FUTURE FOCUSED
Client Driven
REPORT & ACCOUNTS 2024
As we reflect on the
growth of the Group, we are
FOCUSING ON THE FUTURE
and the opportunities this
offers our stakeholders, ensuring
we continue to deliver value
through this time of change.
DELIVERING
FOR OUR CLIENTS
We remain committed to
our clients as we work to
migrate onto one platform.
Read more on page 04
BUILDING A
ROBUST NETWORK
We moved colleagues at eight
sites into the same offices
bringing teams together.
Read more on page 05
CREATING AN
INCLUSIVE CULTURE
We reviewed our culture,
supporting work which will
shape the future of Rathbones.
Read more on page 06
On 21 September 2023, following regulatory approval,
Rathbones Group Plc completed its planned combination
with Investec Wealth & Investment UK (from here in referred
to as IW&I). Throughout this report, figures stated include
IW&I, unless otherwise indicated. Where practicable,
a like-for-like comparative has been included.
CONTENTS
Our reporting suite
This Report and Accounts forms part of our wider reporting
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FURTHER INFORMATION LINKS
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Climate Report 2024
Responsible Business Update 2024
2
STRATEGIC REPORT
2
About Rathbones
3
Highlights
4
A year in focus
7
Investment case
8
Chair’s statement
10
Group Chief Executive Officer’s review
14
Our external markets
16
Our purpose driven approach
17
Our culture and values
18
Our business model
19
Our strategic priorities
24
Section 172 statement
24
Our approach to stakeholder engagement
33
Our key performance indicators
36
Group Chief Financial Officer’s review
40
Financial performance
45
Segmental review
53
Financial position
57
Liquidity and cash flow
58
Risk management and control
63
Principal risks
68
Viability statement
69
Responsible business review
77
Climate-related financial disclosures
89
Non-financial and sustainability
information statement
91
GOVERNANCE REPORT
92
Chair’s letter
100
Nomination Committee report
106
Audit Committee report
111
Group Risk Committee report
114
Remuneration Committee report
118
Annual report on remuneration
131
Directors’ report
134
Statement of Directors’ responsibilities
135
FINANCIAL STATEMENTS
136
Independent auditor’s report to the
members of Rathbones Group Plc
146
Consolidated financial statements
150
Notes to the consolidated
financial statements
211
Company financial statements
214
Notes to the company
financial statements
233 FURTHER INFORMATION
234
Five-year record
234
Corporate information
01
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
ABOUT RATHBONES
INVESTMENT MANAGEMENT
Clients of this discretionary service can expect
a tailored investment strategy that meets
individual objectives backed by an investment
process that aims to provide risk-adjusted
returns to meet clients’ needs today and
in the future.
OUR SPECIALIST CAPABILITIES
— Charities and not-for-profit organisations
— Our specialist ethical arm, Greenbank
— Personal Injury and Court of Protection
— Ability to service international clients through
Rathbones Investment Management
International (RIMI).
OUR SERVICES
Bespoke service
Provides clients access to a dedicated
investment manager who will construct and
manage a bespoke portfolio that is specifically
tailored to their needs.
Managed service
Provides clients with access to a dedicated
investment manager who will invest in a
range of ready-made, diversified multi-asset
portfolios managed by Rathbones Asset
Management (RAM).
Select
Provides clients direct access to a range of
ready-made, diversified multi-asset portfolios
managed by RAM. Select does not come with
a dedicated investment manager; it is a more
appropriate and cost-effective solution for
smaller value portfolios.
Rathbones Asset Management is a UK fund
manager, offering actively managed equity,
fixed income and multi-asset capabilities
for retail- and institutional-type investors.
Our range of single-strategy and multi-asset
funds are designed to potentially meet
investors’ core investment needs, or provide
‘building blocks’ for wealth solutions, with
distribution primarily through UK advisors.
International clients may also access our funds
through the Rathbone Luxembourg Funds
SICAV, which allows access to a similar range
of actively managed funds.
With offices throughout the UK and the
Channel Islands, clients are never far away
from high-quality, personalised wealth
management services.
1. Includes Vision Independent Financial Planning
FINANCIAL PLANNING AND ADVICE
We provide financial planning and advisory
services through Rathbones Financial Planning
and Vision Independent Financial Planning.
We also offer UK trust, tax and legal services
through the Rathbones Trust Company.
Clients can choose a financial planning service
as a standalone offering or combine it with
one of our Investment Management services.
We can deliver our financial planning services
to clients in one of the following ways:
— Initial advice, which could be delivered
as a one-off service
— Ongoing advice and planning.
COMPLEMENTARY SERVICES
As a licensed deposit taker we are able to offer
our clients a range of banking services including
currency and payment services, fixed interest
term deposits and loans to existing clients.
We are now able to offer SIPP administration
services to clients.
Wealth management
Asset management
Where we do it
23
1
LOCATIONS IN THE UK
AND CHANNEL ISLANDS
£109.2bn
MANAGED BY US
FOR OUR CLIENTS
FTSE 250
COMPANY LISTED ON THE
LONDON STOCK EXCHANGE
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
02
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
For a full five-year record
see page 234
Financial highlights
PROFIT BEFORE TAX
£99.6m
2023: £57.6m
UNDERLYING PROFIT
BEFORE TAX*1
£227.6m
2023: £127.1m
RETURN ON CAPITAL
EMPLOYED (ROCE)*
4.8%
2023: 4.9%
UNDERLYING RETURN
ON CAPITAL EMPLOYED
(ROCE)*2
12.0%
2023: 12.1%
BASIC EARNINGS
PER SHARE
63.0p
2023: 52.6p
UNDERLYING EARNINGS
PER SHARE*1
161.6p
2023: 135.8p
DIVIDEND PAID AND
PROPOSED PER SHARE
93.0p
2023: 87.0p
* This measure is considered an alternative
performance measure (APM). Please refer
to page 43 for more detail on APMs
1. A reconciliation between underlying profit
before tax and profit before tax is shown
on page 42
2. Underlying profit after tax as a percentage
of underlying quarterly average equity
at each quarter end
3. This highlight excludes IW&I
Strategic highlights
Stakeholder highlights
NUMBER OF
INVESTMENT MANAGERS
678
2023: 681
NUMBER OF
FINANCIAL PLANNERS
122
2023: 117
CLIENT NET
PROMOTER SCORE3
56%
2023: 43%3
EMPLOYEE SHARE
OWNERSHIP
7.9%
2023: 6.3%
TOTAL FUNDS UNDER
MANAGEMENT AND
ADMINISTRATION (FUMA)
£109.2bn
2023: 105.3bn
STEWARDSHIP
ENGAGEMENTS
WITH COMPANIES3
743
2023: 7523
HIGHLIGHTS OF 2024
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
FUTURE FOCUSED
The client consent process
is now largely complete such
that we expect to migrate
onto a single operating
platform by the end of
the first half of 2025.
CONSOLIDATING OUR CLIENT BASE
Our clients’ interests are a key consideration
in everything we do. In 2024, we worked
hard to ensure a smooth transition for our
clients from IW&I to Rathbones Investment
Management. This process continues in 2025.
We are delighted to see an increase in the
number of clients using MyRathbones (up to
61.1% from 58%) to access information on their
investments and advice.
Read more: See page 11
FOCUSED ON
DELIVERING
for our clients
STRATEGIC
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FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
04
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
Our property and facilities
teams have worked diligently
to align our office spaces
with the needs of our teams.
These changes support our
efforts to fostering a more
connected and productive
workplace for everyone.
SIMPLIFYING OUR
PROPERTY FOOTPRINT
Our property and facilities teams spent
considerable time reviewing our current office
locations to ensure they meet the needs of our
teams. As a result, we identified opportunities
to bring colleagues together at eight locations
where we previously had overlapping sites.
Teams in Birmingham, Bristol, Cheltenham,
Edinburgh, Exeter, Glasgow, Liverpool, and
London were co-located to create shared
workspaces that encourage collaboration and
teamwork. Following these changes, we are now
based in 23 locations across the UK and Channel
Islands, with workspaces designed to foster a
connected and productive work environment.
Read more: See page 95
FOCUSED ON
BUILDING
a robust
network
FUTURE FOCUSED
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
05
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
FUTURE FOCUSED
FOCUSED ON
CREATING
an inclusive
culture
CREATING AN INCLUSIVE CULTURE
Rathbones emphasises fostering a culture that
drives performance and develops rewarding
careers, grounded in shared values and a
commitment to diversity, equality, and inclusion
(DE&I). In 2024, we undertook work to review
our culture. Through workshops, surveys and
executive interviews, we gained an insight into
what our people feel is important as we shape
our future culture. This work aligns with the
review of our purpose, and we look forward
to sharing more in 2025.
Read more: See page 17
A positive culture is the heartbeat
of our organisation, and in 2024,
we took meaningful steps to
strengthen it.
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
06
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
INVESTMENT CASE
A growing business with rewarding characteristics for investors
Rathbones specialises in the UK wealth market which benefits from embedded structural growth,
underpinned by strong long-term trends that support the demand for our services.
1
Relationship-led
business model
2
Trusted brand
operating
at scale
3
Leveraging
an in‑house
asset manager
4
Investing in
marketing and
distribution
5
Operating
responsibly
6
Accelerating
growth with
acquisitions
7
Robust
financials
8
A banking
licence
Established
and trusted client
relationships that
secure flows for
the long-term.
Tailored propositions
that offer choice
and flexibility to
clients and advisors.
A well-established
and independent
UK wealth brand
in the FTSE 250.
The scale to invest in
service improvement
and technology.
Multi-asset and single
strategy investment
capability.
A useful earnings
diversifier as Asset
Management is
subject to different
revenue/cost drivers
than Wealth
Management.
Stronger marketing
and distribution
through both direct
and indirect channels.
Active product
development to meet
the ever-changing
needs of clients
and advisors.
Constructive
relationships
with regulators.
A commitment to
generating long-term
value that benefits
society.
Inorganic
opportunities that
strengthen our
proposition and
accelerate growth.
A stable revenue
margin and recurring
income stream.
Margin enhancement
with scale.
Highly cash
generative.
Future capital
optimisation potential
and a progressive
dividend policy that
has been in place for
more than 25 years.
Ability to offer clients
a range of banking
services including
loans secured against
portfolios and fixed
interest term deposits.
A diversified
revenue stream.
Read more:
See page 18
Read more:
See page 2
Read more:
See page 49
Read more:
See page 19
Read more:
See page 69
Read more:
See page 14
Read more:
See page 135
Read more:
See page 2
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
07
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
08
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
CLIVE C R BANNISTER
CHAIR
Find out more about
our stakeholder activities
The Groupʼs clients are at the
heart of our strategy and their
interests are a key consideration
in everything that we do.
Read more: See page 26
The role of the Board in
providing effective leadership
to promote the long-term
success of the firm.
Read more: See page 92
Understanding the views of our
shareholders is essential to us
delivering long-term sustainable
financial returns.
Read more: See page 30
Understanding the views and
interests of our stakeholders
helps the Group to make
better decisions.
Read more: See page 24
DEAR SHAREHOLDER
In 2023, we announced our combination
with IW&I. Throughout 2024, we have made
significant strides to integrate the two
businesses to further our position as the UKʼs
leading discretionary wealth manager. We have
exceeded both the strategic and financial
objectives that we set for ourselves in the
first year following the announcement. This is
testament to the hard work, commitment,
and collaboration of all of our colleagues.
CLIENTS
Our clients have always been, and will continue
to be, at the heart of our business. Their
interests remain paramount in everything we
do. This is demonstrated by our Net Promoter
Score (NPS) of 56%, above the industry average
of 54%. This score is reassuring, particularly at
a time of transition for the firm, that our client
service and experience has continued to
be strong.
Following the combination with IW&I,
we prioritised client engagement in 2024,
focusing on providing reassurance and stability.
We will strengthen these relationships
throughout 2025, as clients move on to the
Rathbones platform.
COLLEAGUES
The Board recognises the hard work and
commitment of our colleagues during this
year of change and transition. This year has
presented both challenges and opportunities
as we navigated a transformative combination,
requiring adjustments to new structures and
ways of working. On behalf of the Board, I want
to express my gratitude for their contributions
during this pivotal time.
CHAIRʼS STATEMENT
Honouring our past,
shaping our future
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
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REPORT
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09
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
Fostering a stable and equitable culture
is essential to motivate and reward our
colleagues, who are the foundation of
Rathbonesʼ success. The Boardʼs workforce
engagement programme ensures we consider
employee perspectives and strengthens the
connection with our colleagues.
The Board is committed to regularly reviewing
workforce metrics, such as engagement
survey results, retention rates, and satisfaction,
to drive continuous improvement. We will
continue to do this in 2025 and beyond.
ENGAGING WITH SHAREHOLDERS
We are committed to fostering meaningful
engagement with our shareholders. We deeply
value the open and transparent communication
that we maintain with our investors, and I am
personally grateful for the opportunity to
connect with many of you over the past year.
These conversations are vital in helping us align
our strategy with your expectations. I look
forward to continuing our productive dialogue
in the future.
SHAREHOLDER RETURNS
AND DIVIDENDS
Rathbones is focused on driving long-term
shareholder value. We therefore reaffirm our
progressive dividend policy, which has been
in place for more than 25 years and has never
seen a reduction in the dividend.
In July, we announced an interim dividend of
30p. Given the strength of our balance sheet
and our confidence in the long-term future of
the business, the Board has recommended a
final dividend of 63p per share. This brings the
total dividend for the year to 93.0p per share
(2023: 87.0p), representing a 6.9% increase
compared to 2023.
The final dividend is scheduled to be paid on
13 May 2025, subject to shareholder approval
at our Annual General Meeting (AGM) on 8 May
2025, to shareholders on the register as of
11 April 2025.
GOVERNANCE AND CULTURE
The Board places a strong emphasis on good
governance, as a cornerstone of long-term
enterprise success. We are committed to high
standards of transparency, accountability,
and ethical conduct at every level of the
organisation. This is supported by a robust
governance framework. We conduct regular
reviews of our governance processes, including
independent risk assessments, to ensure
effective oversight.
We recognise that good governance goes
beyond mere compliance. It is about creating
a positive and inclusive culture that aligns with
our values and strategic objectives. We strive
to build an environment where employees feel
empowered to share their diverse perspectives
and expertise. This culture not only allows for
personal growth, but also contributes to the
long-term sustainability of our business.
The Board views leadership as a key enabler
of this culture and seeks to set the tone
throughout the organisation. In line with this,
the Board uses a culture dashboard to evaluate
progress and impact. As our purpose and values
work for the enlarged Group is completed, the
dashboard will be updated.
This year, in line with the UK Corporate
Governance Code, the Board appointed an
external evaluator to review its effectiveness
and performance. The overall findings and tone
of the report was positive and indicated that the
Board and its committees continued to operate
effectively. The Board will work to consider
opportunities for incremental improvements
during the year ahead. Further information
on both the culture dashboard and the
independent Board effectiveness review can be
found in the full Corporate Governance Report.
BOARD COMPOSITION AND SUCCESSION
Following significant changes in 2023, the
composition of the Board has remained stable
in 2024.
Sarah Gentleman, Senior Independent Director,
has exceeded her nine-year tenure on the Board.
The Nomination Committee has agreed to
extend her tenure in order to ensure continuity
on the Board following the combination with
IW&I. Succession planning is always a priority,
and we will consider non-executive director
succession during 2025.
The Board has aligned its diversity policy for
appointments with the new targets outlined in
the Listing Rules and is proud to have met these
objectives. As of the end of 2024, our Board
comprises four female directors out of nine,
exceeding the FTSE 350 commitment for
female Board representation set by the FTSE
Women Leaders Initiative. We also continue to
meet the requirements of the Parker Review,
with at least one director from an ethnic
minority background.
LOOKING AHEAD
The integration of IW&I is progressing well.
We are excited to build on the momentum of
2024 as we operate as a unified and cohesive
business. Concluding the integration in 2025
will mark a pivotal moment in our journey.
We remain confident that it will support growth
and enhance the propositions and investment
output we can deliver to our clients in 2025
and beyond.
On behalf of the Board, I would like to
express our sincere gratitude to our clients,
shareholders, colleagues, and wider
stakeholders for your support and commitment
during this transformative year. Your continued
trust and engagement are invaluable and will
remain so, as we navigate Rathbonesʼ next
exciting phase of growth. We look forward to
achieving even greater milestones in Rathbonesʼ
illustrious 283 year history.
CLIVE C R BANNISTER
CHAIR
25 February 2025
CHAIRʼS STATEMENT
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
10
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
PAUL STOCKTON
GROUP CHIEF
EXECUTIVE OFFICER
Find out more on our activities
and strategic progress
OUR STRATEGY
Our strategy sets our four
key strategic objectives.
Read more: See page 19
OUR MARKET
Helping clients manage their
finances in a changing world.
Read more: See page 14
OUR INVESTMENT CASE
A growing business with rewarding
characteristics for investors.
Read more: See page 07
OUR PRINCIPAL RISKS
Our approach to risk
management is fundamental
to supporting the delivery
of our strategic objectives.
Read more: See page 63
2024 IN REVIEW
2024 has been a very exciting year for
the Group as we began in earnest to bring
Rathbones and IW&I together as one combined
business committed to helping our clients
achieve their longer-term financial goals. In an
eventful year, we attracted record gross inflows
by leveraging our enlarged platform and
exceeded the 2024 synergy targets we set out
for the IW&I combination.
This year heralded an improvement in investor
sentiment after what was a challenging two
years for multi-asset investing. Asset values
rebounded as interest rates began to fall, and
stronger economic fundamentals bedded in,
creating conditions that benefited our results.
The UK Budget at the end of October prompted
a short-term increase in withdrawals of funds by
existing clients, but it also proved to be a catalyst
that created a welcome number of client
investment enquiries and advisory discussions.
Throughout the year, we have continued
to improve our services and investment
processes, taking advantage of the best that
the Rathbones and IW&I teams have to offer.
The combination creates some significant
future growth opportunities and provides a
pathway to greater innovation as ideas are
shared and acted upon. I am grateful for the
efforts of all teams around the Group who have
helped us start 2025 in such a strong position.
GROUP CHIEF EXECUTIVE OFFICERʼS REVIEW
Harnessing our
combined strengths
to drive growth
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
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REPORT
FURTHER
INFORMATION
11
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
PERFORMANCE AND FLOWS
Funds under management and administration
(FUMA) managed by Rathbones Group
grew 3.7% in the year to £109.2 billion at 31
December 2024, despite the considerable
agenda of internal change being undertaken
in the Group following the IW&I combination.
Gross inflows across the combined Group
were strong at £12.1 billion (2023: £7.7 billion),
representing 11.5% of opening FUMA. Gross
inflows in Rathbones discretionary and
managed propositions were £6.3 billion (2023:
£5.1 billion), and gross inflows in IW&I were
resilient at £4.0 billion, taking account of the
considerable time spent by client facing teams
to manage an extensive client consent process.
Gross outflows of £13.5 billion (2023: £8.5
billion) were elevated by accounts that we
exited following the completion of the
migration of former Saunderson House FUMA
in July and outflows linked to a limited number
of investment manager departures in the
IW&I business that occurred prior to the
announcement of the combination. After both
transactions, investment manager and financial
planner attrition has remained low. We also saw
a short-term impact of elevated outflows
around the UK Budget as more clients looked to
redistribute wealth, crystallise capital gains or
access their pension wealth.
Flows in single strategy funds continue to
reflect the challenging market environment
for active asset managers with net outflows
of £0.6 billion in the year (2023: net outflows
of £0.5 billion), in spite of the delivery of first or
second quartile performance over one and five
years in our two largest funds, Rathbone Global
Opportunities and Rathbone Ethical Bond.
Market and investment performance added
£5.3 billion (2023: £5.1 billion) to Group FUMA
in the year, recognising that many benchmarks
were difficult to beat. The IW&I combination
has presented us a unique opportunity to
bring together and strengthen our research
capability and we are continuing to improve
our investment process by enhancing
portfolio analysis tools and portfolio
construction resources. Further information
on performance and flows can be found in
the Group Chief Financial Officerʼs Review.
INTEGRATION UPDATE
The combination of Rathbones and IW&I has
made significant progress in 2024. The client
consent process is now largely complete such
that we expect to migrate almost all of the
c.55,000 IW&I clients by the end of H1. To
date, 0.3% of clients have declined to migrate
to Rathbones, and we expect a small proportion
of relationships to leave the Group where we
are unable to provide a suitable proposition. We
continue to place a high priority on maintaining
client service levels and look forward to
welcoming clients fully onto the Rathbones
platform in the coming months. At the heart of
our approach has been a focus on maintaining
service levels throughout the process.
We have delivered cost and revenue synergies
well ahead of our first year £15 million target,
with run-rate synergy realisation of £30.1
million at the end of 2024. This was largely due
to organisational changes and our property
consolidation programme being secured ahead
of the planned timeframe.
During the year, we consolidated all offices
where we had a dual presence – Birmingham,
Cheltenham, Exeter, Glasgow, Edinburgh,
London, Bristol and Liverpool – and have
successfully completed the consolidation
of our property footprint that now operates
in all main UK wealth centres.
Completion of the client migration in the first
half of this year is the next main milestone for
synergy delivery, enabling at least 70% of the
total £60 million to be realised on a cumulative
run-rate basis towards the end of 2025. We
remain confident in our ability to achieve all
remaining synergies by the end of 2026. At the
time of the combination, we expected the deal
to be accretive to underlying EPS in the first full
year following the completion. This has been
achieved with underlying EPS of 161.6p in 2024
(2023: 135.8p).
Combinations inevitably create change, and this
has been well supported by our colleagues,
harnessing the considerable talent across the
Group. We have completed nearly all key
leadership appointments and announced the
majority of organisational design changes
necessary to establish our future operating
model, with the remainder set to complete this
year. We continue to prioritise business stability
and the retention of key talent by providing
clear communication, addressing concerns, and
fostering an environment where our colleagues
feel supported during this period of change.
Operationally, the focus has been on aligning
systems, processes, and client service models to
ensure that we provide clients and advisors with
a seamless experience while preserving the best
elements of both firmsʼ cultures. The enlarged
Group has enhanced its investment and advice
capabilities and will look to leverage this in
2025, marking the end of a multi-year journey
that has significantly strengthened our financial
planning capabilities.
I am excited about the opportunities ahead
for our expanded Group as we embed our
combined infrastructure and look to build
upon it.
FOCUSING ON GROWTH AND THE
CLIENT/ADVISOR PROPOSITION
AND EXPERIENCE
Although much of our recent focus has been on
ensuring that the benefits of the combination
are realised, we have also taken some significant
steps toward improving organic growth rates.
We continue to believe that relationship-led
services are the best way to secure high quality,
resilient future revenues, so alongside our
pursuit of efficiencies to optimise delivery costs
and enhancements to our investment process,
we are working to:
• Strengthen our marketing and distribution
capability
• Deliver more advice-led conversations whilst
working flexibly to provide investment only
services to third-party advisors
• Improve client choice with services that meet
their changing demands
• Leverage our extensive strategic partner
relationships
• Continue to grow Rathbones Asset
Management (RAM).
In September, we announced the appointment
of a new Chief Client Officer role. A key aspect
of this role will be to leverage our combined
marketing expertise and strengthen our brand
presence. The newly formed Client Office will
ensure that Rathbones stands out more
in a competitive market, building both digital
and face-to-face lead generation, as well as
improving the client experience by working
with teams across the business to orchestrate
further improvements to our already strong
service reputation.
GROUP CHIEF EXECUTIVE OFFICERʼS REVIEW
STRATEGIC
REPORT
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
The team will also focus on key target markets
within the Private Client, Charity, and
Independent Financial Advisor (IFA) sectors
through more targeted, data-driven client
prospecting. This approach will involve greater
collaboration across our teams and support
sustained future organic growth.
Over the past year, we have restructured our
Group Distribution team under our Chief
Distribution Officer with a goal to develop a
strong, client-centric distribution strategy, that
not only boosts our market presence but also
fosters enduring relationships with clients. We
have implemented a cohesive approach across
the Group, establishing a channel-led, go-to-
market strategy across Wealth Management,
Strategic Partnerships, Asset Management and
Charities. This segmentation will be robustly
supported by dedicated sales teams and
improved sales enablement resources and
advisor journeys.
We recognise that clients and advisors have
many different preferences as to how to work
with us and we are responding to this by being
able to offer the mix of investment products
and financial advice services that best meets
their needs. Recent transactions have created
a team of 122 financial planners that are
dedicated to meeting the increasingly complex
planning needs of our clients but we also
have 678 dedicated investment managers.
The combination gives us the opportunity to
blend these capabilities much more effectively
to increase the number of wealth-led
conversations we have with clients. We can
now allow employees to specialise in either
discipline, form larger combined teams, and
benefit from training that expands their
qualifications to deepen client and advisor
relationships.
We understand the necessity to adapt our
current offerings in the IFA market to address
the increasing demand for high-quality
service at a lower cost, amid ongoing sector
consolidation. Our multi-asset funds provide
CPI targeted solutions both directly and as part
of our managed service, through investment
platforms and financial advisors, but will also
support the launch of an upgraded Managed
Portfolio Service (MPS) for IFAs in 2025,
subject to regulatory approval.
We also intend to offer a competitive
decumulation offering in 2025, as well as a new
fund-based Charity Authorised Investment
Fund (CAIF) solution, specifically designed for
Charities. Additionally, we are seeking to
establish an office in Dublin to offer investment
solutions through third-party advisors in the
EU markets, subject to regulatory approval.
Alongside our in-house financial planning team,
Vision Independent Financial Planning (Vision)
continues to play an integral role in our advice
proposition, with 142 planners on the network.
We value the strong relationship with Vision and
continue to leverage it as a key driver of flows.
In 2025, Vision will continue to recruit new
IFAs to its network and Rathbones will continue
to dedicate specialist sales and bespoke
relationship management capability to support
the network.
We continue to build referrals through our
strategic partnership with Investec Bank and
have seen an encouraging amount of new
business coming through this channel as we
develop this relationship. We remain excited
about the prospect of building our dedicated
service team to increase business development
activity and foster new and important client
relationships.
Having a respected asset manager in-house
provides us with a distinct advantage, and RAM,
with £15.8 billion in FUM, continues to grow and
be highly regarded. The long-standing tenure
of our fund managers has contributed to the
growth and success of RAM over the years,
with seven fund managers each having more
than 18 years of experience with Rathbones.
RAM remains an important part of the Group
as we look to leverage recent investment in
distribution and systems to broaden our fund
range and extend its institutional reach.
EMBRACING TECHNOLOGY
Our combination with IW&I has presented
a number of opportunities to refine how
we deploy applications into Rathbones, as we
invest in our technology infrastructure.
The combination of our ʻbest of bothʼ chosen
technology solutions, coupled with our people,
allows us to differentiate and deliver improved
client services. Development of client-facing
technology in our business has been well
received by clients, with a digital satisfaction
score of 8.3/10 in the most recent Alpha FMC
survey, compared to an industry benchmark
of 8.0.
In addition to launching the InvestCloud
Client Lifecycle Management (CLM) system
earlier this year, we also deployed common
financial planning, intermediated distribution,
and marketing software systems across
the combined Group. We will continue
to launch tactical enhancements to CLM
throughout 2025.
During the second half of 2024, we migrated
Rathbones custody, settlement and investment
systems into the Cloud. This was a major
undertaking but has made our core books of
record and portfolio management solutions
more resilient and future proof, ready for the
upcoming migration of IW&I clients onto
the platform.
In addition, we are now receiving technology
services from Investec Bank via an outsourced
service agreement, enabling us to leverage
improved capabilities in a scalable delivery
model. This sits alongside further development
of data and analytics capabilities, to support
decision-making and drive greater insight.
Embracing technology alongside our people will
support the achievement of our strategic goals.
Technology and application development will
continue to progress in 2025 as part of our
normal change and development agenda.
Ongoing investment will include the selected
application of AI, robotic processing and data
management tools to improve efficiency and
client service.
GROUP CHIEF EXECUTIVE OFFICERʼS REVIEW
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
OUR PEOPLE
We must recognise the hard work and
commitment of our colleagues during this
significant period of change and transition
for the business. This year has brought both
challenges and opportunities as we have
navigated a transformative combination,
requiring us to adapt to new structures,
systems, and ways of working.
After completing an extensive consultation
process, we are now in a strong position to
embed new organisational designs across
the business that support both growth and
efficiency. The professionalism shown by our
teams in embracing these changes and
contributing to the successful integration of
both businesses has been truly remarkable.
We have made great strides in supporting the
well-being of our colleagues, enhancing our
family-friendly policies, expanding diversity,
equality and inclusion (DE&I) initiatives, aligning
benefits across the Group (including offering
Rathbones share schemes to IW&I colleagues
as part of their overall remuneration),
and improving overall employee support.
Further details can be found in our Responsible
Business Report.
I understand that this transition has asked a
great deal of everyone, and I, along with the
entire leadership team would like to express
our gratitude for everything our colleagues
have contributed during this pivotal time.
RESPONSIBLE BUSINESS
Considering our increased size following the
combination, we continue to respond to
heightened expectations from our stakeholders.
As a larger Group, we reaffirm our commitment
to generating long-term value, benefiting
society and actively mitigating any adverse
impacts our activities may have on the
environment and our communities. In 2024,
we have worked to update our approach to
responsible business and we will share our
updated framework in our 2024 reports over
the coming months. The combination has
enabled us to undertake some exciting
initiatives that support the delivery of our
future ambition.
RISK MANAGEMENT AND REGULATION
Our risk management framework and risk
processes are well established and have further
matured during 2024, through the embedding
of risk software where we collate and analyse
our risks. Our risk landscape throughout the
year reflected external economic and political
factors, as well as internal strategic changes
relating to our digital transformation and the
integration with IW&I. Conflicts overseas and
the election outcomes in the UK and US have
been monitored closely by our investment
teams. We continue to embed our approach
towards Consumer Duty, and the principles of
fairness and transparency have underpinned
our approach to the integration of IW&I.
From an internal perspective, change risk has
been monitored carefully in 2024, particularly
as people and process risks have come to the
fore in the latter half of the year as integration
activities gathered momentum. These risks
will remain in 2025 and our focus will be
unrelenting in order to ensure that clients can
continue to be reassured by our ongoing strong
oversight of controls and processes.
As we mentioned in our interim update,
pension risk exposure has reduced as a result
of action taken by the pension scheme trustees
to complete a full buy-in process, thereby
insuring away all future liabilities of our defined
benefit schemes.
OUTLOOK FOR 2025
Rathbones remains well-equipped to navigate
the challenges associated with industry change
and the potential impacts of geopolitical
instability on investment markets. Alongside
initiatives to enhance our services to clients
and improve organic growth rates, our priorities
for 2025 include completing the migration of
IW&I clients and fully integrating our businesses
onto one platform.
We are making good progress towards
delivering an underlying operating margin
of 30%, and notwithstanding the additional
headwinds that have arisen since we set out
this target (including ongoing inflationary
pressures and the estimated additional annual
cost of £7 million of National Insurance
Contributions from April 2025), we continue to
work towards the delivery of this on a run-rate
basis from three years following completion
of the IW&I transaction (September 2026).
Further detail on our path to achieving this
can be found in the Group Chief Financial
Officerʼs Review.
I would like to thank all colleagues and
stakeholders for their continued commitment
and support throughout what has been a
transformative year. We look forward to
further building a sustainable and profitable
business together in the years to come.
PAUL STOCKTON
GROUP CHIEF EXECUTIVE OFFICER
25 February 2025
GROUP CHIEF EXECUTIVE OFFICERʼS REVIEW
THE OPPORTUNITY IN
THE UK WEALTH SECTOR
We continue to respond to market
trends that are changing the world we
live in, ensuring we remain vigilant and
respond to client needs and capture
potential growth opportunities.
£2.9tn
Estimated UK
household financial
wealth in 20291
£2.4tn
Estimated UK
household financial
wealth in 20241
£109.2bn
Market captured
by Rathbones today
1. Eden McCallum estimates
OUR EXTERNAL MARKETS
Helping clients manage their finances in a changing world
UK AND GLOBAL ECONOMY
The UK and global economies are currently navigating a period of
uncertainty, shaped by factors such as geopolitical tensions, inflationary
pressures, and fluctuating market conditions. These macroeconomic
challenges have put a strain on investor confidence, leading to increased
demand for wealth management services that offer stability and strategic
guidance. As the UK wealth management sector adapts to these changes,
there are significant opportunities to cater to an evolving client base.
REGULATORY CHANGES IMPACTING INVESTOR SENTIMENT
The industry has seen significant regulatory change over the last decade,
with a particular current focus on client outcomes, demonstrated by the
implementation of the Consumer Duty in 2023. We expect regulatory
change to remain a key industry driver going forward.
CONSOLIDATION WITHIN THE UK WEALTH INDUSTRY
The UK wealth management industry is attractive and underpinned
by strong structural growth, recurring revenues, and high customer
retention rates. However, the industry remains fragmented with high
barriers to entry and as such, the benefits of scale remain an attractive
driver for consolidation.
UK GOVERNMENT POLICY IMPACT ON RETIREMENT PLANNING
Changes to the state pension age and pension freedoms, along with shifts
in tax policies related to inheritance and capital gains tax increase the
demand for wealth managers who can provide guidance on managing
retirement funds and tax-efficient strategies. Evolving government policies
present wealth managers a growing client base and the chance to deliver
tailored advice in a changing political, regulatory and financial landscape.
EXPECTATION OF INCREASED INTER-GENERATIONAL WEALTH TRANSFER
Intergenerational wealth transfer will create more opportunities for
wealth managers, as families look to pass on assets efficiently and
minimise tax liabilities. Wealth managers will be essential in providing
advice on inheritance planning, helping clients navigate the complexities
of passing wealth across generations.
CLIENT DEMAND FOR DIGITAL INNOVATION
Clients are becoming increasingly accustomed to using technology to
communicate and manage their financial affairs. Keeping pace with this
change is fundamental to remaining competitive and sustaining a quality
service, particularly as inter-generational wealth transfers accelerate.
GROWING DEMAND FOR RESPONSIBLE BUSINESS PRACTICES
AND OFFERINGS
The role of the wealth management industry in managing environmental,
social and corporate governance issues continues to be important
as clients are becoming increasingly concerned by the impacts of
financial decisions.
MACRO TRENDS
SECTOR SPECIFIC TRENDS
Key trends
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
OUR EXTERNAL MARKETS
How we are responding
We continually monitor and remain
vigilant to the changing market landscape
that can impact our business and the
world we live in, ensuring we keep up
with the pace of change so that we can
continue to provide a quality service
for our clients, advisors and other
stakeholders.
We continue to reinforce the wealth
management model and whole-of-wealth
approach to facilitate the differing needs of
clients through their life events, whether that
be through investment management, financial
planning, or simpler more cost-effective
solutions. We also know that intergenerational
wealth transfer will be one of the biggest events
in our industry in the years to come and aim to
ensure we are best placed to facilitate both this
transfer and the decumulation stages of wealth
for clients as they reach certain stages in life.
Developing an investment approach that is
tailored to these differing client needs will
be a key focus area as the industry and
environment evolves.
We believe in the face-to-face model, but
continue to augment it with digital support to
ensure clients can interact with us in whatever
way works best for them.
We continue to have an open dialogue with
the regulator and are focused on maintaining
best practice as we move through the IW&I
integration process.
Our focus on our clients is clear, enabling us
to further build lifelong relationships and
reinforce our status as their trusted partner
to support them through any future
market changes.
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
OUR PURPOSE DRIVEN APPROACH
Our stakeholders
Clients
Society and communities
Our people
Partners and regulators
Shareholders
Our strategic priorities
Enriching the client
and advisor proposition
and experience
Inspiring
our people
Supporting and
delivering growth
Operating
more efficiently
1
2
3
4
We are driven by our purpose to think,
act and invest for everyone’s tomorrow
This is delivered
by our people
OUR CULTURE AND VALUES
The way we do business is shaped
by our culture and values.
Read more: See page 17
OUR BUSINESS MODEL
We create long lasting, personal
relationships with our clients and
advisors enabling us to deliver a
service that is distinctly Rathbones.
Read more: See page 18
We measure success through
the progress we make against
our strategic priorities
OUR STRATEGIC PRIORITIES
Our strategy is centred around our key
stakeholders – creating value for our customers,
advisors and people – whilst also targeting growth
and operational efficiency across the business.
This is underpinned by the commitments we have
made in our responsible business framework.
1
2
3
4
Read more: See page 19
OUR KEY PERFORMANCE INDICATORS
We use financial and non-financial metrics to
monitor our progress, which in turn determines
our executive remuneration outcomes.
Read more: See page 33
And the sustainable value
we create for our stakeholders
OUR S172 STATEMENT
Balancing the needs of our key
stakeholders is incorporated into
our decision-making processes.
Read more: See page 24
CREATING VALUE
FOR OUR STAKEHOLDERS
Understanding and responding to the
changing needs of our stakeholders
is critical in delivering our purpose.
Read more: See page 25
OUR RESPONSIBLE
BUSINESS FRAMEWORK
We are committed to making a wider
contribution to society through our
responsible business framework.
Read more: See page 69
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
OUR CULTURE AND VALUES
THE ROLE OF THE BOARD
The Board fully understands and accepts its
role in setting the ‘tone from the top’, and in
ensuring our culture and values are lived across
the organisation day-to-day. This is always at
the front of our minds, and especially so as
we continue to integrate our business with IW&I.
OUR CULTURE FRAMEWORK
We have a clear framework for defining,
embedding and monitoring our culture.
Across 2024, it continued to be based on our
values and how we interact with and meet
our responsibilities to our stakeholders and
align with the section 172 obligations. We are
currently refreshing our values and will update
our culture dashboard, in 2025, accordingly.
MONITORING CULTURE
The Board makes it a priority to monitor and
ensure that our culture and values are lived,
and embedded throughout our actions,
decisions, strategy and business model.
Across 2024, the Board:
— commissioned, and reviewed the
outcomes of, an independent culture review,
to identify our strengths and opportunities
for development
— reviewed and discussed our culture
dashboard, which provides insights for
assessing what we do (i.e. delivering against
our purpose and strategy) and how we do it
(i.e. engaging with our stakeholders in line
with our values). Many of our culture
dashboard metrics can be found throughout
this report. The dashboard will be reviewed
and updated in 2025
— digested feedback from employees across
the Group via opinion surveys, townhalls,
and through office visits as part of our
workforce engagement programme
— updates on activities across the Group in
relation to culture and values, including
employee training programmes
— ensured culture, behaviour and conduct
issues are considered by the remuneration
committee as part of assessing
executive reward
— oversaw the inclusion of a section in our
interim and year-end performance appraisals
for colleagues to reflect on how they have
demonstrated our values across the year
— reviewed the Group’s whistleblowing
arrangements
— encouraged employees to participate
in schemes to promote share ownership
(i.e. the Group’s Save As You Earn (SAYE)
and Share Incentive Plan (SIP) schemes,
which provide cost-effective opportunities
for employees to acquire shares in
the company).
The activities have allowed the Board to
monitor the Group’s culture effectively during
the year and to ensure that culture continues
to be aligned with the Group’s purpose, values
and strategy.
Read more in our corporate
governance report on page 91
The importance
of culture
A positive culture is the heartbeat of our
organisation, driving our success and
impact. It underpins our business model,
purpose, strategy and values, and leads
to better performance and positive
outcomes for clients, shareholders,
and communities. It defines how we
support and connect with each other,
and all our stakeholders, and shapes
our daily interactions, collaboration,
and the care we give and receive.
Our values
BEING RESPONSIBLE
SHOWING COURAGE
WORKING TOGETHER
ALWAYS PROFESSIONAL
Read more: Our purpose
Reviewing our culture
TruthWorks spent four months
immersing themselves in the cultures of
Rathbones and IW&I, seeking the truth
about each culture, and focusing forward
to the future.
Engagement included facilitated
workshops, focus groups, surveys and
Group Executive Committee and
management interviews.
What emerged from this research stage
was clear views which have been used
to shape our culture going forward.
Identifying the strengths and opportunities
across each business, has informed the
programme of work to be delivered
through the Chief Client Office and
through our People and Culture plans,
with the intended outcomes of:
— a purposeful and differentiated brand
framework that has huge equity for
colleagues and clients
— increasing (employer) brand advocacy,
loyalty and relevance; a distinctive
employer positioning that attracts
and retains the talent we want
— clearer and more consistent
decision‑making with leaders who
consistently inspire, engage and
motivate our people
— continued engagement of colleagues,
signalling a shift towards transparency
and action.
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
OUR BUSINESS MODEL
We are creating the UK’s leading discretionary wealth manager
RATHBONES
£109.2bn
FUMA
What we do for our clients
WEALTH MANAGEMENT
£93.4bn
What sets us apart
RELATIONSHIP-LED BUSINESS MODEL
that secures flows for the long-term
TRUSTED BRAND OPERATING AT SCALE
that allows us to invest in service
improvement and technology
LEVERAGING AN IN-HOUSE ASSET MANAGER
providing increased investment capabilities
INVESTING IN MARKETING AND DISTRIBUTION
through both direct and indirect channels,
developing products to meet the needs of
clients and advisors
OPERATING RESPONSIBLY
by maintaining constructive relationships
with regulators and committing to generating
long-term value that benefits society
ACCELERATING GROWTH WITH ACQUISITIONS
that strengthen our propositions
ROBUST FINANCIALS
that support a stable revenue margin,
recurring income stream, growing operating
margin and progressive dividend policy
A BANKING LICENCE
that offers clients a range of banking
services including loans secured against
portfolios and fixed interest term deposits
How we generate
value for shareholders
1
INCREASING UNDERLYING
OPERATING MARGIN
A target of delivering a
run-rate margin of 30%
from September 2026
2
ROBUST REVENUE MARGIN
A resilient revenue margin
and Investment Management
fee income stream that makes
up over 70% of revenue
3
PROGRESSIVE DIVIDEND POLICY
A progressive dividend policy
with a dividend that has not been
reduced in more than 25 years
4
FURTHER DIVERSIFIED
AND GROWING INCOME
STREAMS IN THE FORM OF:
— Fund income from the
Asset Management business
— Advisory income
— Interest income through
our banking licence.
Investment
Management
With a dedicated
investment manager:
— Bespoke portfolio services
— Managed fund solutions investing
in multi‑asset portfolios
Without a dedicated
investment manager:
— Cost-effective solutions investing
in multi‑asset portfolios without
a dedicated investment manager
Financial planning
and advice
— One-off advice
— Initial advice and planning
— Ongoing advice and planning
— Tax, Trust and Legal services
ASSET MANAGEMENT
£15.8bn
— Actively managed
single‑strategy funds
— Actively managed
multi‑asset funds
Our approach to stakeholder
engagement: See page 24
Investment case: See page 07
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
We launched our medium-term strategy for the business
in October 2019, to support our purpose of thinking,
acting and investing for everyone’s tomorrow. Our four
strategic priorities are set out here.
1
ENRICHING THE
CLIENT AND ADVISOR
PROPOSITION AND
EXPERIENCE
Enhancing valued services
Deepening investment skills
Read more: See page 20
2
SUPPORTING
AND DELIVERING
GROWTH
Penetrating specialist markets
Driving organic growth
Read more: See page 21
3
INSPIRING
OUR PEOPLE
Our culture and
corporate values
Read more: See page 22
4
OPERATING
MORE EFFICIENTLY
Driving productivity
Read more: See page 23
OUR STRATEGIC PRIORITIES
OVERVIEW
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
OUR STRATEGIC PRIORITIES
ENRICHING THE CLIENT
AND ADVISOR PROPOSITION
AND EXPERIENCE
STRATEGIC FOCUS
Enhancing valued services – enhancing the
experience for private clients and providing
a dedicated service for financial advisors.
Deepening investment skills – developing our
investment expertise, broadening capability
and coverage, and incorporating ESG factors.
RELEVANT KPIS
— Number of Investment Management clients
— Client net promoter score (NPS).
Read more: See page 33
RELEVANT PRINCIPAL RISKS
— Change
— Integration
— Suitability
— Sustainability
— Investment performance
— Regulatory compliance and legal
— People
— Information security and cyber.
Read more: See page 63
2024 PROGRESS
— Engaged with clients on the move from IW&I
to Rathbones through the client consent
process which made significant progress
during the year, in preparation for the client
and asset migration in the first half of 2025
— Successfully launched first stage of
InvestCloud Client Lifecycle Management
(CLM) technology platform
— Participated in the Alpha FMC 2024 client
experience benchmark survey and had a
digital satisfaction score of 8.3/10
— Announced the appointment of a Chief Client
Officer role, to lead and develop our client
advisor proposition and experience
— Kept clients informed through the issue
of regular CEO letters and research notes
containing updates on the market and
investment propositions
— Received customer experience accolades,
including a Gold rating from STAR
(the best practice initiative of improving
customer experience in transferring funds
across platforms) for RAM for the third
consecutive year
— Continued to embed risk management
practices across the business and respond
appropriately to regulatory changes,
including Consumer Duty.
PRIORITIES FOR 2025
— Complete the IW&I client migration process
with as little disruption as possible to the
client and advisor experience
— Launch an upgraded Managed Portfolio
Service (MPS) for Independent Financial
Advisors (IFAs) and new fund-based Charity
Authorised Investment Fund (CAIF) solution
specifically designed for Charities (subject
to regulatory approval), in addition to an
enhanced decumulation offering
— Offer client facing investment staff the
opportunity to expand their qualifications
and financial planning knowledge alongside
Investment Management expertise
— Continue to respond appropriately
to regulatory changes.
1
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
OUR STRATEGIC PRIORITIES
SUPPORTING
AND DELIVERING
GROWTH
STRATEGIC FOCUS
Penetrating specialist markets − focusing on
specialisms and building on existing capabilities.
Driving organic growth − structuring
distribution, driving growth through financial
planning, building our Asset Management
business and managing client-facing capacity.
RELEVANT KPIS
— Total funds under management
and administration (FUMA)
— Investment Management net organic
growth rates
— Underlying operating margin
— Dividend per share
— Underlying earnings per share
— Underlying return on capital employed.
Read more: See page 33
RELEVANT PRINCIPAL RISKS
— Change
— Integration
— Suitability
— Sustainability
— Investment performance
— People
— Third-party supplier.
Read more: See page 63
2024 PROGRESS
— Completed the migration of Saunderson
House clients onto Rathbones’ propositions,
and now have 122 financial planners
across the business to complement
678 investment managers
— Successfully restructured our Group
Distribution team under our Chief
Distribution Officer to develop a strong,
client-centric distribution strategy that
boosts our market presence and fosters
enduring relationships with our clients
— Continued to build relationships with
third-party advisor networks, with a further
142 planners playing an integral role in our
advice proposition through Vision Independent
Financial Planning (Vision)
— Continued to build referrals through our
strategic partnership with Investec Bank and
have seen encouraging new business coming
through this channel.
PRIORITIES FOR 2025
— Improve core distribution processes
and further leverage our growing
multi‑asset capability
— Further strengthen our brand presence in
the marketplace, whilst leveraging the strong
marketing expertise in IW&I
— Improve focus on key target markets
within the private client, charity, and IFA
sectors through more targeted, data-driven
client prospecting
— Continue to grow our relationship with
Investec Bank
— Continue to recruit advisors in Vision
— Grow and leverage from Greenbank, which
continues to receive industry recognition
— Advance work to establish an office in Dublin
(subject to regulatory approval), to offer
investment solutions through third-party
advisors in the EU markets.
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
INSPIRING
OUR PEOPLE
STRATEGIC FOCUS
Our culture and corporate values − becoming
a more diverse and inclusive organisation,
continuing to listen to our people and improving
our commitments to them.
RELEVANT KPIS
— Number of investment professionals
— Number of financial planners.
Read more: See page 33
RELEVANT PRINCIPAL RISKS
— Change
— Integration
— People.
Read more: See page 63
2024 PROGRESS
— Our eight employee networks welcomed
members from across the expanded Group,
supporting broader inclusion
— We commissioned and performed an
independent culture review, involving
interviews and focus groups with Rathbones
and IW&I colleagues. Outcomes have been
fed into the work to update the Rathbones
corporate culture and values
— We are developing a new, Group-wide
purpose and values for all our people,
with inputs from clients and colleagues
across the business
— Ran another year of our non-executive
director engagement programme, led by
Iain Cummings and Dharmash Mistry, read
more on pages 28 to 29
— Delivered wellbeing events both in person
and on line, with sessions recorded and
available on our wellbeing hub
— Gathered further feedback from colleagues
through our engagement surveys, which ran
throughout the year, with a 72% response rate
— Enhanced our family-friendly policies,
expanding DE&I initiatives, aligning benefits
across the Group
— Continued to encourage employee share
ownership through our SIP and SAYE schemes
— Identified engagement leads and a champions
model to support people through integration,
with over 160 champions across our business
— Held Group-wide colleague surveys, including
both legacy Rathbones and IW&I colleagues,
with results cascaded to leaders and managers
— Completed a pension buy-in, to read more
see page 95.
PRIORITIES FOR 2025
— Finalise the integration and continue to
support our colleagues through the process
— Further embed our inclusion networks
— Launch and deliver against our People
Strategy.
OUR STRATEGIC PRIORITIES
3
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
OPERATING
MORE
EFFICIENTLY
STRATEGIC FOCUS
Driving productivity − providing a quality
client experience and making us easy to
do business with.
RELEVANT KPIS
— Underlying operating margin
— Underlying return on capital employed
— Common Equity Tier 1 ratio.
Read more: See page 33
RELEVANT PRINCIPAL RISKS
— Change
— Integration
— People
— Processing
— Third-party supplier.
Read more: See page 63
2024 PROGRESS
— Grew run-rate cost and revenue synergy
realisation to £30.1 million at the end of
2024, significantly ahead of the first-year
post-combination objective of £15 million
— Improved underlying operating margin
from 22.3% in 2023 to 25.4% in 2024
— Rationalised our real estate footprint by
consolidating all offices across the country
where we share locations with IW&I, a total
of eight offices
— Increased the number of clients using
MyRathbones to 61% in 2024 from 58%
in 2023
— Deployed consistent financial planning,
intermediated distribution and
marketing software systems across
the combined Group
— Deployed further enhancements to
the Charles River system into our Asset
Management business
— Underwent considerable organisation design
work, including outsourcing some technology
provision and cyber support to Investec Bank
— Successfully migrated Rathbones custody,
settlement and investment systems into
the Cloud
— Successfully migrated unit trusts to the
Allfunds custody platform bringing
operational efficiencies across the entire
dealing and custody lifecycle
— Deployed robotic process automation
to support key operational processes
— Reduced pension risk exposure as a result of
action taken by the pension scheme trustees
to complete the buy-in process to insure the
future liabilities of the scheme.
PRIORITIES FOR 2025
— Target of at least 70% of total synergies being
achieved on a cumulative run-rate basis
— Complete the IW&I client and asset
migration process
— Close duplicate systems across the
business post migration
— Deploy further enhancements to our
technology suite
— Further streamline our applications
to operate more seamlessly together
— Continue to develop and deploy technology,
such as the use of AI and robotic solutions,
to improve efficiency and client service.
OUR STRATEGIC PRIORITIES
4
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
OUR APPROACH TO STAKEHOLDER ENGAGEMENT
SECTION 172 STATEMENT
MAINTAINING A REPUTATION FOR HIGH
STANDARDS OF BUSINESS CONDUCT
The Board supports the Chief Executive and the
Group Executive Committee in embedding a
culture that encourages the Group’s colleagues
to live our values and help the Group deliver on
its strategic objectives and purpose. The Board
approves and oversees the Group’s adherence to
policies that promote high standards of conduct
and receives regular updates on the Group’s
culture through KPIs that form part of the
Chief Executive’s business performance update.
Our culture and values: See page 17
Corporate governance: Chair: See page 92
THE LIKELY CONSEQUENCES OF
ANY DECISION IN THE LONG TERM
The Group operates within a corporate
governance framework whereby responsibility
for day-to-day decision-making is appropriately
delegated. In considering its duty under
section 172, the Board aims to ensure that the
consideration of stakeholder interests and the
Group’s long-term success is embedded across
its business. The Board sets the strategy, culture
and values, and develops and oversees the
Group’s framework of governance, risk
management and internal controls to promote
and safeguard the Group’s long-term success.
The strategic goals and objectives it sets are
focused around developing the Group’s
proposition and service to fulfil the long-term
needs of its clients.
The identification, management and mitigation
of risks to the Group’s business is key to ensuring
the delivery of its strategy over the longer term,
and the consideration of risk plays an important
part in decision-making. The Group’s Board and
committee paper templates encourage paper
authors to consider and highlight the impact
on the Group’s stakeholders of the matters
covered. This acts as an aid to the Board in
discharging its duties and facilitating focused
debate, and is intended to provide an additional
layer of comfort that paper authors have
properly considered and taken into account
the interests of stakeholders.
Our strategic priorities: See page 19
Risk management: See page 58
ENGAGING WITH OUR
KEY STAKEHOLDERS
Our aim is to maintain an open and transparent
approach to stakeholder engagement based
on building constructive relationships with
our key stakeholders and ensure there is a
two-way dialogue.
Across the firm, there are many examples
of stakeholder engagement influencing both
day-to-day actions and strategic initiatives.
The key strategic developments set out on
pages 26 to 32 illustrate some of our significant
stakeholder considerations that informed the
Board’s decision-making during the year.
Section 172 of the Companies Act 2006
requires the directors to act in a way
they consider will promote the success
of the company for the benefit of its
stakeholders as a whole.
Read more about the Boardʼs key
decisions this year: See page 95
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
Our stakeholder framework
OUR
STAKEHOLDERS
INPUT RECEIVED FROM
OUR ENGAGEMENT
RESPONSE TO OUR ENGAGEMENT
CLIENTS
Engagement allows us to understand our
clients’ evolving priorities and requirements,
including feedback on service, technological
needs and products, enabling us to evolve
our proposition.
— Deliver bespoke and relevant products for the future
— Ensure ongoing high quality service
— Develop client centric propositions
— Support clients with intergenerational wealth management
— Communicated about our client migration programme.
OUR PEOPLE
Engagement helps us attract, retain and
develop our people – with a particular focus
on DE&I issues – helping us to create a
sustainable employee model.
— Provide an inclusive and talented workforce to service client needs
— Ensure continuing strong engagement with colleagues
— Offer a benefits package that supports our people
— Deliver relevant learning and development programmes for all employees to ensure
ongoing support.
SHAREHOLDERS
Engagement allows us to understand key
shareholder issues, informing our strategic
and investment direction.
— Ensure sustainable long-term shareholder returns through our business model
— Maintenance of our progressive dividend policy
— Provide ongoing updates on the IW&I integration and other strategic objectives.
SOCIETY AND
COMMUNITIES
Engagement allows us to understand how we
can have a positive impact on wider society
and the communities we operate within.
— Completed a review of our responsible business framework
— Maintained our levels of community investment, having updated our approach
— Engaged community partners
— Progress on our net zero programme, including work to reset our near-term targets.
PARTNERS AND
REGULATORS
Engagement with regulators provides
feedback on ongoing collaboration and
informs our regulatory preparedness.
Engagement with partners allows us to build
sustainable relationships, many of which are
long-term delivery stability for our partners,
people and allowing engagement to deliver
good value to our shareholders.
— Respond to evolving regulatory requirements and standards in order to maintain
the firm’s high standards
— Work with our supplier partners to ensure ongoing business resilience.
OUR STAKEHOLDER FRAMEWORK
The firm has identified the following key
stakeholder groups and by considering their
perspectives, insights and opinions, the Board
seeks to ensure outcomes of operational,
investment or business decisions that are
more robust and sustainable.
OUR APPROACH TO STAKEHOLDER ENGAGEMENT
STRATEGIC
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
OUR APPROACH TO STAKEHOLDER ENGAGEMENT
CLIENTS
Clients are at the heart of our
strategy and their interests are
a key consideration in everything
that we do.
OUR SURVEY RESULTS
Rathbones partnered with Alpha FMC
to conduct a client experience survey
alongside seven of our Peers in the UK
CX benchmark for 2024.
The survey covered industry key
performance indicators such as overall
satisfaction, Net Promoter Score (NPS)
and deeper dive questions across
areas like financial planning, digital,
communication and Consumer Duty.
Of those clients invited to participate we
had a 13 % response rate, from Rathbones
clients. Given the scale of communication
with IW&I clients as permission to migrate
has been sought, it was decided not to
include IW&I clients in the 2024 full
survey. A shorter pulse survey was shared
with a smaller IW&I client group.
The results found that key metrics have
improved since 2022. Rathbones ranked
near middle of the benchmark on most
instances, but encouragingly above peers
on the likelihood to recommend (coming
second on NPS with score of 56 up from
43 in 2023), digital and client support.
Looking ahead, the results point to making
marginal improvements with keener focus
on particular client segments, rather than
substantial changes. Finally, despite the
high levels of client advocacy, analysis of
clients that are detractors points to issues
with communication, engagement and
value for money for products and
services. In this respect, there is a clear
need to ensure client, Relationship
Manager and firm expectations are fully
aligned to improve overall perceptions
of Rathbones.
STRATEGIC PRIORITY
1
HOW THE BOARD ENGAGED
The Group Executive Committee and the Board
regularly receive updates on client proposition,
investment performance outcomes and
service levels.
HOW THE FIRM ENGAGED
We engaged with our clients through a variety
of different methods including:
— focus groups and targeted surveys
— participated in the @Alpha 2024 client
experience benchmark survey
— regular meetings held between investment
managers, financial planners and clients
— user experience testing of our digital solutions
and propositions
— virtual and in-person conferences held for
private clients, intermediaries and IFAs.
KEY TOPICS RAISED
— Clear communication on the impact
of the consolidation
— Practical help on how to achieve their
financial goals in challenging markets
— Frameworks and guidance to help make
the best financial decisions and ultimately
achieve good outcomes.
HOW THE FIRM RESPONDED
— Regular CEO letters and research notes
issued to clients to update them on the firm,
client migration and our investment
proposition
— Nine financial awareness courses
held virtually
— Around 20 sessions for entrepreneurs
as part of Rathbones Inspire
— Reviewing our services and distribution
to meet current and future client needs
— Continued development of our digital
offering including MyRathbones with
over 61% take up by clients
— Welcomed our Chief Client Officer
and Head of Distribution.
NET PROMOTER SCORE1,2
Client likelihood to recommend Rathbones
(-100% to 100%)
Mean
22
23
24
54
43
34
39
36
56
OVERALL SATISFACTION1,2
Overall satisfaction with Rathbones (0 to 10)
Mean
22
23
24
8.8
8.5
8.3
8.3
8.2
8.8
SATISFACTION WITH THEIR
INVESTMENT MANAGER1,2
Overall satisfaction with their primary investment
manager (0 to 10)
Mean
22
23
24
9.0
8.9
8.8
8.8
8.7
9.1
1. The Benchmark is the average score of the eight firms who
participated in the 2024 Alpha client survey. It is also the
average from historic, NMG and AON benchmark client surveys
2. Data excludes IW&I
Our strategic priorities
Enriching the client
and advisor proposition
and experience
Inspiring
our people
Supporting and
delivering growth
Operating
more efficiently
1
2
3
4
Stakeholder interests and engagement:
See page 25
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
OUR APPROACH TO STAKEHOLDER ENGAGEMENT
OUR PEOPLE
Understanding the needs of our
people is essential in developing a
workplace and culture in which they
can reach their full potential and,
in turn, ensure the long-term success
of the Group.
UNDERSTANDING HOW
OUR PEOPLE FEEL
Our colleague engagement survey is a
primary driver for understanding and
improving how our people feel about
working at Rathbones, and we encourage
all colleagues to give their anonymous
feedback so we can continue to enhance
their experience.
Our overall engagement score was
lower in 2024 than the previous year.
2024 was the first year of both IW&I and
Rathbones colleagues contributing to the
same survey and captured feelings from
across the business associated with
progressing through the integration.
The decrease in overall engagement can
be understood to have been driven by:
increased workloads required to meet
integration timelines; changes to our
organisational structures across the
organisation; and the potential of reduced
job security for some of our people as
we undertook consultation processes.
We continued to score highly in goal
setting, management support, and peer
relationships, putting us in a good position
to successfully navigate the integration
process and reaffirm our strong culture
in our combined business in 2025.
STRATEGIC PRIORITY
3
HOW THE BOARD ENGAGED
The Board gets employee feedback through
multiple channels. Our Chief People Officer
(CPO) provides regular reports on colleague skills
and readiness, succession planning, development
programmes, engagement and inclusion,
based on extensive KPIs. Feedback also comes
from our non-executive director workforce
engagement programme, led by Iain Cummings
and Dharmash Mistry. Read more about the key
themes on the next page. We also gather views
via regular colleague surveys, with detailed
results shared with the executive committee
and key issues escalated to the Board.
HOW THE FIRM ENGAGED
We engaged with our people through
the following activities:
— day-to-day interaction with our people
by our line-managers, supported by our
People Business Partners and the broader
people team
— regular colleague opinion surveys to measure
engagement, wellbeing and opinions
— ongoing and regular virtual and in-person
departmental and Group-wide townhalls to
discuss performance and the firm’s progress
on the strategic plan
— peer recognition scheme to identify
colleagues who demonstrated outstanding
behaviours and conduct aligned to our values.
KEY TOPICS RAISED
— How are we supporting our people through
the integration?
— What impact, opportunities and ways of
working should our people expect following
the combination?
— How does the firm help our colleagues
develop their careers?
— The continued importance of diversity
equality and inclusion (DE&I).
HOW THE FIRM RESPONDED
— Frequent engagement on the combination
process and integration plans to support clear
communication and regular engagement
opportunities to raise questions
— Announced new senior leadership
appointments and team structures that will
bring our teams together
— Appointed employee representatives to
support our colleagues whose roles are
impacted by the integration process
— Leading through change toolkits for
managers and colleagues, resilience toolkits
and resilience training
— Continued work to develop our recruitment
and development processes as part of our
commitment to attract, cultivate and retain
diverse talent
— Involved all leaders and teams in the
development of our new People Strategy
— Roll out of our DE&I strategy across the firm.
Our strategic priorities
Enriching the client
and advisor proposition
and experience
Inspiring
our people
Supporting and
delivering growth
Operating
more efficiently
1
2
3
4
72%
EMPLOYEE RESPONSE RATE
20232: 76%
7.3/10
OVERALL ENGAGEMENT
2024: Benchmark1 7.9
20232: 8.0 (Benchmark1: 7.9)
14
EMPLOYEE NET PROMOTER SCORE
Employee likelihood to recommend Rathbones
2024: Benchmark 26
20232: 37 (Benchmark1: 26)
6.9/10
I FEEL WELL COMMUNICATED WITH
2024: Benchmark1: 7.6
20232: 7.7 (Benchmark1: 7.6)
8.4/10
MY MANAGER CARES ABOUT ME
AS A PERSON
2024: Benchmark1 8.6
20232: 8.7 (Benchmark1: 8.6)
1. Benchmarks are set by Peakon and relate to
the broader financial service sector clients
2. 2023 data excludes IW&I
Responsible business review: See page 69
Culture and values: See page 17
Gender Pay Gap Report
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OUR APPROACH TO STAKEHOLDER ENGAGEMENT
WORKFORCE ENGAGEMENT
In light of requirements in the Corporate
Governance Code for boards to ensure
effective workforce engagement,
Iain Cummings and Dharmash Mistry
are our two designated Non-Executive
Directors responsible for gathering
employee feedback.
A workforce engagement framework
was developed using existing employee
engagement activities already in place
to provide a range of opportunities to engage
directly with employees and receive feedback.
The two-way dialogue between the Board
and employees is facilitated by a combination
of engagement methods, which would include
face-to-face meetings, office visits and
attendance at employee events. Our workforce
are an essential stakeholder of our business,
it is therefore vital that our Board members
are exposed to their concerns and ideas and
are able to consider these as they relate to
Rathbones’ culture and strategy.
In 2024, as a result of integration, for our
people there was a real mix of excitement,
challenge and hard work in supporting what
has been an almost unprecedented level of
internal and external change at Rathbones.
Our workforce engagement plan will continue
to be guided by our Board priorities for the year
and tightly aligned to our four strategic pillars,
enriching the client and advisor proposition
and experience, supporting and delivering
growth, inspiring our people, and operating
more efficiently. In addition to our current
engagement plan, we aim to encourage more
board and GEC visits to our various offices
in 2025 which will give us direct insight into
integration progress.
Our engagement structure
— Listen to the views and
feedback of employees
— Analyse the information
and take into consideration
inputs during its decision-
making process
— Communicate key
messages and actions
across the firm
— Contribute to engagement
initiatives and provide
feedback to the Board
— Collaborate with the Board
and NEDs on implementing
initiatives
— Influence new working
practices and processes
across the firm
BOARD
WORKFORCE
Our
workforce
engagement
structure
— Ensure they are identifiable
and accessible to the workforce
— Engage with segments of the
workforce on a quarterly basis
— Communicate the workforce’s
feedback and messages
to the Board
— Participate in ongoing and
regular dialogue with Group
Executive Committee on
workforce themes arising
from these initiatives
DESIGNATED
NON-EXECUTIVE
DIRECTORS
(NEDS)
MANAGEMENT
OF WORKFORCE
PROGRAMME
— Review and analyse
workforce feedback from
various initiatives
— Prepare and discuss findings
with designated NEDs and
agree recommendations
for the Board
— Support delivery of the
annual engagement
programme
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I felt that we were all given the opportunity
to answer NEDʼs questions and add to
comments that other participants made.
We were all respectful, listened to each other.
Thank you to Iain and Dharmash for their
time and engaging with us. Some of their
comments and questions were very insightful.
I found it reassuring to hear that although
we were essentially from three different
teams who are only now coming together
as one, we all covered the same topics, and
our opinions were surprisingly similar too.
I thought coming into the session with
a blank piece of paper and having an
open and frank discussion was helpful.
I found that the small group setting was
highly effective, as it facilitated active
participation and constructive feedback
from everyone.
Strategic priorities: See pages 19 to 23
Responsible business review: See page 69
Key Board decisions: See page 95
Gender Pay Gap Report
OUR APPROACH TO STAKEHOLDER ENGAGEMENT
HOW WE ENGAGED WITH OUR WORKFORCE IN 2024
Feedback from employees
Key themes
2024 engagement
1
EMPLOYEE ENGAGEMENT SURVEY
(FACILITATED EXTERNALLY)
1
BOARD VISIT
8
NED DROP-IN SESSIONS
ACROSS VARIOUS OFFICES
16
CEO MEETINGS WITH
FRONT OFFICE TEAMS
(INCLUDING OFFICE VISITS)
4
GROUP TOWNHALLS HELD
13
CLIENT-FACING
TOWNHALLS HELD
23
VARIOUS FUNCTIONS
TOWNHALLS
INTEGRATION
The combination of two businesses was
understandably an unsettling period for
our colleagues. It was clear from these
conversations that the workstreams
around integration were as important
for our colleagues as it was for the GEC
and Board.
While it was initially difficult to get the
right balance on internal communications
regarding integration, this has been
something we have been actively trying
to improve over time.
STRATEGY
Colleagues were keen to understand
how the combination would impact
Rathbones’ strategy going forward.
It is promising to see this level of interest
as we believe it will facilitate the successful
implantation of our long-term strategy.
We host regular townhalls during
which Group, and business specific
strategy is discussed by the executive
management team.
CULTURE
It was clear that maintaining the
Rathbones culture during a period of
change was important for colleagues.
We have always been proud of the culture
we have fostered over the years and this is
reflected in how we consider stakeholder
impact in all decision making.
DIVERSITY, EQUALITY & INCLUSION
It was appreciated that the company
takes employee views seriously, though
there was call for increased focus on DE&I
initiatives and this has been brought to
the Board’s attention.
The Board receives updates on progress
against our DE&I strategy and targets and
will continue to engage with this topic.
STRATEGIC
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OUR APPROACH TO STAKEHOLDER ENGAGEMENT
SHAREHOLDERS
Understanding the views of our
shareholders is essential to us
delivering long-term sustainable
financial returns.
ANALYST PERCEPTION
The combination with IW&I has been
well‑received, with its success viewed as a
potential driver for enhancing Rathbones’
valuation. The migration of client assets
is considered a key measure of the
transaction’s success, and analysts value
the ongoing updates, appreciating
management’s strong leadership
and communication.
Concerns about integration challenges,
such as investment manager departures,
have been largely mitigated.
Organic growth remains a focus,
particularly the need to attract new
clients and address generational wealth
transfer to improve growth. Progress
in digital investments is seen as a
positive development.
Analysts recognise the challenging market
conditions affecting net inflows and
welcome the expansion of the proposition
suite, particularly within the financial
planning space.
STRATEGIC PRIORITY
HOW THE BOARD ENGAGED
The Board gathers feedback from our investors,
both directly, via our corporate brokers and
through various conferences. Our AGM also
provided an opportunity for all shareholders
to ask questions of the Board.
HOW THE FIRM ENGAGED
We engaged with our shareholders through
the following activities:
— We continued to expand sell-side analyst
research coverage of the company
— Our Investor Relations team met with our
shareholders, with members of our Group
Executive Committee and senior leaders
— We commissioned an independent analyst
perception study, to gain insight into our
shareholder/investors’ opinions. The results
were presented to the Board.
KEY TOPICS RAISED
— How is the company progressing
on combining with IW&I?
— How is the company navigating
the challenging market conditions?
— How will the company improve
organic growth?
— What is the progress update on client
lifecycle management (CLM) in terms
of budget and benefits?
HOW THE FIRM RESPONDED
— Discussed progress on integrating
IW&I with our top shareholders
— Provided regular updates on the company’s
financial and strategic performance,
through our quarterly market updates
and half-yearly results presentations
— Updated the market on strategic progress
as part of result statements throughout
the year
— Responded to several environmental,
social and governance (ESG)-related
questionnaires during the year and
issued our Task Force on Climate-related
Financial Disclosures (TCFD) report
and responsible business report
— Restated our commitment to our
progressive dividend policy which
was maintained throughout the year
— Maintained meaningful dialogue with
the sell-side analyst community.
NUMBER OF INVESTOR MEETINGS
HELD IN 20241
22
23
24
84
110
81
NUMBER OF NEW INVESTORS IN 20242
22
23
24
107
95
134
1. Calculation methodology was changed for number of
meetings in 2023, with one group meeting counted as one
rather than reflecting the number of investors who attended
2. Number of new investors includes both retail shareholders
and institutional investors
Our strategic priorities
Enriching the client
and advisor proposition
and experience
Inspiring
our people
Supporting and
delivering growth
Operating
more efficiently
1
2
3
4
Stakeholder interests and engagement:
See
page 25
Group Chief Executive Officerʼs review:
See
page 10
STRATEGIC
REPORT
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Responsible business review: See page 69
Responsible Investment Report
Responsible Business Update
OUR APPROACH TO STAKEHOLDER ENGAGEMENT
SOCIETY AND
COMMUNITIES
We are conscious of the impact
of the Group’s operations on the
community and environment and
understand the importance of
being a good corporate citizen.
EMBEDDING OUR
COMMUNITY HUBS
Following the combination and expansion
of our footprint across the UK and
Channel Islands, we took the opportunity
to review the structure of our community
investment network.
Aligning to the structure used for our
front office, we crafted five hubs. Each
hub was allocated a portion of Foundation
funding. Using the updated community
investment toolkit, our colleagues
identified potential local charity partners.
Following a clear due diligence
process suitable projects were identified.
These requests were then discussed
at the Rathbones Group Foundation
trustee meetings.
At the end of 2024, all hubs had
allocated their funding to local partners.
Partnerships varied from one year to
three-year programmes. In 2024
charities supported included London
Youth, FareShare South West, Every Child
Our Future, The Inclusive Hub, FARE
Scotland and Cornwall Young Carers.
STRATEGIC PRIORITY
1
2
HOW THE BOARD ENGAGED
The Group’s responsible business programme,
which is sponsored by the chief executive,
has continued to deliver on commitments
that were made in 2021 relating to responsible
investment, our people, society and
communities and the environment. You can
read more about our responsible business
programme, including the results of our
strategic review on pages 69 to 78, our climate
report and responsible business progress
update. Details of how consideration of our
wider community has shaped some of our
recent initiatives can be found on page 75.
HOW THE FIRM ENGAGED
We engaged with society and the communities
in which we operate through the following
activities:
— We encouraged high standards of governance
as an investment manager and frequently
engaged with companies on environmental,
societal, and corporate governance concerns
— Used our community investment hubs to
identify and agree charity partners and
champion employee matching
— Worked with industry bodies to understand
and respond to the growing regulatory
and reporting frameworks.
KEY TOPICS RAISED
— How can we use our financial knowledge
to support our local communities?
— How did the combination impact our climate
strategy and the environmental impact
of our operations?
— How do we best support the communities
in which we operate?
HOW THE FIRM RESPONDED
— We donated to the Disaster Emergency
Committee Middle East appeal
— We expanded the reach of the Rathbones
Group Foundation, increasing our investment
to cover the expanded national presence.
In 2024, we gave more than £699,000
(2023: £589,000)
— Shared our approach to managing climate
risk. See our climate report for more
information
— Published our net zero engagement
action plan, sharing how the firm will engage
with companies we invest in on behalf of our
clients on their net zero ambition and deliver
against their targets.
CARBON DISCLOSURE PROJECT (CDP) SCORE
22
23
24
B
B
D
In 2024 CDP updated the questionnaire fixing calculation
of several data points through the use of autocalculation.
Unfortunately as a discretionary wealth manager this did not
support the granularity of disclosure we had previously shared
DIRECT ENGAGEMENT WITH
INVESTEE COMPANIES1
22
23
24
752
671
743
TOTAL AMOUNT DONATED
22
23
24
£589,000
£795,000
£699,793
1. Data excludes IW&I
Our strategic priorities
Enriching the client
and advisor proposition
and experience
Inspiring
our people
Supporting and
delivering growth
Operating
more efficiently
1
2
3
4
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
31
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
OUR APPROACH TO STAKEHOLDER ENGAGEMENT
PARTNERS AND
REGULATORS
Engagement with our regulators
and partners is fundamental to the
running of the firm and servicing
our clients.
ENGAGING WITH OUR REGULATORS
Interactions with our regulators such as
the FCA (Financial Conduct Authority),
PRA (Prudential Regulation Authority)
and SRA (Solicitors Regulation Authority)
play a crucial role in maintaining
compliance and ensuring robust financial
practices. Throughout 2024, Rathbones
maintained proactive and transparent
interactions with regulators, ensuring
clear alignment with their expectations
and priorities.
Rathbones engaged in discussions on
emerging regulatory topics, including
conduct risk, operational resilience,
and culture management.
Notably, we intensified our interactions
in 2024, given the IW&I transaction,
increasing the number of meetings.
Key areas addressed included the value
creation of the Rathbones and IW&I
combination, the firm’s response to
Consumer Duty regulation and ESG
related regulations such as Sustainability
Disclosure Requirements (SDR).
STRATEGIC PRIORITY
4
HOW THE BOARD ENGAGED
The Board is regularly briefed on regulatory
developments and expectations, and the
Board’s Risk, Audit and Remuneration
Committees receive detailed insights into
specific areas such as the Internal Capital
Adequacy Assessment Process and Internal
Capital and Risk Assessment, Client Assets
Sourcebook, Regulatory Activity (COBS, SYSC,
DISP, SMCR) as well as managing FCA regulation
including Consumer Duty and the Sustainable
Disclosure Requirements.
The Board also receives updates in relation
to specific matters, such as areas of interest to
the FCA/PRA including operational resilience,
conduct risk and the management of culture.
The Group maintains regular contact with the
PRA, FCA and SRA to ensure awareness of its
concerns, expectations and agenda, and this
informs the prioritisation of activities within
the Group’s annual operating plan.
HOW THE FIRM ENGAGED
We engaged with our partners and regulators
through the following activities:
— We held regular meetings with our regulators
during the year and continue to have a
proactive and transparent relationship with
them. The number of meetings increased
in 2024 given the IW&I integration
— The CEO held membership of the FCA
Practitioner Panel
— We maintained ongoing relations with our
key suppliers and partners during the year
with the Board receiving regular updates
on engagement with our existing partners.
KEY TOPICS RAISED
— How the planned combination of Rathbones
with IW&I would create value for stakeholders
— How the company is managing the client
migration programme
— Rathbones response to Consumer Duty
regulation
— How we would negotiate the exit from leases
as we consolidated our property footprint
— Do we provide fair and transparent terms
with our suppliers?
HOW THE FIRM RESPONDED
— All responses to regulators have been made
within the agreed deadline
— Trained our Board on key topics. See our
website for more on Board training
— Worked in close collaboration with the firm’s
regulators, including through the integration
period relating to IW&I
— Open and transparent engagement with
landlords to support fair exit of leases
— Maintained a constructive relationship
with HMRC
— Embedded a new supplier management
system supporting the review of suppliers for
their ESG policies and processes. See more
on page 76
— Interacted with the industry bodies and
associations we are affiliated with to ensure
we were engaged with issues impacting
our industry
— Engaged with our existing lending partner
— Adhered to payment terms with suppliers.
% OF SUPPLIERS PAID WITHIN 30 DAYS
22
23
24
95%
96%
95%
Data for IW&I
% OF PAYMENTS MADE TO SUPPLIERS
IN AGREED TIMEFRAME
22
23
24
94%
92%
92%
Data for IW&I
Stakeholder interests and engagement:
See page 25
Risk management and control: See page 58
Our strategic priorities
Enriching the client
and advisor proposition
and experience
Inspiring
our people
Supporting and
delivering growth
Operating
more efficiently
1
2
3
4
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
32
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
The Group considers the following financial
and non-financial measures as KPIs of its overall
performance. Each KPI is aligned with at least
one of our four strategic pillars and is used to
measure both the progress and success of our
strategy implementation.
Financial
TOTAL FUNDS UNDER MANAGEMENT
AND ADMINISTRATION £bn
£109.2bn
DEFINITION
Total funds under management and
administration (FUMA) at the end of
the year.
STRATEGIC FOCUS
The value of FUMA that we manage is
directly related to the level of income
we receive.
COMMENTARY
FUMA has increased by 3.7% during the
year to £109.2 billion (2023: £105.3 billion),
predominately driven by positive market
movements. This has resulted in an increase
in Investment Management and Asset
Management fee income.
