to all staff in FY24, as agreed in last year’s benefits review.
All staff will also be eligible to receive their annual free share
award of up to £2,000 based on strong company performance.
The level of the stretching performance measures set for the
Executive Directors’ in FY23 have resulted in EIP outcomes being
below target, primarily due to high expectations in relation to net
new customer numbers and net new AUA inflows.
In considering the extent to which the Executive Directors’ EIP
awards vested, the Committee assessed performance against the
targets set alongside the findings of the CRO risk report, in which
no adverse findings were reported. They also considered relevant
external market conditions and the quality of earnings delivered.
The Committee discussed whether there should be any downward
discretion applied to the outcomes due to the increase in revenue
per £AUA, driven by the increase in base rates experienced over
the period, resulting in a significantly higher gross rate earned on
customer cash. The Committee noted that throughout the year
AJ Bell paid customers a competitive rate of interest on cash, with
amounts paid away determined through a defined governance
approach. This approach included consideration of the total cost
to customers and benchmarking against industry comparators.
Further, the higher inflationary and interest rate environment had
an adverse impact on other revenue streams such as recurring ad
valorem fees and transactional income. The Committee also
noted that in prior years where interest rates have fallen, no
upward adjustments have been made to the EIP outcomes.
As a consequence, it was determined that no adjustment
should be made.
Based on the Committee’s assessment, Michael Summersgill’s
awards as CEO vested at 59%, Peter Birch’s as CFO at 60% and
Roger Stott’s as COO at 63% of maximum. The Committee did
apply any discretion to the formulaic outcomes. Further details
of the outcomes can be found on pages 114 to 117 of the
Annual Report on Remuneration.
The Committee is satisfied that our Executive Directors have
continued to deliver tangible and substantial benefits for the
business and our shareholders, and have delivered strong
performance against stretching targets, as our results attest.
Alignment with wider workforce
Pay and benefits
The Committee reviews information on wider workforce
remuneration, provided by the Human Resources Team,
which oversees the annual pay review and performance review
process. Executive remuneration and other employees’ salaries
are reviewed following the same process and include both fixed
and performance-related elements. This process includes
benchmarking against similar financial services organisations and
considers factors such as local recruitment conditions. During the
year 98% of the wider workforce below Board and Executive
Committee level received a bonus award.
Alongside the annual free share award, we operate a BAYE scheme
for all staff who can buy shares in the company out of pre-income
tax and National Insurance pay, within HMRC approved limits.
During the year approximately 30% of our workforce actively
participated in the plan.
Our share schemes hold significant value for our staff and support
our reward principle by enabling everyone to share in the growth
in value of the Company through equity participation; helping to
aid staff retention and to align the interests of our wider workforce
with those of our shareholders.
Employee Voice Forum (EVF)
During the year, our new Chair, Fiona Clutterbuck, was nominated
as our Employee Engagement Director with effect from May 2023.
The EVF met throughout the year to discuss several topics
including career progression and executive pay. As part of the
discussions around executive pay, information was shared with the
forum on how executives are rewarded through the EIP and how
decisions made around executive pay are aligned with wider
workforce pay considerations.
We also surveyed staff this year through the Best Companies
engagement survey which provided valuable feedback on key
areas such as leadership, development opportunities, wellbeing,
and pay and benefits. Feedback provided through the survey was
anonymous, encouraging staff to give their honest views and
feedback, which were taken into consideration as part of our
annual pay and benefits reviews.
Gender pay
Our latest gender pay data published in 2023 reflects the position
as at April 2022. This showed an improvement in our mean figure
compared to the previous year and our difference in median pay
remains one of the lowest in the investment platform sector,
reflecting the progress we are making to improve diversity through
our talent pipeline and in our senior management appointments.
This is evidenced in the senior management recruitment we have
conducted this year, which has led to an increase in both female
and ethnic representation on the Executive Committee. The
recent appointment of Fiona Fry, as an independent NED with
effect from 7 December 2023, further improves diversity at Board
level. Her appointment and our commitment to improving
diversity is discussed further in the Nomination Committee report
on pages 90 and 91.
The Group’s gender pay gap report can be found at ajbell.co.uk.
Strategic report
Governance
Financial statements
Other information
CEO pay ratio
The median ratio for the CEO’s salary and total remuneration
compared to our employees was 17:1 and 28:1 respectively and
further details can be found on page 120 of the Annual Report
on Remuneration. This is a reduction from last year’s figures.
A significant proportion of the CEO’s pay is in the form of variable
pay through the EIP. As a result, the CEO pay will vary year-on-
year based on Company and share price performance, as will
the CEO to all-employee pay ratio.
Looking forward to FY24
Base salaries
The average base salary increase for the wider workforce for FY24
was just under 6%. As outlined above, in addition to the annual pay
review process, we also increased employer pension contributions
by 1% and again made an annual free share award of up to £2,000
to all eligible staff.
A summary of the base pay awards for our Executive Directors is
set out below:
Executive
Michael Summersgill
Peter Birch
Roger Stott
Title
CEO
CFO
COO
Base salary
effective
1 Oct 2023
£525,000
£385,000
£306,075
%
Change
5%
24%
5%
The increase in base salary for all Executive Directors still positions
their pay around the lower quartile benchmark.
Pension: Pension/cash in lieu of pension may be provided for
Executive Directors up to the rate available to the wider
workforce (6%).
EIP target and maximum award opportunities:
Chair and Non-Executive Directors
In determining the appropriate fees for NEDs for FY24,
consideration was given to our ongoing recruitment activity and
our ability to attract the right calibre of candidate. As stated in last
year’s Annual Report, it was our intention to conduct a review on
Chair and NED fees having experienced difficulties in attracting
candidates based on fee levels at the time and this review took
place alongside the review undertaken for the executives. Our
Chair and NED base fees were below the lower quartile
benchmark and feedback from separate external recruitment
consultancy firms indicated that this level would restrict our ability
to attract the best people. Consequently, it was acknowledged
that a base fee increase above that awarded to the wider
workforce would be required to maintain the strength of the
Board.
Our new Chair, Fiona Clutterbuck, joined the company on 1 May
2023. Fiona’s annual fee of £225,000 reflects the significant
knowledge and relevant experience that she brings to the role.
Under delegated authority from the Board, the Executive Directors
and the Chair reviewed fees for the other NEDs taking into
account the increased scope of their roles, responsibilities and
time commitments in addition to feedback received from the
market as part of active NED recruitment and succession planning.
The base fee agreed for FY24 is £60,000 (representing a 13%
increase from £53,000), which brings the fee in line with the lower
quartile of the market compared to FTSE 250 financial service
companies (excluding banks). For additional committee chair and
SID fees, the following increases were applied for FY24.
Historically, additional chair fees had been set at the same level
regardless of which committee was being chaired. For FY24, the
additional fees reflect the differences in responsibilities as shown
in the table below:
Executive
Michael Summersgill (CEO)
Peter Birch (CFO)
Roger Stott (COO)
FY24 EIP (% of base pay)
Role
Target
135%
125%
125%
Maximum
Risk Committee Chair
270%
250%
250%
Audit Committee Chair
Remuneration Committee Chair
Senior Independent Director
FY23
Additional
Fees
£10,000
£10,000
£10,000
£10,000
FY24
Additional
Fees
£25,000
£20,000
£17,500
£12,500
Both the annual and deferred awards will be assessed against a
balanced scorecard of financial and non-financial measures,
linked to the KPIs and strategy of the business, over the financial
year ending 30 September 2024 as set out below:
Financial
(35% weighting)
Growth and non-financial
(40% weighting)
Strategic initiatives
(25% weighting)
Revenue
AUA inflows
Including but not limited to:
PBT
Customer retention
Consumer Duty embedment
Shareholder views
The Committee is grateful to shareholders for their high level of
support for our Directors’ Remuneration report over the past three
years which reflect our responsible, considered approach
to executive pay. I would also like to thank shareholders and
investor bodies for their constructive input and engagement in
relation to the changes we have made for FY24 and for the
positive feedback received.
PBT margin Customer experience
Projects delivery
Staff engagement
For FY24, PBT margin has replaced diluted EPS as one of our
financial measures, which is more aligned with our focus on
operational gearing.
The % weighting for strategic initiatives has also increased
from the previous year to reflect the importance placed on
key deliverables this year.
We believe that the current Policy operated as intended and
consider that the remuneration received by the Executive
Directors in respect of the 2023 financial year was appropriate,
taking into account Group and personal performance, and the
experience of shareholders and employees. I welcome feedback
at any point in time from our entire shareholder base regarding
our Policy and its application, and I hope that we will earn your
support at the forthcoming AGM.
Yours sincerely
Margaret Hassall
Chair of the Remuneration Committee
6 December 2023
104 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 105
Directors’ Remuneration report
Directors’ Remuneration Policy (Summary)
Our Policy was put to shareholders for approval at the AGM on 8 February 2023, details of which are provided on page 121 of this report.
A summary of the Policy is included on the following pages; the full Policy document is contained in the 2022 Annual Report, which can
be found at ajbell.co.uk/group/investor-relations.
Alignment with the UK Corporate Governance Code
In determining our Remuneration Policy the Committee addressed the following six principles, as set out in the UK Corporate
Governance Code:
Clarity
• The Remuneration Policy has been designed with a clear and robust framework for setting targets and for
measuring and assessing performance objectively, aligned to our business model/cycle, to ensure we reward
executives appropriately for both their own contribution and the performance of the Group.
• Our Policy clearly aligns the interests of the Executive Directors, senior management and employees with those
of shareholders and wider stakeholders, as well as our purpose, guiding principles and strategy.
Simplicity
• We operate a single incentive plan – the EIP, which is designed to promote and reward long-term sustainable
Group performance.
Risk
• Our approach aims to ensure that remuneration and incentives adhere to the principles of good corporate
governance and the FCA Remuneration Code, and support good risk management practice.
• Malus and clawback provisions apply to executive rewards. Deferred awards are also subject to a performance
underpin which is linked to the underlying performance of the Group, risk management, conduct and compliance
over the three-year deferral period.
• The Committee retains discretion to override mechanical assessment ratings to take account of any concerns over
risk management.
Predictability
• All executives are set clear financial and non-financial targets at the start of the year with minimum, target and
maximum thresholds set as shown in our remuneration report.
• All EIP awards are delivered in shares with awards granted at the start of the financial year based on the share price
at the date of grant.
Proportionality
• Executives are assessed against financial and non-financial objectives, which are based on long-term sustainable
performance.
• The Committee retains the discretion to override mechanical assessment ratings, if they consider them to have
resulted in inappropriate award outcomes.
Alignment
to culture
• 50% of executive awards are based on non-financial performance objectives aligned with our purpose, principles
and strategy, including those specifically related to our culture such as staff engagement.
Strategic report
Governance
Financial statements
Other information
Policy for Executive Directors
Purpose and link
to strategy
Operation
Maximum opportunity
Performance measures
Component
Base salary
Core element of fixed
remuneration
reflecting the
individual’s role and
experience.
The Committee ordinarily reviews
base salaries annually taking into
account a number of factors
including (but not limited to) the
value of the individual to the business,
the scope of their role, their skills,
experience and performance.
The Committee also takes into
consideration:
• pay and conditions of the
workforce generally; and
• Group profitability and prevailing
economic conditions.
While no performance
conditions apply to fixed
remuneration,
an individual’s performance
in role is taken into account
in determining any salary
increase.
Not applicable.
Not applicable.
Whilst the Committee does not
set a maximum permissible base
salary, it does have regard to
relevant comparators in
approving salary levels. Increases
will not normally exceed the
range of salary increases
awarded (in percentage of salary
terms) to other employees of the
Group. However, higher
increases may be awarded in
appropriate circumstances,
such as:
• on promotion or in the event
of an increase in scope of the
individual’s role or
responsibilities;
• where an individual has been
appointed to the Board at a
lower than typical market
salary to allow for growth in
the role, in which case larger
increases may be awarded to
move salary positioning to a
typical market level as the
individual gains experience;
• change in size and/or
complexity of the Group; and/
or
• significant market movement.
Increases may be implemented
over such time period as the
Committee deems appropriate.
The Committee has not set
a maximum on the level of
benefits Executive Directors may
receive. The value is set at a level
which the Committee considers
to be appropriate taking into
account the nature and location
of the role and individual
circumstances.
The maximum value of any
employer pension contributions
(or cash in lieu of a pension
contribution) for Executive
Directors will be aligned to the
rate available to the majority of
the wider workforce.
In addition, Executive Directors
may be permitted to sacrifice
other elements of remuneration
and receive an equivalent
contribution to a pension
scheme.
Benefits
To provide fixed
remuneration on a
market-competitive
basis to enable the
retention of
executives to deliver
the Company’s
strategy.
Benefits include medical cover for the
Executive Director and their spouse
and dependent children and life
assurance scheme.
Other benefits may be provided based
on individual circumstances, which
may include company car or
allowance, relocation costs or
allowances, travel and
accommodation expenses.
Reimbursed expenses may include a
gross-up to reflect any tax or social
security due in respect of the
reimbursement.
Retirement
benefits
To provide a
competitive means of
saving to deliver
appropriate income
in retirement.
An Executive Director may receive a
salary supplement in lieu of some or
all of the contributions that would
otherwise be made to a pension
scheme.
Subject to any agreed salary
sacrifice, the Company may make a
contribution to a defined contribution
scheme or a personal pension.
106 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 107
Directors’ Remuneration report
Directors’ Remuneration Policy (Summary)
Purpose and link
to strategy
Operation
Maximum opportunity
Performance measures
Component
EIP
To reward
achievement of the
Group’s business
plan, key
performance
indicators and the
personal contribution
of the Executive
Directors.
Aligns the interests of
Executive Directors
with those of
shareholders and
rewards long-term
stewardship of the
Company.
Delivery in shares
with a performance
underpin and the
ability to apply malus
adjustments and
clawback further
supports longer-term
alignment with
shareholders’
interests.
Performance measures
include a range of financial
and non-financial factors
to encourage long-term
value creation for
shareholders.
Awards will be assessed
against a combination of
financial, non-financial/
strategic and individual
measures, usually
measured over a
one-year period.
At least 50% of the EIP
opportunity is based on
financial and/or growth
measures and/or a relative
performance measure.
Vesting will be determined
between 0% and 100%
depending upon the
Committee’s assessment
of the extent to which the
measure has been
achieved.
For the 2023 financial year,
there is no change to the
on-target opportunity from
the 2020 Policy. Up to 67%
of the maximum award
granted may vest at the
end of the performance
period for delivering
appropriately stretching
on-target performance.
For the 2024 financial year
onwards, up to 50% of the
maximum award granted
may vest at the end of the
performance period for
delivering appropriately
stretching on-target
performance.
Deferred awards will be
subject to performance
underpins linked to the
underlying performance
of the Group, risk
management, conduct
and compliance over the
deferral period. The
underpin performance
conditions applicable to
a deferred award will be
disclosed in the Directors’
Remuneration report.
Not subject to
performance conditions in
line with typical market
practice.
The EIP is a combined annual and
long-term incentive plan under which
both annual awards and deferred
awards may be granted, referred to
together as ‘Awards’.
Awards may be granted in the form of
conditional awards of shares or nil (or
nominal) cost options.
Awards may be settled, in whole or in
part, in cash or granted as a right to
receive a cash amount calculated by
reference to a number of notional
shares, although, for Executive
Directors, the Committee would
only do so where the particular
circumstances made this the
appropriate course of action (for
example where a regulatory reason
prevented the delivery of shares).
Following the end of the performance
period, the Board will determine the
extent to which the performance
condition has been satisfied and
whether it is appropriate to adjust
the extent to which the Awards will
be released to take account of the
underlying performance of the
Company and any other factors
the Board considers relevant.
A deferred award will normally be
released (so that the participant is
entitled to acquire shares subject to it)
following the end of a deferral period
starting on the date on which the
performance condition is assessed
and ending in the fourth year after
the start of the performance period.
Deferred awards will also be subject
to a holding period which shall
normally end in the fifth year after
the start of the performance period.
During the holding period, the
participant may not normally deal
with shares acquired pursuant to
the award other than to satisfy a
tax liability relating to the award or
with the permission of the Board.
An annual award will normally be
released (so that the participant is
entitled to acquire shares subject to it)
on the first dealing day following the
assessment of the performance
condition.
The Executive Directors may
participate in all sections of the
BAYE scheme, being the partnership
and matching section and the free
share section.
Any other all-employee share plan
would be operated for Executive
Directors in accordance with its rules
and on the same basis as for other
qualifying employees.
For the 2023 financial year, there
is no change to the maximum
opportunity from the 2020
Policy. An Executive Director will
not normally be granted Awards
under the EIP in respect of this
financial year over shares with a
market value in excess of 200%
of base salary. In exceptional
circumstances this may be
increased to 250% of base salary.
For the 2024 financial year
onwards, an Executive Director
would not normally be granted
Awards under the EIP in respect
of any financial year over shares
with a market value in excess of
270% of base salary.
The market value of shares
subject to an Award will normally
be based on the five-day average
share price immediately
preceding the date of grant,
unless the Committee
determines otherwise.
The number of shares subject to
an annual award (i.e. not
including the deferred award
element) granted to an Executive
Director in any financial year may
not exceed 40% of the aggregate
number of shares over which
they are granted Awards in
respect of that financial year.
The limits on participation under
the BAYE scheme will be those
set in accordance with the
applicable tax legislation from
time to time.
The limit on participation and
other relevant terms of any other
all-employee share plan would
be determined in accordance
with the plan rules (and, where
relevant, applicable legislation)
and would be the same for the
Executive Directors as for other
relevant employees.
All-
employee
share plans
The Buy As You Earn
(BAYE) scheme
creates staff
alignment with the
Group and provides a
sense of ownership.
Executive Directors
may participate in the
BAYE scheme and/or
in any such other
all-employee share
plan as may be
introduced from
time to time.
Strategic report
Governance
Financial statements
Other information
Dividend equivalents
For deferred awards granted in respect of the 2024 financial year
onwards, additional shares may be delivered in respect of shares
subject to deferred awards to reflect the value of dividends paid
during the deferral period. This payment may assume that
dividends had been reinvested in shares on a cumulative basis.
Recovery provisions (malus and clawback)
Malus and clawback provisions may be applied in the event of:
• participation in or responsibility for conduct resulting in
significant loss to a Group company;
• failure to meet appropriate standards of fairness and propriety
including fraud, material dishonesty or material wrongdoing;
• bringing the Company into material disrepute;
• breaches of the employment contract that give potentially fair
reason for dismissal;
• discovery of an event, post-cessation of employment, that
would have prevented the release or grant of an award had the
Company been aware of the event;
• error in determining an award or assessing the performance
condition;
• material misstatement in financial information that was taken
into account when determining an award or assessing the
performance condition; and
• material failure of risk management.
In the case of annual awards, malus and clawback provisions may be
applied up to the fourth anniversary of the end of the performance
period and in the case of deferred awards up to the end of the
holding period. If the relevant award has been released or exercised,
the clawed back amount may be recovered from the recipient.
Explanation of performance metrics
Performance is measured against a balanced scorecard to support
the Company’s strategy.
The targets are set by reference to long-term strategic objectives.
Deferred awards are subject to performance underpins that are
designed to protect shareholder value and which are aligned to
appropriate long-term behaviours including risk management,
conduct and compliance. The Committee will consider the
underlying performance of the Group over the deferral period
(which may be on a relative and/or absolute basis).
The Committee may vary or substitute any performance measure
or underpin if an event occurs which causes it to determine that it
would be appropriate to do so (including taking account of
acquisitions or divestments, a change in strategy or a change in
prevailing market conditions), provided that any such variation
or substitution is fair and reasonable and (at the discretion of
the Committee) the change would not make the measure less
demanding than the original measure would have been but for the
event in question. If the Committee were to make such a variation,
an explanation would be given in the next Directors’
Remuneration report.
Operation of share plans
The Committee may amend the terms of awards and options
under the Company’s share plans in accordance with the plan
rules in the event of a variation of the Company’s share capital or
a demerger, special dividend or other similar event or otherwise
in accordance with the rules of those plans. The Committee
may operate any such plan in accordance with its rules.
Shareholding guidelines
To align the interests of the Executive Directors with those of
shareholders, the Committee has adopted formal shareholding
guidelines. Executive Directors are expected to retain all shares
acquired through the EIP deferred awards (after sales to cover tax
and any exercise price) until such time as their holding has a value
equal to 350% of salary in the case of the CEO and 300% of salary
in the case of other Executive Directors. Shares subject to EIP
awards which have vested but have not been released (that is
which are in a deferral period or a holding period) or which have
been released but have not been exercised count towards the
guidelines on a net of assumed tax basis.
The Committee has also adopted a formal post-cessation
shareholding requirement. This requires that for 24 months
following cessation, an Executive Director must retain such of
their ‘relevant’ shares as have a value (as at cessation) equal to
their shareholding guideline. If the Executive Director holds less
than the required number of ‘relevant’ shares at any time they
must retain the ‘relevant’ shares they hold.
Shares which the Executive Director has purchased, or which were
held at the date of admission to the London Stock Exchange are
not ‘relevant’ shares for these purposes. The Committee retains
the discretion to vary the post-cessation shareholder requirement
in appropriate circumstances and will continue to review the
requirement in light of developing market practice.
Policy for Non-Executive Directors
Purpose and link
to strategy
Operation
To provide fees within
a market competitive
range reflecting
the individual,
responsibilities of the
role and the expected
time commitment.
To reimburse where
appropriate out-of-
pocket expenses
which are relevant
to the requirements
of the role.
The fees of the Chair are determined by the Committee
and the fees of the Non-Executive Directors are
determined by the Board.
Non-Executive Directors are not eligible to participate in
any of the Company’s share schemes, incentive schemes
or pension schemes.
Non-Executive Directors (including the Chair) may claim
expenses in line with the Company’s expenses policy for
out-of-pocket expenses incurred in the fulfilment of their
responsibilities. Reimbursed expenses may include a
gross-up to reflect any tax or social security due in
respect of the reimbursement.
The Chair and Non-Executive Directors may also be eligible
to receive benefits such as the use of secretarial support,
assistance with the preparation of tax returns, or other benefits
that may be appropriate in performance of their duties.
Maximum opportunity
Fees are set taking into account the responsibilities of the
role and expected time commitment.
Non-Executive Directors are paid a basic fee with
additional fees paid for the chairing of Committees.
An additional fee is also paid for the role of Senior
Independent Director and may be paid for other
responsibilities or time commitments.