UNDERLYING
OPERATING MARGIN %
25.4%
DEFINITION
Underlying profit before tax as a
percentage of operating income.
STRATEGIC FOCUS
The margin is a measure of our operational
efficiency and overall performance. It is
measured on an underlying basis to show
the performance and growth that is driven
by ongoing operating activities, excluding
the effects of strategic investments and
corporate transactions.
COMMENTARY
The underlying operating margin increased
during the year to 25.4% (2023: 22.3%)
reflecting the delivery of synergies and the
benefits of increased scale, as we continue
to make progress towards delivering an
underlying operating margin of at least
30% on a run-rate basis from three
years following the completion of the
IW&I transaction.
UNDERLYING RETURN
ON CAPITAL EMPLOYED %
12.0%
DEFINITION
Underlying profit after tax as a percentage
of the underlying quarterly average total
of equity.
STRATEGIC FOCUS
This is a principal measure of financial
efficiency as it indicates profitability
relative to the level of shareholder capital
required to generate it.
COMMENTARY
The marginal reduction in ROCE in 2024
reflects the higher average statutory rate of
corporation tax in 2024 of 25.0% (2023:
23.5%) and 2024 being the first full year of
the higher capital base that resulted from
the combination relative to the partial
delivery of the overall synergy target during
the year.
OUR KEY PERFORMANCE INDICATORS (KPIs)
109.2
105.3
60.2
24
23
22
25.4%
22.3%
21.3%
24
23
22
12.0%
12.1%
11.8%
24
23
22
Alternative Performance Measure
Read more: on APMs, including a reconciliation to
the financial statements (where possible), on page 43
Read more: Remuneration page 114
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
33
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
Financial continued
DIVIDEND PER SHARE p
93.0p
DEFINITION
Total annual dividend per share for the year
(interim and final).
STRATEGIC FOCUS
Dividends represent an important part
of the returns to shareholders.
COMMENTARY
The dividend for the year represents
an increase of 6.9% relative to the prior
year, consistent with our progressive
dividend policy.
UNDERLYING EARNINGS
PER SHARE p
161.6p
DEFINITION
Underlying profit after tax divided
by the weighted average number of
ordinary shares in issue during the year.
STRATEGIC FOCUS
Measuring earnings on a per share
basis provides further insight into the
profitability of the Group and facilitates
external comparisons.
COMMENTARY
The growth in underlying EPS in 2024 is
driven by the increased profitability of the
business following the combination with
IW&I, which reflects the benefit of the
synergies that have been realised.
COMMON EQUITY
TIER 1 RATIO %1
19.0%
DEFINITION
Common Equity Tier 1 (CET1) capital as a
percentage of the total risk exposure amount.
STRATEGIC FOCUS
As a regulated entity, we must maintain a
level of capital that exceeds the minimum
regulatory requirement. A higher CET1 ratio
is an indicator of financial strength. We seek
to maintain a balance of a robust surplus of
and an efficient allocation of capital.
COMMENTARY
The CET1 ratio has increased during the
year. This reflects the completion of the
Groupʼs defined benefit pension schemesʼ
ʻbuy-inʼ of insurance to cover the schemesʼ
future liabilities. This mitigated the future
risk to the Group and resulted in a
reduction in the minimum level of capital
that the Group is required to hold.
1.
Stated inclusive of the retained profit for the year ended
31 December 2024 which became verified profit on
25 February 2025, but prior to taking into account the
proposed final dividend relating to 2024.
RATE OF NET ORGANIC GROWTH IN
FUNDS UNDER MANAGEMENT %
(1.3)%
DEFINITION
The value of annual net inflows of funds
under management and administration
(FUMA) as a percentage of opening FUMA.
STRATEGIC FOCUS
This is a measure of the ability of the
business to grow organically.
COMMENTARY
Gross inflows of FUMA remained strong but
were offset by a continuation of elevated
gross outflows. The level of outflows is the
result of factors that are macroeconomic
and specific to the business, as set out in the
Group Chief Financial Officerʼs review.
OUR KEY PERFORMANCE INDICATORS (KPIs)
161.6
135.8
130.8
24
23
22
19.0
17.8
17.9
24
23
22
(1.3)
(0.8)
0.6
24
23
22
93.0
87.0
84.0
24
23
22
Alternative Performance Measure
Read more: on APMs, including a reconciliation to
the financial statements (where possible), on page 43
Read more: Remuneration page 114
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
34
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
Non-Financial
NUMBER OF INVESTMENT
MANAGEMENT CLIENTS
114,700
DEFINITION
The number of Investment Management
clients who use our services.
STRATEGIC FOCUS
In an industry where scale is important,
the size of our client base helps to
determine market share.
COMMENTARY
Client numbers have remained stable
following the combination.
CLIENT NET PROMOTER SCORE
56%
DEFINITION
The likelihood that a client will recommend
Rathbones. Collected through a survey
where clients score the business between
-100% and 100%.
STRATEGIC FOCUS
Our client Net Promoter Score (NPS)
highlights client satisfaction. We benchmark
against our peers and our score shows
clientsʼ willingness to recommend
Rathbones as a business.
COMMENTARY
The increase in score reflects our
continuing focus on the quality of our client
service. This score is exclusive of the IW&I
client NPS of 67% (2023: 40%). The 2024
survey had a smaller sample size due to the
migration process. The NPS scores will be
determined on a combined basis following
the migration of IW&I clients onto the
Rathbones platform in 2025.
NUMBER OF INVESTMENT MANAGERS
678
DEFINITION
Employees who are regulated to provide
discretionary investment management
services to clients within the Wealth
Management segment.
STRATEGIC FOCUS
This reflects our capacity to service
the Groupʼs investment management
client base and accommodate growth.
COMMENTARY
The number of investment managers has
remained broadly consistent year on year,
demonstrating that we are able to retain
talent. This KPI excludes Investment
Management professionals in our Asset
Management segment (2024: 26, 2023:
23, 2022: 24).
NUMBER OF FINANCIAL PLANNERS
122
DEFINITION
Employees who are qualified to provide
financial planning advice within the Wealth
Management segment.
STRATEGIC FOCUS
This reflects our capacity to service the
Groupʼs financial planning client base,
capacity to accommodate growth, and
ability to deliver the Groupʼs strategic
objectives relating to advice.
COMMENTARY
The increase in Financial Planners in 2024
shows that we are able to attract new
talent, creating more capacity to service
our clientsʼ advice needs. This KPI excludes
third party Financial Planners who are
employed by firms which are members of
the Vision Independent Financial Planning
network (2024: 142, 2023: 138, 2022: 131).
OUR KEY PERFORMANCE INDICATORS (KPIs)
56%
43%
39%
24
23
22
678
681
355
24
23
22
122
117
74
24
23
22
114,700
114,200
67,700
24
23
22
Alternative Performance Measure
Read more: on APMs, including a reconciliation to
the financial statements (where possible), on page 43
Read more: Remuneration page 114
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
35
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
36
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
IAIN HOOLEY
GROUP CHIEF FINANCIAL OFFICER
A review of our
financial performance
FINANCIAL PERFORMANCE
Growth in profit before tax and
operating margin is supported
by synergy delivery that is well
ahead of target.
Read more: See page 40
FINANCIAL POSITION
The Group maintains a robust
capital base – the key financial
position metrics are set out in
table 19.
Read more: See page 53
SEGMENTAL REVIEW
Read about the Groupʼs
performance through our
Wealth Management and
Asset Management segments.
Read more: See page 45
LIQUIDITY AND CASH FLOW
The Group remains highly
cash generative and
maintains substantial levels
of liquidity.
Read more: See page 57
2024 is the first full financial year following the
combination with Investec Wealth & Investment
UK (IW&I). The increases in operating income,
profit and earnings per share that we report
this year reflect both the strength of the
underlying business, the benefits of the
combination and the extent to which our
delivery of the related synergies has exceeded
the targets we set for 2024.
Total synergies delivered at 31 December 2024
amount to £30.1 million on an annualised
run-rate basis. This represents 50% of our
overall synergy target and is well ahead of the
£15 million originally expected for this stage
in the integration process, reflecting the
organisational and property changes that we
have been able to deliver earlier than planned.
The synergies delivered in 2024 have arisen
over the course of the year, resulting in an
overall benefit to 2024 operating profit of
£24.6 million.
We remain confident that we will deliver the
full £60.0 million of synergies in line with the
timeframe that we committed to at the time we
announced the transaction. We remain focused
on maximising our overall synergy delivery,
in addition to maintaining a high degree of cost
discipline across the Group.
The costs of delivering the integration, which
are reported as non-underlying costs, remain
in line with our expectations. We remain
confident that we will complete the integration
within our original timeframe and overall
cost guidance.
In addition to synergy realisation, business
performance benefited from higher levels of
Funds Under Management and Administration
(FUMA), which increased by 3.7% during the
year to £109.2 billion on 31 December 2024
(2023: £105.3 billion).
GROUP CHIEF FINANCIAL OFFICERʼS REVIEW
Embracing change,
creating value
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
37
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
TABLE 1. GROUP'S OVERALL PERFORMANCE
2024
2023
£m (unless
stated)
£m (unless
stated)
Operating income
895.9
571.1
Underlying operating expenses¹
(668.3)
(444.0)
Underlying profit before tax¹
227.6
127.1
Underlying operating margin¹
25.4%
22.3%
Profit before tax
99.6
57.6
Effective tax rate
34.2%
34.9%
Taxation
(34.1)
(20.1)
Profit after tax
65.5
37.5
Underlying earnings per share¹
161.6p
135.8p
Earnings per share
63.0p
52.6p
Dividend per share²
93.0p
87.0p
Return on capital employed (ROCE)
4.8%
4.9%
Underlying return on capital employed¹
12.0%
12.1%
1. Reconciliation between the measure stated and its closest IFRS equivalent is set out in table 4.
2. Total of the interim dividend paid and the final dividend proposed for the financial year.
Our ambition is set firmly on growing our
underlying operating margin. We have made
significant progress this year with our margin
increasing to 25.4% for 2024 from 22.3% in
2023 as we continue to realise the benefits of
our increased scale.
We have maintained a strong capital base
throughout the year as we work through the
integration of IW&I and remain committed to
our progressive dividend policy. The Board is
recommending a total dividend for the year
of 93.0p per share (2023: 87.0p per share),
an increase of 6.9%. Our policy recognises
that this yearʼs dividend is uncovered at
statutory profit level. However, this reflects
the effect of integration costs that will fall
away in future years.
Our results for 2024 include the contribution
of IW&I for the full financial year. The
comparative figures for 2023 include three
months of IW&Iʼs contribution from 1 October
2023, reflecting the timing of the completion
of the combination.
The movements in income and costs relative
to the prior year therefore largely reflect the
additional nine months of IW&Iʼs contribution
in 2024 relative to 2023.
Operating income increased by 56.9%
to £895.9 million (2023: £571.1 million),
of which IW&I contributed £364.5 million
(2023: £87.9 million) and the legacy Rathbones
Group contributed £531.4 million (2023:
£483.2 million).
Investment management and asset
management fees benefited from higher
levels of FUMA, which increased by 3.7%
to £109.2 billion during the year.
Interest income increased steadily over the
course of the prior year as interest rates rose.
The benefit of the higher level of this income
at the end of 2023 was carried into 2024
and mostly maintained throughout the year.
Net interest income contributed £63.9 million
to operating income in 2024 (2023:
£51.7 million). This income relates mainly to
the legacy Rathbones Group, as IW&I does not
hold banking deposits on its own balance sheet.
Interest relating to client money deposits within
IW&I, which increased during the year due to
the benefit of a full year of higher interest rates,
is recognised within other income. This will be
reported as net interest income following the
migration of IW&I into Rathbones Investment
Management.
Commission income improved as a result of
higher transaction volumes relative to the prior
year. In particular, we saw an unseasonal up-tick
in volumes around the time of the UK Autumn
Budget due to a greater propensity to crystallise
capital gains ahead of the tax changes
anticipated in the Budget.
Underlying operating expenses increased as a
result of the inclusion of a full year of the IW&I
cost base, net of the benefit of synergies
delivered during the year. Expenditure was
driven higher by the effects of inflation and
related salary increases, which averaged 3.6%
and took effect from April (Rathbones) and
June (IW&I). Employee costs in 2024 also
reflect a full year of the cost of the headcount
recruited during 2023. Variable remuneration
increased as a result of income growth.
HIGHLIGHTS:
Financial performance
PROFIT BEFORE TAX
UNDERLYING
PROFIT BEFORE TAX1
£99.6m
£227.6m
2023: £57.6m
2023: £127.1m
FUMA
SYNERGIES
ACHIEVED
£109.2bn
£30.1m
2023: £105.3bn
OPERATING
MARGIN
UNDERLYING
OPERATING
MARGIN1
11.1%
25.4%
2023: 10.1%
2023: 22.3%
BASIC EPS
UNDERLYING
BASIC EPS¹
63.0p
161.6p
2023: 52.6p
2023: 135.8p
DIVIDEND
PER SHARE
93.0p
2023: 87.0p
1.
This measure is considered to be an Alternative
Performance Measure (APM). Please refer to page 43
for more details on APMs
GROUP CHIEF FINANCIAL OFFICERʼS REVIEW
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
38
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
Total headcount set out in note 10 includes 101
heads (measured on a full-time equivalent basis)
at 31 December 2024 who are dedicated
entirely to the IW&I integration project and
whose costs form part of the costs to achieve
the integration, which are reported as non-
underlying costs. Technology costs increased as
we develop and enhance our systems across
the business, including our client service,
operational and data infrastructure capabilities.
A portion of the increase is short-term as we
implement outsourcing of certain services.
The 2024 FSCS levy of £4.4 million was
expensed in full during the first half of 2024.
The cost for the year represents an increase
of £3.8 million relative to the prior year,
inclusive of the levy relating to IW&I. The levy in
the prior year was suppressed as a result of the
FSCS utilising existing surpluses.
The underlying operating margin, which is
calculated as the ratio of underlying profit
before tax to operating income, improved to
25.4% (2023: 22.3%). This increase represents
a significant step towards our target of
delivering a margin in excess of 30% from
September 2026, being three years following
the completion of the IW&I transaction.
The InvestCloud Client Lifecycle Management
system (CLM) was launched into the business
in June 2024. Operating expenses for the year
include £14.7 million in relation to this system.
Total investment during the current and
previous financial years up to the point of
launch amounted to £45 million, in line with
our previous guidance.
Underlying profit before tax, which is net of
the CLM costs referred to above, was £227.6
million for the year ended 31 December 2024
(2023: £127.1million), representing an increase
of 79.1%.
Costs directly related to the integration of
IW&I, net of £16.9 million of credits arising on
the disposal of 8 Finsbury Circus, amounted to
£75.5 million during the year (2023: £36.5
million), which is in line with our guidance.
These costs are reported within non-underlying
costs, which also include amortisation of
intangible assets of £44.6 million and acquisition
costs of £7.9 million (2023: £6.8 million)
relating to deferred consideration payable
for the Saunderson House acquisition.
Statutory profit before tax increased by
72.9% to £99.6 million for the year (2023:
£57.6 million), after expensing amortisation
of client relationship intangible assets of
£44.6 million (2023: £25.2 million) and
integration related costs of £83.4 million
(2023: £44.3 million acquisition-related and
integration costs).
The effective rate of tax reduced to 34.2%
for the year (2023: 34.9%). The prior year rate
was elevated by the effect of disallowable costs
relating to the IW&I transaction. Whilst these
costs were specific to the transaction and have
not recurred in the current year, the effective
tax rate for 2024 has been elevated by certain
non-underlying integration costs along with the
statutory rate of 25.0% applying for the full
financial year. Once the integration of IW&I has
been completed, we expect the effective tax
rate to run at an average of 2 to 3 percentage
points above the statutory rate, reflecting
normal levels of disallowable costs.
The Board considers underlying and statutory
measures of income, expenditure and earnings
when assessing the performance of the Group.
The underlying balances are considered to
provide useful information on business
performance, rather than reviewing results on
a statutory basis only. These measures are also
widely used by research analysts covering the
Group. A full reconciliation between underlying
results and the closest IFRS equivalent is
provided on page 42.
OUTLOOK AND GUIDANCE
The Groupʼs recurring fee income and overall
financial performance remains closely linked to
the level of FUMA and therefore the direction
of global investment markets. Markets have had
a positive impact on FUMA during the year but
FUMA and performance remain sensitive to
future movements, including those driven by
continuing levels of uncertainty in the economic
and geopolitical environment.
The reduction in the rate of UK inflation during
the year is welcome and we remain focused on
ensuring a high degree of discipline in managing
our cost base. While 2025 will see a full year of
the 2024 annual salary reviews, we expect
salary inflation to be lower in 2025 at
around 2%.
The lower rate of inflation has led to reductions
in central bank interest rates during the second
half of 2024. These reductions have so far had
a relatively small impact on net interest income,
due to the effect on interest earned and
interest paid to clients being broadly matched.
Should further reductions materialise in 2025
in line with market expectations, we expect
to see a modest reduction in our net interest
margin, albeit that may be more than offset
by higher fee revenues in the event that equity
prices react positively to rate reductions
materialising.
The UK government announced an increase
in the rate of employersʼ National Insurance
Contributions (NIC) in its Autumn Budget,
which will take effect in April 2025. The changes
announced will increase NIC costs by around
£7.0 million per annum from April 2025,
based on current levels of remuneration
and headcount.
Headcount is expected to reduce over the
course of 2025. This reduction will principally
result from synergy delivery, along with
ongoing cost discipline.
We are making good progress towards
delivering an underlying operating margin
of 30% from September 2026,
notwithstanding the additional headwinds that
have arisen since we set out this target, which
include ongoing inflationary pressures and the
estimated impact of NlCs from April 2025.
Delivery of this will be on a run-rate basis from
three years following completion of the IW&I
transaction, i.e. September 2026.
This margin growth will be underpinned
by a combination of:
• Modest market growth in line with inflation
• A return to organic net inflows, supported
by growth in advice, refreshed marketing
and distribution capabilities and growth in
our Asset Management business
• Ongoing cost discipline, in what we expect
to be a more normalised inflationary
environment
• Synergy delivery in line with guidance.
GROUP CHIEF FINANCIAL OFFICERʼS REVIEW
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
39
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
We expect the improvement in the underlying
operating margin to arise mostly during 2026,
with a more modest improvement in 2025.
This principally reflects the timing of further
synergy benefits, which will be weighted towards
the second half of the 2025 financial year, when
the cost savings which are linked to the migration
to a single operating platform will materialise
and we work towards IW&I ceasing to run as
a separate, regulated entity. Performance in
2025 will also reflect the increase in NIC costs
and a full year of the 2024 salary reviews,
which were undertaken in the higher inflationary
environment. We also expect to see a flatter
seasonal spike in transaction-based commission
income in March 2025 as a result of the
additional activity that arose on client portfolios
ahead of the 2024 Autumn Budget.
We expect to see growth in advice revenues in
2025 as a result of increased advisor capacity
following completion of the Saunderson House
migration and our continuing focus on advice,
along with increased demand following the
taxation changes announced in the 2024
Autumn Budget. Net interest income will
benefit from the delivery of revenue synergies
in the second half of 2025 following the IW&I
client migration, with net interest margins
expected to see only a modest impact from
the reductions in central bank rates that are
anticipated. We will be focused on our growth
agenda in 2025 to drive improved net flows.
Delivering sustainable value to our shareholders
and maintaining a disciplined and efficient
approach to managing shareholder capital
is of the highest importance to the Board.
The Group continues to maintain a robust
capital base, with a surplus of capital above
the regulatory minimum of £207.2 million at 31
December 2024 (prior to taking into account
the proposed final dividend for the year) which
supports strategic investment, the ongoing
integration of the IW&I business and our
progressive dividend policy.
The business remains highly cash generative
and we expect to see a further increase in
cash generation once the integration of IW&I
is complete and we see the full benefits of the
combination synergies. As such, we will review
our capital allocation policy, including an
evaluation of our capacity for surplus returns,
following the migration of IW&I onto a single
operating platform later this year.
GROUP CHIEF FINANCIAL OFFICERʼS REVIEW
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
40
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
BUSINESS PERFORMANCE: FUNDS UNDER MANAGEMENT
AND ADMINISTRATION (FUMA)
Total Group FUMA increased by 3.7% during the year to reach £109.2 billion at 31 December 2024
(2023: £105.3 billion). The increase is driven predominantly by the effect of positive market
movements.
The Group continued to drive strong gross inflows across both the Wealth Management and Asset
Management segments. However, outflows remained elevated, reflecting both the economic
backdrop and specific factors. Consequently, the Group reported net outflows of £1.4 billion
for the year.
FUMA for the Wealth Management segment increased by 3.3% during the year. Gross inflows were
strong, increasing by 76.4% relative to the prior year and reaching record levels in the final quarter
of the financial year as the business continued to drive new business flows despite IW&I investment
teams committing significant time to undertaking the client consent process.
Rathbones discretionary and managed services delivered net inflows of £1.0 billion, representing
an annual growth rate of 2.0% (2023: 1.5%). This reflects gross inflows of £6.3 billion, an increase
of 23.5% relative to 2023, as the business continued to drive strong levels of new business.
In addition to new business flows, Rathbones discretionary and managed FUMA benefited from
the final migration of Saunderson House client assets into Rathbones investment solutions.
IW&I contributed £4.0 billion (2023: £0.8 billion) of gross inflows during the year. After taking
account of elevated gross outflows, IW&I reported net outflows for the year of £1.0 billion
(2023: £0.3 billion).
Gross outflows within the Wealth Management segment remained elevated throughout the year.
This reflected the continuing general economic backdrop of higher interest rates and the increased
cost of living, which has driven existing clients to partially withdraw funds from their portfolios.
In addition, IW&I experienced expected outflows relating to Investment Managers who left the
business prior to the announcement of the combination. Investment Manager turnover since then
has remained low. The level of these outflows reduced over the course of the year, with those
in the final quarter being the lowest level for any quarter of the year. The migration of former
Saunderson House FUMA into Rathbones investment solutions was completed during the year.
Associated outflows of £0.5 billion included £0.2 billion of FUMA relating to clients who did not
complete the consent process. Wealth Management outflows were also somewhat elevated in the
short term as a result of some net withdrawals of funds by existing clients around the time of the
UK governmentʼs Autumn Budget.
The Asset Management segment reported net inflows of £0.6 billion (2023: £1.5 billion) for the
year, representing a rate of net growth of 4.3% (2023: 13.7%). The segment was affected by the
challenging market environment that has continued to impact the UK asset management industry,
where substantial withdrawals from UK funds has continued across the sector. Our single strategy
funds were not immune from this backdrop, but showed relative resilience with net outflows
of £0.6 billion for the year (2023: £0.5 billion outflow), representing 8.1% of opening FUMA
(2023: 8.5%). These outflows were partially offset by investment performance. Multi-asset funds
continued to deliver net inflows, inclusive of intra-group holdings, of £1.2 billion (2023: £2.1 billion).
When adjusted for intra-group holdings, net inflows amounting to £0.2 million for the year
(2023: £0.3 million), represented annual growth of 7.7% (2023: 13.8%) net of intra-group holdings.
Asset Management FUMA increased by 14.5% for the year overall.
Table 2 presents Group FUMA by Wealth Management and Asset Management segment with
associated intra-group holdings. Wealth Management FUMA incorporates our core bespoke
discretionary portfolio and managed portfolio services. It also includes direct sales into our range of
risk-targeted multi-asset funds, which are designed to be used as wealth management solutions for
both our direct clients and those of investment platforms and financial advisors. Asset Management
FUMA includes our focused range of specialist ʻsingle-strategyʼ funds, which are designed to act as
individual holdings within investment portfolios.
TABLE 2. SEGMENT FUMA
Year ended 31 December 2024
Wealth
Management
£bn
Asset
Management
£bn
Intra-group
holdings
£bn
Group FUMA
£bn
Opening FUMA
96.1
13.8
(4.6)
105.3
Gross Inflows
9.7
4.4
(2.0)
12.1
Gross Outflows
(10.7)
(3.8)
1.0
(13.5)
Net Flows
(1.0)
0.6
(1.0)
(1.4)
Market, Investment Performance &
Transfers
4.2
1.4
(0.3)
5.3
Closing FUMA
99.3
15.8
(5.9)
109.2
GROUP CHIEF FINANCIAL OFFICERʼS REVIEW
FINANCIAL PERFORMANCE
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
41
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
Table 3 presents separately the FUMA and associated movements in those services and products
which support our wealth management propositions.
TABLE 3. BREAKDOWN OF FUMA AND FLOWS BY SERVICE LEVEL
Year ended 31
December 2024
Opening
FUMA
£bn
Gross
inflows
£bn
Gross
outflows
£bn
Net
flows
£bn
Transfers
£bn
SHL
migrated
assets
£bn
Market &
investment
performance
£bn
Closing
FUMA
£bn
Net
growth
(flows)
%
Rathbones
Investment
Management
48.8
5.3
(4.5)
0.8
–
1.2
2.1
52.9
1.7%
Bespoke
portfolios
45.0
4.7
(4.1)
0.6
(0.4)
0.8
1.8
47.8
1.4%
Managed via
in-house
funds
3.8
0.6
(0.4)
0.2
0.4
0.4
0.3
5.1
5.1%
Multi-asset
funds
2.5
1.0
(0.8)
0.2
0.1
–
0.3
3.1
7.7%
Rathbones
discretionary
and managed
51.3
6.3
(5.3)
1.0
0.1
1.2
2.4
56.0
2.0%
Non-
discretionary
service
0.7
–
–
–
–
–
–
0.7
(2.9%)
IW&I
42.3
4.0
(5.0)
(1.0)
(0.3)
–
2.0
43.0
(2.5%)
Saunderson
House
1.6
0.1
(0.5)
(0.4)
–
(1.2)
–
–
(26.8%)
Single-strategy
funds
6.7
1.3
(1.9)
(0.6)
–
–
0.7
6.8
(8.1%)
Execution only
and banking
2.7
0.4
(0.8)
(0.4)
0.2
–
0.2
2.7
(14.5%)
Total Group
105.3
12.1
(13.5)
(1.4)
–
–
5.3 109.2
(1.3%)
Year ended 31
December 2023
Opening
FUMA -
proforma
basis
£bn
Gross
inflows
£bn
Gross
outflows
£bn
Net
flows
£bn
Transfers
£bn
SHL
migrated
assets
£bn
Market &
investment
performance
£bn
Closing
FUMA
£bn
Net
growth
(flows)
%
Rathbones
Investment
Management
44.3
4.2
(3.8)
0.4
(0.2)
2.4
1.9
48.8
0.9%
Bespoke
portfolios
42.9
3.8
(3.5)
0.3
(0.9)
1.1
1.6
45.0
0.6%
Managed via
in-house
funds
1.4
0.4
(0.3)
0.1
0.7
1.3
0.3
3.8
10.1%
Multi-asset
funds
2.2
0.9
(0.6)
0.3
–
–
–
2.5
13.8%
Rathbones
discretionary
and managed
46.5
5.1
(4.4)
0.7
(0.2)
2.4
1.9
51.3
1.5%
Non-
discretionary
service
0.7
0.1
(0.1)
–
(0.1)
–
0.1
0.7
(2.9%)
IW&I1
40.8
0.8
(1.1)
(0.3)
(0.1)
–
1.9
42.3
(0.8%)
Saunderson
House
4.1
0.1
(0.5)
(0.4)
–
(2.4)
0.3
1.6
(9.5%)
Single-strategy
funds
6.5
1.3
(1.8)
(0.5)
–
–
0.7
6.7
(8.5%)
Execution only
and banking
2.4
0.3
(0.6)
(0.3)
0.4
–
0.2
2.7
(10.4%)
Total Group
101.0
7.7
(8.5)
(0.8)
–
–
5.1
105.3
(0.8%)
1.
2023 Group FUMA and flows by service level has been prepared on a proforma basis, opening FUMA has been uplifted by £40.8 billion
to include IW&I FUMA acquired with effect from 30 September 2023
GROUP CHIEF FINANCIAL OFFICERʼS REVIEW
FINANCIAL PERFORMANCE
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
42
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
TABLE 4. RECONCILIATION OF UNDERLYING PERFORMANCE MEASURES TO CLOSEST
EQUIVALENT IFRS MEASURES
2024
2023
Note £m (unless stated)
£m (unless stated)
Operating income
4,5,6
895.9
571.1
Underlying operating expenses
7
(668.3)
(444.0)
Underlying profit before tax1
227.6
127.1
Charges in relation to client relationships and goodwill
22
(44.6)
(25.2)
Acquisition-related and integration costs
9
(83.4)
(44.3)
Profit before tax
99.6
57.6
Taxation
11
(34.1)
(20.1)
Profit after tax
65.5
37.5
Operating margin
11.1%
10.1%
Underlying operating margin2
25.4%
22.3%
Weighted average number of shares in issue
13
103.7m
71.3m
Earnings per share (p)
13
63.0p
52.6p
Underlying earnings per share (p)3
13
161.6p
135.8p
Monthly average total equity
1,363.5
787.9
Underlying monthly average total equity4
1,401.0
798.5
ROCE5
4.8%
4.9%
Underlying ROCE6
12.0%
12.1%
1.
Operating income less underlying operating expenses
2. Underlying profit before tax as a percentage of operating income
3. Underlying profit after tax divided by the weighted average number of shares in issue
4. Monthly average equity adjusted for underlying operating expenses
5. Profit after tax as a percentage of monthly average total equity
6. Underlying profit after tax as a percentage of underlying monthly average total equity
GROUP CHIEF FINANCIAL OFFICERʼS REVIEW
FINANCIAL PERFORMANCE
OPERATING INCOME
Operating income increased by £324.8 million in 2024 to £895.9 million, reflecting a full year
of IW&I income in addition to the factors which have driven income growth set out below.
Recurring fee income benefited from higher average FUMA and the increasing revenue synergies
resulting from the continuing migration of former Saunderson House FUMA into Rathbones
investment management and asset management solutions. Transaction-based commission income
was driven higher as volumes returned to expected levels during the year. In addition, there was
a marked increase in trading volumes around the UK governmentʼs Autumn Budget as clients opted
to crystallise capital gains ahead of an anticipated increase in the rate of capital gains tax.
Advice fees progressed relative to the prior year, albeit partly subdued by the time committed by
advisors to the completion of the migration of Saunderson House clients and assets during the year.
The first reductions in the UK base rate had only a marginal adverse impact on net interest income
relative to the benefit of the run rate this income reached at the end of 2023 continuing
into 2024.
OPERATING EXPENSES
Operating expenses of £796.3 million (2023: £513.5 million) comprise the underlying operating
expenses discussed below, together with non-underlying operating expenses explained on page 43.
Underlying operating expenses increased by £224.3 million to £668.3 million (2023:
£444.0 million), an increase of 50.5%, reflecting the impact of a full year of IW&I operating
expenditure, net of the benefit of realised cost synergies relating to the IW&I combination.
Underlying staff costs increased to £464.6 million (2023: £313.6 million) reflecting inflationary
pay rises which averaged 3.6% and took effect in April, other than for the IW&I business which
retained its June salary review date for 2024. The increase also reflects a full year of costs in
relation to 2023 recruitment. Variable remuneration increased as a result of revenue growth.
Underlying non-staff costs increased to £203.7 million (2023: £130.4 million). Inflation drove
most cost lines higher relative to the prior year. Other factors relevant to the increase include
the outsourcing of certain technology services to Investec Group (with a related reduction in
headcount and staff costs) which was agreed under the terms of the combination with IW&I.
Transaction-based costs increased in line with trading volumes. Legal & professional fees increased
largely due to regulatory related activities. FSCS levy costs were suppressed in the prior year as a
result of the one-off benefit of the FSCS utilising existing surpluses. Levy costs normalised in the
year, increasing by £1.8 million. In addition to this, £2.0 million was incurred in IW&I (2023: £nil).
Underlying non-staff costs includes the investment in our InvestCloud Client Lifecycle Management
(CLM) system which was launched into the business in June 2024. Development expenditure
during the year up to the point of launch amounted to £14.7 million, bringing our total investment
to £45.0 million, in line with our previous guidance.
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
43
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
As part of the process of integrating IW&I with the existing Rathbones Group, certain leasehold
properties were planned to vacate earlier than their respective lease expiry dates. During the year
ended 31 December 2023, the useful economic lives of these propertiesʼ right-of-use assets and
their fixtures and fittings were revised to reflect those expected dates of vacation. Consequently,
in 2023, the assetsʼ residual values were calculated and their depreciable amounts restated. As a
result of the reduced useful economic lives of those assets, accelerated depreciation charges were
recognised from the date of the combination to the respective dates the properties are expected
to be vacated. All properties were vacated as planned over the course of 2024. This has therefore
resulted in higher depreciation charges during the year ended 31 December 2024 than would have
been the case had the useful economic lives of the property-related assets not reduced. With a
small number of exceptions, the vacated properties have been disposed of either via sublet,
assignment or early surrender, which is favourable against the original anticipated costs of achieving
property integration. At 31 December 2024, the two remaining vacant leasehold properties have
been reviewed for impairment to determine whether their carrying amounts are supported by their
recoverable amounts, and impairment charges have been recognised as appropriate.
As a result, the Group recognised £5.6 million in relation to accelerated depreciation and
impairment charges on property assets during the year. Other associated costs of vacating these
properties of £3.0 million have also been recognised. These costs represent additional non-
recurring costs in excess of the normal ongoing operating costs incurred in relation to the Groupʼs
properties and were recognised as non-underlying operating expenses and are therefore not
included within underlying operating profit. In addition to this, a net credit to profit or loss of
£4.4 million was recognised during the year in relation to the lease assignment of 8 Finsbury
Circus (see note 20 and note 26 for further detail) within non-underlying operating expenses.
These balances form part of the total acquisition and integration costs of £75.5 million referred
to above.
Deferred consideration
Deferred consideration costs are significant payments that form part of the total consideration
payable under the terms of the acquisition agreement and are considered to be capital in nature,
reflecting the cost to acquire the business and the transfer of its ownership. However, in accordance
with IFRS 2, any deferred consideration that is payable to former shareholders of the acquired
business who are required to remain in employment with the Group for a certain period must be
treated as remuneration and expensed to the income statement over the period to which the
employment condition applies.
£3.3 million of deferred consideration payments (2023: £3.9 million) and £4.6 million of
integration costs (2023: £2.9 million) were charged to the income statement during 2024 in
relation to the acquisition of Saunderson House. In 2023, £1.0 million of deferred consideration
payments were charged to the income statement in relation to the acquisition of Speirs and
Jeffrey, with no further charges recognised in 2024.
GROUP CHIEF FINANCIAL OFFICERʼS REVIEW
FINANCIAL PERFORMANCE
ALTERNATIVE PERFORMANCE MEASURES
Alternative Performance Measures (APMs) are a financial measure of historical or future financial
performance, financial position, or cash flow, other than a financial measure under IFRS.
Charges in relation to client relationships and goodwill (note 22)
As explained in notes 1.14 and 2.1, client relationship intangible assets are recognised when the
Group acquires a business or investment management contracts as a result of the recruitment
of experienced investment managers who have the capability to attract significant FUMA to
the Group.
These intangible assets are amortised over the expected duration of the respective client
relationships. Amortisation of £44.6 million has been charged to the income statement (2023:
£25.2 million). This represents a significant non-cash profit and loss item which is excluded from
underlying profit in order to present an alternative measure that represents largely cash-based
results of the financial reporting period. Research analysts commonly exclude these amortisation
costs when comparing the performance of firms in the wealth management industry.
Acquisition-related and integration costs (note 9)
Acquisition and integration-related costs are significant non-recurring costs that arise from
strategic investments and corporate transactions to grow the business rather than from the
businessʼ operating activities, and are therefore excluded from underlying results.
These costs primarily comprise professional fees directly related to the execution of the relevant
transaction, certain elements of deferred consideration payable to the vendors of acquired
businesses that are conditional upon their continued employment with the Group, and the
non-recurring costs of integrating the acquired businesses with those of the existing Group.
During 2024, £75.5 million of integration costs (2023: £36.5 million, acquisition and integration
related) have been incurred in relation to the IW&I integration. This comprised £48.3 million of
integration related staff costs (2023: £6.2 million), and £27.2 million of integration costs (2023:
£9.0 million), which form part of the total expected costs to deliver the integration and achieve
the related synergies. Acquisition related legal and professional costs of £21.3 million were incurred
in the prior year relating to the execution of the transaction. No acquisition-related legal and
professional costs were recognised as non-underlying costs in 2024.
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
44
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
RETURN ON CAPITAL EMPLOYED
The Board monitors the underlying return on capital employed (ROCE) as a key performance
measure. For monitoring purposes, underlying ROCE is defined as underlying profit after tax
expressed as a percentage of underlying monthly average total equity across the year.
Assessment of underlying return on capital is a key consideration for all investment decisions,
particularly in relation to acquired growth.
In 2024, underlying ROCE was 12.0% (2023: 12.1%). Underlying average total equity increased by
£602.5 million in 2024 compared to 2023, reflecting the full year of the higher capital base that
resulted from the combination. The marginal reduction in ROCE in 2024 reflects this higher capital
base that has applied throughout the year relative to the partial delivery of the overall synergy
target during the year. Statutory ROCE was 4.8% in 2024 (2023: 4.9%). In addition, the average
statutory rate of corporation tax increased to 25.0% in 2024 (2023: 23.5%), reducing ROCE by
0.2 percentage points.
GROUP CHIEF FINANCIAL OFFICERʼS REVIEW
FINANCIAL PERFORMANCE
TAXATION
The corporation tax charge for 2024 was £34.1 million (2023: £20.1 million) (see note 11).
The effective tax rate reduced to 34.2% in 2024 (2023: 34.9%). The effective tax rate reflects
both an increase in the average statutory rate for the year to 25.0% (2023: 23.5%) as a result
of 2024 being the first full financial year following the increase in the statutory rate to 25.0%,
and the impact of disallowable legal and professional costs incurred in relation to the relocation
of our London premises from Finsbury Circus to Gresham Street.
Once the integration of IW&I has been completed, the effective tax rate is expected to be 2 to 3
percentage points above the statutory rate as a result of normal levels of disallowable costs.
BASIC EARNINGS PER SHARE
Basic earnings per share for the year ended 31 December 2024 were 63.0p (2023: 52.6p).
The increase in the year reflects the benefit to statutory profit after tax of the IW&I combination,
with 2024 being the first full financial year of the combined business, and the benefit of the
synergies delivered during the year.
On an underlying basis, basic earnings per share were 161.6p in 2024, compared to 135.8p in 2023
(see note 13). The increase in the year is similarly due to increased underlying profit after tax
resulting from the IW&I combination, partially offset by the increased number of shares in issue.
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
45
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
The Group operates through two segments: Wealth Management and Asset Management.
TABLE 5. RECONCILIATION OF FUMA BY SERVICE LEVELS TO SEGMENTAL PRESENTATION AS AT
31 DECEMBER 2024
Wealth
Management
FUMA
(including
intra-group
holdings)
£bn
Intra-group
holdings1
£bn
Wealth
Management
FUMA
£bn
Asset
Management
FUMA
£bn
Group
FUMA
£bn
Rathbones Investment
Management
52.9
(5.7)
47.2
5.7
52.9
Bespoke portfolios
47.8
(0.7)
47.1
0.7
47.8
Managed via in-house funds
5.1
(5.0)
0.1
5.0
5.1
Multi-asset funds
–
–
–
3.1
3.1
Rathbones discretionary and
managed
52.9
(5.7)
47.2
8.8
56.0
Non-discretionary service
0.7
–
0.7
–
0.7
IW&I
43.0
(0.2)
42.8
0.2
43.0
Saunderson House
–
–
–
–
–
Single-strategy funds
–
–
–
6.8
6.8
Execution only and banking
2.7
–
2.7
–
2.7
Total Group
99.3
(5.9)
93.4
15.8
109.2
1.
Intra-group holdings represent in-house funds of the Asset Management segment held within investment management portfolios
managed by the Wealth Management segment.
WEALTH MANAGEMENT
The activities of the Group are described in detail on pages 2 to 7. The Wealth Management
segment comprises those activities described under the headings ʻInvestment Managementʼ,
ʻFinancial Planning and Adviceʼ and ʻComplementary servicesʼ on page 2. The results of the Wealth
Management segment described below include the trading results of Rathbones Investment
Management, Rathbones Trust Company, Vision Independent Financial Planning, Saunderson
House and IW&I.
Wealth Management income is largely driven by income margins earned from FUMA. Income
margins are expressed as a basis point return, which depends on a mix of tiered annual fee rates
and commissions charged for transactions undertaken on behalf of clients.
FUNDS UNDER MANAGEMENT AND ADMINISTRATION
Year-on-year changes in the key performance indicators for Wealth Management are shown
in table 6. Total Wealth Management FUMA including intra-group holdings increased by 3.3%
to £99.3 billion as at 31 December 2024, predominately driven by positive market movements.
CHART 1. WEALTH MANAGEMENT – NUMBER OF CLIENTS AND INVESTMENT MANAGERS
Number of investment managers
678
681
352
24
23
22
Number of investment management clients (ʼ000s)
114.7
114.2
67.7
24
23
22
TABLE 6. WEALTH MANAGEMENT – KEY PERFORMANCE INDICATORS
2024
2023
FUMA at 31 December1
£99.3bn
£96.1bn
Rate of total net growth (net flows) in Wealth Management funds under
management and administration2
(1.1%)
0.3%
Average net operating basis point income margin3
67.5
66.7
Number of Investment Management clients
114,700
114,200
Number of investment managers
678
681
1. FUMA disclosed on a gross basis (Inclusive of intra-group FUMA). Previously this table was presented on the basis of net FUMA in the
Annual Report & Accounts
2. See table 7 (percentages calculated on unrounded figures)
3. Income margin based on fee and commission income. See table 11
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TABLE 7. WEALTH MANAGEMENT – FUNDS UNDER MANAGEMENT AND ADMINISTRATION
Year ended 31 December
2024
£bn
2023
£bn
As at 1 January1
96.1
51.5
Inflows
9.7
46.3
— organic2
9.7
5.5
— acquired3
–
40.8
Outflows and transfers
(10.7)
(6.1)
Market movement & investment performance
4.2
4.4
Total Group
99.3
96.1
Rate of total net growth4
(1.1)%
0.3%
1. Current and prior year FUMA disclosed on a gross basis (Inclusive of intra-group FUMA). Previously this table was presented on the basis
of net FUMA in the Annual Report & Accounts
2. Value at the date of transfer in/(out)
3. £40.8 billion IW&I FUMA acquired with effect from 30 September 2023
4. 2023 net new business and acquired inflows as a percentage of opening funds under management and administration excludes SHL and
IW&I post-acquisition flows
Table 7 reconciles the movement in FUMA during the year. Strong organic gross inflows for the
year of £9.7 billion, representing 10.1% of opening FUMA, demonstrate the continued ability to
generate new business. This was achieved across the Wealth Management segment despite IW&I
Investment Managers dedicating significant time to integration related activities, including the
client consent process, during the year.
Table 8 (overleaf) provides an analysis of FUMA and new business by channel and service level.
Bespoke portfolios, whilst delivering strong gross inflows, continued to experience elevated
outflows, predominantly reflecting the ongoing economic environment of higher interest rates
and a higher cost of living, resulting in partial withdrawals from portfolios. There was also
increased activity around the time of the UK Autumn Budget. IW&I outflows include those linked
to Investment Managers who left the business prior to the announcement of the combination.
Investment Manager turnover has since remained low. These outflows have continued to decline
over the course of the year, with the final quarter of 2024 seeing the lowest level of such outflows
in the year.
Bespoke portfolios within the advisor linked channel saw net inflows of £0.6 billion (2023:
£0.4 billion). Clients utilising the services of Rathbones Financial Planning or Saunderson House
continued to see growth during 2024 with combined net flows of £0.3 billion. Within the IW&I line
there was £0.2 billion of net flows in respect of clients using an IW&I Financial Planner. The
expansion of the IFA network within Vision Independent Financial Planning to 142 IFAs also
benefited the Group, with gross inflows of £0.4 billion (2023: £0.3 billion). At the year-end, advisor
firms of the Vision Independent Financial Planning network were advising on client assets of £4.0
billion (2023: £3.3 billion).
The migration of former Saunderson House FUMA was completed on 31 July 2024. Gross outflows
for the year include £245 million relating to clients who did not complete the migration consent
process. £4.4 billion of former Saunderson House FUMA is included within Group FUMA at 31
December 2024.
Switches into execution-only services largely reflect the transfer of clients' funds into probate
accounts following their death (£0.2 billion).
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
TABLE 8. WEALTH MANAGEMENT – NEW BUSINESS BY CHANNEL
2024 Gross
opening FUMA
£bn
Gross
inflows
£bn
Gross
outflows
£bn
Net flows
£bn
Transfers
£bn
SHL migrated
FUMA
£bn
Market
movement &
performance
£bn
2024 Gross
closing FUMA
£bn
2024 Intra-group
holdings1
£bn
2024
Net closing
FUMA
£bn
2023
Net FUMA
£bn
Bespoke portfolios
33.0
3.1
(3.0)
0.1
(0.6)
–
1.5
34.0
–
–
–
Managed via in-house funds
1.4
0.2
(0.2)
–
0.4
–
0.1
1.9
–
–
–
Total direct
34.4
3.3
(3.2)
0.1
(0.2)
–
1.6
35.9
–
–
–
Bespoke portfolios
12.0
1.6
(1.0)
0.6
0.2
0.9
0.1
13.8
–
–
–
Managed via in-house funds
2.4
0.3
(0.2)
0.1
0.1
0.4
0.2
3.2
–
–
–
Total financial advisor linked
14.4
1.9
(1.2)
0.7
0.3
1.3
0.3
17.0
–
–
–
Total discretionary and managed
48.8
5.2
(4.4)
0.8
0.1
1.3
1.9
52.9
(5.7)
47.2
44.5
Execution only and banking
2.7
0.4
(0.8)
(0.4)
0.2
–
0.2
2.7
–
2.7
2.7
Non-discretionary service
0.7
–
–
–
–
–
–
0.7
–
0.7
0.7
Saunderson House
1.6
0.1
(0.5)
(0.4)
–
(1.3)
0.1
–
–
–
1.3
IW&I
42.3
4.0
(5.0)
(1.0)
(0.3)
–
2.0
43.0
(0.2)
42.8
42.3
Total Wealth Management
96.1
9.7
(10.7)
(1.0)
–
–
4.2
99.3
(5.9)
93.4
91.5
1.
Holdings of funds of the Asset Management segment held within client portfolios managed by the Wealth Management segment. This FUMA is also reported as FUMA of the Asset Management segment.
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
FINANCIAL PERFORMANCE
Underlying profit before tax for the Wealth Management segment increased by 91.8% in the
year to £202.2 million. This represents an underlying operating margin of 24.8% (2023: 20.9%).
This result reflects a full year of the contribution of the IW&I business (2023 included one quarter
of contribution) and is net of the investment in the InvestCloud Client Lifecycle Management (CLM)
system, which forms a key part of our digital strategy. Operating expenses for the year include
£14.7 million in relation to the CLM system, forming part of our overall multi-year spend on this
project of £45 million which we have communicated previously.
Net investment management fee income increased by £225.0 million (64.3%) in 2024. This
increase reflects higher levels of FUMA during the year, driven by market growth, and the benefit
of the migration of former Saunderson House FUMA into Rathbones investment solutions.
Net commission income increased by 71.3% to £91.8 million (2023: £53.6 million). Transaction
volumes returned to normal levels during the year and also saw specific increases in activity around
the time of the UK Governmentʼs budget in October as clients sought to crystallise capital gains
ahead of expected increases in the rate of capital gains tax.
Net interest income increased steadily over the course of the prior year as interest rates rose.
The benefit of the higher level of this income at the end of 2023 was carried into 2024 and mostly
maintained throughout the year. The overall level of this income illustrates the continuing benefit
of our banking permissions.
Fees from advisory services increased by 34.6% to £54.5 million due to continued growth in the
advice proposition. Other income increased by 211.2% to £30.5 million, driven by the inclusion of
£26.5 million net interest income generated from client money deposits within IW&I.
Underlying operating expenses were £612.0 million for the year (see table 12), an increase of 53.6%
on the prior year. In addition to 2024 including a full year of IW&I costs, costs were driven higher by
the effect of inflationary salary increases and recruitment in the prior year, in respect of which a full
year has been incurred in 2024. Variable staff costs increased as a result of higher income levels.
TABLE 9. WEALTH MANAGEMENT – FINANCIAL PERFORMANCE
2024
2023
£m
£m
Net investment management fee income1
575.1
350.1
Net commission income
91.8
53.6
Net interest income
62.3
49.9
Fees from advisory services2
54.5
40.5
Other income
30.5
9.8
Operating income
814.2
503.9
Underlying operating expenses3 4
(612.0)
(398.5)
Underlying profit before tax
202.2
105.4
Underlying operating margin5
24.8%
20.9%
1. Net investment management fee income is stated after deducting fees and commission expenses paid to introducers
2. Fees from advisory services includes income from trust, tax and financial planning services (including Vision and Saunderson House)
3. See table 12
4. Included within underlying operating expenses are £14.7 million of costs relating to the Groupʼs digital strategy
5. Underlying profit before tax as a percentage of operating income. Excluding £14.7 million of expenditure on our digital strategy in the
year, the underlying operating margin was 26.6%
TABLE 10. WEALTH MANAGEMENT – AVERAGE FUNDS UNDER MANAGEMENT AND
ADMINISTRATION (excluding IW&I)
2024
2023
£bn
£bn
Valuation dates for billing
— 5 April
50.2
45.7
— 30 June
50.5
45.4
— 30 September
50.5
45.4
— 31 December
50.7
48.0
Quarterly average1
50.5
46.1
Average MSCI level2
1,894
1,721
1. Quarterly average FUMA excluding Saunderson House and IW&I
2. MSCI PIMFA Balanced Index is considered to be a reasonable external comparison to Rathbones'portfolios. Based on the corresponding
valuation dates for billing
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
IW&I AVERAGE FUNDS UNDER MANAGEMENT AND
ADMINISTRATION
2024
2023
£bn
£bn
Valuation dates for billing
— 28 Feb
41.9
–
— 31 May
42.9
–
— 31 August
43.2
–
— 30 November1
43.6
40.7
Quarterly average
42.9
–
Average MSCI level2
1,887
1,700
1. IW&I billing aligned to Rathbones quarterly billing cycle from December 2024
2. MSCI PIMFA Balanced Index is considered to be a reasonable external comparison to IW&I's portfolios. Based on the corresponding
valuation dates for billing
TABLE 11. WEALTH MANAGEMENT – REVENUE MARGIN
2024
2023
bps
bps
Basis point return1 from:
— fee income
58.5
57.9
— commission
9.0
8.8
Basis point return on FUMA
67.5
66.7
1. Fee or commission income, divided by the average gross funds under management and administration on the quarterly billing dates (see
table 10)
The method for calculating basis point return on funds under management and administration
for the Wealth Management segment has been revised in order to reflect the gross FUMA of
the segment from which the segment generates income. This approach aligns with the approach
applied to the Asset Management segment. The calculation was previously based on FUMA net
of Groupʼs eliminations.
TABLE 12. WEALTH MANAGEMENT – UNDERLYING OPERATING EXPENSES
2024
2023
£m
£m
Staff costs1
— fixed
233.9
147.2
— variable
129.5
78.2
Total staff costs
363.4
225.4
Other operating expenses
248.6
173.1
Underlying operating expenses
612.0
398.5
Underlying cost/income ratio2
75.2%
79.1%
1. Represents the costs of investment managers and teams directly involved in client-facing activities
2. Underlying operating expenses as a percentage of operating income (see table 9)
ASSET MANAGEMENT
The financial performance of the Asset Management segment is principally driven by the value
of funds under management (FUM). Year-on-year changes in the key performance indicators
for Asset Management are shown in table 13.
FUNDS UNDER MANAGEMENT
Following the challenging trading conditions in 2023, 2024 continued to be a tough environment
for the industry. The year saw significant net redemptions across the asset management industry
(Investment Association (IA) data, December 2024). Industry-wide funds under management grew
to £1.5 trillion at the end of December 2024 driven by market returns (2023: £1.4 trillion).
Gross inflows in Rathbones Asset Management fell 4% from £4.6 billion to £4.4 billion in 2024,
as Saunderson House assets migrating into Rathbones funds, which made a significant contribution
to 2023 inflows and was materially completed in the first half of 2024, delivered a smaller in-year
boost than in 2023. Underlying gross inflows, excluding Saunderson House migration, were
therefore stronger than 2023. Continued investor concerns over inflation, interest rates and equity
market valuations have driven cautious investor sentiment. Despite these macroeconomic impacts
on investor confidence, our range of funds, well balanced between multi-asset and single-strategy,
has helped serve our clientsʼ changing needs and provided some shelter from the market volatility
for our overall FUM. The diverse nature of our multi-asset investment mix, and its obvious continuing
appeal to clients in these challenging times, has ensured that positive net flows have continued into
these funds, partially offsetting the outflows experienced in the single-strategy funds.
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
TABLE 13. ASSET MANAGEMENT – KEY PERFORMANCE INDICATORS
2024
2023
FUM at 31 December1
£15.8bn
£13.8bn
Rate of net growth in Asset Management FUM1
4.3%
13.7%
Underlying profit before tax2
£25.4m
£21.7m
1. See table 15
2. See table 17
TABLE 14. ASSET MANAGEMENT – FUNDS UNDER MANAGEMENT BY PRODUCT
2024
2023
£bn
£bn
Rathbone Multi-Asset Portfolios
6.9
5.3
Rathbone Global Opportunities Fund
4.1
3.6
Rathbone Ethical Bond Fund
2.0
2.2
Offshore funds
0.7
0.6
Rathbone Income Fund
0.6
0.7
Greenbank Multi-Asset Portfolios
0.5
0.4
Rathbone Active Income Fund for Charities
0.2
0.2
Rathbone Core Investment Fund for Charities
0.2
0.2
Rathbone High Quality Bond Fund
0.1
0.2
Rathbone Greenbank Global Sustainability Fund
0.1
0.1
Rathbone Strategic Bond Fund
0.1
0.1
Other funds
0.3
0.2
15.8
13.8
CHART 2. FUNDS – ANNUAL NET FLOWS (£m)
600
1,511
2,076
1,498
24
23
22
21
20
Volatility managed funds (multi-asset portfolios) dropped, according to December IA data, from
being the number one selling sector class but continued to draw strong inflows to December 2024,
with £4.0 billion of net sales across the sector, and this trend was mirrored in Rathbones, which
accounted for approximately 30.0% of the industry total, with net sales totalling £1.2 billion in
the year.
The Groupʼs largest single-strategy fund, Rathbone Global Opportunities Fund, saw a net
£0.2 billion outflow over the course of the year, an improvement of 33.0% compared to 2023
outflows (£0.3 billion), as consumer confidence in global equity markets begins to bounce back.
This was underscored by a strong market performance for the fund, driving an overall growth
in the year of £0.5 billion.
The Global Opportunities fund maintained its excellent industry long-term performance record
in the year by maintaining a first quartile position for performance measured over five years,
which is a key factor in investorsʼ decision-making.
Rathbone Ethical Bond Fund had net redemptions of £0.2 billion in the year, at a similar level
to 2023 (2023: £0.2 billion), as some consumer demand shifted towards funds with passive
management styles.
During the year, the total number of investment professionals running the funds increased by three
to 26 at 31 December 2024 (2023: 23).
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Consistent with the Wealth Management segment, we have seen continued higher levels of
investors withdrawing funds in response to the wider economic environment. These factors have
led to a continuation of the elevated gross outflows experienced in 2023. Strong gross inflows,
leading to positive net flows in Multi-asset funds and favourable investment performance offsetting
net outflows in single strategy funds, ensured total FUM grew to a record high of £15.8 billion at the
end of 2024, an increase of 14% during the year (see table 15).
48
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
TABLE 15. ASSET MANAGEMENT – FUNDS UNDER MANAGEMENT
Year ended 31 December
2024
£bn
2023
£bn
As at 1 January
13.8
11.0
Net inflows
0.6
1.5
— inflows1
4.4
4.6
— outflows1
(3.8)
(3.1)
Market movement & investment performance2
1.4
1.3
As at 31 December
15.8
13.8
Rate of net growth3
4.3%
13.7%
1.
Valued at the date of transfer in or out
2. Impact of market movements and relative performance
3. Net inflows as a percentage of opening FUM
TABLE 16. ASSET MANAGEMENT – PERFORMANCE1, 2, 4
2024/(2023) Quartile ranking³ over
1 year
3 years
5 years
Rathbone Ethical Bond Fund
1 (1)
2 (2)
2 (1)
Rathbone Global Opportunities Fund
2 (1)
3 (3)
1 (1)
Rathbone Income Fund
4 (3)
3 (2)
3 (2)
Rathbone Strategic Bond Fund
2 (1)
3 (3)
3 (3)
Rathbone UK Opportunities Fund
3 (1)
4 (4)
4 (4)
1. Quartile ranking data is sourced from FE Trustnet
2. Excludes multi-asset funds (for which quartile rankings are prohibited by the Investment Association (IA)), High Quality Bond Fund, which
has no relevant peer group against which to measure quartile performance, non-publicly marketed funds and segregated mandates
3. Ranking of institutional share classes at 31 December 2024 and 2023 against other funds in the same IA sector, based on total return
performance, net of fees (consistent with investment performance information reported in the fundsʼ monthly factsheets)
4. Funds included in the above table account for 43% of the total FUM of the fund's business
FINANCIAL PERFORMANCE
Income of the Asset Management segment is primarily derived from annual management charges,
which are calculated on a daily basis on the value of FUM of each fund, net of rebates payable to
intermediaries.
Net annual management charges increased to £79.4 million in 2024, reflecting the rise in average
FUM. Net annual management charges as a percentage of average FUM fell by 0.7 bps to 53.2 bps
(2023: 53.9 bps), as the multi-asset funds, which have a lower annual management charge than
single strategy funds, continued to grow their proportion of total funds under management.
Underlying operating expenses detailed in table 18 increased by £10.8 million to £56.3 million
(2023: £45.5 million). Fixed staff costs of £7.9 million for the year ended 31 December 2024
were £0.8 million higher than 2023. This reflects general inflationary rises as well as the impacts
of staffing changes in the period.
Variable staff costs of £20.5 million were 53.0% higher than 2023. These costs relate to deferred
awards which are spread over multiple years; the current year cost does not therefore solely reflect
performance in the current year.
Other operating expenses have increased by 11.6% to £27.9 million in 2024. A large part of this
cost increase, apart from the inflationary indexing on third-party supplier contracts, relates to the
direct impacts on variable costs of the growth in revenues and scaling of the business. For example,
administration costs which are directly tied to FUM increased by £0.7 million in the year to
£6.8 million. We continue to make enhancements to our Charles River Investment Management
Solution, which provides a strong platform from which we can serve our clients and further
grow the business. This expenditure forms part of our ongoing technology development and
change process.
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
TABLE 17. ASSET MANAGEMENT – FINANCIAL PERFORMANCE
2024
2023
£m
£m
Net annual management charges
79.4
64.7
Interest and other income
2.3
2.5
Operating income
81.7
67.2
Underlying operating expenses1
(56.3)
(45.5)
Underlying profit before tax
25.4
21.7
Operating % margin2
31.1%
32.3%
1.
See table 18
2. Underlying profit before tax divided by operating income
TABLE 18. ASSET MANAGEMENT – UNDERLYING OPERATING EXPENSES
2024
2023
£m
£m
Staff costs
— Fixed
7.9
7.1
— Variable
20.5
13.4
Total staff costs
28.4
20.5
Other operating expenses
27.9
25.0
Underlying operating expenses
56.3
45.5
Underlying cost/income ratio1
68.9%
67.7%
1. Underlying operating expenses as a percentage of operating income (see table 17)
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
SUMMARY OF FINANCIAL POSITIONS
As a banking Group, Rathbones is required to operate in accordance with the requirements relating
to capital resources and banking exposures prescribed by the Capital Requirements Regulation,
as applied in the UK by the Prudential Regulation Authority (PRA). The Group is required to ensure
it maintains adequate capital resources to meet its combined Pillar 1 and Pillar 2 requirements.
TABLE 19. GROUP'S FINANCIAL POSITION
2024
2023
£m
(unless stated)
£m
(unless stated)
Own funds1
— Common Equity Tier 1 ratio2
19.0%
17.8%
— Total own funds ratio3
20.6%
19.4%
— Total retained earnings
279.8
263.7
— Tier 2 subordinated loan notes4
39.9
39.9
— Total risk exposure amount
2,521.9
2,425.6
— Leverage ratio5
21.1%
18.7%
Other resources:
— Total assets
4,290.1
4,224.4
— Treasury assets6
2,737.4
2,601.0
— Investment Management loan book7
76.0
101.7
— Intangible assets from acquired growth8
468.5
502.7
— Tangible assets and software9
62.5
30.9
Liabilities:
— Due to customers10
2,352.1
2,253.3
— Net defined benefit pension asset
0.5
7.0
1.
Stated inclusive of the retained profit for the year ended 31 December 2024 which became verified profit on 25 February 2025, but
prior to taking into account the proposed final dividend relating to 2024.
2. Common Equity Tier 1 capital as a proportion of total risk exposure amount
3. Total own funds (see table 20) as a proportion of total risk exposure amount
4. Represents the carrying value of the Tier 2 loan notes (see note 28)
5. Tier 1 capital as a percentage of total assets, excluding intangible assets, plus certain off-balance-sheet exposures
6. Balances with central banks, loans and advances to banks and investment securities
7. See note 16 to the financial statements
8. Net book value of acquired client relationships and goodwill (note 22)
9. Net book value of property, plant and equipment and computer software (notes 19 and 22)
10.Total amounts of cash in client portfolios held by Rathbones Investment Management as a bank (note 24)
The Groupʼs Pillar 3 disclosures are published annually on our website (rathbones.com/investor-
relations/results-and-presentations) and provide further details about regulatory capital resources
and requirements. The Groupʼs key financial positions are set out in table 19.
The Groupʼs CET1 and total capital ratios increased year on year despite a higher Pillar 1
requirement (see table 21). The larger requirement was countered by the increased own funds
resources (see table 20) which benefited from a reduction in the deduction attributable to the
defined benefit pension schemes following the completion of the buy-in during 2024.
The leverage ratio was 21.1% at 31 December 2024, up from 18.7% at 31 December 2023.
The leverage ratio represents our Tier 1 capital (own funds) as a percentage of the Groupʼs total
assets (i.e. the ʻexposure measureʼ), excluding central bank exposure and intangible assets. Whilst
total assets and Tier 1 capital increased in the year due to the IW&I combination, assets excluded
from the exposure measure (central bank exposure and regulatory deductions) represented
a lower proportion of the balance sheet. This resulted in an uplift to the leverage ratio.
At 31 December 2024, neither Rathbones Investment Management Limited nor the
Rathbones Group were subject to a minimum leverage ratio requirement.
CAPITAL MANAGEMENT
The Group continues to maintain a robust capital base, with a surplus of capital above the
regulatory minimum of £207.2 million at 31 December 2024 (including retained profit for the year
ended 31 December 2024 which became verified profit on 25 February 2025 but prior to reflecting
the proposed final dividend relating to 2024) which supports strategic investment, the ongoing
integration of the IW&I business and our progressive dividend policy.
As set out in the outlook and guidance section above, we will review our capital allocation policy,
including an evaluation of our capacity for surplus returns, following the migration of IW&I onto a
single operating platform later this year.
CAPITAL RESOURCES
At 31 December 2024, the Groupʼs regulatory own funds (including retained profit for the year
ended 31 December 2024 which became verified profit on 25 February 2025) were £520.2 million
(2023: £471.4 million). This figure is prior to taking into account the proposed final dividend relating
to 2024. Own funds consisted of both Common Equity Tier 1 and Tier 2 capital (see table 20).
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
TABLE 20. GROUP'S REGULATORY OWN FUNDS1
2024
2023
£m
£m
Share capital and share premium
323.3
317.7
Reserves
1,104.2
1,088.1
Less:
Own shares
(68.1)
(55.6)
Intangible assets2
(878.7)
(911.8)
Retirement benefit asset3
(0.5)
(7.0)
Common Equity Tier 1 own funds
480.2
431.4
Tier 2 own funds
40.0
40.0
Total own funds
520.2
471.4
1.
Stated inclusive of the retained profit for the year ended 31 December 2024 which became verified profit on 25 February 2025, but
prior to taking into account the proposed final dividend relating to 2024.
2. Net book value of goodwill, client relationship intangible assets and software is deducted directly from own funds, less any related
deferred tax
3. The retirement benefit asset is deducted directly from own funds
The Tier 2 eligible own funds equate to £40.0 million of ten-year subordinated loan notes, which
were issued in October 2021 and have a carrying value of £39.9 million. The notes introduced a
small amount of gearing into our balance sheet as a way of financing future growth in a cost-
effective and capital-efficient manner. They are repayable in October 2031, with a call option for
the issuer annually from 2026. Interest is payable at a fixed rate of 5.6% per annum until the first
option call date, and at a rate of 4.9% over Compound Daily SONIA thereafter (note 28).
When taking the capital requirement into account, the resulting capital surplus at the end of 2024
of £207.2 million represents an increase of £72.7 million relative to the surplus of £134.5 million
as at 31 December 2023.
CAPITAL REQUIREMENT
The Groupʼs own funds requirement (see table 21) is the combined total of both the Groupʼs Pillar 1
and Pillar 2 requirement. The Pillar 2 requirement consists of both the Pillar 2A, set by the PRA,
and the combined regulatory buffer requirement.
TABLE 21. GROUP'S OWN FUNDS REQUIREMENTS
2024
2023
£m
£m
Credit risk requirement
75.2
72.3
Market risk requirement
–
–
Operational risk requirement
126.6
121.7
Pillar 1 own funds requirement
201.8
194.0
Pillar 2A own funds requirement
0.6
39.4
Total Capital Requirement (TCR)
202.4
233.4
Combined buffer:
Capital Conservation Buffer (CCB)
63.0
60.6
Countercyclical Capital Buffer (CCyB)
47.6
42.9
Total Capital Requirement (TCR) and Combined buffer
313.0
336.9
PILLAR 1 OWN FUNDS REQUIREMENT
Pillar 1 determines a total risk exposure amount (also known as ʻrisk-weighted assetsʼ) for the Group,
taking into account expected losses in respect of the Groupʼs exposure to credit, counterparty
credit, market and operational risks. The combined exposure amount equates to the minimum
requirement for the amount of capital the Group must hold.
The increase in credit risk to £75.2 million in 2024 was due to a revised allocation of the Groupʼs
treasury assets along with the consequences of including IW&I exposures.
At 31 December 2024, the Groupʼs total risk exposure amount was £2,521.9 million (2023:
£2,425.6 million). The increase was driven principally by the inclusion of IW&I exposures and
following increased investment in treasury assets.
PILLAR 2A OWN FUNDS REQUIREMENT
The Pillar 2 requirement supplements the Pillar 1 minimum requirement with firm-specific Pillar 2A
requirements and a framework of regulatory capital buffers.
The Pillar 2A own funds requirement is set by the PRA as part of its supervisory review process
and the calculation of it remains confidential to the PRA. The requirement reflects those risks
that are specific to the firm that are not fully captured under the Pillar 1 own funds requirement.
The Group-specific risks that are reflected in the Pillar 2A requirement are set out overleaf:
GROUP CHIEF FINANCIAL OFFICERʼS REVIEW
FINANCIAL POSITION
STRATEGIC
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GOVERNANCE
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55
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
We routinely horizon scan across the regulatory landscape to ensure we maintain our compliance
with future changes in prudential requirements. Our preparations for the incoming Basel 3.1 regime
and the accompanying Small Domestic Deposit Takers (SDDT) regime are progressing and are a
key focus for the Group.
TOTAL ASSETS
Total assets at 31 December 2024 were £4.3 billion (2023: £4.2 billion), of which £2.4 billion
(2023: £2.3 billion) represents the cash element of client portfolios that is held as a banking deposit.
RIM TREASURY ASSETS
As a licensed deposit taker, Rathbones Investment Management Limited holds the Groupʼs surplus
liquidity on its balance sheet together with clientsʼ cash. Cash in client portfolios held on a banking
basis of £2.4 billion (2023: £2.3 billion) (note 24) represented 3.2% of total Investment
Management funds under management and administration at 31 December 2024 compared
to 4.7% at the end of 2023. Cash held in client money accounts was £27.6 million (2023:
£8.4 million), this increase is due to a higher proportion of client settlements transactions
outstanding in the market over year end. These balances are held off balance sheet in accordance
with Client Money Rules of the FCA.
The value of treasury assets held with the Bank of England increased to £1.2 billion (2023: £1.0
billion), as did investment in marketable securities which increased in accordance with our treasury
policy and risk appetite.
The Group treasury department of Rathbones Investment Management, reporting through the
banking committee to the Board, operates in accordance with procedures set out in a Board-
approved treasury manual and monitors exposure to market, credit and liquidity risk as described
in note 33 to the financial statements. It invests in certain securities issued by a diversified range
of highly-rated counterparties. These counterparties must be single ʻA-' rated or higher by Fitch
at the time of investment and are regularly reviewed by the banking committee.
IW&I TREASURY ASSETS
The manner in which Investec Wealth & Investment Limited (a wholly owned subsidiary of
Rathbones Group Plc) holds its surplus client money is governed by the CASS rules. In this regard
these monies are off-balance sheet and held in trust on behalf of clients.
The IW&I Cash & Credit Management Committee (CCMC) is mandated by the Operations
Committee to consider, approve, and keep under review, the suitability of financial institutions
for the placement of firmʼs and clients' cash deposits in accordance with the CASS rules on client
money and assets. Approved institutions are subject to the IW&I Credit Policy and annual due
diligence which is undertaken in accordance with the CASS rules. Total Client Money held was
£1.3 billion as at 31 December 2024 (2023: £1.3 billion) representing 3.0% of Investment
Management funds under management at 31 December 2024 compared to 3.1% at the end
of 2023.
GROUP CHIEF FINANCIAL OFFICERʼS REVIEW
FINANCIAL POSITION
INTEREST RATE RISK IN THE BANKING BOOK
The Group operates on a non-trading book basis, whereby all assets held are with the intent of
holding to maturity. Assets are not actively traded in secondary markets for speculative purposes.
The resulting interest rate risk represents losses that could arise for a 2% parallel shift in the Bank
of England base rate. The exposure would measure the time to reprice interest bearing assets
and liabilities.
CONCENTRATION RISK
Greater potential exposure as a result of the concentration of borrowers located in the UK relative
to other overseas jurisdictions.
Further to the completion of the buy-in of the defined benefit pension scheme in 2024, the
Pillar 2A risk attributable to the scheme was reviewed by the PRA as part of its supervisory review
process and reduced to reflect the transfer of risk. This is reflected in the decreased requirement
set out in table 21.
COMBINED BUFFER REQUIREMENT
The Group is also required to maintain two regulatory capital buffers, both of which must be met
with CET1 capital.
The capital conservation buffer (CCB) is a general buffer, designed to provide for losses in the event
of a stress, and is set by the PRA. The CCB is set at 2.5% of the Groupʼs total risk exposure amount
as at 31 December 2024.
The countercyclical capital buffer (CCyB) reflects the credit conditions and overall health of the
financial system in a particular jurisdiction. The firm specific CCyB reflects the weighted average of
rates for relevant credit exposures. For relevant UK credit risk exposures, the percentage rate that
applies is set by the Financial Policy Committee (FPC) of the Bank of England. For other jurisdictions
where the Group has exposures, the percentage rate applicable to each jurisdiction is applied and
set by their respective prudential policy makers.
The percentage buffer rate for UK exposures is currently 2.0%. The Group has relevant credit
exposures in other jurisdictions where a different rate applies, resulting in a weighted rate of 1.9%
as at 31 December 2024.
CAPITAL AND LIQUIDITY MONITORING
As required under PRA rules, we perform an Internal Capital Adequacy Assessment Process
(ICAAP) and Internal Liquidity Adequacy Assessment Process (ILAAP) annually for the consolidated
Group. Both processes include performing a range of stress tests to determine the appropriate
level of regulatory capital and liquidity that the Group should hold above the regulatory minimum.
In addition, we monitor a wide range of capital and liquidity ratio statistics on a daily and monthly
basis. Surplus capital levels are forecast monthly, taking account of anticipated dividend and
investment requirements, to ensure that appropriate buffers are maintained. Investment of
proprietary funds is controlled by our Group treasury department.
STRATEGIC
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56
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
Client relationship intangible assets are amortised over the estimated life of the client relationship,
which is generally a period between 10 and 15 years. The total amortisation charge for client
relationships in 2024, including the impact of any lost relationships, was £42.2 million (2023:
£22.4 million). The increase in the year is predominately due to a full year of amortisation for the
IW&I client relationship intangible asset.
CAPITAL EXPENDITURE
Capital expenditure during 2024 amounted to £48.7 million (2023: £4.5 million).
The increase in capital expenditure is driven by property spend, which has increased by £44.0
million year on year due to implementation of the property strategy for the enlarged Group
as a result of the IW&I combination.
DEFINED BENEFIT PENSION SCHEMES
We operate two defined benefit pension schemes. With effect from 30 June 2017, we closed
both schemes, ceasing all future benefit accrual and breaking the link to salary.
At 31 December 2024 the combined schemesʼ liabilities, measured on an accounting basis,
had decreased to £87.9 million, down 13.1% from £101.1 million at the end of 2023. This decrease
primarily reflected an increase in discount rates at the end of the year.
A bulk annuity policy buy-in of the of the Groupʼs retirement benefits was completed during the
year for both schemes, fully securing all of their liabilities. The buy-in was funded by the assets of
the schemes, together with a contribution of £3.7 million from the Group. An asset for the bulk
annuity policy was subsequently recognised at a fair value equivalent to the liabilities secured.
The reported position of the schemes as at 31 December 2024 was a surplus of £0.5 million
(2023: surplus of £7.0 million) with the decrease predominantly due to the cost of the bulk annuity
policy being greater than the balance sheet liability of the benefits secured.
GROUP CHIEF FINANCIAL OFFICERʼS REVIEW
FINANCIAL POSITION
Investec Wealth & Investment Limited also hold Firm's money, which is on balance sheet,
also subject to the IW&I Firmʼs Credit Policy Statement and overseen by the CCMC. Total Firmʼs
Money held was £155.6 million as at the 31 December 2024 (2023: £161.9 million).
The treasury department of Investec Wealth & Investment Limited is responsible for the cash
management of both the Client and Firm's money, reporting to the CCMC and operating in
accordance with the Treasury Mandate. The treasury department monitors diversification and
liquidity on a daily basis. Approved Institutions, other than Group companies, must have a minimum
of S&P Short Term rating of A-2, a S&P Long Term Rating of BBB+ and are reviewed quarterly by
the CCMC.
IW&I CLIENT MIGRATION
On migration, IW&I client deposits held on a CASS basis and off-balance sheet will transfer to RIM.
These deposits will be held by RIM on a banking basis on-balance sheet and managed by the Group
treasury department in line with existing Board-approved limits, as set out in the treasury manual.
LOANS TO CLIENTS
Loans are provided as a service to Wealth Management clients who have short to medium term
cash requirements. Such loans are normally made on a fully secured basis against portfolios held
in our nominee, with a requirement that the value of the loan is covered two times by the value
of the secured portfolio. Loans are usually advanced for five years (see note 16 to the financial
statements). In addition, charges may be taken on property held by the client to meet security
cover requirements.
Our ability to provide such loans is a valuable additional service to clients who require short to
medium term finance, typically for bridging finance when buying and selling their homes.
Loans advanced to clients decreased to £76.0 million at end of 2024 (2023: £101.7 million).
As borrowing costs increased, we saw lower demand for new loans as clients looked to reduce
outstanding debt and finance their cash requirements from other means, including drawing
down from investment portfolios, leading to higher outflows of funds under management
and administration.
INTANGIBLE ASSETS
Intangible assets arise principally from business combinations and are categorised as goodwill and
client relationships. Intangible assets reported on the balance sheet also include purchased and
developed software.
At 31 December 2024, the total carrying value of goodwill and client relationship intangible assets
was £973.4 million (2023: £1,010.5 million). During the year, client relationship intangible assets
of £11.6 million were capitalised (2023: £352.9 million). A total of £2.4 million of client relationship
intangible assets were disposed of in the year, relating to cessations of individual relationships.
STRATEGIC
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57
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
TABLE 22. EXTRACTS FROM THE CONSOLIDATED STATEMENT OF CASH FLOWS
2024
2023
£m
£m
Cash and cash equivalents at the end of the year
1,459.2
1,302.9
Net cash inflows from operating activities
293.6
(89.4)
Net change in cash and cash equivalents
156.3
(269.8)
Cash used in investing activities included a net inflow of £18.6 million from the purchase of
certificates of deposit (2023: net outflow of £241.8 million), as we maintained our proportion of
treasury assets held in marketable instruments for the prior year. All investment decisions were
made under the existing low risk appetite framework set by the RIM Banking Committee. Included
within cash used in investing activities is cash of £185.5 million acquired from the acquisition
of IW&I.
The other significant non-operating cash flows during the year were as follows:
—outflows relating to the payment of dividends of £56.9 million (2023: £71.4 million)
—outflows relating to payments to acquire intangible assets of £9.7 million (2023: £5.6 million),
which includes payments in respect of awards made to recently recruited investment managers
in relation to the delivery of new business growth, along with the development of client software
applications
—outflows of £46.9 million relating to capital expenditure on tangible property, plant and
equipment (2023: £5.1 million), which relates predominantly to property fit-out costs.
GROUP CHIEF FINANCIAL OFFICERʼS REVIEW
LIQUIDITY AND CASH FLOW
As a bank, we are subject to the PRAʼs ILAAP regime, which requires us to hold a suitable liquid
assets buffer to ensure that short-term liquidity requirements can be met under certain stressed
scenarios. Liquidity risks are actively managed on a daily basis and depend on operational and
investment transaction activity.
Cash and balances at central banks amounted to £1.2 billion at 31 December 2024 (2023:
£1.0 billion). We continue to hold a substantial portion of the Groupʼs overall liquidity with central
banks. The increase during the year is in line with the growth in client deposits.
Cash and cash equivalents, as defined by accounting standards, includes cash, money market funds
and banking deposits, which had an original maturity of less than three months (see note 33 to the
financial statements). Consequently, cash flows, as reported in the financial statements, include the
impact of capital flows in treasury assets.
Net cash inflows from operating activities in the year largely reflect a £90.2 million increase in
banking client deposits (2023: £251.5 million decrease) and a £147.6 million increase in interest
received (2023: £111.9 million). Loans and advances to banks and customers decreased by £21.8
million in the year, (2023: £87.4 million) due to the repayment of portfolio lending which is
attributed in part to the higher cost of debt.
STRATEGIC
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
Our approach to risk management is
fundamental to supporting the delivery
of our strategic objectives. Our risk
governance and risk processes are
designed to enable the firm to manage
risk effectively in accordance with our
risk appetite and to support the long-term
future of the firm.
MANAGING RISK
The Board has overall responsibility for risk
management across the Group, regularly
assessing the most significant risks and
emerging threats to the Groupʼs strategy.
The Board delegates oversight of risk
management activities to the Group Risk and
Audit Committees. Our risk governance and
risk management framework supports the
Chief Executive and executive committee
members with their day-to-day responsibility
for managing risk.
RISK CULTURE
The risk culture embedded across the Group
enhances the effectiveness of risk management
and decision-making. The Board promotes
a strong risk culture, reinforced by our
executive and senior management team,
which encourages appropriate behaviours
and collaboration on managing risk across
the Group.
Risk management is an integral part of
everyoneʼs day-to-day responsibilities and
activities; it is linked to performance and
development, as well as to the Groupʼs
remuneration and reward schemes. We aim
to create an open and transparent working
environment, encouraging employees to
engage positively in risk management in support
of the achievement of our strategic objectives.
RISK GOVERNANCE AND THREE LINES OF DEFENCE
We operate a three lines of defence model to support risk governance and risk management across the Group
GOVERNANCE
BOARD
AUDIT COMMITTEE
GROUP RISK COMMITTEE
EXECUTIVE COMMITTEE
EXECUTIVE RISK COMMITTEE
BANKING COMMITTEE
Sets strategy and risk appetite
across the Group, and is
ultimately accountable for
risk management.
Monitors and reviews the
effectiveness of internal
controls with oversight of the
internal audit function in line
with the Groupʼs risk profile
on behalf of the Board. It also
oversees the appointment
and relationship with the
external auditor.
Oversees effectiveness of the
risk management framework
and activity across the Group.
Advises the Board on risk
appetite, risk assessment,
risk profile and risk culture.
First line committees with
responsibility for management
of risk and internal control
across the Group.
BUSINESS AREAS AND LINES OF DEFENCE
1
2
3
FIRST LINE OF DEFENCE
SECOND LINE OF DEFENCE
THIRD LINE OF DEFENCE
Senior management
Business operations and control functions
Risk, compliance and anti-money
laundering functions
Internal audit
RESPONSIBILITY
Responsible for managing risk in line
with risk appetite by developing and
maintaining an effective system of
internal control.
RESPONSIBILITY
Responsible for the risk management
framework and the independent
oversight and challenge of first line
risk management activity.
RESPONSIBILITY
Responsible for providing independent
assurance to senior management
on the effectiveness of governance,
risk management and internal control.
RISK MANAGEMENT AND CONTROL
Read more about our risk management
process: See page 61
STRATEGIC
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
RISK MANAGEMENT FRAMEWORK
(RMF) OVERVIEW
Our RMF provides the foundation for
identifying, evaluating, managing and reporting
risk and continually improving the effectiveness
of risk management throughout the firm.
COMMUNICATION AND CONSULTATION
RISK APPETITE
RISK STRATEGY
MONITORING AND REVIEW
RISK GOVERNANCE
RISK FACTORS
BOARD AND
COMMITTEES
PAST
—Loss events
—Near misses
—Could it happen here
RISK
REPORTING
RISK
IDENTIFICATION
Risk
Management
Process
ROLES AND
RESPONSIBILITIES
CURRENT
—Issues
—Change
—Threats
RISK MITIGATION
AND CONTROL
RISK
EVALUATION
POLICIES
FUTURE
—Emerging risks
—Horizon scanning
—Scenario analysis
RISK DATA, SYSTEMS AND INFRASTRUCTURE
RISK CULTURE AND TRAINING
RISK BASED DECISION-MAKING
RISK MANAGEMENT AND CONTROL
Read more about our risk management
process: See page 61
STRATEGIC
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60
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
RISK APPETITE
The Board approves the firmʼs risk appetite
statement and framework at least annually to
ensure it remains consistent with our strategic
objectives and prudential responsibilities.
Specific risk appetite statements are set and
measures established for each principal risk.
The risk appetite framework supports strategic
decision-making, as well as providing a
mechanism to monitor our risk exposures.
The position against our risk appetite
statements and measures is assessed and
reported on a regular basis to the Executive
Committee, Group Risk Committee and
the Board.
Given the current economic outlook and the
evolving regulatory landscape within the sector,
the Board remains committed to having a
relatively low overall appetite for risk in line
with our strategy. The Board recognises our
performance is susceptible to fluctuations in
investment markets and has the potential to
bear losses from financial and non-financial
risks from time to time, either as reductions
in income or increases in operating costs.
Risk appetite measures and thresholds
have been approved by the Board for 2025,
taking into account the combination between
Rathbones and IW&I. This yearʼs measures
reflect the scale of the enlarged Group but,
other than this, there have been no other
material changes to our appetite for risk.
Following full client migration in 2025, an
interim review will be completed to ensure
that measures remain appropriate for the
Group and its individual entities.
RISK CATEGORIES
RISK APPETITE STATEMENT
STRATEGIC ALIGNMENT
BUSINESS AND
STRATEGIC RISK
Business and strategic risks will be identified and actively managed
to protect the ability to deliver sustainable growth.
Change initiatives will be orientated towards longer-term client,
stakeholder and societal expectations.
BUSINESS RESILIENCE
Supporting and delivering growth
FINANCIAL RISK
Financial risks will be actively managed to preserve the Groupʼs
overall resilience.
Credit and market risk exposures will be managed to Board approved
instruments and limits in order to protect company assets and maintain
prudent levels of liquidity and regulatory own funds.
The Group will also continually monitor and respond to risks arising from
its pension scheme obligations.
FINANCIAL RESILIENCE
Supporting and delivering growth
NON-FINANCIAL RISK
(CONDUCT AND
OPERATIONAL)
Conduct and regulatory risks associated with our business are recognised;
however, we have no appetite for intentionally inappropriate behaviour
or action by any entity within the Group or employees that could have
a material detrimental impact on clients, key stakeholders and
our reputation.
Operational risks and losses can arise from inadequate or failed internal
processes, people or systems, or from external events. We have an
extremely low appetite for losses and no appetite for systemic or
materially high risk events that could affect the operational resilience
of important business services.
REGULATORY AND
OPERATIONAL RESILIENCE
Enriching the client and advisor
proposition and experience
Inspiring our people
Operating more efficiently
RISK MANAGEMENT AND CONTROL
Read more about our strategic priorities:
See page 19
STRATEGIC
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61
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
RISK MANAGEMENT PROCESS
Our risk management process is a defined
approach to identify, assess and respond to risks
that could affect delivery of strategic objectives
and annual business plans. The Board, executive
and senior management are actively involved
in this process.
Risks are identified within a three-tier hierarchy,
with the highest level containing business and
strategic, financial, conduct and operational
risks. Risks are assessed on an inherent and
residual basis across a three-year period
according to several impact criteria, which
include consideration of the internal control
environment and/or insurance mitigation.
We maintain a watch list to identify and
evaluate current issues and emerging risks as
a result of business development or changes
in the regulatory landscape, as well as threats
and issues in the wider external environment.
This helps inform the view of the firmʼs current
and longer-term risk profile, and influences
managementʼs decisions and actions.
Stress tests are undertaken to include
consideration of the impact of a number
of severe but plausible events that could
impact the business. This work takes account
of the availability and likely effectiveness
of mitigating actions that could be taken
to avoid or reduce the impact or likelihood
of the underlying risks materialising.
The Groupʼs risk profile, risk register, watch
list and stress tests are regularly reviewed
and challenged by the executive, senior
management, Group Risk Committee and
the Board. Throughout 2024, the Group risk
governance structure has not altered but its
membership and inputs have been enhanced
to ensure oversight of the enlarged Group
and its individual entities.
RISK REPORTING
RISK IDENTIFICATION
—Risk information is routinely reported at governance
committees across the Group
—Group Risk Committee convenes at least quarterly
—Executive Risk Committee meets every month
—A standing agenda across both committees is defined to
ensure complete coverage of risk reporting and executive
attendance is tracked.
—Risks are identified in the context of the Groupʼs
strategic objectives and aligned with our approved
Group risk taxonomy
—Risks are identified from a top-down and bottom-up
basis from Group Executive and business unit
risk owners
—In addition, a watch list is a key tool used to highlight
current and emerging issues, potential threats and
both business and regulatory change likely to affect
the Groupʼs overall risk profile
—Enterprise risk management (ERM) software
is embedded to capture all risk information.
Risk
Management
Process
—Control environment established to mitigate risks
to an appropriate level
—Independent control assurance processes are established
across the three lines of defence as well as through specific
reviews conducted by external auditors
—Risk indicators are developed for each principal risk
to provide an early signal of increasing risk exposure.
Thresholds dictate an early warning trigger, a breach
of risk tolerance through to invocation of the recovery
and resolution plan
—ICAAP and ILAAP is used to calculate regulatory capital
required in the event that principal risks should crystallise.
—Risks are assessed on both an inherent and residual
basis considering their impacts and likelihood
—Risk impact is considered through multiple lenses
including client, financial, regulatory and reputational
—Likelihood is considered over a three-year period
—Risk events and issues are recorded within the ERM
software and linked to risks based on materiality to
help evaluate control effectiveness and the residual
risk ratings
—Internal Capital Adequacy Assessment Process
(ICAAP), Internal Capital Adequacy Risk Assessment
(ICARA) and Internal Liquidity Adequacy Assessment
Process (ILAAP) stress test principal risks across
the Group.
RISK MITIGATION AND CONTROL
RISK EVALUATION
RISK MANAGEMENT AND CONTROL
STRATEGIC
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
EXTERNAL EMERGING RISKS
AND THREATS
Emerging risks, including legislative and
regulatory change, which have the potential
to impact the Group and delivery of our
strategic objectives, are monitored through
our watch list.
During the year, the executive committee
continued to recognise and respond to a
number of emerging risks and threats to
the financial services sector as a whole and
to our business.
Our view for 2025 is that we can reasonably
expect current market conditions and
uncertainties to remain, given the wide range
of global economic and political scenarios
which could emerge.
NEAR TERM
GLOBAL AND UK
SPECIFIC POLITICAL
TENSIONS
Geopolitical events remains a threat to financial stability. War in the Middle East and war between Russia and Ukraine as well as
tension between the US and China have driven increased inflation and market volatility. The US stance to international relations
has changed rapidly. Uncertainty is expected to continue in the near term.
UK AND GLOBAL
ECONOMIC
CHALLENGES
The final quarter of 2024 was shaped by diverging growth patterns and shifting monetary policies. The US economy sustained
steady growth, supported by resilient consumer spending and a recovery in industrial production. Swiftly implemented trade
tariffs following Trumps re-election looks set to influence the global economy and financial markets. In Europe, Germany
entered a technical recession as weak exports and manufacturing output weighed on its economy. Meanwhile, the UK is facing
several challenges in the form of subdued growth and volatility in inflation which may slow the lowering of interest rates.
The full impact of tax changes in the Autumn Budget will be a watch item throughout 2025.
CYBER THREATS
AND SUPPLY CHAIN
RESILIENCE
The sophistication of cyber attacks is ever-evolving, especially as our digital environment advances. Attacks have become far
more persistent with a notable increase in frequency since the invasion of Ukraine. Rathbones is committed to enhancing the
technology infrastructure to help mitigate the risk.
MEDIUM TERM
CHANGING
REGULATORY
EXPECTATIONS
The regulatory landscape is an area of fast paced change centred on client advocacy, transparency and integrity. Of note
Consumer Duty requirements have continued to be embedded. The look ahead shows that 2025 will be another busy year
with key implementation dates for regulatory change.
PANDEMIC
Whilst operational resilience to a future pandemic is much improved following the COVID-19 outbreak, a future infectious
disease epidemic could emerge and with that comes the economic repercussions and slow recovery from it.
CLIMATE CHANGE
TRANSITION RISK
Climate related shocks are becoming a more important macro factor and will contribute to volatility in growth and inflation.
Climate and environmental risk is a key focus as we move towards achieving net zero emissions by 2050 or sooner. Alongside
reviewing our governance structures, we will continue to integrate data, develop metrics and increase disclosures in our
client reporting.
DIGITAL
INNOVATION
Developing technology across the wealth management sector poses a continual threat to maintaining a competitive advantage.
Digital capability is less of a barrier to engaging clients and servicing their needs, in particular younger generations where there
is an expectation of online accessibility. Rathbones is implementing a strategic programme of change to ensure our digital
technology meets the needs of our prospective and existing clients.
NEW ENTRANTS
TO THE MARKET
AND ARTIFICIAL
INTELLIGENCE AI
The threat of new non-traditional entrants to the investment sector is a higher probability. There has been continued
consolidation within the sector including mergers and acquisitions driven by Private equity investments. In addition, AI
capabilities, from advanced analytics, automation and predictive intelligence is fast becoming seen as a future competitive
advantage within the financial sector, however, research has shown that investors are reticent to trust in these new tools.
LONGER TERM
GENERATIONAL
WEALTH CHANGE
Studies show that the over 45s and especially the post-war ʻbaby boomersʼ retain a significant portion of the UK wealth in the
form of property and pensions. This wealth will begin to transfer to younger beneficiaries over the next 30 years. Generational
differences could drive changes in behaviours and appetite towards investments.
SOCIAL CARE
FINANCING
Accessibility and inequality in the adult social care sector has been a topic of concern for some time and it continues to be a risk
to assets under management, with clients drawing on their investments to pay for their care fees.
RISK MANAGEMENT AND CONTROL
STRATEGIC
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
PROFILE AND MITIGATION
OF PRINCIPAL RISKS
We continually assess our risk profile against
both internal and external risk drivers and are
investing further in our people, processes and
technology to improve risk management. We
remain focused on client service, the resilience
of our business and wellbeing of our colleagues
and we believe our approach continues to
be effective.
Based upon our risk assessment processes,
the Board believes that the principal risks and
uncertainties facing the Group that could
impact the delivery of our strategic objectives
have been identified below. These risks
continue to reflect our strategic initiatives
and transformation programme, continual
enhancements to the Groupʼs business model
in response to environmental, societal and
regulatory expectations, the evolving cyber
threat landscape, operational resilience in
relation to our supply chain, the importance
of our people and the economic and political
environment.
Information about our principal risks is set
out on the following pages. The risks are
mapped out by their likelihood and impact
on a residual risk basis, having considered the
effectiveness of controls in place to mitigate
the risk. Details of how our principal risks align
with our strategic priorities can be viewed
in the link below.
We use ratings of high, medium, low and very
low in our risk assessment. High-risk items are
those that have the potential to impact the
delivery of strategic objectives, with medium,
low and very low rated risks having less impact
on the Group. Likelihood is similarly based on
a qualitative assessment.
We consider that the growth of the Group
following the combination with IW&I has
proportionately increased the risk profile.
The ratings of the risks below are relative
to the new scale of the organisation.
PRINCIPAL RISKS: RESIDUAL ASSESSMENT
PRINCIPAL RISKS
Read more about our strategic priorities:
See page 19
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
2024 OVERVIEW
As we moved into the integration phase
of our combination with IW&I we have seen
this reflected in our principal risk profile.
The integration of both firms has naturally
augmented associated risks. People risk has
materially increased in impact and likelihood
and become one of our top risks in the latter
part of the year. To a lesser medium rated
assessment, process risk has become a watch
item as we consolidate and streamline our
organisational design and operating procedures.
This has not appeared in our top risks before
so is new in 2024. Continuing from 2023,
Rathbones other top risk in terms of a high
residual risk assessment is change risk and
integration risk. Whilst both programmes
continue to be successfully delivered, it still
represents a key risk and the outlook remains
unchanged into 2025. Our final risk profile
movement is a positive change to pension risk
which has remained low throughout 2024
following the transfer of risk through a pension
buy-in. All other risks are unchanged in 2024.
CHANGE
The risk that the change portfolio does not support delivery
of the Groupʼs strategy
RISK OWNER: Chief Operating Officer
RISK PROFILE:
RISK APPETITE MEASURES:
— Priority programmes rated red
— Programme overspend
— Executive and Board oversight of material change programmes
— Differentiated governance approach to strategic change
programmes and business projects
— Dedicated change delivery function and use of internal and,
where required, external subject matter experts
— Two-stage assessment, challenge and approval of project plans
— Planning and budgeting, monitoring of variances and actions
to address.
This risk has remained high in 2024 as our digital transformation
programmes delivered key functionality. Executive and senior
management oversight has remained agile and focused on targeted
delivery outcomes, benefits realisation, budget alignment and the
impact of change on our risk profile.
INTEGRATION
The risk that the integration of systems, people and processes
fails or is ineffective
RISK OWNER: Chief Operating Officer
RISK PROFILE:
RISK APPETITE MEASURES:
— Budget compliance
— Cost synergy
— Integration project plan
— Executive oversight of integration programme
— Board oversight of programme delivery
— Transformation office programme board oversight and delivery-
focused operating model
— Cost/benefit monitoring
— KRI tracking
— External party appointed to provide independent assurance.
This was a new risk in 2023. We began the process of integrating
Rathbones and IW&I businesses in early 2024. The risk remains
high as we progress through the integration plan. In 2025 we will
move into the client migration phase of the programme.
PEOPLE
The risk of loss of key employees, lack of skilled resources or
inappropriate behaviour or actions. This could lead to lack of
capacity or capability threatening the delivery of business objectives,
or to behaviour leading to complaints, litigation or regulatory action
RISK OWNER: Chief People Officer
RISK PROFILE:
RISK APPETITE MEASURES:
— Regretted leavers
— Turnover ratio
— Employee behaviour
— Board and executive oversight
— Succession and contingency planning
— Transparent, consistent and competitive remuneration schemes
— Contractual clauses with restrictive covenants
— Continual investment in employee training and development
— Employee engagement survey
— Appropriate balanced performance measurement system
— Culture monitoring and reporting
— Conduct risk framework and committee
— Training and competence framework
— Whistleblowing policy and process.
We have continued to operate effectively in spite of a difficult
labour market over the past few years. Continued high inflation
and cost of living pressures will remain a risk driver into next year.
Management action, and our agile approach to support our
colleagues, has been positively received however, we continue to
engage frequently through our employee survey tool.
RISK AND OWNER
CONTROL ENVIRONMENT
RISK TREND 2024
PRINCIPAL RISKS
STRATEGIC
REPORT
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
INVESTMENT PERFORMANCE
The risk that investment performance fails to meet clientsʼ
objectives or expectations
RISK OWNER: Managing Director Rathbones Investment
Management
RISK PROFILE:
RISK APPETITE MEASURES:
— Actual performance versus performance benchmark
— Portfolio alignment
— Assessment of fund value rating
— Investment policy
— Performance versus benchmarking monitoring
— Defined investment strategy
— Exception reporting
— Product and proposition oversight
— Client engagement and portfolio reviews.
Challenging market conditions are likely to continue in 2025.
The position of client portfolios and investment performance
are closely monitored.
PROCESSING RISK
The risk of loss due to ineffective processes and systems
RISK OWNER: Chief Operating Officer
RISK PROFILE:
RISK APPETITE MEASURES:
— Loss amounts over preceding months
— Reportable issues and events
— Control assurance routines
— Policy framework
— Procedures committee
— Tracking and monitoring routines
— Board and executive oversight.
As a natural consequence of people risk increasing due to
the integration, the potential for process risk has also increased.
It has not previously featured in our principal risks so this is a new
medium rated risk in 2024. Established control routines continue
to operate effectively.
REGULATORY COMPLIANCE AND LEGAL
The risk of failure by the Group or a subsidiary to fulfil its regulatory
or legal requirements and comply with the introduction of new
or updated regulations and laws
RISK OWNER: Group Chief Executive Officer and Chief Risk Officer
RISK PROFILE:
RISK APPETITE MEASURES:
— Compliance monitoring review outcomes
— Regulatory review outcomes
— Complaints data
— Board and executive oversight
— Management oversight and active involvement with
industry bodies
— Compliance monitoring programme to examine the control
of key regulatory risks
— Separate anti-money laundering function with specific
responsibility
— Oversight of industry and regulatory developments
— Documented policies and procedures
— Employee training and development
— Panel of external legal advisers
— Whistleblowing policy and process.
While this risk has remained stable in 2024, the landscape and
expectations on firms and our sector continue to evolve. We have
continued to invest in and develop our first and second line
oversight teams, including the deployment of software to support
regulatory compliance.
Consumer Duty continues to be embedded with regular reporting
to Group Risk Committee.
RISK AND OWNER
CONTROL ENVIRONMENT
RISK TREND 2024
PRINCIPAL RISKS
STRATEGIC
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
SUSTAINABILITY
The risk that the business model does not respond sufficiently to
changing market conditions, including environmental and social
factors, such that sustainable growth, market share or profitability
are adversely affected
RISK OWNER: Group Chief Executive Officer
RISK PROFILE:
RISK APPETITE MEASURES:
— Underlying dividend cover
— Net organic growth rate
— Net organic outflow rate
— Climate targets
— Diversity targets
— Board, Executive and Responsible Business Committee oversight
— A documented strategy, including Responsible Investment Policy
— Monitoring of strategic risks
— Annual business targets, subject to regular review and challenge
— Regular reviews of pricing structure and client propositions
— Continued investment in the investment process, service
standards and marketing
— Regular competitor benchmarking and analysis
— Trade body participation
— ESG factors integrated into the investment process
— Dedicated responsible investment project to drive changes
to achieve sustainability goals
— Diversity and environmental targets included in risk appetite
measures.
2024 has presented challenging market conditions given the
external environment, including a volatile economic and political
landscape.
We do, however, have a strong balance sheet and recognised
market position.
Climate risk has been integrated into our risk management
framework to support the transition to net zero.
We are responding to evolving expectations of firms to manage
climate and other ESG risks, which remain a key priority of our
responsible business agenda.
INFORMATION SECURITY AND CYBER
The risk of inappropriate access to manipulation, or disclosure of,
client or company-sensitive information
RISK OWNER: Chief Operating Officer
RISK PROFILE:
RISK APPETITE MEASURES:
— Number of cyber incidents
— Number of data privacy events
— Cyber external threat landscape rating
— Board and executive oversight
— Data governance committee and information security steering
group oversight
— Information security policy, data protection policy and
associated procedures
— System access controls and encryption
— Penetration testing and multi-layer network security
— Training and employee awareness programmes
— Physical security.
The threat landscape in 2025 continues to be influenced by the
volatile external environment. However, we continue to invest in
our control environment and resources to improve our security
posture and ensure our infrastructure and employees are well
positioned against an ever-changing threat landscape.
THIRD-PARTY SUPPLIER
The risk of one or more third-party suppliers failing to provide
or perform authorised and/or outsourced services to standards
expected by the Group, impacting the ability to deliver core
services. This includes intra-group outsourcing activity.
RISK OWNER: Chief Operating Officer and Chief Executive Officer,
Rathbone Asset Management
RISK PROFILE:
RISK APPETITE MEASURES:
— Supplier chain performance
— Board and executive oversight
— Third-party supplier and outsourcing framework
— Senior dedicated relationship managers
— Supplier contracts and defined service level agreements/KPIs
— Supplier due diligence and approval process
— Close liaison, contractual reviews and regular service
review meetings
— Documented policy and procedures
— Whistleblowing policy and process.
Our framework for third-party supplier and outsourcing risk
management has continued to be embedded and developed in
2024. We have focused on a technology solution which further
improves our controls in this area. We see this risk remaining
medium in 2025 as we add further systemic control to support
operational resilience.
RISK AND OWNER
CONTROL ENVIRONMENT
RISK TREND 2024
PRINCIPAL RISKS
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
SUITABILITY
The risk of an unsuitable client outcome either through service,
investment mandate, investment decisions taken, investment
recommendations made or portfolio or fund construction
RISK OWNER: Managing Director Rathbones Investment
Management
RISK PROFILE:
RISK APPETITE MEASURES:
— Timely portfolio reviews
— Timely client reviews
— Quality scores
— Board, executive and management committee oversight
— Investment governance and structured committee oversight
— Management oversight and segregated quality assurance
and performance teams
— Performance measurement information and attribution analysis
— ʻKnow your clientʼ (KYC) suitability processes
— Weekly investment management meetings
— Training and competence framework
— Investment manager reviews through supervisor sampling
— Compliance monitoring
— Defined investment mandates and tracking
— Exception reporting
— Complaints analysis.
Throughout 2024 we have seen the benefit of the improvements
to improve processes and oversight of investment and suitability
risk which were implemented in 2023. This area continues to be
strengthened with regular review routines in place supported by
dedicated expertise. Our ongoing investment in technology will
also further improve suitability processes and controls in 2025.
PENSION
The risk that the cost of funding our defined benefit pension
schemes increases, or their valuation affects dividends, reserves
and regulatory own funds
RISK OWNER: Chief Financial Officer
RISK PROFILE:
RISK APPETITE MEASURES:
— Pillar 2A Net Stressed deficit
— IFRS deficit
— Board, senior management and trustee oversight
— Monthly valuation estimates
— Triennial independent actuarial valuations
— Investment policy
— Senior management review and defined management actions
— Annual ICAAP.
The Group has recently undertaken a pension buy-in so Rathbones
liability no longer represents the same level of risk.
RISK AND OWNER
CONTROL ENVIRONMENT
RISK TREND 2024
PRINCIPAL RISKS
VIABILITY STATEMENT
ASSESSMENT OF THE
COMPANYʼS PROSPECTS
The Board reviews its strategic plan annually.
This, alongside the ICAAP and ILAAP, forms
the basis for capital planning which is discussed
periodically with the Prudential Regulation
Authority (PRA).
On a monthly basis, critical capital projections
and sensitivities have been refreshed and
reviewed, taking into account current or
expected market movements and business
developments. During the year, the Board has
also considered a number of stress tests and
scenarios which focus on material or severe but
plausible events that could impact the business
and the company’s financial position. The Board
also considers the plans and procedures in
place in the event that contingency funding
is required to replenish regulatory capital
or liquidity.
The Board’s assessment considers all the
principal risks identified by the Group and
assesses the sufficiency of our response to
all Pillar 1 risks (defined as credit, market and
operational risks, including conduct) to the
required regulatory standards. In addition,
the crystallisation of the following events
was considered for enhanced stress testing:
a significant fall in the market value of FUMA,
a business/competitive threat from a
reputational event leading to loss of investment
managers and/or FUMA, loss of FUMA and
higher costs-to-achieve through integration
risk, uncontrolled business expansion risk and
a combined FUMA fall and reputational event.
The economic and commercial impacts of
a global pandemic on the prospects of the
company were also factored into the
assessment. The assessment also considers
the point at which the current business model
could become unviable (reverse stress testing).
The Group considers the possible impacts
of serious business interruption as part of
its operational risk assessment process and
remains mindful of the importance of
maintaining its reputation.
Since the business is almost wholly UK-situated,
it does not suffer from any other material client,
geographical or counterparty concentrations.
While this stress test does not consider all of
the risks that the Group may face, the directors
consider that this severe but plausible suite of
stress testing-based assessment of the Group’s
prospects is reasonable in the circumstances
of the inherent uncertainty involved.
VIABILITY STATEMENT
In accordance with the UK Corporate
Governance Code, the Board has assessed the
prospects and viability of the Group over a
three-year period considering the risk factors
identified above. The Directors have considered
the firm’s current position and the potential
impact of the principal risks and uncertainties
set out above. The Directors confirm that they
have carried out a robust assessment of both
the principal risks facing the Group, and stress
tests and scenarios that would threaten the
sustainability of its business model, and its
future performance, solvency or liquidity.
The Board regularly reviews business
performance and, at least annually, its current
strategic plan, alongside a strategic risk
assessment. The Board also considers five-year
projections as part of its annual regulatory
reporting cycle, including strategic and
investment plans.
However, the Directors have determined, and
continue to believe, that a three-year period to
31 December 2027 constitutes an appropriate
and prudent period over which to provide its
viability statement given the uncertainties
associated with economic and political factors
and their potential impact on investment
markets over a longer period.
This three-year view is also more aligned to
the firm’s detailed stress testing and capital
planning activity. There is no reason to believe
the five-year view would be different but,
as always, there is more uncertainty over a
longer time horizon particularly in relation
to external factors.
Stress testing and scenario analysis shows that
the Group would remain profitable, and in
excess of our risk appetite tolerances for capital
and liquidity, and able to withstand the impact
of such scenarios. An example of a mitigating
action in such scenarios would be a reduction
in costs, specifically around change initiatives,
along with a reduction in dividend.
SCENARIOS MODELLED INCLUDE:
— Market-wide stress (capital & liquidity):
a 30% fall in the market value of FUMA for
a one-year period, with recovery over the
following three years and Foreign Exchange
illiquidity
— Idiosyncratic reputational stress (capital &
liquidity): a reputation-affecting cyber event,
social media or ESG-related event causing
outflow of 20% of FUMA together
with associated compensation and
rectification costs
— Idiosyncratic integration stress (capital):
a specific stress relating to the planned
integration of IW&I into the Group, resulting
in outflow of 15% of FUMA together with
additional integration costs and cost
synergies not being achieved
— Combined stress (capital and liquidity):
aggregation of the above market-wide and
integration stresses
— Reverse stress testing is also undertaken to
assess the point at which the current business
model is no longer viable.
Based on this assessment, the Directors confirm
that they have a reasonable expectation that
the company will be able to continue in operation
and meet its liabilities as they fall due over the
period to 31 December 2027.
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
RESPONSIBLE BUSINESS REVIEW
OUR UPDATED RESPONSIBLE BUSINESS FRAMEWORK
In 2024, we have strengthened our
responsible business framework through
rigorous research and analysis, including
a materiality assessment, competitor
review, and stakeholder engagement.
Our updated framework was approved
by the Responsible Business Committee
in September 2024.
Our responsible business framework guides
our approach to delivering for our clients,
supporting our colleagues and communities,
having strong governance, and being responsible
towards the environment. We work with a
broad range of partners, recognising that
collaboration will help drive the change we,
and our stakeholders, want to see.
The framework outlines our approach across
all key social and environmental topics,
as identified through our impact materiality
assessment. These topics, and the action we are
taking on them, are organised into four themes.
These themes, and the social, environmental
and governance topics within them, will help
guide our actions, track our progress, and
structure disclosure and reporting aligned
with key sustainability frameworks.
Our approach to
responsible business
Our purpose is to think, act and invest
for everyone’s tomorrow.
In support of this purpose, our responsible business
framework has central themes which include:
OUR CLIENTS
Applying an active and thoughtful
approach to client service, marketing
practices and responsible investment
Read more: See page 72
OUR COLLEAGUES
Ensuring our people are safe,
supported and treated fairly
Read more: See page 73
OUR COMMUNITIES
Ensuring we support positive
change in our industry and
our communities
Read more: See page 75
OUR GOVERNANCE
Enhancing our governance
through embedding privacy,
human rights, nature and
climate risk considerations in
our decision-making process
Read more: See page 76
OUR RESPONSIBILITY ACROSS ENVIRONMENTAL AND SOCIAL TOPICS
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
RESPONSIBLE BUSINESS REVIEW
OUR UPDATED RESPONSIBLE BUSINESS FRAMEWORK
AMBITION AND IMPACT
We prioritise the long-term perspective to
create value for our clients and contribute
to our communities. Our commitment to
investing for everyone’s tomorrow involves
understanding environmental, social, and
governance (ESG) issues, ensuring the best
possible outcomes for our business and
our stakeholders.
MANAGEMENT OF
RESPONSIBLE BUSINESS
Our commitment to operating in a way that
creates long-term value for our stakeholders
includes putting in place strong governance
foundations to hold ourselves to account.
Alongside clear accountability, we monitor our
progress and report on our commitments in a
transparent and timely manner. Our approach
to responsible business enables us to deliver
on our purpose through various activity
including our responsible investment approach,
our diversity, equality and inclusion (DE&I)
programme, our community investment
programme, and our action to reduce our
environmental impact.
COLLABORATION
We cannot deliver the level of change
needed to impact the world’s most pressing
environmental, social and governance issues on
our own. Therefore, we have joined forces and
operate in alignment with selected recognised
initiatives and frameworks. This approach,
alongside our work with regulators and
delivery partners, support our understanding
of stakeholder expectations and response
opportunities. A selection of our affiliations
and partnerships can be seen on our website,
including our continued work with and support
of the United Nations Global Compact (UNGC).
Responsible Business Committee
In 2024, our Responsible Business
Committee, co-chaired by our Group Chief
Executive and the Managing Director of our
investment business, discussed and took
action on a range of areas including:
— progress towards our net zero commitment
and restatement of our near-term targets
following integration with IW&I
— responsible business framework update
— our stewardship activities
— our DE&I programme, including our
gender pay gap
— continued engagement with suppliers
and our modern slavery statement
— our human rights statement and a two-year
implementation workplan
— the implementation of a new approach
to community investment.
Of particular focus in 2024 were key
changes to the regulatory requirements of
disclosure including Sustainability Disclosure
Requirements (SDR), and the increasing
ESG reporting requirements introduced
by frameworks such as those published by
the International Sustainability Standards
Board (ISSB) and the final Taskforce
on Nature-related Financial Disclosures
framework (TNFD).
Looking forward
In 2025, we will build upon the evolved
responsible business framework and develop
the implementation plan that will help turn
the framework into a more detailed
responsible business strategy. This will include
setting up workstreams to deliver against
each theme of the framework, identifying
appropriate metrics and setting new targets,
and ensuring continued alignment with
emerging regulation.
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
RESPONSIBLE BUSINESS REVIEW
OUR RESPONSIBLE BUSINESS PROGRESS
AREAS OF PROGRESS IN 2024
THEMES
AREAS OF FOCUS
2024 PROGRESS
FURTHER INFORMATION
CLIENTS
Applying an active and thoughtful approach
to client service, marketing practices and
responsible investment
Client service, experience
and product offering
Conducted an extensive study with over 3,000 participants and created a multi-
dimension market segmentation, defined by lifestage, attitude and source of wealth
Read more: See page 26
Responsible marketing
99.8% of in scope employees completed anti-greenwashing training
98.7% of our Investment Managers completed mandatory training, including our
vulnerable client module
Read more: See page 72
Responsible investment
and stewardship
Undertook 7431 engagements (20231: 752) on 53 topics ranging from anti-microbial
resistance to succession planning
24% of in-scope FUMA have set Science Based Target initiative aligned targets
Read more: See page 72
COLLEAGUES
Ensuring our people are safe, supported
and treated fairly
Culture and values
eNPS score of 14 (benchmark of 26)
We commissioned and performed an independent culture evaluation,
involving interviews and focus groups with Rathbones and IW&I colleagues
Read more: See page 27
Diversity, equality and inclusion
Eight employee networks brought together members from Rathbones and IW&I,
supporting broader inclusion
Read more: See page 73
Employee learning and
development, wellbeing
and benefits
Supported our colleagues though organisational change. This included delivery
of training and toolkits on leading through change and resilience, and the delivery
of wellbeing events both in person and online
Read more: See page 73
COMMUNITIES
Ensuring we support positive change
in our industry and our communities
Community investment
0.7% of pre-tax profit invested in our local communities, supporting 78 charity
partners at both a national and regional level
Read more: See page 75
Financial inclusion and education
Nine Rathbones financial awareness sessions run, our support for Young Enterprise
continued and we welcomed MyBnk as a partner supporting their work focused on
vulnerable young adults
Read more: See page 75
Entrepreneurs
Hosted 19 Rathbones Inspire sessions in 2024 which engaged over 270 participants
Read more: See page 75
Policy engagement
Responded to public consultations and engagements with industry bodies,
regulators and government officials on matters ranging from the proposed reviews
to the Stewardship Code to the FAC consultation on diversity and inclusion in the
financial sector
Read more: See page 75
GOVERNANCE
Enhancing our governance through
embedding privacy, human rights, nature
and climate risk considerations in our
decision-making process
Human rights and supplier
engagement
79% of our in-scope suppliers were reviewed through our responsible business
assessment. Topics raised include net zero commitments and modern slavery
Read more: See page 76
Corporate governance and ethics
96.1% of in-scope employees completed anti-bribery and corruption training
Read more: See page 76
Operational GHG emissions
and impacts
Resource consumption2: 20 sites (out of 33) using renewable electricity,
which covers 66% of our total consumption (kWh)
Carbon intensity Scope 1 and 2 – location-based emissions (tCO2e/FUMA £bn)2: 10.6
(down from 12.9 in 2023)
Read more: See page 77
1. Data excludes IW&I
2. Data covers all sites occupied by Rathbones Group in 2024
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
RESPONSIBLE BUSINESS REVIEW
OUR RESPONSIBLE BUSINESS PROGRESS
OUR
CLIENTS
Applying an active and thoughtful
approach to client service, marketing
practices and responsible investment.
CLIENT SERVICE, EXPERIENCE
AND PRODUCT OFFERING
Clients are at the heart of our strategy and their
interests are a key consideration in everything
that we do. Our commitment to deliver valuable
propositions, exceptional service, and best
practices underpins both our success and our
responsibility as a trusted partner. We strive to
provide clients with the best possible service,
driven by our direct fiduciary duty to put their
needs first in every decision and process.
We build deep, long-lasting relationships with
our clients.
In 2024 we expanded our Client Office
function which oversees our service and
product offering to our clients. From enhanced
insights and improved digital services, to a
broader regional presence and increased scale
and stability, our Client Office function is
dedicated to supporting our client relationships
and servicing our clients’ needs.
We develop a clear view of clients’ evolving
needs by focusing our resources on key client
segments. The team has a clear understanding
of these segments, their unique needs,
preferences, and behaviours. Throughout 2024
we continued to focus on implementing a client
segmentation model to tailor the client
experience, product offerings, and distribution
channels for each segment. Clients are
segmented not just by wealth but also by
life stage (e.g. young professionals, retirees,
family offices) to deliver relevant,
personalised services.
RESPONSIBLE MARKETING
Consumer Duty sits at the heart of Rathbones
and mirrors our long-established culture of
always putting our clients first. We continue to
progress against our regulatory agenda with a
particular focus on Consumer Duty, underlining
how Rathbones should treat its clients. We are
well positioned to meet the challenges this
brings as we continue to raise internal standards
and gather new insights, particularly through
the integration with IW&I. In 2024 we also
conducted training for the team, including
anti-greenwashing and vulnerable client training.
RESPONSIBLE INVESTMENT
AND STEWARDSHIP
We are committed to identifying high-quality,
ESG (Environmental, Social, and Governance)
aligned investments that deliver on clients’
long-term objectives while contributing to
broader societal benefits. With a team of
financial, ESG integration, and stewardship
analysts, supported by third-party data
sources, we assess a wide range of ESG factors.
These include climate change challenges,
resource management, regulatory risks,
human rights, business ethics, and corporate
governance issues like executive pay and board
composition. Our analysis, which can then be
used in investment decisions, incorporates
sustainability frameworks and multiple ESG
data sources.
Our Responsible Investment (RI) Policy is
reviewed annually. This year, our review sought
to allow us to focus on how company intentions
translate into measurable outcomes. We also
published our fossil fuel positioning statement,
thermal coal phase-out plan (targeting 2030),
and net zero stewardship strategy.
Engagement remains a priority; we escalate or
adjust holdings if companies present persistent
ESG risks. In 2024, Rathbones undertook 743
engagements and voted on 11,615 resolutions
(5,068 resolutions for IW&I) to drive change.
Our robust RI oversight includes updates for
key committees and reviews to align with the
Green Claims Code and Consumer Duty
considerations. See more in our Responsible
Investment Report.
OUR INVESTMENT TARGETS
Having re-based our SBTi aligned targets in
2024 following the integration with IW&I we
saw 24% of Funds under management and
administration (FUMA) have set their own SBTi
aligned science-based targets (23% at the end
of 2023). We therefore remain on track to meet
our 2030 near-term target of 55%.
Read more: page 78
Responsible Investment Report
Responsible Investment Policy
Our approach to investment in fossil fuels,
including thermal coal
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
RESPONSIBLE BUSINESS REVIEW
OUR RESPONSIBLE BUSINESS PROGRESS
OUR
COLLEAGUES
Ensuring our people are safe,
supported and treated fairly.
CULTURE AND VALUES
We are a people business, so it is imperative
that our strategy helps foster a culture that
drives performance and builds long, rewarding
careers for our colleagues. Based around
a common set of corporate values and a
commitment to diversity, equality and inclusion
(DE&I), we are focused on leveraging the talent
in our business, as we develop more career
paths, build leadership skills and manage
succession. Rathbones is committed to
becoming a more inclusive business which,
in turn, will support us in delivering value to
our clients.
Our 2022–2024 People Strategy focused
on providing career paths and development
opportunities, building leadership and change
management skills, and embedding our values
and commitment to inclusion. We are currently
in the process of finalising our People Strategy,
which will align what our people want and the
business needs, in the context of our refreshed
corporate objectives and the integration
with IW&I.
The Rathbones’ culture is set from the top.
Our Board and executive team recognise the
role that our culture plays in the long-term
success of the Group. Across 2024, we have
continued to measure our eight drivers of our
culture and performance, with progress against
associated indicators being reported to the
Board twice a year. Our values are integrated
into the employee appraisal process –
at both our mid-year and full-year appraisals,
employees are required to confirm they
are in alignment with these.
Throughout the year, our management team
and the Board have continued to engage with
our people through a variety of channels to
ensure an open dialogue.
A key highlight of the year was our 2024
colleague engagement survey, which identified
Peer relationships, Management support, and
Goal setting as particular cultural strengths
across the Group.
Read more about our culture on page 17
DIVERSITY, EQUALITY AND INCLUSION
At the end of 2024, our Board had five female
directors out of nine, which meant we met
the commitment of 33% female board
representation for FTSE 350 companies.
We also had four female members of our
Group Executive Committee (GEC). In 2024,
we met the requirements of the Parker Review,
to have at least one ethnic minority director
on our board. In 2024, given the organisational
changes the business is undertaking we did not
report a senior management target. We will
look to set one in 2025. We are signatories
to the Women in Finance Charter and as of
September 2024 we reached 30.8% female
representation in senior management
compared to 26.5% female representation in
2023. Reporting on compliance requirements
can be found in the tables on pages 74 and 102.
We are committed to equality and inclusion.
Addressing our gender pay gap is a key
component of achieving this. To read more
on our approach, please see our Gender Pay
Gap Report on our website.
In 2024 we brought together our colleagues
from across both organisations in our eight
Inclusion Networks. The networks will continue
to be colleague led focusing on strands of
diversity where our data tells us we need to
improve representation to better reflect our
communities. The networks work to enable
colleagues from underrepresented groups
to connect and create positive change.
They are inclusive of allies too; colleagues
who may not identify as a member of the
underrepresented group but are passionate
and eager to support our DE&I vision.
In 2024, we were pleased to work with several
organisations to support our work. These include
LGBTGreat, Progress Together, the Armed
Forces Covenant and our membership of the
Business Disability Forum. As a Disability
Confident Employer, we are committed to
creating an inclusive and accessible recruitment
process. We guarantee an interview to disabled
candidates who meet the minimum criteria for
the role. Additionally, we proactively anticipate
and provide reasonable adjustments, supporting
employees who acquire a disability to remain
in work and thrive.
Responsible Business Update
Gender Pay Gap Report
To date, 61% of employees (63% in 2023)
have shared their diversity data with us
(for more details, see the table on page 74).
We believe this decrease may be the result of
the move to a new system to collect data which
introduced more categories of diversity data.
EMPLOYEE LEARNING AND
DEVELOPMENT, WELLBEING
AND BENEFITS
We have a range of provisions in place to
support the mental and physical health of our
people and are committed to investing in the
learning and development of all employees.
The wellbeing of our colleagues is a priority,
which has been particularly important as we
have gone through our integration with IW&I.
We have a range of provisions in place to
support the mental and physical health of
our people.
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
RESPONSIBLE BUSINESS REVIEW
OUR RESPONSIBLE BUSINESS PROGRESS
In 2024, we continued to offer access to our
Employee Assistance Programme, including a
free and confidential phone and online advice
service. Alongside these services our wellbeing
team and inclusion networks have run
awareness sessions on several topics, from
cancer and menopause awareness to mental
health and neurodiversity. We continue to
gather and review colleagues’ feedback about
their wellbeing through our opinion surveys.
We are committed to investing in the learning
and development of all our people and seek
to give everyone the opportunity to develop the
skills and knowledge they need to deliver at their
best. In 2024, we transformed our Learning
and Development team into the Talent,
Performance and Learning team to enhance
how we can deliver on this commitment.
We also rolled out programmes focused on
understanding climate risk and guarding against
greenwashing. Our 2024 training spend per
employee was £499 (2023: £529).
MEASURING OUR DIVERSITY
Success Factors, the platform on which we ask
employees to self-report their demographic
data, covers many of the Equality Act 2010
protected characteristics. It is a secure system
with the necessary governance and controls to
store confidential personal data. The data is
accessible to a limited number of our people
team. The data extracted from Success Factors
will always be aggregated, anonymised, with
groups of less than 10 not being reported on.
All demographic questions have been modelled
from what is considered best practice, e.g.:
“Is your gender identity the same as at birth?”
or “What was the main household earner
occupation when aged 14?”
Gender diversity at 31 December 2024
Total number
of employees
Percentage of
total employees
Men
2024
1,886
52%
2023
1,236
54%
Women
2024
1,717
48%
2023
1,049
46%
Other categories
2024
−
−
2023
−
−
Not specified/prefer not to say
2024
−
−
2023
−
−
Ethnic diversity at 31 December 2024
Total number
of employees
Percentage of
total employees
White British or other White
(including minority white groups)
2024
2,243
62.3%
2023
1,267
54.45%
Mixed/Multiple Ethnic Groups
2024
65
1.8%
2023
22
0.96%
Asian/Asian British
2024
186
5.2%
2023
98
4.29%
Black/African/Caribbean/ Black British
2024
73
2.0%
2023
32
1.40%
Other ethnic group, including Arab
2024
13
0.4%
2023
22
0.96%
Not specified/prefer not to say
2024
1,023
28.4%
2023
844
36.94%
Our Board and Executive diversity data can be found on pages 101-102.
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
OUR
COMMUNITIES
Ensuring we support positive change
in our industry and our communities.
COMMUNITY INVESTMENT
Through our business we aim to add value not
only to our clients but also to the communities
in which we operate. We recognise the role
we can play in helping create successful and
thriving communities of which we are part.
As a UK wealth manager, with over 3,500
people across 23 offices and with over
£109 billion of funds under management, we
understand there is a growing expectation on
our role in society. As a result, we work closely
with regulators, partners, suppliers and
communities to understand their aims and
ambitions, working to align our approach to
best practice across our programmes.
We deliver financial support through the
Rathbones Group Foundation. We offer further
support through our employee Give As You
Earn scheme, our matching scheme, giving
in-kind and volunteering.
Community investment funding from the
Rathbones Group Foundation is focused
on equality of opportunity for children and
young people (up to 25 years old) across
three key areas:
— Education
— Entrepreneurs
— Environment.
In 2024, we were pleased to invest £699,793
(2023: £589,172) in community projects.
This represents 0.7% of our pre-tax profit
(1.38% in 2023). With our focus on equality
of opportunity and disadvantaged youth,
we supported 78 charities. We were
pleased to maintain our support for Young
Enterprise (YE) and welcomed MyBnk as a
new partner, which is aligned with the work
we carry out through our financial awareness
programme. We also supported the Disasters
Emergency Commission (DEC) Middle East
Humanitarian Appeal.
With the aim of encouraging employee
volunteering, we continue to offer our colleagues
paid time off to participate. We are delighted
to see more offices taking advantage of team
volunteering days, fostering collaboration and
giving back to our local communities.
Following the combination with IW&I, we
implemented changes to the structure of our
support and giving by creating five community
investment hubs that include all our offices1.
This new structure aims to foster learning
and collaboration among colleagues from
neighbouring offices.
FINANCIAL INCLUSION AND EDUCATION
We continue to recognise the importance of
financial awareness in society and our role in
supporting this. In 2024, MyBnk joined Young
Enterprise (YE) as our national partners in
delivering programmes to empower children
and young adults with vital financial skills. Their
approaches complement each other, addressing
different age groups and stages of life to create
a continuous pathway toward financial literacy
and inclusion. As a founding partner of YE’s
Inspiring Futures programme, we are excited to
be supporting YE as they equip disadvantaged
youth aged 15 to 19 with practical career,
and employability skills.
Over the past 12 years, Rathbones’ own
financial awareness sessions have reached
more than 13,000 people. To read more about
our work in financial awareness please see our
standalone Responsible Business Update.
Responsible Business Update
ENTREPRENEURS
As a company with a long history of supporting
entrepreneurs and multi-generational family-
run firms, we are committed to supporting
entrepreneurs, founders and business owners
on their growth journey.
One way we achieve this is through Rathbones
Inspire, a programme launched in September
2023 with the objective to create a community
of founders. The programme provides founders
and business leaders with the opportunity to
engage with talented peers, access subject
matter experts, and build new connections to
further strengthen their businesses. Our strong
track record of investing in successful businesses
means we understand the challenges and needs
of entrepreneurs and their leadership teams.
In 2024, we reached over 300 participants on
the programme and hosted 19 content events.
POLICY ENGAGEMENT
Through collaboration and advocacy, we aim
to influence policy frameworks that promote
climate action and equitable economic
development. We see policy engagement
as a core pillar of driving meaningful change.
For example, in 2024 we were signatories
to the 2024 Global Investor Statement to
Governments on the Climate Crisis. This letter
stated that effective policies are essential at all
levels of government to accelerate the private
capital flows needed for a climate-resilient,
nature-positive, just net zero transition.
Therefore, we encourage a whole-of-
government approach to implement policies
in line with countries’ nationally determined
contributions (NDCs) and a 1.5°C scenario,
recognising common but differentiated
responsibilities and respective capabilities
between emerging and developed economies,
that will accelerate private sector action and
large-scale investment.
1. The hubs are: North, South, Scotland and Northern Ireland,
London and Cambridge, and the Channel Islands
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OUR RESPONSIBLE BUSINESS PROGRESS
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
OUR
GOVERNANCE
Enhancing our governance through
embedding privacy, human rights,
nature and climate risk considerations
in our decision-making process.
HUMAN RIGHTS AND
SUPPLIER ENGAGEMENT
Rathbones is pleased to continue to support
the United Nations Global Compact (UNGC).
This commitment aligns with our support
for the International Labour Organization’s
(ILO) standards and the Universal Declaration
of Human Rights (UDHR). As a business, we will
not tolerate child or forced labour, be it through
our operations or the investments we make.
In 2024, we developed a Group-wide human
rights statement which states our commitment
to human rights. We also produced a human
rights work plan for 2025 and 2026. This plan
is aligned to the business and human rights
principles guidance. We also conducted internal
human rights awareness raising activities
including: a webinar open to all our colleagues
on modern slavery in March, and published
articles on our intranet about evolving
legislation changes and key dates.
Our updated modern slavery statement will
go to the Board for approval and is planned
to be released in May 2025 and made available
on our website.
As a UK-based financial services business,
Rathbones has a relatively low human rights risk
within its direct supply chain. Indirect suppliers
further down our supply chain however, may
present an elevated risk. In 2024, we reviewed
and updated our supplier maturity roadmap,
including a revision of our ESG questionnaire.
The roadmap outlines our next steps,
including increased business level management
information and a greater focus on
procurement/on-boarding support from
the central team.
With 79% of suppliers (equating to 70%
of Rathbones third-party spend) having
completed our ESG review, the main areas
identified for further action included modern
slavery statements, living wage compliance
(where our smaller supplier partners response
may be limited by their size) and net zero
approaches supported by near-term targets
and data disclosure in our larger partners.
CORPORATE GOVERNANCE AND ETHICS
Feeling secure and trusting that they will
not suffer adverse consequences helps our
employees have the confidence to raise a
concern about how we operate as a business.
Training on our code of conduct and
whistleblowing process happens every year.
In 2024, there were two cases raised via
our whistleblowing process. All matters were
independently investigated and resolved.
There is strong correlation between corruption
and human rights issues. Considering this
Rathbones has a zero-tolerance policy towards
bribery and corruption and therefore we ensure
all our employees are adequately trained.
At the end of the year, 96.1% (95.2% in 2023)
of Rathbones’ in scope employees completed
our anti-bribery and anti-corruption training.
We also protect personal data and privacy
through a combination of rigorous policies,
advanced security measures, and adherence
to regulatory requirements such as GDPR.
Sensitive information is handled with care,
employing encryption, access controls, and
regular vulnerability assessments to prevent
unauthorised access or breaches.
By fostering a culture of accountability and
providing ongoing education on best practices,
we empower both our team and stakeholders to
uphold privacy standards. This proactive stance
ensures the integrity and confidentiality of all
personal and financial data entrusted to us.
GHG EMISSIONS AND
OPERATIONAL IMPACTS
In 2024, we saw our operational emissions
increase, with purchased goods and services,
capital goods and business travel as the most
significant contributors to our emissions.
We also calculated our investment footprint,
which indicates our investment exposure
to climate change. For full details of our
operational and investment footprint, see the
metrics and targets section of our Climate
Report page 34.
In 2024, we broadened our Climate Change
Working Group to include nature impacts
and brought together experts from across
the business to formulate our approach to
managing and disclosing climate and nature-
related risks and opportunities. This working
group consults on and learns from our specialist
team, Greenbank, which has started the
process of setting nature-related targets
focused on the governance of nature-related
risks, the assessment of nature-related impacts
and dependencies, and training on the relation
between nature loss and investment.
Read more: Greenbank sets new nature targets
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OUR RESPONSIBLE BUSINESS PROGRESS
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
CLIMATE-RELATED FINANCIAL DISCLOSURES
GHG EMISSIONS AND OPERATIONAL IMPACTS
Highlights
OPERATIONAL FOOTPRINT (UK)
37,342 tCO₂e
2023: 23,681 tCO₂e
% OF FUMA ALIGNED
WITH SBTI TARGETS
24%
2023: 23%*
% OF CLIENTS USING
THE MYRATHBONES APP
61%
2023: 58%
* The figure for the % of FUMA aligned with SBTi targets
differs from what was disclosed in 2023. Calculations
were updated to include all in-scope assets under
management in line with the SBTi Financial Institutions’
Near-Term Criteria v2. Where visibility into the
underlying assets of in-scope funds was restricted,
it was assumed none of the underlying assets
had targets.
OUR APPROACH TO MANAGING
OUR IMPACT
Following the combination with IW&I we have
consolidated both our operational data, which
can be seen in the table opposite, and our
emissions exposure through the investments
we make on behalf of our clients. As a result,
we have restated our net zero near-term
targets to reflect these changes using 2023
as our new baseline.
KEY DRIVERS OF OUR
CARBON FOOTPRINT
We saw emissions increase in 2024, with
purchased goods and services remaining the
largest emissions source. As spend increased
our emissions also increased, 75% from 2020
and 10% from 2023. Despite this, emissions
grew slower than spending as cost was focused
on lower-carbon services like management
consultancy services and software support,
leading to a reduction in emissions intensity
from 0.16 to 0.11 kgCO₂e per £ between 2020
and 2024.
Capital Goods account for 36% of emissions in
2024, a significant contrast to previous years
where it contributed 2-4%. This contributed to
a spike in emissions relative to 2023, with the
refit of our London office being a key driver. We
expect emissions in this category to return to
pre-2024 levels next year as the scale of office
renovations slows. Business travel emissions
continued to increase, 66% relative to 2023.
The most significant contributor to this increase
was from air travel, with an increase in long-haul
business class travel increasing emissions by
412 tCO₂e. Other significant contributors were
domestic air travel and increased road mileage.
The increase also reflects improvements in
data accuracy, providing a clearer picture of
our business travel emissions profile. Our levers
for change are on page 78.
OUR CARBON FOOTPRINT DATA1
(Inc. streamlined energy and carbon reporting)
Location-based emissions (tCO₂e)²
2024
2023
2022
Scope 1 (tCO₂e)
531
584
639
UK3 emissions
531
584
639
Global3 emissions (excl UK)
–
–
−
Scope 2 (tCO₂e)
643
773
757
UK3 emissions
637
769
753
Global3 emissions (excl UK)
5
4
4
Scope 3 (tCO₂e)4, 5, 7, 8
36,168
22,425
20,630
UK3 emissions
35,831
21,977
20,621
Global3 emissions (excl UK)
337
448
368
Total location-based emissions (tCO₂e)
37,342
23,781
22,025
UK emissions
36,999
23,330
21,653
Global emissions (excl UK)
342
451
372
Market-based Scope 2 emissions
394
478
540
Total energy consumption (MWh)6
5,194
8,057
8,111
UK consumption
5,104
7,955
7,891
Global consumption (excl UK)
90
101
94
Intensity ratios7, 8, 9
Scope 1 and 2 location-based emissions (tCO₂e/FUMA £bn)
10.7
12.9
13.8
Total location-based emissions (tCO₂e/FUMA £bn)
342
224.9
218
Total location-based emissions (tCO₂e/FTE)
10.6
6.8
6.6
1. Following agreement of the combination with IW&I we have restated our environmental figures. All figures in the table include
IW&I emissions and are therefore comparable
2. In accordance with best practice introduced in 2015, we report two numbers to reflect emissions from electricity. Location-based
emissions are based on average emissions intensity of the UK grid and market-based emissions reflect emissions from our specific
suppliers and tariffs. Scope 2 market-based emissions for 2024 are 394 tCO₂e (2023: 478 tCO₂e)
3. Under SECR regulation we are required to split our global and UK emissions. Our global emissions (excl. UK) and global consumption
(excl. UK) reflect electricity emissions and consumption (respectively) from our Jersey office. It is not possible to split out travel
and allocate to our Jersey office at this stage
4. Data centre emissions are reported under Scope 3, as per the WRI GHG Protocol, categorised in purchased goods and services
5. Electricity transmission and distribution (T&D) reflects emissions from line losses associated with electricity transmission
and distribution
6. Total energy consumption (kWh) of our Scope 1 and Scope 2 emissions (electricity), and scope 3 (employee cars)
7. 2023 Scope 3 emissions increased by 100tCO₂e relative to what was reported last year due to data improvements (business travel),
this also impacted our intensity ratios for 2023
8. Data relates to total Scope 1, 2 (location-based) and Scope 3 GHG emissions
9. Total location-based emissions intensity metrics are calculated using our Scope 1, 2 and Scope 3 category 1-8 data.
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
OUR JOURNEY TO NET ZERO
We have committed to reaching net zero1
emissions by 2050 or sooner. Since the SBTi
approved our net zero emissions targets in
2022, Rathbones merged with Investec Wealth
& Investment UK, which triggered the need for
the recalculation of base year emissions and
targets. Our restated near-term net zero
emissions targets will be submitted for
validation by the SBTi.
Key levers to reach
our net zero1 targets:
— Digitising our business: cloud
computing, data centre consolidation
and digital communications platforms
— Swapping to renewable energy suppliers
— Seeking out green building credentials
— Embedding our travel policy and
hybrid working
— Increasing the amount of relevant
information to support their decisions
— Training to enable our investment
managers to engage clients
— Engaging suppliers and investees
on their climate commitments
— Carbon removal credits, to offset
our residual emissions.
CHALLENGES IN OUR
INVESTMENT FOOTPRINT
Data related to the emissions from the
investments we hold on behalf of our clients
remains an industry challenge. In response,
we regularly engage with data suppliers to
understand both their approach and coverage.
PROGRESS IN OUR
INVESTMENT TARGET
In 2024, 24% of our in-scope4 FUMA
had validated SBTi aligned targets.
This is up from 23% in 2023.
CHALLENGES IN OUR
OPERATIONAL FOOTPRINT
Our purchased goods and services continue
to be a primary driver of our operational
footprint, as referenced on the previous
page, in addition to capital goods and
business travel.
Achieving net zero1 across our operations5
70%
of suppliers3 by emissions to have set targets
within five years of target submission date
42%
reduction across Scope 1 and 2 emissions
77%
have set SBTi validated
targets by 2035
100%
BY 2040
this allows time for those
who have committed to
achieve their targets
55%
of in-scope4 FUMA, by invested value, to have
set SBTi targets by 2030 (category 15)
Achieving net zero across our investments
CLIMATE-RELATED FINANCIAL DISCLOSURES
GHG EMISSIONS AND OPERATIONAL IMPACTS
OUR ROADMAP MILESTONES
2030 (2023 BASELINE2)
ESG engagement across
colleagues, suppliers and clients
2035
ESG integration
and training
2040
2050
External collaboration
and advocacy
1. Rathbones Group Plc define net zero as: balancing the release of greenhouse gases into the atmosphere by absorbing or avoiding an equivalent amount.
As defined in our glossary (https://www.rathbones.com/sites/rathbones.com/files/glossary_clear.pdf)
2. Our environmental target was set based on our 2023 operational and investment emissions footprint. Our investment target covered 89% of our FUMA as of 31 December 2023
3. Scope 3, Category 1 + 2, Purchased Goods, Services and Capital Goods
4. In-scope FUMA include equity, bonds, fixed income, structured products, collectives and passive funds
5. Our near term targets are set on a five year basis. Further targets will be set as we reach the end of our current target term.
Climate Report
Responsible Business Update
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CLIMATE-RELATED FINANCIAL DISCLOSURES
SUMMARY
INTRODUCTION AND COMPLIANCE
As wealth managers, we have a fiduciary duty
on behalf of our clients to consider all long-term
risks that may impact their investments.
We are committed to helping our clients
safeguard their portfolios against physical
and transitional risk as the world moves to
a low-carbon economy. We recognise that this
is a collaborative exercise that spans industries
and as such we are continuously engaging
with our stakeholders, including our clients,
investors, regulators and industry organisations,
to improve our collective climate reporting and
help smooth the transition to a net zero economy.
During the year ending 31 December 2024,
the Board has complied with the requirements
of the listing rule 9.8.6. Our report includes
a measurement of how we comply with the
11 recommendations of the TCFD and with the
mandatory climate-related financial disclosures
(CFD) by UK publicly quoted companies, large
private companies and LLPs. In developing
the report, we have considered and addressed
all recommendations within the all-sector
guidance as well as the supplemental guidance
for asset managers in full. We have also included
a map to our compliance to the CFD.
While the TCFD was disbanded in 2023,
the recommendations continue to be included
in UK listing rules and therefore provide a
baseline for compliance and structure our
2024 Climate Report. The Financial Stability
Board asked the International Financial
Reporting Standards (IFRS) to oversee further
climate reporting developments and Rathbones
has conducted a gap analysis informed by
its criteria, to develop workstreams that
improve alignment with IFRS criteria for
future disclosure.
We have chosen to publish our full 2024
Climate Report as a standalone statement,
allowing us to report in more detail and link
from that report to applicable content across
our reporting suite. Our standalone statement
will be available as a PDF on the reports and
disclosure page of our website. The following
pages include a summary update of our
approach and also signpost to where more
information can be found.
Climate Report
Responsible Business Update
Responsible Investment Report
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
CLIMATE-RELATED FINANCIAL DISCLOSURES
SUMMARY
GOVERNANCE
Disclose the organisation’s governance around climate-related issues and opportunities.
TCFD
RECOMMENDED
DISCLOSURE
2024 UPDATE
CFD REQUIREMENTS
CFD
ALIGNMENT
FURTHER
INFORMATION
Describe the
Board’s oversight
of climate-related
risks and
opportunities
Responsibility for managing climate risks and opportunities sits with the Rathbones Board. The Board is
supported by several committees that maintain responsibility for the consideration and integration of
climate risks and opportunities in their area of specialism as appropriate. The Board is responsible for
setting the right tone for the business, supporting a strong risk management culture and, through our senior
leadership team, encouraging appropriate behaviour and collaboration across the business. The Board
regularly assesses the most significant risks and emerging threats to the Group’s strategy and receives
updates at least twice a year via risk and responsible business papers. Oversight of risk management
activities is also undertaken through the Group Risk and Audit Committees. They offer support to the
Board, setting a constructive tone in support of a strong risk culture, which is integrated into our company
culture and which our people embrace as part of their day-to-day responsibilities.
A description of the governance
arrangements of the company or
LLP in relation to assessing and
managing climate-related risks
and opportunities
Full
Audit Committee
report: page 106
Climate Report:
page 6
Risk management:
page 58
Describe
management’s role
in assessing and
managing climate-
related risks and
opportunities
We have assigned climate-related responsibilities to several individuals and committees across the business.
As chair of the Responsible Business Committee, our Group Chief Executive has responsibility for bringing
climate-related matters to the Board. Our Chief Risk Officer (CRO) is the senior management function
responsible for climate-related financial risks, as designated in accordance with the Prudential Regulation
Authority’s Supervisory Statement on managing financial risks relating to climate change (SS3/19).
Additionally, there are a number of teams involved in assessing, managing and reporting on our climate risk,
including our finance, risk and compliance, research and investment teams, alongside our supplier
management function and properties and facilities departments. At an organisational level responsibility
for climate change-related matters lies with the company secretary and is led by our Responsible
Business Manager.
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REPORT
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
CLIMATE-RELATED FINANCIAL DISCLOSURES
SUMMARY
STRATEGY
Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s business, strategy and financial planning where such information is material.
TCFD
RECOMMENDED
DISCLOSURE
2024 UPDATE
CFD REQUIREMENTS
CFD
ALIGNMENT
FURTHER
INFORMATION
Describe the climate-
related risks and
opportunities the
organisation has
identified over the
short, medium,
and long term
Rathbones’ climate-related risks include physical risks (arising from the physical effects of climate change
on the businesses’ operations, workforce, markets, infrastructure, raw materials and assets) and transition
risks (resulting from policy, legal, technology and market changes occurring from the shift to a lower-carbon
global economy). We have identified transition and physical risks that materialise over the following
timelines: short-term <1-year, medium term 1-5 years and long term >5 years1. Importantly, the transition
to a low-carbon future also provides Rathbones with opportunities which, if acted on, stand to benefit the
business. A detailed overview, timeframe and description of our strategy to mitigate each risk and realise
each opportunity is provided in our full climate report; with a high-level overview shared in the tables on
pages 86 to 87.
A description of the principal
climate-related risks and
opportunities arising in connection
with the operations of the company or
LLP and the time periods by reference
to which those risks and opportunities
are assessed
Full
Responsible
Investment
Report
Climate Report:
pages 14 to 18
Describe the
impact of climate-
related risks and
opportunities on
the organisation’s
businesses, strategy
and financial
planning
The climate-related risks and opportunities that we face as a business occur across both our direct
operations and our investments. A more detailed description of the actual and potential impacts of each
risk and opportunity on our business and the mitigating actions we take in response is described in the full
climate report, and a summarised version is provided in the tables on page 88. By taking these actions, we
endeavour to improve our resilience to the impacts of climate change in our strategic decision-making and
financial planning. Whilst our commitment to becoming a net zero business by 2050 or sooner includes
both our direct operations and our investments, we recognise that the majority of our greenhouse gas
emissions and other climate-related risks are derived from the investments we hold on behalf of our clients.
In response to this, we strive to integrate climate considerations into our investment approach (outlined
in more detail in our RI report and Climate report) and offer investment solutions which adapt to the
continually evolving environment. We continue to pursue an absolute reduction in our operational carbon
footprint and offset residual emissions, and in doing so respond to the operational climate-related risks and
opportunities that we face as a business. The focus of our operational carbon reduction efforts is primarily
directed on the following areas: resource consumption, energy efficiency, digitising our business and
business travel.
A description of the actual and
potential impacts of the principal
climate-related risks and
opportunities on the business model
and strategy of the company or LLP
Full
Responsible
Investment
Report
Climate Report:
pages 19 to 20
1. The risk timeframes align with those we use for going concern and viability statements. Our short term risk aligns with going concern, for which we use a period of at least 12 months from the financials. Our viability statement aligns with our medium term risk (three years),
which mirrors the risk assessment approach. This was reduced from five years, to manage the fact that the longer we look out, the more uncertainty there is. We consider longer term risk five years and beyond.
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
TCFD
RECOMMENDED
DISCLOSURE
2024 UPDATE
CFD REQUIREMENTS
CFD
ALIGNMENT
FURTHER
INFORMATION
Describe the
resilience of the
organisation’s
strategy, taking
into consideration
different climate-
related scenarios,
including a 2°C or
lower scenario
By using climate scenario analysis across physical and transitional risks, we assess the potential impact
of climate change on our propositions, therefore helping to determine the resilience of our strategy as
an organisation. While several scenario models are available, Rathbones use the Network for Greening
the Financial System (NGFS) scenarios, which is preferred by most banks and prudential supervisory
authorities. These undergo regular reviews and updates, with access provided through MSCI. We assess
the impact of physical and transition risks on our investment holdings under the following scenarios:
— 1.5°C / NGFS / Orderly
— 1.5°C / NGFS / Disorderly
— 2°C / NGFS / Orderly
— 3°C / HOT HOUSE WORLD / Nationally Determined Contributions (NDCs).
The TCFD recommends investors consider a set of scenarios, including a ‘2°C or lower scenario’ in line
with the Paris Agreement. In addition, we use the scenarios mentioned above to help understand the
implications of climate action failing on our portfolio.
Our approach to scenario analysis involves assessing the exposure of our equity and corporate bonds
holdings by applying MSCI’s Climate Value-at-Risk (Climate VaR) methodology. This methodology provides
a forward-looking and return-based valuation assessment to measure climate related risks and
opportunities of publicly-listed companies and their issued securities, offering insights into how climate
change could affect financial outcomes in different scenarios. Our results1 from FY24 indicate that:
— Transition risk is projected to be highest in a 1.5°C disorderly scenario, with a similar potential financial risk
under the 1.5°C orderly scenario; likely as a result of policy changes that will be more prominent in these
scenarios
— As expected, physical risk is projected to be highest in a 3°C hot house world scenario, as a result of the
increased frequency and severity of weather events and rising sea levels. This indicates a growing urgency
to take concerned climate action and pursue a 1.5°C scenario
— Climate-related opportunities, specifically technology, are projected to be greatest in a 1.5°C disorderly
scenario; likely as a result of a rapid transition to a low-carbon economy with increased policy shifts and
urgent investment in climate technologies.
We use these results, combined with other climate metrics, to identify priority companies for engagement
and monitoring, and to explore the role we can play alongside policy and corporate action to mitigate
climate risk and promote climate-related opportunities. Our stress testing and scenario analysis shows
that the Group would remain profitable of our risk appetite tolerances and would be able to withstand the
impacts of such scenarios.
See page 21 for our full scenario analysis results in our Climate Report and full details of our business
model resilience.
An analysis of the resilience of the
business model and strategy of
the company or LLP, taking into
consideration different climate-
related scenarios
Full
Responsible
Investment
Report
Climate Report:
page 21
CLIMATE-RELATED FINANCIAL DISCLOSURES
SUMMARY
STRATEGY CONTINUED
1. Analysis based on the securities we held at the end of June 2024 (half-year) and covers 66.7% of our FUMA
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
CLIMATE-RELATED FINANCIAL DISCLOSURES
SUMMARY
RISK MANAGEMENT
Disclose how the organisation identifies, assesses and manages climate-related risks
TCFD
RECOMMENDED
DISCLOSURE
2024 UPDATE
CFD REQUIREMENTS
CFD
ALIGNMENT
FURTHER
INFORMATION
Describe the
organisation’s
processes for
identifying and
assessing climate-
related risks
Risks are identified within a three-tier hierarchy, with the highest level containing business and strategic,
financial, conduct and operational risks. Risks are assessed on an inherent and residual basis across a
three-year period according to several impact criteria and includes consideration of the internal control
environment and/or insurance mitigation. Climate-related risks are identified and assessed as part of our
hierarchical approach to risk management. With external consultancy support, Rathbones undertakes
benchmark research and internal stakeholder engagement to ensure relevant risks and opportunities are
assessed and included in the risk register. A watch list is maintained to record any current, emerging or
future issues, threats, business developments and regulatory or legislative change. The Group’s risk profile,
risk register and watch list are regularly reviewed by the Group Executive Committee, senior management,
Board and Group Risk Committee. We rely on the stress test work undertaken as part of our ICAAP process
to recognise the potential impact of climate or ESG risk on investment valuations, particularly for securities
where ESG risk is high or unmanaged, thereby connecting these risks to our financial stability.
A description of how the company
or LLP identifies, assesses and
manages climate-related risks
and opportunities
Full
Risk
management:
page 58
Climate Report:
pages 29 to 30
Describe the
organisation’s
processes for
managing climate-
related risks
We have a well-established approach to risk management, which has continued to evolve in response to the
firm’s growth and external developments. Our risk governance, processes and infrastructure are designed
to ensure that appropriate risk management is applied to existing and emerging challenges to the firm’s
day-to-day activities and strategic objectives. The Board, Group Executive Committee and Group Risk
Committee regularly review and at least annually formally approve the Group’s risk appetite statement,
ensuring it remains consistent with our strategy and objectives. Our appetite framework is aligned with
the Group’s overall prudential requirements for strategic, financial and non-financial risk (conduct and
operational), and specific appetite measures are set for each principal risk. Risks that have triggered key
risk indicators or risk appetite measures are reported and escalated in accordance with our framework
to the Executive Risk Committee, Group Executive Committee, the Group Risk Committee and the Board
as appropriate, so that risk mitigation can be reviewed and strengthened if needed.
Describe how
processes for
identifying, assessing
and managing
climate-related risks
are integrated into
the organisation’s
overall risk
management
Our risk management framework (RMF) provides the foundation and organisational arrangements
for identifying, monitoring, reviewing and continually improving risk management throughout the firm.
Climate-related risks are identified and assessed as part of our hierarchical approach to risk management.
More specifically, our exposure to climate-related risks is most material through the investments we
make on behalf of our clients. The management of these risks is integrated into four of Rathbones’ core
responsible investment principles and pillars: ESG integration, voting with purpose, engagement with
consequences and transparency. We are in the process of developing our ESG client reporting framework
to support clients in the comprehension and monitoring of the climate and ESG characteristics of
their portfolio.
A description of how processes for
identifying, assessing and managing
climate-related risks are integrated
into the overall risk management
process in the company or LLP
Full
Risk
management:
page 58
Climate Report:
page 29 to 30
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
CLIMATE-RELATED FINANCIAL DISCLOSURES
SUMMARY
METRICS AND TARGETS
Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.
TCFD
RECOMMENDED
DISCLOSURE
2024 UPDATE
CFD REQUIREMENTS
CFD
ALIGNMENT
FURTHER
INFORMATION
Describe the
targets used by
the organisation
to manage climate-
related risks and
opportunities and
performance
against targets
In 2022, Rathbones Group committed to net zero emissions by 2050 or sooner and set validated SBTi
targets. Since these targets were set, Rathbones combined with Investec Wealth & Investment UK, which
triggered the need for a recalculation of base year emissions and targets. As a result, new targets have been
developed and will be taken through the SBTi validation process in 2025. Our standalone Climate Report
summarises Rathbones previously validated targets and provisional targets that will undergo validation
throughout 2025. The below sets out Rathbones new, provisional targets.
Using 2023 as a baseline year, we will work to achieve a 42% reduction in market-based emissions by 2030
and a 70% reduction of Scope 3, Category 1 & 2 suppliers to have science aligned targets within five years
of the target submission date. In terms of our investments, we will work to achieve 54% of the investments
held on behalf of our clients having validated science-based initiative aligned targets by 2030 (77% by
2035). This is in line with our objective of achieving 100% investment coverage by 2040. These targets
correspond to all climate-related risks and opportunities outlined in the table on pages 15 to 20 of our
standalone Climate Report. It will be shared publicly when the new targets are validated and a statement
with more detail about target alignment with SBTi criteria will be available on our website.
Description of the targets used by
the company or LLPs to manage
climate-related risks and to realise
climate-related opportunities and of
performance against those targets
Full
Our Governance:
page 76
Responsible
Business Update
Climate Report:
pages 35 to 39
Disclose the
metrics used by
the organisation
to assess climate-
related risks and
opportunities in line
with its strategy and
risk management
process
We use several metrics to measure the progress of our net zero journey, which is the primary measure
of our response to climate-related risks and opportunities. Specifically, these include carbon emissions
(scopes 1, 2 and 3) and GHG intensity indicators. Therefore, percentage reduction across all Scopes is a key
performance indicator used to measure our overall progress. In addition to our operational metrics, we use
a selection of other metrics to inform our climate risk and engagement strategy. The primary performance
indicator used to measure progress towards our SBTi engagement target (detailed above) is the percentage
of our portfolio which has set or committed to setting SBTi targets. This year, 24% of our portfolio has set
an SBTi target, up from 23% last year. Additionally, we have used a number of data sources to calculate
the carbon emissions associated with our clients’ investments (Scope 3, category 15). We worked with
our research team to determine our absolute carbon emissions, weighted carbon emissions and average
weighted carbon intensity. We also consider the coverage of our portfolio that have set or committed
to SBTi aligned targets.
The key performance indicators used
to assess progress against targets used
to manage climate-related risks and
realise climate-related opportunities
and a description of the calculations
on which those key performance
indicators are based
Full
Our Governance:
page 76
Responsible
Business Update
Climate Report:
pages 35 to 39
Disclose Scope 1,
Scope 2, and, if
appropriate, Scope 3
GHG emissions, and
the related risk
We share our Scope 1, 2 and material Scope 3 GHG emissions and related risks on pages 36 to 37 of our
Climate Report, which also includes more information on the metrics and targets used.
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
CLIMATE-RELATED FINANCIAL DISCLOSURES
SUMMARY
ENTITY LEVEL AND BUSINESS REPORTS
TCFD
RECOMMENDED
DISCLOSURE
2024 UPDATE
CFD REQUIREMENTS
CFD
ALIGNMENT
FURTHER
INFORMATION
Disclose any areas
where entity
approaches differ
from those shared in
the group disclosure
Full details on the entity-level climate reports are found in the appendix of our standalone climate report.