Basic fees are subject to the aggregate limit set in
accordance with the Company’s Articles of Association.
Where benefits are provided to Non-Executive Directors
they will be provided at a level considered to be
appropriate taking into account the individual
circumstances.
108 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 109
Directors’ Remuneration report
Annual Report on Remuneration
We have presented the Annual Report on Remuneration (the
‘Report’) to set out how the Policy of the Company has been
applied in 2023 and how the Committee intends to apply the
Policy going forward. An advisory shareholder resolution to
approve this report will be proposed at the AGM.
Reporting requirements
The Report reflects the reporting requirements on remuneration
matters in accordance with the Companies Act 2006 and the
Large and Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008 (as amended). The Report also meets
the UK Listing Authority’s Listing Rules and the Disclosure and
Transparency Rules. The Report describes how the Board has
complied with the provisions set out in the UK Corporate
Governance Code 2018 relating to remuneration matters.
Advice to the Committee
In relation to its consideration of Directors’ remuneration during
the year, the Committee has received input from:
• The Chief Executive Officer, Chief Financial Officer,
HR Director and Company Secretary, although none were
present when their own remuneration was being discussed; and
• Deloitte LLP (Deloitte).
Deloitte is retained to provide independent and objective
advice to the Committee as required. Deloitte is a member of
the Remuneration Consultants Group and, as such, voluntarily
operates under the Code of Conduct in relation to executive
remuneration consulting in the UK. Deloitte has provided advice
covering annual remuneration report and policy disclosures,
market practice and corporate governance updates. Fees for
providing remuneration advice to the Committee were £31,000
for the year ended 30 September 2023. The Committee assesses
from time to time whether this appointment remains appropriate
or should be put out to tender and takes into account the
Remuneration Consultants Group Code of Conduct when
considering this.
Main activities during the financial year
The Committee has an annual cycle of work to ensure that all responsibilities are met over a financial year. The Committee
met five times during the year; the list below summarises the key items considered by the Committee during the year ended
30 September 2023.
November
Assessment of remuneration performance
• Review of financial and non-financial
performance ratings (including progress
against our ESG priorities)
• Review of CRO risk report
• Consideration of application
of discretion
April
Wider workforce
• Update on FY22 wider workforce bonuses
• Review of CSOP discretionary awards
• Review of draft Senior Manager Incentive
Governance
• Update on shareholdings against
guidelines
• Market developments update
Plan (SMIP) rules
Directors’ Remuneration report
• Review of FY22 Directors’
Remuneration report
Assessment of remuneration performance
• EIP interim performance assessment
Remuneration schemes
• Update on share schemes
Remuneration Policy
• General Remuneration Policy approval
• Internal audit approach of General
Remuneration Policy
Governance
• Appointment of Remuneration Committee
consultants
• Review of approach to Material Risk
Takers regulation
July
Specific remuneration arrangements
• Review of Board executive pay structure
September*
Assessment of remuneration
performance
• Update on FY23 financial and
non-financial performance
(including progress against
our ESG priorities)
• Review of proposed
objectives for FY24
*Additional meeting held in September 2023.
Directors’ Remuneration report
• Review of draft FY23
Directors’ Remuneration
Report
Remuneration Policy
• Review internal audit results
of General Remuneration
Policy
Governance
• Annual Committee evaluation
• Annual review of Committee
terms of reference
• Annual review of Committee
meeting cycle
For more information on the Committee’s Terms of Reference visit ajbell.co.uk
Strategic report
Governance
Financial statements
Other information
Committee evaluation
As indicated within the Corporate Governance report, the Remuneration Committee assessed its own effectiveness during the year.
This identified a small number of improvements which will be implemented during the forthcoming year. Overall, the Committee was
satisfied that it continues to operate effectively.
Implementation of the Remuneration Policy for 2022/23
The following table sets out total remuneration for each Director in respect of the year ending 30 September 2023.
Total single figure remuneration (Audited)
Executive Director
Michael
Summersgill
Roger Stott
Peter Birch
(From 1 July 2022)
Andy Bell
(Stepped down
1 October 2022)
Non-Executive Directors
Fiona Clutterbuck
(From 1 May 2023)
Evelyn Bourke
Eamonn Flanagan
Margaret Hassall
Simon Turner
Les Platts
(Stepped down
26 January 2022)
(Reappointed
13 July 2023)
Helena Morrissey
(Stepped down
30 April 2023)
Year
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Executive Incentive Plan(c)
£ 000
Salary and
fees(a)
£000
Benefits(b)
£000 Annual award
Deferred
award
Pension(d)
£000
Total
remuneration
£000
Total fixed
remuneration
£000
Total variable
remuneration
£000
500
313
292
275
310
78
—
499
94
—
63
57
63
60
63
57
63
60
13
43
111
150
2
1
2
2
8
—
—
18
—
—
—
—
—
—
—
—
—
—
—
—
—
—
173
128
103
113
129
—
—
237
—
—
—
—
—
—
—
—
—
—
—
—
—
—
261
193
154
169
194
—
—
356
—
—
—
—
—
—
—
—
—
—
—
—
—
—
5
—
—
—
9
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
941
635
551
559
650
78
—
1,110
94
—
63
57
63
60
63
57
63
60
13
43
507
314
294
277
327
78
—
517
94
—
63
57
63
60
63
57
63
60
13
43
111
150
111
150
434
321
257
282
323
—
—
593
—
—
—
—
—
—
—
—
—
—
—
—
—
—
110 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 111
Directors’ Remuneration report
Annual Report on Remuneration
The figures in the single figure tables on the previous page are derived from the following:
Non-Executive Directors receive fees reflecting the time commitment, demands and responsibilities of the role. Details of Chair and
Non-Executive Directors’ fees are detailed below.
Strategic report
Governance
Financial statements
Other information
The amount of salary/fees earned in respect of the year. A salary sacrifice pension arrangement is operated by the
Company. Directors’ salaries are shown gross of salary sacrifice pension contributions.
As at 1 October
Base fees
(a) Salary
and fees
(b) Benefits
The benefits received by the Executive Directors comprise:
• amounts received for sacrificed annual leave; and
• private medical insurance.
(c) Executive
Incentive Plan
Annual award for FY23: the value of the annual award earned in respect of the financial year is based on the share
price at vesting of 276.8p. A description of performance against the measures which applied for the financial year
is provided on pages 114 to 117.
Deferred award for FY23: the value of the deferred award earned in respect of the financial year is based on the
share price at initial vesting of 276.8p. A description of performance against the measures which applied for the
financial year is provided on pages 114 to 117. Note: a deferred award will normally be released following the end
of a deferral period starting on the date on which the performance condition is assessed and ending in the fourth
year after the start of the performance period.
The values in the single figure of remuneration table are calculated in accordance with the applicable regulations
by reference to the share price at vesting. The values of the deferred awards are included in the FY23 table,
notwithstanding that the values will not be released to the Directors until the end of the deferral period.
EIP options are granted at the start of the performance period and therefore executives are exposed to the impact
of any subsequent movement in the share price over the performance period. In the period between grant and
vesting, the share price decreased from 361.0p to 276.8p and is therefore attributable to a c. 23% reduction in the
award values.
The values for the FY22 annual and deferred awards were based on the share price at vesting of 354.8p.
(d) Pension
Contributions made by AJ Bell to a defined contribution scheme or personal pension, excluding any pension
contributions made in respect of an individual under the Company’s salary sacrifice arrangement.
Fiona Clutterbuck
Evelyn Bourke
Eamonn Flanagan
Margaret Hassall
Simon Turner
Les Platts
(Stepped down 26 January 2022)
(Reappointed 13 July 2023)
Helena Morrissey
(Stepped down 30 April 2023)
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
£225,000
n/a
£60,000
£53,000
£60,000
£53,000
£60,000
£53,000
£60,000
£53,000
£60,000
n/a
n/a
£190,800
Additional
fees
—
—
Total
£225,000
n/a
£12,500
£72,500
£10,000
£63,000
£20,000
£80,000
£10,000
£63,000
£17,500
£77,500
£10,000
£63,000
£25,000
£85,000
£10,000
£63,000
—
—
—
—
£60,000
n/a
n/a
£190,800
Executive Incentive Plan (EIP) (Audited)
For the financial year ended 30 September 2023, the maximum EIP awards granted to Michael Summersgill as CEO equated to 200%
of base salary, and 187.5% of base salary for Roger Stott as COO and Peter Birch as CFO.
Base salary and fees
The Executive Directors’ base salaries with effect from 1 October 2023 are set out in the table below. The approach of the Committee
in determining these salaries is discussed in the Annual statement by the Chair of the Remuneration Committee on page 105.
Executive Director
Michael Summersgill
Maximum
opportunity
On-target
opportunity
Number
of shares
200% of salary
133% of salary
107,039 Annual
160,559 Deferred
Face value
at grant1
£399,000
£598,500
Michael Summersgill
Roger Stott
Peter Birch
Base salary as
at 1 October
2023
Base salary as
at 1 October
2022
£525,000
£500,000
£306,075
£291,500
£385,000
£310,000
% Change
5%
5%
24%
Roger Stott
187.5% of salary
125% of salary
58,650 Annual
87,975 Deferred
£218,625
£327,937
Peter Birch
187.5% of salary
125% of salary
77,966 Annual
116,948 Deferred
£290,627
£435,938
Performance
period2
Financial year
ended
30 September
2023
Financial
year ended
30 September
2023
Financial
year ended
30 September
2023
1. For these purposes, the face value of the award is calculated by multiplying the number of shares over which the award was granted by 373p, the five-day average share price
prior to grant date. Peter Birch joined the business on 1 July 2022 and received a pro-rated EIP award, to reflect the three months Peter was employed during FY22. This award
was granted as part of the FY23 EIP award and was subject to the same performance targets as the FY23 EIP award.
2. Each award was subject to performance conditions assessed over the financial year ended 30 September 2023 (as described on the following pages). Deferred awards are also
subject to a performance underpin for a further three years (to 30 September 2026).
112 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 113
Strategic report
Governance
Financial statements
Other information
Directors’ Remuneration report
Annual Report on Remuneration
The EIP awards are made up of an annual award and deferred award (40% and 60% of the total number of shares respectively) both granted
as nominal cost options. Both the annual and deferred awards are assessed against a balanced scorecard of financial and non-financial
measures, linked to the KPIs and strategy of the business, over the financial year ending 30 September 2023 as set out below:
Our customers
Combined AJBIC/AJ Bell customer % retention rate
Threshold
85.2%
Target
94.7%
Stretch
100.0%
Actual
95.2%
Finance and Assurance Growth
Our customers
Our technology
Our people
Individual measures
Revenue
PBT
Diluted EPS
Weighting:
CEO: 35%
COO: 35%
CFO: 35%
Total customers
Total AUA
Brand awareness
Customer
retention rates
Weighting:
CEO: 25%
COO: 15%
CFO: 25%
Weighting:
CEO: 15%
COO: 25%
CFO: 15%
PBT margin
Staff engagement
Including, but not limited to
Consumer Duty, culture, and
progressing our ESG agenda
Weighting:
CEO: 5%
COO: 0%
CFO: 5%
Weighting:
CEO: 5%
COO: 10%
CFO: 5%
Weighting:
CEO: 15%
COO: 15%
CFO: 15%
Payout for performance between threshold and stretch is calculated on a stepped basis. The payout for each individual metric is 33%
of maximum at threshold, 67% of maximum at on-target performance and 100% of maximum at stretch. In FY23, the Committee
introduced an additional metric related to the individual strategic objectives, with resultant payout measured using a number of
quantitative and qualitative indicators. The final payout is based on an assessment of each performance measure, taking into account
outperformance above stretch.
Finance and Assurance
Revenue
Profit before tax
Diluted EPS
Threshold
Target
Stretch
Actual
£196.6m
£218.4m
£240.2m
£218.2m
£74.8m
14.68p
£83.1m
16.31p
£91.4m
17.94p
£87.7m
16.53p
Commentary on achievements
Not withstanding a challenging external environment, revenue increased by 33% to £218.2 million in the year, delivering outcomes
between threshold and target.
Commentary on achievements
Our high-quality service provided to customers is evidenced by our 4.8-star Trustpilot score and a customer retention rate of 95.2%,
outperforming target.
Payout (as a % of the maximum):
CEO: 67%
COO: 60%
CFO: 67%
Our technology
Profit margin
Threshold
34.3%
Target
38.1%
Stretch
41.9%
Actual
40.2%
Commentary on achievements
The Committee noted a strong financial performance driven by AJ Bell’s dual-channel business model and diversified revenue streams,
resulting in profit margin outperforming target by 2.1ppts.
Payout (as a % of the maximum):
CEO: 67%
CFO: 67%
Our people
Driven by increased revenues and higher revenue margins, PBT and DEPS both outperformed the target, reflecting the record financial
performance achieved in the year.
Star rating from Best Companies survey results
Target
3-star
Actual
3-star
Payout (as a % of the maximum):
CEO: 58%
COO: 58%
CFO: 58%
Growth
Total customers
Total AUA
Brand awareness
Threshold
Target
Stretch
Actual
476,534
529,482
582,430
491,402
£73.2bn
£81.3bn
£89.4bn
£76.1bn
34.7%
38.6%
42.4%
37.3%
Commentary on achievements
Customer growth has been challenging due to external conditions. The outturn exceeded the threshold and, despite being lower than
the challenging target level of performance, the Committee noted that customer numbers increased by 50,813 in the year driven by our
platform propositions and dual-channel business model.
Similarly, total AUA has increased by £6.9 billion due to a combination of inflows from new customers, existing customer inflows and
favourable market movements. We have achieved robust AUA inflows in the year, with the increases of 10.0% total resulting in an outturn
between threshold and target.
Brand awareness represents the percentage of people who are aware of, or who have used the services of AJ Bell. This KPI is measured
and assessed using the results of a survey conducted by a third party. The Committee noted that although good progress has been made
in this area, actual results fell short of target by 1.3%. The brand awareness objective relates solely to the CEO.
Payout (as a % of the maximum):
CEO: 33%
COO: 33%
CFO: 33%
Commentary on achievements
The staff engagement measure is based on a single target (that is either achieved or not), to achieve a 3-star Best Companies survey
rating. This is the highest engagement level achievable in the survey and the Committee noted that a 100% payout would only be
awarded in the case of exceptional performance, for example placing in the top 10 UK companies to work for.
AJ Bell maintained a 3-star status in the Best Companies survey this year, meeting target.
Payout (as a % of the maximum):
CEO: 67%
COO: 67%
CFO: 67%
Strategic objectives
Director
Objective
Michael
Summersgill
Increase the pace of business change: The change management process has been refreshed and modernised and good
progress has been made, with a successful closed beta launch of Touch and a number of other key proposition
developments completed in the year.
Improve prompted and unprompted brand awareness: FY23 saw the commencement of our refreshed brand strategy
with simplification of the D2C brand and launch of a new brand awareness campaign. The Committee notes that the
new strategy is a significant advancement from prior years, and whilst the objectives that were set for the year have been
achieved there is a need to continue building momentum through future years.
Implement Consumer Duty to a high standard and in line with regulatory deadlines: The Committee is satisfied with
the quality and timeliness of the implementation, and notes that compliance was evidenced to the Board before the
deadline of 31 July.
Refresh and embed succession planning: Worked closely with the Executive Committee to ensure robust succession
plans are in place throughout the business, whilst being mindful of the FCA’s diversity requirements. The Committee
acknowledges there is still more to be done to continue to drive greater diversity at both Board and Executive level.
Payout (as a % of the maximum):
81%
114 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 115
Directors’ Remuneration report
Annual Report on Remuneration
Director
Objective
Roger Stott
Continue to enhance our operational resilience: Significant advances have been made in relation to the delivery of the
Board-approved Operational Resilience roadmap in line with regulatory guidance, including appropriate sophistication
of the Group’s disaster recovery capabilities.
Increase the pace of operational change: Good progress has been made on strengthening the operational change
function, automating processes and making better use of data. The Committee notes that although progress has been
made in this area, it acknowledges there is still more to be done, which has been agreed as part of a multi-year road-map.
Implement Consumer Duty to a high standard and in line with regulatory deadlines: The Committee is satisfied with
the quality and timeliness of the implementation, and notes that compliance was evidenced to the Board before the
deadline of 31 July.
Payout (as a % of the maximum):
Director
Objective
95%
Peter Birch
Improve our long-term planning: Strong progress made in delivering enhancements to long-term strategic and
financial planning which has enabled the Board to commit to multi-year investments in our propositions and operational
efficiency.
Establish himself as the lead investor relations executive: The Committee is satisfied that good relationships have been
developed with analysts and shareholders, resulting in positive engagement made during the year. Excellent feedback
was also received from an externally-facilitated investor perception study, which provided the Board with detailed
feedback on how the Company is viewed by investors.
Improve the scalability of the financial control environment to support future growth: Successful implementation
of a new data warehouse in the year, which has strengthened our control environment and will support the continued
growth of the business. Initial positive progress made in preparing for proposed controls attestation requirements in the
Corporate Governance Code. Good progress has also been made with the implementation of our new finance system,
which will be completed in FY24.
Payout (as a % of the maximum):
89%
In considering the extent to which the Executive Directors’ EIP awards vested, the Committee assessed achievement against the financial
and non-financial targets set alongside the findings of the CRO risk report, in which no adverse findings were reported. The Committee
also had regard to the share price at vesting of 276.8p relative to the share price at grant of 361p. Whilst recognising the impact of the fall
in the share price on the overall experience of shareholders, the Committee concluded that it was unnecessary to make any adjustment
to the vesting outcome to take account of this. The Committee took into account that the structure of the EIP means that the whole
amount of each Executive Director’s variable pay is denominated in shares from the start of the year with no bonuses paid in cash, so
that the Executive Directors are exposed to any share price movement over the performance period. The Committee also recognised
that the majority of the vested EIP awards are deferred awards, in relation to which the Executive Directors are aligned with the
shareholder experience for a longer period and with the awards remaining subject to robust performance underpins linked to the
underlying performance of the Group.
Taking into consideration the strong financial performance in the year despite a challenging external environment, and the successful
implementation of the FCA’s new Consumer Duty requirements, the CEO’s, CFO’s and COO’s awards vested at 59%, 60% and 63%
respectively, as regards both the annual and deferred awards. Further detail is included in the table below. The Committee considers
that the level of payout is reflective of the overall performance of the Group in the year and is appropriate.
CEO
COO
CFO
Annual awards
Deferred awards
Annual awards
Deferred awards
Annual awards
Granted
107,039
160,559
58,650
87,975
77,966
Vested and
released
Initially vested
and deferred
62,795
—
—
94,194
37,144
—
—
55,717
46,778
—
Deferred awards
116,948
—
70,168
Forfeited
44,244
66,365
21,506
32,258
31,188
46,780
Strategic report
Governance
Financial statements
Other information
The deferred awards are also subject to performance underpins for a further three years. The underpin conditions are set out below.
Underpin
Measure
Details
Grow shareholder value Measurement of the underlying
performance and strength of the Company.
Risk, conduct and
compliance
Effective individual and Company
risk management.
No material deterioration in the underlying performance of the
Company which is significantly greater than any deterioration in
the performance of comparator listed financial services companies.
No material failure in risk management, conduct or compliance.
The participants are entitled to acquire shares following the assessment of the underpins but (other than as regards sales to cover tax
liabilities) participants are required to hold acquired shares (and to not dispose of shares) for a further 12 months.
Payments made to former Directors during the year (Audited)
As reported in the 2022 Annual Report, Andy Bell stepped down from the Board with effect from 30 September 2022, but has continued
to work with the business in a consultancy role. AJ Bell Business Solutions, a wholly owned subsidiary of AJ Bell plc, entered into a
consultancy agreement with Blythe Business Services Ltd (BBSL), a company associated with Andy, on 1 October 2022. Under the terms
of the consultancy agreement, BBSL was paid a fee of £150,000 in the year ended 30 September 2023.
Andy retained his deferred awards under the EIP which will continue to be released following the end of a deferral period subject to the
satisfaction of the performance underpin. The holding period and post-employment shareholding guidelines will also continue to apply.
On 30 April 2023, Helena Morrissey stepped down as Chair and has remained in a consultancy role with a focus on Money Matters,
AJ Bell’s initiative to encourage more women to think about investing, as well as advising the Company on its diversity and inclusion
strategy. Since stepping down as Chair, Helena has received £88,000 in the year ended 30 September 2023.
Payments for loss of office during the year (Audited)
No payments for loss of office were made in the year.
Statement of Directors’ shareholding and share interests (Audited)
The interests of the Directors and their connected persons in the Company’s ordinary shares as at 30 September 2023 (or date of
cessation) and 30 September 2022 were as follows:
Executive Directors
Michael Summersgill
Roger Stott
Peter Birch
Non-Executive Directors
Fiona Clutterbuck
Evelyn Bourke
Eamonn Flanagan
Margaret Hassall
Simon Turner
Les Platts
Helena Morrissey
30 September
2023
30 September
2022
1,146,182
1,195,812
231,622
210,872
26,500
19,000
6,809
85,297
n/a
85,297
151,090
151,090
—
—
185,953
185,953
310,447
310,5171
2,4902
2,490
1. Les Platts stepped down from the Board as Chair on 26 January 2022. His shareholding is shown at this date. Les was subsequently reappointed as a Non-Executive Director
on 13 July 2023.
2. Helena Morrissey stepped down from the Board on 30 April 2023. Her shareholding is shown at this date.
Since 30 September 2023 Roger Stott has acquired an interest in an additional 111 shares under the Companies’ BAYE plan, via awards of
partnership shares which were made in accordance with the terms of an agreement which was put in place before the year end. There
has been no other subsequent change in Directors’ shareholdings and share interests.
Executive Directors’ shareholding guidelines
The Committee has adopted a shareholding guideline for the Executive Directors, which requires a shareholding equivalent to 350% of
base salary for the Chief Executive Officer and 300% of base salary for other Executive Directors as further described in the Directors’
Remuneration Policy. Michael Summersgill has significantly exceeded this guideline at 30 September 2023, based on the share price at
the end of the financial year. Roger Stott and Peter Birch were appointed as Executive Directors during FY22 and have built up a
shareholding of 291% and 78% respectively. This includes 26,500 shares purchased by Peter Birch. As set out in the Remuneration Policy,
Executive Directors are expected to retain all shares acquired through the EIP deferred awards until the shareholding guideline is met.
The Committee’s approach to the post-cessation shareholding requirements is set out in the Directors’ Remuneration Policy approved at
the 2023 AGM.
116 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 117
Granted
during
the year
Forfeited
during
the year
Exercised
during
the year
As at
30 September
2023
Directors’ Remuneration report
Annual Report on Remuneration
Executive Directors’ interests under share schemes (Audited)
Awards under share plans:
Michael
Summersgill
Roger Stott
Peter Birch
Deferred
award
Deferred
award
Deferred
award
Annual
award
Deferred
award
Annual
award
Deferred
award
Deferred
award
Deferred
award
Annual
award
Deferred
award
Annual
award
Deferred
award
Annual
award
Deferred
award
Award date
18 Jan 19
As at
1 October
2022
81,675
12 Dec 19
39,983
10 Dec 20
36,163
9 Dec 21
36,195
9 Dec 21
54,293
—
—
—
—
—
—
—
—
—
—
8 Dec 22
8 Dec 22
—
—
107,039
44,244
160,559
66,365
12 Dec 19
6,231
10 Dec 20
6,151
9 Dec 21
31,826
9 Dec 21
47,740
—
—
—
—
—
—
—
—
8 Dec 22
8 Dec 22
8 Dec 22
8 Dec 22
—
—
—
—
58,650
21,506
87,975
32,258
77,966
31,188
116,948
46,780
81,675
—
—
—
39,983
36,163
36,195
—
—
—
—
54,293
62,795
94,194
6,231
—
—
6,151
31,826
—
—
—
—
—
—
47,740
37,144
55,717
46,778
70,168
Status
Vested and
exercised
Subject to
performance
underpins
Subject to
performance
underpins
Vested and
exercised
Subject to
performance
underpins
Vested and
unexercised
Subject to
performance
underpins
Vested and
exercised
Vested and
unexercised
Vested and
exercised
Subject to
performance
underpins
Vested and
unexercised
Subject to
performance
underpins
Vested and
unexercised
Subject to
performance
underpins
Current service contracts and terms of engagement
Executive Directors
The Executive Directors are employed under service contracts that can be terminated by the Executive Director or the Company with six
months’ notice. The Directors’ service contracts are available for shareholder inspection at the Company’s registered office. These
contracts were dated as follows:
Strategic report
Governance
Financial statements
Other information
Non-Executive Directors
The Non-Executive Directors do not have service agreements and are appointed subject to letters of appointment that can be
terminated with one month’s notice by either the Non-Executive Director or the Company. The letters of appointment are dated
as follows:
Fiona Clutterbuck
Evelyn Bourke
Eamonn Flanagan
Margaret Hassall
Simon Turner
Les Platts
Helena Morrissey1
Contract date
1 May 2023
1 July 2021
22 March 2018
1 September 2021
1 July 2014
13 July 2023
1 July 2021
1. Helena Morrissey stepped down from the Board on 30 April 2023.
Performance graph and historical Chief Executive Officer remuneration outcomes
The graph below shows the total shareholder return (TSR) performance of the Company’s shares in comparison to the FTSE 250 for the
period from the date of admission, 12 December 2018 to 30 September 2023. The TSR performance of the FTSE 250 index has been
selected as it is considered the most appropriate comparator group to AJ Bell. For the purposes of the graph, TSR has been calculated
as the percentage change during the period in the market price of the shares, assuming that dividends are reinvested in shares on the
ex-dividend date. The graph shows the change in value, up to October 2023, of £100 invested in shares in the Company on the date
of admission compared with the change in value of £100 invested in the FTSE 250.
Total shareholder return for AJ Bell against the FTSE 250 index
250
200
150
100
)
0
0
1
o
t
d
e
s
a
b
e
r
(
n
r
u
t
e
R
r
e
d
o
h
e
r
a
h
S
l
l
a
t
o
T
50
c 1
e
8
D
9
r 1
M a
9
n 1
u
J
9
p 1
e
S
9
c 1
e
D
0
r 2
M a
0
n 2
u
J
0
p 2
e
S
0
c 2
e
D
1
r 2
M a
1
n 2
u
J
1
p 2
e
S
1
c 2
e
D
2
r 2
M a
2
n 2
u
J
2
p 2
e
S
2
c 2
e
D
3
r 2
M a
3
n 2
u
J
3
p 2
e
S
AJ Bell
FTSE 250
CEO remuneration
The table below shows details of the total remuneration and EIP vesting (as a percentage of the maximum opportunity) for the
Chief Executive Officer.
Michael Summersgill
Roger Stott
Peter Birch
Contract date
1 November 2019
1 November 2019
1 July 2022
2023
2022
2021
2020
2019
Total single
figure
remuneration
£000
Annual EIP
award (% of
maximum
opportunity)
Deferred EIP
award (% of
maximum
opportunity)
941
1,110
1,191
1,297
1,906
59%
67%
79%
79%
65%
59%
67%
79%
79%
65%
118 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 119
Directors’ Remuneration report
Annual Report on Remuneration
Directors’ remuneration ratios and percentage change
The table below sets out in relation to salary / fees, taxable benefits and incentives, the percentage change in pay for the Directors
compared to the wider workforce from 2020 to 2023. The annual change in salary is based on the salary of employees (on a full-time-
equivalent basis) at the end of each financial year, and the annual change in bonus excludes employees that are not eligible for a bonus.
The average employee change has been calculated by reference to the mean change.
Fiona Clutterbuck and Les Platts were appointed during the year 30 September 2023 and accordingly, have been excluded from the table
below. Helena Morrissey stepped down from the Board on 30 April 2023, and has therefore also been excluded from the table below.
2023
2022
2021
2020
Salary/
Fees
Benefits
Annual
bonus
Salary/
Fees
Benefits
Annual
bonus
Salary/
Fees
Benefits
Annual
bonus
Salary/
Fees
Benefits
Annual
bonus
Michael
Summersgill
Roger
Stott
Peter
Birch*
Evelyn
Bourke
Eamonn
Flanagan
Margaret
Hassall
Simon
Turner
Wider
workforce
59.9%1
55.3%
35.4%
27.9%
(3.5%)
20.9%
0.0%
13.4%
(17.7%)1
2.5%
(87.5%)
(44.4%)
6.0%
0.0%
(8.9%)2
n/a
0.0% 571.3% 3
n/a
n/a
11.2%
n/a
n/a
11.8%
5.0%
n/a
n/a
11.7%
11.2%
n/a
n/a
11.8%
5.0%
n/a
n/a
11.7%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
13.2%
n/a
n/a
n/a
13.2%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
2.2%
n/a
n/a
n/a
2.2%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
11.7% 1,385.6%4
7.5%
9.9%
6.9%
13.5%
3.3%
28.0%
11.1%
4.9%
(56.0%)
(8.3%)
* Peter Birch’s salary has been annualised for comparative purposes.
1. The increase in salary and benefits for Michael Summersgill reflects his change in role to CEO in the year.
2. The reduction in the annual bonus for the COO is based on the awards granted under the EIP which are subject to share price movements. For the FY23 awards, the share price
decreased from 361.0p to 276.8p in the period between the grant and vesting. For the FY22 awards, the share price decreased from 375.6p to 354.8p.
3. The increase in benefits for Peter Birch is due to amounts received for sacrificed annual leave in the year.
4. The increase in benefits for the wider workforce reflects the strengthening of our benefits package for employees. Changes to our benefits were implemented from 1 October 2022.
CEO pay ratio
The table below sets out the ratio at median (50th percentile), 25th and 75th quartile of the total remuneration received by the CEO
compared with the total remuneration received by employees (calculated on a full-time equivalent basis). The ratios have been
calculated in accordance with the Companies (Miscellaneous Reporting) Requirements 2018 (the Regulations).
Year
2023
2022
2021
2020
Pay element
Method
Salary
Option A
Total remuneration
Option A
Salary
Option A
Total remuneration
Option A
Salary
Option A
Total remuneration
Option A
Salary
Option A
Total remuneration
Option A
25th (Lower
quartile)
50th
(Median)
75th (Upper
quartile)
21:1
35:1
22:1
46:1
23:1
52:1
24:1
59:1
17:1
28:1
19:1
37:1
19:1
42:1
19:1
47:1
10:1
16:1
11:1
21:1
12:1
25:1
12:1
29:1
Strategic report
Governance
Financial statements
Other information
Remuneration figures used to calculate the above ratio:
Year
2023
2022
2021
2020
Pay element
CEO
25th (Lower
quartile)
50th
(Median)
75th (Upper
quartile)
Salary
£500,000
£23,984
£28,948
£50,880
Total remuneration
£941,203
£26,558
£33,430
£58,796
Salary
£498,613
Total remuneration £1,109,710
Salary
£481,752
Total remuneration £1,190,522
Salary
£481,752
Total remuneration
£1,297,056
£22,171
£24,331
£21,188
£22,823
£20,349
£22,026
£26,449
£30,052
£25,272
£28,380
£25,008
£27,511
£44,964
£51,731
£40,716
£46,996
£38,568
£44,197
The calculation methodology used to identify the employees at each quartile between 2020 and 2023 is Option A, as defined in the
regulations. We believe this is the most robust and accurate approach, and in line with shareholder expectations. The median, 25th and
75th percentile colleagues were determined based on calculating total annual remuneration up to and including 30 September. Total
full-time equivalent remuneration for employees reflects all pay and benefits received by an individual in respect of the relevant year and
has been calculated in line with the methodology for the single figure of remuneration for the CEO, shown on page 111. Only employees
that were employed at the end of the financial year were included. Annual bonuses of employees are based on the expected pay-out.
The reason for this is that the annual bonus results had not been paid at the time of preparing the ratio calculations. The workforce
comparison is based on the payroll data for the financial year for all employees (including the CEO but excluding Non-Executive Directors).
A significant proportion of the CEO’s pay is in the form of variable pay through the EIP scheme. CEO pay will therefore vary year-on-year
based on Company and share price performance. The CEO to all-employee pay ratio will therefore also fluctuate taking this into account.
The Committee believes that the median pay is consistent with the pay, reward and progression policies for the UK employee population,
and is appropriate for the Company’s size and structure.
Distribution statement
The following table sets out the total remuneration for all employees and the total shareholder distributions:
Total remuneration for all employees1
Dividends (including special dividends) and share buybacks2
Dividends (excluding special dividends) and share buybacks2
1. Total remuneration for all employees represents the underlying staff cost for the Group.
2. See notes 11 and 23 in the consolidated financial statements.
2023
£000
64,758
35,294
35,294
2022
£000
54,887
50,383
29,872
% change
18%
(30%)
18%
Statement of voting at the AGM
Votes cast by proxy and at the meeting at the AGM held on 8 February 2023 in respect of the Directors’ Remuneration report and the
Directors’ Remuneration Policy, were as follows:
Resolution
Approve Directors’
Remuneration report
Approve Directors’
Remuneration Policy
Votes for
including
discretionary
votes
%
for
Votes
against
%
against
Total votes
cast excluding
votes withheld
Votes
withheld
Total votes
cast including
votes withheld
336,094,144
98.13
6,387,898
1.87 342,482,042
186,724 342,668,766
335,054,935
98.14
6,337,734
1.86 341,392,669
1,276,097 342,668,766
Approval
This report was approved by the Board on 6 December 2023 and signed on its behalf by:
Margaret Hassall
Chair of the Remuneration Committee
6 December 2023
120 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 121
Directors’ report
The Directors present their annual report on
the affairs of the Group, together with the
consolidated financial statements and Auditor’s
report, for the year ended 30 September 2023.
Results and future performance
A review of the Group’s results and activities is covered within the
Strategic report on pages 1 to 69. This incorporates the Chair’s
statement and Chief Executive Officer’s review, which include an
indication of likely future developments.
Additional disclosures
The Strategic report is a requirement of the UK Companies Act
2006 and can be found on pages 1 to 69 of this Annual Report.
The Company has chosen, in accordance with section 414C (11)
of the Companies Act 2006, to include details of the following
matter in its Strategic report that would otherwise be disclosed
in the Directors’ report.
Detail
Likely future developments in the business
Research and development
Greenhouse gas emissions
Non-financial reporting
Page(s)
15
58 and 59
46 to 54
55
Corporate governance
The Corporate Governance report is set out on pages 80 to 87.
The information in that section is incorporated into this Directors’
report by reference, is deemed to form part of this report and so
fulfils the requirements of the corporate governance statement for
the purposes of DTR 7.2.1.
A statement as to the Company’s compliance with the UK
Corporate Governance Code ( the ‘Code’) and details of where the
Code is publicly available can be found in the Chair’s Introduction
to Corporate Governance on page 73.
Key performance indicators
Key performance indicators in relation to the Group’s activities are
continually reviewed by senior management and are presented on
pages 26 and 27.
Dividends
The Board recommends a final dividend of 7.25p per ordinary
share for the year ended 30 September 2023. This, together with
the interim dividend of 3.50p per ordinary share paid on 30 June
2023, makes a total dividend in respect of the financial year
ended 30 September 2023 of 10.75p per ordinary share. The final
dividend proposed by the Directors will be subject to approval at
the AGM on 30 January 2024. If approved, the Company will pay a
final dividend on 9 February 2024 to shareholders on the register
at 12 January 2024. The ex-dividend date will be 11 January 2024.
The employee benefit trusts have elected to waive all dividends on
shares held under the trusts relating to AJ Bell plc. Further details
can be found in note 11 to the financial statements.
Articles of Association
The Articles of Association of the Company (the ‘Articles’)
were adopted by special resolution on 15 November 2018. Any
amendments to the Articles may be made in accordance with
the provisions of the Companies Act 2006, by way of a special
resolution at a general meeting of shareholders.
The Strategic report and the Directors’ report together form the
Management report for the purposes of the Disclosure Guidance
and Transparency Rules (‘DTR’) 4.1.8R.
Directors
The Directors of the Group who were in office during the year are
disclosed on pages 74 to 77.
The Company is required to disclose certain information under
Listing Rule 9.8.4R in the Directors’ report or to advise where such
relevant information is contained. Information required to be
disclosed by the Listing Rules, and which is not included in the
Directors’ report, can be located as follows:
Listing Rule 9.8.4
Required Disclosure
Location in the Annual Report
and Financial Statements
(12) Current year dividend
waiver agreements
(13) Future dividend
waiver agreements
Note 11 to the consolidated financial
statements provides information on
employee benefit trusts that have
waived dividends.
Note 11 to the consolidated financial
statements provides information on
employee benefit trusts that have
waived dividends.
Principal activity
AJ Bell plc (the ‘Company’) and its subsidiaries (together the
‘Group’) provide an investment platform operating in the advised
and D2C markets. The Company is registered as a public limited
company under the Companies Act 2006 and is listed on the Main
Market of the London Stock Exchange.
Under the Articles, all of the Directors are required to retire from
the Board at the AGM. Accordingly, each of the Directors, being
eligible, will offer themselves for re-election by the members of
the Company.
The service agreements of current Executive Directors and the
letters of appointment of the Non-Executive Directors are
available for inspection at the Company’s registered office.
Directors’ powers
Subject to company law and the Company’s Articles, the Directors
may exercise all of the powers of the Company and may delegate
their power and discretion to committees. The ExCo is responsible
for the day-to-day management of the Group. The Articles give
the Directors power to appoint and replace Directors.
Directors’ interests
Directors’ interests in the shares of AJ Bell plc are disclosed in the
Directors’ Remuneration report on page 117.
During the period covered by this report, no Director had any
material interest in a contract to which the Company or any of its
subsidiary undertakings was a party (other than their own service
contract) that requires disclosure under the requirements of the
Companies Act 2006.
Strategic report
Governance
Financial statements
Other information
Directors’ indemnities
The Company has made qualifying third-party indemnity
provisions for the benefit of its Directors. These provisions were
for the purposes of section 234 of the Companies Act 2006 and
were in force throughout the financial year and remain so at the
date of this report.
Share capital
Details of the Company’s issued share capital, together with
details of the movements therein, are set out in note 23 to the
financial statements. This includes the rights and obligations
attaching to shares and restrictions on the transfer of shares.
The Company has one class of ordinary share which carries no
right to fixed income. There are no specific restrictions on the
size of the holding nor on the transfer of shares, which are both
governed by the general provisions of the Articles and prevailing
legislation.
The Directors are not aware of any agreements between holders
of the Company’s shares that may result in restrictions on the
transfer of securities or on voting rights.
Employee benefit trusts have been established in order to provide
benefits for the Group’s employees and former employees. This
includes acting as a vehicle for the acquisition and holding of
a pool of shares to satisfy share awards under the Company’s
employee share plans. During the year, 115,908 options under
the Executive Incentive Plan (EIP) were exercised and issued
from the trusts as discussed in note 23.
Authority to purchase its own shares
The Company is permitted pursuant to the terms of its Articles to
purchase its own shares subject to shareholder approval. The
Company was granted authority at the 2023 AGM to purchase its
own shares up to an aggregate value of 10% of the issued nominal
capital. No shares were purchased under this authority in the year
to 30 September 2023 and up to the date of this report. The
authority will expire on the earlier of the end of the next AGM
and 28 February 2024.
Substantial shareholdings
Information provided to the Company by substantial shareholders
(holding voting rights of 3% or more in the financial instruments of
the Company) pursuant to the DTRs are published via a Regulatory
Information Service and are available on the Company’s website.
As at 30 September 2023, the following information has been
received in accordance with DTR 5 from holders of notifiable
interests in the Company’s issued share capital. It should be noted
some of these holdings may have changed since the Company
received the notification. Holders are not required to notify the
Company of any change until this, or the next applicable threshold
is reached or crossed.
Interested party
Andy Bell
Liontrust Investment Partners LLP
41,050,165
Number of
shares
% of share
capital1
87,118,663
21.75
9.96
Between 30 September 2023 and 6 December 2023 (the latest
practicable date for inclusion in this report), the following
information has been received in accordance with DTR 5 from
holders of notifiable interests in the Company’s issued share capital:
Interested party
Kayne Anderson Rudnick Investment
Management, LLC
Number of
shares
% of share
capital1
12,421,956
3.01
Change of control
There are no significant agreements to which the Company is a
party that take effect, alter or terminate on a change of control of
the Company following a takeover bid. There are no agreements
between the Company and its Directors or employees providing
for compensation for loss of office or employment that occurs
because of a takeover bid.
However, options and awards granted to employees under the
Company’s share schemes and plans may vest on a takeover,
under the schemes’ provisions.
Capital management
The Group is subject to the Investment Firm Prudential Regime
(IFPR) for UK firms authorised under the Markets in Financial
Instruments Directive (MiFID). It therefore complies with the rules
outlined by the Financial Conduct Authority (FCA) within the
Prudential Sourcebook for MIFID Investment Firms (MIFIDPRU).
The Group has a consolidated regulatory capital requirement.
The capital held to meet this requirement comprises share capital,
share premium and retained earnings. The Directors ensure that
the level of capital held in the Group:
• meets the regulatory capital requirements;
• provides a strong base for ongoing trading activities; and
• is sufficient to support the Group’s long-term strategy.
The Group’s regulatory capital requirement and details can be
found under our MIFIDPRU 8 disclosures, which can be found on
the Group’s website at ajbell.co.uk. The Group continues to hold
a significant amount of capital above its regulatory capital
requirement.
Financial instruments and risk management
The risk management objectives and policies of the Group are set
out within note 25 of the financial statements.
Political contributions
No political contributions were made by the Group during the year
(2022: £nil).
Corporate social responsibility
Information about the Group’s approach to the environment,
including details of our greenhouse gas emissions, is set out
on pages 46 to 54 of the Strategic report.
122 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 123
1. The percentage of voting rights detailed above was calculated at the time of the relevant disclosures made in accordance with Rule 5 of the DTRs.
Directors’ report
Statement of Directors’ responsibilities
Strategic report
Governance
Financial statements
Other information
Disabled employees
We welcome applications from people with disabilities and we
make reasonable adjustments to the recruitment and selection
process for those who are interested in working for the Group. In
the event of employees becoming disabled, every effort is made
to ensure that their employment with the Group continues and
that the appropriate facilities and training are arranged. It is the
policy of the Group that the training, career development and
promotion of disabled persons must, as far as possible, be the
same as that of other employees.
Going concern and Viability statement
The consolidated financial statements have been prepared on a
going concern basis. After making enquiries and considering the
Group’s financial position, its business model, strategy, financial
forecasts and regulatory capital together with its principal risks
and uncertainties, the Directors have a reasonable expectation
that the Group will be able to continue in operation and meet its
liabilities as they fall due for at least 12 months from the date of
signing this report. The going concern basis of preparation is
discussed within note 2.1 to the consolidated financial statements.
Engagement with employees
The Group places considerable value on the involvement of its
employees and has continued to keep them informed on matters
affecting them as employees and on the various other factors
affecting the performance of the Group. This is achieved through
formal and informal meetings and internal publications. Employee
representatives are consulted regularly on a wide range of matters
affecting their current and future interests via AJ Bell’s Employee
Voice Forum which is chaired by Fiona Clutterbuck. Employee
share schemes have been operated since June 2005. These
schemes have promoted wider employee involvement in the
Group and include our annual free share award scheme.
Further information on employee engagement is set out
on pages 39 to 43 of the Strategic report.
The Directors believe that the incentivisation of senior
management and key employees by equity participation is
an important factor in the continuing success of the Group.
This policy aligns the interests of management and the wider
workforce with those of the shareholder base.
Engagement with suppliers, customers and
other stakeholders
Details of how the Group engages with its key stakeholders,
including its shareholders, can be found on pages 28 and 29
of the Strategic report.
Details of how interests of stakeholders are considered in the
Board’s decision making can be found in the Section 172
statement on pages 30 and 31.
Internal control
The Board has overall responsibility for the maintenance of the
internal control system established by the Group and places
considerable reliance on a strong control environment. However,
such a system is designed to manage rather than eliminate the
risk of failure to achieve business objectives. It can only provide
reasonable and not absolute assurance against material
misstatement or loss. Compliance with internal control
procedures is monitored by the Directors through the Risk &
Compliance Committee and the Audit Committee, which are
responsible for overseeing the Group’s risk management,
compliance and internal audit functions. Details of the Group’s
risk management can be found on pages 60 to 62.
Market Abuse Regulation
The Company has its own internal dealing rules which encompass
the requirements of the Market Abuse Regulation.
In accordance with provision 31 of the UK Corporate Governance
Code, the Directors have assessed the prospects of the Group
over a longer period than the 12 months required by the going
concern provision. Details of the assessment can be found on
page 69.
Events after reporting date
Details of significant events since the reporting date are contained
in note 29 to the financial statements.