Including:
Rathbones Investment Management
Rathbones Investment Management International
Greenbank Investments
Rathbones Asset Management
Investec Wealth & Investment UK.
N/A
Full
Climate Report
Rathbones
Investment
Management
Rathbones
Investment
Management
International
Greenbank
Investments
Rathbones Asset
Management
Investec Wealth &
Investment UK
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
CLIMATE-RELATED RISKS
As a business, we consider several transitional
and physical risks and opportunities. In the
table below, we have provided a description
of each climate-related risk and opportunity,
an assessment of the potential impact on
the business and our mitigation response.
TRANSITIONAL
RISK TYPE AND DESCRIPTION
ACTUAL AND POTENTIAL IMPACT
MITIGATION ACTIONS
S
REPUTATIONAL: CUSTOMER PERCEPTION
Failure to manage climate transition risk
within existing propositions
— Claims for financial compensation and loss of business and market share
if we do not deliver on our fiduciary duty as well as managing climate risk
— Corporate policies established with periodic review and approval
— Company engagement with clients
— Capability building (investment and fund managers)
M
REPUTATIONAL: EMPLOYEE SATISFACTION
AND RETENTION
Inability to attract and retain suitable resource
— Lack of climate-related expertise needed to identify and manage climate risk
and emissions reductions
— Lack of expertise across the business leading to disruption of business-as-
usual and financial losses. For example, due to inadequate risk assessments
and poor decision-making
— Delivery of net zero target and associated actions
— ESG-linked remuneration measures
— Training and development
S
REPUTATIONAL: SHAREHOLDER CONCERN
Failure to manage shareholder expectations
— Failure to manage shareholder expectations could lead to a loss of business
and competitive advantage; through potential shareholder withdrawals and
an inability to attract new shareholders
— Transparency and compliance
— Target setting
— Risk management
— Peer benchmarking
M
REGULATORY, COMPLIANCE AND LEGAL:
CARBON PRICING
Increased regulations on carbon pricing
(investments)
— Indirect devaluation of investments through increased operational costs
for investee companies
— Engagement with investee companies on ESG
— Consideration of ESG criteria in investment decisions
S
REGULATORY, COMPLIANCE AND LEGAL:
CARBON PRICING
Increased regulations on carbon pricing
(operations)
— Direct regulatory costs imposed on operations through potential energy
and fuel price increases
— Increasing supply chain costs, particularly from suppliers impacted
by carbon pricing
— Internal carbon price
— Energy efficiency programmes and green initiatives
— Routine assessment of emerging regulation
— ESG review of suppliers
S
REGULATORY, COMPLIANCE AND LEGAL:
EMISSIONS REPORTING OBLIGATIONS
Failure to maintain compliance with emissions
reporting obligations and readiness for
emerging regulations
— Fines as a result of regulatory action
— Reputational damage
— Increased operational costs due to remedial actions
— Monitoring of legislative landscape
— Resource allocation to responsible business functions
— Retention of external consultants for business and compliance support
All risks and opportunities outlined below
are deemed material to the business and
correspond to Rathbones Group principal
risk categories (full definitions of which can
be found on pages 64 to 67).
The following table provides a high-level
overview of Rathbones climate-related risks –
full narrative of descriptions of impacts and
mitigation responses are available on pages 15
to 18 of our Climate Report.
Magnitude
Risk trend
Time horizon
High
Medium-high
Medium
Low
Increasing
Stable
Decreasing
L
Long term
M
Medium term
S
Short term
For more details on how we identify, manage
and respond to these risks, please see the risk
management section of the full Climate Report.
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CLIMATE-RELATED RISKS
RISK TYPE AND DESCRIPTION
ACTUAL AND POTENTIAL IMPACT
MITIGATION ACTIONS
S
SUSTAINABILITY: UNCERTAINTY IN
MARKET SIGNALS
Inability to attract and retain clients due to
uncertain risks related to climate change
— Adverse effects on market share and profitability if the business model does
not respond to changing market conditions (including environmental and
social factors)
— Providing access to dedicated funds that consider ESG-criteria
— Ensuring the right resource is in place to help assess investment risk
and opportunities
M
SUSTAINABILITY: PRODUCTS
AND SERVICES
Technology: Substitution of existing products
and services with lower emissions options
— Failure to substitute existing products and services with lower emission
options poses a risk to our operations and value chain through increased
costs and stranded assets
— Management and monitoring of carbon footprint aligned with Science
Based Target initiative targets
PHYSICAL
RISK TYPE AND DESCRIPTION
ACTUAL AND POTENTIAL IMPACT
MITIGATION ACTIONS
M
BUSINESS CONTINUITY: ACUTE –
EXTREME WEATHER EVENTS
The impact of climate-change related extreme
weather events on business operation
— Disruption to business operations and continuity
— Increased operational expenses to rectify damage
— Maintain business continuity plans
— Contingency testing
— ESG review of critical suppliers and their continuity plans
L
SUITABILITY: CHRONIC –
CHANGES IN WEATHER PATTERNS
The impact of long-term changes in weather
patterns, such as air temperature and
precipitation (operations of companies
invested in)
— Impacts to operations of global companies invested in
— Impacts to financial value of company assets
— Increased operational expenses and lower returns for clients
— Development of responsible investment framework
— Development of sector-specific standards
— Application of integration approaches to fit investment services
and mandates
Magnitude
Risk trend
Time horizon
High
Medium-high
Medium
Low
Increasing
Stable
Decreasing
L
Long term
M
Medium term
S
Short term
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
CLIMATE-RELATED
OPPORTUNITIES
Importantly, the transition to a low-carbon economy also provides Rathbones with opportunities which, if acted on, stand
to benefit the business. An overview, timeframe and a description of our strategy to realise each opportunity is provided
in the table below:
OPPORTUNITY TYPE AND DESCRIPTION
ACTUAL AND POTENTIAL IMPACT
STRATEGIC ACTIONS TO REALISE OPPORTUNITIES
M
RESOURCE EFFICIENCY:
EFFICIENT BUILDINGS
Increased energy efficiency at our offices
— Scope 1 and 2 emissions reductions
— Decrease in costs associated with carbon credit purchases
— Reduced operational costs through efficiency measures
— Energy Savings Opportunity Scheme (ESOS) action plan
— Streamlined Energy and Carbon Reporting (SECR) compliance
— Building Research Establishment Environmental Assessment Methodology
(BREEAM) for buildings
M
ENERGY SOURCE: RENEWABLE ENERGY
Purchase and use of renewable energy
sources in our direct operations
— Scope 1 and 2 emissions reduction
— Decrease in costs associated with carbon credit purchases
— Prevention of stranded assets (e.g. heating equipment)
— Renewable energy procurement (renewable electricity tariffs)
— Installation of lower-emission energy sources (e.g. electric boilers)
S
SUSTAINABILITY: R&D AND INNOVATION
OF NEW PRODUCTS AND SERVICES TO
PROVIDE ACCESS TO NEW MARKETS
Launch products that provide clients with
access to financing low-carbon opportunities
— Reduction in Scope 3 Category 15 emissions
— Stimulus for low-carbon industries
— Acceleration of net zero targets
— Increased market share and revenue from increased demand in products
— Alignment with responsible investment framework
— Compliance with Sustainability Taxonomies
— Direct propositions in climate solutions and leveraging existing solutions
Magnitude
Risk trend
Time horizon
High
Medium-high
Medium
Low
Increasing
Stable
Decreasing
L
Long term
M
Medium term
S
Short term
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
NON-FINANCIAL AND SUSTAINABILITY
INFORMATION STATEMENT
The information presented here, including the sections referred to, represents our non-financial information statement as required by sections 414CA
and 414CB of the Companies Act 2006. The next pages contain a summary of our approach to management of these aspects of our business and
measuring our performance.
ISSUE AND SUMMARY
RELEVANT POLICIES AND POLICY OUTCOMES
OVERVIEW OF DUE DILIGENCE PROCESS
EMPLOYEES
We are a people business, it is therefore imperative
that our strategy sets a culture that drives
performance and builds long, rewarding careers
for our colleagues. Based around a common set of
values and our DE&I commitment we are focused
on becoming a more diverse business that will
support us in delivering value to our clients.
Our colleagues: See page 73
— Code of Conduct
— Equal Opportunities Policy
— Health and Safety Policy
— Compliance Framework Policy
— Anti-bribery Policy
— Rathbones is the employer of choice
for the wealth sector.
— Regular employee engagement surveys
— Workforce engagement programme
— Regular tracking of people metrics and trends
— Diversity, equality and inclusion strategy
— Executive sponsored inclusion networks.
SOCIAL IMPACTS
We are committed to being a trusted member
of the communities in which we operate.
The Rathbones Group Foundation supports
projects that align with our focus on opportunities
for disadvantaged youngsters.
Our communities: See page 75
— Code of Conduct
— Community Investment Guidelines
— Anti-bribery Policy
— Rathbones is a trusted partner in the
communities in which we operate.
— Responsible Business Committee has oversight
of our responsible business programme and
how we work to have a positive impact.
HUMAN RIGHTS
Rathbones is committed to respecting the human
rights of others. Our approach aligns with our
membership of the UNGC and commitment to
provide decent work and economic growth.
Our Governance: See page 76
— Code of Conduct
— Modern Slavery Statement
— Anti-bribery Policy
— Rathbones understands and manages
our human rights and modern slavery risk.
— Responsible Business Committee reviewed
our Modern Slavery Statement, ahead of Board
approval and received reports on our ongoing
supplier engagement on ESG matters
— 79% of our suppliers have been reviewed
in alignment with our ethics questionnaire.
More information
OUR BUSINESS MODEL
OUR PRINCIPAL RISKS
OUR COMMUNITIES
Read more: See page 18
Read more: See page 63
Read more: See page 75
OUR KEY PERFORMANCE INDICATORS
OUR COLLEAGUES
OUR GOVERNANCE
Read more: See page 33
Read more: See page 73
Read more: See page 76
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
89
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT
ISSUE AND SUMMARY
RELEVANT POLICIES AND POLICY OUTCOMES
OVERVIEW OF DUE DILIGENCE PROCESS
CLIMATE AND ENVIRONMENT
In 2021, Rathbones committed to achieve net zero
emissions by 2050 at the latest. In 2024 we
re-based our SBTi aligned near-term targets
to reflect the business post combination.
We continue to monitor and manage the carbon
emissions of our operations, recognising that the
most material exposure is through the investments
we make on behalf of our clients.
Climate-related financial disclosures: See page 77
— Responsible Investment Policy
— Group’s climate statement
— Net zero emissions commitment
— Fossil Fuel Statement
— Thermal Coal Exclusion Policy
— Rathbones delivers progress against our 2050
net zero commitment and near-term targets.
— Climate governance structure in place
— Responsible Business Committee monitors
the climate-related risks operationally
— Responsible Investment Committee oversee
the investment aspects of our net zero
commitment and the impact on the
investments we hold on behalf of our clients
— Engagement Committee proposes our
stewardship programme
— Executive Risk Committee oversees an
annual review of our climate risk appetite.
ANTI-CORRUPTION AND BRIBERY
Rathbones has a zero-tolerance towards
anti‑bribery and corruption.
All employees must comply with our code
of conduct and complete our conflicts of
interest submission.
Our Governance: See page 76
— Anti-bribery Policy
— Conflicts of Interest Policy
— Whistleblowing Policy
— Rathbones maintains our zero tolerance to
anti-bribery and corruption culture seeking to
prevent, detect and report any identified cases
of bribery and corruption
— In 2024, there were two cases raised
via our whistleblowing hotline.
— Anti-bribery and corruption training
completed by 96.1% of in-scope employees
— Due-diligence of all third-party relationships
— Gifts and Entertainment Policy
— Conflict of Interest Policy
— Whistleblowing Policy.
The strategic report contains certain
forward-looking statements, which are
made by the Directors in good faith based
on the information available to them at
the time of their approval of this annual
report. Statements contained within
the strategic report should be treated
with some caution due to the inherent
uncertainties (including but not limited to
those arising from economic, regulatory
and business risk factors) underlying
any such forward-looking statements.
The strategic report has been prepared
by Rathbones Group Plc to provide
information to its shareholders and should
not be relied upon for any other purpose.
Pages 1 to 90 constitute the strategic
report, which was approved by the Board
and signed on its behalf by:
PAUL STOCKTON GROUP
CHIEF EXECUTIVE OFFICER
IAIN HOOLEY GROUP
CHIEF FINANCIAL OFFICER
25 February 2025
More information
CLIMATE-RELATED
DISCLOSURES
OUR GOVERNANCE
FOR MORE INFORMATION
ON OUR STRATEGY
Read more: See page 76
Read more: See page 77
Our Climate Report
OUR COLLEAGUES
Read more: See page 19
Published policies can be found on our website
Read more: See page 73
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
90
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
GOVERNANCE
REPORT
92
Chair’s letter
94
Corporate governance framework
95
Key Board decisions
96
Board of Directors
99
Compliance with the 2018 UK
corporate governance code
100 Nomination Committee report
106 Audit Committee report
111
Group Risk Committee report
114
Remuneration Committee report
118
Annual report on remuneration
131
Directors’ report
134 Statement of Directors’
responsibilities in respect
of the Report and Accounts
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
CORPORATE GOVERNANCE REPORT
CHAIR’S LETTER
On behalf of the Board, it is my pleasure to
present our Corporate Governance report
for the year ended 31 December 2024.
This sets out how the Group’s governance
framework supports and promotes its
long-term success, and also provides an
overview of the activities of the Board and
its committees.
The key responsibilities of the Board are to
ensure effective leadership, the long-term
sustainability of the firm and the creation
of value for our stakeholders. The Board
recognises that sustainable business success is
not possible without a clear purpose and that
good governance is about more than complying
with rules; it is also about culture, behaviours
and how we service our clients. The Board is
therefore committed to ensuring that the firm’s
purpose, values and culture are set by the whole
Board and embedded throughout the firm.
The executive directors and management team
play an integral role in this, ensuring that our
people understand the firm’s culture and what
is expected of them to achieve our purpose.
I believe that all this, together with our strong
governance framework, allows the Board to
ensure that the whole firm is moving in the
right direction as we develop and execute
our strategy.
Our approach to governance has been even
more important in the past 12 months, as we
have navigated through integration of the IW&I
business, finalisation of the Saunderson House
migration, implementation of our digital
programme and Consumer Duty obligations
while being mindful of the impact on our
stakeholders. The Board is committed to
maintaining a robust and effective governance,
control and risk management framework. I have
been pleased, once again this year, to see the
benefits of that framework.
CLIVE C R BANNISTER
CHAIR
RISK MANAGEMENT
We were pleased to approve
a pension buy-in, mitigating
future balance sheet risk,
whilst insuring the benefits
of the members.
Read more: See page 58
BOARD EVALUATION
This year we undertook an
external board evaluation
programme.
Read more: See page 104
Board highlights 2024
Governance
in focus
CULTURE AND STRATEGIC INITIATIVES
The firm’s client focus and integrity are
fundamental to achieving the best results for
clients, colleagues and shareholders over the
long term by delivering our strategic initiatives.
As a Board, we are responsible for setting the
tone and for championing a healthy, responsible
culture that will promote long-term sustainable
success for all of our stakeholders, which is at
the heart of our purpose. In order to achieve
this goal, the Board reviews our culture
dashboard which is used to monitor and analyse
the firm’s culture. The culture dashboard is
updated every six months and presented to the
Board for review and monitoring. In addition,
Non-executive Directors assess the firm’s
culture through informal engagement, branch
visits to teams as well as the workforce
engagement initiatives that are discussed
on pages 28 to 29.
As the Board has a long term orientation,
we continued to place strategy – both execution
and evolution – at the heart of our discussions
in 2024, reflecting on trends in the wealth
industry. The Board has dedicated additional
time to analysing industry developments,
in order to remain well informed in a period
of increased pace of change, alongside our
oversight of business performance, our people,
and maintaining our culture during an intense
period of strategic delivery. It is clear to the
Board that the industry is facing unusually high
levels of change and we must remain alert to
opportunities and the unexpected. Continuing
to be relevant and close to clients during volatile
times is and will be vital to us whilst ensuring
we can deliver investment performance and
service to them. These will be our priorities
in our new strategy as will the continued
development of our talent, which we see as
the bedrock on which the business is built.
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
CORPORATE GOVERNANCE REPORT
CHAIR’S LETTER
MANAGEMENT SUCCESSION
During the year, the Board has also successfully
overseen a number of new appointments
to key roles on our Executive Committee.
We welcomed Jayne Rogers as Chief
Distribution Officer and Chair of RAM in 2023
and Simonetta Rigo as Chief Client Officer,
in September 2024. Further detail on the
Board’s approach to succession planning can
be found on page 100.
EXECUTIVE REMUNERATION
Executive remuneration is an important area
of focus and debate. As reported in last year’s
report, we introduced changes to our directors’
remuneration policy as part of our triennial
remuneration policy review. Our revised
remuneration policy was approved at the
2024 Annual General Meeting (AGM) and
I was pleased that it received such strong
support from our shareholders. The Directors’
remuneration report, which includes further
detail on the application of the new policy,
can be found later in this section.
DIVERSITY, EQUALITY AND INCLUSION
The Board agrees that greater diversity drives
better decision-making. We strongly believe that
building a diverse and inclusive workforce will
lead to better outcomes for clients, colleagues
and for our business. You can read more about
our approach to building diversity and inclusion
across our workforce and the initiatives that
support it in our responsible business review
on page 69. The Board has aligned its diversity
policy for Board appointments with new targets
set out in the UK Listing Rules and is proud to
have met those targets.
In 2024, over 40% of our Board was made up
of women, one of our senior Board positions
is held by women and we have at least one
director from an ethnic minority background.
You can read more about the policy and
the importance we place on diversity in the
recruitment of Non-executive Directors and
across the organisation on page 100 of the
Nomination Committee report.
BOARD EVALUATION
This year’s annual board and committee
effectiveness evaluation was conducted by
an external facilitator. In accordance with
the recommendations of the Code and best
practice, the evaluation process was formal and
rigorous and covered a broad range of elements
relevant to the effectiveness and performance
of the Board and its committees. The findings
are set out on page 104 and the Board will
shortly be developing an action plan to identify
opportunities to implement these findings
during the year ahead.
STAKEHOLDER ENGAGEMENT
Stakeholder engagement remains a priority
for the Board. During the year, the Board has
used formal meetings and other opportunities
to discuss the firm’s performance. These
discussions included consideration of their
interests, as well as risks arising from the wider
regulatory, economic and political environment.
As part of the Board’s regular meetings and
in sessions specifically focusing on strategy,
the directors have spent considerable time
assessing and having regard to the impact of
individual decisions and the firm’s operations on
different stakeholder groups. This has included
extensive discussion of points arising from
engagement with shareholders, customers,
employees, regulators and other groups.
You can find our formal statement in relation
to section 172 of the Companies Act 2006,
together with further detail about how the
directors have engaged with, and had regard
to the interests of, stakeholders in the strategic
report on page 24.
The Board gains a direct understanding
of employees’ views through employee
survey results, townhalls and branch visits.
Separately, the Board’s workforce engagement
programme, led by Iain Cummings and
Dharmash Mistry, continued during the year
with ongoing engagement with our employees.
Details of this initiative can be found on page
28. In addition, both my Non-Executive
Director colleagues and I used formal and
informal opportunities to talk to employees
across all offices.
Our shareholders are key. We managed a
comprehensive engagement programme with
them throughout the year. We undertook a
number of investor meetings, either in person
or virtually. The Group Chief Financial Officer
continues to report to the Board regularly
on shareholders’ views regarding the firm, and
the firm’s corporate brokers present regularly
to the Board on market developments and
shareholder perceptions. This helps to ensure
that the Board is fully briefed on the views and
aspirations of shareholders.
Our relationship with our various regulators
is of fundamental importance to us and we
maintain an open, constructive dialogue with
them to ensure that we are aware of and meet
the standards that they expect. For more
information about how the directors have had
regard to the interests of our key stakeholders
within the context of promoting the success
of the company, please see our section 172
statement on page 24.
This report, in its entirety, has been approved
by the Board of Directors and signed on its
behalf by:
CLIVE C R BANNISTER
CHAIR
25 February 2025
2024 BOARD AND COMMITTEE ATTENDANCE
Board
Nomination
Committee
Audit
Committee
Group Risk
Committee
Remuneration
Committee
Number of meetings held
7
3
4
7
4
Clive Bannister (Chair)
6/7
3/3
–
–
4/4
Paul Stockton (CEO)
7/7
–
–
–
–
Iain Hooley (CFO)
7/7
–
–
–
–
Sarah Gentleman (SID)
7/7
3/3
4/4
7/7
4/4
Terri Duhon (NED)
7/7
3/3
4/4
7/7
4/4
Iain Cummings (NED)
7/7
3/3
4/4
6/7
4/4
Dharmash Mistry (NED)
7/7
1/3
3/4
6/7
4/4
Henrietta Baldock (NED)
7/7
–
–
–
–
Ruth Leas (NED)
7/7
–
–
–
–
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
CORPORATE GOVERNANCE REPORT
CORPORATE GOVERNANCE FRAMEWORK
Our stakeholders
Clients
Society and communities
Our people
Partners and regulators
Shareholders
Role
Individual
Committee
Our strategic priorities
Enriching the client
and advisor proposition
and experience
Inspiring
our people
Supporting and
delivering growth
Operating
more efficiently
1
2
3
4
The Board
1
2
3
4
Key highlights:
— Monitored integration of IW&I, including and synergies
and cost to achieve
— Approval of firm’s Consumer Duty annual report
— Approved the proposal and implementation of the pension
buy‑in arrangement
— Conducted an externally led Board evaluation
and developed an action plan
— Approved the opening of an office in Ireland
— Monitored the delivery of the firm’s technology platform
— Regular review of our investor perception study
Key roles:
Chair
Senior Independent Director
Non-executive Directors
Executive Directors
For roles and responsibilities, please see our website
AUDIT COMMITTEE
RISK COMMITTEE
REMUNERATION COMMITTEE
NOMINATION COMMITTEE
CHAIR: IAIN CUMMINGS
Key highlights:
— Reviewed the Annual Report and
Interim Accounts
— Approval of CASS reports for both
Rathbones and IW&I
— Approved the findings and decision
of the External Quality Assessment
— Monitored the transition of lead
external audit partner
CHAIR: TERRI DUHON
Key highlights:
— Reviewed and approved the ICAAP and
ILAAP for RIM and ICARA for IW&I
— Monitored implementation of the firm’s
Consumer Duty activities
— Approved the firm’s risk appetite for the
combined Group
CHAIR: DHARMASH MISTRY
Key highlights:
— Approved the new Executive Performance
Share Plan and performance targets
under new scheme rules
— Approved the remuneration of the
executive members and the firm’s
MRT population
CHAIR: CLIVE BANNISTER
Key highlights:
— Reviewed the succession planning and
talent pipeline for members of the GEC
and those who hold senior manager
functions (SMFs)
— Received updates on the Diversity,
Equality & Inclusion Strategy
2
4
1
2
4
2
3
3
4
Audit Committee report:
See page 106
Group Risk Committee report:
See page 111
Remuneration Committee report:
See page 114
Nomination Committee report:
See page 100
For full terms of Reference for the committee, please see our website
Group Executive Committee
1
2
3
4
Key highlights:
— Held a GEC offsight to discuss strategic and growth initiatives
for the combined Group
— Discussed the results of the employee engagement survey
and developed an action plan
— Monitored and discussed the synergies achieved and the
cost synergy targets
— Oversight of the delivery of the integration programme
— Discussed and approved the consolidation of dual
location of offices
— Reviewed the results of the client survey and developed
an action plan
LEADERSHIP
CHALLENGE AND OVERSIGHT
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
94
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
CORPORATE GOVERNANCE REPORT
KEY BOARD DECISIONS AND CONSIDERATION
OF STAKEHOLDER INTEREST
Our stakeholders
Clients
Society and communities
Our people
Partners and regulators
Shareholders
Our strategic priorities
Enriching the client
and advisor proposition
and experience
Inspiring
our people
Supporting and
delivering growth
Operating
more efficiently
1
2
3
4
KEY AREAS
BOARD DECISION
STAKEHOLDER IMPACT
INTEGRATION AND
SYNERGIES
1
2
4
CLIENT MIGRATION PREPARATION
Approval and oversight of the process for attaining client
consent ahead of planned client migration in 2025.
Clients – ensuring seamless service with minimal client impact
Our People – preparing our colleagues for the client migration to ensure adequate capacity
and coverage
Partners and regulators – assurance to our regulators that we remain compliant with our
responsibilities relating to client assets and client care
PROPERTY CONSOLIDATION
Approval of the consolidation of properties in eight locations
where we have dual presence, which led to a number of
office relocations.
Our People – co-locating with IW&I colleagues fosters a shared collaborative culture.
Renovation of some sites created better working environments
Shareholders – creating value for shareholders through management of cost base
Society and Communities – reduction of emissions by selecting greener buildings where
available which support our efforts to reduce environmental impact
Partners and regulators – provided opportunities to consolidate our supplier partners across
larger sites
FINANCE AND
REGULATORY CAPITAL
2
4
PENSION BUY-IN
Approval of a collaborative approach to enter into an agreement
to fully insure the benefits of the members. This removed the
future obligations on the Group to fund these benefits and
mitigates substantive risks on the Group’s balance sheet.
Our People – removal of future obligations for the Group safeguards our employees pension
position in the future
Shareholders – mitigating risk on the Group’s balance sheet supports value creation
for shareholders
Partners and regulators – engaging with the regulator throughout this process has enabled
appropriate supervision
TECHNOLOGY
1
2
3
4
OBJECTWAY CONTRACT
Approval of a new contract with one of our existing supplier
partners, Objectway, to upgrade the firm’s investment
management platform with a view to modernising the platform
over the next few years, increasing resilience and security.
Clients – harnessing technology to enable our client service capabilities
Our People – investing in the improvement of our platforms supports and encourages our
colleagues’ efforts to work more effectively and efficiently
Shareholders – creating value for shareholders by improving our services with the aim of driving
new business
Partners and regulators – leveraging existing relationships for new projects builds trust with
our supplier partners and improves these relationships
PEOPLE
2
3
4
SUCCESS FACTORS
Oversight of the progress made in migrating our IW&I colleagues
onto our new people system.
Our People – enabling our IW&I colleagues to have better oversight of their compensation
packages, and greater ownership over their personal and professional development
Partners and regulators – gathering of data to support the business in setting targets and
introducing initiatives to deliver an inclusive workforce
DIVERSITY EQUITY & INCLUSION
Oversight of the key milestones achieved in the Group’s DE&I
strategy to date and the proposed plan to achieve the medium
to long term goals.
Our People – encouraging our colleagues to bring their authentic selves to work by promoting
a strategy which values everyone’s individual backgrounds
Society and Communities – continuing to ensure we promote DE&I within our firm to support
the wider goals we have in society
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
95
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
CORPORATE GOVERNANCE REPORT
BOARD OF DIRECTORS
CLIVE BANNISTER
CHAIR
PAUL STOCKTON
GROUP CHIEF
EXECUTIVE OFFICER
IAIN HOOLEY
GROUP CHIEF
FINANCIAL OFFICER
SARAH GENTLEMAN
SENIOR INDEPENDENT DIRECTOR
TERRI DUHON
NON-EXECUTIVE DIRECTOR
(INDEPENDENT)
N
RE
G
G
N
A
RI
RE
N
A
RI
RE
APPOINTED: 06/04/2021
EXPERIENCE, SKILLS
AND CONTRIBUTIONS
Clive brings a wealth of strategic,
commercial, and financial experience to
the Board. He started his career as a banker
at First National Bank of Boston in 1981
in Boston and London. In 1984, he joined
Booz Allen Hamilton and became a partner
in their financial consulting practice in 1990.
In 1994, Clive joined HSBC Investment Bank
as director and head of planning and strategy
in London. He moved to New York in 1996 to
be the deputy CEO of HSBC Inc and head of
Investment Banking in the US. In 1999, he was
appointed Chief Executive of HSBC Group
Private Banking, became a group general
manager in July 2001, and group managing
director in 2006 responsible for Group
Insurance and Asset Management at HSBC
Holdings Plc. In 2011, Clive was appointed as
group CEO of the Phoenix Group, the UK’s
largest life and pensions consolidator.
CURRENT EXTERNAL APPOINTMENTS
Clive is currently the chair of the Museum
of London and Beazley plc.
APPOINTED: 09/05/2019
EXPERIENCE, SKILLS
AND CONTRIBUTIONS
Paul was appointed as Group Chief Executive
in May 2019, having served as Managing
Director of Rathbones Investment
Management from May 2018. He was
previously Group Finance Director from
2008 to 2019.
Paul brings the following key skills to the
Board which supports the firm’s strategy:
executive leadership, financial services and
wealth management, risk management
and regulation.
Paul qualified as a chartered accountant
with PricewaterhouseCoopers in 1992,
subsequently accepting a position in
New York before returning to London in
1996. In 1999 he joined Old Mutual Plc as
group financial controller, becoming finance
director of Gerrard Limited in 2001.
In 2005, two years after the sale of Gerrard,
he left to work initially for Euroclear and,
subsequently, as a divisional finance director
of the Phoenix Group. He was formerly a
non-executive director of the Financial
Services Compensation Scheme.
CURRENT EXTERNAL APPOINTMENTS
Paul is a board member of the Personal
Investment Management and Financial
Advice Association (PIMFA) and Member
of the FCA Practitioner Panel.
APPOINTED: 01/01/2024
EXPERIENCE, SKILLS
AND CONTRIBUTIONS
Iain was appointed as Group Chief Financial
Officer on 1 January 2024. Iain served as
finance director of Investec Wealth &
Investment Limited (IW&I) for more than a
decade and was appointed CEO of IW&I UK in
February 2023. He brings to his current role
his extensive knowledge of the sector along
with a wealth of experience of financial and
regulatory reporting, corporate governance
and risk management.
Iain is a fellow chartered accountant
and began his career with Coopers &
Lybrand, which subsequently became
PricewaterhouseCoopers. Working in the
audit practice, Iain had responsibility for
managing a varied portfolio of audit
engagements which included SMEs and
listed companies across a range of sectors.
In 2000, he joined BWD Securities PLC,
which went on to become IW&I UK, initially as
group financial controller with responsibility
for the management of the Group’s internal
and external financial reporting, tax
compliance and other financial matters.
CURRENT EXTERNAL APPOINTMENTS
None.
APPOINTED: 21/01/2015
EXPERIENCE, SKILLS
AND CONTRIBUTIONS
Sarah joined Rathbones Board in 2015
and was appointed Senior Independent
Director in 2022. Sarah was Chair of the
Remuneration Committee from June 2017
and August 2023 and was a designated
Non-executive Director of the firm’s
workforce engagement programme between
2019 and 2023.
Sarah brings the following key skills to the
Board which supports the firm’s strategy:
banking, digital marketing, risk management,
corporate governance and regulatory
experience.
She started her career as a consultant at
McKinsey & Company and then subsequently
spent several years in the telecoms and
digital sectors, latterly as chief financial
officer of the LCR Telecom Group. In 1999,
she joined the internet bank Egg, the internet
banking subsidiary of Prudential, where she
was responsible for business development
and strategy. In 2005, she joined Sanford C.
Bernstein & Co, the institutional research
and trading arm of Alliance Bernstein,
as a banking analyst covering the European
banking sector. Sarah joined Engine B Ltd
in 2020 as an adviser to early-stage
technology companies.
CURRENT EXTERNAL APPOINTMENTS
Non-executive director of Molten
Ventures Plc.
APPOINTED: 02/07/2018
EXPERIENCE, SKILLS
AND CONTRIBUTIONS
Terri is Chair of the Group Risk Committee.
She has over 30 years of experience in the
financial market and brings the following
skills to the Board: banking, investment
management, risk management and
regulatory experience.
Terri graduated with a maths degree from
the Massachusetts Institute of Technology
(MIT). She is a non-executive director of
Morgan Stanley International where she
chairs the risk committee. In addition, she
is non-executive director of Wise Plc and
Hanover Investors Ltd, and is an Associate
Fellow at The Saïd Business School at Oxford
University. Previously, Terri was a board
member of CHAPS Co and Operation Smile
UK, was chair of Morgan Stanley Investment
Management Limited and was a founding
member of the Women’s Leadership Group
for the Prince’s Trust. As an executive, Terri
held a number of senior roles at JP Morgan
and ABN AMRO before setting up her own
consultancy firm.
CURRENT EXTERNAL APPOINTMENTS
Non-executive director of Morgan Stanley
International Ltd, Hanover Investors Ltd
and Wise Plc.
N
NOMINATION COMMITTEE
A
AUDIT COMMITTEE
RI
RISK COMMITTEE
RE
REMUNERATION COMMITTEE
G
GROUP EXECUTIVE COMMITTEE
COMMITTEE CHAIR
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
CORPORATE GOVERNANCE REPORT
BOARD OF DIRECTORS
IAIN CUMMINGS
NON-EXECUTIVE DIRECTOR
(INDEPENDENT)
DHARMASH MISTRY
NON-EXECUTIVE DIRECTOR
(INDEPENDENT)
HENRIETTA BALDOCK
NON-EXECUTIVE DIRECTOR
RUTH LEAS
NON-EXECUTIVE DIRECTOR
ALI JOHNSON
GROUP COMPANY SECRETARY
N
A
RI
RE
N
A
RI
RE
APPOINTED: 05/10/2021
EXPERIENCE, SKILLS
AND CONTRIBUTIONS
Iain is Chair of the Audit Committee and
co-leads the firm’s workforce engagement
programme with Dharmash Mistry.
To support the firm’s strategy, he brings a
wealth of experience in audit and accounting
regulatory reporting, financial services,
corporate governance and risk management.
Iain is a Fellow of the Institute of Chartered
Accountants in England & Wales with over 36
years of experience working in the financial
sector. He was a partner at KPMG for over
24 years working with banks and other major
financial services firms in both audit and
advisory roles including three years leading
KPMG’s banking audit practice. His audit
roles included large firms in the investment
banking sector and listed firms in the wealth,
asset management and insurance sectors
while his advisory engagements focused on
aspects of risk, regulation and internal audit.
Iain also served for a number of years as
chairman of the ICAEW Financial Services
Faculty’s risk and regulation committee and
as a member of the ICAEW’s Technical
Strategy Board.
CURRENT EXTERNAL APPOINTMENTS
Non-executive director of Skipton Building
Society, and The Tradition London group
of companies.
APPOINTED: 05/10/2021
EXPERIENCE, SKILLS
AND CONTRIBUTIONS
Dharmash joined Rathbones as a
Non‑executive Director in October 2021, he is
a Chair of the Remuneration Committee, and
co-leads the firm’s workforce engagement
programme with Iain Cummings.
Dharmash brings the following key skills to
the Board which support the firm’s strategy:
financial services, media & technology
experience, digital transformation, private
& public market investing and corporate
governance.
He started his career with Procter & Gamble
as a Brand Manager, followed by a period
with Boston Consulting Group. He spent
eight years in the media as Group Managing
Director of EMAP Consumer Media and
EMAP Performance. He co-led the 2008
delisting of Emap Plc from the FTSE 100.
He was formerly a Partner at Balderton
& Lakestar, leading investments including
Revolut, Glovo, Infarm, Blockchain.com and
Lovefilm amongst others. He co-founded
Blow LTD and served as Chairman & CEO
until its sale in 2021. His previous non-
executive appointments include: Hargreaves
Lansdown Plc, Dixons Retail Plc, The British
Business Bank and BBC Commercial Holdings.
CURRENT EXTERNAL APPOINTMENTS
A board member of Halma plc, The FA
(Football Association), The FA Premier
League, and Competition and Markets
Authority (CMA).
APPOINTED: 21/09/2023
EXPERIENCE, SKILLS
AND CONTRIBUTIONS
Henrietta Baldock was appointed as a
Non-executive Director on 21 September
2023 under the terms of the Relationship
Agreement following completion of IW&I
(UK) combination.
Henrietta has extensive knowledge of
the financial services sector, through her
25 years’ experience in investment banking,
most recently as chair of the European
Financial Institutions team at Bank of
America Merrill Lynch, where she advised
boards on significant transactions. In 2021,
she was appointed chair of Investec Wealth
& Investment (UK). Henrietta’s industry
experience demonstrates her valuable
strategic and transformation advisory skills.
CURRENT EXTERNAL APPOINTMENTS
Henrietta is a senior independent director
designate of Legal & General Group Plc, chair
of Legal and General Assurance Society,
chair of the remuneration committee at
Investec Plc, non-executive director of
Investec Bank Plc, and non-executive
director of Hydro Industries Limited.
APPOINTED: 21/09/2023
EXPERIENCE, SKILLS
AND CONTRIBUTIONS
Ruth Leas was appointed as a Non-executive
Director on 21 September 2023 under the
terms of the Relationship Agreement
following completion of IW&I (UK)
combination.
Ruth has been with Investec for 25 years
having joined in South Africa in 1998.
In 2002, she moved to London where she
spent 10 years in client-facing roles and was
subsequently appointed as co-head of US
Principal Finance. She joined the credit team
and was subsequently appointed as Head
of UK Investor Relations. In 2016, she was
appointed as an executive director and head
of risk management and as chief risk officer
in 2017. In 2019, she was appointed as
chief executive officer of Investec Bank plc,
the main banking subsidiary of Investec plc,
which includes Investec Group’s non-
Southern African operations (including
the UK, Channel Islands, Republic of Ireland,
US and India).
CURRENT EXTERNAL APPOINTMENTS
Chief executive officer of Investec Bank plc.
APPOINTED: 01/05/2016
EXPERIENCE, SKILLS
AND CONTRIBUTIONS
Ali joined Rathbones in April 2016
and was appointed Company Secretary
in May 2016.
Ali graduated in law and is a fellow of the
Chartered Governance Institute. He has
over 20 years’ experience as a company
secretary in a wide range of publicly
listed companies in the UK and US. Ali has
extensive knowledge and experience in
corporate governance, executive
remuneration, corporate transactions,
stock exchange listing obligations,
responsible business programme,
insurance and employee/executive
share plans.
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
97
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
CORPORATE GOVERNANCE REPORT
MEET THE GROUP EXECUTIVE COMMITTEE
PAUL STOCKTON
GROUP CHIEF EXECUTIVE OFFICER
IAIN HOOLEY
GROUP CHIEF FINANCIAL OFFICER
RUPERT BARON
CHIEF EXECUTIVE OFFICER
INVESTMENT MANAGEMENT
ANDY BRODIE
GROUP CHIEF OPERATING OFFICER
IVO DARNLEY
MANAGING DIRECTOR RIM
GAYNOR GILLESPIE
GROUP CHIEF PEOPLE OFFICER
MURRAY MACKAY
MANAGING DIRECTOR
IW&I (UK)
TONY OVERY
CHIEF EXECUTIVE OFFICER
SHL/RFP
SARAH OWEN-JONES
GROUP CHIEF RISK OFFICER
SIMONETTA RIGO
CHIEF CLIENT OFFICER
JAYNE ROGERS
GROUP CHIEF DISTRIBUTION OFFICER
EXECUTIVE CHAIR OF RAM
The group executive committee (GEC) is chaired
by Paul Stockton, Group Chief Executive Officer,
and he is supported by the senior management
team. The key role of the GEC is day-to-day
management of Rathbones. The committee
actively reviews and assesses business
performance supported by a range of
committees that operate across the Group.
Full biographies of the Group Executive
Committee are available on our website.
Read more on the
Group Executive Committee
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
98
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
CORPORATE GOVERNANCE REPORT
COMPLIANCE WITH THE 2018 UK CORPORATE GOVERNANCE CODE
The firm is committed to the highest standards of corporate governance as set out in the UK Corporate Governance Code (the Code).
The Code sets out the standards of good practice in relation to how the company should be governed and can be found on the
FRC’s website at www.frc.org.uk. This has been applied by the company during the period under review. The Board is satisfied that
the company has complied with the provisions of the Code throughout the period under review with one instance to the contrary,
which is referenced in more detail in the Nomination Committee report on page 100. You can read more about the firm’s compliance
with the Code as set out below:
SECTION 1: BOARD LEADERSHIP
AND COMPANY PURPOSE
Page
A
Effective and entrepreneurial Board
to promote the long-term sustainable
success of the company, generating
value for shareholders and contributing
to wider society
B
Purpose, values and strategy with
alignment to culture
C
Resources for the company to meet its
objectives and measure performance.
Controls framework for management
and assessment of risks
D
Effective engagement with shareholders
and stakeholders
E
Consistency of workforce policies
and practices to support long-term
sustainable success
•
Chair’s statement
8
•
Strategic Report
2
•
Board engagement
with key stakeholders
24
•
Shareholder engagement
30
•
Audit Committee report
106
•
Risk Committee report
111
•
Conflicts of interest
102
SECTION 2: DIVISION OF
RESPONSIBILITIES
Page
F
Leadership of Board by Chair
G
Board composition and responsibilities
H
Role of non-Executive Directors
I
Company secretary, policies,
processes, information, time
and resources
•
Board composition
96
•
Key roles and responsibilities
94
•
General qualifications required
of all directors
101
•
Information and training
100
•
Board appointments and
succession planning
100
SECTION 3: COMPOSITION,
SUCCESSION AND EVALUATION
Page
J
Board appointments and succession
plans for Board and senior management
and promotion of diversity
K
Skills, experience and knowledge of
Board and length of service of Board
as a whole
L
Annual evaluation of Board and
Directors and demonstration of
whether each director continues
to contribute effectively
•
Board composition
96
•
Diversity, tenure and experience
100
•
Board, committee and director
performance evaluation
104
•
Nomination Committee report
100
SECTION 4: AUDIT, RISK
AND INTERNAL CONTROLS
Page
M
Independence and effectiveness of
internal and external audit functions
and integrity of financial and narrative
statements
N
Fair, balanced and understandable
assessment of the company’s position
and prospects
O
Risk management and internal control
framework and principal risks company
is willing to take to achieve its long-term
objectives
•
Audit Committee report
106
•
Risk Committee report
111
•
Strategic report
2
•
Fair, balanced and understandable
annual report
106
•
Going concern basis of accounting
106
•
Viability statement
68
SECTION 5: REMUNERATION
Page
P
Remuneration policies and practices
to support strategy and promote
long-term sustainable success with
executive remuneration aligned to
company purpose and values
Q
Procedure for executive director and
senior management remuneration
R
Authorisation of remuneration
outcomes
•
Remuneration Committee report
114
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
99
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
NOMINATION COMMITTEE REPORT
This report sets out an overview of the
committee’s roles, responsibilities and its key
activities during the year. Activities undertaken
by the committee included a formal review
of senior management succession planning,
assessing the capability and potential of
incumbents in key roles and the succession
pipeline across the Group. Further information
on talent and succession planning can be found
in the responsible business review on page 69.
SUCCESSION PLANNING
In tandem with considering composition during
the year the committee ensured appropriate
succession planning for both the Board and
the Group’s senior management was in place.
This involved:
— Reviewing the succession planning and talent
pipeline for members of the GEC and those
who hold senior manager functions (SMFs)
to ensure resilience in these key areas is
maintained and planned
— Actively considering mechanisms for
staggering Board tenure to manage evenly
the distribution of change amongst the Board
— Reviewing arrangements for short-term
contingency planning to prepare for
unexpected periods using existing talent –
for Non-Executive Directors, members of
the GEC and individuals holding SMFs.
This process helped identify any areas of
over-reliance on key individuals, which the
committee will monitor.
All of these assessments (relating to
composition and succession) were undertaken
in line with the board diversity policy – the
committee reviews broader aspects of diversity
as part of its reviews of board composition
and succession planning, and when searching
for candidates.
CLIVE C R BANNISTER
CHAIR OF THE
NOMINATION COMMITTEE
Full terms of reference for the Committee
are available on the companyʼs website.
EXECUTIVE MANAGEMENT
AND TALENT DEVELOPMENT
The committee spent considerable time during
the year considering the Group’s succession
planning at Executive Committee level and
below. Murray Mackay has decided to retire
from the firm at the end of February 2025.
Also, during the year, Rupert Baron notified
the firm that he would like us to plan for his
retirement once a successor had been identified
as CEO of Investment Management. To ensure
a comprehensive and unbiased evaluation
of potential candidates, both internal and
external, we collaborated with Russell Reynolds,
the executive search firm. The detailed
candidate specification was centred on our
overall strategic objectives and the integral role
the CEO of Investment Management would play
in achieving these. This was pivotal in defining
the required competencies and experiences for
the prospective candidates. Russell Reynolds
assessed the competencies of both internal
and external candidates in order to assess all
candidates on an equal footing and to ensure
that the selection process was objective and
fair. Further details on the recruitment of CEO
of Investment Management will follow later
in 2025.
Recognising that investing in our workforce
and nurturing talent is critical to the future
success of the Group, the Committee also paid
particular attention to succession planning
below the GEC as part of the integration with
IW&I UK. The committee monitored initiatives
to ensure that there was a suitably experienced
pipeline in place for internal promotion to
senior management roles.
BOARD INDUCTION PROGRAMME
Our Executive and Non-Executive Directors
are offered a comprehensive and tailored
induction programme to introduce them to
the business, industry and regulatory context.
The programme is based on one-to-one
meetings with the Executive Directors and
Executive Committee members, the heads of
group functions and the Company Secretary
and covers the areas of business outlined below.
BOARD DIVERSITY
The Board believes that building a diverse
and inclusive workforce is important not just
because it is the right thing to do, but because
it is good for the Group’s clients, its business
and its colleagues. The Group’s objective is to
build a diverse workforce at all levels and create
an inclusive culture. The Board is committed
to creating a culture where people treat each
other with dignity and are encouraged to
realise their full potential. The Group’s Inclusion
and Diversity Policy makes clear the Group’s
aspirations and commitment; and by defining
the roles and responsibilities that will support
it in attaining these objectives.
The Group’s diversity, equality and inclusion
strategy outlines the priority areas of focus,
which are currently:
— To build a culture of inclusion where
colleagues feel safe, respected and where
they belong
— To increase ethnic minority representation,
recognising the need to accelerate progress
in this area
— To maintain our commitment to increase
female representation and close the gender
pay gap.
The committee spent
considerable time during
the year considering the
Group’s succession planning
at executive committee
and senior manager levels.
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
100
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
NOMINATION COMMITTEE REPORT
During the period, the committee reviewed
progress against the Group’s inclusion and
diversity strategy and action plan, including a
number of key achievements, details of which
can be found on page 73 of the strategic report.
The Board’s diversity policy is designed
to ensure transparency and diversity in
making appointments to the Board upon the
recommendation of the Nomination Committee.
The policy recognises the importance of having
Directors with a range of relevant experience,
and embraces the benefits derived from having
Directors who come from diverse backgrounds.
The gender and ethnicity balance of the Board
is taken into consideration when recruiting a
new Non-executive Director. This is reflected
in the current composition of our Board.
To achieve this goal, we only engage with
external search firms that are signatories to
the Voluntary Code of Conduct for Executive
Search Firms for board-level appointments.
The Nomination Committee reviews and
evaluates the structure, size and composition of
the Board and is responsible for identifying and
recommending new Directors for appointment.
Board appointments are made following
rigorous consideration by the Nomination
Committee of the balance of skills, experience,
knowledge and diversity. When considering
Board composition, the Nomination Committee
reviews best practice, including the new
Listing Rules relating to diversity, the findings
of the FTSE Women Leaders Review and the
Parker Review.
The committee considered the Group’s
diversity in the context of the UK Listing Rule
6.6.6R(9)(a) requirements on diversity metrics
and reporting. As at 31 December 2024, the
company has met the FCA diversity targets:
— the Board met its target of having 40%
female directors (2024: 44%)
— the Board met its target of having at least one
director from a minority ethnic background
(2024: 1)
— the Board met the requirement to have one
of the senior board positions (Chair, Senior
Independent Director, Chief Executive or
Chief Financial Officer) occupied by a female
director. The directors who hold these roles
were appointed following formal, rigorous
and transparent procedures and are the most
suitable and experienced individuals for their
roles and the Group’s needs. The Board
recognises that this will be a consideration
for future appointments to these roles
(2024: 1).
In accordance with UK Listing Rule 6.6.6R(9)(a)
the data for the above disclosure is as disclosed by
the relevant individuals as at 31 December 2024.
The tables on the following page illustrate the
gender and ethnic diversity of the executive
management population, which comprises the
Group Executive Committee and company
secretary, but excludes administrative or
support colleagues, pursuant to UK Listing
Rule 6.6.13R.
BOARD COMPOSITION
Chairman: 11%
Executive: 22%
Non-executive directors
(independent): 45%
Non-executive directors
(non-independent): 22%
BOARD GENDER DIVERSITY
Male: 5
Female: 4
NON-EXECUTIVE DIRECTORSʼ TENURE
0–2 years: 28.57%
3–5 years: 42.86%
6–10 years: 28.57%
BOARD ETHNICITY
White British or other
White (incl other minority
white groups): 89%
Asian/Asian British: 11%
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
101
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
NOMINATION COMMITTEE REPORT
DIRECTOR INDEPENDENCE,
TIME COMMITMENT AND RE-ELECTION
The committee conducted its annual review
of the independence of the Non-executive
Directors, and time commitments of the
Directors generally. In reviewing the
independence of the Non-executive Directors,
the committee considered in detail whether
any circumstances had arisen, including those
set out in Provision 10 of the Code, which are
likely to impair, or could appear to impair the
independence of each non-executive director.
The committee concluded that it considered
each of the Non-executive Directors (other
than the shareholder nominated directors)
to be independent under the provisions of
the Code. The committee recognises that
Sarah Gentleman, Senior Independent
Director, has exceeded her nine-year tenure
on the Board. The committee has agreed to
extend her tenure in order to ensure stability
and continuity on the Board following the
combination with IW&I. The committee has
noted her significant contribution, including as
Remuneration Committee Chair and the Board,
and I, as Chair, value her knowledge, experience
and continuity. Nevertheless, the committee
will consider Non-executive Director succession
during 2025.
As outlined in my statement last year, two
Shareholder Representative Directors were
appointed to the Board following completion
of the combination with IW&I: Ruth Leas and
Henrietta Baldock. Under the terms of the
Relationship Agreement, such appointments
required the committee’s approval but the
Board agreed that Shareholder Directors would
not be considered independent under the
Code given their relationships with appointing
shareholders. They will not be appointed to the
Audit, Remuneration or Risk Committees.
In concluding that each of the Non-executive
Directors has sufficient time available to
allocate to the company as set out in their
letters of appointment, the committee
considered: the detailed requirements of the
Code and other key regulatory requirements;
attendance records for each Director and
responsiveness to company business; as well as
the confirmations given to the Chair by each of
the Non-executive Directors that they continue
to have sufficient time to discharge their
responsibilities effectively. Based on its
assessment of each director’s performance and
ability to continue to contribute to the Board in
light of the knowledge, skill and experience they
possess, the committee has recommended to
the Board that each of the directors is eligible to
be put forward for election or re-election at the
2025 AGM as appropriate.
BOARD AND GROUP EXECUTIVE COMMITTEE GENDER DISCLOSURE
Reporting table on gender representation as at 31 December 2024
Number of
Board members
% of
the Board
Number of
senior positions
on the Board
(Chair, CEO,
CFO, SID)
Number
in GEC
% of
executive
management
Men
5
56%
3
8
67%
Women
4
44%
1
4
33%
Not specified/
prefer not to say
–
–
–
–
–
1. GEC is defined as members of our Group Executive Committee including the Group Company Secretary
BOARD AND GROUP EXECUTIVE COMMITTEE ETHNICITY DISCLOSURE
Reporting table on ethnicity representation as at 31 December 2024
Number of
Board members
% of
the Board
Number of
senior positions
on the Board
(Chair, CEO,
CFO, SID)
Number
in GEC1
% of
executive
management
White British (including
minority white groups)
8
89%
4
9
75%
Mixed/multiple
ethnic group
–
–
–
–
–
Asian/Asian British
1
11%
Black/African/Caribbean/
Black British
–
–
–
–
Other ethnic group
–
–
–
–
Not specified/
prefer not to say
–
–
–
3
25%
1. GEC is defined as members of our Group Executive Committee including the Group Company Secretary
STRATEGIC
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FINANCIAL
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GOVERNANCE
REPORT
FURTHER
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102
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
NOMINATION COMMITTEE REPORT
BOARD EFFECTIVENESS REVIEW
During the year, the committee led the annual
Board evaluation process. The committee
supported the Senior Independent Director
and the Company Secretary in agreeing the
scope of the evaluation and oversaw the
process to select Independent Audit as the
independent board evaluator. Further
information can be found on page 104.
The committee considers that during the
year it continued to have access to sufficient
resources to enable it to carry out its duties
and has continued to perform effectively.
During the year, the committee reviewed
its terms of reference to ensure that they
remain appropriate.
CHAIR AND INDIVIDUAL DIRECTOR
PERFORMANCE EVALUATIONS
The SID leads the non-executive members
of the Board in an annual evaluation of the
performance of the Chair, which includes an
assessment of the working relationship between
the Chair and the Group CEO. In carrying out
the annual evaluation, the SID meets with the
non-executives without the Chair present and
takes into account the views of the Executive
Directors, as appropriate. Following this year’s
review, the effectiveness of the Chair continued
to be highly-rated. The Chair meets with Board
members throughout the year to assess their
individual performance. Following this year’s
review, and the insights gained from the
external facilitator, the Chair confirmed that
the individual directors’ continued to contribute
effectively to the Board.
FOCUS FOR 2025
Looking ahead to the next financial year, it is
anticipated that the committee will focus on:
— Succession planning and talent pipeline
to ensure alignment to the future strategic
needs of the firm
— Delivery of our diversity and inclusion strategy
— Implementation of the recommendations
from external Board effectiveness review.
CLIVE C R BANNISTER
CHAIR OF THE NOMINATION COMMITTEE
25 February 2025
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
103
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
NOMINATION COMMITTEE REPORT
BOARD AND COMMITTEE EVALUATION
Our evaluation process
Another role of the Nomination Committee is
to oversee the annual Board and Committees’
effectiveness review. In line with best practice,
a formal and rigorous review of the effectiveness
of the Board and its Committees is conducted
each year. The Board and its Committees
undergo a full, independent external evaluation
every three years, and an externally-facilitated
internal evaluation on all other years. This year,
in line with the requirements of the Code,
the effectiveness review was undertaken by
an independent, external board effectiveness
review specialist.
Following a robust tender process conducted by
the SID and Group Company Secretary, upon
the Committee’s recommendation, the Board
approved the appointment of Independent
Audit Limited (IAL) as the independent external
reviewer to conduct the 2024 evaluation.
IAL was chosen due to its experience in financial
services firms. IAL have previously supported
the firm’s internal and external reviews and,
to ensure independence was maintained, this
year’s review was undertaken by a new team.
The process, findings and resulting actions from
the 2024 effectiveness review of the Board and
its Committees can be found in the diagram to
the right. IAL had the opportunity to comment
on these disclosures. They have also conducted
an external review of a firm which is chaired by
the Rathbones’ Chair.
INITIAL MEETING TO
AGREE THE SCOPE
The exercise focused on:
— Board composition and
succession planning,
Board dynamics and
decision-making
— Strategy, performance
and risk culture.
INDIVIDUAL INTERVIEWS
AND DOCUMENT REVIEW
— Thorough review of Board
and Committee papers,
including minutes
— One-to-one interviews
held with all members of
the Board and with other
key stakeholders, internal
and external.
OBSERVATION OF
BOARD AND MAIN
SUB COMMITTEES
Assisted in assessing
meeting dynamics
and behaviours;
— Enabled Independent
Audit Limited to form
an independent view
of the Board.
ANALYSIS AND DISCUSSION
OF THE REPORT AT THE
BOARD MEETING
— A draft report was prepared
and discussed with Chair,
SID and Company Secretary,
in the first instance
— A final report was presented
to the Board for discussion
on the findings, together
with a suggested
development plan.
MONITOR AND
REVIEW PROGRESS
An action plan will be
prepared and monitored
by the Board during 2025.
Our
evaluation
process
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
104
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
Following our 2024 external evaluation, the overall findings and tone of the report was positive and indicated that the Board and its
committees have the attributes necessary for an effective Board. There was confidence in the Board’s ability to oversee strategy whilst
delivering a transformational transaction and chair continued to lead the Board effectively. A summary of the Board’s strengths along
with a number of recommendations for development are provided below.
KEY OUTCOMES
STRENGTHS
CONTINUED AREAS OF FOCUS
BOARD
OPERATIONS,
COMPOSITION
AND DIVERSITY:
— Non-Executive Directors are well prepared for the meetings
— Differing personal styles of the Non-Executive Directors
add diversity of thought to Board and Committee
discussions
— The Board Committees and the extensive work of the chairs
outside of the boardroom, supported the effectiveness
of the Board.
— Non-Executive Directors to continue to share more
of their own experiences with the Executive team
— Enhance the quality of the Board and Committee
papers to enable the Board to ask the right questions
and better support its priorities on strategy.
ENGAGEMENT
WITH THE
EXECUTIVE TEAM:
— The strength of the company’s culture built around good
behaviours and positive challenge to the executive team.
— Facilitate more informal engagement between the
non-executive directors and the Executive team to
enable more open discussions
— Continue to cascade feedback received from our
people to the Executive team.
PEOPLE AND
CULTURE:
— Chair is effective at encouraging participation in meetings
and fostering debate supported by a very able SID
— The CEO is highly regarded by the Board and has a
collaborative relationship with the Chair
— There is good challenge by the NEDs in board meetings
— Board agendas address the key priorities of the business.
— Continued focus on succession to ensure the Board
has the right skills
— Culture and values may need to be reviewed in line
with combined enlarged Group
— Conduct a review of the firm’s longer-term
people strategy.
STRATEGY
AND RISK:
— The Board and the executive team continue to focus on
evolving the firm’s strategy post integration of IW&I
— The Board, supported by the Risk Committee, ensure that
consideration is given to risk in all major decisions made.
— There needs to be ongoing focus on the firm’s
long term strategy and more time given to
“blue sky” thinking
— At Board strategy day, introduce internal and
external speakers to discuss key topics, market trends
and development.
The full details of the internal evaluation,
including the process and its findings,
can be found on page 98 of our 2023
Annual Report. Below is a summary of
the progress against the actions from
the 2023 evaluation:
INTEGRATION
Monitoring and delivery of the IW&I
integration, agree format/dashboard of
regular reporting and ensure the Board
has sufficient MI during integration.
The Board received critical MI and
dashboard on integration at each meeting
that ensured oversight of activity.
STRATEGY
Continue to focus on the ‘big picture’
and the future of the firm as well as the
direction of the industry.
The Board and GEC held a strategy day
in 2024 to discuss the future direction
of the firm.
ENGAGEMENT WITH MANAGEMENT
Increase the level of 1:1 meetings between
management and the NEDs to ensure
Board discussions are better informed.
Also, additional informal meetings can
be arranged to address key topics with
management.
Non-Executive Directors and the
executive team held regular 1:1 catch ups,
in addition, the Board held a number of
informal virtual meetings during the year.
NOMINATION COMMITTEE REPORT
BOARD AND COMMITTEE EVALUATION
2024 External evaluation
2023 Internal evaluation
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
105
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
AUDIT COMMITTEE REPORT
This report provides an overview of how the
committee has discharged its responsibilities
over the last 12 months. Key areas of focus
in 2024 were:
— Analysis of the firm’s financial reporting
with particular consideration of accounting
judgements made during the preparation
of the financial statements
— Assessing the integrity and fair presentation
of the Group’s external financial reporting,
including climate change disclosures as well
as our climate report
— Reviewing and approval of the client assets
sourcebook audits and submissions for
relevant subsidiaries
— Reviewing the maintenance and effectiveness
of the Group’s internal control framework
including the impact of significant
change activity
— Reviewing the impact and the Group’s
response to the upcoming changes to the
Corporate Governance Code
— Overseeing the effectiveness of internal
audit and the External Quality Assessment
(EQA) process.
The Audit Committee’s key role is to ensure
there is confidence in the integrity of our
processes and procedures as they relate to
internal financial controls and corporate
reporting. The Board relies on the committee
to review financial reporting and to appoint
and oversee the work of the internal and
external auditors. This includes reviewing and
challenging the appropriateness of accounting
policies, significant issues and judgements, and
the assumptions in support of the company’s
ability to continue as a going concern and its
longer-term viability. You can find further
details on page 68.
COMMITTEE MEMBERSHIP,
OPERATIONS AND EFFECTIVENESS
The committee acts independently of
management to ensure the interests of
shareholders are properly protected in relation
to financial reporting and internal control.
The committee members bring a diverse range
of experience in finance, risk, control and
business, with particular experience in the
financial services sector.
The composition of the committee satisfies
the relevant requirements of the UK Corporate
Governance Code. The Board also considers
that I have the appropriate recent and relevant
experience. The qualification for each of
the members is outlined on pages 96 to 97.
In addition to the members of the committee,
standing invitations are extended to the Chair,
Executive Directors, Chief Risk Officer, Head
of Internal Audit, Group Financial Controller,
and the external audit partner and manager.
Other executives and external advisers are
invited to attend the committee from time
to time as required to present and advise
on reports commissioned.
An external evaluation of the Board and its
committees was undertaken during the year in
line with the requirements of the UK Corporate
Governance Code, as described on page 99.
The evaluation found that the committee
continues to operate effectively. The committee
considers that it has access to sufficient
resources to enable it to carry out its duties.
IAIN CUMMINGS
CHAIR OF THE AUDIT COMMITTEE
Full terms of reference for the Committee
are available on the companyʼs website.
FINANCIALS
REPORT AND FINANCIAL STATEMENTS
AND INTERIM RESULTS
Through considering significant accounting
issues, policies and judgements throughout the
year, the committee plays an important role
in the production of the report and financial
statements and interim results. This includes
reviewing and challenging the basis of our
reporting in key areas of judgement and
uncertainty (Note 2) and the assumptions that
support the use of the going concern basis for
the preparation of the financial statements and
the statement given by the Directors as to the
company’s longer-term viability, which can be
found on page 68. In addition, the committee
also undertakes a broader review of the content
of the report and financial statements to advise
the Board as to whether, taken as a whole, it is
fair, balanced, and understandable and provides
the information necessary for shareholders
to assess the Group’s performance, business
model and strategy. This supports the Board
in providing the confirmations set out on
page 134.
In considering the wider content of the report
and financial statements, the committee has
focused its attention to ensuring the narrative
sections are consistent with, and provide
context for, the financial statements and outline
an appropriate balance between the articulation
of successful outcomes, opportunities,
challenges, and risks. In addition to considering
its content, the committee oversees the
process for preparing the report and financial
statements and receives regular updates
throughout the period on planning for the year
end reporting, with overall responsibility for
coordinating production assigned to the Chief
Financial Officer.
The committee acts
independently of
management to ensure
the interests of
stakeholders are
properly protected.
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
AUDIT COMMITTEE REPORT
EXTERNAL AUDIT
A key aspect of the committee’s role is its
oversight of the Group’s relationship with
the external auditor. This includes making
recommendations to the Board in relation
to the appointment of the external auditor,
approving its scope of work, fees and terms of
engagement, as well as regularly reviewing its
independence, objectivity and effectiveness.
We received assurance from our internal
effectiveness review and the FRC Audit Quality
Review that our external auditors, Deloitte LLP,
continue to perform satisfactorily. Further
details of work in respect of these and other
key areas are set out in the sections below.
AUDIT WORK 2024
Deloitte has been auditor to the Group since
May 2019, and Simon Cleveland succeeded
Manbhinder Rana as the firm’s lead partner,
who rotated off this audit during 2024.
During the year, the Audit Committee Chair has
engaged and had oversight of the succession
and smooth handover process. Mr Simon
Cleveland attended all committee meetings.
The committee has overseen the end-to-end
audit process and reviewed and approved the
external auditor’s engagement letter and the
detailed audit plan to ensure appropriateness
of scope. In approving the proposed audit fees,
the committee paid particular attention to
ensuring they were appropriate to enable an
effective and high-quality audit.
The committee reviewed the findings from
the audit process with the external auditor,
which included a discussion of key audit and
accounting matters, including significant
judgements and provisions which included
details of the external auditor’s views on its
interactions with management.
The committee reviewed and recommended to
the Board that it sign the representation letter
requested by the external auditor in respect of
its audit of the financial statements. The views
of the external auditor were sought at the
committee’s meetings, which included sessions
without management present, to discuss its
remit and any issues arising from the audit.
The company has complied with the Statutory
Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive
Tender Processes and Audit Committee
Responsibilities) Order 2014 for the year ended
31 December 2024. Also, the committee has
considered and prepared for the adoption of
the Minimum Standard as issued by the FRC
and, in the year-to-date, has had no matters
on which it is required to report.
EXTERNAL AUDIT EFFECTIVENESS
AND INDEPENDENCE
We place great importance on the quality,
effectiveness and independence of the external
audit process. In order to review the external
audit process, including the performance of
the external auditor, feedback is gathered from
both committee members and management.
This process was coordinated by internal audit.
The committee noted that the external auditor
had demonstrated challenge and professional
scepticism in performing its role through the
provision of regular reporting and drawing the
committee’s attention to key matters during
committee meetings. We also reviewed the
FRC Audit Quality Inspection report prepared
on our external auditor and discussed this
report with the audit partner. No material
findings were identified from this inspection.
As part of its role to monitor and assess the
independence and objectivity of the external
auditor, the committee has considered the
FRC’s Revised Ethical Standard 2019 (the
Standard) and paid particular attention to the
Group’s wider relationship with the external
auditor through its provision of non-audit
services to the Group, the rotation of the
Senior Audit Partner, and the external auditor’s
tenure with the Group, as detailed below.
The external auditor provided the committee
with a report confirming that, in line with
the FRC’s Standard and having regard to the
threats and safeguards to independence, it had
concluded that there were no matters that
impaired or restricted its objectivity as auditors
to the Group.
NON-AUDIT SERVICES
The committee has responsibility for
recommending to the Board the Group’s policy
on non-audit services supplied by the external
auditor. The policy is specifically designed to
ensure that the external auditor’s independence
and objectivity is maintained. It sets out a
number of permissible non-audit services
that the external auditor may carry out in line
with the FRC’s Standard. The committee,
in particular, considers that it is desirable
that the external auditors also perform the
assurance services required by regulation
in respect of CASS and Safeguarding as this
provides efficiencies in the audit process and,
in its judgement, the threats to the auditors’
independence are insignificant. The committee’s
prior approval is only required where the fee
for an individual non-audit service is expected
to exceed £50,000 and it is on the list of
pre-approved services.
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
AUDIT COMMITTEE REPORT
Prior to undertaking any non-audit service,
Deloitte also completes its own independence
confirmation processes, which are approved
by the engagement partner. To provide the
committee with oversight in this area, it submits
six-monthly reports on the non-audit services
it has provided.
In line with the FRC’s Standard, the policy
specifies that the maximum non-audit fees
that the external auditor can receive from the
Group is 70% of the average of the audit fees
incurred by the Group over the previous three
years. Assurance services in relation to CASS
and safeguarding are specifically excluded
from the fee cap. The Group was charged
£2,318,000 by Deloitte in relation to the
financial year 2024 (FY23: £1,742,000) for
audit and audit-related assurance services,
and £238,000 (FY23: £540,000) for other
assurance services, giving a total fee to Deloitte
of £2,556,000 (FY23: £2,282,000), 39.5%
was therefore for non-audit services. Further
information on auditors’ remuneration is set
out in note 7 to the financial statements.
The committee considered the information
and views presented to it and has concluded
that the external audit process was effective,
that it is satisfied with the performance of the
external auditor, and that there are policies
and procedures in place adequate to protect
the independence and objectivity of the
external auditor. Accordingly, the committee
has recommended to the Board that a
resolution be put to shareholders at the
upcoming AGM for the reappointment of the
external auditor. In conformance with the
required rules, provisions and good corporate
governance in respect of audit tendering and
rotation, the group will be required to tender
for the external audit at the 2029 financial year
end. The committee will consider in due course
its plan for the tender.
RISK MANAGEMENT AND
INTERNAL CONTROLS
The Group’s internal control framework
is an essential part of ensuring the integrity
of its financial reporting and other business
operations. The committee oversees the
effectiveness of, and ongoing improvements to,
the Group’s internal controls, as well as having
responsibility for monitoring and reviewing
the effectiveness of the Group’s internal
audit function, which provides assurance
on those controls.
In conjunction with the Risk Committee,
the committee provides assurance to the Board
on the Group’s system of internal controls.
A key element of this is the review of the
financial control systems that identify, assess,
manage, and monitor financial risks, which are
an important aspect of ensuring the integrity
of the Group’s financial statements as a whole.
The committee receives reports from
management on the effectiveness of those
controls in addition to the independent
assurance on the effectiveness of controls
contained in the control environment from
the external auditor.
At each meeting a report is tabled by the Head
of Internal Audit and the committee reviews
any major findings into control weaknesses and
management’s response. The committee also
reviews the results of our annual ISAE3402
reporting for clients in RIM and the AAF for
clients, which was run to September 2023.
The committee members actively follow up
with management on the rectification of
identified control weaknesses. In addition,
the committee receives an assessment from
the risk management function on the balance
of key accounting judgements and fraud risk
and controls to assist with the review of the
Annual Report.
During the period, the committee has:
— Reviewed the Internal Audit reports for
the period as well as the progress of actions
against any prior year observations
on controls
— Considered year-end reports on various
aspects of the internal control environment
of the business from internal audit, the Group
Chief Risk Officer and the Chief Financial
Officer. In addition, a year-end update was
provided to the committee covering the
Group financial control framework
— Reviewed and approved the ISAE3402
reports for Rathbones and AAF for IW&I
on their testing of controls over the core
operating systems supporting the Investment
Management and Funds businesses
— Reviewed the external audits that were
performed regarding controls applicable
to client assets held by regulated entities
in the Group.
The committee was satisfied that no material
weaknesses were identified and that adequate
steps were being taken to remedy control
deficiencies identified.
In conjunction with the Group Risk Committee,
we have satisfied ourselves that the Group’s
internal control framework is effective and
adequately aligned with the Group’s risk profile.
We are satisfied that the internal controls
in relation to the financial reporting process
are appropriately designed and effective in
identifying risks faced by the Group. Full details
of the internal control framework are given
within the risk management section on pages
58 to 67.
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
AUDIT COMMITTEE REPORT
INTERNAL AUDIT EFFECTIVENESS
The committee considers the effectiveness of
internal audit on an ongoing basis. Every five
years, in line with the requirements of the Code
this includes an External Quality Assessment,
which is an assessment of an internal audit
function’s compliance with the International
Professional Practices Framework (which
includes Global Internal Audit Standards) and
the Chartered IAA Internal Audit Financial
Services Code of Practice.
The outcome of this review indicated that
the internal audit function generally conforms
– the highest available rating – with these
professional standards and has applied the
FS Code appropriately ensuring that the
function continues to be effective. The team is
well respected across the firm and has direct
access to the executive team as well as 2nd line
functions which helps avoid duplication of
activities. A small number of enhancements
to the team and its approach to audits had
been recommended which had been discussed
with the Head of Internal Audit and the
Committee. An action plan to address these
areas of enhancement has been developed and
completion will be monitored by the Committee.
An EQA was performed in 2024 and the
Committee commissioned the review, oversaw
the selection of the third party assessor and
received and discussed their report.
INTERNAL AUDIT FUNCTION
The Group’s internal audit function’s role
is to provide objective assurance and advice
to both the Board and management on the
Group’s internal control and risk management
framework. The committee provides oversight
of the programme of work carried out by the
function, as well as monitoring and reviewing its
role and effectiveness, including its objectivity.
The role of the Group’s internal audit function
is defined by the Internal Audit Charter,
which sets out its objectives, responsibilities,
and scope of work. The charter was subject to
review this year based on industry best practice
and was approved by the committee in
April 2024.
The function’s detailed work programme is set
out in a rolling 12-month Internal Audit Plan.
This is reviewed based on updated risk
assessments and approved by the committee
every six months and the Committee also
ensures that adequate resources are available
to deliver the plan. The committee is satisfied
that the Plan covers the Group’s key risks,
regulatory priorities and strategic ambitions
and aligns with the assurance activity being
carried out by the Group’s second line function
and the external auditor. Important topics
covered by the Audit Plan this financial year
include Consumer Duty implementation,
Strategic Change delivery plan and integration
programme for IW&I. Any Plan modifications
are approved by the Committee.
During the period, regular reports were
received on progress against the Plan and
these reports form a crucial input to our
assessment of the internal control environment.
The committee uses this information to assess
the function’s effectiveness and to ensure that
it is adequately resourced and fully equipped
to fulfil its mandate and perform in accordance
with the Internal Audit Charter and relevant
professional standards.
The Head of Internal Audit is a permanent
invitee to the committee’s meetings and meets
regularly with both the committee chair and
its members without management present.
Having considered the information provided
to it throughout the period under review, the
committee remains satisfied that the quality,
experience, and expertise of the function is
appropriate and that it is operating effectively.
The committee continues to support the
maintenance of the function’s objectivity.
It ensures the Head of Internal Audit has direct
access to both the Chair of the Board and the
Committee Chair, in each case without the
involvement of management, and they receive
reporting directly from the function.
The Committee Chair is responsible for setting
objectives for the Head of Internal Audit,
appraising her performance (with support from
the Chief Executive Officer) and recommending
her annual remuneration for approval by the
Remuneration Committee.
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
WHISTLEBLOWING CHAMPION
The Committee Chair is the whistleblowing
champion for the Group, and the Group is
committed to creating a culture of openness,
integrity, and accountability. A formal policy
is in place which encourages colleagues and
contractors to raise concerns, in confidence,
about possible wrongdoing. Awareness of the
policy is achieved through regular engagement
and training throughout the year. Changes to
the policy require the approval of the Board.
The committee has responsibility for regularly
reviewing the adequacy of arrangements to
ensure reports are investigated, appropriate
action is taken where necessary, and that
appropriate steps are in place to safeguard
reporters against victimisation.
During the period, the committee received
regular reporting on whistleblowing, including
management information on concerns raised.
The committee was satisfied that the strength
of the arrangements is aligned with other
financial services organisations. As part of the
Group’s commitment to ensure reasonable
procedures are in place to prevent fraud,
the committee also received a report on fraud
risk assessments. This outlined the controls
and measures in place to detect fraud and
safeguard clients’ assets. No material issues
were identified.
FOCUS FOR 2025
As well as considering the standing items of
business, the committee will also focus on the
following areas during 2025:
— measurement and delivery of synergy benefits
— maintenance of internal controls through
the integration programme
— monitor the action plan to deliver potential
enhancements identified by the EQA exercise
— readiness for enhanced controls reporting
under the Corporate Governance Code.
IAIN CUMMINGS
CHAIR OF THE AUDIT COMMITTEE
25 February 2025
AUDIT COMMITTEE REPORT
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
GROUP RISK COMMITTEE REPORT
As chair of the Group Risk Committee,
I am pleased to present the committee’s
report on the activities undertaken in the
year under review.
The committee plays a key role in overseeing
the integrity of the robustness of the Group’s
system of internal control and financial and
risk management.
The Group’s approach to risk management,
how it evaluates and manages the principal risks
and uncertainties the Group faces are set out
on pages 58 to 67.
The Board is responsible for the Group’s risk
management and strategy, and for determining
an appropriate risk appetite. The committee
ensures that risk management is properly
considered in Board decisions and provides
oversight of risk within the Group, including
for IW&I following the combination in 2023.
The committee advises the Board on changes
to the Group’s risk profile and risk appetite
and monitors the effectiveness of the Group’s
risk management framework.
The committee plays a key role in overseeing
the management of capital adequacy and
liquidity through the ICAAP, ILAAP and ICARA
which includes ensuring Rathbones has
sufficient capital for its existing and future
strategy. Continued enhancements to the
Group’s risk maturity have been reviewed
by the committee, which has scrutinised the
Group’s risk profile in relation to solvency,
liquidity, operational, conduct and reputational
risks. In addition, we continue to progress
against our regulatory agenda, with a particular
focus on Consumer Duty this year as well as
having oversight of the firm’s first Consumer
Duty Report.
Also, our attention has remained focused
on business-as-usual matters such as conduct
risk, investment performance risk, cyber risk
and third-party risk. The committee receives
updates on each of these areas, and I remain
confident that we are well positioned to meet
the challenges and uncertainties that each
of these will pose.
The committee undertakes a robust assessment
of both the principal and emerging risks facing
the Group over the course of the year, and
reviews reports from the risk and compliance
function on the processes that support the
management and mitigation of those risks.
As part of the ongoing review process, a specific
assessment of the principal risks and emerging
risks and uncertainties facing the Group is also
carried out by the committee, including those
that would threaten its business model, future
performance, solvency or liquidity.
The committee has continued to keep under
review the Group’s strategy, delivery of our
digital programme and managing integration
risks. Regular updates on mobilisation priorities
have been received to ensure that the activities
supporting the delivery and execution of the
strategy are adequately managed and prioritised
across other business-as-usual activities in
order to support good client outcomes.
The committee reviews a report from the Chief
Risk Officer at each meeting, which includes key
themes impacting the risk profile and regulatory
change risks that could impact the Group. It also
covers the output of risk assurance activities and
specific areas of financial and non-financial risk,
including regulatory risk and client outcomes.
TERRI DUHON
CHAIR OF THE
GROUP RISK COMMITTEE
Full terms of reference for the Committee
are available on the companyʼs website.
The committee works closely with the audit
committee on risk and control matters,
and both committee Chairs are members of
the other committee to ensure a co-ordinated
approach. The operation of effective key
controls for assessing and managing the
Group’s key risks is delegated to the audit
and risk committees.
The committee also focused on programmes
to further align and integrate the Group risk
management framework in anticipation of
the combination with Investec Wealth &
Investment (UK) (IW&I).
COMMITTEE MEETINGS
Our current members are the independent
Non-Executive Directors, who met formally
on five occasions during the year and informally
three times to review key regulatory reports.
In addition to the members of the committee,
standing invitations are extended to the Chair
and other Board members, the Executive
Directors, the Chief Risk Officer, the Chief
Operating Officer, the managing directors
and the Head of Internal Audit. All attend
committee meetings as a matter of course
and inform the committee’s discussions.
Other Group Executive Committee members
and risk team members are invited to attend
the committee meetings from time to time
as required to present and advise on
reports commissioned.