Disclosure of information to auditor
Each of the persons who is a Director at the date of approval of
this Annual Report confirms that:
• so far as the Director is aware, there is no relevant audit
information of which the Company’s auditor is unaware; and
• the Director has taken all the steps that they ought to have
taken as a Director in order to make themselves aware of any
relevant audit information and to establish that the Company’s
auditor is aware of that information.
This confirmation is given pursuant to section 418 of the
Companies Act 2006 and should be interpreted in accordance
with, and subject to, those provisions.
Auditor
Resolutions to reappoint BDO LLP as auditor of the Company and
to authorise the Audit Committee to determine its remuneration
will be proposed at the AGM to be held on 30 January 2024.
Annual General Meeting
The AGM will be held at 12 noon on 30 January 2024 and
will be held as a physical meeting as detailed in the Corporate
Governance report on page 87. Details of the resolutions to be
proposed at the AGM are set out in the separate circular which
has been sent to all shareholders and is available on the AJ Bell
website at ajbell.co.uk/group/investor-relations/agm.
Approved by the Board on 6 December 2023 and signed on its
behalf by:
Olubunmi Likinyo
Company Secretary
4 Exchange Quay
Salford Quays
Manchester
M5 3EE
They are also responsible for safeguarding the assets of the Group
and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are responsible for ensuring the Annual Report
and the Financial Statements are made available on a website.
Financial statements are published on the Company’s website in
accordance with legislation in the United Kingdom governing the
preparation and dissemination of financial statements, which may
vary from legislation in other jurisdictions. The maintenance and
integrity of the Company’s website is the responsibility of the
Directors. The Directors’ responsibility also extends to the
ongoing integrity of the financial statements contained therein.
Each of the Directors, whose names and responsibilities are listed
in the Corporate Governance report, confirms that, to the best of
their knowledge:
• The financial statements have been prepared in accordance
with the applicable set of accounting standards and give a true
and fair view of the assets, liabilities, financial position and profit
and loss of the Group.
• The Annual Report includes a fair review of the development
and performance of the business and the financial position of
the Group and Parent Company, together with a description of
the principal risks and uncertainties that they face.
We consider that the Annual Report and Financial Statements,
taken as a whole, are fair, balanced and understandable and
provides the information necessary for shareholders to assess the
Group’s position and performance, business model and strategy.
Approved by the Board on 6 December 2023 and signed on its
behalf by:
Olubunmi Likinyo
Company Secretary
4 Exchange Quay
Salford Quays
Manchester
M5 3EE
The Directors are responsible for preparing the
Annual Report and the Financial Statements in
accordance with UK-adopted international
accounting standards and applicable law
and regulations.
Company law requires the Directors to prepare Group and Parent
Company financial statements for each financial year. Under that
law the Directors are required to prepare the Group financial
statements in accordance with UK-adopted international
accounting standards and have elected to prepare the Parent
Company financial statements in accordance with UK accounting
standards and applicable law including FRS 101 Reduced
Disclosure Framework.
Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Parent Company and
of the profit or loss for the Group for that period. The Directors
are also required to prepare the Group financial statements in
accordance with international financial reporting standards as
adopted by the UK.
In preparing these financial statements, the Directors are
required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and accounting estimates that are reasonable
and prudent;
• for the Group financial statements, state whether they have
been prepared in accordance with UK-adopted international
accounting standards, subject to any material departures
disclosed and explained in the financial statements;
• for the Parent Company financial statements, state whether
applicable UK accounting standards have been followed,
subject to any material departures disclosed and explained
in the financial statements;
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group or Parent
Company will continue in business; and
• prepare a Directors’ report, a Strategic report and Directors’
Remuneration report which comply with the requirements
of the Companies Act 2006.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Parent
Company’s transactions and disclose with reasonable accuracy at
any time the financial position of the Parent Company and enable
them to ensure that the financial statements comply with the
Companies Act 2006.
124 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 125
Strategic report
Governance
Financial statements
Other information
As a parent, financial security is incredibly
important to me, so investing was high up on
my agenda. It’s been a pretty easy journey so far;
I’m just pleased I’ve made that jump. Investing
makes me feel secure and on track in life. Now
I’ve done it, I can only feel like I’m winning.”
Mark
AJ Bell customer
#FeelGoodInvesting
See more at ajbell.co.uk/group/feel-good-investing
Helping Mark invest for the
long-term
Age: 37 years old
Mission: To take a sabbatical and boost
his own private pension
Mark began investing last June, and as
a parent, financial security is incredibly
important to him. He wants to secure his
children’s futures, whether that be for
university fees or a house deposit in the
future. Mark has opened up an ISA and
a SIPP, aiming to gradually increase his
contributions each month.
Mark was impressed by the number of
options offered on our platform and
believes it’s a one-stop shop for his
investing needs. He is able to track his
investment progress using our easy-to-
use website and has also been very
impressed with AJ Bell’s customer
service, who were attentive to his initial
queries about using the site.
Mark is a real AJ Bell customer sharing his
honest opinions.
Financial statements
128 Independent auditor’s report
to the members of AJ Bell plc
134 Consolidated income statement
135 Consolidated statement
of financial position
136 Consolidated statement
of changes in equity
137 Consolidated statement
of cash flows
138 Notes to the consolidated
financial statements
164 Company statement
of financial position
165 Company statement
of changes in equity
166 Notes to the Company financial
statements
Other information
170 Consolidated unaudited five-year
summary
171 Glossary
172 Definitions
173 Company information
126 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 127
Independent auditor’s report to the members of AJ Bell plc
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the Directors’ assessment of the Group and the
Parent Company’s ability to continue to adopt the going concern
basis of accounting included:
• Review of the prior year forecasts prepared by the Directors
compared to current year actuals to assess the historical
accuracy of the Directors’ budgets and forecasts and
considered the reason for variations;
• Review of the current year forecasts prepared by the Directors
and challenge of the key inputs and assumptions such as
customer growth rate and retention included therein based
on our knowledge of the business and understanding of the
risks arising from the current economic environment; and
• Understanding and review of the Group’s stress testing of
liquidity and regulatory capital, including challenging the
rationale behind the severity of the stress scenarios that were
used based on our understanding of the wider economic
environment in which the business is operating.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Group and the Parent Company’s ability to continue as a going
concern for a period of at least twelve months from when the
financial statements are authorised for issue.
In relation to the Parent Company’s reporting on how it has
applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the Directors’
statement in the financial statements about whether the Directors
considered it appropriate to adopt the going concern basis of
accounting.
Our responsibilities and the responsibilities of the Directors with
respect to going concern are described in the relevant sections of
this report.
Opinion on the financial statements
In our opinion:
• the financial statements give a true and fair view of the state
of the Group’s and of the Parent Company’s affairs as at
30 September 2023 and of the Group’s profit for the year
then ended;
• the Group financial statements have been properly prepared
in accordance with UK-adopted international accounting
standards;
• the Parent Company financial statements have been properly
prepared in accordance with United Kingdom Generally
Accepted Accounting Practice; and
• the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
We have audited the financial statements of AJ Bell plc (the ‘Parent
Company’) and its subsidiaries (the ‘Group’) for the year ended
30 September 2023 which comprise the consolidated income
statement, the consolidated statement of financial position, the
consolidated statement of changes in equity, the consolidated
statement of cash flows, the company statement of financial
position, the company statement of changes in equity and notes
to the financial statements, including a summary of significant
accounting policies.
The financial reporting framework that has been applied in the
preparation of the Group financial statements is applicable law
and UK-adopted international accounting standards. The financial
reporting framework that has been applied in the preparation of
the Parent Company financial statements is applicable law and
United Kingdom Accounting Standards, including Financial
Reporting Standard 101 Reduced Disclosure Framework (United
Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor’s responsibilities for the audit of the financial statements
section of our report. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion. Our audit opinion is consistent with the additional report
to the audit committee.
Independence
Following the recommendation of the audit committee, we were
appointed by the Board of Directors in June 2019 to audit the
financial statements for the year ended 30 September 2020 and
subsequent financial periods. The period of total uninterrupted
engagement including retenders and reappointments is 4 years,
covering the years ended 30 September 2020 to 30 September
2023. We remain independent of the Group and the Parent
Company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard as applied to listed
public interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
The non-audit services prohibited by that standard were
not provided to the Group or the Parent Company.
Strategic report
Governance
Financial statements
Other information
Overview
Coverage
100% (2022: 100%) of Group profit before tax
100% (2022: 100%) of Group revenue
100% (2022: 100%) of Group total assets
Key audit matters
Existence and accuracy of revenue
Share based payments – post-acquisition earn out1
Materiality
Group financial statements as a whole
£4.4m (2022: £2.9m) based on 5% (2022: 5%) of profit before tax.
2023
2022
Y
N
Y
Y
1. We do not consider this to be a key audit matter for the current year given the share based payment charge associated with the transaction is not material to the Group
financial statements.
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s system of internal
control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override
of internal controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk of material
misstatement.
The group engagement team carried out a full scope audit of all significant components as well as non-significant components in the
group as they required audits for statutory purposes.
Climate change
Our work on the assessment of potential impacts on climate-related risks on the Group’s operations and financial statements included:
• Enquiries and challenge of management and the Board to understand the actions they have taken to identify climate-related risks and
their potential impacts on the financial statements and adequately disclose climate-related risks within the annual report;
• Our own qualitative risk assessment taking into consideration the sector in which the Group operates and how climate change affects
this particular sector; and
• Review of the minutes of Board and Audit Committee meetings and other papers related to climate change and performed a risk
assessment as to how it may affect the financial statements and our audit.
We also assessed the consistency of management’s disclosures included as ‘Other Information’ on page 131 with the financial statements
and with our knowledge obtained from the audit.
Based on our risk assessment procedures, we did not identify there to be any key audit matters materially impacted by climate-related risks.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements
of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we
identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and
directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
128 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 129
Independent auditor’s report to the members of AJ Bell plc
Key audit matter
Existence and accuracy
of revenue
Please refer to
accounting policies in
note 2.4 and revenue
breakdown in note 5
As disclosed in note 5 of
the financial statements,
management and the
Board categorise revenue
into three sub categories:
• “recurring fixed”, which
includes the recurring
pension administration
fees;
• “recurring ad valorem”,
which includes custody
fees and net interest
income; and
• “transactional”, which
includes dealing fees,
FX fees and non-
recurring pension
administration fees.
There is a risk that
revenue may be misstated
due to errors in system
calculations or manual
processes. There is also a
risk that fees are not
calculated in line with
agreements in place. We
therefore considered the
accuracy of revenue to be
a significant risk and a key
audit matter.
There are also various
performance incentive
schemes in place
therefore there is a risk of
overstatement of revenue
by management. We
therefore consider the
existence of revenue to
be a significant risk and a
key audit matter.
How the scope of our audit addressed the key audit matter
For Dealing, Custody, FX and recurring pension administration fees, where revenue
is calculated based on transactions with and assets of customers, we gained an
understanding of the processes and controls, including IT controls around the
end-to-end payment process and evaluated the design effectiveness of key
controls. This included an assessment of the appropriateness of the configuration
rules within the system that were designed to ensure funds are appropriately
allocated and tagged to each individual customer and testing to check the
configuration is working appropriately.
Based on this assessment we used a combination of substantive testing and controls
based testing to gain assurance around the integrity of the system configuration rules
to check that fees were calculated accurately and in line with agreements.
The key aspects of this testing are set out below:
• We tested the operating effectiveness of relevant IT controls over the revenue
systems as well as the systems with which they interact. Where deficiencies were
identified in these controls, we identified and tested manual mitigating controls,
or performed risk crystallisation testing to verify that the risk posed by these
deficiencies had not crystallised in the period under audit.
• To address the risk of inaccurate and potential manipulation of key data inputs
used in the automated calculation of dealing, FX, custody and recurring pension
administration fee:
– We tested the operating effectiveness of management’s manual controls over
the relevant data in the revenue systems (for example over the recording of
customer holdings, and matching of transactions to third party records).
– We tested samples of key data inputs held and used in the revenue systems to
supporting documentation.
• To address the risk of potential manipulation of the calculation logic within the
administrative system to increase reported revenue, we used our data analytics
software to reperform the calculation of key income streams on
a customer-by-customer basis, including dealing income, FX income, custody
income and recurring pension administration fees, using source data extracted
from records held by the group. We then compared our independent
recalculations to the amounts reported. With respect to the calculations, we
noted differences which in quantitative terms were immaterial. A sample of these
differences were investigated and agreed to supporting documentation to assess
their legitimacy.
• For a sample of Custody Solutions and Institutional customers, we checked that
their dealing and custody fees were being calculated in accordance with the
underlying agreements.
• For a sample of the non-recurring administration fees, we agreed a sample to
customer instructions and checked that the associated fee was in line with the
Group’s documented fee structure; and
• We performed a reconciliation of the recurring pension administration fees recorded
in the customer system to the banking reports for the current financial year.
For net interest income, we performed the following procedures:
• Verification that the deposited money per the internally maintained interest
income workings reconciled to the amount of deposited client money per
separately maintained internal records;
• Tested the operating effectiveness of controls around the external client money
reconciliations;
• Tested the operating effectiveness of controls around the external Self-Invested
Personal Pension (SIPP) money reconciliations and agreed client money and SIPP
money balances to external bank confirmations.
• For a sample of interest earning deposits, agreed terms to confirmations sent by
the banks to the Group at the point the deposit was placed;
• Agreed a sample of interest receipts to bank statements;
• Recalculated the expected interest income based on the deposit amounts and
terms per internal records across 100% of the population of deposits active during
the period under review and agreed the amount to that recorded
• For a sample of customers, recalculated the amount of interest paid away by the
Group to those individuals; and
• Agreed total paid away interest to bank statements.
Key observations:
Strategic report
Governance
Financial statements
Other information
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We
consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of
reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality
level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not
necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular
circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality
as follows:
Group financial statements
Parent company financial statements
2023
£m
4.4
2022
£m
2.9
2023
£k
915
2022
£k
810
5% of profit before tax.
5% of profit before tax.
1.5% of total assets of the
parent company.
1.5% of total assets of the
parent company.
Profit on ordinary activities
before taxation attributable
to shareholders has been
used as we consider this to
be the most significant
determinant of the Group’s
financial performance used
by shareholders and other
users of the financial
statements.
Profit on ordinary activities
before taxation attributable
to shareholders has been
used as we consider this to
be the most significant
determinant of the Group’s
financial performance used
by shareholders and other
users of the financial
statements.
Total assets is considered
the most relevant metric to
the users of the financial
statements given that the
parent company is parent of
the group and does not
earn any income other than
dividends from subsidiary
entities.
Total assets is considered the
most relevant metric to the
users of the financial
statements given that the
parent company is parent of
the group and does not earn
any income other than
dividends from subsidiary
entities.
3.3
2.0
685
607
Performance materiality
was calculated using 75% of
overall materiality.
Performance materiality
was calculated using 75% of
overall materiality.
Performance materiality
was calculated using 75% of
overall materiality.
Performance materiality was
calculated using 75% of
overall materiality.
This was based on our risk
assessment procedures and
the expectation of a low
level of misstatements
based on past experience.
This was based on our risk
assessment procedures and
the expectation of a low
level of misstatements
based on past experience.
This was based on our risk
assessment procedures and
the expectation of a low
level of misstatements
based on past experience.
This was based on our risk
assessment procedures and
the expectation of a low level
of misstatements based on
past experience.
Materiality
Basis for
determining
materiality
Rationale
for the
benchmark
applied
Performance
materiality
Basis for
determining
performance
materiality
Rationale
for the
percentage
applied for
performance
materiality
Component materiality
For the purposes of our Group audit opinion, we set materiality for each significant component of the Group. Component materiality
ranged from £39k to £3.29m (2022: £39k to £2.18m) based on the materiality levels set for the components’ individual entity audits,
while also considering the size and our risk of material misstatement of that component and capping its materiality level where relevant
to take into consideration aggregation risk. In the audit of each significant component, we further applied performance materiality levels
of 75% (2022: 75%) of the component materiality to our testing to ensure that the risk of errors exceeding component materiality was
appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £87k (2022:£58k).
We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report
and financial statements other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise
appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
130 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 131
From testing we consider the existence and accuracy of revenue to be appropriate.
We have nothing to report in this regard.
Independent auditor’s report to the members of AJ Bell plc
Corporate Governance statement
The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that part of the
Corporate Governance statement relating to the parent company’s compliance with the provisions of the UK Corporate Governance
Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance
statement is materially consistent with the financial statements or our knowledge obtained during the audit.
Going concern and
longer-term viability
• The Directors’ statement with regards to the appropriateness of adopting the going concern basis of
accounting and any material uncertainties identified; and
• The Directors’ explanation as to their assessment of the Group’s prospects, the period this assessment covers
Other Code
provisions
and why the period is appropriate.
• Directors’ statement on fair, balanced and understandable;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks;
• The section of the annual report that describes the review of effectiveness of risk management and internal
control systems; and
• The section describing the work of the Audit Committee.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies
Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic report and
Directors’ report
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic report and the Directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
• the Strategic report and the Directors’ report have been prepared in accordance with applicable legal
requirements.
In the light of the knowledge and understanding of the Group and Parent Company and its environment obtained
in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors’ report.
Directors’
remuneration
In our opinion, the part of the Directors’ Remuneration report to be audited has been properly prepared in
accordance with the Companies Act 2006.
Matters on which we
are required to
report by exception
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit
have not been received from branches not visited by us; or
• the Parent Company financial statements and the part of the Directors’ Remuneration report to be audited are
not in agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the statement of Directors’ responsibilities, the Directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary
to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including fraud is detailed on the next page.
Strategic report
Governance
Financial statements
Other information
Fraud
We assessed the susceptibility of the financial statements to
material misstatement, including fraud. Our risk assessment
procedures included:
We focused on laws and regulations that could give rise to
a material misstatement in the financial statements. Our tests
included:
• agreement of the financial statement disclosures to underlying
• Enquiry with management and those charged with governance
supporting documentation;
regarding any known or suspected instances of fraud;
• Obtaining an understanding of the Group’s policies and
procedures relating to:
– Detecting and responding to the risks of fraud; and
– Internal controls established to mitigate risks related to fraud.
• Review of minutes of meetings of those charged with
governance for any known or suspected instances of fraud;
• Discussion amongst the engagement team as to how and
where fraud might occur in the financial statements; and
• Considering remuneration incentive schemes and performance
targets and the related financial statement areas impacted
by these.
We considered which areas of the financial statements might be
most susceptible to fraud and irregularities and identified the
following areas:
• Existence and accuracy of revenue;
• Capitalisation of the share-based payment expense and other
staff costs attributable to the development of the Adalpha
platform proposition;
• Management override of controls.
Our tests included:
• The procedures set out in the key audit matters section above;
• In respect of the risk of management override of controls,
testing a sample of journals which met defined fraud risk criteria
by agreeing those journals to supporting documentation and
evaluating whether there was evidence of bias by Directors that
represented a risk of material misstatement due to fraud;
• Testing the operating effectiveness of the controls in place over
the appropriate proportioning of costs capitalised vs expensed
in respect of the Adalpha platform proposition, as well as
agreeing these costs to supporting documentation; and
• Consideration of whether the costs capitalised in respect of the
Adalpha platform proposition met the capitalisation criteria of
the applicable accounting standard.
Non-compliance with laws and regulations
Based on:
• Our understanding of the Group and the industry in which
it operates;
• Discussion with management and those charged with
governance;
• review of correspondence with the regulator;
• review of minutes of board meetings and other committee
meetings throughout the period until the date of our audit
report for discussions around potential irregularities throughout
the period and for instances of non-compliance with laws and
regulations; and
• Review and consideration of stress testing performed on
forecasts and consideration of whether required regulatory
capital levels would be breached in an extreme downside
scenario.
The engagement team was deemed to collectively have the
appropriate competence and capabilities to identify or recognise
non-compliance with laws and regulations. We communicated
relevant identified laws and regulations and potential fraud risks
to all engagement team members and remained alert to any
indications of fraud or non-compliance with laws and regulations
throughout the audit.
Our audit procedures were designed to respond to risks of
material misstatement in the financial statements, recognising that
the risk of not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from error, as
fraud may involve deliberate concealment by, for example,
forgery, misrepresentations or through collusion. There are
inherent limitations in the audit procedures performed and the
further removed non-compliance with laws and regulations is
from the events and transactions reflected in the financial
statements, the less likely we are to become aware of it.
A further description of our responsibilities is available
on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as a
body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might
state to the Parent Company’s members those matters we are
required to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Parent
Company and the Parent Company’s members as a body, for our
audit work, for this report, or for the opinions we have formed.
• Obtaining and understanding of the Group’s policies and
procedures regarding compliance with laws and regulations
including an understanding of the control environment in
monitoring compliance with laws and regulations; and
Neil Fung-On
(Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, United Kingdom
• Consideration of the risk of acts by the Group which were
06 December 2023
contrary to applicable laws and regulations, including fraud.
We considered the significant laws and regulations to be
compliance with Companies Act 2006, the relevant accounting
standards, the Financial Conduct Authority’s regulations and the
Listing Rules, as well as consideration of required regulatory
capital levels and whether there was a risk that required capital
levels might be breached in an extreme downside scenario.
BDO LLP is a limited liability partnership registered in
England and Wales (with registered number OC305127).
132 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 133
Consolidated income statement
for the year ended 30 September 2023
Consolidated statement of financial position
as at 30 September 2023
Strategic report
Governance
Financial statements
Other information
Revenue
Administrative expenses
Operating profit
Investment income
Finance costs
Profit before tax
Tax expense
Profit for the financial year attributable to:
Equity holders of the parent company
Earnings per share
Basic (pence)
Diluted (pence)
Note
2023
£000
2022
£000
5
6
8
9
218,234
163,847
(132,014)
(104,866)
86,220
2,393
(952)
58,981
198
(768)
87,661
58,411
10
(19,442)
(11,672)
Assets
Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Right-of-use assets
Deferred tax asset
68,219
46,739
Current assets
12
12
16.59
16.53
11.39
11.35
All revenue, profit and earnings are in respect of continuing operations.
There were no other components of recognised income or expense in either period and, consequently, no statement of other
comprehensive income has been presented.