I frequently meet with the Chief Risk Officer in
a combination of formal and informal sessions
throughout the year. I also meet with senior
management across all divisions of the Group,
including the risk and compliance division,
to discuss the business environment and to
gather their views on emerging risks.
The committee undertakes
a robust assessment
of both the principal
and emerging risks
related to strategic and
operational matters.
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
— Oversaw the activity of the compliance
function which ensures adequate oversight
of the regulatory obligations and compliance
with them. The adequacy and effectiveness
of the function was confirmed as part of the
annual review
— Oversaw developments in the risk and
compliance teams, including their integration
across Rathbones and IW&I
— Received regular updates from the CRO
on the resource capacity and capability
in the risk function.
RISK REVIEW
Our risk management framework underpins
our culture to enable a responsive and forward-
looking approach to the risks we face as a
Group. There has been particular focus again
this year on the firm’s risk appetite framework,
particularly given then programme of change
that has been delivered during the year.
During this financial year we conducted our
regular review of the key risks facing the Group
as summarised in the principal and emerging
risks, with changes reflected in our risk report
on pages 58 to 67.
The committee continued its focus on
investment risk throughout the year, looking
at investment performance, suitability and
governance enhancements.
GROUP RISK COMMITTEE REPORT
The committee has an agreed annual standing
agenda to cover key risk items in the year, which
are required to be addressed in accordance
with the terms of reference. The committee
always discusses the Chief Risk Officer’s report,
which covers the second line risk view, as well as
reports from management which give the first
line risk view. We also then hear about financial
risks, and finally internal audit gives any
thoughts at the end of the meeting to cover
the third line risk view. Prior to each meeting,
I agree the agenda with the Chief Risk Officer
and the Company Secretary to identify key
issues impacting on the firm that may require
the committee’s attention, which either become
ad hoc agenda items or standing agenda items
depending on the issue.
KEY AREAS OF FOCUS DURING 2024
CONSUMER DUTY
To support the delivery of good client
outcomes, regular updates on embedding
activities related to Consumer Duty were
reviewed. Progress of the embedding plan and
delivery of key elements, including the review
of monitoring frameworks, were monitored to
ensure coverage of the regulations had been
considered prior to completion of the annual
assessment by 31 July 2024.
OPERATIONAL RESILIENCE
In its role overseeing operational resilience,
the committee scrutinised the completeness
of the Operational Resilience Self-Assessment,
including Important Business Service coverage
and thresholds, as well as management plans
to address outstanding actions, prior to
recommending this for approval by the Board.
This risk will continue to be a material area of
focus for the committee as we move into 2025.
INFORMATION SECURITY, DATA
AND FRAUD RISK
To provide visibility of risk exposure and
activities underway to address and mitigate
risks, regular updates were provided on
data risk as part of BAU activity, as well as
integration planning.
Regular updates on enhancements made
within the Group’s financial crime framework
and controls were received, including
technology updates to support anti-money
laundering (AML) screening.
The annual report from the Money Laundering
Reporting Officer (MLRO) took into account
the FCA’s findings from its recent assessment
of compliance with AML regulations and was
subsequently approved by the Board.
RISK MANAGEMENT OVERSIGHT
In 2024 the committee:
— Reviewed and challenged the risk appetite
statements in support of risk-informed
decision-making aligned with the firm’s
strategic aims. Received regular updates
on the status of the Group’s risk profile
supported by reference to the approved
risk appetite, reviews undertaken of risk and
compliance events and the status of control
effectiveness and remediation activities
— Reviewed and challenged reporting for
evidence of the continued evolution of risk
management capabilities in the first line and
monitored the response of management to
issues identified
— Continued to encourage the Group’s
Risk function to further focus on oversight
through the increased transfer of risk
management activities to the first line
operational teams
— Received and challenged assessments of the
Group’s emerging risks and the principal risks
and uncertainties the Group faces, as reflected
on pages 62 to 67
— Reviewed and monitored progress of the
second line assurance plan and oversaw the
ongoing prioritisation of risk management
activity across the Group
— Received reports from the compliance
monitoring function on the effectiveness
of measures designed to ensure compliance
with the Group’s regulatory risk and
control framework
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
GROUP RISK COMMITTEE REPORT
ICAAP, ILAAP AND ICARA
As part of ensuring the Group has sufficient
capital and liquidity for its growth strategy,
the committee kept the ICAAP, ILAAP and
ICARA under periodic review as well as arranging
deep dives into each of these documents.
The ICAAP, ILAAP and ICARA were
recommended to the Board for approval,
following review and challenge to ensure
they were proportionate to the nature, scale
and complexity of the firm. The review covered
the key assumptions and methodologies used
to assess the material risks of harm to ensure
the results continued to reflect the risk
profile of the Group. The committee oversaw
the scenarios used, such as regulatory
compliance, technology and severe market
movements to validate the results and also
reviewed the annual regulatory disclosures.
DIGITAL CHANGE PROGRAMME
As referenced in our report last year,
the implementation of the Group’s digital
change programme was a significant area of
focus for the Risk Committee during the year.
The committee received and reviewed reports
by management as well as the Chief Risk Officer
on the key risks of this deployment across the
Group. These risks will continue to be a material
area of focus for the committee as we move
into 2025.
CULTURE AND RISK
The links between culture, risk and remuneration
are fundamental. The Chief People Officer
prepares a report on people risk themes on an
annual basis, and the Chief Risk Officer provides
a regular risk culture update from a second line
perspective. In addition, the Risk Committee
Chair and Chief Risk Officer have provided
input to the Remuneration Committee to
ensure behaviours and the management
of risk during the year were considered in
Remuneration Committee decisions.
RISK APPETITE
There has been particular focus again this
year on the firm’s risk appetite framework,
particularly given the programme of change
and integration that has been delivered during
the year. Also, the committee continued to
focus on conduct risk, controls and processes,
and risk of fraud.
A number of areas of operational and financial
risks were stressed again this year as part of the
annual ICAAP, ILAAP and ICARA. Following
extensive debate and challenge, the committee
and Board were satisfied that the Group’s
business model and allocated risk appetite
remained appropriate. This is an important
outcome given the number of change
management programmes underway across
the Group.
COMMITTEE EFFECTIVENESS
An evaluation of the committee’s effectiveness
was undertaken during the year as part of the
external Board effectiveness review. The review
found that the committee operated well and
ensured that the firm’s risks were sufficiently
analysed during the year.
In addition, the committee is satisfied that
it has access to sufficient resource to enable
it to carry out its duties and continue to
perform effectively.
FOCUS FOR 2025
In reviewing the committee’s priorities for
the coming year, consideration will be given
to the following area:
— overseeing the next phase of Consumer
Duty development
— overseeing the remaining integration risks
— monitoring the risk landscape as integration
progresses, at this committee and the Board
— reviewing the risk appetite framework
following the main phase of integration
— deep dives on a few key areas which could
impact client outcomes e.g, investment risk.
TERRI DUHON
CHAIR OF THE GROUP RISK COMMITTEE
25 February 2025
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REPORT
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GOVERNANCE
REPORT
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INFORMATION
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
Full terms of reference for the Committee
are available on the companyʼs website.
DHARMASH MISTRY
CHAIR OF THE REMUNERATION
COMMITTEE
REMUNERATION COMMITTEE REPORT
REMUNERATION COMMITTEE CHAIRʼS
ANNUAL STATEMENT
2024 has been a busy year for the remuneration
committee, which mainly focused on
implementing the new directors’ Remuneration
Policy. At the AGM in May 2024, shareholders
provided strong support for the policy, which
was developed to ensure that remuneration
structures and performance measures:
— have the success of the combination with
IW&I at their core
— ensure strong alignment between executive
remuneration outcomes and the successful
implementation of our strategy and delivery
of shareholder value
— continue to comply with regulations and
industry best practice.
2024 PERFORMANCE AND
REMUNERATION OUTCOMES
Our remuneration framework is closely aligned
with the financial performance of the Group,
which has performed strongly with FUMA
increasing by 3.7%, reaching £109.2 billion,
and profit before tax increasing by 72.9% to
£99.6 million with an underlying operating
margin of 25.4% at 31 December 2024.
Following the Group’s strong performance in
the year, the Board is proposing a final dividend
of 63p per share, resulting in a full-year
dividend per share of 93p, an increase of 6.9%.
The executive team have delivered a significant
amount of activity aligned with our strategic
priorities and details can be found on page 120.
ANNUAL BONUS OUTCOMES
The Remuneration Committee assessed
the following factors when determining
remuneration outcomes for the Executive
Directors: how to maintain a fair balance
between the interests of different stakeholders,
including shareholders, employees and
management; how to encourage and reward
the behaviours that reflect our purpose and
culture; and how to judge performance against
objectives, including considering where the
remuneration committee should apply
discretion to adjust any formulaic outcomes.
As detailed in last year’s report, variable
remuneration is made up of two components:
— Annual bonus with a maximum opportunity
of 135% of fixed pay
— A Performance Share Plan (PSP) with
a maximum of 200% of fixed pay with
a three-year performance period and
two-year deferral.
Following the 2024 AGM, the first PSP grant
will vest in 2027, subject to the assessment
of performance conditions. The annual bonus
was assessed against two financial measures,
underlying profit before tax and total net
organic growth in FUMA, as these are the key
indicators of performance used by the firm
and investors, as well as strategic measures.
These specific targets are reviewed annually
to ensure the nature and weightings are
appropriate to achieve alignment between
the continued incentivisation of our executive
directors, our strategy and the interests of our
stakeholders. Also, the committee set these
targets to encourage stretching levels of
performance and to ensure alignment with
the firm’s annual budget.
The Board considered a number of factors
when setting and approving the final budget
for 2024. This resulted in the remuneration
committee approving higher year-on-year
targets for profit for the enlarged Group whilst
balancing the impact of planned investments,
which were critical to the execution of strategy.
In addition, the strategic objectives that were
set include delivery of the firm’s critical projects
as well as taking into account the firm’s
stakeholder measures and client experience.
In terms of delivery of our key strategic
objectives, positive progress had been made
during the year, which resulted in an outcome
of 35% out of a maximum of 50% for this
measure. We have set out in more detail the
outcomes against targets for 2024. After
consideration, the Remuneration Committee
decided that these outcomes were appropriate
and consistent for the year and no discretionary
adjustment was required.
Our remuneration
framework is closely
aligned to the value
delivered to our
stakeholders.
STRATEGIC
REPORT
FINANCIAL
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GOVERNANCE
REPORT
FURTHER
INFORMATION
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
REMUNERATION COMMITTEE REPORT
RESTRICTED STOCK PLAN OUTCOMES
The second RSP award will vest in March 2025,
and the committee assessed the performance
underpin over the 2022–24 period.
In summary, over the three-year period:
— total dividends paid have increased
— return on Capital Employed (ROCE) was
higher than our Weighted Average Cost
of Capital (WACC)
— satisfactory operational performance has
been maintained
— our risk and control environment was
robust and no significant failings or events
have occurred.
As such, the committee confirmed that the
underpins had been met and therefore the RSP
will vest in full.
GROUP-WIDE EMPLOYEE
REMUNERATION
The responsibility for determining the reward
practices on a firm-wide basis lies with the
Remuneration Committee. As in previous years,
the committee continues to spend time in
having oversight of overall remuneration for
employees across the firm. The average salary
increase for 2025 across the firm will be 2%.
The Group is committed to paying all our people
at or above the national living wage, which is in
excess of the national minimum wage.
FEES AND SALARIES
In setting Directors’ remuneration, the
committee takes into account the pay and
employment conditions of all employees,
the performance of the firm, and the views
of shareholders and their representatives.
Remuneration arrangements at other firms
of similar size and complexity are also reviewed
for guidance. The committee will continue to
use a number of reference points to determine
future pay structure, quantum and peer group
positioning for executive directors and
members of the Group Executive Committee.
The Committee reviewed the fee for the Chair
and agreed an increase for the first time since
being appointed to the role in April 2021.
Full detail on this change in fee is on page 122.
In relation to fixed pay for Paul Stockton and
Iain Hooley for 2025, the Committee agreed
to no increase.
CONCLUSION
I hope that you find the information in this
letter and the Directors’ Remuneration Report
clear and useful. The remuneration landscape
continues to be the subject of many political
and regulatory policy changes and, as these
evolve, the committee will ensure that our
policy and practices remain compliant,
balancing the need to remain performance-
driven and competitive. I welcome any feedback
you may have during the year and hope to
receive your support for the approval of the
remuneration report.
DHARMASH MISTRY
CHAIR OF THE REMUNERATION
COMMITTEE
25 February 2025
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
REMUNERATION AT A GLANCE
Remuneration outcomes
2024
2023
PAUL STOCKTON £’000
Target
Minimum
Maximum
Actual
£578
£1,546
£1,399
£618
£1,711
£1,557
£1,447
£1,880
IAIN HOOLEY* £’000
Target
Minimum
Maximum
Actual
£791
£437
£856
£1,026
* Iain Hooley was appointed as Group Chief Financial
officer on 1 January 2024.
Variable pay outcomes
Threshold
Target
Max
ONE-YEAR MEASURES (ANNUAL BONUS)
Underlying profit
before tax
24.7%
Actual £227.6m
£234.3m
4.0%
1.0%
2.4%
100%
Total net organic
growth in FUMA
0.0%
£202m
Actual -1.2%
£219m
Achieved
Strategic objectives
35.0%
30%
20%
% of award
50%
Actual 70%
THREE-YEAR MEASURES (RESTRICTED STOCK PLAN)
ROCE was higher than WACC
over the last 3 years
Total dividend continued to increase
over the last 3 years
Satisfactory operational and risk
management over the last 3 years
100%
Achieved
100%
100%
Single total figure of remuneration for Executive Directors £’000
Fixed pay (inc pension)
Taxable benefits
Annual bonus 2024
RSP
SIP & SAYE
£10
£3
Paul Stockton
£428
£1,557
£59
£8
Iain Hooley
£437
£352
£856
£498
£618
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
2025
PRE
GRANT
CONDʼS
IMPLEMENTATION OF REMUNERATION POLICY IN 2025
Application of remuneration policy
Fixed pay (inc pension)
Annual bonus 2024
PSP
PAUL STOCKTON £’000
IAIN HOOLEY £’000
Maximum
Target
Maximum +50%
share price growth
Minimum
£2,688
£1,860
£3,306
£618
33%
23%
19%
27%
31%
25%
40%
46%
56%
100%
Maximum
Target
Maximum +50%
share price growth
Minimum
£1,900
£1,315
£2,337
£437
33%
23%
19%
27%
31%
25%
40%
46%
56%
100%
Our remuneration philosophy
OUR REMUNERATION POLICY
IS DESIGNED TO BE:
— Transparent
— Simple
— Predictable
— Proportionate
— Drive the right culture and
behaviour and is aligned with:
— Our purpose to think, act and
invest for everyone’s tomorrow
— The interests of our key stakeholders
Read more: See page 19
Read more: See page 24
— Our strategic priorities
1
2
3
4
Performance over 3 years
2 year holding period
2026
Grant year
2027
2029
2030
2031
2028
PERFORMANCE
SHARE PLAN
(Max 200% of fixed)
2025 MEASURES
30% EPS
40% ROCE
30% TSR
27.5% Underlying profit
before tax
22.5% Total net organic
growth in FUMA
50% Strategic objectives
BONUS
(Max 135% of fixed)
CASH
(50%)
1/3 Released
1/3
SHARES
(50%)
1/3
FIXED PAY
(100%)
SHARES
(100%)
SHARES
RELEASED
STRATEGIC
REPORT
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
ANNUAL REPORT ON REMUNERATION
REMUNERATION POLICY
The Remuneration Policy (Policy) was approved at the AGM on 9 May 2024 and can be found on
our website. The policy has operated as intended in terms of company performance and quantum.
No further changes have been made to the Remuneration Policy since it was approved in 2024.
This part of the Directors’ remuneration report explains how we have implemented our
remuneration policy during the year. This annual report on remuneration is subject to an advisory
vote at the 2025 AGM, and the financial information in this part of the remuneration report has
been audited where indicated.
ROLE OF REMUNERATION COMMITTEE
The role of the committee is to set the overarching principles of the Remuneration Policy and
provide oversight on remuneration across the firm. Details of the committee’s responsibilities and
composition are noted above. At the invitation of the Committee Chair, the Group Chief Executive
Officer, Group Chief Financial Officer and Chief People Officer attend some or all of each meeting.
The Chief Risk Officer also advises the committee on matters relating to remuneration, and attends
meetings as required. The Company Secretary acts as secretary and, with the Chair, agrees the
agenda for each meeting. At the end of each meeting, there is an opportunity for private discussion
between committee members without the presence of management. No committee member or
attendee is present when matters relating to his or her own remuneration are discussed. The Chair
of the Board consults our major shareholders on a regular basis on key issues, including remuneration.
A formal consultation exercise was undertaken during 2023 with our major shareholders
and shareholder advisory bodies as part of the process of reviewing the Remuneration Policy.
The pay and terms and conditions of employment of employees within the Group are taken into
consideration when setting the Directors’ Remuneration Policy and pay of the Executive Directors.
The Remuneration Committee does not formally consult with employees when setting the policy,
although the employee opinion survey conducted every year includes remuneration as one of the
topics surveyed.
UK CORPORATE GOVERNANCE CODE
In determining the Policy, the committee took into account the principles as set out in the Code,
in addition, the committee ensured that the proposed policy was transparent, simple and easily
understood, fair and linked Group performance and reward, and to drive the right behaviour,
it is aligned to our purpose, values and Group strategy.
SINGLE TOTAL FIGURE OF REMUNERATION FOR EACH EXECUTIVE DIRECTOR (AUDITED)
The table below sets out a single figure for the total remuneration received by each executive director for the year ended 31 December 2024 and the prior year:
Fixed pay
Variable pay
Fixed pay
£’000
Taxable
benefits and
allowances
£’000
Pensions
£’000
Subtotal
£’000
Annual bonus
£’000
RSP1
£’000
SIP
£’000
SAYE
£’000
Subtotal
£’000
Total
£’000
R P Stockton
2024
618
3
–
621
498
4281
4
6
936
1,557
2023
578
3
–
581
470
3872
4
5
866
1,447
I W Hooley
2024
437
59
–
496
352
–
2
6
360
856
1. RSP – this award was made in 2022 and relates to the three-year performance period ending 2024. The award will vest in March 2025 and will be subject to a two-year holding period. The value of this award was based on the average share price during Q4 2024 of £17.08.
2. The value for 2023 has been restated from the number in last years report to reflect the actual share price at the date of vest (£17.72)
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
TAXABLE BENEFITS
Taxable benefits and allowances represent the provision of private medical insurance for executive directors and their dependants on terms consistent with the company’s workforce. In addition,
Iain Hooley receives travel expenses to cover the cost of working out of our London office.
ANNUAL BONUS
Performance is assessed using a combination of measures that are detailed below:
Weight
%
% of
fixed pay
Financial
50
67.5
Non-financial
50
67.5
Total
100
135
FINANCIAL
The one-year financial performance measures are two key performance indicators actively used by the business, which are closely aligned to strategy. The one-year financial measures and achievement
levels are provided below:
% of
fixed pay
Threshold
(25% of
maximum)
On target
(60% of
maximum)
Maximum
Actual
Weighted
payout
(% of fixed pay)
Financial
Underlying profit before tax (£m)
40.5
£202m
£219m
£234.3m
£227.6m
33.3%
Total net organic growth in funds under management and administration (%)
27
1
2.4
4
-1.2
–
The net organic growth in funds under management and administration covers both our Investment Management and Asset Management businesses.
ANNUAL REPORT ON REMUNERATION
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
119
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
NON-FINANCIAL STRATEGIC
The non-financial strategic measures are designed to drive strategic goals. Details of the performance measures, assessment and outcomes are detailed below:
PERFORMANCE IN 2024
STRATEGIC DRIVER
STAKEHOLDER IMPACT
OUTCOME
OBJECTIVE: PREPARE TO INTEGRATE IW&I SUCCESSFULLY
— Exceeded synergy run rate level for 2024 (delivered over £25m vs target published pre deal of £15m)
and also remain within the overall cost to achieve (CTA)
— Ensured the successful lease reassignment of 8 Finsbury Circus, London ahead of plan and eight other
co‑locations across the country
— On track to deliver client migration by the end of H1 2025
1
3
4
Largely achieved
OBJECTIVE: COMPLETE SAUNDERSON HOUSE INTEGRATION
— Completed client migration successfully with over £4bn of assets transferred
— Migration of operating systems completed on time and within budget
— Actions to deliver planned cost synergies complete
— Wind down of SHL structure substantially complete
1
2
4
Largely achieved
OBJECTIVE: DELIVER THE BENEFITS OF TECHNOLOGY
— Successfully launched the InvestCloud Client Lifecycle Management (CLM) system into the business
— Further CLM enhancements delivered throughout 2024, although ongoing support costs and resource
requirements were higher than expected
— Successfully delivered upgrade of core investment systems into the cloud
— Launched best of breed planning, marketing and distribution systems from the combination
1
3
4
Partially achieved
OBJECTIVE: DELIVER ORGANIC GROWTH
— Achieved gross inflows of c.£10bn, significantly above our target for the year
— Established Client Office (marketing) and restructured distribution teams
— Higher than expected outflows from former IW&I investment management teams
1
2
3
Largely achieved
OBJECTIVE: CLIENT AND PEOPLE ENGAGEMENT
— Achieved an improved client NPS and overall satisfaction score from the previous year
— Employment engagement scores in line with previous years with over 70% participation
— Regretted turnover of Investment Managers was less than 3%
— Delivery of the firm’s DE&I strategy and ambitions seen through the firm achieving the Women in Finance
target and embedded key Inclusion Networks across the business
1
2
3
4
Largely achieved
ANNUAL REPORT ON REMUNERATION
Our stakeholders
Clients
Society and communities
Our people
Partners and regulators
Shareholders
Our strategic priorities
Enriching the client
and advisor proposition
and experience
Inspiring
our people
Supporting and
delivering growth
Operating
more efficiently
1
2
3
4
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
TOTAL 2024 ANNUAL BONUS AWARD
In addition to the above specific measures, the committee also considered direct client feedback,
investment performance and other feedback from the Risk and Audit Committees. After taking this
into account, the committee concluded that an overall score for this element of the annual bonus
of 35% out of 50% was appropriate, which corresponds to 47.3% of fixed pay.
Weight
%
Award
achieved
Financial
50
24.7%
Non-financial
50
35.0%
Total
100
59.7%
Total award
(£)
Delivered in
cash (£)
Delivered in
shares (£)
R P Stockton
498
249
249
I W Hooley
352
176
176
RESTRICTED STOCK PLAN
The performance underpin for the 2022 RSP was assessed based on performance to 31 December
2024. The committee considered performance over the three years and determined that there
was no reason to reduce the level of vesting. In particular the committee took into account the
following factors:
— Dividends payable – dividends increased each year in line with our progressive dividend policy
— ROCE – ROCE materially exceeded WACC in each of the three years of the performance period
— Operational performance – satisfactory over the period, with no events causing the committee
to believe a reduction in vesting is warranted
— Risk and Compliance – satisfactory over the period, with no events causing the committee
to believe a reduction in vesting is warranted
— Internal control environment – satisfactory over the period, with no events causing the
committee to believe a reduction in vesting is warranted.
As a result the following awards will vest:
Number of
shares granted
Proportion of
award vesting
Number of
shares vesting
Estimated
value of
vested shares1
Paul Stockton
25,036
100%
25,036
£427,498
1. Based on average share price over Q4 2024 of £17.08
PENSIONS
No Directors receive a separate pension allowance and neither is in receipt of a defined benefit
pension. All Executive Directors are eligible for death in service benefits on terms consistent with
the workforce.
SHARE INCENTIVE PLAN (SIP)
This benefit is the value of the matching and free share awards made in the year under the SIP.
Executive directors, alongside all employees, may contribute up to £150 per month to buy
partnership shares with contributions matched on a one-for-one basis by the company.
SAVE AS YOU EARN (SAYE)
This benefit is the value of the discount on SAYE options granted during the year.
PAYMENTS TO PAST DIRECTORS (AUDITED)
There were no payments for loss of office or payments to past directors during the year.
ANNUAL REPORT ON REMUNERATION
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
121
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
IMPLEMENTATION OF THE REMUNERATION POLICY IN 2025
FIXED PAY
There are no fixed pay increases for Paul Stockton or Iain Hooley.
ANNUAL BONUS
The annual bonus has a maximum value opportunity of 135% of fixed pay with measures
and weightings as follows:
Weight
%
Financial
— Underlying profit before tax
27.5%
— Total net organic growth in FUMA
22.5%
Strategic measures aligned to key objectives
50%
— IW&I integration
— Growth enablement
— Productivity
— Client and colleague satisfaction
— People and culture
100%
The targets under the financial metrics are deemed to be commercially sensitive and will be disclosed
following the end of the performance period in next year’s DRR.
PERFORMANCE SHARE PLAN (PSP)
The 2025 PSP award will be granted in March 2025. The Remuneration Committee determined that
it was appropriate to grant the Executive Directors an award at the maximum level of 200% of fixed
pay. The Committee will review the level of vesting upon completion of the performance period.
The 2025 PSP targets are detailed in the table below, all measures have straight line vesting
between threshold and maximum:
Measure
Weighting %
Threshold (25%
of maximum
vesting)
Maximum
(100% vesting)
Underlying EPS (2027)
30
185.7p
243.9p
Relative TSR 2025–2027
30
Median Upper Quartile
ROCE
40
13%
17%
1. Peer group: abrdn, AJ Bell, Ashmore, Aviva, Close Brothers, Integrafin, Jupiter, Legal & General, Liontrust, M&G, Ninety One, Phoenix,
Quilter, Schroders, St James’s Place
CHAIR FEE
The fee paid to the Chair was reviewed in the year for the first time since appointment in 2021.
The following increase was applied:
Fee effective
1 January 2025
Fee effective
1 January 2024
Chair fee
£220,000
£195,000
SERVICE CONTRACTS AND LETTER OF APPOINTMENT
It is company policy that service contracts should not normally contain notice periods of more than
12 months. Details of the notice periods in the contracts of employment of Executive Directors
serving during the year are shown below.
Executive director
Date of
contract
Notice period
R P Stockton
1 May 2019
12 months
I W Hooley
1 January 2024 6 months
There are no provisions within the contracts to provide automatic payments in excess of payment
in lieu of notice upon termination by the company, and no predetermined compensation package
exists in the event of termination of employment. Payment in lieu of notice would include fixed pay
and benefits. There are no provisions for the payment of liquidated damages or any statements in
respect of the duty of mitigation. In the event of entering into a termination agreement, the Board
will take steps to impose a legal obligation on the director to mitigate any loss incurred. There are
no clauses in contracts amending employment terms and conditions on a change of control.
Executive Directors’ contracts of service, which include details of remuneration, are available
for inspection at the company’s registered office and will be available for inspection at the AGM.
Non-Executive Directors have a letter of appointment rather than a contract of employment
and these are available for inspection at the AGM. As with all other Directors, they are required
to stand for re-election annually in accordance with the UK Corporate Governance Code.
The effectiveness of the Non-Executive Directors is subject to an annual assessment. Any term
beyond six years is subject to particularly rigorous review and takes into account the need for
progressive refreshing of the Board. The Executive Directors are responsible for determining
the fees of the Non-Executive Directors.
Non-executive director
Date of
appointment
Notice
period
Length of service at
31 December 2024
C C R Bannister
6 April 2021
1 month
3 years 8 months
S F Gentleman
21 January 2015
1 month
9 years 11 months
I A Cummings
5 October 2021
1 month
3 years 3 months
T L Duhon
2 July 2018
1 month
6 years 5 months
D P Mistry
5 October 2021
1 month
3 years 3 months
H Baldock
21 September 2023
1 month
1 year 3 months
R Leas
21 September 2023
1 month
1 year 3 months
ANNUAL REPORT ON REMUNERATION
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
DIRECTORSʼ INTERESTS IN SHARES (AUDITED)
The table below sets out details of the Directors’ shareholdings and outstanding share awards
that are subject to vesting conditions, as at 31 December 2024:
Beneficially owned shares
Subject to relevant holding period
Executive director
Private shares
SIP
Total
EIP
RSP
Deferred
bonus shares
SIP (not yet
beneficially
owned)1
PSP
SAYE
Total
R P Stockton
154,966
4,743
159,709
16,476
46,461
28,591
1,162
80,221
1,541
174,452
I W Hooley
5,056
68
5,124
–
–
40,276
69
56,700
1,541
98,586
Total
160,022
4,811
164,833
16,476
46,461222
68,867
1,231
136,921
3,082
273,038
1. SIP matching and free shares held for less than three years may be forfeited in certain circumstances and so are not considered
beneficially owned
2. The deferred bonus shares for Iain Hooley relates to the bonus he received from Investec Bank for the period 1 April
to 21 September 2023
SHAREHOLDING GUIDELINES
In order to align the interests of Executive Directors and shareholders, the Executive Directors
are required to acquire and retain a holding in shares or rights to shares equivalent to the value of
250% of fixed pay for the CEO and 200% of fixed pay for the CFO within five years of the date of
appointment. Shares that count towards these guidelines include shares that are owned outright,
vested and not exercised EIP, SIP and RSP awards and unvested deferred bonus awards. Unvested
PSP awards are not counted towards the shareholding guidelines given performance conditions
apply. Awards count towards the shareholding requirement on a notional net of tax basis if
relevant. Percentages are calculated using the 31 December 2024 share price of £16.60.
In addition, a post-cessation shareholding requirement applies. Executive Directors are required to
hold 100% of the in employment requirement (or the Executive’s actual shareholding on cessation
if lower) for two years following cessation. This requirement can be disapplied in certain
exceptional personal circumstances (e.g. death or disability).
SHARED OWNERSHIP VERSUS POLICY
0%
100%
200%
300%
400%
500%
800%
1,000%
900%
600%
700%
Beneficially owned
Conditional
429%
19%
I W Hooley (CFO)
R P Stockton (CEO)
253%
159%
Remuneration policy
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
PERFORMANCE SHARE PLAN
Details of the share award held by the Executive Directors are set out in the table below:
At 1 January 2024
During 2024
At 31 December 2024
Executive Directors/Grant date
Face value of
award at grant
£
Number of
securities
originally
granted
Number of
unvested
securities
Securities
granted1
Vested but
unexercised
(subject to sales
restriction
period)
Unvested
securities
Vested but
unexercised
(subject to
two-year
holding period)
End of
performance
period
End of holding
period period)2
R P Stockton
20/05/2024
1,236,000
–
–
80,221
–
80,221
–
20/05/2027
20/05/2029
I W Hooley
20/05/2024
873,600
–
–
56,700
–
56,700
–
20/05/2027
20/05/2029
1. Awards equivalent to 200% of fixed pay were granted. As regulations prohibit the payment of dividend on such awards, the number of shares awarded has been determined by applying a share price over five days preceding the grant date, discounted to reflect the value
of estimated future dividends foregone over the vesting period (2024: £15.41). The face value has been calculated using a share price of £17.76 which was the average price over five days preceding the grant
2. The award will vest on the third anniversary of the grant date, with associated values to be included in the single figure table, and a further two-year holding period will apply. The awards are subject to malus and clawback provisions
RESTRICTED STOCK PLAN
Details of the restricted share award held by the Executive Directors are set out in the table below:
At 1 January 2024
During 2024
At 31 December 2024
Executive Directors/Grant date
Face value of
award at grant
£
Number of
securities
originally
granted
Number of
unvested
securities
Securities
granted1
Vested but
unexercised
(subject to sales
restriction
period)
Unvested
securities
Vested but
unexercised
(subject to
two-year
holding period)
End of
performance
period
End of holding
period period)2
R P Stockton
14/05/2023
418,002
21,425
−
−
−
21,425
–
14/04/2026
14/04/2028
07/03/2022
402,579
25,036
−
−
−
25,036
–
07/03/2025
07/03/2027
14/05/2021
392,764
21,881
−
−
21,881
–
21,881
14/05/2024
14/05/2026
1. Awards equivalent to 65% of fixed pay were granted. As regulations prohibit the payment of dividend on such awards, the number of shares awarded has been determined by applying a share price over five days preceding the grant date, discounted to reflect the value
of estimated future dividends foregone over the vesting period (2023: £17.18, 2022: £13.87, 2021: £15.87). For the 2023 award, the face value has been calculated using a share price of £19.51, which was the average price over five days preceding the grant (2022: £16.08
and 2021: £17.95)
2. The award will vest on the third anniversary of the grant date, with associated values to be included in the single figure table, and a further two-year holding period will apply. The awards are subject to malus and clawback provisions
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
DEFERRED BONUS PLAN
The deferred bonus awards held by executive directors are set out in the table below:
At 1 January 2024
During 2024
At 31 December 2024
Executive Directors/Grant date
Face value
of award
at grant
£
Number of
securities
originally
granted
Number of
unvested
securities
Securities
granted
Number of
securities
vested
Unvested
securities
Vested
securities
Vesting dates for
three equal tranches
R P Stockton1
15/03/2024
234,781
–
–
17,109
–
17,109
–
15/03/2025, 15/03/2026, 15/03/2027
14/04/2023
108,184
6,030
6,030
–
1,924
4,106
1,924
14/04/2024, 14/04/2025, 14/04/2026
07/03/2022
306,917
21,042
14,378
–
7,002
7,376
13,666
07/03/2023, 07/03/2024, 07/03/2025
I W Hooley2
21/06/2024
651,544
–
–
42,720
9,540
33,180
9,540
21/06/2024, 21/06/2025, 21/06/2026,
21/06/2027, 21/06/2028, 21/06/2029
21/06/2024
110,142
–
–
7,096
–
7,096
–
21/06/2025, 21/06/2026, 21/06/2027
1. The maximum annual bonus opportunity is 135% of fixed pay of which 50% is deferred into Rathbones shares and 50% is paid in cash. As regulations prohibit the payment of dividend on such awards, the number of shares awarded has been determined by applying a share price
over five days preceding the grant date, discounted (based on a three-year historical yield) to reflect the value of estimated future dividends foregone over the vesting period. As the award vests over a three-year period in equal tranches of 1/3 per annum, for the 2023 award,
the face value has been calculated using three share prices (year 1: £18.74, year 2: £17.96, year 3: £17.18 ), and for the 2022 award, the face value has been calculated using three share prices (year 1: £15.35, year 2: £14.61, year 3: £13.87). The award will vest over a three-year
period in equal tranches of 1/3 per annum. The awards are subject to malus and clawback provisions.
2. The granted share awards is in respect of performance for the period from 1 April 2023 to 31 December 2023, this relates to his role prior to being appointed Rathbones CFO on 1 January 2024. As regulations prohibit the payment of dividend on such awards, the number of
shares awarded has been determined by applying a share price over five days preceding the grant date, and discounted to reflect the value of estimated future dividends foregone over the vesting period. The face value of the awards has been calculated using five share prices
(year 1: £16.32, year 2: £15.56, year 3: £14.80, year 4: £14.05 and year 5: £13.29). The award will vest over a five-year period in equal tranches of 1/5 per annum, and a three-year period in equal tranches of 1/3 per annum. The awards are subject to malus and clawback provisions.
EXECUTIVE INCENTIVE PLAN
At 1 January 2024
During 2024
At 31 December 2024
Executive Directors/Grant date
Type of security
Grant date
Face value
of award
at grant1
£
Number of
securities
originally
granted
Number of
unvested
securities
Vested but
unexercised
(subject to sales
restriction
period)
Unvested
securities
Vested but
unexercised
(subject to sales
restriction
period)
Normal
exercise date
(end of sales
restriction
period2
R P Stockton
Conditional shares
06/04/2021
486,826
29,029
17,417
5,806
11,611
17,418
06/04/2026
Conditional shares
23/03/2020
372,435
24,326
9,730
4,865
4,865
19,461
23/03/2025
Conditional shares
22/03/2019
376,169
16,376
3,275
5,806
–
–
22/03/2024
1. Exercise price is nil
2. EIP awards vest in five equal tranches (1, 2, 3, 4 and 5 years from grant). All shares must be held until the fifth anniversary of the grant (the normal exercise date). There are no further performance conditions on these shares
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
SHARE INCENTIVE PLAN
At 1 January
2024
During
2024
At 31 December
2024
Executive Directors/Grant date
Total number
of SIP Shares1
Partnership
shares
acquired
Matching
shares
acquired
Dividend
shares
acquired
Free shares
received
Total number
of SIP shares1
R P Stockton
5,521
106
106
172
−
5,905
I W Hooley
–
68
68
1
–
137
Total
5,521
174
174
173
0
6,042
1. SIP matching and free shares held for less than three years may be forfeited in certain circumstances and so are not considered to be beneficially owned
SAVE AS YOU EARN OUTSTANDING OPTIONS
Number of shares
Executive Directors
Grant date
At 1 January
2024
Granted in
2024
Exercised in
2024
Lapsed in
2024
At 31 December
2024
Earliest
exercise date
Option
price
£
Market price
on grant
£
Face value
of award1
Value of award
£2
R P Stockton
09/04/2024
–
1,541
–
–
1,541
01/06/2027
12.03
15.80
24,348
5,810
28/04/2023
1,181
–
–
1,181
–
01/06/2026
15.24
19.54
–
–
I W Hooley
09/04/2024
–
1,541
–
–
1,541
01/06/2027
12.03
15.80
24,348
5,810
Total
1,181
3,082
–
1,181
3,082
1. The face value of the award is based on the middle market share price on the grant date multiplied by the number of shares under option
2. The value of the award is based on the middle market share price on the grant date minus the option price
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
PERFORMANCE GRAPH
The chart below shows the company’s total shareholder return (TSR) against the FTSE All Share
Index for the 10 years to 31 December 2024. TSR is calculated assuming that dividends are
reinvested. TSR compares our dividends and share price performance measures with our selected
index, the FTSE All Share. This index has been chosen because it is a recognised market index of
which Rathbones Group Plc is a member.
-20
0
20
40
60
80
100
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
% change
Rathbones – Total Shareholder Return
FTSE All Share – Total Shareholder Return
CHIEF EXECUTIVE OFFICER SINGLE FIGURE
During the ten years to 31 December 2024, Philip Howell was Chief Executive until 9 May 2019
when he was succeeded by Paul Stockton.
Year
Chief Executive
Chief Executive
single figure of
total remuneration
£’000
EIP award or
short-term bonus
as % of maximum
opportunity
Long-term
incentive vesting
as % of maximum
opportunity
2024
Paul Stockton
1,557
60
1002
2023
Paul Stockton
1,447
60
1002
2022
Paul Stockton
759
30
−
2021
Paul Stockton
1,155
85
−
2020
Paul Stockton
1,358
57
−
2019
Paul Stockton
1,125
47
−
2019
Paul Stockton1
467
52
−
2018
Philip Howell
1,389
59
−
2017
Philip Howell
1,104
64
–
2016
Philip Howell
1,398
66
67
2015
Philip Howell
1,608
78
100
1. Payment relates to holding the role for part of the year
2. RSP vested at 100%, this had an underpin only
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
ANNUAL PERCENTAGE CHANGE IN THE REMUNERATION OF THE DIRECTORS AND EMPLOYEES
The table below shows the percentage year-on-year change in salary, benefits and bonus in 2024 for the Directors compared with the average Rathbones employee.
2024
2023
2022
2021
2020
Salary
Benefits
Annual
bonus
Salary
Benefits
Annual
bonus
Salary
Benefits
Annual
bonus
Salary
Benefits
Annual
bonus
Salary
Benefits
Annual
bonus
Executive Directors
R P Stockton1
3.0%
9.4%
12.5%
12.4%
5.4%
117.0%
0.0%
5.1%
-67.1%
0.0%
1.2%
-22.1%
0.0%
7.1%
27%
I W Hooley²
0.0%
0.0%
0.0%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Non-Executive Directors
C C R Bannister
0.0%
n/a
n/a
0.0%
n/a
n/a
0.0%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
I A Cummings3
13.3%
n/a
n/a
7.4%
n/a
n/a
16.4%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
S F Gentleman4
-5.9%
n/a
n/a
4.5%
n/a
n/a
8.5%
n/a
n/a
0.0%
n/a
n/a
7.1%
n/a
n/a
T L Duhon3
13.3%
n/a
n/a
0.0%
n/a
n/a
0.0%
n/a
n/a
0.0%
n/a
n/a
7.1%
n/a
n/a
D P Mistry5
30.8%
n/a
n/a
8.3%
n/a
n/a
0.0%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
H Baldock6
-67.3%
n/a
n/a
0.0%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
R Leas7
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
n/a
n/a
Average pay based on all
Rathbones employees8
2.1%
45.1%
-0.6%
4.7%
3.6%
2.4%
3.6%
9.8%
-20.5%
1.9%
2.1%
-6.4%
3.6%
12.3%
11.9%
1. The annual bonus figure includes 2024 annual bonus award, and RSP which was granted in 2022 and relates to the three year performance period ending 2024. The award will vest in March 2025 and will be subject to a two-year holding period
2. Iain Hooley was appointed Group Chief Financial Officer on 1 January 2024
3. Iain Cummings and Terri Duhon received a fee increase during 2024
4. Sarah Gentleman was appointed Senior Independent Director during 2022 and stepped down as a chair of remuneration committee in September 2023
5. Dharmash Mistry was appointed as chair of the Remuneration Committee in September 2023 and received a fee increase during 2024
6. Henrietta Baldock’s 2023 annualised salary included the amounts paid for serving as a Chair and Non-executive director at IW&I (stepped down on 21 September 2023), and also for her role as an Non-executive director of Rathbones Group Plc
7. Ruth Leas is excluded from the above table as she is not an employee of the Rathbones Group
8. For 2024, the above values for the employee group include IW&I employees
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
CHIEF EXECUTIVE AND EMPLOYEE PAY RATIO
Year
Method
25th
percentile
pay ratio
Median
(50th
percentile)
pay ratio
75th
percentile
pay ratio
1 January to 31 December 2024
B
46:1
18:1
13:1
1 January to 31 December 2023
B
39:1
19:1
10:1
1 January to 31 December 2022
B
21:1
11:1
4:1
1 January to 31 December 2021
B
43:1
15:1
6:1
1 January to 31 December 2020
B
43:1
23:1
11:1
1 January to 31 December 2019
B
42:1
23:1
13:1
The Chief Executive pay ratio provides a comparison of total remuneration paid to the Chief
Executive in the year ended 31 December 2024 with total remuneration paid to the three
employees whose pay is at the 25th, 50th and 75th percentile of the Group’s UK workforce
(P25, P50 and P75 respectively). Where multiple employees are at these percentiles we have
selected the most representative job role from across the Group.
The pay data for the Chief Executive is taken from the total single figure of remuneration on page 118
of this report for Paul Stockton for the year ended 31 December 2024. The three employees have
been identified from our 2024 gender pay gap data under ‘Option B’ of the three methodologies
provided under the regulations, as the equivalent figures to the single figure table for each of the
Group’s UK employees (Option A) are not available at the time of producing this report.
Total pay for P25, P50 and P75 has been based on actual earnings for the financial year. Variable
remuneration has been calculated using the Group’s forecast financial performance. Total pay
and benefits for the three employees includes the following: base salary, employer pension
contributions, taxable benefits, bonuses, share-based payment awards and profit share. The total
pay and benefits for these individuals is as follows:
— P25 46:1 (£33,636)
— P50 18:1 (£83,899)
— P75 13:1 (£120,448)
The reduction in the pay ratio between 2020 and 2021 is primarily driven by the introduction of
a remuneration policy for the CEO and senior management introduced in 2021. This has a lower
maximum opportunity, and these changes only applied to the senior management and not the
wider employees. The Group believes the median pay ratio for the year to be consistent with the
Group’s pay, reward and progression policies for its UK workforce.
The committee will review these ratios on an annual basis.
CHAIR AND NON-EXECUTIVE DIRECTORSʼ FEES
Fees paid to the Non-Executive Directors were increased for the 2024 financial year. Any future
increases will depend upon a rigorous assessment of the burden of responsibilities and market rates.
CHAIR AND NON-EXECUTIVE DIRECTORSʼ FEES (AUDITED)
Year
2024
£’000
2023
£’000
Chair
C C R Bannister
195
195
Non-executive directors
I A Cummings1
85
75
T L Duhon1
85
75
S F Gentleman2
80
85
D P Mistry1
85
65
H Baldock3
65
56
R Leas4
n/a
n/a
Total
595
551
1. Acts as Committee Chair
2. Acts as Senior Independent Director
3. Henrietta Baldock was appointed on 21 September 2023 as a Non-Executive Director by Investec Bank plc under the terms of the
Relationship Agreement. The total fee includes payment received for Non-Executive Director position held on the Board of
Rathbones Group Plc
4. Ruth Leas was appointed on 21 September 2023 as a Non-Executive Director by Investec Bank plc under the terms of the Relationship
Agreement. Ruth Leas does not receive a Non-Executive fee as she is an employee of Investec Bank Plc (a subsidiary of Investec plc)
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
NON-EXECUTIVE DIRECTORSʼ SHARE INTERESTS
The interest of the Directors in the ordinary shares of the company are set out below:
Year
2024
2023
Chair
C C R Bannister
15,300
15,300
Non-Executive Directors
I A Cummings
2,671
2,594
T L Duhon
500
500
S F Gentleman
1,128
1,128
D P Mistry
5,000
2,500
H Baldock
0
0
R Leas
0
0
Total
24,599
22,022
RELATIVE IMPORTANCE OF SPEND ON PAY
The chart below shows the relationship between total employee remuneration and profit after tax
for 2024 and 2023. The reported profit after tax has been selected by the Directors as a useful
indicator when assessing the relative importance of spend on pay.
TOTAL STAFF COSTS £m
23
24
464.6
48%
313.6
PROFIT AFTER TAX £m
23
24
65.5
75%
37.5
DIVIDENDS PAID £m1
23
24
56.9
-20%
71.4
1. For 2024, the figure represents the 2023 final dividend and the 2024 interim dividend paid. The 2024 final dividend announced
on 26 February 2025 is not reflected in this chart as this is subject to shareholder approval at our AGM on 8 May 2025. For 2023,
the figure represents the 2022 final dividend, the 2023 half-year interim and second interim dividend paid.
STATEMENT OF SHAREHOLDER VOTING
The table below shows the voting outcomes on the Directors’ Remuneration Policy at the 2024
AGM in May 2024 and Directors’ Remuneration Report at the last AGM in May 2024.
Annual Report
on Remuneration
(2024 AGM)
Remuneration
Policy
(2024 AGM)
Votes cast in favour
92.07%
93.78%
Votes cast against
7.93%
6.22%
Total votes cast
84.46%
84.46%
Votes withheld
63,366
63,367
ADVISERS TO THE COMMITTEE AND THEIR FEES
PwC were appointed by the Committee, as advisers to the Committee in August 2017 following
a competitive tender process. They are members of the Remuneration Consultants Group and
advise the committee on a range of matters, including remuneration package assessments, scheme
design and reporting best practice. PwC also provide professional services in the ordinary course
of business, including advisory work to the Group. The Committee is of the opinion that the advice
received is objective and independent. PwC’s fees are charged on a time cost basis and fees for
services to the remuneration committee were £99,000 in 2024. The appointment of advisers
is reviewed annually.
EVALUATING THE PERFORMANCE OF THE COMMITTEE
An evaluation of the Committee’s effectiveness was undertaken as part of the Board’s external
evaluation process during the year. The Committee and senior management attendees were invited
to respond to questions on the content, management, quality and focus of discussion during
meetings. Responses indicated that the committee is performing well with no particular concerns.
APPROVAL
The Remuneration Committee report has been approved by the Board.
Signed on behalf of the Board.
DHARMASH MISTRY
CHAIR OF THE REMUNERATION COMMITTEE
25 February 2025
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
DIRECTORS’ REPORT
The directors present their annual report and audited financial statements for the year ended
31 December 2024.
The Directors’ report includes the following sections of the Annual Report and Accounts which
form part of the Directors’ report:
DTR Rule
Page
Strategic Report
DTR 4.1.5R
2
Corporate governance report including the Nomination,
Audit, Risk and Remuneration Committee reports
DTR 7.2.1R
92
Statement of Directors’ responsibilities
DTR 4.1.5R
134
STATEMENT BY THE DIRECTORS UNDER SECTION 172 OF THE COMPANIES ACT 2006
(THE ʻACTʼ) REGARDING PERFORMANCE OF THEIR STATUTORY DUTIES
The Directors consider that they have acted in the way they consider, in good faith, would be most
likely to promote the success of the company for the benefit of its members as a whole and, in doing
so, having regard to the stakeholders and matters set out in section 172(1)(a-f) of the Act. Details of
how they have done this are set out in the strategic report on pages 24 to 32.
ANNUAL GENERAL MEETING (AGM)
The 2025 AGM will be held on Thursday 8 May 2025 at 30 Gresham Street, London, EC2V 7QN.
Full details of all resolutions and notes are set out in the separate notice of AGM.
GROUP RESULTS AND COMPANY DIVIDENDS
The Rathbones Group Plc group profit after tax for the year ended 31 December 2024
was £65.5m (2023: £37,503,923).
The Directors recommend the payment of a final dividend of 63p per share which, if approved
by shareholders at the 2025 AGM, will be paid on 13 May 2025 to shareholders on the register
on 11 April 2025.
2024
2023
Pence
£m
Pence
£m
First interim dividend
30.0
31.3
29.0
17.5
Second interim dividend
–
–
34.0
20.5
Final dividend
63.0*
65.8*
24.0
25.1
Total
93.0
97.1
87.0
63.1
* Subject to shareholder approval at the 2025 AGM on 8 May 2025
See note 12 to the financial statements.
The company operates a generally progressive dividend policy subject to market conditions.
The aim is to increase the dividend in line with the growth of the business over each economic cycle.
This means that there may be periods where the dividend is maintained but not increased and
periods where profits are retained rather than distributed to maintain retained reserves and
regulatory capital at prudent levels through troughs and peaks in the cycle.
SUBSTANTIAL SHAREHOLDINGS
The table below shows the notifiable holdings of major shareholders in the voting rights of the
company in accordance with the Financial Conduct Authority’s Disclosure Guidance and
Transparency Rule 5.1.2, as at 31 December 2024 and 3 March 2025.
Shareholder
Number of
voting rights
% of
voting rights
Investec Bank Plc
27,056,463
29.42
Fidelity Management & Research
7,588,738
9.64
Rathbones Group Plc Employee Benefit Trust (EBT)
4,940,254
5.37
Lindsell Train Ltd
4,318,892
4.70
BlackRock
3,950,465
4.29
Vanguard Group
3,225,927
3.51
Heronbridge Investment Management
2,982,919
3.24
SHARE CAPITAL
The company’s share capital comprises of two classes of ordinary shares:
Classes of Ordinary Shares
As at 31 December 2024
Ordinary shares of 5 pence each with voting rights:
On a show of hands each voting shareholder shall have one vote,
and on a poll each voting shareholder shall have one vote for each
ordinary share of which they are the holder. Ordinary shares rank
pari passu in all respects with each other and rank in full for all
dividends and other distributions thereafter declared, made,
or paid in respect of the ordinary shares.
91,925,520 ordinary shares
of 5 pence each with voting rights
in issue (2023: 90,584,129).
Convertible non-voting ordinary shares of 5 pence each:
The holders of the convertible non-voting ordinary shares are
not entitled to receive notice of nor attend, speak or vote at any
general meeting of Rathbones unless the business of the meeting
includes the consideration of a resolution to vary the class
rights attaching to the convertible non-voting ordinary shares.
Convertible non-voting ordinary shares shall rank pari passu
in all other respects with each other and shall rank pari passu
for all dividends and other distributions thereafter declared,
made, or paid. The convertible non-voting ordinary shares are
non-transferable and are not admitted to trading or listing.
17,481,868 convertible non-voting
ordinary shares of 5 pence each
in issue (2023: 17,481,868).
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DIRECTORS’ REPORT
The company does not hold any shares in treasury. Details of movements during the year are set
out in note 30 to the financial statements. Neither class carries the right to fixed income and all
shares are fully paid.
COMBINATION OF RATHBONES AND INVESTEC WEALTH & INVESTMENT UK
The all-share combination between the company and Investec Wealth & Investment UK (IW&I)
completed on 21 September 2023. Under the terms of the Combination, Rathbones issued to
Investec Bank Plc as Consideration:
— 27,056,463 ordinary voting shares of the Rathbones enlarged ordinary voting share capital
— 17,481,868 convertible non-voting ordinary shares.
As at 31 December 2024, Investec Group has an economic interest of 40.71% in Rathbones’
enlarged share capital.
Subject to certain customary and other exceptions, Investec Group will be subject to a lock-up for
the first two years following completion during which Investec Group will not be permitted to sell
any consideration shares. In each of years three and four following completion, Investec Group will
be entitled to sell one-third of the consideration shares which it owns. Any disposals of shares by
Investec Group once released from lock-up will be subject to customary orderly market provisions.
The lock-up arrangement will terminate on the fourth anniversary of completion.
A standstill restriction also applies to Investec Group under which it has been agreed, among other
matters, not to acquire shares in, or make an unsolicited takeover offer for Rathbones for the
period up to the fifth anniversary of completion.
NEW ISSUES OF SHARE CAPITAL
Under section 551 of the Companies Act 2006, the Board currently has the authority to allot
36,065,314 shares (approximately one third of the issued share capital as at 31 March 2024).
The existing authorities given to the company at the last AGM to allot shares will expire at the
conclusion of the forthcoming 2025 AGM and details of the resolution renewing this authority
is set out in the notice of AGM.
Awards under the company’s employee share plans are satisfied from a combination of shares
held in the employee benefit trust and newly issued shares. During the year, the company issued
323,491 shares to satisfy share awards and 1,017,900 shares were issued to the company’s
employee benefit trust to satisfy future awards.
PURCHASE OF OWN SHARES
At the 2024 AGM, shareholders approved resolution 21 which granted the Board the authority to
buy back up to a maximum number of 10,819,594 of the company’s shares under certain stringent
conditions. During the year, the company did not utilise this authority, but the Board considers it
prudent to renew it. Therefore the company intends to seek shareholder approval for the continued
authority to purchase its own shares at the forthcoming AGM in line with current investor sentiment
and details of the resolution renewing the authority are included in the notice of AGM.
EMPLOYEE SHARE TRUST
On 4 April 2017, Equiniti Trust (Jersey) Limited was appointed as trustee of the employee benefit
trust. The trust is independent and holds shares for the benefit of employees and former employees
of the Group. The trustee has agreed to satisfy awards under all the company’s employee share
plans. During the year, the trustee satisfied awards totalling 490,353 ordinary shares.
In addition, under the rules of the Rathbones Share Incentive Plan, shares are held in trust for
participants by Equiniti Share Plan Trustees Limited (the ‘Trustee’). At the participants’ direction,
the trustees can exercise the voting rights over ordinary shares in respect of participant share
entitlements. If no such instruction is received by the Trustee, then no vote is registered. No person
has any special rights of control over the company’s share capital and all issued shares are fully paid.
APPOINTMENT AND REMOVAL OF DIRECTORS
The appointment and replacement of directors is governed by the company’s Articles of
Association, the UK Corporate Governance Code, the Companies Act 2006 and related legislation
and the Relationship Agreement with Investec Group. Under the terms of the Combination, two
Investec Group representatives joined the Board of the company as Non-Executive Directors on
completion (21 September 2023), reflecting Investec Group’s position as a significant, strategic
shareholder. Investec Group will be entitled to nominate two non-executive directors for as long
as it holds at least 20% of the issued share capital of the company; and one Non-Executive Director
for as long as it holds at least 10% but less than 20% of the issued share capital of the company.
DIRECTORS
All those who served as Directors at any time during the year are listed on pages 96 to 97.
All Directors will be submitted for re-election at the 2025 AGM. The directors’ interests in the
share capital of the company as at 31 December 2024 are set out on pages 123 and 130 of the
Remuneration Committee Report.
INSURANCE AND INDEMNIFICATION OF DIRECTORS
The company has put in place insurance to cover its Directors and officers against the costs of
defending themselves in civil legal action taken against them in that capacity and any damages
awarded. The company has granted indemnities, which are uncapped, to its Directors and the
Company Secretary by way of a deed. Qualifying third-party indemnity provisions, as defined by
section 234 of the Companies Act 2006, were therefore in place for the Directors of the Group’s
subsidiary companies throughout 2024 and remains in force at the date of this report.
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DIRECTORS’ REPORT
OUR PEOPLE AND DIVERSITY
Details of the company’s employment practices, including engaging with our people and diversity,
employment of disabled persons and employee involvement practices, can be found in the our
colleagues section on pages 73 and 74.
RESPONSIBLE BUSINESS
Information about greenhouse gas emissions and our approach to operating as a responsible
business are set out in the responsible business review on page 69.
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The risk management objectives and policies of the Group are set out in note 33 to the
financial statements.
AUDITOR
The Audit Committee makes a recommendation to the Board regarding the appointment,
re-appointment and removal of the external auditor and oversees its relationship with the Group,
including the implementation of the policy on audit and non-audit services. Note 7 to the financial
statements sets out details of the auditor’s remuneration. Deloitte LLP was re-appointed as the
external auditor at the 2024 AGM. Having reviewed the independence and effectiveness of
Deloitte the audit committee has recommended to the Board that they are re-appointed and
resolutions proposing their re-appointment and authorising the audit committee to set their
remuneration will be proposed at the 2025 AGM.
The Directors in office at the date of signing this report confirm that, so far as they are aware, there
is no relevant audit information of which the auditor is unaware and that each director has taken all
reasonable steps that he or she ought to have taken to make him or herself aware of any relevant
audit information and to establish that the auditor is aware of that information.
GOING CONCERN
Details of the Group’s business activities, results, cash flow and resources, together with the risks
it faces and other factors likely to affect its future development, performance and position are set
out in the chair’s statement, chief executive’s review, financial performance and segmental review.
In addition, note 1.5 to the financial statements provides further detail.
The Group companies are regulated by the Prudential Regulation Authority (PRA) and/or the
Financial Conduct Authority (FCA) and perform annual capital adequacy and liquidity assessments,
which include the modelling of certain extreme stress scenarios. The company publishes Pillar 3
disclosures annually on its website which provide detail about its regulatory capital resources and
requirements. In October 2021, Rathbones Group Plc issued £40 million of 10-year subordinated
loan notes to finance future growth. The Group has no other external borrowings.
The Directors believe that the company is well placed to manage its business risks successfully
despite the continuing uncertain economic and geopolitical outlook. As the Directors have a
reasonable expectation that the company has adequate resources to continue in operational
existence for the foreseeable future they continue to adopt the going concern basis of accounting
in preparing the annual financial statements.
CHARITABLE DONATIONS
As at 31 December 2024, the Group had made total charitable donations of £699,793
representing 0.7% of Group pre-tax profits (2023: £589,172 representing 1.38% of Group pre-tax
profits). This includes the matching of employee donations made through the tax efficient Give As
You Earn (GAYE) payroll giving scheme. In 2024, Rathbones employees made payments totalling
£331,059 (2023: £262,567) through this scheme, which is administered by the Charities Aid
Foundation. The company matched employee donations* of up to £200 per month made through
GAYE and, in 2024, donated £215,150 (2023: £215,974) to causes chosen by employees through
this method.
POLITICAL DONATIONS
No political donations were made during the year (2023: nil).
POST-BALANCE SHEET EVENTS
Details of post-balance sheet events are set out in note 38 to the financial statements.
OVERSEAS SUBSIDIARIES
Details of overseas subsidiaries are set out in note 44 to the financial statements.
Approved and authorised for issue by the Board of Directors.
ALI JOHNSON
GROUP COMPANY SECRETARY
25 February 2025
Registered office: 30 Gresham Street, London, EC2V 7QN
* At this time IW&I colleague GAYE donations are not matched. This will be reviewed as we complete the alignment of benefits.
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STATEMENT OF DIRECTORS’ RESPONSIBILITIES
IN RESPECT OF THE REPORT AND ACCOUNTS
The Directors are responsible for preparing the Report and Accounts 2024, and the Group
and parent company financial statements in accordance with applicable law and regulations.
Under company law the Directors are required to prepare Group and parent company financial
statements for each financial year. They are also required to prepare Group financial statements
in accordance with UK-adopted International Accounting Standards (International Financial
Reporting Standards (IFRS)) and applicable law and have elected to prepare the parent company
financial statements on the same basis.
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 their profit or loss for that period. In preparing each of the Group and parent company
financial statements, the Directors are required to:
— select suitable accounting policies and then apply them consistently
— make judgements and estimates that are reasonable, relevant and reliable
— state whether they have been prepared in accordance with UK-adopted International
Accounting Standards (IFRS)
— assess the Group and parent company’s ability to continue as a going concern, disclosing,
as applicable, matters related to going concern
— use the going concern basis of accounting unless they either intend to liquidate the Group
or the parent company or to cease operations, or have no realistic alternative but to do so.
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 its financial statements
comply with the Companies Act 2006.
They are responsible for such internal controls as they determine are necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to
fraud or error, and have general responsibility for taking such steps as are reasonably open to them
to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a strategic
report, directors’ report, directors’ remuneration report and corporate governance statement
that comply with that law and those regulations.
The Directors are responsible for the maintenance and integrity of the corporate and financial
information included on the company’s website. Legislation in the UK governing the preparation
and dissemination of financial statements may differ from legislation in other jurisdictions.
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE REPORT
AND ACCOUNTS
We confirm that to the best of our knowledge:
— the financial statements, prepared in accordance with the applicable set of accounting standards,
give a true and fair view of the assets, liabilities, financial position and profit or loss of the
company and the undertakings included in the consolidation taken as a whole
— the strategic report and directors’ report include a fair review of the development and
performance of the business and the position of the issuer and the undertakings included in the
consolidation taken as a whole, together with a description of the principal risks and uncertainties
that they face.
We consider the Report and Accounts, taken as a whole, is fair, balanced and understandable
and provides the information necessary for shareholders to assess the Group’s position and
performance, business model and strategy.
By order of the Board
PAUL STOCKTON
GROUP CHIEF EXECUTIVE OFFICER
25 February 2025
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FINANCIAL
STATEMENTS
136 Independent auditor’s report to the
members of Rathbones Group Plc
146 Consolidated financial statements
150 Notes to the consolidated
financial statements
211
Company financial statements
214 Notes to the company
financial statements
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
1.
OPINION
In our opinion:
—the financial statements of Rathbones Group Plc (the ʻparent companyʼ) and its subsidiaries
(the ʻGroupʼ) give a true and fair view of the state of the Groupʼs and of the parent companyʼs
affairs as at 31 December 2024 and of the Groupʼs profit for the year then ended;
—the Group financial statements have been properly prepared in accordance with United
Kingdom adopted international accounting standards;
—the parent company financial statements have been properly prepared in accordance with
United Kingdom adopted international accounting standards and as applied in accordance
with the provisions of the Companies Act 2006; and
—the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
We have audited the financial statements which comprise:
— the consolidated statement of comprehensive income;
— the consolidated and parent company statements of changes in equity;
— the consolidated and parent company statement of financial position;
— the consolidated and parent company cash flow statement and;
— the related notes 1 to 59.
The financial reporting framework that has been applied in their preparation is applicable law and
United Kingdom adopted international accounting standards and as regards the parent company
financial statements, as applied in accordance with the provisions of the Companies Act 2006.
2. 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 auditorʼs
responsibilities for the audit of the financial statements section of our report.
We are 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
Financial Reporting Councilʼs (the ʻFRCʼsʼ) 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 provided to the Group and parent company for the year
are disclosed in note 7 to the financial statements. We confirm that we have not provided any
non-audit services prohibited by the FRCʼs Ethical Standard to the Group or the parent company.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
3.
SUMMARY OF OUR AUDIT APPROACH
KEY AUDIT MATTERS
The key audit matters that we identified in the current year were:
—Impairment of client relationship intangible assets and goodwill;
—Recognition of net investment management fee income; and
—Classification and disclosure of acquisition and integration costs.
Within this report, key audit matters are identified as follows:
Newly identified
Increased level of risk
Similar level of risk
Decreased level of risk
MATERIALITY
The materiality that we used for the Group financial statements was £9.1 million which was
determined on the basis of 5% of adjusted profit before tax.
SCOPING
Our Group audit covered a substantial portion of the Group. The scope of our audit and the
nature, timing and extent of audit procedures performed were determined based on our risk
assessment. This included audit of the entire financial statements of the two primary wealth
management entities as well as the asset management entity. Additionally, we have performed
specified audit procedures over operating income and cash.
SIGNIFICANT CHANGES IN OUR APPROACH
In the current year, we have made the following changes to our key audit matters:
— The key audit matter related to the defined benefit pension scheme assumptions is no longer
applicable due to the 2024 pension buy-in agreement, minimising the judgement associated
to the balance. This is further detailed in note 2.2.
— While the acquisition accounting for Investec Wealth & Investment Limited (ʻIW&Iʼ) and
subsidiary entities audit matter is no longer relevant, the key audit matter on the impairment
of client relationship intangible assets and goodwill covers the significant balance from
the acquisition.
—Due to the ongoing integration and migration of the Group, we identified a new key audit
matter on the classification and disclosure of acquisition and integration costs as this area
is potentially susceptible to fraud due to the level of judgement involved.
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4.
CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have concluded that the directorsʼ use of the going concern
basis of accounting in the preparation of the financial statements is appropriate.
Our evaluation of the directorsʼ assessment of the Groupʼs and parent companyʼs ability to
continue to adopt the going concern basis of accounting included:
—Evaluating the directorʼs assumptions applied in the going concern assessment in light of the
current economic environment and testing the mechanical accuracy of the underlying forecast;
—Assessing managementʼs sensitivity analysis and the key assumptions applied;
—Assessing managementʼs stress testing for the amount by which the markets would need to fall
to potentially impact the going concern basis and comparing this to historical falls in the markets
to assess the likelihood of such an event occurring;
—Assessing the regulatory capital and liquidity position of the Group and evaluating managementʼs
reverse stress test;
—Checking consistency with the forecast assumptions applied in the going concern assessment
across other forecasts within the Group; and
—Assessing the disclosures within the financial statements to ensure they are appropriate.
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's and
parent companyʼs 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 reporting on how the Group has applied the UK Corporate Governance Code,
we have nothing material to add or draw attention to in relation to the directorsʼ 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.
5.
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. These
matters included 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.
5.1 IMPAIRMENT OF CLIENT RELATIONSHIP INTANGIBLE ASSETS AND GOODWILL
KEY AUDIT MATTER DESCRIPTION
The Group holds client relationship intangible assets of £468.5 million (2023: £502.7 million)
comprising client relationships acquired both through business combinations and through
acquisition of individual investment managers and their client portfolios. Of this balance, the IW&I
client relationship intangible contributes £317.7 million (2023: £344.0 million). The Group also
holds £504.9 million of goodwill (2023: 507.8 million).
As detailed in the summary of principal accounting policies in notes 1 and 2, client relationship
intangible assets are reviewed bi-annually for indicators of impairment and, if an indicator of
impairment exists, a comparison of the assetʼs carrying amounts with its recoverable amount
is performed. Goodwill is tested for impairment at least annually, whether or not indicators of
impairment exist.
Management has either prepared a value-in-use or fair value less costs to sell mode to use within
their impairment assessments. For the value-in-use assessment, a discounted cash flow forecast
is prepared where key assumptions including operating profit margin, net client flows and pre-tax
discount rates are determined. For the fair value less costs to sell assessment, an indicative trading
multiple from recent market acquisition is determined. Under both methods, there is judgement
and complexity in the assumptions applied.
For goodwill, the impairment assessment is performed by comparing the carrying amount of each
group of cash generating units (“CGU groups”) to its recoverable amount from its value-in-use
(“VIU”), calculated using a discounted cash flow method. In determining the VIU for the CGU
groups, judgement is required to make assumptions in relation to an appropriate income growth
rate, expenditure growth rate and the discount rate. The discount rate, annual revenue growth
rate and terminal growth rate used are disclosed in note 22.
We have identified this as a key audit matter given the inherent judgement and level of estimation
in the assumptions that support the bi-annual measurement of recoverable amount.
This matter has been considered by the directors within the critical accounting judgements and
key sources of estimation within note 2.
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HOW THE SCOPE OF OUR AUDIT RESPONDED TO THE KEY AUDIT MATTER
We obtained an understanding of relevant controls in relation to the impairment review process
for client relationship intangible assets and goodwill.
For client relationship intangible assets, we assessed the key judgements used when determining
whether there is any indication of impairment for each client portfolio. We assessed the
reasonableness of the judgement and evaluated the accuracy of the inputs used. As the IW&I
client relationship intangible asset is the largest of the Group (£317.7m), and given the inherent
subjectivity in determining a reasonable deal multiplier and allocating fair value to intangible
assets, our audit response focused on this area.
We assessed the relevant assumptions and judgements made in determining whether an
impairment needed to be recognised through the calculation of the assetsʼ fair value. We also
assessed whether they meet the requirement of IAS 36 “Impairment of Assets”.
To challenge managementʼs fair value impairment assessment we performed the following
procedures:
—Assessed the completeness and accuracy of data inputs and key assumptions underpinning
the fair value model;
—Engaged with internal valuation specialists to assess the appropriateness of the deal multiplier
applied within the fair value model, by comparing to external market data;
—Tested the mechanical accuracy of managementʼs fair value model;
—Performed sensitivity analyses to assess the potential impact of reasonably possible changes
in key assumptions on assetʼs fair value; and
—Performed a stand back assessment comparing the calculated fair value, against the discounted
cash flow model utilised for the purpose of valuing the client relationship intangibles assets at
the point of acquisition, and evaluated any differences.
For goodwill, in order to challenge the appropriateness of the income and expenditure growth
assumptions used in the VIU calculations, we assessed the assumptions used by comparing them
against historical actual performance and checked for consistency with forecasts used elsewhere
in the business. We engaged with our valuation specialist to determine whether the discount rate
applied is appropriate by benchmarking to appropriate rates of interest.
We have also assessed the appropriateness of the disclosures within the financial statement
to determine whether all required information has been disclosed for the impairment of client
relationship intangible assets and goodwill.
KEY OBSERVATIONS
We concluded that management's approach and impairment conclusion was appropriate and
that the carrying value of the client relationship intangible assets and goodwill as of 31 December
2024 is not impaired.
5.2 RECOGNITION OF NET INVESTMENT MANAGEMENT FEE INCOME
KEY AUDIT MATTER DESCRIPTION
As detailed in the summary of principal accounting policies in notes 1 and 3, operating income
comprises net investment management fee income of £654.5 million (2023: £414.8 million),
net commission income of £91.8 million (2023: £53.6 million), net interest income of £63.9 million
(2023: £51.7 million) and fees from advisory services and other income of £85.7 million (2023:
£51.0 million).
Investment management (“IM”) fees from the IM segment account for approximately 64.2%
(2023: 61.3%) of total operating income and are based on a percentage of an individual clientʼs
Funds Under Management (“FUM”).
The Group's history of acquisitions and long-standing client relationships has resulted in a
complex fee structure and results in amendments to fee rate cards during the financial year.
As remuneration schemes for investment managers often link to FUM and fee generation,
there is an elevated risk of fraud. This risk pertains particularly to potential manipulation of
fee amendments during the period and the onboarding of new clients.
Due to the time and resources utilised in the audit, we have determined this to be a key audit
matter and identified recognition of net investment management fee income as an area with
the potential for fraud.
INDEPENDENT AUDITORʼS REPORT TO THE MEMBERS OF RATHBONES GROUP PLC
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HOW THE SCOPE OF OUR AUDIT RESPONDED TO THE KEY AUDIT MATTER
We have tailored the audit approach to each of the wealth management entities (Rathbones
Investment Management Ltd (ʻRIMʼ) and Investec Wealth & Investment Limited), given their
different control environments.
In both entities, we have performed the following procedures:
—Obtained an understanding of relevant manual and IT controls which management have
established so that fee rates are appropriately applied.
—Agreed a sample of management fee rates through to client agreements and correspondence,
with a focus on new and amended fee rates. Where manual fee rate amendments were made
to system generated fees, we inspected evidence of appropriate authorisation and rationale.
For the Rathbones legacy business (RIM), we have performed the following additional procedures:
—Tested the manual and IT controls related to fee rates applied.
—Engaged with our data analytics specialists to perform a recalculation of the fees to gain
comfort over the system generated fees.
In order to address the completeness and accuracy of FUM as a key input into management fees
in RIM, we tested the controls over FUM (including associated IT controls) and agreed a sample
of FUM holdings to third-party custodian reports.
For the IW&I business, we have performed the following additional procedures:
—Recalculated a sample of fee charges to gain comfort over the system generated fees.
—Agreed a sample of FUM holdings to third-party custodian reports to test the completeness
and accuracy of FUM as a key input.
KEY OBSERVATIONS
We concluded that the net investment management fee income is appropriately recognised
for the year ended 31 December 2024.
5.3 CLASSIFICATION AND DISCLOSURE OF ACQUISITION AND INTEGRATION COSTS
KEY AUDIT MATTER DESCRIPTION
The Group recognised £83.4 million (2023: £44.3 million) of acquisition and integration costs.
As a result of the Investec Wealth & Investment Limited acquisition in 2023, there has been
significant increase in the acquisition and integration costs.
The classification of acquisition and integration costs relies on judgement, and increases the
potential for management bias, especially considering that certain management remuneration
schemes are linked to the integrationʼs success and the realisation of synergies.
Furthermore, we note that throughout the annual report and within the Groupʼs other public
announcements, underlying profit and underlying earnings per share are key performance
indicators for the Group and an area of increased focus by investors. They are adjusted for
acquisition and integration costs, as disclosed in note 9, and reported as key Alternative
Performance Measures ("APMs") of the Group on page 43 of the strategic report. Because this
gives rise to an incentive to misclassify expense as acquisition and integration costs, we identified
this area as a key audit matter.
HOW THE SCOPE OF OUR AUDIT RESPONDED TO THE KEY AUDIT MATTER
We have obtained an understanding of the relevant controls in place in relation to the
classification of acquisition and integration costs.
We assessed the appropriateness of the Groupʼs policy in recognising acquisition and integration
related costs. We also examined the year-on-year consistency of the policy.
We have challenged the Groupʼs policy for the recognition and classification of the expenses,
such as specific share-based payment schemes, and whether these were incurred as part of the
acquisition and integration activities.
As the classification of expenses impacts certain management remuneration scheme,
we evaluated the relevant remuneration schemes and the incentive criteria.
For a sample of expenses, we have assessed managementʼs rationale for recognition and
classification of these costs against managementʼs policy.
We have assessed the appropriateness of disclosures included within the financial statement
to determine whether all required information has been included for acquisition and
integration costs.
KEY OBSERVATIONS
We have concluded that the classification and disclosure of acquisition and integration expenses
is appropriate for the year ended 31 December 2024.
INDEPENDENT AUDITORʼS REPORT TO THE MEMBERS OF RATHBONES GROUP PLC
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
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6.
OUR APPLICATION OF MATERIALITY
6.1 MATERIALITY
We define materiality as the magnitude of misstatement in the financial statements that makes it
probable that the economic decisions of a reasonably knowledgeable person would be changed or
influenced. We use materiality both in planning the scope of our audit work and in evaluating the
results of our work.
Based on our professional judgement, we determined materiality for the financial statements
as a whole as follows:
GROUP FINANCIAL STATEMENTS
PARENT COMPANY
FINANCIAL STATEMENTS
MATERIALITY
£9.1 million (2023: £5.0 million)
£11.3 million (2023: £11.3 million)
BASIS FOR
DETERMINING
MATERIALITY
5% of adjusted profit before tax
(2023: 5% of adjusted profit
before tax)
Profit before tax has been adjusted
to include the non-recurring
acquisition and integration related
costs incurred in the year.
For the purpose of our opinion on the
parent company financial statements
materiality has been set at 1% (2023:
1%) of net assets. The materiality
determined for the standalone
Company financial statements
exceeds the Group materiality.
This is due to the net asset balance
The performance materiality applied
to the parent company for the
purposes of the group audit opinion
is discussed in section 7.1.
RATIONALE FOR
THE BENCHMARK
APPLIED
Adjusted profit before tax has been
used as the basis for determining
materiality as this is the key metric
used by members of the parent
company and other relevant
stakeholders in assessing financial
performance. In determining
adjusted profit before tax, we have
taken the statutory value and
included the non-recurring
acquisition and integration related
costs incurred in the year as outlined
in note 9, on the basis that they are
non-recurring and that this provides
a consistent basis for determining
materiality year on year.
The parent company primarily holds
the investments in Group entities
and, therefore net assets is
considered to be the key focus for
users of the financial statements.
Adjusted PBT
£182.9m
Adjusted PBT
Group materiality
6.2 PERFORMANCE MATERIALITY
We set performance materiality at a level lower than materiality to reduce the probability that,
in aggregate, uncorrected and undetected misstatements exceed the materiality for the financial
statements as a whole.
GROUP FINANCIAL STATEMENTS
PARENT COMPANY
FINANCIAL STATEMENTS
PERFORMANCE
MATERIALITY
70% (2023: 70%) of Group
materiality
70% (2023: 70%) of parent
company materiality
BASIS AND
RATIONALE FOR
DETERMINING
PERFORMANCE
MATERIALITY
In determining performance materiality, we considered the following
factors:
—Our risk assessment, including our assessment of the Groupʼs overall
control environment, and we consider it appropriate to rely on controls
over certain business processes;
—The performance of the Group and the parent company during 2024; and
—Our past experience of the Group and parent company audit, which has
indicated a low number of corrected and uncorrected misstatements
identified in prior periods.
6.3 ERROR REPORTING THRESHOLD
We agreed with the Audit Committee that we would report to the Committee all audit differences
in excess of £455,000 (2023: £250,000), as well as differences below that threshold that,
in our view, warranted reporting on qualitative grounds. We also report to the Audit Committee
on disclosure matters that we identified when assessing the overall presentation of the
financial statements.
INDEPENDENT AUDITORʼS REPORT TO THE MEMBERS OF RATHBONES GROUP PLC
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
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7. AN OVERVIEW OF THE SCOPE OF OUR AUDIT
7.1 IDENTIFICATION AND SCOPING OF COMPONENTS
The Group prepares a single consolidation of its components. Deloitte LLP was appointed as
auditors of Investec Wealth & Investment Limited in the current year, meaning all audit work of
the entire Group is performed directly by Group audit team. We obtained an understanding of the
environment, including Group-wide controls, implemented a risk-based approach by developing
an appropriate audit plan for each significant account balance, and assessed the risks of material
misstatement at the Group level.