Trade and other receivables
Current tax receivable
Cash and cash equivalents
Total assets
Liabilities
Current liabilities
Trade and other payables
Current tax liability
Lease liabilities
Provisions
Non-current liabilities
Lease liabilities
Provisions
Total liabilities
Net assets
Equity
Share capital
Share premium
Own shares
Retained earnings
Total equity
Note
2023
£000
2022
£000
13
14
15
16
18
6,991
7,433
3,809
6,991
8,779
3,325
10,800
12,273
484
610
29,517
31,978
19
58,501
49,436
—
38
20
146,304
84,030
204,805
133,504
234,322
165,482
21
16
22
16
22
23
(52,437)
(15,604)
(151)
(1,540)
(1,126)
—
(1,566)
(519)
(55,254)
(17,689)
(10,866)
(12,395)
(2,165)
(2,004)
(13,031)
(14,399)
(68,285)
(32,088)
166,037
133,394
52
8,963
(2,377)
51
8,930
(473)
159,399
124,886
166,037
133,394
The financial statements were approved by the Board of Directors and authorised for issue on 6 December 2023 and signed on its
behalf by:
Peter Birch
Chief Financial Officer
AJ Bell plc
Company registered number: 04503206
The notes on pages 138 to 163 form an integral part of these financial statements.
The notes on pages 138 to 163 form an integral part of these financial statements.
134 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 135
Consolidated statement of changes in equity
for the year ended 30 September 2023
Consolidated statement of cash flows
for the year ended 30 September 2023
Strategic report
Governance
Financial statements
Other information
Balance at 1 October 2022
Total comprehensive income for the year:
Profit for the year
Transactions with owners, recorded directly in equity:
Issue of shares
Dividends paid
Equity settled share-based payment transactions
Deferred tax effect of share-based payment transactions
Tax relief on exercise of share options
Share transfer relating to EIP (note 23)
Payment of tax from employee benefit trust
Own shares acquired (note 23)
Total transactions with owners
Balance at 30 September 2023
Balance at 1 October 2021
Total comprehensive income for the year:
Profit for the year
Transactions with owners, recorded directly in equity:
Issue of shares
Dividends paid
Equity settled share-based payment transactions
Deferred tax effect of share-based payment transactions
Tax relief on exercise of share options
Share transfer relating to EIP
Total transactions with owners
Balance at 30 September 2022
Share
capital
£000
51
Share
premium
£000
Retained
earnings
£000
Own
shares
£000
Total
equity
£000
8,930
124,886
(473)
133,394
—
1
—
—
—
—
—
—
—
1
—
68,219
—
(33,294)
(110)
(88)
123
(96)
(241)
33
—
—
—
—
—
—
—
—
—
—
—
—
—
96
—
68,219
34
(33,294)
(110)
(88)
123
—
(241)
—
(2,000)
(2,000)
33
(33,706)
(1,904)
(35,576)
52
8,963
159,399
(2,377)
166,037
Share
capital
£000
Share
premium
£000
Retained
earnings
£000
Own
shares
£000
Total
equity
£000
51
8,658
122,739
(740)
130,708
—
—
—
—
—
—
—
—
—
46,739
272
—
—
—
—
—
—
(50,383)
6,162
(275)
171
(267)
272
(44,592)
51
8,930
124,886
—
—
—
—
—
—
267
267
(473)
46,739
272
(50,383)
6,162
(275)
171
—
(44,053)
133,394
Cash flows from operating activities
Profit for the financial year
Adjustments for:
Investment income
Finance costs
Income tax expense
Depreciation, amortisation and impairment
Share-based payment expense
Increase/(decrease) in provisions
Loss on disposal of property, plant and equipment
Increase in trade and other receivables
Increase in trade and other payables
Cash generated from operations
Income tax paid
Net cash flows from operating activities
Cash flows from investing activities
Purchase of other intangible assets
Purchase of property, plant and equipment
Interest received
Net cash flows used in investing activities
Cash flows from financing activities
Payments of principal in relation to lease liabilities
Payment of interest on lease liabilities
Proceeds from issue of share capital
Purchase of own share for employee share schemes
Payment of tax from employee benefit trust
Dividends paid
Net cash flows used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Total cash and cash equivalents at end of year
.
Note
2023
£000
2022
£000
68,219
46,739
(2,393)
952
(198)
768
19,442
11,672
4,788
1,103
607
16
3,643
4,728
(1,007)
21
(9,065)
(11,974)
36,833
120,502
2,839
57,231
(19,092)
(11,433)
101,410
45,798
(1,926)
(1,574)
2,393
(2,365)
(1,014)
198
(1,107)
(3,181)
(1,576)
(1,716)
(952)
34
(2,000)
(241)
(33,294)
(38,029)
62,274
84,030
146,304
(768)
272
—
—
(50,383)
(52,595)
(9,978)
94,008
84,030
24
14
15
16
16
23
23
11
20
20
The notes on pages 138 to 163 form an integral part of these financial statements.
The notes on pages 138 to 163 form an integral part of these financial statements.
136 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 137
Notes to the consolidated financial statements
for the year ended 30 September 2023
1 General information
AJ Bell plc (the ‘Company’) is the Parent Company of the AJ Bell group of companies (together the ‘Group’). The Group provides
investment administration, dealing and custody services. The nature of the Group’s operations and its principal activities are set out
in the Strategic report and the Directors’ report.
The Company is a public limited company which is listed on the Main Market of the London Stock Exchange and incorporated and
domiciled in the United Kingdom. The Company’s number is 04503206 and the registered office is 4 Exchange Quay, Salford Quays,
Manchester, M5 3EE. A list of investments in subsidiaries, including the name, country of incorporation, registered office, and proportion
of ownership is given in note 6 of the Company’s separate financial statements.
The consolidated financial statements were approved by the Board on 6 December 2023.
2 Significant accounting policies
Basis of accounting
The consolidated financial statements of AJ Bell plc have been prepared in accordance with UK-adopted International Financial
Reporting Standards.
The financial statements are prepared on the historical cost basis and prepared on a going concern basis. They are presented in sterling,
which is the currency of the primary economic environment in which the Group operates, rounded to the nearest thousand.
The accounting policies have been applied consistently to all periods presented in these financial statements and by all Group entities,
unless otherwise stated.
Changes to International Reporting Standards
Interpretations and standards which became effective during the year:
The following amendments and interpretations became effective during the year. Their adoption has not had any significant impact on
the Group.
IAS 37
IAS 16
IFRS 3
Onerous Contracts: Cost of Fulfilling a Contract (Amendments)
Effective from
1 January 2022
Property, Plant and Equipment: Proceeds before intended use (Amendments)
1 January 2022
Annual Improvements to IFRS Standards 2018-2020
Reference to the Conceptual Framework (Amendments)
1 January 2022
1 January 2022
Interpretations and standards in issue but not yet effective
The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its
subsidiaries) made up to 30 September each year. The Group controls an entity when it is exposed to, or it has rights to variable returns
from its involvement with the entity and has the ability to affect those returns through its power over the entity. The Group reassesses
whether it controls an entity if facts and circumstances indicate there are changes to one or more elements of control. The results of a
subsidiary undertaking are included in the consolidated financial statements from the date the control commences until the date that
control ceases.
All intercompany transactions, balances, income and expenses are eliminated on consolidation.
2.1 Going concern
The Group’s business activities, together with its financial position and the factors likely to affect its future development and performance
are set out in the Strategic report on pages 1 to 69 and the Directors’ report on pages 122 to 124. Note 25 includes the Group’s policies
and processes for managing exposure to credit and liquidity risk.
Strategic report
Governance
Financial statements
Other information
The Group’s forecasts and objectives, considering a number of potential changes in trading conditions, show that the Group should be
able to operate at adequate levels of both liquidity and capital for at least 12 months from the date of signing this report. The Directors
have performed a number of stress tests, covering a significant reduction in equity market values, a fall in the Bank of England base
interest rate leading to a lower interest rate retained on customer cash balances, and a further Group-specific idiosyncratic stress relating
to a scenario whereby prolonged IT issues cause a reduction in customers. Further detail of the forecasts and stress test scenarios are set
out in the Viability statement on page 69. These scenarios provide assurance that the Group has sufficient capital and liquidity to operate
under stressed conditions.
Consequently, after making reasonable enquiries, the Directors are satisfied that the Group has sufficient financial resources to continue
in business for at least 12 months from the date of signing the report and therefore have continued to adopt the going concern basis in
preparing the financial statements.
2.2 Business combinations
A business combination is recognised where separate entities or businesses have been acquired by the Group. The acquisition method of
accounting is used to account for the business combinations made by the Group. The cost of a business combination is measured at the
aggregate of the fair values (at the date of exchange), of assets given, liabilities incurred or assumed and equity instruments issued by the
Group in exchange for control of the acquired entity. Where the consideration includes a contingent consideration arrangement, the
contingent consideration is measured at its acquisition date fair value and included as part of the cost of the acquisition. Subsequent
changes in such fair values are adjusted against the cost of acquisition where they qualify as measurement period adjustments. All other
subsequent changes in the fair value of contingent consideration are charged to the income statement, except for obligations that are
classified as equity, which are not re-measured. Where consideration is dependent on continued employment within the business this is
treated as a separate transaction as post-acquisition remuneration.
Acquisition related costs are expensed as incurred in the income statement, except if related to the issue of debt or equity securities.
Identifiable assets acquired and liabilities and contingent liabilities assumed in the business combination are measured initially at their fair
values at the acquisition date. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets
acquired is recorded as goodwill. If this is less than the fair value of the Group’s share of the identifiable net assets of the subsidiary
acquired, the difference is taken immediately to the income statement.
2.3 Segmental reporting
The Group determines and presents operating segments based on the information that is provided internally to the Board, which is the
Group’s Chief Operating Decision Maker (CODM). In assessing the Group’s operating segments the Directors have considered the nature
of the services provided, product offerings, customer bases, operating model and distribution channels amongst other factors. The
Directors concluded there is a single segment as it operates with a single operating model; operations, support and technology costs
are managed and reported centrally to the CODM. A description of the services provided is given within note 4.
2.4 Revenue recognition
Revenue represents fees receivable from investment administration and dealing and custody services for both client assets and client
money. Revenue is measured based on the consideration specified in a contract with a customer. The Group recognises revenue when
it transfers control over a good or service to a customer.
Recurring fixed
Recurring fixed revenue comprises recurring administration fees and media revenue.
Administration fees include fees charged in relation to the administration services provided by the Group and are recognised over time
as the related service is provided.
Included within administration fees are annual pension administration fees. The Group recognises revenue from such fees over time,
using an input method to measure progress towards complete satisfaction of a single performance obligation. The Group determined
that the input method is the best method in measuring progress of the services relating to these fees because there is a direct
relationship between the Group’s effort (i.e. labour hours incurred) and the transfer of service to the customer.
The Group recognises revenue on the basis of the labour hours expended relative to the total expected labour hours to complete
the service.
Certain pension administration fees are received in arrears or in advance. Where revenue is received in arrears for an ongoing service,
the proportion of the income relating to services provided but not yet received is accrued. This is recognised as accrued income until the
revenue is received. Where revenue is received in advance for an ongoing service, the proportion of the income relating to services that
have not yet been provided is deferred. This is recognised as deferred income until the services have been provided.
Media revenue includes advertising, subscriptions, events and award ceremony and corporate solutions contracts. Subscriptions and
corporate solutions revenue is recognised evenly over the period in which the related service is provided. Advertising, event and award
ceremony revenue is recognised in the period in which the publication is made available to customers or the event or award ceremony
takes place.
138 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 139
Notes to the consolidated financial statements continued
for the year ended 30 September 2023
2 Significant accounting policies continued
2.4 Revenue recognition continued
Recurring ad valorem
Recurring ad valorem revenue comprises custody fees, retained interest income and investment management fees provided by the
Group and is recognised evenly over the period in which the related service is provided.
Ad valorem fees include custody fees charged in relation to the holding of client assets and interest received on client money balances.
Custody fees and investment management fees are accrued on a time basis by reference to the AUA.
Transactional fees
Transactional revenue comprises dealing fees and pension scheme activity fees.
Transaction-based fees are recognised when received in accordance with the date of settlement of the underlying transaction.
Other non-recurring fees are recognised in the period to which the service is rendered.
Customer incentives
Customer incentives paid to new retail customers are considered to be a reduction in revenue under IFRS 15. In line with IFRS 15,
customer incentives to acquire new customers are offset against recurring ad valorem revenue and spread over the period which the
customer is required to remain a customer in order to be eligible for the incentive. Customer incentives are paid in cash.
2.5 Share-based payments
The Group operates a number of share-based payment arrangements for its employees and non-employees. These generally involve an
award of share options (equity-settled share-based payments) which are measured at the fair value of the equity instrument at the date
of grant.
The share-based payment arrangements have conditions attached before the beneficiary becomes entitled to the award. These can be
performance and/or service conditions.
The total cost is recognised, together with a corresponding increase in the equity reserves, over the period in which the performance
and/or service conditions are fulfilled. Costs relating to the development of internally generated intangible assets are capitalised in
accordance with IAS 38. The cumulative cost recognised for equity-settled transactions at each reporting date until the vesting date
reflects the extent to which the vesting period has expired and management’s estimate of shares that will eventually vest. At the end of
each reporting period, the entity revises its estimates of the number of share options expected to vest based on the non-market vesting
conditions. It recognises any revision to original estimates in the income statement and to intangible assets where appropriate, with a
corresponding adjustment to equity reserves.
No cost is recognised for awards that do not ultimately vest, except for equity-settled transactions for which vesting is conditional upon
a market or non-vesting condition. These are treated as vested irrespective of whether or not the market or non-vesting condition is
satisfied, provided that all other performance and/or service conditions are satisfied.
The cost of equity-settled awards is determined by the fair value at the date when the grant is made using an appropriate valuation
model or the market value discounted to its net present value, further details of which are given in note 24. The expected life applied
in the model has been adjusted based on management’s best estimate for the effects of non-transferability, exercise restrictions and
behavioural considerations.
2.6 Investment income
Investment income comprises the returns generated on corporate cash at banks and short-term highly-liquid investments. Investment
income is recognised in the income statement as it accrues, using the effective interest rate method.
2.7 Finance costs
Finance costs comprise interest incurred on lease liabilities recognised under IFRS 16. Finance costs are recognised in the income
statement using the effective interest rate method.
2.8 Taxation
The tax expense represents the sum of the current tax payable and deferred tax. Tax is recognised in the income statement except to the
extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to tax payable or
receivable in respect of previous years, using tax rates enacted or substantively enacted at the reporting date.
Strategic report
Governance
Financial statements
Other information
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes. Deferred tax is not recognised if the temporary difference arises from:
• the initial recognition of goodwill; or
• investments in subsidiaries to the extent that the Group is able to control the timing of the reversal of the temporary differences and it
is probable they will not reverse in the foreseeable future; or
• the initial recognition of an asset and liability in a transaction other than a business combination that, at the time of the transaction,
affects neither the accounting nor taxable profit or loss.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is
probable that taxable profits will be available in the future, against which deductible temporary differences can be utilised. Recognised
and unrecognised deferred tax assets are reassessed at each reporting date.
The principal temporary differences arise from accelerated capital allowances, provisions for share-based payments and unutilised losses.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates
enacted or substantively enacted at the reporting date.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets
and liabilities on a net basis.
2.9 Dividends
Dividend distributions to the Company’s shareholders are recognised in the period in which the dividends are declared and paid.
The final dividend is approved by the Company’s shareholders at the Annual General Meeting.
2.10 Goodwill
Goodwill arising on consolidation represents the difference between the consideration transferred and the fair value of net assets
acquired of the subsidiary at the date of acquisition. Goodwill is not amortised, but is reviewed at least annually for impairment.
Any impairment is recognised immediately through the income statement and is not subsequently reversed.
For the purposes of impairment testing goodwill acquired in a business combination is allocated to the cash generating unit (CGU)
expecting to benefit from the synergies of the combination. CGUs to which goodwill has been allocated are reviewed annually or more
frequently when there is an indication that the goodwill relating to that CGU may have been impaired. If the recoverable amount from
the CGU is less than the carrying amount of the assets present on the consolidated statement of financial position forming that CGU, the
impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the assets forming that CGU and then to the
assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
2.11 Intangible assets (excluding goodwill)
Intangible assets comprise computer software and mobile applications, and the Group’s Key Operating Systems (KOS). These are stated
at cost less amortisation and any recognised impairment loss. Amortisation is charged on all intangible assets excluding goodwill and
assets under construction at rates to write off the cost or valuation, less estimated residual value, of each asset evenly using a straight-
line method over its estimated useful economic life as follows:
Computer software and mobile applications
3-4 years
KOS
15 years
KOS enhancements
Over the remaining life of the KOS
The assets’ estimated useful lives, amortisation rates and residual values are reviewed, and adjusted if appropriate at the end of each
reporting period. An asset’s carrying value is written down immediately to its recoverable amount if its carrying value is greater than the
recoverable amount.
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the
carrying amount of the asset and is recognised in the income statement immediately.
140 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 141
Notes to the consolidated financial statements continued
for the year ended 30 September 2023
2 Significant accounting policies continued
2.12 Internally-generated intangible assets
An internally-generated asset arising from work performed by the Group is recognised only when the following criteria can be
demonstrated:
• the technical feasibility of completing the intangible asset so that it will be available for use or sale;
• the intention to complete the intangible asset and use or sell it;
• the ability to use or sell the intangible asset;
• how the intangible asset will generate probable future economic benefits;
• the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible
asset; and
• the ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially recognised for internally-generated intangible assets is the sum of expenditure incurred from the date when the
asset first meets the recognition criteria listed above. Development expenditure that does not meet the criteria is recognised as an
expense in the period which it is incurred.
Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation and
accumulated impairment losses, on the same basis as intangible assets that are acquired separately. Assets under construction are not
amortised until the asset is operational and available for use.
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
2.13 Property, plant and equipment
All property, plant and equipment is stated at cost, which includes directly attributable acquisition costs, less accumulated depreciation
and any recognised impairment losses. Depreciation is charged on all property, plant and equipment, except assets under construction,
at rates to write off the cost, less estimated residual value, of each asset evenly using a straight-line method over its estimated useful
economic life as follows:
Leasehold improvements Over the life of the lease
Office equipment
4 years
Computer equipment
3-5 years
The assets’ estimated useful lives, depreciation rates and residual values are reviewed, and adjusted if appropriate at the end of each
reporting period. An asset’s carrying value is written down immediately to its recoverable amount if its carrying value is greater than the
recoverable amount.
Assets under construction relate to capital expenditure on assets not yet in use by the Group and are therefore not depreciated.
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the
carrying amount of the asset and is recognised in the income statement immediately.
2.14 Leased assets and lease liabilities
Leases
(i) Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the leases. Right-of-use assets are measured at cost, less any
accumulated depreciation and impairment losses, and adjusted for any re-measurement of lease liabilities. The cost of right-of-use
assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the
commencement date less any lease incentives received.
Depreciation is applied in accordance with IAS 16: Property, Plant and Equipment. Right-of-use assets are depreciated over the lease term.
Right-of-use assets are subject to impairment.
(ii) Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be
made over the lease term. The lease payments include fixed payments less any lease incentives receivable.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if
the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased
to reflect the addition of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is
re-measured if there is a modification, a change in the lease term, a change in the fixed lease payments or a change in the assessment to
purchase the underlying asset.
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Governance
Financial statements
Other information
2.15 Impairment of intangible assets (excluding goodwill), property, plant and equipment
and leased assets
At each reporting date the Group reviews the carrying amount of its intangible assets, property, plant and equipment and leased assets
to determine whether there is any indication that those assets have suffered impairment. If such an indication exists then the recoverable
amount of that particular asset is estimated.
An impairment test is performed for an individual asset unless it belongs to a CGU, in which case the present value of the net future cash
flows generated by the CGU is tested. A CGU is the smallest group of assets that generates cash inflows from continuing use that are
largely independent of the cash inflows of other assets or of groups of other assets. An intangible asset with an indefinite useful life or
an intangible asset not yet available for use is tested for impairment annually and whenever there is an indication that the asset may
be impaired.
The recoverable amount is the higher of its fair value less costs to sell and its value-in-use. In assessing its value-in-use, the estimated
net future pre-tax cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset or CGU in which the asset sits is estimated to be lower than the carrying value, then the carrying
amount is reduced to the recoverable amount. An impairment loss is recognised immediately in the income statement as an expense.
An impairment loss is reversed only if subsequent events reverse the effect of the original event which caused the recognition of the
impairment. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. An impairment reversal is
recognised in the income statement immediately.
2.16 Retirement benefit costs
The Group makes payments into the personal pension schemes of certain employees as part of their overall remuneration package.
Contributions are recognised in the income statement as they are payable.
The Group also contributes to employees’ stakeholder pension schemes. The assets of the scheme are held separately from those of the
Group in independently-administered funds. Any amount charged to the income statement represents the contribution payable to the
scheme in respect of the period to which it relates.
2.17 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event and it is probable
that the Group will be required to settle that obligation.
The amount recognised as a provision is the Directors’ best estimate of the consideration required to settle that obligation at the
reporting date and is discounted to present value where the effect is material.
2.18 Levies
The Group applies the guidance provided in IFRIC 21 to levies issued under the Financial Services Compensation Scheme. The
interpretation clarifies that an entity should recognise a liability when it conducts the activity that triggers the payment of the levy
under law or regulation.
2.19 Financial instruments
Financial assets and liabilities are recognised in the statement of financial position when a member of the Group becomes party to the
contractual provisions of the instrument.
Financial assets
Financial assets are classified according to the business model within which the asset is held and the contractual cash-flow
characteristics of the asset. All financial assets are classified at amortised cost.
Financial assets at amortised cost
The Group’s financial assets at amortised cost comprise trade receivables, loans, other receivables and cash and cash equivalents.
Financial assets at amortised cost are initially recognised at fair value including any directly attributable costs. They are subsequently
measured at amortised cost using the effective interest method, less any impairment. No interest income is recognised on financial
assets measured at amortised cost, with the exception of cash and cash equivalents, as all financial assets at amortised cost are short-
term receivables and the recognition of interest would be immaterial. Financial assets are derecognised when the contractual right to the
cash flows from the asset expire.
142 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 143
Notes to the consolidated financial statements continued
for the year ended 30 September 2023
2 Significant accounting policies continued
2.19 Financial instruments continued
Trade and other receivables
Trade and other receivables are initially recorded at the fair value of the amount receivable and subsequently measured at amortised cost
using the effective interest method, less any provision for impairment. Other receivables also represent client money required to meet
settlement obligations.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, on demand deposits with banks and other short-term highly-liquid investments with
original maturities of three months or less, or those over which the Group has an immediate right of recall. Where appropriate, bank
overdrafts are shown within borrowings in current liabilities in the consolidated statement of financial position.
Impairment of financial assets
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for
all trade receivables and contract assets. To measure the expected credit losses, trade receivables have been grouped based on shared
credit risk characteristics and number of days past due. The Group considers a trade receivable to be in default when it is past due by
more than 90 days, or when the value of a client’s receivable balance exceeds the value of the assets they hold with AJ Bell.
The expected loss rates are based on the payment profiles of sales over a period of 12 months before 30 September 2023 and the
corresponding historical credit losses experienced within this period.
The carrying amount of the financial assets is reduced by the use of a provision. When a trade receivable is considered uncollectable, it is
written off against the provision. Subsequent recoveries of amounts previously written off are credited against the provision. Changes in
the carrying amount of the provision are recognised in the income statement.
Financial liabilities
Financial liabilities are classified according to the substance of the contractual arrangements entered into.
Lease liabilities
Lease liabilities consist of amounts payable by the Group measured at the present value of lease payments to be made over the lease term.
Other financial liabilities
The Group’s other financial liabilities comprised borrowings and trade and other payables. Other financial liabilities are initially measured
at fair value, net of transaction costs. They are subsequently carried at amortised cost using the effective interest rate method. A financial
liability is derecognised when, and only when, the Group’s obligations are discharged, cancelled or they expire.
Trade and other payables
Trade and other payables consist of amounts payable to clients and other counterparties and obligations to pay suppliers for goods and
services in the ordinary course of business, including amounts recognised as accruals. Trade and other payables are measured at
amortised cost using the effective interest method.
2.20 Employee benefit trust
The employee benefit trusts provide for the granting of shares, principally under share option schemes. AJ Bell plc is considered to have
control of the trusts and so the assets and liabilities of the trusts are recognised as those of AJ Bell plc.
Shares of AJ Bell plc held by the trusts are treated as ‘own shares’ held and shown as a deduction from equity. Subsequent consideration
received for the sale of such shares is also recognised in equity, with any difference between the sales proceeds and original cost being
taken to equity.
3 Critical accounting adjustments and key sources of estimation uncertainty
In the application of the Group’s accounting policies, which are described in note 2, the Directors are required to make judgements,
estimates and assumptions to determine the carrying amounts of certain assets and liabilities. The estimates and associated assumptions
are based on the Group’s historical experience and other relevant factors. Actual results may differ from the estimates applied.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period
in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision
affects both current and future periods.
There are no judgements made, in applying the accounting policies, about the future, or any other major sources of estimation
uncertainty at the end of the reporting period, that have a significant risk of resulting in a material adjustment to the carrying amounts
of assets and liabilities within the next financial year.
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Governance
Financial statements
Other information
4 Segmental reporting
It is the view of the Directors that the Group has a single operating segment being investment services in the advised and D2C space
administering investments in SIPPs, ISAs and General Investment/Dealing accounts. Details of the Group’s revenue, results and assets
and liabilities for the reportable segment are shown within the consolidated income statement and consolidated statement of financial
position on pages 134 and 135 respectively.
The Group operates in one geographical segment, being the UK.
Due to the nature of its activities, the Group is not reliant on any one customer or group of customers for generation of revenues.
5 Revenue
The analysis of the consolidated revenue is as follows:
Recurring fixed
Recurring ad valorem
Transactional
2023
£000
2022
£000
30,666
29,787
161,152
102,184
26,416
31,876
218,234
163,847
Recurring ad valorem fees include custody fees. These recurring charges are derived from the market value of retail customer assets,
based on asset mix and portfolio size, and are therefore subject to market and economic risks. The rate charged is variable dependent
on the product, portfolio size and asset mix within the portfolio. The risks associated with this revenue stream in terms of its nature and
uncertainty is discussed further within the financial instruments and risk management note 25 on page 160.
Recurring ad valorem fees also include retained interest income earned on the level of customer cash balances, which are based on
product type, customers’ asset mix and portfolio size and are therefore subject to market and economic risks. The risks associated with
this revenue stream in terms of its nature and uncertainty is discussed further within the financial instruments and risk management
note 25 on page 160.
The total revenue for the Group has been derived from its principal activities undertaken in the United Kingdom.
6 Operating profit
Profit for the financial year has been arrived at after charging:
Amortisation and impairment of intangible assets
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Loss on the disposal of property, plant and equipment
Auditor’s remuneration (see below)
Staff costs (see note 7)
2023
£000
2,055
1,079
1,654
16
1,093
64,758
2022
£000
1,034
1,019
1,590
21
496
54,887
During the year there was no expenditure in relation to research and development expensed to the income statement (2022: £nil).
Auditor’s remuneration
The analysis of auditor’s remuneration is as follows:
Fees payable to the Company’s auditor for the audit of the Company’s annual accounts
Fees payable to the Company’s auditor for the audit of the Company’s subsidiaries’ accounts, pursuant
to legislation
Audit-related assurance services
Other assurance services
1. Of which £215,000 relates to the audit for the year ended 2022.
Of the above, audit-related services for the year totalled £1,063,000 (2022: £473,000).
2023
£000
329
589
115
60
1,0931
2022
£000
155
204
89
48
496
144 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 145
Notes to the consolidated financial statements continued
for the year ended 30 September 2023
7 Staff costs
The average monthly number of employees (including Executive Directors) of the Group was:
Operational and support
Technology
Distribution
Employee benefit expense for the Group during the year:
Wages and salaries
Social security costs
Retirement benefit costs
Termination benefits
Share-based payments (note 24)
Strategic report
Governance
Financial statements
Other information
2023
No.
856
279
140
2022
No.
761
225
109
1,275
1,095
2023
£000
2022
£000
51,854
41,427
5,846
5,937
18
1,103
64,758
4,808
3,857
67
4,728
54,887
Deferred tax relating to share-based payments (note 18)
Current tax relief on exercise of share options
The charge for the year can be reconciled to the profit per the income statement as follows:
Profit before tax
UK Corporation Tax at 22% (2022: 19%):
Effects of:
Expenses not deductible for tax purposes
Income not taxable in determining taxable profit
Amounts not recognised
Effect of rate changes to deferred tax
Adjustments to current and deferred tax in respect of prior periods
Effective tax rate
2023
£000
88
(123)
(35)
2022
£000
275
(171)
104
2023
£000
87,661
19,293
2022
£000
58,411
11,098
(22)
(16)
325
(133)
(5)
669
(86)
236
(52)
(193)
19,442
11,672
22.2%
20.0%
In addition to the above, £1,919,000 staff costs (2022: £1,315,000) have been capitalised as an internally generated intangible asset
(see note 14).
8 Investment income
Interest income on cash balances
9 Finance costs
Interest on lease liabilities
10 Taxation
Tax charged in the income statement:
Current taxation
UK Corporation Tax
Adjustment to current tax in respect of prior periods
Deferred taxation
Origination and reversal of temporary differences
Adjustment to deferred tax in respect of prior periods
Effect of changes in tax rates
Total tax expense
2023
£000
2,393
2022
£000
198
2023
£000
952
2022
£000
768
2023
£000
2022
£000
19,750
11,855
(346)
(238)
19,404
11,617
(170)
341
(133)
38
62
45
(52)
55
19,442
11,672
Corporation Tax is calculated at 22% of the estimated assessable profit for the year to 30 September 2023 (2022: 19%).
In addition to the amount charged to the income statement, certain tax amounts have been credited directly to equity as follows:
Deferred tax has been recognised at 25%, being the rate expected to be in force at the time of the reversal of the temporary difference
(2022: 19% or 25%). A deferred tax asset in respect of future share option deductions has been recognised based on the Company’s share
price at 30 September 2023.
11 Dividends
Amounts recognised as distributions to equity holders during the year:
Final dividend for the year ended 30 September 2022 of 4.59p (2021: 4.50p per share)
Special dividend for the year ended 30 September 2022 of nil (2021: 5.00p per share)
Interim dividend for the year ended 30 September 2023 of 3.50p (2022: 2.78p per share)
Total dividends paid on equity shares
Proposed final dividend for the year ended 30 September 2023 of 7.25p (2022: 4.59p) per share
2023
£000
2022
£000
18,893
—
14,401
33,294
29,807
18,460
20,511
11,412
50,383
18,843
A final dividend declared of 7.25p per share is payable on 9 February 2024 to shareholders on the register on 12 January 2024. The
ex-dividend date will be 11 January 2024. The final dividend is subject to approval by the shareholders at the Annual General Meeting
on 30 January 2024 and has not been included as a liability within these financial statements.
Dividends are payable on all ordinary shares as disclosed in note 23.
The employee benefit trusts, which held 1,082,343 ordinary shares (2022: 567,100) in AJ Bell plc at 30 September 2023, have agreed to
waive all dividends. This represented 0.3% (2022: 0.1%) of the Company’s called-up share capital. The maximum amount held by the
trusts during the year was 1,082,343.
12 Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of the Parent Company by the weighted average
number of ordinary shares, excluding own shares, in issue during the year.
Diluted earnings per share is calculated by adjusting the weighted average number of shares to assume exercise of all potentially dilutive
share options.
The weighted average number of anti-dilutive share options and awards excluded from the calculation of diluted earnings per share was
148,995 as at 30 September 2023 (FY22: 201,774).
146 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 147
Strategic report
Governance
Financial statements
Other information
14 Other intangible assets
Cost
At 1 October 2021
Additions
Disposals
At 30 September 2022
Additions
Disposals
At 30 September 2023
Amortisation
As at 1 October 2021
Amortisation charge
Eliminated on disposal
At 30 September 2022
Amortisation and impairment
Eliminated on disposal
At 30 September 2023
Carrying amount
At 30 September 2023
At 30 September 2022
At 30 September 2021
Average remaining amortisation period
Key operating
system
£000
Contractual
customer
relationships
£000
Computer
software and
mobile
applications
£000
11,681
2,749
2,135
—
—
(2,135)
14,430
706
—
15,136
7,191
337
—
7,528
337
—
7,865
7,271
6,902
4,490
2 years
—
—
—
—
2,135
—
(2,135)
—
—
—
—
—
—
—
Total
£000
20,285
3,799
(2,618)
21,466
713
(36)
6,469
1,050
(483)
7,036
7
(36)
7,007
22,143
4,945
697
(483)
5,159
1,718
(32)
14,271
1,034
(2,618)
12,687
2,055
(32)
6,845
14,710
162
1,877
1,524
Nil
7,433
8,779
6,014
The amortisation and impairment charge above is included within administrative expenses in the income statement.
Additions include an amount of £706,000 relating to internally generated assets for the year ended 30 September 2023 (2022: £3,556,000).
Total additions in the period are net of a credit of £1,213,000 related to the reversal of capitalised share-based payment expenses
(2022: additions of £1,434,000). The reversal recognised in the period is due to a change in estimate regarding the expected vesting
of milestones relating to the earn-out arrangement (note 24).
The net carrying amount of key operating systems includes £6,430,000 (2022: £5,724,000), relating to assets in development which are
currently not amortised. At the year end, the Group had not entered into any contractual commitments (2022: £103,000) for the
acquisition of intangible assets.
Notes to the consolidated financial statements continued
for the year ended 30 September 2023
12 Earnings per share continued
The calculation of basic and diluted earnings per share is based on the following data:
Earnings
Earnings for the purposes of basic and diluted earnings per share being profit attributable to the owners
of the Parent Company
68,219
46,739
2023
£000
2022
£000
Number of shares
Weighted average number of ordinary shares for the purposes of basic EPS in issue during the year
411,242,458
410,248,095
Effect of potentially dilutive share options
Weighted average number of ordinary shares for the purposes of fully diluted EPS
1,405,191
1,485,721
412,647,649
411,733,816
2023
No.
2022
No.
Earnings per share (EPS)
Basic (pence)
Diluted (pence)
13 Goodwill
Cost
As at 1 October and 30 September
Impairment
As at 1 October and 30 September
Carrying value at 30 September
2023
2022
16.59
16.53
11.39
11.35
2023
£000
2022
£000
7,103
7,103
(112)
6,991
(112)
6,991
Goodwill relates to acquisitions allocated to the Group’s single cash generating unit (CGU).
The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired.
The recoverable amount of the assets within the CGU is determined using value-in-use calculations. In assessing the value-in-use the
estimated future cash flows of the CGU are discounted to their present value using a pre-tax discount rate. Cash flows are based upon
the most recent forecasts, approved by the Board, covering a two-year period.
The key assumptions for value-in-use calculations are those regarding discount rate, growth rates and expected changes to revenues
and costs in the period, as follows:
• a compound rate of 9.5% (2022: 20%) has been used to assess the expected growth in revenue for the two-year forecast period.
This is based on a combination of historical and expected future performance;
• benefits realised from our economies of scale are passed onto customers in the form of price reductions; and
• modest ongoing maintenance expenditure is required on the assets within the CGU in order to generate the expected level of
cash flows.
The Directors have made these assumptions based upon past experience and future expectations in the light of anticipated market
conditions and the results of streamlining processes through implementation of the target operating model for customer services.
Cash flows have been discounted using a pre-tax discount rate of 8.6% (2022: 8.1%).
The pre-tax discount rate has been calculated using an independent external source. The Directors have performed sensitivity analysis
on their calculations, with key assumptions being revised adversely to reflect the potential for future performance being below expected
levels. Changes to revenue are the most sensitive as they would have the greatest impact on future cash flows. However, even with nil
growth in revenue, there would still be sufficient headroom to support the carrying value of the assets under the CGU.
Based upon the review above the estimated value-in-use of the CGU comfortably supports the carrying value of the assets held within it,
and so the Directors are satisfied that for the period ended 30 September 2023 goodwill is not impaired.
148 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 149
Notes to the consolidated financial statements continued
for the year ended 30 September 2023
15 Property, plant and equipment
Leasehold
improvements
£000
Office
equipment
£000
Computer
equipment
£000
Strategic report
Governance
Financial statements
Other information
16 Leases
i) Right-of-use assets
Cost
At 1 October 2021
Additions
At 30 September 2022
Additions
Disposals
At 30 September 2023
Depreciation
At 1 October 2021
Charge for the year
At 30 September 2022
Charge for the year
Disposals
At 30 September 2023
Carrying amount
At 30 September 2023
At 30 September 2022
At 30 September 2021
Computer
and office
equipment
£000
252
—
252
21
(6)
Property
£000
16,158
538
16,696
161
—
Total
£000
16,410
538
16,948
182
(6)
16,857
267
17,124
2,940
1,541
4,481
1,617
—
6,098
10,759
12,215
13,218
145
49
194
37
(5)
226
41
58
107
3,085
1,590
4,675
1,654
(5)
6,324
10,800
12,273
13,325
Total
£000
8,756
1,014
(325)
9,445
1,574
2,192
9
—
2,201
186
—
954
22
(1)
975
42
(9)
5,610
983
(324)
6,269
1,346
(241)
(250)
2,387
1,008
7,374
10,769
655
167
—
822
174
—
996
1,391
1,379
1,537
797
72
(1)
868
58
(9)
3,953
780
(303)
4,430
847
(230)
917
5,047
91
107
157
2,327
1,839
1,657
5,405
1,019
(304)
6,120
1,079
(239)
6,960
3,809
3,325
3,351
Cost
At 1 October 2021
Additions
Disposals
At 30 September 2022
Additions
Disposals
At 30 September 2023
Depreciation
At 1 October 2021
Charge for the year
Eliminated on disposal
At 30 September 2022
Charge for the year
Eliminated on disposal
At 30 September 2023
Carrying amount
At 30 September 2023
At 30 September 2022
At 30 September 2021
The depreciation charge above is included within administrative expenses in the income statement.
The depreciation charge above is included within administrative expenses in the income statement.
At the year end, the Group had not entered into contractual commitments for the acquisition of property, plant and equipment
(2022: £471,000).
Computer equipment includes assets under construction of £68,000 (2022: £37,000) which are currently not depreciated.
The Group has entered into various leases in respect of property and computer and office equipment as a lessee. Lease terms are
negotiated on an individual basis and contain a range of different terms and conditions. Property leases typically run for a period of
six to fifteen years and computer and office equipment for a period of one to six years.
Additions include £161,000 relating to the increase in the Group’s dilapidation provision (2022: £455,000) (see note 22).
Other than property and computer and office equipment there are no further classes of assets leased by the Group.
ii) Lease liabilities
Current
Non-current
The undiscounted maturity analysis of lease liabilities is shown below:
Within one year
In the second to fifth years inclusive
After five years
Total minimum lease payments
2023
£000
1,540
10,866
12,406
2023
£000
2,384
8,216
5,525
2022
£000
1,566
12,395
13,961
2022
£000
2,517
8,579
7,533
16,125
18,629
The total lease interest expense for the year ended 30 September 2023 was £952,000 (2022: £768,000). Principal cash outflow for leases
accounted for under IFRS 16 for the year ended 30 September 2023 was £1,576,000 (2022: £1,716,000).
150 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 151
Notes to the consolidated financial statements continued
for the year ended 30 September 2023
17 Subsidiaries
The Group consists of a Parent Company, AJ Bell plc incorporated within the UK, and a number of subsidiaries held directly and
indirectly by AJ Bell plc which operate and are incorporated in the UK. Note 6 to the Company’s separate financial statements lists
details of the interests in subsidiaries.
18 Deferred tax asset
Deferred tax asset
Deferred tax liability
2023
£000
999
(515)
484
The movement on the deferred tax account and movement between deferred tax assets and liabilities is as follows:
At 1 October 2021
(Charge)/credit to income statement
Charge to equity
At 30 September 2022
(Charge)/credit to income statement
Charge to equity
At 30 September 2023
Accelerated
capital
allowances
£000
Share-based
payments
£000
Short-term
timing
differences
£000
Losses
£000
(199)
(97)
—
(296)
(219)
—
(515)
990
31
(275)
746
80
(88)
738
149
11
—
160
101
—
261
—
—
—
—
—
—
—
2022
£000
906
(296)
610
Total
£000
940
(55)
(275)
610
(38)
(88)
484
The current year deferred tax adjustment relating to share-based payments reflects the estimated total future tax relief associated with
the cumulative share-based payment benefit arising in respect of share options granted but unexercised as at 30 September 2023.
Deferred tax assets have been recognised in respect of other temporary differences giving rise to deferred tax assets where it is probable
that these assets will be recovered. As at 30 September 2023, deferred tax assets have not been recognised on trading losses of
£5,524,000 (2022: £4,051,000).
Strategic report
Governance
Financial statements
Other information
The ageing profile of trade receivables was as follows:
Current – not past due
Past due:
0 to 30 days
31 to 60 days
61 to 90 days
91 days and over
Provision for impairment
The movement in the provision for impairment of trade receivables is as follows:
Opening loss allowance as at 1 October
Loss allowance recognised
Receivables written off during the year as uncollectable
Unused amount reversed
Balance at end of year
20 Cash and cash equivalents
Group cash and cash equivalent balances
2023
£000
1,137
476
279
173
1,341
3,406
(793)
2,613
2023
£000
605
254
(8)
(58)
793
2022
£000
747
886
116
39
1,024
2,812
(605)
2,207
2022
£000
524
174
(21)
(72)
605
2023
£000
2022
£000
146,304
84,030
Cash and cash equivalents at 30 September 2023 and 30 September 2022 are considered to be holdings of less than one month, or
those over which the Group has an immediate right of recall.
19 Trade and other receivables
21 Trade and other payables
Trade receivables
Prepayments
Accrued income
Other receivables
2023
£000
2,613
8,861
33,662
13,365
58,501
2022
£000
2,207
6,824
21,960
18,445
49,436
Trade payables
Social security and other taxes
Other payables
Accruals
Deferred income
2023
£000
960
3,453
859
45,043
2,122
2022
£000
138
2,151
678
10,428
2,209
52,437
15,604
The Directors consider that the carrying amount of trade and other receivables approximates their fair value. Included within other
receivables is client money required to meet settlement obligations and are payable on demand.
Included within accrued income is £1,081,000 (2022: £984,000) relating to contract assets, a movement of £97,000 (2022: £6,000)
during the year due to increased revenues.
Trade payables, accruals and deferred income principally comprise amounts outstanding for trade purposes including payment of
interest to customers and ongoing costs of the business. The Directors consider that the carrying amount of trade payables
approximates their fair value.
Deferred income in the current and prior year relates to contract liabilities. The prior year deferred income balance has now all been
recognised as revenue and the current year balance all relates to cash received in the current period. Total deferred income as at
30 September 2023 is expected to be recognised as revenue in the coming year.
152 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 153
Notes to the consolidated financial statements continued
for the year ended 30 September 2023
22 Provisions
At 1 October 2022
Additional provisions
Provisions used
At 30 September 2023
Included in current liabilities
Included in non-current liabilities
Office
dilapidations
£000
Other
provision
£000
2,004
161
—
2,165
—
2,165
519
778
(171)
1,126
1,126
—
Total
£000
2,523
939
(171)
3,291
1,126
2,165
Office dilapidations
The Group is contractually obliged to reinstate its leased properties to their original state and layout at the end of the lease terms. During
the year, management reviewed the Group’s dilapidation provision and the assumptions on which the provision is based. The estimate is
based upon property location, size of property and an estimate of the charge per square foot. A further charge of £161,000 has been
recognised in relation to an increase in the estimated charge per square foot. The office dilapidations provision represents management’s
best estimate of the costs which will ultimately be incurred in settling these obligations.
Other provisions
The other provisions relate to the settlement of an operational tax dispute, the costs associated with defending a legal case and
compensation required to settle a small number of disputed claims. There is some uncertainty regarding the amount and timing of
the outflows required to settle the obligations; therefore a best estimate has been made by assessing a number of different outcomes
considering the potential areas and time periods at risk and any associated interest. The timings of the outflows are uncertain and
could be paid within 12 months of the date of the statement of financial position, subject to the timing of a final resolution.
23 Share capital
Issued, fully-called and paid:
Ordinary shares of 0.0125p each
All ordinary shares have full voting and dividend rights.
The following transactions have taken place during the year:
Transaction type
Share class
Exercise of CSOP options
Ordinary shares of 0.0125p each
Exercise of EIP options
Ordinary shares of 0.0125p each
Free shares
Ordinary shares of 0.0125p each
2023
Number
2022
Number
2023
£
2022
£
412,211,306 411,091,634
51,526
51,386
Number of
shares
31,462
530,303
557,907
1,119,672
Share
premium
£000
33
—
—
33
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at
general meetings of the Company. They are entitled to share in the proceeds on the return of capital, or upon the winding up of the
Company in proportion to the number of and amounts paid on shares held. The shares are non-redeemable.