Through our scoping assessment, we have identified four components which contribute
significantly to the overall Group performance. This consists of the two main trading subsidiaries
Rathbones Investment Management Limited and Investec Wealth & Investment Limited, the
parent company Rathbones Group Plc, and Rathbones Asset Management Limited. Therefore,
we have audited the entire financial information of these entities. For the parent company
component, we applied a component performance materiality equal to £5.7 million; for the other
components, we used individual component performance materiality levels determined on the
basis of their individual financial statements, which ranged from £0.3 million to £5.7 million.
We further identified and performed specified audit procedures of the operating income balances
within Rathbones Investment Management International Limited, Saunderson House Limited and
Vision Independent Financial Planning Limited, as well as specified audit procedures on the cash
balance within Investec Wealth & Investment (Channel Islands) Limited. We performed analytical
procedures on other balances.
Our scoping and audit procedures has provided us significant coverage of the Group, the
components that were scoped in for audits of entire financial information or specified audit
procedures represented 95% of the Groupʼs operating income; 92% of the Groupʼs profit before
tax, and 98% of the Groupʼs net assets.
REVENUE
PROFIT BEFORE TAX
NET ASSETS
INDEPENDENT AUDITORʼS REPORT TO THE MEMBERS OF RATHBONES GROUP PLC
Audit of the entire
financial information: 95%
Specified audit
procedures: 3%
Review at group level: 2%
Audit of the entire
financial information: 92%
Specified audit
procedures: 4%
Review at group level: 4%
Audit of the entire
financial information: 98%
Specified audit
procedures: 1%
Review at group level: 1%
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
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8.
OTHER INFORMATION
The other information comprises the information included in the annual report, other than the
financial statements and our auditorʼs report thereon. The directors are responsible for the other
information contained within the annual report.
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.
We have nothing to report in this regard.
9.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the directorsʼ responsibilities statement, 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 Groupʼs
and the parent companyʼs 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.
10.
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 auditorʼs
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.
INDEPENDENT AUDITORʼS REPORT TO THE MEMBERS OF RATHBONES GROUP PLC
7.2 OUR CONSIDERATION OF THE CONTROL ENVIRONMENT
Based on our understanding of the Groupʼs control environment, we have assessed the
relevant business and IT controls for investment management fee income in the Wealth
Management segment.
The key IT systems relevant to the audit were the financial accounting system, the back-office
databases and core IM business engines and the front office applications. The latter two are
pivotal systems for the provision of the investment management service and directly feed into the
investment management fee and commission income recognised in the IM segment. Therefore,
they are particularly relevant for Rathbones Investment Management (ʻRIMʼ) Limited and Investec
Wealth & Investment Limited.
We adopted a fully substantive approach for IW&I, where changes in the control environment
are planned and for which the component auditor changed to Deloitte during the year. For other
components, we relied on controls and through the involvement of our IT specialists. We tested the
controls over the above systems, as well as supplementary systems and processes within the Group.
We also tested business controls over investment management fee income recognised in RIM.
We have taken a controls reliance approach to the back-office database and front-office
application systems and therefore to investment management income in RIM.
Consistent with the prior year, we have tested the controls over the financial accounting system
but have not taken reliance due to the degree of manual intervention.
7.3 OUR CONSIDERATION OF CLIMATE-RELATED RISKS
In planning our audit, we have considered the potential impact of climate change on the Groupʼs
business and its financial statements.
The Group continues to develop its assessment of the potential impacts and opportunities of ESG,
and climate change as explained in the strategic report on pages 77 to 88.
As a part of our audit, we obtained managementʼs climate-related risk assessment and held
discussions with management to understand the process of identifying climate-related risks,
the determination of mitigating actions and the impact on the Groupʼs financial statements.
We engaged our climate specialists to perform a review of the TCFD and CFD disclosures.
We read the climate risk disclosures included in the strategic report section of the annual report,
and also evaluated the appropriateness of disclosures included in the financial statements within
note 33, to consider whether they are materially consistent with the financial statements and our
knowledge obtained in the audit.
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
A further description of our responsibilities for the audit of the financial statements is located on
the FRCʼs website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditorʼs report.
11.
EXTENT TO WHICH THE AUDIT WAS CONSIDERED 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 below.
11.1 IDENTIFYING AND ASSESSING POTENTIAL RISKS RELATED TO IRREGULARITIES
In identifying and assessing risks of material misstatement in respect of irregularities, including
fraud and non-compliance with laws and regulations, we considered the following:
—the nature of the industry and sector, control environment and business performance including
the design of the Groupʼs remuneration policies, key drivers for the directorsʼ remuneration,
bonus levels and performance targets;
—the Groupʼs own assessment of the risks that irregularities may occur either as a result of fraud
or error that was approved by the Board on 19 February 2025;
—results of our enquiries of management, internal audit, the directors and the Audit Committee
about their own identification and assessment of the risks of irregularities, including those that
are specific to the Groupʼs sector;
—any matters we identified having obtained and reviewed the Groupʼs documentation of their
policies and procedures relating to:
—identifying, evaluating and complying with laws and regulations and whether they were aware
of any instances of non-compliance;
—detecting and responding to the risks of fraud and whether they have knowledge of any actual,
suspected or alleged fraud;
—the internal controls established to mitigate risks of fraud or non-compliance with laws and
regulations; and
—the matters discussed among the audit engagement team and relevant internal specialists,
including tax, valuations, IT, climate and industry specialists regarding how and where fraud
might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist
within the organisation for fraud and identified the greatest potential for fraud in the following
areas: the impairment of client relationship intangible asset and goodwill, the recognition of net
investment management fee income and classification and disclosure of acquisition and integration
costs. In common with all audits under ISAs (UK), we are also required to perform specific
procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Group
operates in, focusing on provisions of those laws and regulations that had a direct effect on the
determination of material amounts and disclosures in the financial statements. The key laws and
regulations we considered in this context included the Prudential Regulation Authority and the
Financial Conduct Authorityʼs regulations; UK Companies Act; the Listing Rules; pensions legislation
and the UK tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect
on the financial statements but compliance with which may be fundamental to the Groupʼs ability to
operate or to avoid a material penalty. These included the Groupʼs regulatory solvency requirements.
11.2 AUDIT RESPONSE TO RISKS IDENTIFIED
As a result of performing the above, we identified the impairment of client relationship intangible
assets and goodwill, the recognition of net investment management fee income and classification
and disclosure of acquisition and integration costs as key audit matters related to the potential risk
of fraud. The key audit matters section of our report explains the matters in more detail and also
describes the specific procedures we performed in response to those key audit matters.
In addition to the above, our procedures to respond to risks identified included the following:
—reviewing the financial statement disclosures and testing to supporting documentation to assess
compliance with provisions of relevant laws and regulations described as having a direct effect
on the financial statements;
—enquiring of management, the Audit Committee and in-house and external legal counsel
concerning actual and potential litigation and claims;
—performing analytical procedures to identify any unusual or unexpected relationships that may
indicate risks of material misstatement due to fraud;
—reading minutes of meetings of those charged with governance, reviewing internal audit reports
and reviewing correspondence with HMRC, the Prudential Regulation Authority and the Financial
Conduct Authority; and
—in addressing the risk of fraud through management override of controls, testing the
appropriateness of journal entries and other adjustments; assessing whether the judgements
made in making accounting estimates are indicative of a potential bias; and evaluating the
business rationale of any significant transactions that are unusual or outside the normal course
of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all
engagement team members including internal specialists and remained alert to any indications
of fraud or non-compliance with laws and regulations throughout the audit.
INDEPENDENT AUDITORʼS REPORT TO THE MEMBERS OF RATHBONES GROUP PLC
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
12.
OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion the part of the directorsʼ remuneration report to be audited has been properly
prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
—the information given in the strategic report and the directorsʼ report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
—the strategic report and the directorsʼ report have been prepared in accordance with applicable
legal requirements.
In the light of the knowledge and understanding of the Group and the parent company and their
environment obtained in the course of the audit, we have not identified any material
misstatements in the strategic report or the directorsʼ report.
13.
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 Groupʼs
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 and our knowledge obtained during the audit:
— the directorsʼ statement with regards to the appropriateness of adopting the going concern
basis of accounting and any material uncertainties identified set out on page 133;
— the directorsʼ explanation as to its assessment of the Groupʼs prospects, the period this
assessment covers and why the period is appropriate set out on page 24;
— the directors' statement on fair, balanced and understandable set out on page 134;
— the Boardʼs confirmation that it has carried out a robust assessment of the emerging and
principal risks set out on page 63;
— the section of the annual report that describes the review of effectiveness of risk management
and internal control systems set out on pages 62-63; and
— the section describing the work of the Audit Committee set out on pages 106-110.
14.
OPINION ON OTHER MATTER PRESCRIBED BY THE CAPITAL REQUIREMENTS
(COUNTRY-BY-COUNTRY REPORTING) REGULATIONS 2013
In our opinion the information given in note 39 to the financial statements for the financial year
ended 31 December 2024 has been properly prepared, in all material respects, in accordance
with the Capital Requirements (Country-by Country Reporting) Regulations 2013.
15.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
15.1 ADEQUACY OF EXPLANATIONS RECEIVED AND ACCOUNTING RECORDS
Under the Companies Act 2006 we are required to report to you if, in our opinion:
—we have not received all the information and explanations we require for our audit; or
—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 are not in agreement with the accounting records
and returns.
We have nothing to report in respect of these matters.
15.2 DIRECTORS' REMUNERATION
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures
of the directorsʼ remuneration have not been made or the part of the directorsʼ remuneration
report to be audited is not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
16.
OTHER MATTERS WHICH WE ARE REQUIRED TO ADDRESS
16.1 AUDITOR TENURE
Following the recommendation of the Audit Committee, we were appointed by shareholders
on 9 May 2019 to audit the financial statements for the year ending 31 December 2019 and
subsequent financial periods. The period of total uninterrupted engagement including previous
renewals and reappointments of the firm is 6 years, covering the years ending 31 December 2019
to 31 December 2024.
16.2 CONSISTENCY OF THE AUDIT REPORT WITH THE ADDITIONAL REPORT TO THE
AUDIT COMMITTEE
Our audit opinion is consistent with the additional report to the Audit Committee we are required
to provide in accordance with ISAs (UK).
INDEPENDENT AUDITORʼS REPORT TO THE MEMBERS OF RATHBONES GROUP PLC
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
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17. USE OF OUR REPORT
This report is made solely to the companyʼs 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 companyʼs members those matters we are required to state to them in an auditorʼs 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 company and the companyʼs members as a body, for our
audit work, for this report, or for the opinions we have formed.
As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule
(DTR) 4.1.15R – DTR 4.1.18R, these financial statements will form part of the Electronic Format
Annual Financial Report filed on the National Storage Mechanism of the FCA in accordance with
DTR 4.1.15R – DTR 4.1.18R. This auditorʼs report provides no assurance over whether the Electronic
Format Annual Financial Report has been prepared in compliance with DTR 4.1.15R – DTR 4.1.18R.
SIMON CLEVELAND, FCA
(SENIOR STATUTORY AUDITOR)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
25 February 2025
INDEPENDENT AUDITORʼS REPORT TO THE MEMBERS OF RATHBONES GROUP PLC
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
2024
2023
Note
£m
£m
Interest and similar income
147.8
128.8
Interest expense and similar charges
(83.9)
(77.1)
Net interest income
4
63.9
51.7
Fee and commission income
835.1
538.6
Fee and commission expense
(34.3)
(29.7)
Net fee and commission income
5
800.8
508.9
Other operating income
6
31.2
10.5
Operating income
895.9
571.1
Charges in relation to client relationships and goodwill
(44.6)
(25.2)
Acquisition-related and integration costs
9
(83.4)
(44.3)
Other operating expenses
(668.3)
(444.0)
Operating expenses
7
(796.3)
(513.5)
Profit before tax
99.6
57.6
Taxation
11
(34.1)
(20.1)
Profit after tax
65.5
37.5
Profit for the year attributable to equity holders of the company
65.5
37.5
Other comprehensive income:
Items that will not be reclassified to profit or loss
Net remeasurement of defined benefit asset or liability
29
(10.6)
(5.8)
Deferred tax relating to net remeasurement of defined benefit asset or liability
21
2.7
1.5
Other comprehensive income net of tax
(7.9)
(4.3)
Total comprehensive income for the year net of tax attributable to equity holders of the company
57.6
33.2
Dividends paid and proposed for the year per ordinary share
12
93.0p
87.0p
Dividends paid and proposed for the year
96.9
62.9
Earnings per share for the year attributable to equity holders of the company:
13
— basic
63.0p
52.6p
— diluted
60.4p
50.8p
The accompanying notes form an integral part of the consolidated financial statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
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INFORMATION
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
Share
capital
Share
premium
Merger
reserve
Own
shares
Retained
earnings
Total
equity
Note
£m
£m
£m
£m
£m
£m
At 1 January 2023
3.2
310.0
77.0
(52.6)
297.2
634.8
Profit for the year
–
–
–
–
37.5
37.5
Net remeasurement of defined benefit liability
29
–
–
–
–
(5.8)
(5.8)
Deferred tax relating to components of other comprehensive income
21
–
–
–
–
1.5
1.5
Other comprehensive income net of tax
–
–
–
–
(4.3)
(4.3)
Dividends paid
12
–
–
–
–
(71.4)
(71.4)
Issue of share capital
30
2.2
2.3
747.4
–
–
751.9
Share-based payments:
— cost of share-based payment arrangements
32
–
–
–
–
24.0
24.0
— cost of vested employee remuneration and share plans
32
–
–
–
–
(6.0)
(6.0)
— cost of own shares vesting
31
–
–
–
13.0
(13.0)
–
— cost of own shares acquired
31
–
–
–
(16.0)
–
(16.0)
— tax on share-based payments
–
–
–
–
(0.3)
(0.3)
31 December 2023
5.4
312.3
824.4
(55.6)
263.7
1,350.2
Profit for the year
–
–
–
–
65.5
65.5
Net remeasurement of defined benefit asset
29
–
–
–
–
(10.6)
(10.6)
Deferred tax relating to components of other comprehensive income
21
–
–
–
–
2.7
2.7
Other comprehensive income net of tax
–
–
–
–
(7.9)
(7.9)
Dividends paid
12
–
–
–
–
(56.9)
(56.9)
Issue of share capital
30
0.1
5.5
–
–
–
5.6
Share-based payments:
— cost of share-based payment arrangements
32
–
–
–
–
29.1
29.1
— cost of vested employee remuneration and share plans
32
–
–
–
–
(4.2)
(4.2)
— cost of own shares vesting
31
–
–
–
9.5
(9.5)
–
— cost of own shares acquired
31
–
–
–
(22.0)
–
(22.0)
— tax on share-based payments
–
–
–
–
–
–
31 December 2024
5.5
317.8
824.4
(68.1)
279.8
1,359.4
The accompanying notes form an integral part of the consolidated financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
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INFORMATION
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RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
Assets
Cash and balances with central banks
14
1,166.0
1,038.3
Settlement balances
128.3
165.7
Loans and advances to banks
15
293.2
266.9
Loans and advances to customers
16
96.1
115.6
Investment securities:
— fair value through profit or loss
17
–
1.2
— amortised cost
17
1,278.2
1,294.6
Prepayments, accrued income and other assets
18
242.8
225.3
Property, plant and equipment
19
53.2
16.1
Right-of-use assets
20
42.3
64.5
Current tax asset (UK)
6.8
3.9
Intangible assets
22
982.7
1,025.3
Net defined benefit asset
29
0.5
7.0
Total assets
4,290.1
4,224.4
Liabilities
Deposits by banks
23
3.8
12.4
Settlement balances
133.6
172.1
Due to customers
24
2,352.1
2,253.3
Accruals and other liabilities
25
249.9
209.6
Provisions
26
28.1
25.5
Lease liabilities
27
44.8
74.9
Current tax liabilities (overseas)
0.5
0.5
Net deferred tax liability
21
78.0
86.0
Subordinated loan notes
28
39.9
39.9
Total liabilities
2,930.7
2,874.2
2024
2023
Note
£m
£m
Equity
Share capital
30
5.5
5.4
Share premium
30
317.8
312.3
Merger reserve
30
824.4
824.4
Own shares
31
(68.1)
(55.6)
Retained earnings
279.8
263.7
Total equity
1,359.4
1,350.2
Total liabilities and equity
4,290.1
4,224.4
2024
2023
Note
£m
£m
The financial statements were approved by the Board of Directors and authorised for issue on
25 February 2025 and were signed on its behalf by:
PAUL STOCKTON
IAIN HOOLEY
GROUP CHIEF EXECUTIVE OFFICER
GROUP CHIEF FINANCIAL OFFICER
Company registered number: 01000403
The accompanying notes form an integral part of the consolidated financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
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Cash flows from operating activities
Profit before tax
99.6
57.6
Change in fair value through profit or loss
–
(1.0)
Net interest income
4
(63.9)
(51.7)
Impairment losses on financial instruments
33
–
0.1
Net charge for provisions
26
14.9
9.4
Depreciation, amortisation and impairment
80.4
47.1
Loss on disposal of property, plant and equipment
0.1
–
Gain on modification of leases
(13.5)
–
Foreign exchange movements
17
(1.0)
3.4
Defined benefit pension scheme credits
29
(0.4)
(0.5)
Defined benefit pension contributions paid
29
(3.7)
(2.9)
Share-based payment charges
29.1
24.0
Interest paid
(79.8)
(67.7)
Interest received
147.6
111.9
209.4
129.7
Changes in operating assets and liabilities:
Net decrease in loans and advances to banks and
customers
21.8
87.4
Net decrease in settlement balance debtors
37.4
133.3
Net increase in prepayments, accrued income and other
assets
(12.1)
(36.2)
Net increase/(decrease) in amounts due to customers
and deposits by banks
90.2
(251.5)
Net decrease in settlement balance creditors
(38.5)
(123.6)
Net increase in accruals, provisions and other liabilities
27.2
1.0
2024
2023
Note
£m
£m
Cash generated from/(used in) operations
335.4
(59.9)
Tax paid
(41.8)
(29.5)
Net cash inflow/(outflow) from operating activities
293.6
(89.4)
Cash flows from investing activities
Cash acquired on acquisition of subsidiaries
8
–
172.6
Purchase of property, plant, equipment and intangible
assets
(56.6)
(10.7)
Purchase of investment securities
17
(2,028.0)
(2,059.9)
Proceeds from sale and redemption of investment
securities
17
2,046.6
1,818.1
Net cash used in investing activities
(38.0)
(79.9)
Cash flows from financing activities
Issue of ordinary shares
37
5.6
–
Repurchase of ordinary shares
37
(22.0)
(16.0)
Dividends paid
12
(56.9)
(71.4)
Payment of lease liabilities
27
(20.9)
(7.5)
Interest paid
(5.1)
(5.6)
Net cash used in financing activities
(99.3)
(100.5)
Net increase/(decrease) in cash and cash equivalents
156.3
(269.8)
Cash and cash equivalents at the beginning of the year
1,302.9
1,572.7
Cash and cash equivalents at the end of the year
37
1,459.2
1,302.9
2024
2023
Note
£m
£m
The accompanying notes form an integral part of the consolidated financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Future new standards and interpretations
The following standards are effective for annual periods beginning on or after 1 January 2025 and
earlier application is permitted; however, the Group has not early-adopted the amended standards
in preparing these consolidated financial statements.
The following standard is expected to have a material impact on the Groupʼs financial statements.
This standard has not yet been endorsed in the UK.
Standards available for early adoption
Effective date
IFRS 18 Presentation and Disclosure in Financial Statements
01 January 2027
The following standards are not expected to have a material impact on the Groupʼs financial
statements.
Standards available for early adoption
Effective date
Sale or Contribution of Assets between an Investor and its Associate or Joint
Venture (Amendments to IFRS 10 and IAS 28)
Optional
Lack of Exchangeability – Amendments to IAS 21
01 January 2025
Amendments to the Classification and Measurement of Financial Instruments –
Amendments to IFRS 9 and IFRS 7
01 January 2026
Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9
and IFRS 7
01 January 2026
Annual Improvements to IFRS Accounting Standards – Amendments to IFRS 1,
IFRS 7, IFRS 9, IFRS 10 and IAS 7
01 January 2026
IFRS 19 Subsidiaries without Public Accountability: Disclosures (not yet endorsed
in the UK)
01 January 2027
1.4 BUSINESS COMBINATIONS
Business combinations are accounted for using the acquisition method. The consideration for
each acquisition is measured at the aggregate of the fair values (at the date of exchange) of assets
transferred, liabilities assumed and equity instruments issued by the Group in exchange for control
of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.
Where applicable, the consideration for the acquisition includes any asset or liability resulting from
a contingent consideration arrangement, measured at its acquisition-date fair value. 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 classified as an asset or liability are accounted for in accordance with relevant asset /
liability recognition and measurement guidance in IFRS. Changes in the fair value of contingent
consideration classified as equity are not recognised.
NOTES TO THE CONSOLIDATED STATEMENTS
1 PRINCIPAL ACCOUNTING POLICIES
Rathbones Group Plc (ʻthe companyʼ) is a public company limited by shares incorporated and
domiciled in England and Wales under the Companies Act 2006.
1.1 BASIS OF PREPARATION
The consolidated and company financial statements have been prepared in accordance with
UK-adopted International Accounting Standards. The company financial statements are presented
on pages 211 to 232.
The financial statements have been prepared on the historical cost basis, except for certain
financial instruments that are measured at fair value (notes 1.9, 1.12, 1.16 and 1.18). The principal
accounting policies adopted are set out in this note and, unless otherwise stated, have been applied
consistently to all periods presented in the consolidated financial statements.
1.2 BASIS OF CONSOLIDATION
The consolidated financial statements incorporate the financial statements of the company and
entities controlled by the company (its subsidiaries), together ʻthe Groupʼ, made up to 31 December
each year.
The Group controls an entity when it is exposed to, or 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. Subsidiaries are fully consolidated from the date on which control is obtained, and no longer
consolidated from the date that control ceases; their results are included in the consolidated
financial statements up to the date that control ceases. Inter-company transactions and balances
between Group companies are eliminated on consolidation.
1.3 DEVELOPMENTS IN REPORTING STANDARDS AND INTERPRETATIONS
Standards and interpretations affecting the reported results or the financial position
The following amendments to standards have been adopted in the current period, but have not
had a significant impact on the amounts reported in these financial statements:
— Lease Liability in a Sale and Leaseback – Amendments to IFRS 16
— Classifications of liabilities as current or non-current (Amendments to IAS 1)
—Amendments to IAS 7 Statements of Cash Flows and IFRS 7 Financial Instruments: Disclosures
Supplier Finance Arrangements
— International Tax Reform – Pillar Two Model Rules (Amendments to IAS 12).
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1 PRINCIPAL ACCOUNTING POLICIES CONTINUED
1.5 GOING CONCERN
The directors have, at the time of approving the financial statements, a reasonable expectation
that the company and the Group have adequate resources to continue in operational existence.
In forming this view, the directors have considered the companyʼs and the Groupʼs prospects for
a period of at least 12 months from the date of approval of the annual report. The directorsʼ
assessment included consideration of the Groupʼs profit and capital forecasts; the impact of capital
and liquidity stress tests; the impact of reverse stress testing and the management actions available
to mitigate this impact. The assessment also ensured that the assumptions applied were consistent
with those used in other forward-looking areas of the financial statements, such as impairment
testing. The directors continue to adopt the going concern basis of accounting in preparing the
financial statements.
1.6 FOREIGN CURRENCIES
The functional and presentational currency of the company and its subsidiaries is sterling.
Transactions in currencies other than the relevant Group entityʼs functional currency are recorded
at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date,
monetary assets and liabilities that are denominated in foreign currencies are retranslated at the
rates prevailing on the balance sheet date. Gains and losses arising on retranslation are included in
profit or loss for the year.
1.7 INCOME
Net interest income
Interest income or expense is recognised within net interest income using the effective
interest method.
The effective interest method is the method of calculating the amortised cost of a financial asset or
liability (or group of assets and liabilities) and of allocating the interest income or interest expense
over the relevant period. The effective interest rate is the rate that exactly discounts the expected
future cash payments or receipts through the expected life of the financial instrument, or when
appropriate, a shorter period, to:
—the gross carrying amount of the financial asset; or
—the amortised cost of the financial liability.
The application of the method has the effect of recognising income (or expense) receivable
(or payable) on the instrument evenly in proportion to the amount outstanding over the period to
maturity or repayment. In calculating effective interest, the Group estimates cash flows
considering all contractual terms of the financial instrument but excluding the impact of future
credit losses.
The interest charged on the Groupʼs lease liabilities and subordinated loan notes is included within
cash used in financing activities in the Group statement of cash flows. Interest charged on client
funds is included within cash generated from operations.
Net fee and commission income
Portfolio or investment management fees, commissions receivable or payable and fees from
advisory services are recognised on a continuous basis over the period that the related service
is provided.
Commission charges for executing transactions on behalf of clients are recognised when the
transaction is dealt at the trade date.
The Group has made an assessment as to whether the work performed to earn such fees
constitutes the transfer of services and, therefore, fulfils any performance obligation(s). If so, then
these fees are recognised when the relevant performance obligation has been satisfied; if not, then
the fees are only recognised in the period in which the services are provided.
A breakdown of the timing of revenue recognition can be found in note 3.
Dividend income
Dividend income from final dividends on equity securities is accounted for on the date the security
becomes ex-dividend. Interim dividends are recognised when received.
Other income
In cases where cash held within client portfolios does not represent a banking deposit, the Group
invests this cash in cash securities with approved financial institutions. The margin earned on these
funds, being the difference between the rate of interest paid by the custodian bank and that paid
to clients, represents the rate of return available to the Group through the pooling of client funds.
This margin is included within other operating income in the financial statements.
1.8 LEASES
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract
is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a
period of time in exchange for consideration. To assess whether a contract conveys the right to
control the use of an identified asset, the Group uses the definition of a lease in IFRS 16.
The Group recognises a right-of-use asset and a lease liability at the inception date of the lease.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or before the commencement date, plus any initial
direct costs incurred and an estimate of dilapidation costs to dismantle and remove the underlying
asset or to restore the underlying asset or the site on which it is located, less any lease incentives
received. As a result of new information, the Group revised its recognition of dilapidations during
2024. The estimate for recognition of dilapidation assets, which reflect costs to dismantle and
remove structural changes made to leased premises, was revised from 100% of the total cost of
dilapidations to 50%. The remaining 50% is charged to profit or loss over the useful life of the lease
and recognised as a provision. In line with IAS 8, this change in accounting estimate was applied
prospectively to new leases entered into from 1 January 2024. The impact of the change was a
reduction to the dilapidation asset by £0.4 million, and an equal reduction in the related provision.
NOTES TO THE CONSOLIDATED STATEMENTS
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payments in an optional renewal period if the Group is reasonably certain to exercise an
extension option, and penalties for early termination of a lease unless the Group is reasonably
certain not to terminate early.
The lease liability is subsequently measured by adjusting the carrying amount to reflect the interest
charge, the lease payments made and any reassessment or lease modifications. The lease liability
is remeasured if the Group changes its assessment of whether it will exercise a purchase, extension
or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the
carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount
of the right-of-use asset has been reduced to zero.
Where the Group is an intermediate lessor in a sub-lease, it accounts for its interests in the head
lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference
to the right-of-use asset arising from the head lease, not with reference to the underlying asset.
Leases that qualify for the low-value asset exemption or short-term lease exemption do not fall
within the scope of IFRS 16 and continue to be treated as off balance sheet.
1.9 SHARE BASED PAYMENTS
The Group engages in equity-settled and cash-settled share-based payment transactions in respect
of services received from its employees.
Equity-settled awards
For equity-settled share-based payments, the fair value of the award is measured by reference to
the fair value of the shares or share options granted on the grant date. The cost of the employee
services received in respect of the shares or share options granted is recognised in profit or loss
over the vesting period, with a corresponding credit to equity.
The fair value of the awards or options granted is determined using a binomial pricing model, which
takes into account the current share price, the risk-free interest rate, the expected volatility of the
companyʼs share price over the life of the option or award, any applicable exercise price and other
relevant factors. Only those vesting conditions that include terms related to market conditions are
taken into account in estimating fair value. Non-market vesting conditions are taken into account
by adjusting the number of shares or share options included in the measurement of the cost of
employee services so that, ultimately, the amount recognised in profit or loss reflects the number
of vested shares or share options, with a corresponding adjustment to equity. Where vesting
conditions are related to market conditions, the charges for the services received are recognised
regardless of whether or not the market-related vesting condition is met, provided that any non-
market vesting conditions are also met. Shares purchased and issued are recorded directly in
equity.
Cash-settled awards
For cash-settled share-based payments, a liability is recognised for the services received, and the
related employerʼs taxes, at the balance sheet date, measured at the fair value of the liability. At
each subsequent balance sheet date and at the date on which the liability is settled, the fair value of
the liability is remeasured with any changes in fair value recognised in profit or loss.
1.10 TAXATION
Current Tax
Current tax is the expected tax payable or receivable on net taxable income for the year. Current
tax is calculated using tax rates enacted or substantively enacted by the balance sheet date,
together with any adjustment to tax payable or receivable in respect of previous years.
Deferred tax
Deferred tax is accounted for under the balance sheet liability method in respect of temporary
differences using tax rates (and laws) that have been enacted or substantively enacted by the
balance sheet date and are expected to apply when the liability is settled or when the asset
is realised.
NOTES TO THE CONSOLIDATED STATEMENTS
1 PRINCIPAL ACCOUNTING POLICIES CONTINUED
1.8 LEASES CONTINUED
The right-of-use assets and dilapidations assets are subsequently depreciated on a straight-line
basis over the shorter of the expected life of the asset and the lease term, adjusted for any
remeasurements of the lease liability. At the end of each reporting period, the assets are assessed
for indicators of impairment in accordance with IAS 36.
The lease liability is initially measured at the present value of the lease payments that are not paid
at the commencement date, discounted using the interest rate implicit in the lease or, if that rate
cannot be readily determined, the Groupʼs incremental borrowing rate. The Group uses an
incremental borrowing rate of 5.6%, derived from its subordinated loan notes (note 28), as the
discount rate for all leases entered into prior to the acquisition of IW&I on 21 September 2023. For
all leases entered into or modified after this date, an incremental borrowing rate is determined on a
lease-by-lease basis, with reference to the lease term and rental payments specific to each lease.
Lease payments included in the measurement of the lease liability comprise the following:
— fixed payments, including in-substance fixed payments
— variable lease payments that depend on an index or a rate, initially measured using the index
or rate as at the commencement date
— amounts expected to be payable under a residual value guarantee
— the exercise price under a purchase option that the Group is reasonably certain to exercise, lease
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1 PRINCIPAL ACCOUNTING POLICIES CONTINUED
1.10 TAXATION CONTINUED
Deferred tax liabilities are recognised for all temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be available against which
deductible temporary differences may be utilised, except where the temporary difference arises:
—from the initial recognition of goodwill
—from the initial recognition of other assets and liabilities in a transaction, which affects neither
the tax profit nor the accounting profit, other than in a business combination; or
—in relation to investments in subsidiaries and associates, where the Group is able to control the
reversal of the temporary difference and it is the Groupʼs intention not to reverse the temporary
difference in the foreseeable future.
Deferred tax assets and liabilities are offset 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.
Current and deferred tax are recognised:
— in other comprehensive income if they relate to items recognised in other comprehensive income
— directly in retained earnings if they relate to items recognised directly in retained earnings.
1.11 CASH AND CASH EQUIVALENTS
Cash comprises cash in hand and demand deposits.
Demand deposits include balances with central banks which are realisable on demand.
Cash equivalents includes loans and advances to banks with a maturity of less than three months
from the date of acquisition.
For the purposes of the consolidated statement of cash flows, cash and cash equivalents consist of
cash and cash equivalents as defined above, net of outstanding bank overdrafts (overnight cash
book overdraft balances – Note 23), which are included in the Groupʼs cash management.
1.12 FINANCIAL ASSETS
Initial recognition and measurement
Financial assets, excluding trade debtors, are initially recognised when the Group becomes party
to the contractual provisions of the asset. Trade debtors are recognised when cash is advanced
to the borrowers.
Financial assets are initially recognised at fair value plus transaction costs that are directly
attributable to their acquisition (except those assets classified at fair value through profit or loss).
Trade debtors without a significant financing component are initially measured at the
transaction price.
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes
its business model for managing financial assets, in which case all affected financial assets are
reclassified on the first day of the first reporting period following the change in the business model.
For settlement balances, trade date accounting is applied to all regular way purchases and sales
of assets.
Classification and subsequent measurement
Financial assets are classified and measured in the following categories:
—amortised cost
Financial assets are measured at amortised cost if their contractual terms give rise to cash flows
that are solely payments of principal and interest on the principal amount outstanding and they
are held within a business model whose objective is to hold assets to collect contractual cash flows.
Assets are measured at amortised cost using the effective interest rate method (note 1.7), less
any impairment losses. Interest income, foreign exchange gains and losses and impairment are
recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
—at fair value through other comprehensive income (FVOCI)
Debt instruments are measured at FVOCI if their contractual terms give rise to cash flows that
are solely payments of principal and interest on the principal amount outstanding and they are
held within a business model whose objective is both to hold assets to collect contractual cash
flows and to sell the assets.
For debt instruments, interest income is calculated using the effective interest method. For
equity instruments, dividends are recognised as income in profit or loss unless the dividend
clearly represents a recovery of part of the cost of the investment. All other gains and losses on
assets at FVOCI are recognised in OCI.
—at fair value through profit or loss (FVTPL)
All equity instruments are measured at FVTPL unless the instrument is not held for trading,
the Group irrevocably elects to measure the instrument at FVOCI. This election is made on an
investment-by-investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are
measured at FVTPL. On initial recognition, the Group may irrevocably designate a financial asset
that otherwise meets the requirements to be measured at amortised cost or FVOCI at FVTPL if
doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
Net gains and losses, including any interest or dividend income, are recognised in profit or loss.
NOTES TO THE CONSOLIDATED STATEMENTS
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1 PRINCIPAL ACCOUNTING POLICIES CONTINUED
1.12 FINANCIAL ASSETS CONTINUED
Business model assessment
The Group assesses the objective of the business model in which a financial asset is held at a
portfolio level. The information considered includes:
—the objectives for the portfolio and how those tie in to the current and future strategy of the
Group
—how the performance of the portfolio is evaluated and reported to the Groupʼs management
—the risks that affect the performance of the business model (and the financial assets held within
that business model) and how those risks are managed
—how Group employees are compensated, e.g. whether compensation is based on the fair value of
the assets managed or the contractual cash flows collected
—the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such
sales and expectations about future sales activity.
Payments of principal and interest criterion
In assessing whether the contractual cash flows are solely payments of principal and interest,
the Group considers:
—the contractual terms of the instrument, checking consistency with basic lending criteria
—the impact of the time value of money
—features that would change the amount or timing of contractual cash flows
—other factors, such as prepayment or extension features.
Derecognition
Financial assets are derecognised when the contractual rights to receive cash flows have expired
or the Group has transferred substantially all the risks and rewards of ownership.
Impairment of financial assets
The Group recognises loss allowances for expected credit losses (ECLs) on financial assets
measured at amortised cost and FVOCI and loan commitments held off balance sheet.
A financial asset will attract a loss allowance equal to either:
—12-month ECLs (losses resulting from possible defaults within the next 12 months); or
—lifetime ECLs (losses resulting from possible defaults over the remaining life of the
financial asset).
The latter applies if there has been a significant deterioration in the credit quality of the asset;
albeit lifetime ECLs will always be recognised for trade receivables, contract assets or lease
receivables without a significant financing component.
The maximum period considered when estimating ECLs is the maximum contractual period over
which the Group is exposed to credit risk.
The Group measures loss allowances at an amount equal to lifetime ECLs, except for treasury book
and investment management loan book exposures (see note 33) for which credit risk has not
increased significantly since initial recognition, which are measured at 12-month ECLs.
Loss allowances for trust and financial planning debtors are always measured at an amount equal
to lifetime ECLs.
When assessing whether the credit risk of a financial asset has increased significantly between the
reporting date and initial recognition, quantitative and qualitative indicators are used. More detail
can be found at note 33.
Measurement of ECLs
Treasury book and investment management loan book
The Group has developed a model for calculating ECLs on its treasury book and investment
management loan book (which includes loan commitments held off balance sheet). The Group has
developed three different economic scenarios: a base case, an upside and a downside.
The base case is assigned a 60% probability of occurring with the upside and downside each
assigned a 20% probability of occurring.
The economic scenarios are based on the projections of GDP, inflation, unemployment rates, house
price indices, financial markets and interest rates as set out in the banking system stress testing
scenario published annually by the PRA.
Management adjust the projections for the economic variables in arriving at the upside and
downside scenarios.
NOTES TO THE CONSOLIDATED STATEMENTS
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1.13 PROPERTY, PLANT AND EQUIPMENT
All property, plant and equipment is stated at historical cost, which includes directly attributable
acquisition costs, less accumulated depreciation and impairment losses. Depreciation is charged
so as to write off the cost of assets to their estimated residual value over their estimated useful
lives, using the straight-line method, on the following bases:
— leasehold improvements: 10 years or over the lease term
— plant, equipment and computer hardware: over 3 to 10 years.
The assetsʼ residual lives are reviewed, and adjusted if appropriate, at each balance sheet date.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount
and these are included in profit or loss.
1.14 INTANGIBLE ASSETS
Goodwill
Goodwill arises through business combinations and represents the excess of the cost of acquisition
over the Groupʼs interest in the fair value of the identifiable assets, liabilities and contingent
liabilities of a business at the date of acquisition.
Goodwill is recognised as an asset and measured at cost less accumulated impairment losses. It is
allocated to Groups of cash-generating units, which represent the lowest level at which goodwill is
monitored for internal management purposes. Cash-generating units are identified as the smallest
identifiable group of assets that generates cash inflows that are largely independent of the cash
inflows from other assets or groups of assets, and are no larger than the Groupʼs operating
segments, as set out in note 3.
On disposal of a subsidiary, the attributed amount of goodwill that has not been subject to
impairment is included in the determination of the profit or loss on disposal.
Client relationships
Client relationships acquired as part of a business combination are initially recognised at fair value
(note 1.4). Determining whether a transaction that involves the purchase of client relationships is
treated as a business combination or a separate purchase of intangible assets requires judgement.
The factors that the Group takes into consideration in making this judgement are set out in note 2.1.
Individually purchased client relationships are initially recognised at cost. Where a transaction to
acquire client relationship intangible assets includes an element of variable deferred consideration,
an estimate is made of the value of consideration that will ultimately be paid. The client relationship
intangible asset recognised on the balance sheet is adjusted for any subsequent change in the value
of deferred consideration. Note 2.1 sets out the approach taken by the Group where judgement is
required to determine whether payments made for the introduction of client relationships should
be capitalised as intangible assets or charged to profit or loss.
NOTES TO THE CONSOLIDATED STATEMENTS
1 PRINCIPAL ACCOUNTING POLICIES CONTINUED
1.12 FINANCIAL ASSETS CONTINUED
Under each resultant scenario, an ECL is forecast for each exposure in the treasury book and
investment management loan book. The ECL is calculated based on managementʼs estimate of the
probability of default, the loss given default and the exposure at default of each exposure taking
into account industry credit loss data, the Groupʼs own credit loss experience, the expected
repayment profiles of the exposures and the level of collateral held. Industry credit loss information
is drawn from data on credit defaults for different categories of exposure published by the Council
of Mortgage Lenders and Standard & Poorʼs.
The model adopts a staging allocation methodology, primarily based on changes in the internal and/
or external credit rating of exposures to identify significant increases in credit risk since inception
of the exposure.
The Group has not rebutted the presumption that if an exposure is more than 30 days past due,
the associated credit risk has significantly increased.
More detail on the Groupʼs staging criteria is provided in note 33.
ECLs are discounted back to the balance sheet date at the effective interest rate of the asset.
Trust and financial planning debtors
The Groupʼs trust and financial planning debtors are generally short term and do not contain
significant financing components. Therefore, the Group has applied a practical expedient by using
a provision matrix to calculate lifetime ECLs based on actual credit loss experience over the past
four years.
Credit-impaired financial assets
At each reporting date, the Group assesses whether financial assets carried at amortised cost and
FVOCI are credit-impaired. A financial asset is ʻcredit-impairedʼ when one or more events that have
a detrimental impact on the estimated future cash flows of the financial asset have occurred.
The Groupʼs definition of default is given in note 33.
Presentation of impairment
The carrying amount of financial assets measured at amortised cost is reduced by a loss allowance.
The carrying value of assets measured at FVOCI, is not adjusted by loss allowance but instead the
loss allowance is recorded in equity.
Impairment losses related to the Groupʼs treasury book and investment management loan book are
presented in ʻinterest expense and similar chargesʼ and those related to all other financial assets
(including trust and financial planning debtors) are presented under ʻother operating expensesʼ.
No losses are presented separately on the statement of the comprehensive income and there have
been no reclassifications of amounts previously recognised under IAS 39.
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Client relationship intangible assets are reviewed bi-annually for indicators of impairment.
Intangible assets acquired through business combinations are tested for impairment by reviewing
the key inputs supporting the initial valuation of the asset at acquisition against the Groupʼs current
forecasts of those inputs, including revenue margins and net client flows. Intangible assets acquired
through newly recruited investment managers under contractual agreements are tested for
impairment by reviewing lost client relationships in the period. In determining whether a client
relationship is lost, the Group considers factors such as the level of funds withdrawn and the
existence of other retained family relationships. When client relationships are lost, the full amount
of unamortised cost is recognised immediately in profit or loss and the intangible asset is
derecognised. See note 2.1 for further detail.
If the recoverable amount of any asset other than goodwill or client relationships is estimated to be
less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount.
Any impairment loss is recognised immediately in profit or loss.
1.16 FINANCIAL LIABILITIES
Initial recognition and measurement
Financial liabilities are initially recognised at fair value plus transaction costs that are directly
attributable to their acquisition or issue.
Classification and subsequent measurement
Financial liabilities are classified as measured at amortised cost or at fair value through profit
or loss.
The Group has not designated any liabilities as fair value through profit or loss and holds no
liabilities as held for trading. Financial liabilities are measured at amortised cost using the effective
interest method (note 1.7). Amortised cost is calculated by taking into account any issue costs and
any discounts or premiums on settlement. Interest expense and foreign exchange gains and losses
are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
For settlement balances, trade date accounting is applied to all regular way purchases and sales
of assets.
Derecognition
The Group derecognises financial liabilities when its contractual obligations are discharged,
cancelled or expired, or when the financial liability is substantially modified.
NOTES TO THE CONSOLIDATED STATEMENTS
1 PRINCIPAL ACCOUNTING POLICIES CONTINUED
1.14 INTANGIBLE ASSETS CONTINUED
Client relationship intangible assets are subsequently carried at the amount initially recognised less
accumulated amortisation, which is calculated using the straight-line method over their estimated
useful lives (normally 10 to 15 years, but not more than 15 years).
Computer software and software development costs
Costs incurred to acquire and bring to use computer software licences are capitalised and
amortised through profit or loss over their expected useful lives (3 to 4 years).
Costs that are directly associated with the production of identifiable and unique software products
controlled by the Group are recognised as intangible assets when the Group is expected to benefit
from future use of the software and the costs are reliably measurable. Other costs of producing
software are charged to profit or loss as incurred. Computer software development costs
recognised as assets are amortised using the straight-line method over their useful lives
(not exceeding 4 years).
Where services provided by a software-as-a-service arrangement do not result in the recognition
of an intangible asset, non-distinct configuration and customisation costs are expensed when
access to the software is provided. The cost is spread over the contractual term.
1.15 IMPAIRMENT OF GOODWILL AND INTANGIBLE ASSETS
At each balance sheet date, the Group reviews the carrying amounts of its intangible assets to
determine whether there is any indication that those assets have suffered an impairment loss.
If any such indication exists, the recoverable amount of the asset is estimated in order to determine
the extent of the impairment loss (if any). Where the asset does not generate cash flows that are
independent from other assets, the Group estimates the recoverable amount of the cash-
generating unit to which the asset belongs. The recoverable amount is the higher of fair value less
costs to sell and value in use. See note 2.1 for further detail.
Goodwill is tested for impairment at least annually. For the purposes of impairment testing,
goodwill is allocated to groups of cash-generating units. The carrying amount of each group of
cash-generating units is compared to its value in use, calculated using a discounted cash flow
method. If the recoverable amount of the group of cash-generating units is less than the carrying
amount of the group of units, the impairment loss is allocated first to reduce the carrying amount
of the goodwill allocated to that group of units and then to the other assets of the group of units
pro rata on the basis of the carrying amount of each asset in the group of units.
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1 PRINCIPAL ACCOUNTING POLICIES CONTINUED
1.17 PROVISIONS AND CONTINGENT LIABILITIES
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 an outflow of economic benefits, that can be reliably
estimated, will occur. Provisions are measured at the present value of the expenditures expected to
be required to settle the obligation, discounted using a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the obligation.
Contingent liabilities are possible obligations that depend on the outcome of uncertain future
events or those present obligations where the outflows of resources are uncertain or cannot be
measured reliably. Contingent liabilities are not recognised in the financial statements but are
disclosed unless the likelihood of crystallisation is judged to be remote.
1.18 RETIREMENT BENEFIT OBLIGATIONS ON RETIREMENT BENEFIT SCHEMES
The Groupʼs net liability/asset in respect of defined benefit pension plans is calculated separately
for each plan by estimating the amount of future benefit that employees have earned in return for
their service in the current and prior years; that benefit is discounted to determine its present
value, and the fair value of any plan assets (at bid price), including the value of any bulk annuity
policies, is deducted. Any asset resulting from this calculation is limited to the present value of
available refunds and reductions in future contributions to the plan.
The cost of providing benefits under defined benefit plans is determined using the projected
unit credit method, with actuarial valuations being carried out at each balance sheet date.
Net remeasurements of the defined benefit liability/asset are recognised in full in the period
in which they occur in other comprehensive income.
Past service costs or gains are recognised in profit or loss immediately in the period of a plan
amendment. Interest income on defined benefit assets and interest expense on the defined benefit
obligations are also recognised in profit or loss in the period.
The amount recognised in the balance sheet for death-in-service benefits represents the present
value of the estimated obligation, reduced by the extent to which any future liabilities will be met
by insurance policies.
The company determines the net interest on the net defined benefit liability/asset for the year by
applying the discount rate used to measure the defined benefit obligation at the beginning of the
year to the net defined benefit liability/asset.
Contributions to defined contribution retirement benefit schemes are charged to profit or loss
as an expense as they fall due.
1.19 SEGMENTAL REPORTING
The Group determines and presents operating segments based on the information that is provided
internally to the Group Executive Committee, which is the Groupʼs chief operating decision-maker.
Operating segments are organised around the services provided to clients.
Transactions between operating segments are reported within the income or expenses for those
segments; intra-segment income and expenditure is eliminated at Group level. Indirect costs are
allocated between segments in proportion to the principal cost driver for each category of indirect
costs that is generated by each segment.
1.20 FIDUCIARY ACTIVITIES
The Group commonly acts as trustee and in other fiduciary capacities that result in the holding or
placing of assets on behalf of individuals, trusts, retirement benefit plans and other institutions.
Such assets and income arising thereon are excluded from these financial statements, as they are
not assets of the Group. Largely as a result of cash and settlement processing, the Group holds
money on behalf of some clients in accordance with the Client Money Rules of the Financial
Conduct Authority, the Jersey Financial Services Commission, the Guernsey Financial Services
Commission and the Solicitorsʼ Accounts Rules issued by the Solicitors Regulation Authority, as
applicable. Such monies and the corresponding amounts due to clients are not shown on the
balance sheet as the Group is not beneficially entitled to them.
1.21 MERGER RESERVE
The merger reserve is used where more than 90% of the share capital in a subsidiary is acquired,
and the consideration includes the issue of new shares by the Company, thereby attracting merger
relief under Section 612 of the Companies Act 2006.
1.22 FAIR VALUE MEASUREMENT
The fair values of quoted financial instruments in active markets are based on current bid prices.
Such instruments would be included in level 1 of the fair value hierarchy. If an active market for a
financial asset does not exist, the Group establishes fair value by using valuation techniques. These
include the use of recent armʼs length transactions, discounted cash flow analysis, option pricing
models and other valuation techniques commonly used by market participants. These instruments
would be classified under level 3 in the fair value hierarchy.
The Group recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred.
NOTES TO THE CONSOLIDATED STATEMENTS
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Impairment review of client relationship intangible assets
At the end of each reporting period, the Group reviews the carrying amount of its client
relationship intangible assets acquired through business combinations to determine whether there
is any indication of impairment. At 31 December 2024, these intangible assets totalled £429.3
million (2023: £468.6 million). Significant judgment is required in determining whether certain
events or circumstances constitute indicators of impairment, and in calculating the recoverable
amount of the intangible assets when required.
If an indication of impairment exists, the recoverable amount of the asset is estimated, being the
higher of fair value less costs to sell and value-in-use. Where value-in-use is used to calculate the
recoverable amount, discounted cash flow forecasts associated with the acquired client
relationships are produced, reflecting key assumptions for operating profit margin, net client flows
and pre-tax discount rates. Future cash flows are based on the latest financial budgets approved by
the Board, or historic data, where relevant. Discount rates are aligned with the Group cost of
capital. Where fair value is estimated to calculate the recoverable amount of an asset, indicative
trading multiples from recent market acquisitions of comparable businesses in the same industry
are used. Changes in these inputs may impact the amount of any impairment loss recognised in
operating expenses.
At 31 December 2024, no indicators of impairment relating to the Groupʼs client relationship
intangible assets were identified.
The largest individual client relationship intangible asset relates to the acquisition of IW&I in 2023,
with a carrying amount of £317.7 million at 31 December 2024 and this asset was determined as the
asset with the greatest potential for material impairment. During the year, this was assessed for
indicators of impairment using a fair value less cost to sell model. Our estimate of the fair value less
costs to sell, based on the comparable business FUM multiples, would have to fall by approximately
30% in order to trigger a possible impairment of the client relationship intangible asset.
2.2 RETIREMENT BENEFIT OBLIGATIONS (NOTE 29)
Estimation uncertainty
The principal assumptions underlying the reported surplus of £0.5 million (2023: £7.0 million
surplus) are set out in note 29.
During the year, the Trustees of the Groupʼs defined benefit pension schemes entered into an
agreement with Canada Life to fully insure the future benefits of members of both schemes in a
ʻbuy-inʼ arrangement. An asset for the bulk annuity policy was subsequently recognised at a fair
value equivalent to the liabilities in the scheme. The liabilities continue to be revalued in line with
IAS 19, and the bulk annuity policy asset is revalued accordingly by an equal and offsetting amount.
Given that the risks relating to retirement benefits are fully insured, we no longer consider this to
be an area of estimation uncertainty, although we note that the final premium payable to Canada
Life is subject to confirmation once a period of data cleanse is conducted, albeit with no significant
adjustments expected.
NOTES TO THE CONSOLIDATED STATEMENTS
2 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION
UNCERTAINTY
The Group makes judgements and estimates that affect the application of the Groupʼs accounting
policies and reported amounts of assets, liabilities, income and expenses within the next financial
year. Estimates and assumptions are continually evaluated and are based on historical experience
and other factors, including expectations of future events that are believed to be reasonable under
the circumstances.
The following key accounting policies involve critical judgements made in applying the accounting
policies and involve material estimation uncertainty.
2.1 CLIENT RELATIONSHIP INTANGIBLES (NOTE 22)
Critical judgements
Client Relationship intangibles purchased through corporate transactions
When the Group purchases client relationships through transactions with other businesses,
a judgement is made as to whether the transaction should be accounted for as a business
combination or as a separate purchase of intangible assets. In making this judgement, the Group
assesses the assets, liabilities, operations and processes that were the subject of the transaction
against the definition of a business combination in IFRS 3. In particular, consideration is given to
whether ownership of a corporate entity has been acquired, among other factors.
Payments to newly recruited investment managers
The Group assesses whether payments made to newly recruited investment managers under
contractual agreements represent payments for the acquisition of client relationship intangible
assets or remuneration for ongoing services provided to the Group. If these payments are
incremental costs of acquiring investment management contracts and are deemed to be
recoverable (i.e. through future revenues earned from the FUMA that relate to the investment
management contract), they are capitalised as client relationship intangible assets (note 22).
Otherwise, the payments are judged to be in relation to the provision of ongoing services and are
expensed as remuneration costs in the period that they are transferred. Upfront payments made
to investment managers upon joining are expensed as incurred, as they are not judged to be
incremental costs for acquiring client relationships. At 31 December 2024, these intangible assets
totalled £39.2 million (2023: £34.2 million).
Estimation uncertainty
Amortisation of client relationship intangible assets
The Group makes estimates as to the expected duration of client relationships to determine the
period over which the related intangible assets are amortised. The amortisation period is estimated
with reference to historical data on the longevity of client relationships. During the year, client
relationship intangible assets were amortised over a period of between 10 and 15 years. As a result
of the IW&I combination in 2023, the sensitivities over the amortisation charge no longer meets
the criteria of being at significant risk of material adjustment for the enlarged Group within the
next financial year. Consequently, this is no longer considered to be an area of estimation
uncertainty, but this shall continue to be monitored.
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3 SEGMENTAL INFORMATION
IFRS 8 requires operating segments to be identified on the basis of internal reports about
components of the Group that are regularly reviewed by the chief operating decision-maker, which
takes the form of the Group Executive Committee, in order to allocate resources to the segment
and to assess its performance.
For management purposes, the Group is organised into two operating segments: Wealth
Management and Asset Management. Centrally incurred shared services are allocated to these
operating segments on the basis of the cost drivers that generate the expenditure; principally,
these are, the headcount of income generating teams within the segment, the value of funds under
management and administration of the segment, the segmentʼs total revenue, and the segmentʼs
share of total expenditure. The allocation of these costs is shown in a separate column in the table
below, alongside the information presented for internal reporting. Wealth Management Segmental
Assets relate to assets held within the Investment Management (which includes Financial Planning
advice), Banking and Trust Business Segments. Asset Management Segmental Assets are assets held
solely within the Asset Management Business Segment. Unallocated Segmental Assets relate to the
Net Defined Benefit Asset held on the balance sheet.
NOTES TO THE CONSOLIDATED STATEMENTS
2 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
CONTINUED
2.3 BUSINESS COMBINATIONS (NOTE 8)
2.3.1 Investec Wealth & Investment
Critical judgements
In 2023, the Group acquired the entire share capital of Investec Wealth & Investment Limited
(IW&I). The Group accounted for the transaction as a business combination, as set out in note 8.
Consideration receivable
A reduction in the value of IW&I goodwill by £5.1 million has been recognised during the year. This is
attributable to the recognition of consideration receivable by the Group from the seller, Investec
Bank plc, under the terms of the acquisition. This reassessment of the fair value of net assets
acquired relates to new information received during the IFRS 3 measurement period about facts
and circumstances that existed at the date of acquisition. Any variance to the asset of £5.1 million
recognised at 31 December 2024 will be a post-acquisition adjustment; a reasonable possible
change to this asset is an increase to cash by £0.9 million.
2.3.2 Saunderson House
Estimation uncertainty
In 2021, the Group acquired the entire share capital of Saunderson House Limited which was
recognised as a business combination. The consideration included equity-settled deferred awards
payable under the Saunderson House Transaction Incentive Plan 2021, which was contingent on
the recipients remaining employees of the Group for a specific period, and was consequently
accounted for as remuneration for ongoing services from employment. The amounts payable were
expensed over the deferral period.
The amount payable under the Saunderson House Transaction Incentive Plan 2021 was subject
to the achievement of certain operational and performance targets, which were measured at 31
December 2024 ('the measurement date'). A profit or loss charge was recognised in equity for the
consideration payable. Under the terms of the award, payment was calculated as 0.1% of the
Saunderson House funds under management (FUM) at the measurement date, excluding assets
that had not migrated to a Rathbones proposition by this date. In addition to the FUM-based award
were integration and discretionary awards.
These awards vested at 31 December 2024 (see note 8 for further detail), therefore this matter is
no longer considered an area of estimation uncertainty.
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3 SEGMENTAL INFORMATION CONTINUED
IW&I was identified as a separate operating segment of the Group in 2023, the results of the segment were presented in aggregate with the Groupʼs Wealth Management segment, on the basis that the
long-term characteristics of both are expected to align following the initial integration period of the businesses. Due to the process of integrating IW&I into the wider business during the current year,
IW&I is no longer considered a separate operating segment of the Group and is now considered to be a part of the Wealth Management operating segment.
Wealth
Management
Asset
Management
Shared
Services
Total
31 December 2024
Note
£m
£m
£m
£m
Net investment management fee income
575.1
79.4
–
654.5
Net commission income
91.8
–
–
91.8
Net interest income
62.3
1.6
–
63.9
Fees from advisory services
54.5
–
–
54.5
Other income
30.5
0.7
–
31.2
Operating income
814.2
81.7
–
895.9
Staff costs − fixed
(233.9)
(7.9)
(54.6)
(296.4)
Staff costs − variable
(129.5)
(20.5)
(18.2)
(168.2)
Total staff costs
(363.4)
(28.4)
(72.8)
(464.6)
Other direct expenses
(108.3)
(15.4)
(80.0)
(203.7)
Allocation of shared services
(140.3)
(12.5)
152.8
–
Underlying operating expenses
(612.0)
(56.3)
–
(668.3)
Underlying profit before tax
202.2
25.4
–
227.6
Charges in relation to client relationships and goodwill
22
(44.6)
–
–
(44.6)
Acquisition-related and integration costs
9
(83.4)
–
–
(83.4)
Segment profit before tax
74.2
25.4
–
99.6
Profit before tax attributable to equity holders of the company
99.6
Taxation
11
(34.1)
Profit for the year attributable to equity holders of the company
65.5
Wealth
Management
Asset
Management
Unallocated
Assets
Total
£m
£m
£m
£m
Segment total assets
4,218.8
70.8
0.5
4,290.1
NOTES TO THE CONSOLIDATED STATEMENTS
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3 SEGMENTAL INFORMATION CONTINUED
Wealth
Management
Asset
Management
Shared Services
Total
31 December 2023
Note
£m
£m
£m
£m
Net investment management fee income
350.1
64.7
–
414.8
Net commission income
53.6
–
–
53.6
Net interest income
49.9
1.8
–
51.7
Fees from advisory services
40.5
–
–
40.5
Other income
9.8
0.7
–
10.5
Operating income
503.9
67.2
–
571.1
Staff costs – fixed
(147.2)
(7.1)
(51.8)
(206.1)
Staff costs – variable
(78.2)
(13.4)
(15.9)
(107.5)
Total staff costs
(225.4)
(20.5)
(67.7)
(313.6)
Other direct expenses
(53.7)
(12.2)
(64.5)
(130.4)
Allocation of shared services
(119.4)
(12.8)
132.2
–
Underlying operating expenses
(398.5)
(45.5)
–
(444.0)
Underlying profit before tax
105.4
21.7
–
127.1
Charges in relation to client relationships and goodwill
22
(25.2)
–
–
(25.2)
Acquisition-related and integration costs
9
(11.0)
–
(33.3)
(44.3)
Segment profit before tax
69.2
21.7
(33.3)
57.6
Profit before tax attributable to equity holders of the company
57.6
Taxation
11
(20.1)
Profit for the year attributable to equity holders of the company
37.5
Wealth
Management
Asset
Management
Unallocated
Assets
Total
£m
£m
£m
£m
Segment total assets
4,099.6
117.8
7.0
4,224.4
NOTES TO THE CONSOLIDATED STATEMENTS
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3 SEGMENTAL INFORMATION CONTINUED
The following table reconciles underlying operating expenses to operating expenses:
2024
2023
Note
£m
£m
Underlying operating expenses
668.3
444.0
Charges in relation to client relationships and goodwill
22
44.6
25.2
Acquisition-related costs
9
83.4
44.3
Operating expenses
796.3
513.5
GEOGRAPHIC ANALYSIS
The following table presents operating income analysed by the geographical location of the Group
entity providing the service:
2024
2023
£m
£m
United Kingdom
874.4
553.4
Channel Islands
21.5
17.7
Operating income
895.9
571.1
The following is an analysis of the carrying amount of non-current assets analysed by the
geographical location of the assets:
2024
2023
£m
£m
United Kingdom
1,075.2
1,103.0
Channel Islands
3.0
2.9
Non-current assets
1,078.2
1,105.9
TIMING OF REVENUE RECOGNITION
The following table presents operating income analysed by the timing of revenue recognition of the
operating segment providing the service:
2024
2023
Wealth
Management
Asset
Management
Wealth
Management
Asset
Management
£m
£m
£m
£m
Products and services transferred at a
point in time
96.9
–
44.4
–
Products and services transferred over
time
717.3
81.7
459.5
67.2
814.2
81.7
503.9
67.2
MAJOR CLIENTS
The Group is not reliant on any one client or group of connected clients for generation of revenues.
NOTES TO THE CONSOLIDATED STATEMENTS
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4 NET INTEREST INCOME
2024
2023
Note
£m
£m
Interest income
Cash and balances with central banks
56.3
56.3
Amortised cost investment securities
73.0
56.1
Loans and advances to banks
12.2
7.9
Loans and advances to customers
6.3
8.5
147.8
128.8
Interest expense
Due to customers
(78.8)
(71.6)
Lease liabilities
(2.8)
(3.2)
Subordinated loan notes
28
(2.3)
(2.3)
(83.9)
(77.1)
Net interest income
63.9
51.7
All net interest income is calculated using the effective interest method (note 1.7).
5 NET FEE AND COMMISSION INCOME
2024
2023
£m
£m
Fee and commission income
Wealth Management
752.4
469.0
Asset Management
82.7
69.6
835.1
538.6
Fee and commission expense
Wealth Management
(32.5)
(26.2)
Asset Management
(1.8)
(3.5)
(34.3)
(29.7)
Net fee and commission income
800.8
508.9
6 OTHER OPERATING INCOME
2024
2023
£m
£m
Gains on financial assets measured at fair value
–
1.1
Net client money interest income
28.0
7.7
Other operating income
3.2
1.7
31.2
10.5
Other operating income of £31.2 million (2023: £10.5 million) comprised gains from fair value
through profit or loss equity securities of £nil (2023: £1.1 million), net interest income from client
money deposits £28.0 million (2023: £7.7 million) of which £26.5 million relates to IW&I (2023:
£6.4 million) and other operating income of £3.2 million (2023: £1.7 million).
NOTES TO THE CONSOLIDATED STATEMENTS
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7 OPERATING EXPENSES
2024
2023
Note
£m
£m
Staff costs
10
464.6
313.6
Depreciation and impairment charges of property, plant
and equipment
19
7.2
5.2
Depreciation and impairment charges of right-of-use
assets
20
14.6
6.5
Amortisation of internally generated intangible assets
22
2.2
1.8
Amortisation and impairment of purchased software
22
3.9
3.8
Auditorʼs remuneration (see below)
2.6
3.0
Impairment charges on loans and advances to customers
33
–
0.1
Administration and other expenses
173.2
110.0
Other operating expenses
668.3
444.0
Charges in relation to client relationships and goodwill
22
44.6
25.2
Acquisition-related and integration costs
9
83.4
44.3
Total operating expenses
796.3
513.5
The property, plant and equipment depreciation and impairment charge differs to the amount
in note 19 due to £2.6 million of net accelerated depreciation and impairment charges on fixtures
and fittings (2023: £1.7 million), which have been treated as acquisition-related costs (note 9).
The right-of-use asset depreciation and impairment charge differs to the amount in Note 20 due to
£4.1 million of net accelerated depreciation and impairment charges (2023: £1.1 million), which
have been treated as acquisition-related costs (note 9).
The internally generated intangible assets amortisation charge differs to the amount in Note 22
predominantly due to £1.3 million of net accelerated amortisation charges on purchased software
(2023: £nil), which have been treated as acquisition-related costs (note 9).
A more detailed analysis of auditorʼs remuneration is provided below:
2024
2023
£m
£m
Fees payable to the companyʼs auditor for the audit of the companyʼs
annual financial statements
0.1
0.7
Fees payable to the companyʼs auditor and their associates for other
services to the Group:
— audit of the companyʼs subsidiaries pursuant to legislation
1.6
1.0
— audit-related assurance services
0.6
1.2
— other services
0.3
0.1
2.6
3.0
Audit-related assurance services includes costs relating to audits of the Groupʼs client money
and independent reporting to third parties on internal controls under ISAE 3402.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
165
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
Gross
amount
Grant date
Grant date
fair value
Final vesting date
£m
£m
Rathbones Integration Incentive Scheme
39.0
6 October 2023
31.2
22 September 2027
The Rathbone Integration Incentive Scheme award of £39.0 million is payable in shares, and will
vest in three equal tranches annually on the second, third and fourth anniversaries of the
acquisition completion date, subject to conditions relating to the client migration process. Vesting
of the final one-third of the shares on the fourth anniversary of the date of grant will be subject to
engagement in the client migration process. The gross amount of £39.0 million represents
managementʼs best estimate of the extent to which these conditions will be met. The fair value at
the date of grant was determined with reference to the share price at the date of grant less the
value of expected dividends receivable over the period up to vesting, as no dividends will be
receivable during the vesting period. There are no market-related performance conditions
attached to these awards.
A Business Enablement award of £6.9 million was also granted during the prior year and is payable
predominantly in cash to different groups of employees in key business enablement functions.
Recipients of the award who are classified by the company as material risk-takers receive 50% of
their total variable pay in the form of shares of Rathbones Group plc. Approximately 30% of the
total award vested on 31 March 2024, and the remainder will vest on 31 March 2025, subject to
the recipients remaining employed until this date and other conditions being met. The Group treats
the cash element of the award as an employee benefit under IAS 19, with a corresponding liability
recognised for the services received at the balance sheet date, and the share element of the awards
as equity-settled share-based payments under IFRS 2.
In May and June 2024, two additional awards were granted to certain employees of Rathbones
Group Plc, conditional upon the delivery of the integration plan for Rathbones clients. The integration
awards are payable in cash in 2025 and 2027 and have been recognised in line with IAS 19.
The charge in the income statement for the above elements is as follows;
2024
2023
Note
£m
£m
Incentivisation awards
15.9
4.8
These costs are being reported as staff costs within integration-related costs (see note 9).
SAUNDERSON HOUSE
On 20 October 2021, the Group acquired 100% of the ordinary share capital of the Saunderson
House Group.
Other Deferred Payments
In addition to a total cash consideration of £98.9 million paid in prior years, the sale and purchase
agreement detailed other deferred and contingent payments to be made to the vendors for the
sale of the shares of the Saunderson House Group. These payments were contingent on the
recipients remaining in employment with the Group for the duration of the respective deferral
periods. Consequently, the awards were treated as remuneration for post-combination services
and the cost was charged to the income statement over the respective vesting periods. Details of
each of these elements are as follows:
Gross
amount
Grant date
Grant date
fair value
Vesting date
£m
£m
Initial share consideration
5.2
20 October 2021
5.5
20 October 2024
Management incentive scheme
5.7
20 December 2021
4.9
31 December 2024
NOTES TO THE CONSOLIDATED STATEMENTS
8 BUSINESS COMBINATIONS
INVESTEC WEALTH & INVESTMENT
On 21 September 2023, the Group completed its acquisition of 100% of the ordinary share capital
of Investec Wealth & Investment Limited (IW&I) from Investec Bank plc. Full details of the
acquisition are set out in note 8 of the 2023 annual report and accounts.
Total consideration transferred to Investec Bank plc of £751.9 million comprised a share issue
of 27,056,463 ordinary shares and 17,481,868 convertible non-voting ordinary shares. Based on
Rathbonesʼ issued share capital at completion, the total shares transferred to Investec Bank plc
amounted to an economic interest in Rathbones Group Plc of 41.25% but, in accordance with the
terms of the acquisition, 29.9% of the total voting rights in Rathbones Group Plc.
As set out in note 22, the value of acquired goodwill has been adjusted during the year for new
information relating to facts and circumstances that existed at the acquisition date.
Deferred Incentive awards
Deferred awards and contingent payments were granted to certain IW&I employees under the
Rathbones Integration Incentive Scheme. These payments require the recipients of the awards to
remain in employment with the Group for the duration of the respective deferral periods, and
therefore these amounts have not been included in the accounting for the acquisition under IFRS 3
Business Combinations. The cost for these equity-settled awards is being charged to profit or loss in
line with IFRS 2 and spread over each respective vesting period. Details of the share awards are as
follows:
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
166
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
8 BUSINESS COMBINATIONS CONTINUED
All of these payments were accounted for as equity-settled share-based payments under IFRS 2.
—Initial share consideration of £5.2 million was issued on the date of acquisition and vested on
the third anniversary of the acquisition date, which fell during the year. As the share issuance
was in pursuance of the arrangement to acquire the shares of the Saunderson House Group,
the premium of £5.2 million on the issuance of these shares was recognised within the
merger reserve.
—The incentive plan for the Saunderson House senior management team was subject to certain
operational and financial performance targets at the measurement date of 31 December 2024.
The award was calculated as 0.1% of qualifying funds under management at the measurement
date (see note 2). Additionally, £1.0 million of integration awards vested at this date. £0.5 million
of discretionary awards were granted to employees as part of the scheme in previous years.
These costs are being reported as staff costs within acquisition-related costs (see note 9).
9 ACQUISITION-RELATED AND INTEGRATION COSTS
During 2024 £83.4 million of acquisition-related and integration costs were incurred
(2023: £44.3 million).
2024
2023
£m
£m
Acquisition of Speirs & Jeffrey
–
1.0
Acquisition of Investec Wealth & Investment
75.5
36.5
Acquisition of Saunderson House
7.9
6.8
Acquisition-related and Integration costs
83.4
44.3
Total acquisition-related staff costs of £21.4 million (2023: £11.0 million) incurred during the year
relate to equity-settled share-based payments (note 10).
COSTS RELATING TO THE ACQUISITION OF INVESTEC WEALTH & INVESTMENT (IW&I)
The Group has incurred the following costs in relation to the acquisition of IW&I, summarised by
the following classification within the income statement:
2024
2023
Note
£m
£m
Acquisition costs:
Acquisition-related legal and advisory costs
–
21.3
Integration costs:
Integration related staff costs
10
48.3
6.2
Other Integration Costs
27.2
9.0
Acquisition-related and Integration costs
75.5
36.5
Acquisition-related legal and advisory costs of £nil (2023: £21.3 million) and integration costs of £nil
(2023: £9.0 million) have not been allocated to a specific operating segment (note 3).
Integration-related staff costs of £48.3 million (2023: £6.2 million) predominately relate to
restructuring costs of £20.1 million, the majority of which have not yet been settled and have been
recognised within accruals and other liabilities (note 25), and deferred incentive awards of
£20.4 million.
Other integration costs of £27.2 million (2023: £9.0 million) mainly relate to technology and
consultancy costs.
COSTS RELATING TO THE ACQUISITION OF SPEIRS & JEFFREY
The Group has incurred the following costs in relation to the 2018 acquisition of Speirs & Jeffrey,
summarised by the following classification within the income statement:
2024
2023
Note
£m
£m
Acquisition costs:
Staff costs
10
–
1.0
Acquisition-related and Integration costs
–
1.0
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
167
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
9 ACQUISITION-RELATED AND INTEGRATION COSTS CONTINUED
COSTS RELATING TO THE ACQUISITION OF SAUNDERSON HOUSE
The Group has incurred the following costs in relation to the acquisition of Saunderson House
Group, summarised by the following classification within the income statement:
2024
2023
Note
£m
£m
Acquisition costs:
Staff costs
10
3.3
3.9
Integration costs:
Other Integration Costs
4.6
2.9
Acquisition-related and Integration costs
7.9
6.8
Integration costs of £nil (2023: £2.9 million) have not been allocated to a specific operating
segment (note 3).
Staff costs of £3.3 million (2023: £3.9 million) relate to deferred remuneration.
10 STAFF COSTS
2024
2023
Note
£m
£m
Wages and salaries
366.8
244.3
Social security costs
49.5
32.2
Acquisition-related equity-settled share-based payments
9
12.8
7.5
Acquisition-related cash-settled staff costs
8.6
3.5
Other equity-settled share-based payments
16.4
16.5
Pension costs:
29
— Defined benefit schemes
(0.4)
(0.5)
— Defined contribution schemes
32.3
21.1
31.9
20.6
Total staff costs
486.0
324.6
Acquisition-related staff costs
(21.4)
(11.0)
Underlying staff costs
3
464.6
313.6
The monthly average number of employees on a full-time equivalent basis during the year was
as follows:
2024
2023
Wealth Management
2,231
1,686
Asset Management
58
52
Shared services
1,233
760
3,522
2,498
The actual number of Group employees at 31 December 2024 was 3,545 (2023: 3,532).
11 INCOME TAX EXPENSE
2024
2023
Note
£m
£m
Current tax:
— charge for the year
41.1
22.8
— adjustments in respect of prior years
(2.2)
1.1
Deferred tax:
21
— credit for the year
(6.4)
(1.9)
— adjustments in respect of prior years
1.6
(1.9)
34.1
20.1
The tax charge is calculated based on the estimated amount payable as at the balance sheet date.
Any subsequent differences between these estimates and the actual amounts paid are recorded as
adjustments in respect of prior years.
The tax charge on profit for the year is higher (2023: higher) than the standard rate of corporation
tax in the UK of 25.0% (2023: 23.5%). 23.5% is a composite tax rate, since the UK corporation tax
rate was 19.0% until 31 March 2023 and 25.0% for the remainder of the financial year.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
168
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
11 INCOME TAX EXPENSE CONTINUED
The differences are explained below:
2024
2023
Note
£m
£m
Tax on profit from ordinary activities at the standard rate of 25%
(2023: 23.5%)
24.9
13.6
Effects of:
— disallowable expenses
7.1
8.0
— share-based payments
2.9
(0.2)
— tax on overseas earnings
(0.8)
(0.7)
— adjustments in respect of prior year
(0.6)
(0.8)
— deferred payments to previous owners of acquired companies
9
–
0.3
— change in corporation tax rate on deferred tax
–
(0.1)
— Tax impact on intra-group dividends
0.6
–
34.1
20.1
£nil of current tax on share-based payments was charged to equity during the year
(2023: £0.4 million).
On 11 July 2023, the government of the United Kingdom, where the parent company is
incorporated, enacted the Pillar II income taxes legislation effective from 1 January 2024. Under
the legislation, the parent company will be required to pay, in the United Kingdom, top-up tax on
profits of its subsidiaries located in territories outside the United Kingdom that are taxed at an
effective tax rate of less than 15%. We have undertaken a review of the regime and determined that
the Group will not be in scope for Pillar II income tax reporting until the year ended 31 December
2026, we will continue to monitor.
12 DIVIDENDS
2024
2023
£m
£m
Amounts recognised as distributions to equity holders in the year:
— final dividend for the year ended 31 December 2023 of 24.0p
(2022: 56.0p) per share
25.2
33.4
— interim dividend for the year ended 31 December 2024 of 30.0p
(2023: 29.0p) per share
31.7
17.5
— second interim dividend for the year ended 31 December 2023 of
34.0p per share
–
20.5
Dividends paid in the year of 54.0p (2023: 119.0p) per share
56.9
71.4
Proposed final dividend for the year ended 31 December 2024 of
63.0p (2023: 24.0p) per share
65.2
24.9
An interim dividend of 30.0p per share was paid on 1 October 2024 to shareholders on the
register at the close of business on 6 September 2024 (2023: 29.0p).
A second interim dividend was not paid in 2024 (2023: 34.0p).
A final dividend declared of 63.0p per share (2023: 24.0p) is payable on 13 May 2025 to
shareholders on the register at the close of business on 11 April 2025. The final dividend is subject
to approval by shareholders at the Annual General Meeting on 8 May 2025 and has not been
included as a liability in these financial statements.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
169
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
13 EARNINGS PER SHARE
Earnings used to calculate earnings per share on the bases reported in these financial
statements were:
2024
2023
Pre-tax
Taxation
Post-tax
Pre-tax
Taxation
Post-tax
Note
£m
£m
£m
£m
£m
£m
Underlying profit attributable to
shareholders
227.6
(59.9)
167.7
127.1
(30.3)
96.8
Charges in relation to client
relationships and goodwill
22
(44.6)
10.2
(34.4)
(25.2)
5.9
(19.3)
Acquisition-related costs
9
(83.4)
15.6
(67.8)
(44.3)
4.3
(40.0)
Profit attributable to
shareholders
99.6
(34.1)
65.5
57.6
(20.1)
37.5
Basic earnings per share has been calculated by dividing profit attributable to shareholders by the
weighted average number of shares in issue throughout the year, excluding own shares, of
103,729,536 (2023: 71,269,129). This includes 17,481,868 convertible non-voting shares issued as
consideration for the IW&I transaction. In total, 44,538,331 shares were issued as a result of the
IW&I transaction on 21 September 2023.
Diluted earnings per share is the basic earnings per share, adjusted for the effect of contingently
issuable shares and outstanding employee share options.
2024
2023
Weighted average number of ordinary shares in issue during the year –
basic
103,729,536
71,269,129
Dilutive effect of share options and awards
4,481,773
2,605,448
Weighted average number of diluted ordinary shares outstanding
108,211,309
73,874,577
2024
2023
Earnings per share for the year attributable to equity holders of the
company:
— basic
63.0p
52.6p
— diluted
60.4p
50.8p
Underlying earnings per share for the year attributable to equity holders
of the company:
— basic
161.6p
135.8p
— diluted
154.9p
131.0p
Underlying earnings per share is calculated in the same way as earnings per share, but by reference
to underlying profit attributable to shareholders.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
170
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
14 CASH AND BALANCES WITH CENTRAL BANKS
2024
2023
£m
£m
Balances with central banks
1,166.0
1,038.3
Less impairment loss allowance
–
–
1,166.0
1,038.3
The fair value of balances with central banks is not materially different from their carrying amount.
2024
2023
£m
£m
Repayable:
— on demand
1,166.0
1,036.0
— within 1 year but over 3 months
–
2.3
Less impairment loss allowance
–
–
1,166.0
1,038.3
Amounts include balances:
— with variable interest rates
1,166.0
1,036.0
— which are non-interest-bearing
–
2.3
Less impairment loss allowance
–
–
1,166.0
1,038.3
The Groupʼs exposure to credit risk arising from cash and balances with central banks is described
in note 33.
15 LOANS AND ADVANCES TO BANKS
2024
2023
£m
£m
Current accounts
247.5
252.4
Fixed term deposits/notice accounts
45.7
14.5
Less impairment loss allowance
–
–
293.2
266.9
2024
2023
£m
£m
Repayable:
on demand
247.5
245.4
within 3 months or less excluding on demand
45.7
21.5
Less impairment loss allowance
–
–
293.2
266.9
Amounts include loans and advances:
with variable interest rates
257.9
256.8
with fixed interest rates
18.7
9.9
which are non-interest-bearing
16.6
0.2
Less impairment loss allowance
–
–
293.2
266.9
The fair value of loans and advances is not materially different to their carrying amount. Fair value
has been calculated as the discounted amount of estimated future cash flows expected to be
received using current market rates.
Loans and advances to banks included in cash and cash equivalents at 31 December 2024 were
£293.2 million (note 37) (2023: £266.9 million).
The Groupʼs exposure to credit risk arising from loans and advances to banks is described in
note 33.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
171
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
16 LOANS AND ADVANCES TO CUSTOMERS
2024
2023
£m
£m
Overdrafts
15.9
9.7
Investment management loan book
76.0
101.7
Trust and financial planning debtors
2.5
2.9
Other debtors
1.9
1.6
Less impairment loss allowance
(0.2)
(0.3)
96.1
115.6
The fair value of loans and advances to customers is not materially different to their carrying
amount. Fair value has been calculated as the discounted amount of estimated future cash flows
expected to be received using current market rates. Debtors arising from the trust and financial
planning businesses are non-interest-bearing or subject to a fixed interest rate.
2024
2023
£m
£m
Repayable:
— on demand
18.5
11.5
— within 3 months or less excluding on demand
10.2
3.4
— within 1 year but over 3 months
31.8
3.2
— within 5 years but over 1 year
35.8
97.8
Less impairment loss allowance
(0.2)
(0.3)
96.1
115.6
Amounts include loans and advances:
— with variable interest rates
93.0
111.3
— which are non-interest-bearing
3.2
4.3
— with fixed interest rates
0.1
0.3
Less impairment loss allowance
(0.2)
(0.3)
96.1
115.6
The Groupʼs exposure to credit risk arising from loans and advances to customers is described
in note 33.
17 INVESTMENT SECURITIES
FAIR VALUE THROUGH PROFIT OR LOSS
2024
2023
£m
£m
Equity securities:
— unlisted
–
1.2
–
1.2
Equity securities comprised shares in Euroclear. During the year, the Group disposed of its
remaining shares in Euroclear. These securities did not bear interest.
At 31 December 2023, the Group held 517 shares in Euroclear Holdings SA, which were valued at
£1.2 million by reference to the price secured from the sale of 1,292 of the Group's shareholding
during 2023. During the year, the Group sold its total remaining shares in Euroclear at the same
price used to value its shareholding at 31 December 2023.
AMORTISED COST
2024
2023
£m
£m
Debt securities:
— unlisted
1,278.3
1,294.6
Less impairment loss allowance
(0.1)
–
1,278.2
1,294.6
Debt securities comprise certificates of deposit that are all due to mature within one year (2023:
all), and treasury bills that are due to mature within one year (2023: all).
The fair value of debt securities is disclosed in note 33.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
172
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
17 INVESTMENT SECURITIES CONTINUED
The change in the Groupʼs holdings of investment securities in the year is summarised below.
Fair value through
profit or loss
Amortised
cost
Total
£m
£m
£m
At 1 January 2023
11.2
1,045.2
1,056.4
Additions
–
2,059.9
2,059.9
Disposals (sales and redemptions)
(11.0)
(1,807.1)
(1,818.1)
Foreign exchange movements
(3.2)
(3.4)
(6.6)
Gain from changes in fair value
4.2
–
4.2
Increase in impairment loss allowance
–
–
–
At 1 January 2024
1.2
1,294.6
1,295.8
Additions
–
2,028.0
2,028.0
Disposals (sales and redemptions)
(1.2)
(2,045.4)
(2,046.6)
Foreign exchange movements
–
1.0
1.0
Gain from changes in fair value
–
–
–
Increase in impairment loss allowance
–
–
–
31 December 2024
–
1,278.2
1,278.2
Included within fair value through profit or loss are disposals of £1.2 million (2023: £11.0 million) of
financial instruments that are not classified as cash and cash equivalents.
18 PREPAYMENTS, ACCRUED INCOME AND OTHER ASSETS
2024
2023
£m
£m
Work in progress
4.4
14.4
Prepayments and other assets
17.3
6.5
Other Assets
63.1
57.4
Accrued income
158.0
147.0
242.8
225.3
Other assets include temporary client receivables, which are subject to daily movements as a result
of outstanding client transactions.
Work in progress reflects time and materials charged at year end but not invoiced to clients.
Accrued income reflects investment management fees, which are charged on a quarterly basis.
19 PROPERTY, PLANT AND EQUIPMENT
Short term
leasehold
improvements
Plant and
equipment
Total
Note
£m
£m
£m
Cost
At 1 January 2023
24.3
29.1
53.4
Additions
0.3
4.8
5.1
Acquisitions through business combinations
2.4
2.6
5.0
Disposals
–
(0.2)
(0.2)
Other Movements
0.8
(0.8)
–
At 1 January 2024
27.8
35.5
63.3
Additions
43.8
3.1
46.9
Disposals
8
(0.6)
(3.9)
(4.5)
At 31 December 2024
71.0
34.7
105.7
Depreciation
At 1 January 2023
15.8
24.9
40.7
Charge for the year
3.5
3.2
6.7
Disposals
–
(0.2)
(0.2)
At 1 January 2024
19.3
27.9
47.2
Charge for the year
6.5
3.2
9.7
Disposals
(0.6)
(3.8)
(4.4)
At 31 December 2024
25.2
27.3
52.5
Carrying amount at 31 December 2024
45.8
7.4
53.2
Carrying amount at 31 December 2023
8.5
7.6
16.1
Carrying amount at 1 January 2023
8.5
4.2
12.7
During the prior year, where there was an expectation of the Group vacating its properties prior to
their respective lease termination dates, the useful lives of any property, plant and equipment were
revised, and the assets were reviewed for impairment. The Group subsequently recognised
impairment and accelerated depreciation charges in the year of £2.6 million (2023: £1.7 million),
which have been recognised within acquisition-related costs (note 9).
During the year, the Group capitalised £40.8 million in relation to the fitting-out of the premises at
30 Gresham Street. These assets are being depreciated over 10 years, in line with the Groupʼs
policy and the expected period of utilisation of these assets.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
173
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
20 RIGHT-OF-USE ASSETS
Property
Motor vehicles
and equipment
Total
Note
£m
£m
£m
Cost
At 1 January 2023
58.1
0.3
58.4
Additions
2.1
–
2.1
Acquisitions through business combinations
8
32.9
–
32.9
Disposals
(0.2)
–
(0.2)
Other movements
(2.8)
–
(2.8)
At 1 January 2024
90.1
0.3
90.4
Additions
22.1
–
22.1
Disposals
(42.8)
–
(42.8)
Other movements
(0.8)
–
(0.8)
At 31 December 2024
68.6
0.3
68.9
Depreciation and impairment
At 1 January 2023
19.2
0.1
19.3
Charge for the year
7.4
0.1
7.5
Disposals
(0.9)
–
(0.9)
Other movements
–
–
–
At 1 January 2024
25.7
0.2
25.9
Charge for the year
18.8
–
18.8
Disposals
(18.1)
–
(18.1)
Other movements
–
–
–
At 31 December 2024
26.4
0.2
26.6
Carrying amount at 31 December 2024
42.2
0.1
42.3
Carrying amount at 31 December 2023
64.4
0.1
64.5
Carrying amount at 1 January 2023
38.9
0.2
39.1
Following the acquisition of IW&I, the Groupʼs enlarged property portfolio was reviewed for leases
that would require early termination. During the prior year, where there was an expectation of the
Group vacating its properties prior to their respective lease termination dates, the useful lives of
the right-of-use assets were revised, and the assets were reviewed for impairment. During the year,
the Group recognised impairment and accelerated depreciation charges of £4.1 million (2023: £2.9
million), which have been recognised within acquisition-related costs (note 9).
On 6 March 2024, the lease at 8 Finsbury Circus was assigned to a new tenant. As the original
terms and conditions of the lease did not include an option to terminate the lease or reduce the
lease term, this was treated as a lease modification. At the effective date of the modification, the
lease liability was remeasured based on the remaining rental payments, the revised lease term and a
revised incremental borrowing rate. The right-of-use asset was also revalued to reflect its reduced
useful economic life. This resulted in a net gain to profit or loss of £12.9 million, which has been
recognised within acquisition-related costs.
During the prior year, the IFRS 3 property lease accounting recognised as part of the acquisition of
IW&I resulted in a £1.6 million increase to the value of the IW&I right-of-use assets, attributable to
property dilapidations. Due to new information received during the IFRS 3 measurement period
relating to facts and circumstances that existed at the date of acquisition, this treatment was
revised during the current year. This led to a reduction in right-of-use assets of £1.5 million, with a
corresponding increase recognised to goodwill.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
174
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
21 NET DEFERRED TAX ASSET/(LIABILITY)
The UK Government legislated in the Finance Act 2021 to increase the UK corporation tax rate to 25.0% from 19.0% on 1 April 2023. This has been reflected in the current and prior year deferred tax
calculations. Deferred income taxes are calculated on all temporary differences under the liability method using the rate expected to apply when the relevant timing differences are forecast to unwind.
The Group has applied the temporary exception, introduced in May 2023, from the accounting requirements for deferred taxes in IAS 12, so that the Group neither recognises nor discloses information
about deferred tax assets and liabilities related to Pillar II income taxes.
The movement on the deferred tax account is as follows:
Deferred
capital
allowances
Pensions
Share-based
payments
Staff-related
costs
Fair value
through
profit or loss
Intangible
assets
Total
£m
£m
£m
£m
£m
£m
£m
As at 1 January 2024
7.5
(1.8)
8.7
13.4
(0.3)
(113.5)
(86.0)
Recognised in profit or loss in respect of:
current year
(5.9)
(1.0)
(1.0)
5.3
0.3
8.7
6.4
prior year
(1.8)
–
–
–
–
0.2
(1.6)
change in rate
–
–
–
–
–
–
–
Total
(7.7)
(1.0)
(1.0)
5.3
0.3
8.9
4.8
Recognised in other comprehensive income in respect of:
–
current year
–
2.7
–
–
–
–
2.7
prior year
–
–
–
–
–
–
–
change in rate
–
–
–
–
–
–
–
Total
–
2.7
–
–
–
–
2.7
Recognised in equity in respect of:
current year
–
–
(0.5)
0.4
–
–
(0.1)
prior year
–
–
–
–
–
0.6
0.6
change in rate
–
–
–
–
–
–
–
Total
–
–
(0.5)
0.4
–
0.6
0.5
Business combinations
–
–
–
–
–
–
–
Total
–
–
–
–
–
–
–
As at 31 December 2024
(0.2)
(0.1)
7.2
19.1
–
(104.0)
(78.0)
Deferred tax assets
–
–
7.2
19.1
–
–
26.3
Deferred tax liabilities
(0.2)
(0.1)
–
–
–
(104.0)
(104.3)
As at 31 December 2024
(0.2)
(0.1)
7.2
19.1
–
(104.0)
(78.0)
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
175
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
21 NET DEFERRED TAX ASSET/(LIABILITY) CONTINUED
Deferred
capital
allowances
Pensions
Share-based
payments
Staff-related
costs
Fair value
through
profit or loss
Intangible
assets
Total
£m
£m
£m
£m
£m
£m
£m
As at 1 January 2023
4.0
(2.4)
12.1
9.2
(0.9)
(29.5)
(7.5)
Recognised in profit or loss in respect of:
current year
1.3
(0.8)
(2.5)
(0.5)
0.6
3.8
1.9
prior year
0.8
–
–
1.3
–
(0.2)
1.9
change in rate
0.1
(0.1)
–
–
–
–
–
Total
2.2
(0.9)
(2.5)
0.8
0.6
3.6
3.8
Recognised in other comprehensive income in respect of:
current year
–
1.4
–
–
–
–
1.4
prior year
–
–
–
–
–
–
–
change in rate
–
0.1
–
–
–
–
0.1
Total
–
1.5
–
–
–
–
1.5
Recognised in equity in respect of:
current year
–
–
(0.9)
0.1
–
–
(0.8)
prior year
–
–
–
–
–
–
–
change in rate
–
–
–
–
–
–
–
Total
–
–
(0.9)
0.1
–
–
(0.8)
Business combinations
1.3
–
–
3.3
–
(87.6)
(83.0)
Total
1.3
–
–
3.3
–
(87.6)
(83.0)
As at 31 December 2023
7.5
(1.8)
8.7
13.4
(0.3)
(113.5)
(86.0)
Deferred tax assets
7.5
–
8.7
13.4
–
–
29.6
Deferred tax liabilities
–
(1.8)
–
–
(0.3)
(113.5)
(115.6)
As at 31 December 2023
7.5
(1.8)
8.7
13.4
(0.3)
(113.5)
(86.0)
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
176
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
2024
2023
£m
£m
Goodwill
504.9
507.8
Other intangible assets
477.8
517.5
982.7
1,025.3
GOODWILL
Goodwill acquired in a business combination is allocated, at acquisition, to the cash-generating units
(CGUs) that are expected to benefit from that business combination.
The carrying amount of goodwill has been allocated as follows:
Cost
At 1 January 2023
167.7
–
1.9
169.6
Acquired through business combinations
8
82.1
258.0
–
340.1
At 1 January 2024
249.8
258.0
1.9
509.7
Other movements
–
(2.9)
–
(2.9)
Reclassification
255.1
(255.1)
–
–
At 31 December 2024
504.9
–
1.9
506.8
Impairment
At 1 January 2023
–
–
1.9
1.9
Charge for the year
–
–
–
–
At 1 January 2024
–
–
1.9
1.9
Charge for the year
–
–
–
–
At 31 December 2024
–
–
1.9
1.9
Carrying amount at 31 December 2024
504.9
–
–
504.9
Carrying amount at 31 December 2023
249.8
258.0
–
507.8
Carrying amount at 1 January 2023
167.7
–
–
167.7
Wealth
Management
IW&I
Asset
Management
Total
Note
£m
£m
£m
£m
Due to a change in the Groupʼs reporting structure and operating segments in the year (see note 3),
the Group now monitors total goodwill at the Wealth Management reporting segment level,
whereas previously IW&I goodwill was monitored separately. This has resulted in a reclassification
of the total acquired IW&I goodwill to the Wealth Management column in the table above as the
CGU groups are considered to have merged.
NOTES TO THE CONSOLIDATED STATEMENTS
22 INTANGIBLE ASSETS
Goodwill of £340.1 million was initially recognised in 2023 as a result of the acquisition of IW&I (see
note 8), representing the future economic benefit expected from an acquired workforce, expected
future growth and future client relationships, as well as operational and revenue synergies.
Goodwill was revalued in the period to £337.3 million, due to management receiving information
during the 12 month measurement period post-acquisition about facts and circumstances that
existed at the acquisition date. A reduction of £5.1 million was attributable to the recognition of
consideration receivable owed to the Group by the seller (see note 2). This was partially offset by a
£0.7 million increase in goodwill attributable to a re-measurement of the acquired client
relationship intangible assets and the related deferred tax liability, and a £1.5 million increase
attributable to a re-measurement of acquired property lease assets (see note 20).
Client relationships of £350.3 million were initially recognised as part of the acquisition of IW&I (see
note 8). An average useful life of 14 years was assigned to these relationships, based on observed
historic attrition rates. During the year, these intangible assets were re-measured in line with IFRS 3
and adjusted downwards by £1.2 million to reflect new information about facts and circumstances
in existence at the acquisition date. The related deferred tax liability was also reduced accordingly
by £0.5 million.
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
177
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
22 INTANGIBLE ASSETS CONTINUED
IMPAIRMENT
The recoverable amounts of the CGUs to which goodwill is allocated are assessed using value-in-use
calculations. The Group prepares cash flow forecasts derived from the most recent financial
budgets approved by the Board, which cover the three year period from the end of the current
financial year. This is extrapolated for five years based on recent historic annual revenue and cost
growth for each CGU (see table below), adjusted for significant historic fluctuations in industry
growth rates where relevant, as well as the Groupʼs expectation of future growth.
A five-year extrapolation period is chosen as this aligns with the period covered by the Groupʼs
Internal Capital Adequacy Assessment Process (ICAAP) modelling. A terminal growth rate is applied
to year five cash flows, which takes into account the net growth forecasts over the extrapolation
period and the long-term economic growth rate. The Group estimates discount rates using pre-tax
rates that reflect current market assessments of the time value of money and the risks specific to
each CGU.
The pre-tax rate used to discount the forecast cash flows for each CGU is shown in the table below;
these are based on a risk-adjusted weighted average cost of capital. The Group judges that these
discount rates appropriately reflect the markets in which each CGU operates.
There was no impairment to the goodwill allocated to the Wealth Management CGU during the
period. The Group has considered any reasonably foreseeable changes to the assumptions used in
the value-in-use calculation and the level of risk associated with those cash flows. Based on this
assessment, no such change would result in an impairment of goodwill.
Wealth Management
At 31 December
2024
2023
Discount rate
16.1%
14.6%
Average annual revenue growth rate
4.5%
4.1%
Average annual profit margin
28.6%
21.0%
Terminal growth rate
1.5%
1.5%
The terminal growth rate of 1.5% is aligned with current expectations of long-term UK economic
growth. The increase in the average annual revenue growth rate since the prior year primarily
reflects forecast growth in funds under management. The increase in the expected operating profit
margin is primarily due to higher funds under management and the realisation of synergies as a
result of the integration of IW&I into the Groupʼs Wealth Management operating segment.
OTHER INTANGIBLE ASSETS
Client
relationships
Software
development
costs
Purchased
software
Total
Note
£m
£m
£m
£m
Cost
At 1 January 2023
300.9
13.5
54.9
369.3
Internally developed in the year
–
1.0
–
1.0
Acquired through business combinations
8
350.3
1.7
2.0
354.0
Purchased in the year
2.6
–
2.2
4.8
Disposals
(2.8)
–
–
(2.8)
At 1 January 2024
651.0
16.2
59.1
726.3
Internally developed in the year
–
1.0
–
1.0
Other movements
(1.2)
–
–
(1.2)
Purchased in the year
11.6
–
0.8
12.4
Disposals
(2.4)
–
(5.5)
(7.9)
At 31 December 2024
659.0
17.2
54.4
730.6
Amortisation and impairment
At 1 January 2023
125.9
10.0
44.9
180.8
Amortisation charge
25.2
1.8
3.8
30.8
Disposals
(2.8)
–
–
(2.8)
At 1 January 2024
148.3
11.8
48.7
208.8
Amortisation charge
44.6
2.2
5.1
51.9
Disposals
(2.4)
–
(5.5)
(7.9)
At 31 December 2024
190.5
14.0
48.3
252.8
Carrying amount at 31 December 2024
468.5
3.2
6.1
477.8
Carrying amount at 31 December 2023
502.7
4.4
10.4
517.5
Carrying amount at 1 January 2023
175.0
3.5
10.0
188.5
Purchases of client relationships of £11.6 million (2023: £2.6 million) in the year relate to payments
made to investment managers and third parties on the acquisition of client relationships.
The total amount charged to profit or loss in the year in relation to client relationship intangible
assets was £44.6 million (2023: £25.2 million).
Purchased software with a cost of £37.6 million (2023: £36.4 million) has been fully amortised but
remains in use.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
178
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
2024
2023
£m
£m
Repayable:
— on demand
1,810.5
1,652.3
— within 3 months or less excluding on demand
492.3
501.8
— within 1 year or less but over 3 months
49.3
99.2
2,352.1
2,253.3
Amounts include balances:
— with variable interest rates
1,793.8
1,618.6
— with fixed interest rates
523.1
589.6
— which are non-interest-bearing
35.2
45.1
2,352.1
2,253.3
The fair value of amounts due to customers was not materially different from their carrying value.
The estimated fair value of deposits with no stated maturity, which include non-interest-bearing
deposits, is the amount at which deposits could be transferred to a third party at the measurement
date. The estimated fair value of fixed-interest-bearing deposits is based on discounted cash flows
using interest rates for new debts with similar remaining maturity.
25 ACCRUALS AND OTHER LIABILITIES
2024
2023
Note
£m
£m
Amounts due to associates
36
6.2
8.3
Trade creditors
6.2
8.2
Other creditors
22.1
24.4
Accruals
215.4
168.7
249.9
209.6
26 PROVISIONS
Deferred,
variable costs
to acquire
client
relationship
intangible
assets
Deferred
consideration
in business
combinations
Legal &
professional
and
compensation
Property-
related
Onerous
Contract
Total
Note
£m
£m
£m
£m
£m
£m
At 1 January 2023
4.4
–
2.7
5.8
–
12.9
Charged to profit or loss
–
–
9.1
0.2
1.2
10.5
Unused amount credited to
profit or loss
–
(0.1)
(1.1)
–
–
(1.2)
Net charge to profit or loss
–
(0.1)
8.0
0.2
1.2
9.3
Acquisitions through
business combinations
8
–
3.4
1.9
5.4
–
10.7
Other movements
2.6
–
–
–
–
2.6
Utilised/paid during the year
(2.3)
–
(7.7)
–
–
(10.0)
At 1 January 2024
4.7
3.3
4.9
11.4
1.2
25.5
Charged to profit or loss
–
–
6.4
13.1
3.1
22.6
Unused amount credited to
profit or loss
–
–
(2.6)
(4.9)
(0.2)
(7.7)
Net charge to profit or loss
–
–
3.8
8.2
2.9
14.9
Other movements
11.6
–
–
–
–
11.6
Utilised/paid during the year
(7.9)
(0.7)
(2.6)
(11.2)
(1.5)
(23.9)
At 31 December 2024
8.4
2.6
6.1
8.4
2.6
28.1
Payable within 1 year
0.1
2.6
5.7
3.0
1.8
13.2
Payable after 1 year
8.3
–
0.4
5.4
0.8
14.9
8.4
2.6
6.1
8.4
2.6
28.1
NOTES TO THE CONSOLIDATED STATEMENTS
23 DEPOSITS BY BANKS
On 31 December 2024, deposits by banks comprise a temporary overnight cash book balance of
£3.8 million (2023: £12.4 million). This balance is covered by physical cash balances shown in Loans
and advances to banks (note 15). The Group does not utilise overdrafts for the purpose of the
Groupʼs working capital.
The fair value of deposits by banks was not materially different to their carrying value. Fair value
has been calculated as the discounted amount of estimated future cash flows expected to be paid
using current market rates.
24 DUE TO CUSTOMERS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
179
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
ONEROUS CONTRACT
In 2023, the Group terminated a support agreement with a third party service provider. The
onerous element of the contract represented a cost of £1.2 million to the Group, which was
recognised as a provision at the prior year end. The provision was settled in full during the year.
The onerous contract provision of £2.7 million (2023: £nil) relates to the estimated cost to exit
contracts that are no longer required as a result of the combination of IW&I with Rathbones, where
the term of the contract exceeds the period over which IW&I, or the wider Rathbones Group, is
expected to derive benefit from that contract.
Amounts payable after one year
Property-related provisions of £5.4 million are expected to be settled within 10 years of the
balance sheet date, which corresponds to the longest lease for which a dilapidations provision is
being held. Remaining provisions payable after one year are expected to be settled within 9 years of
the balance sheet date.
NOTES TO THE CONSOLIDATED STATEMENTS
26 PROVISIONS CONTINUED
DEFERRED, VARIABLE COSTS TO ACQUIRE CLIENT RELATIONSHIP INTANGIBLE ASSETS
Other movements in provisions relate to deferred payments to investment managers and third
parties on the acquisition of client relationships, which have been previously capitalised.
DEFERRED CONSIDERATION IN BUSINESS COMBINATIONS
Deferred Consideration in Business Combinations relates to IW&Iʼs deferred consideration
provision on their acquisition of Murray Asset Management. The Share Centre deferred
consideration provision was settled in March 2024, on transfer of the assets to Rathbones Asset
Management Limited.
LEGAL & PROFESSIONAL AND COMPENSATION
During the ordinary course of business the Group may, from time to time, be subject to complaints,
as well as threatened with actual legal proceedings (which may include lawsuits brought on behalf of
clients or other third parties) both in the UK and overseas. Any such material matters are
periodically reassessed, with the assistance of external professional advisers where appropriate, to
determine the likelihood of the Group incurring a liability. In those instances where it is concluded
that it is more likely than not that a payment will be made, a provision is established, representing
the Groupʼs best estimate of the amount required to settle the obligation at the relevant balance
sheet date. The Groupʼs best estimate is based on legal advice and managementʼs expectation of
the most likely outcome, the estimation of which may be supported by external professional
advisers. The timing of settlement of provisions for client compensation or litigation is dependent,
in part, on the duration of negotiations with third parties.
PROPERTY-RELATED
Property-related provisions of £8.4 million relate to dilapidation obligations expected to arise on
leasehold premises held by the Group (2023: £11.4 million). During the year, the Groupʼs policy for
calculating dilapidation provisions was revised (see note 1.8).
During the year, the Group assigned its lease at 8 Finsbury Circus to a new tenant. As a result, the
Group recognised a property-related provision of £11.2 million at the date the property was
vacated, which was paid during the year. The Group also released its dilapidation obligations relating
to the property of £3.1 million. The net cost has been recognised within acquisition-related costs.
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
180
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
27 LEASE LIABILITIES
2024
2023
Maturity analysis
£m
£m
Less than one year
10.0
11.9
One to five years
25.8
29.4
More than five years
9.0
33.6
Lease liabilities at 31 December
44.8
74.9
Current
10.0
11.9
Non-current
34.8
63.0
44.8
74.9
The total cash outflow for Group leases during the year was £23.8 million (2023: £10.7 million).
28 SUBORDINATED LOAN NOTES
2024
2023
£m
£m
Subordinated loan notes
— face value
40.0
40.0
— carrying value
39.9
39.9
Rathbones Group Plc holds £39.9 million of 10-year Tier 2 notes with a call option in October 2026
and annually thereafter. The Issuer requires the Groupʼs subsidiaries to comply with all laws and
governmental rules or regulations to which they are subject. Interest is payable at a fixed rate of
5.6% per annum until the first call option date in 2026, and at a fixed rate of 4.9% over
Compounded Daily SONIA thereafter. An interest expense of £2.3 million (2023: £2.3 million) was
recognised in the year.
29 LONG-TERM EMPLOYEE BENEFITS
DEFINED CONTRIBUTION PENSION SCHEME
The Group operates a defined contribution group personal pension scheme and contributes to
various other personal pension arrangements for certain directors and employees. The total
contributions made to these schemes during the year were £32.3 million (2023: £21.0 million).
The Group also operates a defined contribution scheme for overseas employees, for which the total
contributions were £0.1 million (2023: £0.1 million).
DEFINED BENEFIT PENSION SCHEMES
The Group operates two defined benefit pension schemes that operate within the UK legal and
regulatory framework: the Rathbone 1987 Scheme and the Laurence Keen Retirement Benefit
Scheme. The schemesʼ investments are managed on a discretionary basis, in accordance with the
statements of investment principles agreed by the trustees. Scheme assets are held separately
from those of the Group.
The trustees of the schemes are required to act in the best interest of the schemesʼ beneficiaries.
The appointment of trustees is determined by the schemesʼ trust documentation and legislation.
The Group has a policy that one third of all trustees should be nominated by members of the
schemes.
The Laurence Keen Scheme was closed to new entrants and future accrual with effect from 30
September 1999. Past service benefits continue to be calculated by reference to final pensionable
salaries. From 1 October 1999, all the active members of the Laurence Keen Scheme were included
under the Rathbone 1987 Scheme for accrual of retirement benefits for further service. The
Rathbone 1987 Scheme was closed to new entrants with effect from 31 March 2002 and to future
accrual from 30 June 2017.
The schemes are valued by independent actuaries at least every three years using the projected
unit credit method, which looks at the value of benefits accruing over the years following the
valuation date based on projected salary to the date of termination of services, discounted to a
present value using a rate that reflects the characteristics of the liability. The valuations are
updated at each balance sheet date in between full valuations. The latest full actuarial valuations
were carried out as at 31 December 2022.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
181
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
29 LONG-TERM EMPLOYEE BENEFITS CONTINUED
In June 2023, the High Court handed down a judgement that casts doubt on the validity of previous
pension scheme amendments made by schemes which were previously contracted out. This was in
the Court Case of Virgin Media Limited Vs NTL Pension Trustees II Limited, where it was
determined that a Deed of Amendment was not valid because the accompanying written actuarial
confirmation under Section 37 of the Pensions Act 1995 was not present. An appeal to the ruling in
July 2024 upheld the original ruling. There remains a risk that the benefits of schemes affected by
the ruling turn out to be incorrect. The Rathbone 1987 Scheme was never contracted out and so is
not impacted by this ruling, however there could be a potential impact on the Lawrence Keen
Scheme if any amendments are found to be invalid. The impact is not currently known. Based on
the information currently available, which has been assessed by the Actuary, we have not identified
this as material to the Group. We will continue to monitor.
The assumptions used by the actuaries, to estimate the schemesʼ liabilities, are the best estimates
chosen from a range of possible actuarial assumptions. Due to the timescale covered by the liability,
these assumptions may not necessarily be borne out in practice.
The principal actuarial assumptions used, which reflect the different membership profiles of the
schemes, were:
Laurence Keen Scheme
Rathbone 1987 Scheme
2024
2023
2024
2023
%
(unless stated)
%
(unless stated)
%
(unless stated)
%
(unless stated)
Rate of increase of salaries
n/a
n/a
n/a
n/a
Rate of increase of pensions in payment
3.7
3.7
3.0
2.9
Rate of increase of deferred pensions
3.2
3.1
3.2
3.1
Discount rate
5.4
4.4
5.4
4.4
Inflation*
3.2
3.1
3.2
3.1
Percentage of members transferring out
of the schemes per annum
–
2.0
–
2.0
Average age of members at date of
transferring out (years)
n/a
52.5
n/a
52.5
•
Inflation assumptions are based on the Retail Prices Index
Over the year, the financial assumptions have been amended to reflect changes in market
conditions. Specifically:
1. the discount rate has increased by 0.1% to reflect an increase in the yields available on AA-rated
Corporate Bonds;
2. the assumed rate of future inflation has increased by 0.1% and reflects expectations of long-
term inflation as implied by changes in the Bank of England inflation yield curve;
3. the assumed rates of future increases to pensions in payment, where linked to inflation,
have increased by 0.1% for the Rathbone 1987 Scheme and remain unchanged for the
Laurence Keen Scheme
Over the year the mortality assumptions have been updated. The standard mortality tables known
as Series 4 tables (2023: Series 3) are used, with the ʻLightʼ version of the tables used to reflect an
expectation that members of the schemes will experience longer than average life expectancies.
The CMI model used to project future improvements in mortality has been updated from the 2022
version to the 2023 version.
2% of members not yet in receipt of their pension are assumed to transfer out of the scheme each
year (2023: 2%).
The proportion of members assumed to be married at retirement age is 80% (2023: 80%).
The assumed duration of the liabilities for the Laurence Keen Scheme is 12 years (2023: 12 years)
and the assumed duration for the Rathbone 1987 Scheme is 15 years (2023: 16 years).
The normal retirement age for members of the Laurence Keen Scheme is 65 (60 for certain
former directors). The normal retirement age for members of the Rathbone 1987 Scheme is 60 for
service prior to 1 July 2009 and 65 thereafter, following the introduction of pension benefits based
on Career-Average Revalued Earnings (CARE) from that date.
The assumed life expectancies on retirement were:
2024
2023
Males
Females
Males
Females
Retiring today:
aged 60
27.4
29.2
27.6
29.5
aged 65
22.7
24.2
22.8
24.5
Retiring in 20 years:
aged 60
29.2
31.0
29.4
31.2
aged 65
24.2
25.9
24.3
26.1
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
182
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
29 LONG-TERM EMPLOYEE BENEFITS CONTINUED
The amount included in the balance sheet arising from the Groupʼs assets in respect of the schemes
is as follows:
2024
2023
Laurence
Keen
Scheme
£m
Rathbone
1987
Scheme
£m
Total
£m
Laurence
Keen
Scheme
£m
Rathbone
1987
Scheme
£m
Total
£m
Present value of defined benefit
obligations
(6.2)
(81.7)
(87.9)
(7.3)
(93.8)
(101.1)
Fair value of scheme assets
6.5
81.9
88.4
8.2
99.9
108.1
Net defined benefit asset
0.3
0.2
0.5
0.9
6.1
7.0
The amounts recognised in profit or loss, within operating expenses, are as follows:
2024
2023
Laurence
Keen
Scheme
£m
Rathbone
1987
Scheme
£m
Total
£m
Laurence
Keen
Scheme
£m
Rathbone
1987
Scheme
£m
Total
£m
Interest expense
–
(0.4)
(0.4)
(0.1)
(0.4)
(0.5)
–
(0.4)
(0.4)
(0.1)
(0.4)
(0.5)
Remeasurements of the net defined benefit asset have been reported in other comprehensive
income. The actual return on scheme assets was a fall in value of £1.2 million (2023: £0.4 million
rise) for the Laurence Keen Scheme and a fall in value of £18.7 million (2023: £3.6 million rise) for
the Rathbone 1987 Scheme.
Movements in the present value of defined benefit obligations were as follows:
2024
2023
Laurence
Keen
Scheme
£m
Rathbone
1987
Scheme
£m
Total
£m
Laurence
Keen
Scheme
£m
Rathbone
1987
Scheme
£m
Total
£m
At 1 January
7.3
93.8
101.1
7.2
87.5
94.7
Interest cost
0.4
4.1
4.5
0.3
4.1
4.4
Actuarial experience gains/
(losses)
–
(0.1)
(0.1)
0.1
3.4
3.5
Actuarial gains/(losses) arising
from:
— demographic assumptions
(0.1)
(0.4)
(0.5)
(0.1)
(1.5)
(1.6)
— financial assumptions
(0.8)
(12.8)
(13.6)
0.2
2.8
3.0
Past service cost
–
–
–
–
–
–
Benefits paid
(0.6)
(2.9)
(3.5)
(0.4)
(2.5)
(2.9)
At 31 December
6.2
81.7
87.9
7.3
93.8
101.1
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
183
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
29 LONG-TERM EMPLOYEE BENEFITS CONTINUED
Movements in the fair value of scheme assets were as follows:
2024
2023
Laurence
Keen
Scheme
£m
Rathbone
1987
Scheme
£m
Total
£m
Laurence
Keen
Scheme
£m
Rathbone
1987
Scheme
£m
Total
£m
At 1 January
8.2
99.9
108.1
8.1
96.0
104.1
Remeasurement of net defined
benefit asset/(liability)
— interest income
0.4
4.4
4.8
0.4
4.5
4.9
— return on scheme assets
(excluding amounts included in
interest income)
(1.5)
(23.2)
(24.7)
–
(0.8)
(0.8)
Contributions from the
sponsoring companies
–
3.7
3.7
0.1
2.8
2.9
Benefits paid
(0.6)
(2.9)
(3.5)
(0.4)
(2.6)
(3.0)
At 31 December
6.5
81.9
88.4
8.2
99.9
108.1
On 9 April 2024 both Schemes invested in a bulk annuity policy to match their liabilities as part of a
ʻbuy-inʼ process. The Schemesʼ assets are now therefore almost entirely invested in bulk policies,
with some residual funds in the Schemesʼ bank accounts or cash deposits. In accordance with IAS 19,
the fair value of the bulk annuity policies has been calculated to be equal to the value of the
liabilities the policies cover.
Following the purchase of the bulk annuities which match the Schemesʼ liabilities, the risks relating
to interest rates, inflation and mortality have been transferred to the insurer. The residual risks to
the Group arising from both schemes are in respect of the following;
—counterparty default risk – risk of insurer default is considered low, with a number of protections
in place against this.
—risk that there are changes to the premium – final premium payable to the insurer is subject to
confirmation following a period of data cleanse, no significant adjustments expected.
The analysis of the scheme assets, measured at bid prices, at the balance sheet date was as follows:
2024
2023
2024
2023
Laurence Keen Scheme
Fair value
£m
Fair value
£m
Current
allocation
%
Current
allocation
%
Equity instruments
–
–
–
–
Debt instruments:
— United Kingdom corporate bonds
–
0.4
–
0.4
–
5
Liability-driven investments
–
7.8
–
93
Cash
0.4
0.1
5
2
Annuities
6.1
–
95
–
At 31 December
6.5
8.3
100
100
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
184
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
29 LONG-TERM EMPLOYEE BENEFITS CONTINUED
2024
2023
2024
2023
Rathbone 1987 Scheme
Fair value
£m
Fair value
£m
Current
allocation
%
Current
allocation
%
Liability-driven investments
–
98.4
–
99
Cash
0.2
1.5
–
1
Other
81.7
–
100
–
At 31 December
81.9
99.9
100
100
The key assumptions affecting the results of the valuation are the discount rate, future inflation,
mortality. In order to demonstrate the sensitivity of the results to these assumptions, the actuary
has recalculated the defined benefit obligations for each scheme by varying each of these
assumptions in isolation whilst leaving the other assumptions unchanged. Changes to these
assumptions of a different, but similar, magnitude would result in a broadly proportional change in
these figures. Where the changes to these assumptions are more significant the impact will be more
significant, but potentially not proportional. These events within the sensitivity analysis are unlikely
to occur in isolation. For example, in order to demonstrate the sensitivity of the results to the
discount rate, the actuary has recalculated the defined benefit obligations for each scheme using a
discount rate that is 0.5% higher than that used for calculating the disclosed figures. A similar
approach has been taken to demonstrate the sensitivity of the results to the other key assumptions.
A summary of the sensitivities in respect of the total of the two schemesʼ defined benefit
obligations is set out below.
Combined impact on schemesʼ
liabilities
(Decrease)/
increase
£m
(Decrease)/
increase
%
0.5% increase in:
— discount rate
(6.3)
(7.2)
0.5% increase in:
— rate of inflation
3.6
4.1
1-year increase to:
— longevity at 60
3.5
4.0
The total contributions made by the Group to the 1987 Scheme during the year were £3.7 million
(2023: £2.8 million).
There have been no contributions (2023: £0.2 million) made by the Group to the Laurence Keen
Scheme during the year.
Per IAS 19, companies are required to limit the value of any defined benefit asset to the lower of the
surplus in the plan and the defined benefit asset ceiling, where the asset ceiling is the present value
of economic benefits available in the form of refunds from the plan or reductions in future
contributions to the plan. The company expects to access any surplus assets remaining in the plan
once all members have left after gradual settlement of the liabilities. Therefore, the net asset is
deemed to be recoverable and the effect of the asset ceiling is £nil.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
185
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
30 SHARE CAPITAL, SHARE PREMIUM AND MERGER RESERVE
The following movements in share capital occurred during the year:
Share Capital
– Voting
shares
Convertible
Share Capital
– Non-voting
shares
Exercise/
issue price
Pence
Share
capital
£m
Share
premium
£m
Merger
reserve
£m
Total
£m
At 1 January 2023
63,394,837
–
–
3.2
310.0
77.0
390.2
Shares issued:
–
— to Share Incentive Plan
132,829
–
1,574.0 - 2,160.0
–
2.3
–
2.3
— to Save As You Earn scheme
–
–
–
–
–
–
–
— to Employee Benefit Trust
–
–
–
–
–
–
–
— to Business Combinations
27,056,463
17,481,868
1,635.9 - 1,722.0
2.2
–
747.4
749.6
At 1 January 2024
90,584,129
17,481,868
–
5.4
312.3
824.4
1,142.1
Shares issued:
–
— to Share Incentive Plan
317,313
–
1,556.0 - 1,884.0
–
5.4
–
5.4
— to Save As You Earn scheme
6,178
–
1,365.0 - 1,394.0
–
0.1
–
0.1
— to Employee Benefit Trust
1,017,900
–
5.00
0.1
–
–
0.1
At 31 December 2024
91,925,520
17,481,868
–
5.5
317.8
824.4
1,147.7
The total number of issued and fully paid up ordinary shares at 31 December 2024 was
109,407,388 (2023: 108,065,997) with a par value of 5p per share.
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 meetings of the company. The ordinary shareholders are
entitled to any residual assets on the winding up of the company.
The convertible non-voting shares rank pari passu with the ordinary shares, except that they do not
carry voting rights. Both the ordinary shares and convertible non-voting shares qualify as common
equity Tier 1 capital.
On 21 September 2023, the company issued to Investec Bank plc 27,056,463 of ordinary shares at
£17.22 per share, and 17,481,868 of convertible non-voting ordinary shares at £16.36 per share.
Share issue costs of £2.2 million were offset against the merger reserve. See notes 8 and 9 for
further detail.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
186
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
31 OWN SHARES
The following movements in own shares occurred during the year:
Number of
Shares
£m
At 1 January 2023
4,887,294
52.6
Additions in the year
931,153
16.0
Released on vesting
(1,374,930)
(13.0)
At 1 January 2024
4,443,517
55.6
Additions in the year
2,286,618
22.0
Released on vesting
(781,922)
(9.5)
At 31 December 2024
5,948,213
68.1
Own shares represent the cost of the companyʼs own shares, either purchased in the market or
issued by the company, that are held by the company or in an Employee Benefit Trust (ʻEBTʼ) to
satisfy future awards under the Groupʼs share-based payment schemes (note 32). A total of
4,950,545 shares were held in the EBT at 31 December 2024 (2023: 3,275,598), and 997,668 of
shares were held by the trustees of the Share Incentive Plan but were not unconditionally gifted to
employees (2023: 894,966).
During the year, the Saunderson House initial share consideration award vested (see note 8).
This resulted in a disposal of 272,952 of own shares that were held in nominee.
32 SHARE BASED PAYMENTS
The Group recognised total charges of £29.1 million in relation to share-based payment transactions
in 2024 (2023: £24.0 million) (see note 10). This includes acquisition-related share-based
payments (see note below), and excludes social security costs of £1.9 million (2023: £1.7 million).
The impact on retained earnings of employee remuneration and share plans vesting in the year,
where shares were not released from the Group employee benefit trust, was a debit of £4.2 million
(2023: debit of £6.0 million).
SHARE INCENTIVE PLAN
The Group operates a Share Incentive Plan (SIP), which is available to all employees. Employees can
contribute up to £150 per month to acquire partnership shares in Rathbones Group Plc, which are
purchased or allotted in monthly accumulation periods. The Group currently matches employee
contributions on a one-for-one basis to acquire matching shares.
From time to time the Group also provides free shares to eligible employees on a discretionary
basis. The maximum allocation per employee is £3,600 per annum.
For UK employees, SIP dividends are reinvested and used to purchase dividend shares, whilst for
Jersey employees dividends are paid in cash.
Fair value assumptions required by IFRS 2 are used to calculate the relevant fair values for this
award. The assumptions have been set with reference to market conditions at the grant date. The
fair value of free shares has been calculated as the value of an option with a zero exercise price and
exercise date 15 months from the date of grant. Once free share awards are allocated, they accrue
dividends, which become payable once the awards vest. The dividend yield has been calculated
based on the share price at grant and 12 monthsʼ historical dividends at each grant date.
As at 31 December 2024, the trustees of the SIP held 1,842,374 (2023: 1,773,475) ordinary shares
of 5p each in Rathbones Group Plc with a total market value of £30.6 million (2023: £30.9 million).
The Group recognised a charge of £2.1 million in relation to this scheme in 2024 (2023: £2.5 million).
SAVINGS-RELATED SHARE OPTION OR SAVE AS YOU EARN (SAYE) PLAN
Under the SAYE plan, employees can contribute up to £500 per month to acquire shares at the
end of a three- or five-year savings period.
Options with an aggregate estimated fair value of £4.1 million, determined using a binomial
valuation model including expected dividends, were granted on 9 April 2024 to directors and staff
under the SAYE plan. The inputs into the binomial model for options granted during 2024, as at the
date of issue, were as follows:
2024
2023
Share price (pence)
1,503
1,954
Exercise price (pence)
1,203
1,524
Expected volatility
28.0%
28.0%
Risk-free rate
4.1%
3.8%
Expected dividend yield
5.7%
4.3%
The number of share options outstanding for the SAYE plan at the end of the year, the period
in which they were granted and the dates on which they may be exercised are given below.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
187
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
32 SHARE BASED PAYMENTS CONTINUED
2024
2023
Year of grant
Exercise price
Pence
Exercise price
period
Number of
share options
Number of
share options
2018
1,977.0
2021 and 2023
–
60
2019
1,813.0
2022 and 2024
661
4,260
2020
1,085.0
2023 and 2025
488,682
520,303
2021
1,365.0
2024 and 2026
45,547
169,879
2022
1,394.0
2025 and 2027
221,437
320,801
2023
1,524.0
2026 and 2028
156,678
388,343
2024
1,203.0
2027 and 2029
1,220,843
–
At 31 December
2,133,848
1,403,646
Movements in the number of share options outstanding for the SAYE plan were as follows:
2024
2023
Number of
share options
Weighted
average
exercise price
Pence
Number of
share options
Weighted
average
exercise price
Pence
At 1 January
1,403,646
1,313.0
1,597,484
1,272.0
Granted in the year
1,257,914
1,203.0
418,512
1,524.0
Forfeited or cancelled in the year
(382,078)
1,450.0
(89,609)
1,403.0
Exercised in the year
(145,634)
1,325.0
(522,741)
1,086.0
At 31 December
2,133,848
1,223.0
1,403,646
1,313.0
The fair value assumptions for each SAYE award granted are set with reference to market
conditions at the grant date. Factors affecting the fair value of the award are the volatility of the
share return, dividend policy, expected leaving service rates and early exercise.
In setting the assumption for future share return volatility, historical volatility is calculated, using
the Groupʼs historical share price and calculating the return on a weekly basis. The historical
annualised volatility of the Groupʼs share return is then measured over rolling one, three and five
periods. The most appropriate historical volatility measure, based on weekly share price data, is
then used for the purposes of setting the volatility assumption for both awards. Consistent with
previous practice, a 5-year historical volatility measure was used, creating a volatility assumption of
28% per annum (2023: 28% per annum).
The weighted average share price at the dates of exercise for share options exercised during the
year was £13.25 (2023: £10.86). The options outstanding at 31 December 2024 had a weighted
average contractual life of 2.6 years (2023: 2.6 years) and a weighted average exercise price of
£12.23 (2023: £13.13).
The Group recognised a charge of £3.0 million in relation to this scheme in 2024 (2023: £1.8 million).
EXECUTIVE INCENTIVE PLAN
Under the remuneration policy, 40% of the total award will be given in cash with the remaining
60% of the award granted in shares. The Group treats the cash element of the award as an
employee benefit under IAS 19 and the share element of the award as an equity-settled share-
based payment under IFRS 2. The fair value has been determined with reference to the share price
at grant.
In 2021 this award was replaced with the Executive Share Performance Plan.
The Group recognised a charge of £0.2 million in relation to the equity-settled share-based
payment element of this scheme in 2024 (2023: £0.6 million).
The number of outstanding options left to vest for the EIP scheme as at 31 December 2024
is 104,707.
EXECUTIVE SHARE PERFORMANCE PLAN
The scheme was launched in 2021 to replace the Executive Incentive Plan. Details of the general
terms of this plan are set out in the remuneration committee report on page 124.
Under the remuneration policy, 50% of the annual bonus award is paid in cash and 50% is deferred
in shares, although this split can be altered subject to Remuneration Committee approval. An
annual restricted stock plan award is also granted under the scheme, and payment is deferred in
shares. In 2024, the annual restricted stock plan was replaced with the annual performance share
plan (PSP), with payment deferred in shares, Please see the remuneration committee report on
page 124 for further details.
The Group treats the cash element of the award as an employee benefit under IAS 19 and the share
element of the awards as equity-settled share-based payments under IFRS 2. The fair value has
been determined with reference to the share price at grant.
The Group recognised a charge of £3.2 million in relation to the equity-settled share-based
payment element of this scheme in 2024 (2023: £3.3 million).
The number of outstanding options left to vest for the ESPP scheme as at 31 December 2024
is 819,049.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
188
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
32 SHARE BASED PAYMENTS CONTINUED
STAFF EQUITY PLAN
The Key Employee Equity Plan (KEEP) was launched in 2022 for individuals within Rathbones
Investment Management and Rathbones Investment Management International, as well as
employees within the Groupʼs support functions.
Under the scheme, participants were granted awards under the plan in the form of an option
with an exercise price of £nil. The option awards are subject to certain service and performance
conditions. There are no market-related performance conditions attached to these awards.
The awards will vest and become exercisable on the fifth anniversary of the grant date for the front
office employees, and on the third anniversary of the grant date for employees in support
functions. The fair value has been determined with reference to the share price at grant. There are
no market-related performance conditions attached to this award.
The Group recognised a charge of £4.6 million for the KEEP awards during the year (2023:
£2.7 million).
The number of outstanding options left to vest for the KEEP scheme as at 31 December 2024
was 1,522,182.
OTHER SCHEMES
The Group operates a number of other plans for rewarding employees. Participants are granted
awards under these plans in the form of options, which vest automatically on an anniversary of the
grant date (generally between one and five years). As the intention is to settle the options in such
plans in shares, the awards are treated as equity-settled share-based payments under IFRS 2.
The Group recognised a charge of £0.7 million for the Rathbones Exceptional Performance Plan
scheme in 2024 (2023: £1.3 million).
The Group recognised a charge of £2.5 million for the Rathbone Enhanced Profit Share Plan
scheme in 2024 (2023: £2.3 million).
ACQUISITION-RELATED SHARE-BASED PAYMENTS
Details of the general terms of share-based payments associated with the acquisition of Speirs &
Jeffrey, Saunderson House and IW&I are set out in note 8.
The Group recognised a charge of £9.3 million for the Rathbones Integration Incentive Scheme
(IW&I) in 2024 (2023: £3.0 million).
The Group recognised a charge of £3.1 million for the Saunderson House Limited Remuneration
Incentive Scheme in 2024 (2023: £3.6 million).
33 FINANCIAL RISK MANAGEMENT
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,
as described in the Group Risk Committee report on pages 111 to 113.
The Group categorises its financial risks into the following primary areas:
(i)
credit risk (which includes counterparty default risk)
(ii)
liquidity risk
(iii) market risk (which includes fair value interest rate risk, cash flow interest rate risk, foreign
exchange risk and price risk)
(iv) pension risk.
The Groupʼs exposures to pension risk are set out in note 29.
The Groupʼs financial risk management policies are designed to identify and analyse the financial
risks that the Group faces, to set appropriate risk tolerances, limits and controls, and to monitor
the financial risks and adherence to limits by means of reliable and up-to-date information systems.
The Group regularly reviews its financial risk management policies and systems to reflect changes
in the business, counterparties, markets and the range of financial instruments that it utilises.
The treasury department, reporting through the banking committee, has principal responsibility
for monitoring exposure to credit risk, liquidity risk and market risk. Procedures and delegated
authorities are documented in a Group treasury manual and policy documents prescribe the
management and monitoring of each type of risk. The primary objective of the Groupʼs treasury
policy is to manage short term liquidity requirements whilst maintaining an appropriate level of
exposure to other financial risks in accordance with the Groupʼs risk appetite.
(i)
CREDIT RISK
The Group takes on exposure to credit risk, which is the risk that a counterparty will be unable to
pay amounts in full when due, through its banking, treasury, trust and financial planning activities.
The principal source of credit risk arises from placing funds in the money market and holding
interest-bearing securities. The Group also has exposure to credit risk through its client loan book.
It is the Groupʼs policy to place funds generated internally and from deposits by clients with a range
of high-quality, investment grade financial institutions and the Bank of England. Investments with
financial institutions are spread to avoid excessive exposure to any individual counterparty. Loans
made to clients are secured against clientsʼ assets that are held and managed by Group companies.
Exposure to credit risk is managed through setting appropriate ratings requirements and lending
limits. Limits are reviewed regularly, taking into account the ability of borrowers and potential
borrowers to meet repayment obligations.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
189
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
Balances with central banks, loans and advances to banks and debt and other securities
(excluding equity securities) are collectively referred to as the Groupʼs treasury book.
2024
2023
Treasury book
£m
£m
Balances with central banks
1,166.0
1,038.3
Loans and advances to banks − fixed deposits/notice accounts
45.7
14.5
Unlisted debt securities
1,278.2
1,294.6
Gross amount
2,489.9
2,347.4
The Groupʼs policy requires that all such exposures are only taken with counterparties that have
been awarded a minimum long-term rating of single A by Fitch or equivalent rating by Moodyʼs or
S&P. Counterparty limits are also in place to limit exposure to an individual counterparty or
connected group of counterparties. Counterparty exposures are monitored on a daily basis by the
treasury department and reviewed by the banking committee on a monthly basis, or more
frequently when necessary. The banking committee may suspend dealing in a particular
counterparty, or liquidate specific holdings, in the light of adverse market information.
Loans and advances to customers (note 16)
The Group provides loans to clients through its investment management operations (ʻthe
investment management loan bookʼ). The Group is also exposed to credit risk on overdrafts on
clientsʼ investment management accounts, work in progress arising from the trust, tax and financial
planning businesses (ʻtrust and financial planning debtorsʼ) and other debtors.
(a) Overdrafts
Overdrafts on clientsʼ investment management accounts arise from time to time due to short-
term timing differences between the purchase and sale of assets on a clientʼs behalf. Overdrafts
are actively monitored and reported to the banking committee on a monthly basis.
(b) Investment management loan book
Loans are provided as a service to investment management clients, who are generally asset-rich
but have short- to medium-term cash requirements. Such loans are normally made on a fully
secured basis against portfolios held in Rathbonesʼ nominee name, and some loans may be
partially secured by property. Extensions to the initial loan period may be granted subject to
credit criteria.
All lending exposures undergo an initial assessment of creditworthiness according to Rathbonesʼ
internal affordability model. On an ongoing basis, the assessment is repeated at least annually,
or sooner in the event of a trigger, such as a decline in portfolio value due to withdrawal or
market conditions, as this would highlight a potential deterioration in creditworthiness.
At 31 December 2024, the total lending exposure limit for the investment management loan
book was £250.0 million (2023: £250.0 million), of which £74.9 million had been advanced
(2023: £100.2 million) and a further £14.8 million had been committed (2023: £15.4 million).
(c) Trust and financial planning debtors
Trust and financial planning debtors relate to fees which have been invoiced but not yet settled
by clients. The collection and ageing of trust and financial planning debtors are reviewed on a
monthly basis by the management committees of the Groupʼs trust and financial planning
businesses.
(d) Other debtors
Other loans and advances to customers relate to management fees receivable.
Settlement balances
Settlement risk arises in any situation where a payment in cash or transfer of a security is made in
the expectation of a corresponding delivery of a security or receipt of cash. The majority of
transactions are carried out on a delivery versus payment basis, which results in securities and cash
being exchanged within a very close timeframe. Settlement balances outside standard terms are
monitored on a daily basis.
The Wealth Management and Asset Management segments have exposure to market
counterparties in the settlement of trades. Settlement balances arising in the Investment
Management segment are primarily in relation to client trades and risk of non-settlement is borne
by clients.
NOTES TO THE CONSOLIDATED STATEMENTS
33 FINANCIAL RISK MANAGEMENT CONTINUED
(i)
CREDIT RISK CONTINUED
The Group categorises its exposures based on the long-term ratings awarded to counterparties
by Fitch, Moodyʼs or S&P. Each exposure is assessed individually, both at inception and in ongoing
monitoring. In addition to formal external ratings, the banking committee also utilises market
intelligence information to assist with its ongoing monitoring. The Groupʼs financial assets are
categorised as follows:
Balances with central banks (note 14)
The Group has exposure to central banks through its deposits held with the Bank of England.
Loans and advances to banks (note 15) and debt and other securities (note 17)
The Group has exposures to a wide range of financial institutions through its treasury portfolio,
which includes bank deposits, certificates of deposit and UK Government treasury bills. These
exposures principally arise from the placement of clientsʼ cash, where it is held under a banking
relationship, and the Groupʼs own reserves.
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
190
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
33 FINANCIAL RISK MANAGEMENT CONTINUED
(i)
CREDIT RISK CONTINUED
Maximum exposure to credit risk
2024
2023
£m
£m
Credit risk relating to on-balance-sheet exposures:
Cash and balances with central banks
1,166.0
1,038.3
Settlement balances
128.3
165.7
Loans and advances to banks
293.2
266.9
Loans and advances to customers:
— overdrafts
15.9
9.7
— investment management loan book
76.0
101.7
— trust and financial planning debtors
2.5
2.7
— other debtors
1.9
1.6
Investment securities:
— unlisted debt securities
1,278.3
1,294.6
Other financial assets
211.9
191.3
Credit risk relating to off-balance-sheet exposures:
Loan commitments
14.8
15.4
3,188.8
3,087.9
The above table represents the Groupʼs gross credit risk exposure at 31 December 2024 and 2023,
without taking account of any associated collateral held or other credit enhancements. For on-
balance-sheet assets, the exposures set out above are based on gross carrying amounts.
Of the total maximum exposure, 12.2% is derived from loans and advances to banks and customers
(2023: 14.2%) and 40.1% represents investment securities (2023: 41.1%).
Impairment of financial instruments
The Groupʼs accounting policy governing impairment of financial assets is given in note 1.12.
Impairment losses on financial assets recognised in profit or loss were as shown in the table below.
The main class of asset these impairment losses have arisen against is cash and balances held with
central banks.
2024
2023
£m
£m
Impairment losses/(reversals) arising from:
— treasury book
–
–
— investment management loan book
–
–
— trust and financial planning debtors
–
0.1
–
0.1
Expected Credit Loss (ECL) assessment
At each reporting date, for both the treasury book and investment management loan book, the
Group assesses whether there has been a significant increase in credit risk of exposures since initial
recognition, by comparing the change in the risk of a default occurring over the expected life of the
instrument between the reporting date and the date of initial recognition. The following criteria are
used to identify significant increases in credit risk and are monitored and reviewed periodically for
appropriateness by the treasury team.
The Groupʼs ECL model was calibrated during a time of benign inflation, and thus inflation was
historically negatively correlated with the Probability of Default (PD). Given current inflation is
supply-driven, a post-model adjustment was made to flatten the inflation forecast to remove the
dampening effect on the PD.
Qualitative indicators
The Group periodically monitors its exposures and uses a set of defined criteria to flag any
counterparties that may be experiencing financial difficulties. Such exposures are monitored by the
treasury team, and those that are considered to have experienced a significant increase in credit
risk are classified as ʻstage 2ʼ, on which a lifetime ECL is recognised.
Quantitative indicators
The lifetime probability of default at the reporting date is compared to the original lifetime
probability of default at initial recognition and if the difference exceeds a predefined threshold
(for the current analysis this threshold is set at 50% of the value at initial recognition) the exposure
is moved to stage 2.
Probability of defaults used for identifying significant increases in credit risk for staging purposes
are calculated using the same methodology and data used for estimating probability of defaults for
the purpose of measuring expected credit losses.
The ʻ30 days past dueʼ backstop indicator has not been rebutted by the Group, albeit it is not a
significant driver of stage movements as the opportunity for a counterparty to miss a payment is
low due to the fact that over the life of exposure, any interest and/or principal is directly debited
from the counterpartyʼs investment balance and investment income, which is in turn held as
collateral under the Groupʼs custody.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
191
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
33 FINANCIAL RISK MANAGEMENT CONTINUED
(i)
CREDIT RISK CONTINUED
Materially all exposures in both the treasury book and investment management loan book follow
a bullet repayment structure; therefore, the exposure at any point in time reflects the outstanding
balance of the instrument at that point in time.
Definition of default
The Group considers an investment management loan book exposure to be in default when a client
fails to respond to three sets of default notices (every 30 days for a period of 90 days). A treasury
book exposure is deemed to be in default when a payment is past due by more than one working
day (grace period).
Probability of default (PD)
The Group uses a lifetime PD for each exposure, which is the probability-weighted result of
considering three economic scenarios: a base case, an upside scenario and a downside scenario.
These scenarios include the forecast of the macroeconomic factors that have been identified as
relevant to the Groupʼs exposures, which are incorporated into the estimation of lifetime PDs.
The methodology for estimating lifetime PDs and adjustments for macroeconomic scenarios used
for identifying significant increases in credit risk are as follows:
Treasury book assessment
The 12-month PD for each exposure is initially estimated as the historical 12-month PD sourced
from Standard & Poorʼs, by credit rating and country of exposure. In order to estimate the PDs
occurring over the lifetime of an underlying exposure, the Group applies its expectations of future
progression in point in time (ʻPiTʼ) default probabilities, which inherently revolve around
expectations of future development of macroeconomic factors relevant to treasury assets, namely
UK GDP, UK unemployment rates, UK inflation and UK interest rates.
Loss given default (LGD) for treasury book assets is dependent on the nature of the counterparty
and the region in which the instrument was issued. For sovereign exposures, the Group applies a
flat LGD rate, which is externally sourced from Moodyʼs most recent sovereign default and
recovery rates research statistics, by country of issuer. For unsecured corporate exposures, a time
series of historical corporate recovery rates is sourced from Moodyʼs annual publication on
corporate defaults and recovery rates.
The following table presents an analysis of the credit quality of treasury book exposures at
amortised cost and FVTPL. It indicates whether assets measured at amortised cost were subject to a
12-month ECL or lifetime ECL allowance and, in the latter case, whether they were credit-impaired:
2024
2023
At amortised cost
Fair value
through profit
or loss
£m
12-month ECL
£m
Lifetime ECL –
not credit-
impaired
£m
Lifetime ECL –
credit-impaired
£m
Fair value through
profit or loss
£m
12-month ECL
£m
Lifetime ECL –
not credit-
impaired
£m
Lifetime ECL –
credit-impaired
£m
AAA
–
–
–
–
–
–
–
–
AA+ to AA-
–
1,842.0
–
–
–
1,666.2
–
–
A+ to A-
–
648.0
–
–
–
681.3
–
–
Gross carrying amounts
–
2,490.0
–
–
–
2,347.5
–
–
Loss allowance
–
(0.1)
–
–
–
(0.1)
–
–
Carrying amount
–
2,489.9
–
–
–
2,347.4
–
–
Cash and balances with central banks
–
1,166.0
–
–
–
1,038.3
–
–
Loans and advances to banks
–
45.7
–
–
–
14.5
–
–
Unlisted debt securities
–
1,278.2
–
–
–
1,294.6
–
–
Carrying amount
–
2,489.9
–
–
–
2,347.4
–
–
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
192
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
33 FINANCIAL RISK MANAGEMENT CONTINUED
(i)
CREDIT RISK CONTINUED
The movement in allowance for impairment for the treasury book during the year was as follows.
12-month
ECL
£m
Lifetime ECL –
not credit-
impaired
£m
Lifetime ECL
– credit-
impaired
£m
Total
ECL
£m
Balance at 1 January 2024
0.1
–
–
0.1
Net remeasurement of loss allowance
–
–
–
–
Balance at 31 December 2024
0.1
–
–
0.1
Cash and balances with central banks
–
–
–
–
Loans and advances to banks
–
–
–
–
Unlisted debt securities
0.1
–
–
0.1
ECL provision
0.1
–
–
0.1
Investment management loan book assessment
Due to the lack of historical defaults within the investment management loan book, the model uses
publicly available default data for UK secured lending as a starting point in order to obtain an initial
estimate for PD. The 12-month PD is estimated as the historical long-term default rate on lending
in the UK as sourced from the Council of Mortgage Lenders (CML).
In order to estimate the PDs occurring over the lifetime of an underlying exposure, the Group
develops its expectations of future progression in PiT default probabilities, which inherently
revolves around expectations of future development of macroeconomic factors relevant to the
bankʼs lending portfolio, namely UK GDP (ʻGDPʼ) and UK unemployment rates (UR).
In order to develop and apply such forward-looking expectations, a historical relationship between
PD, GDP and UR is estimated statistically through a multi-factor regression analysis of past
movements between these variables. The relationship resulting from this analysis reflects the
relative quantitative behaviour of the regressed macroeconomic factors against PD.
Using the calculated 12-month PiT PD as a starting point, conditional PDs for each future period
within the period of exposure are estimated by applying the GDP and UR coefficients to the
Groupʼs forecasts of UK GDP and UK UR respectively, as sourced from International Monetary Fund
(IMF) forecast data. This analysis forms the base case scenario for estimating lifetime PDs. The same
methodology is applied for separate upside and downside scenarios as required by the standard.
The following table presents an analysis of the credit quality of investment management loan book
exposures at amortised cost. It indicates whether assets measured at amortised cost were subject to
a 12-month ECL or lifetime ECL allowance and, in the latter case, whether they were credit-impaired.
The categories below reflect the Groupʼs internal affordability tests, which consider a range of
factors for the client, including their portfolio value, Experian score, and the length of their
relationship with the Group. ʻHighʼ is an indication the client poses a high risk in terms of being able
to afford repayment of the loan facility. ʻMediumʼ is an indication of a possibility the client may pose
a risk in terms of being able to afford repayment of the loan facility. ʻLowʼ is where the risk of a
client not being able to repay the loan facility is considered reasonably low. ʻVery lowʼ is where the
risk of a client not being able to repay the loan facility is considered extremely low.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
193
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
33 FINANCIAL RISK MANAGEMENT CONTINUED
(i)
CREDIT RISK CONTINUED
2024
2023
At amortised cost
12-month
ECL
£m
Lifetime
ECL – not
credit-
impaired
£m
Lifetime
ECL –
credit-
impaired
£m
12-month
ECL
£m
Lifetime ECL
– not credit-
impaired
£m
Lifetime ECL
– credit-
impaired
£m
Very low
24.5
–
–
23.1
–
–
Low
45.5
–
–
70.2
–
–
Medium
5.1
–
–
6.9
–
–
High
0.9
–
–
1.5
–
–
Gross carrying amounts
76.0
–
–
101.7
–
–
Loss allowance
–
–
–
–
–
–
Carrying amount
76.0
–
–
101.7
–
–
The movement in allowance for impairment of the investment management loan book during the
year was as follows.
12-month
ECL
£m
Lifetime ECL
– not credit-
impaired
£m
Lifetime
ECL –
credit-
impaired
£m
Total ECL
£m
Balance at 1 January 2024
–
–
–
–
Net remeasurement of loss allowance
–
–
–
–
Balance at 31 December 2024
–
–
–
–
Trust and financial planning debtors assessment
The Group uses a provision matrix to measure the ECLs of trust and financial planning debtors,
which comprise a large number of small balances. For such debts, a normal settlement period of
up to 30 days is expected.
The weighted average loss rates are calculated with reference to the historic credit losses as a
proportion of the overall debtor balance within each ageing category at the time of default. The
current period of assessment for the provision is five years.
The following table provides information about the exposure to credit risk and ECLs for trust and
financial planning debtors as at 31 December 2024:
2024
2023
£m
£m
Rathbones Trust Company
1.6
1.3
Rathbones Trust & Legal Services
0.2
0.2
Rathbone Financial Planning
0.7
0.7
Saunderson House
–
0.7
Gross carrying amounts
2.5
2.9
Loss allowance
(0.1)
(0.2)
Carrying amount
2.4
2.7
Loss allowance
Rathbones Trust Company
Weighted
average loss rate
Gross carrying
amount
£m
Not credit-
impaired
£m
Credit-impaired
£m
Total
£m
<90 days overdue
0.3%
0.7
–
–
–
90-180 days overdue
1.4%
0.2
–
–
–
180-270 days overdue
2.6%
0.4
–
–
–
270-365 days overdue
4.4%
0.1
–
–
–
>365 days overdue
23.2%
0.2
(0.1)
–
(0.1)
1.6
(0.1)
–
(0.1)
At the prior year end, £(0.1) million was recognised as an expected credit loss provision for
Rathbones Trust Company.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
194
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
33 FINANCIAL RISK MANAGEMENT CONTINUED
(i)
CREDIT RISK CONTINUED
Loss allowance
Rathbones Trust & Legal
Services
Weighted
average loss rate
Gross carrying
amount
£m
Not credit-
impaired
£m
Credit-impaired
£m
Total
£m
<90 days overdue
0.8%
0.2
–
–
–
90-180 days overdue
3.9%
–
–
–
–
180-270 days overdue
7.0%
–
–
–
–
270-365 days overdue
12.7%
–
–
–
–
>365 days overdue
11.9%
–
–
–
–
0.2
–
–
–
At the prior year end, £nil was recognised as an expected credit loss provision for Rathbones Trust
& Legal Services.
Loss allowance
Rathbone Financial Planning
Weighted
average loss rate
Gross carrying
amount
£m
Not credit-
impaired
£m
Credit-impaired
£m
Total
£m
<90 days overdue
0.0%
0.4
–
–
–
90-180 days overdue
0.0%
0.2
–
–
–
180-270 days overdue
0.0%
0.1
–
–
–
270-365 days overdue
0.0%
–
–
–
–
>365 days overdue
0.0%
–
–
–
–
0.7
–
–
–
At the prior year end £nil was recognised as an expected credit loss provision for Rathbone
Financial Planning.
Loss allowance
Saunderson House
Weighted
average loss rate
Gross carrying
amount
£m
Not credit-
impaired
£m
Credit-impaired
£m
Total
£m
<90 days overdue
0.0%
–
–
–
–
90-180 days overdue
0.0%
–
–
–
–
180-270 days overdue
0.0%
–
–
–
–
270-365 days overdue
0.0%
–
–
–
–
>365 days overdue
0.0%
–
–
–
–
–
–
–
–
At the prior year end, £(0.1) million was recognised as an expected credit loss provision for
Saunderson House.
The movement in allowance for impairment in respect of trust and financial planning debtors
during the year is set out below.
Movement in impairment provision during the year
Trust
and financial
planning debtors
£m
At 1 January
0.2
Amounts written off
(0.1)
Change in credit risk
–
At 31 December 2024
0.1
Concentration of credit risk
The Group has counterparty credit risk within its financial assets in that exposure is to a number of
similar credit institutions. The banking committee actively monitors counterparties and may reduce
risk by either suspending dealing or liquidating investments in light of adverse market information,
for example in anticipation of or in response to any formal Fitch or Moodyʼs rating downgrade.
This may happen in relation to specific banks or banks within a particular country or sector.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
195
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
33 FINANCIAL RISK MANAGEMENT CONTINUED
(i)
CREDIT RISK CONTINUED
(a) Geographical sectors
The following table analyses the Groupʼs credit exposures, at their carrying amounts, by
geographical region as at the balance sheet date. In this analysis, exposures are categorised based
on the country of domicile of the counterparty.
At 31 December 2024
United
Kingdom
£m
Eurozone
£m
Rest of
the World
£m
Total
£m
Cash and balances with central banks
1,166.0
–
–
1,166.0
Settlement balances
115.1
5.6
7.6
128.3
Loans and advances to banks
271.2
7.2
14.8
293.2
Loans and advances to customers:
–
–
–
–
— overdrafts
15.1
0.2
0.5
15.8
— investment management loan book
60.6
0.1
15.3
76.0
— trust and financial planning debtors
2.4
–
–
2.4
— other debtors
1.9
–
–
1.9
Investment securities:
— unlisted debt securities
293.0
484.7
500.5
1,278.2
Other financial assets
185.2
11.8
14.9
211.9
2,110.5
509.6
553.6
3,173.7
At 31 December 2023
United
Kingdom
£m
Eurozone
£m
Rest of
the World
£m
Total
£m
Cash and balances with central banks
1,038.3
–
–
1,038.3
Settlement balances
150.7
5.9
9.1
165.7
Loans and advances to banks
232.8
7.5
26.6
266.9
Loans and advances to customers:
–
–
–
–
— overdrafts
9.3
0.1
0.3
9.7
— investment management loan book
80.1
0.1
21.5
101.7
— trust and financial planning debtors
2.7
–
–
2.7
— other debtors
1.5
–
–
1.5
Investment securities:
–
— unlisted debt securities and money
market funds
415.9
366.8
511.9
1,294.6
Other financial assets
164.4
10.9
16.0
191.3
2,095.7
391.3
585.4
3,072.4
At 31 December 2024, materially all eurozone exposures were to counterparties based in the
Netherlands, France, Denmark and Finland (2023: Netherlands, France and Finland) and materially
all rest of the world exposures were to counterparties based in Sweden, Norway, Canada, Japan,
United States of America and Australia (2023: Switzerland, Sweden, Norway, Canada, Japan.
United States of America and Australia). At 31 December 2024, the Group had exposure to the UK
government through the holding of treasury bills (2023: UK government through the holding of
treasury bill).
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
196
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
33 FINANCIAL RISK MANAGEMENT CONTINUED
(i)
CREDIT RISK CONTINUED
(b) Industry sectors
The Groupʼs credit exposures at the balance sheet date, analysed by the primary industry sectors
in which our counterparties operate, were:
At 31 December 2024
Public
sector
£m
Financial
institutions
£m
Clients
and other
corporate
£m
Total
£m
Cash and balances with central banks
1,166.0
–
–
1,166.0
Settlement balances
–
90.5
37.8
128.3
Loans and advances to banks
–
293.2
–
293.2
Loans and advances to customers:
–
–
–
–
— overdrafts
–
–
15.8
15.8
— investment management loan book
–
–
76.0
76.0
— trust and financial planning debtors
–
–
2.4
2.4
— other debtors
–
–
1.9
1.9
Investment securities:
–
— unlisted debt securities
53.2
1,225.0
–
1,278.2
Other financial assets
2.0
52.2
157.7
211.9
1,221.2
1,660.9
291.6
3,173.7
At 31 December 2023
Public
sector
£m
Financial
institutions
£m
Clients
and other
corporate
£m
Total
£m
Cash and balances with central banks
1,038.3
–
–
1,038.3
Settlement balances
–
163.9
1.8
165.7
Loans and advances to banks
–
266.9
–
266.9
Loans and advances to customers:
–
–
–
–
— overdrafts
–
–
9.7
9.7
— investment management loan book
–
–
101.7
101.7
— trust and financial planning debtors
–
–
2.7
2.7
— other debtors
–
–
1.5
1.5
Investment securities:
–
— unlisted debt securities and money
market funds
200.9
1,093.7
–
1,294.6
Other financial assets
6.4
56.8
128.1
191.3
1,245.6
1,581.3
245.5
3,072.4
(ii)
LIQUIDITY RISK
Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated
with financial liabilities that are settled by delivering cash or another financial asset.
The primary objective of the Groupʼs treasury policy is to manage short- to medium-term liquidity
requirements. In addition to setting the treasury policy, Rathbones Investment Management
(the Bank) performs an annual assessment of liquidity adequacy in accordance with the regulatory
requirements of the Prudential Regulation Authority (PRA) (our Internal Liquidity Adequacy
Assessment Process). The Bank faces two principal risks, namely that a significant proportion
of client funds are withdrawn over a short period of time (retail funding risk) and the risk that
marketable assets may not be capable of being realised in the time and at the value required
(marketable assets risk).
Funding risks are monitored by daily cash mismatch analyses and CRR ratios using expected cash
and asset maturity profiles and regular forecasting work. This is supported by stress tests which
cover firm-specific idiosyncratic scenarios and/or the effects of unforeseen market-wide stresses.
Marketable assets risk is primarily managed by holding cash and marketable instruments which are
realisable at short notice. The Group operates strict criteria to ensure that investments are liquid
and placed with high-quality, investment grade counterparties. A minimum liquid assets buffer (to
be held in eligible liquid assets) is set by the Board at least annually in conjunction with an amount
prescribed by the PRA.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
197
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
33 FINANCIAL RISK MANAGEMENT CONTINUED
(ii)
LIQUIDITY RISK CONTINUED
Non-derivative cash flows
The table below presents the undiscounted cash flows receivable and payable by the Group under non-derivative financial assets and liabilities analysed by the remaining contractual maturities at the
balance sheet date.
At 31 December 2024
On
demand
£m
Not more than
3 months
£m
After 3 months
but not more
than 1 year
£m
After 1 year
but not more
than 5 years
£m
After 5 years
£m
No fixed
maturity date
£m
Total
£m
Cash and balances with central banks
1,166.0
2.0
–
–
–
–
1,168.0
Settlement balances
3.9
124.4
–
–
–
–
128.3
Loans and advances to banks
247.5
45.7
–
–
–
–
293.2
Loans and advances to customers
18.2
10.0
33.2
43.7
–
–
105.1
Debt securities
–
365.7
970.0
–
–
–
1,335.7
Other financial assets
0.6
178.3
1.6
1.5
–
–
182.0
Cash flows arising from financial assets
1,436.2
726.1
1,004.8
45.2
–
–
3,212.3
Deposits by banks
3.8
–
–
–
–
–
3.8
Settlement balances
4.3
129.3
–
–
–
–
133.6
Due to customers
1,810.6
496.5
50.5
–
–
–
2,357.6
Subordinated loan notes
–
–
2.3
42.2
–
–
44.5
Lease liabilities
–
2.9
9.6
30.7
10.0
–
53.2
Other financial liabilities
2.0
43.1
19.0
11.5
2.5
–
78.1
Cash flows arising from financial liabilities
1,820.7
671.8
81.4
84.4
12.5
–
2,670.8
Net liquidity gap
(384.5)
54.3
923.4
(39.2)
(12.5)
–
541.5
Cumulative net liquidity gap
(384.5)
(330.2)
593.2
554.0
541.5
541.5
–
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
198
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
33 FINANCIAL RISK MANAGEMENT CONTINUED
(ii)
LIQUIDITY RISK CONTINUED
At 31 December 2023
On
demand
£m
Not more than
3 months
£m
After 3 months
but not more
than 1 year
£m
After 1 year
but not more
than 5 years
£m
After 5 years
£m
No fixed
maturity date
£m
Total
£m
Cash and balances with central banks
1,036.0
2.8
2.3
–
–
–
1,041.1
Settlement balances
6.4
159.3
–
–
–
–
165.7
Loans and advances to banks
245.4
21.5
–
–
–
–
266.9
Loans and advances to customers
11.5
3.4
3.2
115.0
–
–
133.1
Debt securities and money market funds
–
413.2
941.1
–
–
–
1,354.3
Equity securities
–
–
–
–
–
1.2
1.2
Other financial assets
1.1
157.0
3.3
0.3
–
–
161.7
Cash flows arising from financial assets
1,300.4
757.2
949.9
115.3
–
1.2
3,124.0
Deposits by banks
12.4
–
–
–
–
–
12.4
Settlement balances
7.4
164.7
–
–
–
–
172.1
Due to customers
1,652.5
506.5
103.0
–
–
–
2,262.0
Subordinated loan notes
–
–
2.3
44.5
–
–
46.8
Lease liabilities
–
5.0
9.1
41.6
36.6
–
92.3
Other financial liabilities
1.6
45.7
11.5
6.5
5.9
–
71.2
Cash flows arising from financial liabilities
1,673.9
721.9
125.9
92.6
42.5
–
2,656.8
Net liquidity gap
(373.5)
35.3
824.0
22.7
(42.5)
1.2
467.2
Cumulative net liquidity gap
(373.5)
(338.2)
485.8
508.5
466.0
467.2
–
Liabilities which do not have a contractual maturity date are categorised as ʻon demandʼ.