Own shares
As at 30 September 2023, the Group held 1,082,343 in own shares in employee benefit trusts to satisfy future share incentive plans.
Shares held by the Trust are held at £2,377,000 (2022: £473,000) being the price paid to repurchase, and the carrying value is shown
as a reduction within shareholders’ equity.
During the year, 631,151 ordinary own shares were purchased through AJ Bell’s employee benefit trust in exchange for consideration
of £2,000,000 (2022: £nil). 115,908 EIP options were exercised and issued from the employee benefit trusts in the year.
The costs of operating the trusts are borne by the Group but are not material. The trusts waived the right to receive dividends on
these shares.
Strategic report
Governance
Financial statements
Other information
24 Share-based payments
Company Share Option Plan (CSOP)
The CSOP is a HMRC approved scheme in which the Board, at their discretion, grant options to employees to purchase ordinary shares.
Each participating employee can be granted options up to the value of £60,000. Options granted under the CSOP can be exercised
between the third and tenth anniversary after the date of grant and are usually forfeited if the employee leaves the Group before the
option expires. The expense for share-based payments under the CSOP is recognised over the respective vesting period of these options.
Option To Buy Scheme (OTB) – Growth shares
The OTB scheme is a historical award scheme whereby the Board at its discretion granted growth shares to employees. Growth shares
entitled the holder to participate in the growth value of the Group above a certain threshold level, set above the current market value
of the Group at the time the shares were issued. Growth shares granted under the OTB scheme had different vesting conditions.
The vesting condition attached to all growth shares granted is that the threshold level needs to be met and an exit event needs to
have occurred. As part of the AJ Bell listing process all awards were converted into ordinary shares and those awards granted with
an additional employment condition of four or six years after the date of grant, continue to be recognised as a share-based payment.
Awards that were issued subject to employment conditions are subject to buy back options under which the Group can buy back
the shares for their issue price if the employee leaves the Group before the expiry of the employment condition period.
Buy As You Earn plan (BAYE)
The BAYE plan is an all-employee share plan under which shares can be issued to employees as either free shares or partnership shares.
The Company may grant free shares up to a maximum of £3,600 per employee in a tax year. During the year, free shares up to a
maximum value of £2,000 have been offered to all employees who were employed by the Company at 30 September 2022 (2022: nil).
Employees have been offered the opportunity to participate in the partnership plan to enable such employees to use part of their pre-tax
salary to acquire shares. The limit to the pre-tax salary deduction is £1,800 or, if lower, 10% of salary each year.
The plan entitles employees to use this deduction to buy shares in the Company on a monthly basis at the current market value.
Employees are able to withdraw their shares from the plan at any time but may be subject to income tax and national insurance charges
if withdrawn within three years of purchasing the shares. Therefore the monthly partnership plan does not give rise to a share-based
payment charge.
Executive Incentive Plan (EIP)
The EIP is a performance share plan that involves the award of nominal cost options to participants conditional on the achievement of
specified performance targets and continuous employment over a certain period of time. Individual grants will be dependent on the
assessment of performance against a range of financial and non-financial targets set at the beginning of the financial year.
Senior Manager Incentive Plan (SMIP)
The SMIP is a performance share plan that involves the award of nominal cost options to participants conditional on the achievement of
specified performance targets and continuous employment over a certain period of time. Individual grants will be dependent on the
assessment of performance against a range of financial and non-financial targets set at the beginning of the financial year.
CSR initiative
A CSR initiative was introduced in December 2019 with the intention of giving an additional contribution to charity through the donation
of share options should a number of stretching targets be met by the Group. The awards made are equity-settled awards and involved
the grant of market value options to the AJ Bell Trust conditional on the achievement of diluted earnings per share (DEPS) targets for the
financial years 2022, 2023 and 2024 (Performance Period).
The exercise of each tranche will be conditional upon the DEPS having increased in relation to the 7.47 pence DEPS for the year ended
30 September 2019, by more than:
• 90% for September 2022;
• 115% for September 2023; and
• 140% for 30 September 2024.
These are considered to be the lower DEPS targets. The upper DEPS target for each performance period is 10% above the lower
DEPS target.
The percentage of shares granted that will vest in each performance period is determined as follows:
• If actual DEPS is below the lower DEPS target, the vesting percentage is equal to zero;
• If actual DEPS is above the upper DEPS target, the vesting percentage is equal to 100%; and
• If actual DEPS is between the lower and upper target, then the vesting percentage is determined by linear interpolation on a straight-
line basis and rounded down to the nearest 10%.
154 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 155
Strategic report
Governance
Financial statements
Other information
Notes to the consolidated financial statements continued
for the year ended 30 September 2023
24 Share-based payments continued
EIP
CSR initiative continued
As no service is being provided by the AJ Bell Trust, all conditions involved in the arrangement are considered to be non-vesting
conditions. Non-vesting conditions should be taken into account when estimating the fair value of the equity instrument granted.
The fair value has been estimated using the Monte Carlo simulation model.
Earn-out arrangement
The acquisition of Adalpha gave rise to an earn-out arrangement whereby share awards will be made should a number of operational
and financial milestones, relating to AUA targets and the development of a simplified proposition for financial advisers, be met. The
awards will be equity-settled and will vest in several tranches in line with the agreed milestones.
Under the terms of the acquisition agreement, shares will be awarded to eligible employees conditional upon the successful completion
of certain performance milestones and their continued employment with the Group during the vesting period. There is no exercise price
attached to the share award.
Outstanding at beginning of the year
Granted during the year
Exercised during the year
Lapsed during the year
Outstanding at the end of the year
Exercisable at the end of the year
2023
2022
Weighted
Average
Exercise Price
£
Weighted
Average
Exercise Price
£
Number
Number
1,615,868
0.000125
1,487,313
0.000125
912,833
0.000125
736,015
0.000125
(646,211)
0.000125
(495,550)
0.000125
(207,298)
0.000125
(111,910)
0.000125
1,675,192
0.000125
1,615,868
0.000125
349,055
0.000125
565,636
0.000125
The weighted average remaining contractual life of EIP shares outstanding at the end of the period was 8.3 years (2022: 8 years).
The fair value of the earn-out arrangement is estimated as at the date of grant calculated by reference to the quantum of the earn-out
payment for each performance milestone and an estimated time to proposition completion, discounted to net present value. The
performance conditions included within the arrangement are not considered market conditions and therefore the expected vesting
is reviewed at each reporting date.
SMIP initiative
Movements during the year
The tables below summarise the outstanding options for each share-based payment scheme.
CSOP
Outstanding at the beginning of the year
Granted during the year
Forfeited during the year
Exercised during the year
Outstanding at the end of the year
Exercisable at the end of the year
2023
2022
Weighted
Average
Exercise Price
£
3.90
3.73
3.94
1.04
3.91
3.94
Number
1,101,893
223,167
(1,111,523)
(31,462)
182,075
39,339
Weighted
Average
Exercise Price
£
3.23
3.73
4.05
1.02
3.90
1.04
Number
1,015,763
461,744
(108,611)
(267,003)
1,101,893
31,462
The lowest exercise price for share options outstanding at the end of the period was 298p (2022: 104p) and the highest exercise price
was 434p (2022: 434p). The weighted average remaining contractual life of share options outstanding at the end of the period was
7.6 years (2022: 8.3 years).
OTB – Growth Shares
Outstanding at the beginning of the year
Vested
Outstanding at the end of the year
2023
2022
Weighted
Average
Exercise Price
£
Weighted
Average
Exercise Price
£
Number
Number
1,166,131
0.63
3,192,268
—
—
(2,026,137)
1,166,131
0.63
1,166,131
0.63
0.63
0.63
Upon listing to the London Stock Exchange, all growth shares were converted to ordinary shares and therefore no exercise price exists
for growth shares outstanding at the end of the period. The weighted average remaining contractual life of growth shares converted to
ordinary shares under a call option agreement at the end of the period was 0.2 years (2022: 1.2 years).
Outstanding at beginning of the year
Granted during the year
Outstanding at the end of the year
Exercisable at the end of the year
CSR initiative
Outstanding at the beginning of the year
Forfeited during the year
Outstanding at the end of the year
Exercisable at the end of the year
2023
Weighted
Average
Exercise Price
£
—
Number
—
3,999
0.000125
3,999
0.000125
—
—
2023
2022
Weighted
Average
Exercise Price
£
4.01
4.01
4.01
4.01
Number
1,662,510
(332,502)
1,330,008
498,753
Weighted
Average
Exercise Price
£
4.01
4.01
4.01
—
Number
2,493,766
(831,256)
1,662,510
—
The weighted average remaining contractual life of CSR options outstanding at the end of the period was 6.2 years (2022: 7.2 years).
Weighted average share price of options exercised
The weighted average share price of all options exercised during the year was £3.46 (2022: £3.67).
Earn-out arrangement
Shares granted during the year
2023
2022
Weighted
Average
Exercise Price
£
Weighted
Average
Exercise Price
£
Number
—
155,974
3.15
Number
—
156 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 157
Notes to the consolidated financial statements continued
for the year ended 30 September 2023
24 Share-based payments continued
Measurement
The fair value of equity-settled share options granted is estimated as at the date of grant using the Black-Scholes model, taking into
account the terms upon which the options and awards were granted.
The inputs into the Black-Scholes model and assumptions used in the calculations are as follows:
EIP
Grant date
Number of shares under option
Fair value of share from generally accepted business model (£)
Share price (£)
Exercise price of an option (£)
Expected volatility
Expected dividend yield
Risk-free interest rate
Expected option life to exercise (months)
CSOP
Grant date
Number of shares under option
Fair value of share option from generally accepted business model (£)
Share price (£)
Exercise price of an option (£)
Expected volatility
Expected dividend yield
Risk-free interest rate
Expected option life to exercise (months)
SMIP
Grant date
Number of shares under option
Fair value of share option from generally accepted business model (£)
Share price (£)
Exercise price of an option (£)
Expected volatility
Expected dividend yield
Risk-free interest rate
Expected option life to exercise (months)
09/12/2022
09/12/2022
09/12/2022
425,873
121,478
365,482
3.54
3.61
3.40
3.61
3.33
3.61
0.000125
0.000125
0.000125
36.90%
35.09%
35.09%
2.04%
3.15%
12
2.04%
3.18%
36
2.04%
3.22%
48
08/12/2022
223,167
0.82
3.61
3.73
35.09%
2.04%
3.18%
36
08/02/2023
3,999
3.25
3.46
0.000125
14.79%
2.13%
3.15%
36
Expected volatility is estimated by considering historic average share price volatility at the grant date.
The expected life of the options is based on the minimum period between the grant of the option, the earliest possible exercise date and
an analysis of the historical exercise data that is not necessarily indicative of exercise patterns that may occur. The expected volatility
reflects the assumption that historical volatility is indicative of future trends, which may also not necessarily be the case.
During the year, the Group recognised a total share-based payment expense of £1,103,000 (2022: £4,728,000), inclusive of a £1,213,000
reversal of capitalised share-based payment expense (2022: capitalised £1,434,000) within the statement of financial position.
The reversal recognised in the period is due to a change in estimate regarding the expected vesting dates of milestones relating to the
earn-out arrangement. Under the terms of the earn-out arrangement, shares will be awarded to eligible employees conditional upon the
successful completion of certain performance milestones and their continued employment with the Group during the vesting period.
The performance condition included within the arrangement is not considered a market condition and therefore the expected vesting
will be reviewed at each reporting date.
Strategic report
Governance
Financial statements
Other information
25 Financial instruments and risk management
The Group’s activities expose it to a variety of financial instrument risks; market risk (including interest rate and foreign exchange),
credit risk and liquidity risk. Information is presented below regarding the exposure to each of these risks, including the procedures for
measuring and managing them.
Financial instruments include both financial assets and financial liabilities. Financial assets principally comprise trade and other
receivables and cash and cash equivalents. Financial liabilities comprise trade and other payables, accruals and obligations under
leases. The Group does not have any derivative financial instruments.
Risk management objectives
The Group has identified the financial, business and operational risks arising from its activities and has established policies and
procedures to manage these items in accordance with its risk appetite. The Board of Directors has overall responsibility for establishing
and overseeing the Group’s risk management framework and risk appetite.
The Group’s financial risk management policies are intended to ensure that risks are identified, evaluated and subject to ongoing
monitoring and mitigation (where appropriate). These policies also serve to set the appropriate control framework and promote a robust
risk culture within the business.
The Group regularly reviews its financial risk management policies and systems to reflect changes in the business, counterparties,
markets and range of financial instruments that it uses.
The Group’s Treasury Committee has principal responsibility for monitoring exposure to the risks associated with cash and cash
equivalents. Policies and procedures are in place to ensure the management and monitoring of each type of risk. The primary objective
of the Group’s treasury policy is to manage short-term liquidity requirements whilst maintaining an appropriate level of exposure to other
financial risks in accordance with the Group’s risk appetite.
Significant accounting policies
Details of the significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which
income and expenses are recognised, in respect of each financial asset and financial liability, are disclosed within note 2 to the financial
statements.
Categories of financial instrument
The financial assets and liabilities of the Group are detailed below:
Financial assets
Trade receivables
Accrued income
Other receivables
Cash and cash equivalents
Financial liabilities
Trade and other payables
Lease liabilities
Amortised
cost
£000
2,613
33,662
13,365
146,304
195,944
2023
Financial
liabilities
£000
Carrying
value
£000
Amortised
cost
£000
2022
Financial
liabilities
£000
—
—
—
—
—
2,613
33,662
13,365
146,304
195,944
46,030
12,406
58,436
2,207
21,960
18,445
84,030
126,642
—
—
—
—
—
—
—
—
10,598
13,961
24,559
—
—
—
46,030
12,406
58,436
Carrying
value
£000
2,207
21,960
18,445
84,030
126,642
10,598
13,961
24,559
The carrying amount of all financial assets and liabilities is approximate to their fair value due to their short-term nature.
158 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 159
Notes to the consolidated financial statements continued
for the year ended 30 September 2023
25 Financial instruments and risk management continued
Market risk
Interest rate risk
The Group holds interest bearing assets in the form of cash and cash deposits. Cash at bank earns interest at floating rates based on daily
bank deposit rates. Term deposits can also be made for varying periods depending on the immediate cash requirements of the Group,
and interest is earned at the respective fixed-term rate. Based on the cash balances shown in the Group’s statement of financial position
at the reporting date, if interest rates were to move by 25bps it would change profit before tax by approximately:
+ 25 bps (0.25%)
- 25 bps (0.25%)
2023
£000
293
(293)
2022
£000
191
(154)
As at the year end the Group had no borrowings, and therefore was not exposed to a material interest rate risk related to debt as the
interest rate is fixed at the inception of the lease.
The Group retains a proportion of the interest income generated from the pooling of customer cash balances and as a result, the Group
revenue has an indirect exposure to interest rate risk. The cash balances are held with a variety of banks and are placed in a range of
fixed-term, notice and call deposit accounts with due regard for counterparty credit risk, capacity risk, concentration risk and liquidity
risk requirements. The spread of rate retained by the Group is variable dependent on rates received by banks (disclosed to customers at
between 1.15% below and 0.15% above the prevailing base rate) and amounts paid away to customers.
The impact of a 50bps increase or decrease in UK base interest rates on the Group’s revenue has been calculated and shown below.
This has been modelled on a historical basis for each year separately assuming that the UK base rate was 50bps higher or lower for the year.
+ 50 bps (0.50%)
- 50 bps (0.50%)
2023
£000
—
—
2022
£000
11,827
(12,759)
In FY23, movements in the UK base interest rate would not have impacted the retained interest income earned by the Group, as any
increases or decreases to the UK base interest rate when it is at higher levels would be passed to customers in the form of higher or
lower pay away rates respectively.
Conversely, in FY22 a 50bps increase would result in an additional £11.8m retained interest income, as the majority of the increased gross
interest income earned would be retained by the Group to rebuild revenue margins when UK base is at low levels. A 50bps decrease
would result in a reduction of £12.8m with the reduction in gross interest income earned being absorbed by the Group. At low levels
of UK base rate it would not be possible to reduce the pay away rates significantly as they would already be at low levels.
Customer cash balances are not a financial asset of the Group and so are not included in the statement of financial position.
Market movement sensitivity
The Group’s custody fees are derived from the market value of the underlying assets held by the retail customer in their account, based
on product type, mix and portfolio size which are charged on an ad valorem basis. As a result, the Group has an indirect exposure to
market risks, as the value of the underlying customers’ assets may rise or fall. The impact of a 10% increase or reduction in the value of
the customers’ underlying assets subject to the custody fees on the Group’s revenue has been calculated and shown below. This has
been modelled on a historical basis for each year separately assuming that the value of the customers’ assets were 10% higher or lower
than the actual position at the time.
+ 10% higher
- 10% lower
2023
£000
6,341
(6,341)
2022
£000
5,846
(5,846)
Foreign exchange risk
The Group is not exposed to significant foreign exchange translation or transaction risk as the Group’s activities are primarily within the
UK. Foreign exchange risk is therefore not considered material.
Credit risk
The Group’s exposure to credit risk, which is the risk that a counterparty will be unable to pay amounts in full when due, arises principally
from its cash balances held with banks and trade and other receivables.
Trade receivables are presented net of expected credit losses within the statement of financial position. The Group applies the IFRS 9
simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. To
measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and number of days
past due. Details of those trade receivables that are past due are shown within note 19.
Strategic report
Governance
Financial statements
Other information
The Group has implemented procedures that require appropriate credit or alternative checks on potential customers before business is
undertaken. This minimises credit risk in this area.
The credit and concentration risk on liquid funds, cash and cash equivalents is limited as deposits are held across a number of major
banks. The Directors continue to monitor the strength of the banks used by the Group. The principal banks currently used by the Group
are Bank of Scotland plc, Barclays Bank plc, Lloyds Bank plc, Lloyds Bank Corporate Markets plc, HSBC Bank plc, NatWest Markets plc,
Santander UK plc, Clearstream Banking SA and Qatar National Bank (Q.P.S.C). Bank of Scotland plc, the Group’s principal banker, is
substantial and is 100% owned by Lloyds Banking Group plc. All these banks currently have long-term credit ratings of at least A (Fitch).
Where the services of other banks are used, the Group follows a rigorous due diligence process prior to selection. This results in the
Group retaining the ability to further mitigate the counterparty risk on its own behalf and that of its customers.
The Group has no significant concentration of credit risk as exposure is spread over a large number of counterparties and customers.
The maximum exposure to credit risk is represented by the carrying amount of each financial asset at the reporting date. In relation to
dealing services, the Group operates as agent on behalf of its underlying customers and in accordance with London Stock Exchange Rules.
Any settlement risk during the period between trade date and the ultimate settlement date is substantially mitigated as a result of the
Group’s agency status, its settlement terms and the delivery versus payment mechanism whereby if a counterparty fails to make
payment, the securities would not be delivered to the counterparty. Therefore any risk exposure is to an adverse movement in market
prices between the time of trade and settlement. Conversely, if a counterparty fails to deliver securities, no payment would be made.
There has been no material change to the Group’s exposure to credit risk during the year.
Liquidity risk
This is the risk that the Group may be unable to meet its liabilities as and when they fall due. These liabilities arise from the day-to-day
activities of the Group and from its obligations to customers. The Group is a highly cash-generative business and maintains sufficient
cash and standby banking facilities to fund its foreseeable trading requirements.
There has been no change to the Group’s exposure to liquidity risk or the manner in which it manages and measures the risk during
the year.
The following table shows the undiscounted cash flows relating to non-derivative financial liabilities of the Group based upon the
remaining period to the contractual maturity date at the end of the reporting period.
2023
Trade and other payables
Lease liabilities
2022
Trade and other payables
Lease liabilities
Due within
1 year
£000
46,030
2,384
48,414
10,598
2,517
13,115
—
8,216
8,216
—
8,579
8,579
1 to 5 years
£000
After 5 years
£000
Total
£000
46,030
16,125
62,155
—
5,525
5,525
—
7,533
7,533
10,598
18,629
29,227
Capital management
The Group’s objectives in managing capital are to:
• safeguard the Group’s ability to continue as a going concern so that it can continue to provide returns for shareholders, security for
our customers and benefits for other stakeholders;
• maintain a strong capital base to support the development of its business; and
• comply with regulatory requirements at all times.
The capital structure of the Group consists of share capital, share premium and retained earnings. As at the reporting date the Group had
capital of £166,037,000 (2022: £133,394,000).
Capital generated from the business is both reinvested in the business to generate future growth and returned to shareholders principally
in the form of dividends. The capital adequacy of the business is monitored on an ongoing basis and as part of the business planning
process by the Board. It is also reviewed before any distributions are made to shareholders to ensure it does not fall below the agreed
surplus as outlined in the Group’s capital management policy. The liquidity of the business is monitored by management on a daily basis
to ensure sufficient funding exists to meet the Group’s liabilities as they fall due. The Group is highly cash-generative and maintains
sufficient cash and standby banking facilities to fund its foreseeable trading requirements.
The Group conducts an ICARA, as required by the FCA to assess the appropriate amount of regulatory capital and liquid resources to be
held by the Group. Regulatory capital and liquid resources for ICARA are calculated in accordance with published rules.
160 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 161
Notes to the consolidated financial statements continued
for the year ended 30 September 2023
25 Financial instruments and risk management continued
Capital management continued
The ICARA compares the Group’s financial resources against regulatory capital and liquidity requirements as specified by the relevant
regulatory authorities. Our current financial resources, regulatory capital and liquidity requirements can be found on page 59.
The Group maintained a surplus of regulatory capital and liquid resources throughout the year. The disclosures required under
MIFIDPRU 8 of the Investment Firms Prudential Regime are available on the Group’s website at ajbell.co.uk.
26 Interests in unconsolidated structure entities
The Group manages a number of investment funds (open-ended investments) acting as agent of the Authorised Corporate Director.
The dominant factor in deciding who controls these entities is the contractual arrangement in place between the Authorised Corporate
Director and the Group, rather than voting or similar rights. As the Group directs the investing activities through its investment
management agreement with the Authorised Corporate Director, the investment funds are deemed to be structured entities. The
investment funds are not consolidated into the Group’s financial statements as the Group is judged to act as an agent rather than having
control under IFRS 10.
The purpose of the investment funds is to invest capital received from investors in a portfolio of assets in order to generate a return in the
form of capital appreciation, income from the assets, or both. The Group’s interest in the investment funds is in the form of management
fees received for its role as investment manager. These fees are variable depending on the value of the assets under management.
The funds do not have any debt or borrowings and are financed through the issue of units to investors.
The following table shows the details of unconsolidated structured entities in which the Group has an interest at the reporting date:
Year
2023
2022
Number of
funds
9
9
Net AUM of
funds
£m
2,426.6
1,465.5
Annual
management
charge
£000
Management
charge
receivable at
30 September
£000
2,859
1,816
280
369
Type
OEIC
OEIC
The annual management charge is included within recurring ad valorem fees within revenue in the consolidated income statement.
The annual management charge receivable is included within trade and other receivables in the consolidated statement of
financial position.
The maximum exposure to loss relates to a reduction in future management fees should the market value of the investment
funds decrease.
Strategic report
Governance
Financial statements
Other information
28 Related party transactions
Transactions between the Parent Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are
not disclosed.
Transactions with key management personnel:
Key management personnel is represented by the Board of Directors as shown on pages 74 to 77 and the ExCo as shown on pages 78
and 79.
The remuneration expense of key management personnel is as follows:
Short-term employee benefits (excluding NI)
Retirement benefits
Share-based payment
2023
£000
2,893
66
1,484
4,443
2022
£000
2,779
114
2,389
5,282
During the year there were no material transactions or balances between the Group and its key management personnel or members
of their close families, other than noted below.
Transactions with directors:
The remuneration of individual directors is provided in the Directors’ Remuneration report on pages 111 to 113.
Dividends totalling £163,000 (2022: £11,743,000) were paid in the year in respect of ordinary shares held by the Company’s directors.
The aggregate gains made by the Directors on the exercise of share options during the year were £469,000 (2022: £772,000).
During the year Directors and their families received beneficial staff rates in relation to personal portfolios. The discount is not material
to the Directors or to AJ Bell.
Other related party transactions:
Charitable donations
During the year the Group made donations of nil (2022: £298,000) to the AJ Bell Trust, a registered charity of which Mr A J Bell is a trustee.
EQ Property Services Limited
The Group is party to three leases with EQ Property Services Limited for rental of the Head Office premises, 4 Exchange Quay, Salford
Quays, Manchester, M5 3EE. Mr M T Summersgill and Mr R Stott are directors and shareholders of both AJ Bell plc and EQ Property
Services Limited, Mr A J Bell is a shareholder of both AJ Bell plc and EQ Property Services Limited. The leases for the rental of the
building were entered into on 17 August 2016 for terms which expire on 30 September 2031, at an aggregate market rent of £2,009,000
(2022: £1,826,000 per annum).
27 Reconciliation of liabilities arising from financing activities
At the reporting date, there is no payable outstanding (2022: £nil) with EQ Property Services Limited.
2023
Lease liabilities
Total liabilities from financing activities
2022
Lease liabilities
Total liabilities from financing activities
1 October
2022
£000
13,961
13,961
1 October
2021
£000
15,594
15,594
Cashflows
£000
(1,576)
(1,576)
Cashflows
£000
(1,716)
(1,716)
Change in
lease liability
£000
30 September
2023
£000
21
21
12,406
12,406
Change in
lease liability
£000
30 September
2022
£000
83
83
13,961
13,961
Andy Bell consultancy
On 1 October 2022 Andy Bell stepped down as CEO into a consultancy role for the Group, and remains a significant shareholder of
AJ Bell plc. In his capacity as a consultant, he was paid £157,000 (2022: £nil).
Any amounts outstanding with related parties are unsecured and will be settled in cash. No guarantees have been given or received.
No provision has been made for doubtful debts in respect of amounts owed by related parties.
29 Subsequent events
There have been no material events occurring between the reporting date and the date of approval of these consolidated financial
statements.
162 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 163
Company statement of financial position
as at 30 September 2023
Company statement of changes in equity
for the year ended 30 September 2023
Strategic report
Governance
Financial statements
Other information
Assets
Non-current assets
Investments
Other receivables
Current assets
Trade and other receivables
Current tax asset
Cash at bank and in hand
Total assets
Liabilities
Current liabilities
Trade and other payables
Total liabilities
Net assets
Equity
Share capital
Share premium
Own shares
Retained earnings
Total equity
Notes
2023
£000
2022
£000
6
7
7
8
10
29,437
28,983
9,711
39,148
2,506
1,587
19,431
23,524
62,672
7,027
36,010
2,804
805
15,502
19,111
55,121
(960)
(960)
(1,278)
(1,278)
61,712
53,843
52
8,963
(2,377)
55,074
61,712
51
8,930
(473)
45,335
53,843
The financial statements were approved by the Board of Directors and authorised for issue on 6 December 2023 and signed on its
behalf by:
Peter Birch
Chief Financial Officer
AJ Bell plc
Company registered number: 04503206
Balance at 1 October 2022
Total comprehensive income for the year:
Profit for the year
Transactions with owners, recorded directly in equity:
Issue of shares
Dividends paid
Equity settled share-based payment transactions
Deferred tax effect of share-based payment transactions
Tax relief on exercise of share options
Share transfer relating to EIP
Payment of tax from employee benefit trust
Own shares acquired
Total transactions with owners
Balance at 30 September 2023
Balance at 1 October 2021
Total comprehensive income for the year:
Profit for the year
Transactions with owners, recorded directly in equity:
Issue of shares
Dividends paid
Equity settled share-based payment transactions
Deferred tax effect of share-based payment transactions
Tax relief on exercise of share options
Share transfer relating to EIP
Total transactions with owners
Balance at 30 September 2022
Share capital
£000
Share
premium
£000
51
8,930
Retained
earnings
£000
45,335
Own shares
£000
Total equity
£000
(473)
53,843
—
1
—
—
—
—
—
—
—
1
—
43,445
—
(33,294)
(110)
(88)
123
(96)
(241)
33
—
—
—
—
—
—
—
—
—
—
—
—
—
96
—
43,445
34
(33,294)
(110)
(88)
123
—
(241)
—
(2,000)
(2,000)
33
(33,706)
(1,904)
(35,576)
52
8,963
55,074
(2,377)
61,712
Share capital
£000
Share
premium
£000
Retained
earnings
£000
Own shares
£000
Total equity
£000
51
8,658
50,128
(740)
58,097
—
—
—
—
—
—
—
—
51
—
39,799
—
39,799
272
—
—
—
—
—
—
(50,383)
6,162
(275)
171
(267)
272
8,930
(44,592)
45,335
—
—
—
—
—
267
267
(473)
272
(50,383)
6,162
(275)
171
—
(44,053)
53,843
The notes on pages 166 to 169 form an integral part of these financial statements.
The notes on pages 166 to 169 form an integral part of these financial statements.
164 AJ Bell plc Annual Report and Financial Statements 2023
164 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 165
AJ Bell plc Annual Report and Financial Statements 2023 165
Notes to the Company financial statements
for the year ended 30 September 2023
1 General information
The principal activity of AJ Bell plc (the ‘Company’) is that of a holding company.
The Company is a public limited company which is listed on the London Stock Exchange and incorporated in the United Kingdom
under the Companies Act 2006 and is registered in England and Wales. The Company’s number is 04503206 and its registered office
is 4 Exchange Quay, Salford Quays, Manchester, M5 3EE.
2 Significant accounting policies
Basis of accounting
The financial statements are prepared on the historical cost basis and a going concern basis in accordance with the Companies Act
2006. These financial statements are presented in sterling, which is the currency of the primary economic environment in which the
Company operates, rounded to the nearest thousand.
The financial statements are prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101).
The Company has set out below where advantage of the FRS 101 disclosure exemptions have been taken. Shareholders were notified of,
and did not object to, the use of the disclosure exemptions.
Disclosure exemptions
The Company is included within the consolidated financial statements of AJ Bell plc, a company incorporated in the United Kingdom,
whose consolidated financial statements are publicly available. Consequently, the Company has, in compliance with FRS 101, taken
advantage of the exemption from preparing the following disclosures that would otherwise have been required under UK-adopted
international accounting standards:
• IAS 7 presentation of a cash flow statement;
• IAS 8 Disclosures in respect of new standards and interpretations that have been issued but which are not yet effective;
• IAS 24 Disclosure of key management personnel compensation and the disclosure of transactions with group companies;
• IFRS 7 Disclosure in respect of financial instruments, provided that the equivalent disclosures are included in the consolidated financial
statements of the group in which the entity is consolidated;
• IFRS 13 Fair Value Measurement paragraphs 91 to 99, provided that equivalent disclosures are included within the consolidated
financial statements of the group for which the entity is consolidated; and
• IFRS 2 Share-Based Payment paragraphs 45 and 46 to 52 provided that equivalent disclosures are included within the consolidated
financial statements of the group for which the entity is consolidated.
The accounting policies adopted are the same as those set out in note 2 of the Group financial statements, which have been applied
consistently apart from the following:
Investments
Investments in subsidiary undertakings are shown at cost less provision for impairment. The Company grants share-based payments to
the employees of subsidiary companies. Each period the fair value of the employee services received by the subsidiary as a capital
contribution from the Company is reflected as an addition to investments in subsidiaries.
Financial instruments
The Company follows the accounting policy of the Group for financial instruments. In addition, the Company has balances with other
group companies. Amounts owed by group companies are financial assets and are recognised at amortised cost. Amounts owed to
group companies are financial liabilities.
Loans issued to group companies at below-market rates of interest are initially recognised at fair value, measured as the present value
of loan repayments, with the below-market element recognised as an investment in subsidiary.
3 Critical accounting judgements and key sources of estimation uncertainty
In the application of the Company’s accounting policies, which are described in note 2 of the consolidated financial statements, the
Directors are required to make judgements, estimates and assumptions to determine the carrying amounts of certain assets and
liabilities. The estimates and associated assumptions are based on the Company’s historical experience and other relevant factors.
Actual results may differ from the estimates applied.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period
in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision
affects both current and future periods.
Strategic report
Governance
Financial statements
Other information
The following judgements have been made by the Directors in applying the Company’s policies:
Investment in subsidiaries
At each reporting date, the Company assesses whether there are any indicators of impairment in its investment in subsidiaries. If any such
indicators exist, the investments’ recoverable amount is estimated. There are a number of estimates that management use to forecast the
expected future cash flows of the investments. The estimated recoverable amount of these balances is subjective due to the inherent
uncertainty in forecasting trading conditions and cash flows used in the budgets.
Key judgements and estimates in relation to the estimated recoverable amount of this investment include:
• cash flow forecasts based on anticipated future demand for the investment’s products and services;
• budgeted future costs attributable to the supply of the investment’s products and services; and
• the level of ongoing maintenance expenditure required by the Company’s assets in order to generate the expected level of cash flows.
Any share transactions undertaken in the past 12 months are considered when assessing the fair value of the investment.
Management has identified impairment indicators for Ad Alpha Solution Ltd, which has a carrying value of £6.8m. Subsequently, the
Directors have performed sensitivity analysis on their projections for this subsidiary, with key assumptions being revised adversely to
reflect the potential for assets under administration to be 25% below expected levels and a 63% increase on the pre-tax discount rate
applied to cash flows. The value-in-use continued to support the carrying value of the investment with headroom of £11.4m.
4 Profit for the year
As permitted by section 408 of the Companies Act 2006, the Company has elected not to present its own income statement for the year.
The Company reported a profit of £43,445,000 for the year ended 30 September 2023 (2022: £39,799,000). This profit was generated
from the Company’s principal activity which is that of a holding company.
The auditor’s remuneration for the audit and other services is disclosed in note 6 of the consolidated financial statements.
5 Dividends
Details of dividends paid during the year are disclosed in note 11 of the consolidated financial statements.
6 Investments
Cost
As at 1 October
Share-based payments
Below-market element of loans to subsidiaries
At 30 September
Accumulated impairment losses
As at 1 October
Accumulated impairment losses at 30 September
Carrying value at 30 September
2023
£000
2022
£000
32,783
26,247
(139)
593
6,093
443
33,237
32,783
(3,800)
(3,800)
(3,800)
(3,800)
29,437
28,983
166 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 167
Notes to the Company financial statements continued
for the year ended 30 September 2023
6 Investments continued
The Company has investments in the ordinary share capital of the following subsidiaries at 30 September 2023:
Name of subsidiary
Principal activity
Country of incorporation
AJ Bell Business Solutions Limited1
Investment/Group administration
England and Wales
AJ Bell Management Limited1
Investment administration
AJ Bell Securities Limited1
Dealing and custody
AJ Bell Media Limited1
Media
England and Wales
England and Wales
England and Wales
AJ Bell Asset Management Limited1
Investment management services
England and Wales
AJ Bell Touch Limited1
Intermediate holding company
England and Wales
Ad Alpha Solutions Limited
Technology company
AJ Bell EBT Limited1
AJ Bell Digital Savings Limited1
AJ Bell Platinum Limited1
AJ Bell Trustees Limited
AJ Bell (PP) Trustees Limited
Ashby London Trustees Limited
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Ashby London (PP) Trustees Limited
Dormant
Lawshare Nominees Limited
Sippdeal Limited
Sippdeal Trustees Limited
Whitehead Trustees Limited
1.
Indicates direct investment of AJ Bell plc.
Dormant
Dormant
Dormant
Dormant
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
Proportion of ownership
interest and voting rights held
2023
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2022
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
The financial statements for the year ended 30 September 2023 of AJ Bell EBT Limited have been exempted from audit under s479A of
the Companies Act 2006 by way of parent guarantee from AJ Bell plc.
The registered office of all subsidiaries is 4 Exchange Quay, Salford Quays, Manchester, M5 3EE.
7 Trade and other receivables
Amounts due within one year:
Amounts owed by Group undertakings
Prepayments
2023
£000
2022
£000
2,451
55
2,506
2,768
36
2,804
Included within amounts owed by Group undertakings is £2,451,000 (2022: £2,451,000) relating to a loan issued to AJ Bell Business
Solutions Limited by the Company in relation to costs incurred by AJ Bell Business Solutions Limited in renewing IT infrastructure and
administration systems in order to enhance products and services for the Group.
Amounts due after one year:
Deferred tax asset relating to share-based payments
Amounts owed by Group undertakings
2023
£000
2022
£000
738
8,973
9,711
748
6,279
7,027
Amounts owed by Group undertakings relate to loans issued to AJ Bell Touch Limited and Ad Alpha Solutions Limited by the Company.
The loan to AJ Bell Touch Limited was issued to facilitate the acquisition of Ad Alpha Solutions Limited. The loan to Ad Alpha Solutions
Limited is a working capital arrangement issued in relation to the costs of developing the simplified mobile-focused platform proposition
for financial advisers.
Strategic report
Governance
Financial statements
Other information
8 Trade and other payables
Accruals
Amounts owed to Group undertakings
9 Related party transactions
2023
£000
324
636
960
2022
£000
296
982
1,278
Transactions with key management personnel:
The key management personnel of the Group and the Company are the same. The related party disclosure is given in note 28 of the
consolidated financial statements.
Transactions with Group companies:
During the year the Company entered into the following transactions with its subsidiaries:
Recharges
Dividends received
2023
2022
Receivable
£000
Payable
£000
Receivable
£000
Payable
£000
—
44,000
44,000
595
—
595
—
40,600
40,600
372
—
372
The Company’s balances with fellow group companies at the reporting date are set out in notes 7 and 8 of the Company financial
statements.
All transactions with fellow group companies are provided on an arm’s length basis and are to be settled in cash. None of the balances
are secured and no provisions have been made for doubtful debts for any amounts due from fellow group companies.
10 Called-up share capital
The Company’s share capital is disclosed in note 23 of the consolidated financial statements.
11 Subsequent events
After the end of the reporting period events occurred which means there is a risk that a significant number of previously issued equity
instruments may not vest for certain employees. The costs of these instruments are recognised over the vesting period, and if they are
no longer expected to vest, the previously recognised costs would need to be reversed.
The maximum impact of this reversal would be £2.8m, of which £1.9m has been expensed and £0.9m has been capitalised as an
intangible asset. The impact on profit before tax would be an increase of £1.9m.
There have been no other material events occurring between the reporting date and the date of approval of these financial statements.
168 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 169
Consolidated unaudited five-year summary
for the year ended 30 September 2023
Results
Revenue
Profit from operations
Profit before tax
Profits attributable to equity holders of AJ Bell plc
Assets employed
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets
Financed by
Equity
Key statistics
Earnings per share (pence)
Fully diluted earnings per share (pence)
Ordinary dividend per share paid in year (pence)
Special dividend per share paid in year (pence)
Ordinary dividend per share declared with respect to profits
generated in year (pence)
Special dividend per share declared with respect to profits
generated in year (pence)
1. Reflects the impact of IFRS 16 in 2020.
2023
£000
2022
£000
2021
£000
2020
£000
2019
£000
218,234
163,847
145,826
126,749
104,902
86,220
87,661
68,219
58,981
58,411
46,739
55,851
55,084
43,822
49,236
48,550
38,829
29,517
31,978
30,621
24,395¹
204,805
133,504
131,521
116,945¹
37,409
37,695
30,353
11,269
92,021
(55,254)
(13,031)
(17,689)
(14,399)
(15,999)
(15,435)
(15,303)¹
(14,202)
(16,571)¹
(3,025)
166,037
133,394
130,708
109,466
86,063
166,037
133,394
130,708
109,466
86,063
16.59
16.53
8.09
—
11.39
11.35
7.28
5.00
10.75
7.37
—
—
10.71
10.67
7.12
—
6.96
5.00
9.51
9.47
4.83
—
6.16
—
7.51
7.47
3.74
—
4.83
—
Strategic report
Governance
Financial statements
Other information
Glossary
Adalpha
AJ Bell Touch Limited and its
wholly-owned subsidiaries
AGM
AJBI
Annual General Meeting
AJ Bell Investments
AJBIC
AJ Bell Investcentre
BAYE
BBSL
Board,
Directors
BPP
BPS
CAM
CASS
CBT
CDP
CGU
CODM
CSOP
CSR
CTP
DC
DEPS
DTR
DWP
D2C
EIP
EPS
ERC
ESG
EVF
EVIC
ExCo
FCA
FRC
FRS
FTE
FTSE
FX
Buy as you earn
Blythe Business Services Limited
The Board of Directors of AJ Bell plc
Business Planning Process
Basis points
Combined Assurance Model
Client Assets Sourcebook
Computer-Based Training
Carbon Disclosure Project
Cash Generating Unit
Chief Operating Decision Maker
Company Share Option Plan
Corporate Social Responsibility
Competitive Tender Process
Defined Contribution
Diluted Earnings Per Share
Disclosure Guidance and Transparency Rules
Department for Work and Pensions
Direct to Consumer
Executive Incentive Plan
Earnings Per Share
Executive Risk Committee
Environmental, Social and Governance
Employee Voice Forum
Enterprise Value Including Cash
Executive Committee (formerly EMB)
Financial Conduct Authority
Financial Reporting Council
Financial Reporting Standards
Full Time Equivalent
The Financial Times Stock Exchange
Foreign Exchange
GHG
HMRC
HR
Greenhouse Gas
His Majesty’s Revenue and Customs
Human Resources
ICARA
Internal Capital and Risk Assessment
ICO
IFRIC
IFPR
IFRS
IPO
ISA
ISO
ISSB
IT
KOS
KPI
KRI
LISA
Information Commissioner’s Office
International Financial Reporting Interpretations
Committee
Investment Firm Prudential Regime
International Financial Reporting Standards
Initial Public Offering
Individual Savings Account
International Organisation for Standardisation
International Sustainability Standards Board
Information Technology
Key Operating System
Key Performance Indicator
Key Risk Indicator
Lifetime ISA
MiFID
Markets in Financial Instruments Directive
MiFIDPRU Prudential Sourcebook for MiFID Investment Firms
MPS
MSCI
NGFS
OCF
OEIC
OTB
PBT
PCAF
PLC
PR&U
R&CC
RMF
SID
SIPP
SMIP
SSAS
TCFD
WACI
Managed Portfolio Service
Morgan Stanley Capital International
Network for Greening the Financial System
Ongoing Charges Figure
Open-Ended Investment Company
Option To Buy
Profit Before Tax
Partnership for Carbon Accounting Financials
Public Limited Company
Principal Risks and Uncertainties
Risk and Compliance Committee
Risk Management Framework
Senior Independent Director
Self-Invested Personal Pension
Senior Management Incentive Plan
Small Self-Administered Scheme
Task Force on Climate-related Financial Disclosures
Weighted Average Carbon Intensity
170 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 171
Definitions
Company information
Company number
04503206
Company Secretary
Olubunmi Likinyo
Registered office
4 Exchange Quay
Salford Quays
Manchester
M5 3EE
Auditor
BDO LLP
55 Baker Street
London
W1U 7EU
Banker
Bank of Scotland plc
The Mound
Edinburgh
EH1 1YZ
Ad valorem
According to value
AUA
AUM
Assets Under Administration
Assets Under Management
Customer
retention rate
The customer retention rate is the average
number of funded platform customers during the
financial year that remain funded at the year end
Lifetime value The total amount of revenue a business expects
to generate over the lifetime of a customer
Listing rules
MSCI ESG
rating
Own shares
Platforum
Recurring
ad valorem
revenue
Regulations subject to the oversight of the FCA
applicable to companies listed on a UK stock
exchange
MSCI’s assessment of a Company’s resilience to
long-term, industry material ESG risks and how
well they manage those risks relative to peers
Shares held by the Group to satisfy future
incentive plans
The advisory and research business specialising
in investment platforms
Includes custody fees, retained interest income
and investment management fees
Recurring
fixed revenue
Includes recurring pension administration fees
and media revenue
Revenue
per £ AUA
Represents revenue as a percentage of the
average AUA in the year. Average AUA is
calculated as the average of the opening and
closing AUA in each quarter averaged for the year
Transactional
revenue
Includes dealing fees and pension scheme
activity fees
UK Corporate
Governance
Code
A code which sets out standards for best
boardroom practice with a focus on Board
leadership and effectiveness, remuneration,
accountability and relations with shareholders
172 AJ Bell plc Annual Report and Financial Statements 2023
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AJ Bell plc
4 Exchange Quay
Salford Quays
Manchester M5 3EE
T: 0345 40 89 100
ajbell.co.uk
Company registration number 04503206
174 AJ Bell plc Annual Report and Financial Statements 2023
AJ Bell plc Annual Report and Financial Statements 2023 PB