Included within the amounts due to customers on demand are balances which historical experience
shows are unlikely to be called in the short term. A prudent level of highly liquid assets is retained
to cover reasonably foreseeable short-term changes in client deposits. All debt securities are
readily marketable and can be realised through disposals.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
199
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
At 31 December 2024
Not more
than 3
months
£m
After 3
months but
not more
than 1 year
£m
After 1
year but
not more
than 5 years
£m
After
5 years
£m
Total
£m
Loan commitments
–
14.8
–
–
14.8
Capital commitments
–
1.1
–
–
1.1
Total off-balance-sheet items
–
15.9
–
–
15.9
At 31 December 2023
Not more
than 3
months
£m
After 3
months but
not more
than 1 year
£m
After 1
year but
not more
than 5 years
£m
After
5 years
£m
Total
£m
Loan commitments
15.4
–
–
–
15.4
Capital commitments
8.5
5.5
–
–
14.0
Total off-balance-sheet items
23.9
5.5
–
–
29.4
Total liquidity requirement
At 31 December 2024
On
demand
£m
Not more
than 3
months
£m
After 3
months but
not more
than 1 year
£m
After 1
year but
not more
than 5 years
£m
After
5 years
£m
Total
£m
Cash flows arising from
financial liabilities
1,820.7
671.8
81.4
84.4
12.5
2,670.8
Total off-balance-sheet items
–
–
15.9
–
–
15.9
Total liquidity requirement
1,820.7
671.8
97.3
84.4
12.5
2,686.7
At 31 December 2023
On
demand
£m
Not more
than 3
months
£m
After 3
months but
not more
than 1 year
£m
After 1
year but
not more
than 5 years
£m
After
5 years
£m
Total
£m
Cash flows arising from
financial liabilities
1,673.9
721.9
125.9
92.6
42.5
2,656.8
Total off-balance-sheet items
–
23.9
5.5
–
–
29.4
Total liquidity requirement
1,673.9
745.8
131.4
92.6
42.5
2,686.2
(iii)
MARKET RISK
Interest rate risk
Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will
fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the
value of a financial instrument will fluctuate because of changes in market interest rates.
The Groupʼs principal exposure to cash flow interest rate risk arises from the mismatch between
the repricing of its financial assets and liabilities. In particular, customer accounts and loan balances
are repriced very shortly after changes in base rates, whereas the yield on the Groupʼs interest-
bearing assets is correlated to the future expectation of base rates and varies depending on the
maturity profile of the Groupʼs treasury portfolio. The average maturity mismatch is controlled by
the banking committee, which generally lengthens the mismatch when the yield curve is rising and
shortens it when the yield curve is falling.
NOTES TO THE CONSOLIDATED STATEMENTS
33 FINANCIAL RISK MANAGEMENT CONTINUED
(ii) LIQUIDITY RISK CONTINUED
Off-balance-sheet items
Cash flows arising from the Groupʼs off-balance-sheet financial liabilities (note 35) are summarised
in the table below.
The contractual value of the Groupʼs commitments to extend credit to clients are analysed by the
duration of the commitment. Capital commitments are summarised by the earliest expected date
of payment.
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
200
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
33 FINANCIAL RISK MANAGEMENT CONTINUED
(iii) MARKET RISK CONTINUED
The table below shows the consolidated repricing profile of the Groupʼs financial assets and liabilities, stated at their carrying amounts, categorised by the earlier of contractual repricing or maturity dates.
At 31 December 2024
Not more than
3 months
£m
After 3 months
but not more
than 6 months
£m
After 6 months
but not more
than 1 year
£m
After 1 year but
not more than
5 years
£m
After
5 years
£m
Non-
interest-
bearing
£m
Total
£m
Assets
Cash and balances with central banks
1,166.0
–
–
–
–
–
1,166.0
Settlement balances
–
–
–
–
–
128.3
128.3
Loans and advances to banks
237.9
38.7
–
–
–
16.6
293.2
Loans and advances to customers
92.8
–
0.3
–
–
3.0
96.1
Investment securities:
— equity securities
–
–
–
–
–
–
–
— unlisted debt securities
351.8
352.4
574.0
–
–
–
1,278.2
Other financial assets
0.5
–
–
–
–
211.4
211.9
Total financial assets
1,849.0
391.1
574.3
–
–
359.3
3,173.7
Liabilities
Deposits by banks
3.8
–
–
–
–
–
3.8
Settlement balances
–
–
–
–
–
133.6
133.6
Due to customers
2,267.6
49.3
–
–
–
35.2
2,352.1
Subordinated loan notes
–
–
–
39.9
–
–
39.9
Other financial liabilities
2.3
3.0
5.6
27.1
9.0
77.8
124.8
Total financial liabilities
2,273.7
52.3
5.6
67.0
9.0
246.6
2,654.2
Interest rate repricing gap
(424.7)
338.8
568.7
(67.0)
(9.0)
112.7
519.5
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
201
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
33 FINANCIAL RISK MANAGEMENT CONTINUED
(iii) MARKET RISK CONTINUED
At 31 December 2023
Not more than
3 months
£m
After 3 months
but not more
than 6 months
£m
After 6 months
but not more
than 1 year
£m
After 1 year but
not more than
5 years
£m
After
5 years
£m
Non-
interest-
bearing
£m
Total
£m
Assets
Cash and balances with central banks
1,036.0
–
–
–
–
2.3
1,038.3
Settlement balances
–
–
–
–
–
165.7
165.7
Loans and advances to banks
252.2
14.5
–
–
–
0.2
266.9
Loans and advances to customers
111.8
0.4
0.3
–
–
3.1
115.6
Investment securities:
–
–
–
–
–
–
— equity securities
–
–
–
–
–
1.2
1.2
— unlisted debt securities and money market funds
400.4
370.8
523.4
–
–
–
1,294.6
Other financial assets
0.5
–
–
–
–
190.8
191.3
Total financial assets
1,800.9
385.7
523.7
–
–
363.3
3,073.6
Liabilities
Deposits by banks
12.4
–
–
–
–
–
12.4
Settlement balances
–
–
–
–
–
172.1
172.1
Due to customers
2,108.9
99.2
–
–
–
45.2
2,253.3
Subordinated loan notes
–
–
–
39.9
–
–
39.9
Other financial liabilities
4.4
2.4
4.8
39.2
26.0
69.6
146.4
Total financial liabilities
2,125.7
101.6
4.8
79.1
26.0
286.9
2,624.1
Interest rate repricing gap
(324.8)
284.1
518.9
(79.1)
(26.0)
76.4
449.5
The banking committee has set an overall pre-tax interest rate exposure tolerance of £8.0 million
(2023: £8.0 million) for the total potential loss resulting from an unexpected immediate and
sustained 2% movement in sterling interest rates for the Bank, the principal operating subsidiary.
The potential total loss is calculated on the basis of the average number of days to repricing of the
interest-bearing liabilities compared with the period to repricing on a corresponding amount of
interest-bearing assets.
At 31 December 2024, the Bank had a net present value sensitivity of £8.1 million (2023: £7.5
million) for an upward 2% shift in rates. The year end exposure was £0.1 million above the banking
committee tolerance due to a temporary lengthening of the maturity profile as a result of
investment in marketable securities which reversed in January 2025 to be within tolerance.
The Group held no forward rate agreements at 31 December 2024 (2023: none).
The Group has assessed the impact of climate change on the carrying amount of its financial assets
and liabilities at year-end, and considers there to be no material impact.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
202
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
33 FINANCIAL RISK MANAGEMENT CONTINUED
(iii) MARKET RISK CONTINUED
Foreign exchange risk
The Group is exposed to translational foreign exchange risk as it undertakes transactions in foreign currencies and is therefore exposed to foreign exchange rate fluctuations. The Group monitors its
currency exposures that arise in the ordinary course of business on a daily basis and significant exposures are managed through the use of spot contracts, from time to time, so as to reduce any currency
exposure to a minimal amount. The Group has no structural foreign currency exposure.
The Group does not have any material exposure to transactional foreign exchange risk. The table below summarises the Groupʼs exposure to foreign currency translation risk at 31 December 2024.
Included in the table are the Groupʼs financial assets and liabilities, at carrying amounts, categorised by currency.
At 31 December 2024
Sterling
£m
US dollar
£m
Euro
£m
Other
£m
Total
£m
Assets
Cash and balances with central banks
1,166.0
–
–
–
1,166.0
Settlement balances
109.1
14.5
1.1
3.6
128.3
Loans and advances to banks
260.4
14.2
14.6
4.0
293.2
Loans and advances to customers
89.3
5.4
1.4
–
96.1
Investment securities:
–
–
–
–
–
— unlisted debt securities
1,250.5
27.7
–
–
1,278.2
Other financial assets
210.4
0.9
0.4
0.2
211.9
Total financial assets
3,085.7
62.7
17.5
7.8
3,173.7
Liabilities
Deposits by banks
3.8
–
–
–
3.8
Settlement balances
105.7
17.9
4.2
5.8
133.6
Due to customers
2,291.8
45.3
12.4
2.6
2,352.1
Subordinated loan notes
39.9
–
–
–
39.9
Other financial liabilities
124.7
0.1
–
–
124.8
Total financial liabilities
2,565.9
63.3
16.6
8.4
2,654.2
Net on-balance-sheet position
519.8
(0.6)
0.9
(0.6)
519.5
Loan commitments
14.8
–
–
–
14.8
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
203
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
33 FINANCIAL RISK MANAGEMENT CONTINUED
(iii) MARKET RISK CONTINUED
At 31 December 2023
Sterling
£m
US dollar
£m
Euro
£m
Other
£m
Total
£m
Assets
Cash and balances with central banks
1,038.3
–
–
–
1,038.3
Settlement balances
150.6
5.4
2.4
7.3
165.7
Loans and advances to banks
230.3
13.2
18.7
4.7
266.9
Loans and advances to customers
109.3
5.1
1.2
–
115.6
Investment securities:
–
–
–
–
–
— equity securities
–
–
1.2
–
1.2
— unlisted debt securities and money market funds
1,259.3
35.3
–
–
1,294.6
Other financial assets
185.1
1.6
1.7
2.9
191.3
Total financial assets
2,972.9
60.6
25.2
14.9
3,073.6
Liabilities
Deposits by banks
12.4
–
–
–
12.4
Settlement balances
146.5
16.0
2.3
7.3
172.1
Due to customers
2,176.4
53.7
18.2
5.0
2,253.3
Subordinated loan notes
39.9
–
–
–
39.9
Other financial liabilities
146.2
0.2
–
–
146.4
Total financial liabilities
2,521.4
69.9
20.5
12.3
2,624.1
Net on-balance-sheet position
451.5
(9.3)
4.7
2.6
449.5
Loan commitments
15.4
–
–
–
15.4
A 10% weakening of the US dollar against sterling, occurring on 31 December 2024, would have
increased equity and profit after tax by £0.5 million (2023: increased by £0.7 million). In addition, a
10% weakening of the euro against sterling, occurring on 31 December 2024, would have reduced
equity and profit after tax by £0.6 million (2023: reduced by £0.4 million). A 10% strengthening of
the US dollar or euro would have had an equal and opposite effect. This analysis assumes that all
other variables, in particular other exchange rates, remain constant.
Price risk
Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market prices (other than those arising from interest rate risk or foreign
exchange risk). The Group is exposed to price risk through its holdings of equity investment
securities, which are reported at their fair value (note 17).
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
204
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
33 FINANCIAL RISK MANAGEMENT CONTINUED
(iii) MARKET RISK CONTINUED
Fair values
The table below analyses financial instruments measured at fair value into a fair value hierarchy
based on the valuation technique used to determine the fair value:
—Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
—Level 2: inputs other than quoted prices included within level 1 that are observable for the asset
or liability, either directly or indirectly
—Level 3: inputs for the asset or liability that are not based on observable market data.
At 31 December 2024
Level 1
£m
Level 2
£m
Level 3
£m
Total
£m
Assets
Fair value through profit or loss:
— equity securities
–
–
–
–
–
–
–
–
At 31 December 2023
Level 1
£m
Level 2
£m
Level 3
£m
Total
£m
Assets
Fair value through profit or loss:
— equity securities
–
–
1.2
1.2
–
–
1.2
1.2
The Group recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred. There have been no transfers between
levels during the year (2023: none).
The fair values of the Groupʼs other financial assets and liabilities are not materially different from
their carrying values, with the exception of the following:
— Investment debt securities measured at amortised cost (note 17) comprise bank and building
society certificates of deposit, which have fixed coupons, and treasury bills. The fair value of the
debt securities at 31 December 2024 was £1,249.4 million (2023: £1,296.8 million) and the
carrying value was £1,278.2 million (2023: £1,294.6 million). Fair value of debt securities is based
on market bid prices, and hence would be categorised as level 1 within the fair value hierarchy.
— Subordinated loan notes (note 28) comprise Tier 2 loan notes. The fair value of the loan notes at
31 December 2024 was £34.2 million (2023: £37.4 million) and the carrying value was £39.9
million (2023: £39.9 million). Fair value of the loan notes is based on discounted future cash flows
using current market rates for debts with similar remaining maturity, and hence would be
categorised as level 2 in the fair value hierarchy.
Level 3 financial instruments
Fair value through profit or loss
At 31 December 2023, the Group held 517 shares in Euroclear Holdings SA, which were valued at
£1.2 million by reference to the price secured from the sale of 1,292 of the Group's shares during
2023. During the current year, the Group sold its total remaining shares in Euroclear at the same
price used to value its shareholding at 31 December 2023.
Changes in the fair values of financial instruments categorised as level 3 within the fair value
hierarchy were as follows:
2024
£m
2023
£m
At 1 January
1.2
3.1
Total unrealised gains/(losses) recognised in profit or loss
–
1.0
Total disposals
(1.2)
(2.9)
At 31 December
–
1.2
The gains or losses relating to the fair value through profit or loss equity securities is included within
ʻother operating incomeʼ in the consolidated statement of comprehensive income.
There were no other gains or losses arising from changes in the fair value of financial instruments
categorised as level 3 within the fair value hierarchy.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
205
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
33 FINANCIAL RISK MANAGEMENT CONTINUED
(iv) PENSION RISK
The main risks to the Group arising from both schemes are in respect of:
—Volatility of assets: In accordance with the requirements of IAS19, the discount rate used for
valuing the Schemes' defined benefit obligations has been derived from the yield available on
suitably dated 'high quality' (AA-rated) corporate bonds at the effective date. The schemes'
assets are invested in instruments other than such bonds, and so relative under-performance will
lead to a fall in the balance sheet position
—Changes in Bond yields: A change in the yields of corporate bonds used to set the discount rate
will affect the value placed on the Schemes' defined benefit obligations. This is expected to be
partially mitigated by the holding of corporate bonds by the schemes
—Inflation: The value placed on the schemes' defined benefit obligations are linked to inflation.
If actual levels of inflation are higher or lower than the assumed rate of inflation, or the assumed
rate of inflation changes, this will affect the value of the schemes' defined benefit obligations.
Both schemes holds investments linked to future inflation rates (including Liability Driven
Investments), which act to provide protection to the balance sheet position from inflation
changes.Investments), which act to provide protection to the balance sheet position from
inflation changes
—Life Expectancy (mortality): Members and their spouses receive benefits payable over their
lifetime, so an increase in future life expectancies will result in pensions being assumed to be paid
for longer, and an increase in the defined benefit obligation.
34 CAPITAL MANAGEMENT
Rathbones Group Plcʼs capital is defined for accounting purposes as total equity. As at 31 December
2024 this totalled £1,359.4 million (2023: £1,350.2 million).
In 2021 Rathbones Group Plc issued £40.0 million of 10-year Tier 2 notes with a call option in
October 2026 and annually thereafter (note 28). As at 31 December 2024, the carrying value of
the notes was £39.9 million (2023: £39.9 million). From time to time, the Group also runs small
overnight overdraft balances as part of working capital.
The Groupʼs objectives when managing capital are to:
—safeguard the Groupʼs ability to continue as a going concern so that it can continue to provide
returns for shareholders and benefits for other stakeholders
—maintain a strong capital base in a cost-efficient manner to be able to support the development
of the business when required
—optimise the distribution of capital across Group companies, reflecting the requirements of each
business
—strive to make capital freely transferable across the Group where possible
—comply with regulatory requirements at all times.
Rathbones is classified for capital purposes as a banking group and performs an ICAAP, which is
prepared on an annual basis and presented to the PRA on request. Regulatory capital resources for
ICAAP purposes are calculated in accordance with published rules. These require certain
adjustments to and certain deductions from accounting capital, the latter largely in respect of
intangible assets. The ICAAP compares regulatory capital resources against regulatory capital
requirements derived using the PRAʼs Pillar 1 and Pillar 2 methodology. The Group has adopted the
standardised approach to calculating its Pillar 1 credit risk component and the basic indicator
approach to calculating its operational risk component. Capital management policy and practices
are applied at both Group and entity level.
At 31 December 2024 the Groupʼs regulatory capital resources, including retained earnings for
2024, were £520.4 million (2023: £471.4 million). The increase in reserves during 2024 is due to
an increase in the Groupʼs retained earnings, on account of profits generated in the year, and newly
issued shares in the year for employee remuneration awards.
In addition to a variety of stress tests performed as part of the ICAAP process, and daily reporting
in respect of treasury activity, capital levels are monitored and forecast on a monthly basis to
ensure that dividends and investment requirements are appropriately managed and appropriate
buffers are kept against adverse business conditions.
No breaches were reported to the PRA during the financial years ended 31 December 2023
and 2024.
The Group has not applied transitional relief in recognising expected credit losses (ECLs) in
regulatory capital resources. As such, there is no difference between accounting ECLs and
regulatory capital ECLs.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
206
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
35 CONTINGENT LIABILITIES AND COMMITMENTS
(a) Capital expenditure authorised and contracted for at 31 December 2024 but not provided in
the financial statements amounted to £1.1 million relating to expenditure on fixtures and
fittings and software (2023: £14.0 million).
(b) The contractual amounts of the Groupʼs commitments to extend credit to its clients are
as follows:
2024
2023
£m
£m
Undrawn commitments to lend of 1 year or less
11.5
11.8
Undrawn commitments to lend of more than 1 year
3.3
3.6
14.8
15.4
(c) The arrangements put in place by the Financial Services Compensation Scheme (FSCS) to
protect depositors and investors from loss in the event of failure of financial institutions has
resulted in significant levies on the industry in recent years. The financial impact of unexpected
FSCS levies is largely out of the Groupʼs control as they result from other industry failures.
There is uncertainty over the level of future levies from the Financial Services Compensation
Scheme (FSCS) as the annual levy is set each year by the FSCS and is dependent on their
assessment of the ultimate cost to the FSCS of industry failures. The FSCS levy comprises
differing classes which relate to specific types of service activity. The Group contributes to the
deposit class, investment fund management class and investment intermediation levy classes
and recognises the cost of the levy at the point the obligation arises to pay the levy for any
given year.
36 RELATED PARTY TRANSACTIONS
TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
The remuneration of the key management personnel of the Group, who are defined as the
companyʼs directors and other members of senior management who are responsible for planning,
directing and controlling the activities of the Group, is set out below.
In the current year, as part of a review of individuals defined as senior management for the group,
the prior year disclosure has been restated. The result of the restatement has been to decrease
short-term employee benefits by £5.6 million, decrease other long-term benefits by £1.5 million
and decrease share based payments by £0.1 million for 2023.
Gains on options exercised by directors during the year totalled £nil (2023: £nil).
Further information about the remuneration of individual Directors is provided in the audited part
of the Directorsʼ remuneration report on page 127.
2024
2023 (restated)
£m
£m
Short-term employee benefits
8.4
7.6
Other long-term benefits
(0.1)
(0.2)
Share-based payments
2.4
2.5
10.7
9.9
Dividends totalling £0.2 million were paid in the year (2023: £0.3 million) in respect of ordinary
shares held by key management personnel and their close family members.
At 31 December 2024, key management personnel and their close family members had gross
outstanding deposits of £0.9 million (2023: £1.0 million) and gross outstanding banking loans of
£nil (2023: £0.1 million). A number of the Groupʼs key management personnel and their close
family members make use of the services provided by companies within the Group. Charges for
such services are made at various staff rates. All transactions were made on normal business terms.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
207
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
36 RELATED PARTY TRANSACTIONS CONTINUED
OTHER RELATED PARTY TRANSACTIONS
The Groupʼs transactions with the pension funds are described in note 29. At 31 December 2024,
no amounts were outstanding with either the Laurence Keen Scheme or the Rathbone 1987
Scheme (2023: none).
As a result of the IW&I transaction on 21 September 2023, Rathbones Group Plc is an associate
of Investec Bank plc. Investec Bank plc currently provide services to Rathbones Group Plc under
a Transitional Services Agreement (TSA), entered into on acquisition of IW&I. In April 2024 an
Outsourced Service Agreement (OSA) was established.
As at 31 December 2024 there was a gross payable balance with Investec Bank plc of £12.6 million
(2023: £8.3 million) which is predominately related to IW&I employee salary costs and associated
payroll taxes which are outsourced to Investec Bank plc under the TSA. A gross receivable of
£6.4 million has been recognised at year-end, predominately attributable to the recognition of
£5.1 million of consideration receivable by the Group from Investec Bank plc under the terms of the
acquisition agreement (note 2). IW&I also has a small number of legacy client related arrangements
with Investec Bank plc.
The total expense recognised with respect to Investec Bank plc in the period is as follows:
2024
2023
£m
£m
Expense incurred under TSA
10.7
4.8
Expense incurred under OSA
13.4
–
Expenses incurred on behalf of clients
0.5
–
24.6
4.8
IW&I partially sublets certain regional office space to Investec Bank plc companies and charges
Investec Bank plc for use of research. Total fees receivable under these arrangements at 31
December 2024 are as follows;
2024
2023
£m
£m
Research fees
0.2
0.3
Property fees
0.4
0.1
0.6
0.4
One Group subsidiary, Rathbones Asset Management Limited, has authority to manage the
investments within a number of unit trusts. During 2024, the Group managed 28 unit trusts,
Sociétés dʼInvestissement à Capital Variable (SICAVs) and open-ended investment companies
(OEICs) (together, ʻcollectivesʼ) (2023: 28 unit trusts and OEICs).
The Group charges each fund an annual management fee for these services, but does not earn
any performance fees on the unit trusts. The management charges are calculated on the bases
published in the individual fund prospectuses, which also state the terms and conditions of the
management contract with the Group.
The following transactions and balances relate to the Groupʼs interest in the unit trusts:
2024
2023
Year ended 31 December
Note
£m
£m
Total management fees
82.7
69.6
2024
2023
As at 31 December
£m
£m
Management fees owed to the Group
7.2
6.5
7.2
6.5
Total management fees are included within ʻfee and commission incomeʼ in the consolidated
statement of comprehensive income.
Management fees owed to the Group are included within ʻaccrued incomeʼ.
All amounts outstanding with related parties are unsecured and will be settled in cash.
No guarantees have been given or received. No expected credit loss provisions have been made
in respect of the amounts owed by related parties.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
208
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
37 CONSOLIDATED STATEMENT OF CASH FLOWS
For the purposes of the consolidated statement of cash flows, cash and cash equivalents comprise
the following balances with less than three months until maturity from the date of acquisition:
2024
2023
Note
£m
£m
Cash and balances at central banks
14
1,166.0
1,036.0
Loans and advances to banks
15
293.2
266.9
At 31 December
1,459.2
1,302.9
Mandatory reserve deposits of £nil (2023: £2.3 million) are held with central banks in accordance
with statutory requirements. As these deposits are not held in demand accounts, and are not
available to finance the Group's day-to-day operations, they are excluded from cash and
cash equivalents.
Cash flows arising from the issue/(repurchase) of ordinary shares comprise:
2024
2023
Note
£m
£m
Share capital issued
30
0.1
2.2
Share premium on shares issued
30
5.5
2.3
Merger reserve on shares issued
30
–
747.4
Shares issued in relation to share-based schemes and business
combinations for which no cash consideration was received
–
(751.9)
Proceeds from issue of share capital
5.6
–
Shares repurchased and placed into own shares
31
(22.0)
(16.0)
Net issue/(repurchase) of ordinary shares
(16.4)
(16.0)
During the year, £22.0 million (2023: £16.0 million) of shares were repurchased and recognised
within the Groupʼs own shares.
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
209
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
37 CONSOLIDATED STATEMENT OF CASH FLOWS CONTINUED
A reconciliation of the movements of financing liabilities and equity to cash flows arising from financing activities is as follows:
Subordinated
loan notes
£m
Lease liabilities
£m
Liabilities from
financing
activities
£m
Share capital/
premium
£m
Reserves
£m
Retained
earnings
£m
Total
equity
£m
Total
£m
At 1 January 2024
39.9
74.9
114.8
317.7
768.8
263.7
1,350.2
1,465.0
Changes from financing cash flows
Proceeds from issue of share capital
–
–
–
5.6
–
–
5.6
5.6
Payments for share repurchases
–
–
–
–
(22.0)
–
(22.0)
(22.0)
Dividends paid
–
–
–
–
–
(56.9)
(56.9)
(56.9)
Interest charge
(2.3)
(2.8)
(5.1)
–
–
–
–
(5.1)
Payment for lease liabilities
–
(9.7)
(9.7)
–
–
–
–
(9.7)
Payment on exit of property leases
–
(11.2)
(11.2)
–
–
–
–
(11.2)
Total financing cash flows
(2.3)
(23.7)
(26.0)
5.6
(22.0)
(56.9)
(73.3)
(99.3)
Total non-cash movements
2.3
(6.4)
(4.1)
–
9.5
73.0
82.5
78.4
At 31 December 2024
39.9
44.8
84.7
323.3
756.3
279.8
1,359.4
1,444.1
Subordinated
loan notes
£m
Lease liabilities
£m
Liabilities from
financing
activities
£m
Share capital/
premium
£m
Reserves
£m
Retained
earnings
£m
Total
equity
£m
Total
£m
At 1 January 2023
39.9
50.5
90.4
313.2
24.4
297.2
634.8
725.2
–
Changes from financing cash flows
–
Proceeds from issue of share capital
–
–
–
2.3
(2.3)
–
–
–
Payments for share repurchases
–
–
–
–
(16.0)
–
(16.0)
(16.0)
Dividends paid
–
–
–
–
–
(71.4)
(71.4)
(71.4)
Interest charge
(2.3)
(3.3)
(5.6)
–
–
–
–
(5.6)
Payment for lease liabilities
–
(7.5)
(7.5)
–
–
–
–
(7.5)
Total financing cash flows
(2.3)
(10.8)
(13.1)
2.3
(18.3)
(71.4)
(87.4)
(100.5)
Total non-cash movements
2.3
35.2
37.5
2.2
762.7
37.9
802.8
840.3
At 31 December 2023
39.9
74.9
114.8
317.7
768.8
263.7
1,350.2
1,465.0
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
210
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
38 EVENTS AFTER THE BALANCE SHEET DATE
There have been no material events occurring between the balance sheet date and the date of signing this report.
39 COUNTRY-BY-COUNTRY REPORTING
HM Treasury has transposed the requirements set out under the Capital Requirements Directive IV (CRD IV) and issued the Capital Requirements Country-by-Country Reporting Regulations 2013,
effective 1 January 2014. The legislation requires Rathbones Group Plc (together with its subsidiaries, ʻthe Groupʼ) to publish certain additional information, on a consolidated basis, for the year ended 31
December 2024.
BASIS OF PREPARATION:
Country
In most cases, we have determined the country by reference to the country of tax residence. Where an entity is not subject to tax (e.g. a partnership) we have considered the
location of management or the jurisdiction in which the revenues are generated. In these cases it is possible that tax is paid in a different country to the one in which profits are
reported.
Nature of
activities
The nature of activities within the United Kingdom are described within our services on page 2. Discretionary investment management is the sole activity which occurs in the Channel
Islands.
Turnover
Turnover is defined as operating income. As the consolidated results are split by country, there is an element of double counting when inter-jurisdictional transactions (for example,
the payment of dividends) occur. The entries to eliminate this double counting are included at the bottom of the table to enable the disclosed figures to agree to the published
consolidated accounts of the Group.
Profit/(loss)
before taxation
These are accounting profits. As with turnover some double counting may arise and again this has been eliminated at the bottom of the table. The majority of the total relates to the
elimination of inter-jurisdictional dividends, which are reflected as profits in the United Kingdom.
Tax paid
This column reflects corporation tax actually paid in the year. Note that it is rare that tax paid in any given year relates directly to the profits earned in the same period.
Public subsidies
received
The Group received no public subsidies in the year.
Number of
employees
The number of employees reported is the average number of full-time employees who were permanently employed by the Group, or one of its subsidiaries, during the year.
Contractors are excluded.
Subsidiaries
A list of the subsidiaries of the Group, including their main activity and country of incorporation, is shown within note 44.
Country
Turnover
£m
Profit/(loss)
before
taxation
£m
Tax paid
£m
Number of
employees
United Kingdom
877.1
533.2
41.0
3,486
Channel Islands
25.4
(350.2)
0.5
36
Sub-total
902.5
183.0
41.5
3,522
Inter-group eliminations and other entries arising on consolidation
(6.6)
(83.4)
–
–
Total
895.9
99.6
41.5
3,522
NOTES TO THE CONSOLIDATED STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
211
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
Share
capital
Share
premium
Merger
reserve
Own
shares
Retained
earnings
Total
equity
Note
£m
£m
£m
£m
£m
£m
At 1 January 2023
3.2
310.0
45.1
(52.6)
143.1
448.8
Profit for the year
–
–
–
–
63.3
63.3
Net remeasurement of defined benefit liability
52
–
–
–
–
(5.8)
(5.8)
Deferred tax relating to components of other comprehensive income
47
–
–
–
–
1.5
1.5
Other comprehensive income net of tax
–
–
–
–
(4.3)
(4.3)
Dividends paid
43
–
–
–
–
(71.4)
(71.4)
Issue of share capital
53
2.2
2.3
747.4
–
–
751.9
Share-based payments:
— cost of share-based payment arrangements
–
–
–
–
24.0
24.0
— cost of vested employee remuneration and share plans
–
–
–
–
(6.0)
(6.0)
— cost of own shares vesting
53
–
–
–
13.0
(13.0)
–
— cost of own shares acquired
53
–
–
–
(16.0)
–
(16.0)
— tax on share-based payments
–
–
–
–
(0.4)
(0.4)
31 December 2023
5.4
312.3
792.5
(55.6)
135.3
1,189.9
Profit for the year
–
–
–
–
91.9
91.9
Net remeasurement of defined benefit asset
52
–
–
–
–
(10.6)
(10.6)
Deferred tax relating to components of other comprehensive income
47
–
–
–
–
2.7
2.7
Other comprehensive income net of tax
–
–
–
–
(7.9)
(7.9)
Dividends paid
43
–
–
–
–
(56.9)
(56.9)
Issue of share capital
53
0.1
5.5
–
–
–
5.6
Share-based payments:
— cost of share-based payment arrangements
–
–
–
–
29.1
29.1
— cost of vested employee remuneration and share plans
–
–
–
–
(4.2)
(4.2)
— cost of own shares vesting
–
–
–
9.5
(9.5)
–
— cost of own shares acquired
53
–
–
–
(22.0)
–
(22.0)
— tax on share-based payments
–
–
–
–
(0.5)
(0.5)
31 December 2024
5.5
317.8
792.5
(68.1)
177.3
1,225.0
The accompanying notes form an integral part of the company financial statements.
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
212
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
Non-current assets
Investment in subsidiaries
44
1,228.2
1,173.4
Right-of-use assets
46
20.2
33.2
Deferred tax
47
8.1
7.5
Net defined benefit asset
52
0.5
7.0
1,257.0
1,221.1
Current assets
Trade and other receivables
45
67.6
143.6
Cash and cash equivalents
101.7
16.3
169.3
159.9
Total assets
1,426.3
1,381.0
Current liabilities
Trade and other payables
48
(128.8)
(95.4)
Lease liabilities
49
(3.5)
(5.3)
Provisions
50
(1.2)
(4.7)
(133.5)
(105.4)
Net current assets
35.8
54.5
Non-current liabilities
Provisions
50
(11.1)
(5.4)
Subordinated loan notes
51
(39.9)
(39.9)
Lease liabilities
49
(16.8)
(40.4)
(67.8)
(85.7)
Total liabilities
(201.3)
(191.1)
Net assets
1,225.0
1,189.9
2024
2023
Note
£m
£m
2024
2023
Note
£m
£m
Equity
Share capital
53
5.5
5.4
Share premium
53
317.8
312.3
Merger reserve
53
792.5
792.5
Own shares
53
(68.1)
(55.6)
Retained earnings
177.3
135.3
Equity shareholders' funds
1,225.0
1,189.9
As permitted by section 408 of the Companies Act 2006 the company has elected not to present
its own statement of comprehensive income for the year. Rathbones Group Plc reported a profit
after tax for the financial year ended 31 December 2024 of £91.9 million (2023: £63.3 million).
The financial statements were approved by the Board of Directors and authorised for issue on
25 February 2025 and were signed on its behalf by:
PAUL STOCKTON
IAIN HOOLEY
GROUP CHIEF EXECUTIVE OFFICER
GROUP CHIEF FINANCIAL OFFICER
Company registered number: 01000403
The accompanying notes form an integral part of the company financial statements.
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
213
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
Cash flows from operating activities
Profit before tax
99.6
63.9
Change in fair value through profit or loss
–
(0.1)
Net interest and dividend income
(101.5)
(90.9)
Net charge for provisions
50
10.5
6.6
Depreciation and amortisation
12.1
7.0
Defined benefit pension scheme (credits)/charges
52
(0.4)
(0.5)
Defined benefit pension scheme contributions paid
52
(3.7)
(2.9)
Share-based payment charges
53
18.8
24.0
35.4
7.1
Changes in operating assets and liabilities:
net decrease/(Increase) in prepayments, accrued income
and other assets
34.5
(42.7)
net increase/(decrease) in accruals, provisions and other
liabilities
10.1
(14.2)
Cash (used in)/generated from operations
80.0
(49.8)
Tax (paid)/received
(6.2)
2.6
Net cash inflow/(outflow) from operating activities
73.8
(47.2)
Cash flows from investing activities
Interest received
0.2
3.9
Inter-company dividends received
105.0
92.0
Proceeds from sale and redemption of investment securities
–
8.1
Net cash generated investing activities
105.2
104.0
2024
2023
Note
£m
£m
Cash flows from financing activities
Issue of ordinary shares
53
5.6
–
Repurchase of ordinary shares
53
(22.0)
(16.0)
Dividends paid
43
(56.9)
(71.4)
Payment of lease liabilities
49
(16.5)
(4.7)
Interest paid
(3.8)
(5.0)
Net cash used in financing activities
(93.6)
(97.1)
Net increase/(decrease) in cash and cash equivalents
85.4
(40.3)
Cash and cash equivalents at the beginning of the year
16.3
56.6
Cash and cash equivalents at the end of the year
58
101.7
16.3
2024
2023
Note
£m
£m
The accompanying notes form an integral part of the consolidated financial statements.
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
214
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
41 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION
UNCERTAINTY
The critical accounting judgements and key sources of estimation uncertainty are described in note
2 to the consolidated financial statements.
42 EXPENSES FOR THE YEAR
The auditorʼs remuneration for audit and other services to the company is set out in note 7 to the
consolidated financial statements.
The monthly average number of employees, on a full-time-equivalent basis, during the year was as
follows:
2024
2023
Wealth Management
1,437
1,247
Asset Management
58
52
Shared services
681
617
2,176
1,916
NOTES TO THE COMPANY STATEMENTS
40 SIGNIFICANT ACCOUNTING POLICIES
STATEMENT OF COMPLIANCE
The separate financial statements of the company are presented as required by the Companies Act
2006 and have been prepared in accordance with UK-adopted International Accounting Standards
and IAS 27 ʻSeparate Financial Statementsʼ.
On publishing the parent company financial statements here together with the Group financial
statements, the company is taking advantage of the exemption in section 408 of the Companies
Act 2006 not to present its individual statement of comprehensive income and related notes that
form a part of these approved financial statements.
DEVELOPMENTS IN REPORTING STANDARDS AND INTERPRETATIONS
Developments in reporting standards and interpretations are set out in note 1.3 to the consolidated
financial statements.
PRINCIPAL ACCOUNTING POLICIES
The financial statements have been prepared on the historical cost basis, except for the revaluation
of certain financial instruments. The principal accounting policies adopted are as set out below.
INVESTMENTS IN SUBSIDIARIES
Investments in subsidiaries are stated at cost less, where appropriate, provision for impairment.
MANAGEMENT CHARGES
Intra-group management charges arise in relation to staff costs and other administrative expenses
that are initially borne by the company and then recharged to other Group companies, when
incurred.
Accounting policies in relation to impairment, interest income, dividend income, leases, foreign
currency, retirement benefit obligations, taxation, cash and cash equivalents and share-based
payments are set out in note 1 to the consolidated financial statements.
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
215
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
2024
2023
£m
£m
Net assets
1,225.0
1,189.9
Less:
— share capital
(5.5)
(5.4)
— share premium
(317.8)
(312.3)
— merger reserve
(792.5)
(792.5)
— Unrealised profits
(9.6)
(9.6)
Distributable reserves
99.6
70.1
Movements in reserves available for distribution were as follows:
2024
2023
£m
£m
As at 1 January
70.1
90.6
Profit for the year
91.9
63.3
Net remeasurement of defined benefit liability/asset
(7.9)
(4.3)
Dividends paid
(56.9)
(71.4)
Unrealised profits
–
(9.6)
Other movements
2.4
1.5
As at 31 December
99.6
70.1
44 INVESTMENTS IN SUBSIDIARIES
Equities
£m
At 1 January 2023
421.5
Additions
751.9
At 1 January 2024
1,173.4
Additions
54.8
At 31 December 2024
1,228.2
The additions in the current year of £54.8 million relate to two separate share subscriptions of one
ordinary share of 1p each by the company in its subsidiary, CastleCo Limited. The additions in the
prior year of £751.9 million relate to the acquisition of Investec Wealth & Investment (see note 8).
During the year, the companyʼs subsidiary, Rathbones Investment Management Limited (RIM),
acquired the trade and assets of its sister company, Saunderson House Limited (SHL) at the
carrying values in the transferorʼs financial statements. This led to a transfer of the companyʼs
investment in SHL of £140.9 million to an investment in RIM. The net impact on the companyʼs
total cost of investment in subsidiaries from this transaction was £nil.
An impairment review is undertaken at the end of each reporting period when indicators of
potential impairment are identified. Where impairment may be indicated, a test of carrying value
against the recoverable value is performed. The recoverable amount is calculated as the value in
use (VIU) which is derived from the present value of future cash flows expected to be received from
the investment. Impairment is recognised where the investment exceeds the recoverable amount.
No indicators of impairment have been identified this financial period (2023: £nil).
NOTES TO THE COMPANY STATEMENTS
43 DIVIDENDS
Details of the companyʼs dividends paid and proposed for approval at the Annual General Meeting
are set out in note 12 to the consolidated financial statements.
The companyʼs dividend policy is described in the directorsʼ report on page 145.
The merger reserve is used where more than 90% of the share capital in a subsidiary is acquired
and the consideration includes the issue of new shares by the Company, thereby attracting merger
relief under Section 612 of the Companies Act 2006.
Reserves available for distribution as at 31 December were as follows:
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
216
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
44 INVESTMENTS IN SUBSIDIARIES CONTINUED
EQUITIES
At 31 December 2024, the companyʼs subsidiary undertakings, which have all been included in the
Groupʼs financial statements, were as follows:
Rathbones Investment Management Limited
Investment management and
banking services
1448919
Rathbones Investment Management International Limited*
Investment management
50503
Rathbones Trust Company Limited
Trust and tax services
1688454
Rathbones Asset Management Limited
Asset Management
2376568
Arcticstar Limited**
Introducer of private clients
3898083
Vision Independent Financial Planning Limited
Financial planning services
6650476
Castle Investment Solutions Limited
Investment support services
7370865
Rathbones Legal Services Limited*
Trust and legal services
10514352
Laurence Keen Holdings Limited**
Intermediate holding company
2474285
Rathbone Directors Limited*
Corporate director services
4410000
Rathbone Secretaries Limited*
Corporate secretarial services
4627820
Laurence Keen Nominees Limited*
Corporate nominee
2801952
Neilson Cobbold Client Nominees Limited*
Corporate nominee
3217430
Rathbone Nominees Limited*
Corporate nominee
646336
Citywall Nominees Limited*
Corporate nominee
3070653
Penchart Nominees Limited*
Corporate nominee
2608726
Argus Nominee Limited
Corporate nominee
11395344
Rathbone Brothers Ltd
Non-trading
12866506
Rathbone Pension & Advisory Services Limited
Non-trading
5679426
Rathbone Stockbrokers Limited*
Non-trading
2483921
Dean River Asset Management Limited*
Non-trading
SC204313
R.M. Walkden & Co. Limited*
Non-trading
1246166
Speirs & Jeffrey Limited**
Investment management
SC098335
Speirs & Jeffrey Client Nominees Limited*
Corporate nominee
SC162589
Speirs & Jeffrey Portfolio Management Limited*
Corporate nominee
SC122842
Speirs & Jeffrey Fund Management Limited*
Corporate nominee
SC095908
Saunderson House Limited
Financial planning and
investment management
940473
CastleCo Limited
Non-trading
130602
Subsidiary undertaking
Activity and operation
Company
registration
number
HouseCo Limited
Non-trading
130603
CabinCo Limited
Non-trading
130601
CottageCo Limited
Non-trading
131144
Investec Wealth & Investment Limited
Investment management
2122340
Bell Nominees Limited (In Liquidation)
Non-trading
00625232
Investment Administration Nominees Limited (In
Liquidation)
Non-trading
02075505
R. & R. Nominees Limited (In Liquidation)
Non-trading
00790828
Tudor Nominees Limited (In Liquidation)
Non-trading
02016278
Carr PEP Nominees Limited (In Liquidation)
Non-trading
02560336
Ferlim Nominees Limited
Corporate nominee
01022478
Murray Asset Management UK Limited
Non-trading
09447298
Castle Street Nominees UK Limited
Corporate nominee
09329323
Murray Asset Nominees UK Limited
Corporate nominee
09329081
Click Nominees Limited (In Liquidation)
Non-trading
03276308
PEP Services (Nominees) Limited (In Liquidation)
Non-trading
02368386
Murray Asset Management Limited
Non-trading
SC173493
Murray Investment Management Limited
Non-trading
SC173492
Murray Asset Nominees Limited
Corporate nominee
SC196715
Spring Nominees Limited
Non-trading
01747036
Anston Trustees Limited
Non-trading
02826318
Carr Investment Services Nominees Limited (In
Liquidation)
Non-trading
02620560
Investec Wealth & Investment Trustees Limited
Trustee Company
02243919
Rensburg Client Nominees Limited
Corporate nominee
02020824
Scarwood Nominees Limited (In Liquidation)
Non-trading
01147539
Castle Street Nominees Limited
Corporate nominee
SC050721
Hero Nominees Limited
Corporate nominee
34543
Investec Wealth & Investment (Channel Islands) Limited
Investment management
54988
Torch Nominees Limited
Corporate nominee
54991
Subsidiary undertaking
Activity and operation
Company
registration
number
*
Held by subsidiary undertaking
** UK subsidiary has taken an exemption from audit under section 479A of the Companies Act 2006 for the year ended 31 December 2024
NOTES TO THE COMPANY STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
217
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
44 INVESTMENTS IN SUBSIDIARIES CONTINUED
EQUITIES CONTINUED
The registered office for all subsidiary undertakings is 30 Gresham Street, London, England EC2V
7QN except for the following:
Rathbones Investment Management Limited
Port of Liverpool Building, Pier Head, Liverpool L3 1NW
Rathbones Investment Management
International Limited
25-26 Esplanade, St Helier, Jersey JE1 2RB
Vision Independent Financial Planning Limited
Vision House, Unit 6A Falmouth Business Park, Bickland
Water Road, Falmouth, Cornwall TR11 4SZ
Castle Investment Solutions Limited
Vision House, Unit 6A Falmouth Business Park, Bickland
Water Road, Falmouth, Cornwall TR11 4SZ
Speirs & Jeffrey Limited
George House, 50 George Square, Glasgow G2 1EH
Speirs & Jeffrey Client Nominees Limited
George House, 50 George Square, Glasgow G2 1EH
Speirs & Jeffrey Portfolio Management Limited George House, 50 George Square, Glasgow G2 1EH
Speirs & Jeffrey Fund Management Limited
George House, 50 George Square, Glasgow G2 1EH
Dean River Asset Management Limited
10 George Street, Edinburgh EH2 2PF
CastleCo Limited
Aztec Group House, IFC6, The Esplanade, Jersey, JE4
0QH
HouseCo Limited
Aztec Group House, IFC6, The Esplanade, Jersey, JE4
0QH
CabinCo Limited
Aztec Group House, IFC6, The Esplanade, Jersey, JE4
0QH
CottageCo Limited
Aztec Group House, IFC6, The Esplanade, Jersey, JE4
0QH
Neilson Cobbold Client Nominees Ltd
Port of Liverpool Building, Pier Head, Liverpool L3 1NW
Rathbone Nominees Limited
Port of Liverpool Building, Pier Head, Liverpool L3 1NW
Bell Nominees Limited (In Liquidation)
The Wooden Barn, Little Baldon, Oxford, OX44 9PU
Investment Administration Nominees Limited
(In Liquidation)
The Wooden Barn, Little Baldon, Oxford, OX44 9PU
R. & R. Nominees Limited (In Liquidation)
The Wooden Barn, Little Baldon, Oxford, OX44 9PU
Tudor Nominees Limited (In Liquidation)
The Wooden Barn, Little Baldon, Oxford, OX44 9PU
Carr PEP Nominees Limited (In Liquidation)
The Wooden Barn, Little Baldon, Oxford, OX44 9PU
Subsidiary undertaking
Registered office
Subsidiary undertaking
Registered office
Click Nominees Limited (In Liquidation)
The Wooden Barn, Little Baldon, Oxford, OX44 9PU
PEP Services (Nominees) Limited (In Liquidation) The Wooden Barn, Little Baldon, Oxford, OX44 9PU
Murray Asset Management Limited
10 George Street, Edinburgh EH2 2PF
Murray Investment Management Limited
10 George Street, Edinburgh EH2 2PF
Murray Asset Nominees Limited
10 George Street, Edinburgh EH2 2PF
Carr Investment Services Nominees Limited (In
Liquidation)
The Wooden Barn, Little Baldon, Oxford, OX44 9PU
Scarwood Nominees Limited (In Liquidation)
The Wooden Barn, Little Baldon, Oxford, OX44 9PU
Castle Street Nominees Limited
10 George Street, Edinburgh EH2 2PF
Hero Nominees Limited
Unit 2, Upper House, 16-20 Smith Street, St Peter
Port, GY1 2JQ, Guernsey
Investec Wealth & Investment (Channel Islands)
Limited
Upper House, 16-20 Smith Street, St Peter Port, GY1
2JQ, Guernsey
Torch Nominees Limited
Upper House, 16-20 Smith Street, St Peter Port, GY1
2JQ, Guernsey
The company owns, directly or indirectly, 100% of the ordinary share capital of all subsidiary
undertakings.
NOTES TO THE COMPANY STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
218
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
45 TRADE AND OTHER RECEIVABLES
2024
2023
£m
£m
Prepayments and other receivables
7.1
6.8
Amounts owed by Group undertakings
60.5
136.8
67.6
143.6
Current
67.6
143.6
67.6
143.6
Amounts owed by Group undertakings do not have specific repayment dates but are on demand
and are paid down periodically as trading requires.
46 RIGHT-OF-USE ASSETS
Property
£m
Motor vehicles
and equipment
£m
Total
£m
Cost
At 1 January 2023
56.0
0.4
56.4
Additions
1.9
–
1.9
Other movements
(2.6)
–
(2.6)
At 1 January 2024
55.3
0.4
55.7
Additions
22.1
–
22.1
Disposals
(42.9)
–
(42.9)
At 31 December 2024
34.5
0.4
34.9
Depreciation and impairment
1 January 2023
18.0
0.1
18.1
Charge for the year
4.8
0.1
4.9
Disposals
(0.5)
–
(0.5)
1 January 2024
22.3
0.2
22.5
Charge for the year
12.2
–
12.2
Disposals
(20.0)
–
(20.0)
At 31 December 2024
14.5
0.2
14.7
Carrying amount at 31 December 2024
20.0
0.2
20.2
Carrying amount at 31 December 2023
33.0
0.2
33.2
Carrying amount at 1 January 2023
38.0
0.2
38.2
On 6 March 2024, the Companyʼs lease at 8 Finsbury Circus was assigned to a new tenant. As the
original terms and conditions of the lease did not include an option to terminate the lease or reduce
the lease term, this was treated as a lease modification. This resulted in a partial disposal of the
right-of-use asset and lease liability during the year. See note 20 for further detail.
NOTES TO THE COMPANY STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
219
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
47 DEFERRED TAX
The UK Government legislated in the Finance Act 2021 to increase the UK corporation tax rate to
25.0% from 19.0% on 1 April 2023. This has been reflected in the deferred tax calculations.
Deferred income taxes are calculated on all temporary differences under the liability method using
the rate expected to apply when the relevant timing differences are forecast to unwind.
The movement on the deferred tax account is as follows:
Pensions
£m
Share-
based
payments
£m
Staff-
related
costs
£m
Fair value
through
profit or
loss
£m
Total
£m
At 1 January 2024
(1.8)
8.9
0.4
–
7.5
Recognised in profit or loss in respect of:
— current year
(1.0)
(1.1)
0.5
–
(1.6)
— prior year
–
–
–
–
–
— change in rate
–
–
–
–
–
Total recognised in profit
or loss
(1.0)
(1.1)
0.5
–
(1.6)
Recognised in other comprehensive income
in respect of:
— current year
2.7
–
–
–
2.7
— prior year
–
–
–
–
–
— change in rate
–
–
–
–
–
Total recognised in other comprehensive
income
2.7
–
–
–
2.7
Recognised in equity in respect of:
— current year
–
(0.5)
–
–
(0.5)
— prior year
–
–
–
–
–
— change in rate
–
–
–
–
–
Total recognised in equity
–
(0.5)
–
–
(0.5)
At 31 December 2024
(0.1)
7.3
0.9
–
8.1
Deferred tax assets
–
7.3
0.9
–
8.2
Deferred tax liabilities
(0.1)
–
–
–
(0.1)
At 31 December 2024
(0.1)
7.3
0.9
–
8.1
Pensions
£m
Share-based
payments
£m
Staff-related
costs
£m
Fair value
through
profit or loss
£m
Total
£m
At 1 January 2023
(2.4)
12.1
0.1
(0.2)
9.6
Recognised in profit or loss in respect of:
— current year
(0.8)
(2.5)
0.1
0.2
(3.0)
— prior year
–
–
0.2
–
0.2
— change in rate
(0.1)
–
–
–
(0.1)
Total recognised in profit
or loss
(0.9)
(2.5)
0.3
0.2
(2.9)
Recognised in other comprehensive income
in respect of:
— current year
1.4
–
–
–
1.4
— prior year
–
–
–
–
–
— change in rate
0.1
–
–
–
0.1
Total recognised in other comprehensive
income
1.5
–
–
–
1.5
Recognised in equity in respect of:
— current year
–
(0.7)
–
–
(0.7)
— prior year
–
–
–
–
–
— change in rate
–
–
–
–
–
Total recognised in equity
–
(0.7)
–
–
(0.7)
At 31 December 2023
(1.8)
8.9
0.4
–
7.5
Deferred tax assets
–
8.9
0.4
–
9.3
Deferred tax liabilities
(1.8)
–
–
–
(1.8)
At 31 December 2023
(1.8)
8.9
0.4
–
7.5
£0.5 million of current tax on share-based payments was charged to equity during the year
(2023: £0.4 million).
NOTES TO THE COMPANY STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
220
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
48 TRADE AND OTHER PAYABLES
2024
2023
£m
£m
Trade creditors
3.0
1.7
Accruals and other creditors
114.9
83.7
Other taxes and social security costs
10.9
10.0
128.8
95.4
The fair value of trade and other payables is not materially different from their carrying amount.
49 LEASE LIABILITIES
2024
2023
Maturity analysis
£m
£m
Less than one year
3.5
5.3
One to five years
10.8
18.7
More than five years
6.0
21.7
Lease liabilities at 31 December
20.3
45.7
Current
3.5
5.3
Non-current
16.8
40.4
20.3
45.7
The total cash outflow for Company leases during the year was £18.0 million (2023: £7.6 million).
50 PROVISIONS
Deferred, variable
costs to acquire
client relationship
intangibles
£m
Legal and
compensation
£m
Property-
related
£m
Total
£m
At 1 January 2023
4.3
0.1
5.4
9.8
Charged to profit or loss
–
–
–
–
Unused amount credited to profit
or loss
–
–
–
–
Net charge to profit or loss
–
–
–
–
Other movements
2.6
–
–
2.6
Utilised/paid during the year
(2.3)
–
–
(2.3)
At 31 December 2023
4.6
0.1
5.4
10.1
Charged to profit or loss
–
0.5
13.1
13.6
Unused amount credited to profit
or loss
–
–
(3.1)
(3.1)
Net credit to profit or loss
–
0.5
10.0
10.5
Other movements
10.8
–
–
10.8
Utilised/paid during the year
(7.9)
–
(11.2)
(19.1)
At 31 December 2024
7.5
0.6
4.2
12.3
Payable within 1 year
–
0.6
0.6
1.2
Payable after 1 year
7.5
–
3.6
11.1
7.5
0.6
4.2
12.3
Other movements in provisions relate to deferred payments to investment managers and third
parties for the introduction of client relationships, which have been previously capitalised.
Property-related provisions of £4.2 million relate to dilapidation provisions expected to arise on
leasehold premises held by the Group (2023: £5.3 million).
As a result of the company assigning its lease at 8 Finsbury Circus to a new tenant during the year,
the company recognised a property-related provision of £11.2 million at the date the property was
vacated, which was paid during the year. The company did not utilise any other property-related
provisions in 2024 (2023: £nil).
Provisions payable after one year are expected to be settled within three years of the balance sheet
date (2023: four years), except for the property-related provisions of £3.6 million (2023: £4.9
million), which are expected to be settled within 10 years of the balance sheet date (2023: 11 years).
NOTES TO THE COMPANY STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
221
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
51 SUBORDINATED LOAN NOTES
2024
2023
£m
£m
Subordinated loan notes
— face value
40.0
40.0
— carrying value
39.9
39.9
Rathbones Group Plc holds £39.9 million of 10-year Tier 2 notes with a call option in October 2026
and annually thereafter. The Issuer requires the Groupʼs subsidiaries to comply with all laws and
governmental rules or regulations to which they are subject. Interest is payable at a fixed rate of
5.6% per annum until the first call option date and at a fixed rate of 4.9% over Compounded Daily
SONIA thereafter.
An interest expense of £2.3 million (2023: £2.3 million) was recognised in the year.
52 LONG-TERM EMPLOYEE BENEFITS
Details of the defined benefit pension schemes operated by the company are provided in note 29
to the consolidated financial statements.
53 SHARE CAPITAL, OWN SHARES AND SHARE BASED PAYMENTS
Details of the share capital of the company and ordinary shares held by the company together with
changes thereto are provided in notes 30 and 31 to the consolidated financial statements. Details of
options on the companyʼs shares and share-based payments are set out in note 32 to the
consolidated financial statements.
54 FINANCIAL INSTRUMENTS
The companyʼs risk management policies and procedures are integrated with the wider Rathbones
Groupʼs risk management process. The Rathbones Group has identified the risks arising from all of
its activities, including those of the company, and has established policies and procedures to
manage these items in accordance with its risk appetite. The company categorises its financial risks
into the following primary areas:
(i)
credit risk;
(ii)
liquidity risk;
(iii) market risk (which includes fair value interest rate risk, cash flow interest rate risk,
foreign exchange risk and price risk); and
(iv) pension risk.
The companyʼs exposures to pension risk are set out in note 29 to the consolidated financial
statements.
The sections below outline the Group risk appetite, as applicable to the company, and explain how
the company defines and manages each category of financial risk.
The companyʼs financial risk management policies are designed to identify and analyse the financial
risks that the company faces, to set appropriate risk tolerances, limits and controls, and to monitor
the financial risks and adherence to limits by means of reliable and up-to-date information systems.
The company regularly reviews its financial risk management policies and systems to reflect
changes in the business and the wider industry.
The companyʼs overall strategy and policies for monitoring and management of financial risk are set
by the Board of Directors. The Board has embedded risk management within the business through
the executive committee and senior management.
NOTES TO THE COMPANY STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
222
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
54 FINANCIAL INSTRUMENTS CONTINUED
(i)
CREDIT RISK
The company takes on exposure to credit risk, which is the risk that a counterparty will be unable to
pay amounts in full when due, through its trading activities. The principal sources of credit risk arise
from depositing funds with banks and through providing long-term and working capital financing
for subsidiaries.
The companyʼs financial assets are categorised as follows.
Trade and other receivables
Trade and other receivables relate to amounts placed with subsidiaries and staff advances.
The collection and ageing of trade and other receivables are reviewed on a periodic basis
by management.
The company places surplus funds with its banking subsidiary, which operates under the Groupʼs
credit risk management policies. Group policy requires that funds are placed with a range of high-
quality financial institutions. Investments are spread to avoid excessive exposure to any individual
counterparty.
For the purposes of financial reporting the company categorises its exposures based on the long-
term ratings awarded to counterparties by Fitch, Moodyʼs or S&P.
Cash and cash equivalents (balances at banks)
The company has exposure to financial institutions through its bank deposits (reported within
cash equivalents).
2024
2023
Maximum exposure to credit risk
£m
£m
Trade and other receivables:
— amounts owed by Group undertakings
60.5
136.8
— other financial assets
1.3
1.1
Balances at banks
101.7
16.3
163.5
154.2
The above table represents the gross credit risk exposure of the company at 31 December 2024
and 2023, without taking account of any collateral held or other credit enhancements attached.
Trade and other receivables
No trade and other receivables have been written off or are credit-impaired at the reporting date.
Amounts owed by Group undertakings do not have specific repayment dates and are paid down
periodically as trading requires.
Balances at banks
The credit quality of balances at banks is analysed below by reference to the long-term credit rating
awarded by Fitch, or equivalent rating by Moodyʼs or S&P, as at the balance sheet date.
2024
2023
£m
£m
A+ to A-
4.8
7.6
Other
96.9
8.7
101.7
16.3
£96.9 million of cash was held in a designated account with Rathbones Investment Management
Limited at 31 December 2024, which acts as the Groupʼs treasury function and a licenced deposit
taker (2023: £8.7 million). The credit risk assessed for this balance at the year-end was ʻlowʼ.
NOTES TO THE COMPANY STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
223
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
54 FINANCIAL INSTRUMENTS CONTINUED
(i)
CREDIT RISK CONTINUED
Concentration of credit risk
The company has counterparty credit risk within its balances at banks in that the principal exposure
is to its banking subsidiary. The Board sets and monitors the Group policy for the management of
Group funds, which includes the placement of funds with a range of high-quality financial
institutions.
(a) Geographical sectors
The following table analyses the companyʼs credit exposures, at their carrying amounts, by
geographical region as at the balance sheet date. In this analysis, exposures are categorised based
on the country of domicile of the counterparty:
At 31 December 2024
United
Kingdom
£m
Rest of
the World
£m
Total
£m
Trade and other receivables:
— amounts owed by Group undertakings
59.4
1.1
60.5
— other financial assets
1.2
0.1
1.3
Balances at banks
101.7
–
101.7
162.3
1.2
163.5
At 31 December 2023
United
Kingdom
£m
Rest of
the World
£m
Total
£m
Trade and other receivables:
— amounts owed by Group undertakings
135.8
1.0
136.8
— other financial assets
1.0
0.1
1.1
Balances at banks
16.3
–
16.3
153.1
1.1
154.2
At 31 December 2024, all rest of the world exposures were to counterparties based in Jersey,
Japan and the United States of America (2023: Jersey, Japan and the United States of America).
At 31 December 2024, the Group had exposure to the UK government through the holding of
treasury bills (2023: UK government).
(b) Industry sectors
The companyʼs credit exposures at the balance sheet date, analysed by the primary industry sectors
in which our counterparties operate, were:
31 December 2024
Financial
institutions
£m
Clients and
other
corporates
£m
Total
£m
Trade and other receivables:
— amounts owed by Group undertakings
16.5
44.0
60.5
— other financial assets
–
1.3
1.3
Balances at banks
101.7
–
101.7
118.2
45.3
163.5
31 December 2023
Financial
institutions
£m
Clients and
other
corporates
£m
Total
£m
Trade and other receivables:
— amounts owed by Group undertakings
8.3
128.5
136.8
— other financial assets
–
1.1
1.1
Balances at banks
16.3
–
16.3
24.6
129.6
154.2
Liquidity risk is the risk that the company will encounter difficulty in meeting obligations associated
with financial liabilities that are settled by delivering cash or another financial asset. The company
places its funds in short-term or demand facilities with financial institutions to ensure liquidity.
The company has no bank loans (2023: £nil).
NOTES TO THE COMPANY STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
224
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
54 FINANCIAL INSTRUMENTS CONTINUED
(ii) LIQUIDITY RISK
Non-derivative cash flows
The table below presents the undiscounted cash flows receivable and payable by the company on its non-derivative financial assets and liabilities by remaining contractual maturities at the balance
sheet date.
At 31 December 2024
On
demand
£m
Not more than
3 months
£m
After 3 months
but not more
than 1 year
£m
After 1 year
but not more
than 5 years
£m
After 5
years
£m
No fixed
maturity
date
£m
Total
£m
Trade and other receivables:
— amounts owed by Group undertakings
60.5
–
–
–
–
–
60.5
— other financial assets
0.1
0.8
0.4
0.1
–
–
1.4
Balances at banks
101.7
–
–
–
–
–
101.7
Cash flows arising from financial assets
162.3
0.8
0.4
0.1
–
–
163.6
Trade and other payables:
— amounts owed to Group undertakings
–
–
–
–
–
–
–
— subordinated loan notes
–
–
2.3
42.3
–
–
44.6
— lease liabilities
–
0.8
3.7
13.3
6.8
–
24.6
— other financial liabilities
0.1
19.7
–
9.3
1.2
–
30.3
Cash flows arising from financial liabilities
0.1
20.5
6.0
64.9
8.0
–
99.5
Net liquidity gap
162.2
(19.7)
(5.6)
(64.8)
(8.0)
–
64.1
Cumulative net liquidity gap
162.2
142.5
136.9
72.1
64.1
64.1
NOTES TO THE COMPANY STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
225
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
54 FINANCIAL INSTRUMENTS CONTINUED
(ii) LIQUIDITY RISK CONTINUED
At 31 December 2023
On
demand
£m
Not more than
3 months
£m
After 3 months
but not more
than 1 year
£m
After 1 year
but not more
than 5 years
£m
After 5
years
£m
No fixed
maturity
date
£m
Total
£m
Trade and other receivables:
— amounts owed by Group undertakings
136.8
–
–
–
–
–
136.8
— other financial assets
–
0.2
0.8
0.2
–
–
1.2
Balances at banks
16.3
–
–
–
–
–
16.3
Cash flows arising from financial assets
153.1
0.2
0.8
0.2
–
–
154.3
Trade and other payables:
— amounts owed to Group undertakings
–
–
–
–
–
–
–
— subordinated loan notes
–
–
2.3
44.5
–
–
46.8
— lease liabilities
–
2.0
5.9
20.6
31.9
–
60.4
— other financial liabilities
0.2
11.3
0.9
3.0
3.7
–
19.1
Cash flows arising from financial liabilities
0.2
13.3
9.1
68.1
35.6
–
126.3
Net liquidity gap
152.9
(13.1)
(8.3)
(67.9)
(35.6)
–
28.0
Cumulative net liquidity gap
152.9
139.8
131.5
63.6
28.0
28.0
Included within trade and other payables disclosed above are balances that are repayable on demand or that do not have a contractual maturity date, which historical experience shows are unlikely to be
called in the short term.
NOTES TO THE COMPANY STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
226
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
54 FINANCIAL INSTRUMENTS CONTINUED
(ii) LIQUIDITY RISK CONTINUED
Total liquidity requirement
At 31 December 2024
On
demand
£m
Not more
than 3 months
£m
After 3 months
but not more
than 1 year
£m
After 1 year
but not more
than 5 years
£m
After
5 years
£m
Total
£m
Cash flows arising from financial liabilities
0.1
20.5
6.0
64.9
8.0
99.5
Total off-balance-sheet items
–
–
–
–
–
–
Total liquidity requirement
0.1
20.5
6.0
64.9
8.0
99.5
At 31 December 2023
On
demand
£m
Not more
than 3 months
£m
After 3 months
but not more
than 1 year
£m
After 1 year
but not more
than 5 years
£m
After
5 years
£m
Total
£m
Cash flows arising from financial liabilities
0.2
13.3
9.1
68.1
35.6
126.3
Total off-balance-sheet items
–
–
–
–
–
–
Total liquidity requirement
0.2
13.3
9.1
68.1
35.6
126.3
(iii) MARKET RISK
Interest rate risk
Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the value
of a financial instrument will fluctuate because of changes in market interest rates.
The companyʼs principal exposure to cash flow interest rate risk arises from the mismatch between the repricing of its financial assets and liabilities.
The table below shows the repricing profile of the companyʼs financial assets and liabilities, stated at their carrying amounts, categorised by the earlier of contractual repricing or maturity dates.
Assets
Other investments:
— equity securities
–
–
–
–
–
–
–
Trade and other receivables:
— amounts owed by Group undertakings
–
–
–
–
–
60.5
60.5
— other financial assets
0.5
–
–
–
–
0.8
1.3
Balances at banks
101.7
–
–
–
–
–
101.7
Total financial assets
102.2
–
–
–
–
61.3
163.5
At 31 December 2024
Not more
than 3 months
£m
After 3 months
but not more
than 6 months
£m
After 6 months
but not more
than 1 year
£m
After 1 year
but not more
than 5 years
£m
After
5 years
£m
Non-interest
-bearing
£m
Total
£m
NOTES TO THE COMPANY STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
227
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
54 FINANCIAL INSTRUMENTS CONTINUED
(iii) MARKET RISK CONTINUED
Liabilities
Trade and other payables:
— amounts owed to Group undertakings
–
–
–
–
–
–
–
— subordinated loan notes
–
–
–
39.9
–
–
39.9
— other financial liabilities
0.6
0.9
1.9
10.9
6.0
30.1
50.4
Total financial liabilities
0.6
0.9
1.9
50.8
6.0
30.1
90.3
Interest rate repricing gap
101.6
(0.9)
(1.9)
(50.8)
(6.0)
31.2
73.2
At 31 December 2024
Not more
than 3 months
£m
After 3 months
but not more
than 6 months
£m
After 6 months
but not more
than 1 year
£m
After 1 year
but not more
than 5 years
£m
After
5 years
£m
Non-interest
-bearing
£m
Total
£m
At 31 December 2023
Not more
than 3 months
£m
After 3 months
but not more
than 6 months
£m
After 6 months
but not more
than 1 year
£m
After 1 year
but not more
than 5 years
£m
After
5 years
£m
Non-interest
-bearing
£m
Total
£m
Assets
Other investments:
— equity securities
–
–
–
–
–
–
–
Trade and other receivables:
— amounts owed by Group undertakings
–
–
–
–
–
136.8
136.8
— other financial assets
0.5
–
–
–
–
0.6
1.1
Balances at banks
16.3
–
–
–
–
–
16.3
Total financial assets
16.8
–
–
–
–
137.4
154.2
Liabilities
Trade and other payables:
— amounts owed to Group undertakings
–
–
–
–
–
–
–
— subordinated loan notes
–
–
–
39.9
–
–
39.9
— other financial liabilities
1.3
1.3
2.7
18.7
21.7
17.6
63.3
Total financial liabilities
1.3
1.3
2.7
58.6
21.7
17.6
103.2
Interest rate repricing gap
15.5
(1.3)
(2.7)
(58.6)
(21.7)
119.8
51.0
A 2% parallel increase or decrease in the sterling yield curve would have no impact on profit after tax or equity (2023: no impact).
The company has assessed the impact of climate change on the carrying amount of its financial assets and liabilities at year-end, and considers there to be no material impact.
NOTES TO THE COMPANY STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
228
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
54 FINANCIAL INSTRUMENTS CONTINUED
(iii) MARKET RISK CONTINUED
Foreign exchange risk
The company does not have any material exposure to transactional foreign exchange risk. The table
below summarises the companyʼs exposure to foreign currency translation risk at 31 December
2024. Included in the table are the companyʼs financial assets and liabilities, at carrying amounts,
categorised by currency.
At 31 December 2024
Sterling
£m
US dollar
£m
Euro
£m
Total
£m
Assets
Other investments:
— equity securities
–
–
–
–
Trade and other receivables:
— amounts owed by Group undertakings
60.5
–
–
60.5
— other financial assets
1.2
0.1
–
1.3
Balances at banks
101.7
–
–
101.7
Total financial assets
163.4
0.1
–
163.5
Liabilities
Trade and other payables:
— amounts owed to Group undertakings
–
–
–
–
— subordinated loan notes
39.9
–
–
39.9
— other financial liabilities
50.2
0.2
–
50.4
Total financial liabilities
90.1
0.2
–
90.3
Net on-balance-sheet position
73.3
(0.1)
–
73.2
At 31 December 2023
Sterling
£m
US dollar
£m
Euro
£m
Total
£m
Assets
Other investments:
— equity securities
–
–
–
–
Trade and other receivables:
— amounts owed by Group undertakings
136.8
–
–
136.8
— other financial assets
1.0
0.1
–
1.1
Balances at banks
16.3
–
–
16.3
Total financial assets
154.1
0.1
–
154.2
Liabilities
Trade and other payables:
— amounts owed to Group undertakings
–
–
–
–
— subordinated loan notes
39.9
–
–
39.9
— other financial liabilities
63.2
0.1
–
63.3
Total financial liabilities
103.1
0.1
–
103.2
Net on-balance-sheet position
51.0
–
–
51.0
A 10% weakening of the US dollar against sterling would have reduced equity and profit after tax
by £nil in 2024 (2023: £nil). A 10% strengthening of the US dollar would have had an equal and
opposite effect. This analysis assumes that all other variables, in particular other exchange rates,
remain constant.
Price risk
The Groupʼs exposure to price risk, all of which is through the companyʼs holdings of equity
investment securities, is described in note 33.
NOTES TO THE COMPANY STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
229
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
54 FINANCIAL INSTRUMENTS CONTINUED
(iii) MARKET RISK CONTINUED
Fair values
The table below analyses financial instruments measured at fair value into a fair value hierarchy
based on the valuation technique used to determine the fair value:
—Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
—Level 2: inputs other than quoted prices included within level 1 that are observable for the asset
or liability, either directly or indirectly.
—Level 3: inputs for the asset or liability that are not based on observable market data.
At 31 December 2024
Level 1
£m
Level 2
£m
Level 3
£m
Total
£m
Assets
Fair value through profit or loss:
— equity securities
–
–
–
–
–
–
–
–
At 31 December 2023
Level 1
£m
Level 2
£m
Level 3
£m
Total
£m
Assets
Fair value through profit or loss:
— equity securities
–
–
–
–
–
–
–
–
The company recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred. There have been no transfers between
levels during the year (2023: none).
Details of the methods and assumptions used to determine the fair values of the financial assets in
the above table, along with how reasonably possible changes to the assumptions affect these fair
values, are provided in note 33 to the consolidated financial statements.
The fair values of the companyʼs financial assets and liabilities are not materially different from
their carrying values, with the exception of equity investments in subsidiaries, which are carried
at historical cost (note 44).
55 CAPITAL MANAGEMENT
The companyʼs objectives when managing capital are to:
— safeguard the companyʼs ability to continue as a going concern so that it can continue to provide
returns for shareholders and benefits for other stakeholders
— maintain a strong capital base to support the development of its business
For monitoring purposes, the company defines capital as distributable reserves (see note 43).
The company monitors the level of distributable reserves on a monthly basis and compares this to
forecast dividends. Capital is distributed to the company from operating subsidiaries on a timely
basis to ensure sufficient capital is maintained. The Board of Directors monitors the level of capital
held in relation to forecast performance, dividend payments and wider plans for the business,
although formal quantitative targets are not set.
There were no changes in the companyʼs approach to capital management during the year.
56 CONTINGENT LIABILITIES AND COMMITMENTS
The company had no contingent liabilities or commitments at the year-end (2023: £nil).
57 RELATED PARTY TRANSACTIONS
Rathbones Group Plc is considered to be the ultimate controlling party.
TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
The remuneration of the key management personnel of the company, who are defined as the
companyʼs directors and other members of senior management who are responsible for planning,
directing and controlling the activities of the company, is set out below. The table below details the
aggregated compensation made to the key management of the Company for their services to the
Rathbones Group. In the current year, as part of a review of consistency of reporting across
Rathbones Group companies, following a recent significant Group acquisition, the methodology of
calculating directors compensation has been revised from an apportionment basis to an aggregated
basis, and as a result the prior year disclosure has been restated. The result of the restatement has
been to increase short-term employee benefits by £5.9 million, increase other long-term benefits
by £0.3 million and increase share based payments by £1.8 million for 2023.
2024
2023 (restated)
£m
£m
Short-term employee benefits
8.4
7.6
Other long-term benefits
0.2
0.3
Share-based payments
2.1
1.9
10.7
9.8
NOTES TO THE COMPANY STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
230
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
57 RELATED PARTY TRANSACTIONS CONTINUED
OTHER RELATED PARTY TRANSACTIONS
Dividends totalling £0.2 million were paid in the year (2023: £0.3 million) in respect of ordinary
shares held by key management personnel and their close family members.
All amounts outstanding with related parties are unsecured and will be settled in cash. No
guarantees have been given or received. No provisions have been made for doubtful debts in
respect of the amounts owed by related parties. All transactions were made on normal business
terms.
During the year, the company entered into the following transactions with its subsidiaries:
2024
2023
Receivable
£m
Payable
£m
Receivable
£m
Payable
£m
Interest
0.1
–
3.8
–
Charges for management services
101.9
–
68.1
–
Dividends received
105.0
–
92.0
–
207.0
–
163.9
–
The companyʼs balances with fellow Group companies at 31 December 2024 are set out in notes 45
and 48.
The companyʼs transactions with the pension funds are described in note 52. At 31 December
2024, no amounts were due from the pension schemes (2023: £nil).
All transactions and outstanding balances with fellow Group companies are priced on an armʼs-
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.
58 CASH AND CASH EQUIVALENTS
For the purposes of the company statement of cash flows, cash and cash equivalents comprise
the following balances with less than three months until maturity from the date of acquisition:
2024
2023
£m
£m
Cash at bank (excluding amounts held by employee benefit trust)
101.7
16.3
NOTES TO THE COMPANY STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
231
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
58 CASH AND CASH EQUIVALENTS CONTINUED
A reconciliation of the movements of financing liabilities and equity to cash flows arising from financing activities is as follows:
Subordinated
loan notes
£m
Lease
liabilities
£m
Liabilities from
financing
activities
£m
Share capital/
premium
£m
Reserves
£m
Retained
earnings
£m
Total
equity
£m
Total
£m
At 1 January 2024
39.9
45.7
85.6
317.7
736.9
135.3
1,189.9
1,275.5
Changes from financing cash flows
Proceeds from issue of share capital
–
–
–
5.6
–
–
5.6
5.6
Payments for share repurchases
–
–
–
–
(22.0)
–
(22.0)
(22.0)
Dividends paid
–
–
–
–
–
(56.9)
(56.9)
(56.9)
Interest charge
(2.3)
(1.5)
(3.8)
–
–
–
–
(3.8)
Payment for lease liabilities
–
(5.3)
(5.3)
–
–
–
–
(5.3)
Payment on exit of property leases
–
(11.2)
(11.2)
–
–
–
–
(11.2)
Total financing cash flows
(2.3)
(18.0)
(20.3)
5.6
(22.0)
(56.9)
(73.3)
(93.6)
Total non-cash movements
2.3
(7.4)
(5.1)
–
9.5
98.9
108.4
103.3
At 31 December 2024
39.9
20.3
60.2
323.3
724.4
177.3
1,225.0
1,285.2
Subordinated loan
notes
£m
Lease
liabilities
£m
Liabilities from
financing
activities
£m
Share capital/
premium
£m
Reserves
£m
Retained
earnings
£m
Total
equity
£m
Total
£m
At 1 January 2023
39.9
49.7
89.6
313.2
(7.4)
143.1
448.9
538.5
Changes from financing cash flows
Proceeds from issue of share capital
–
–
–
2.3
(2.3)
–
–
–
Payments for share repurchases
–
–
–
–
(16.0)
–
(16.0)
(16.0)
Dividends paid
–
–
–
–
–
(71.4)
(71.4)
(71.4)
Interest charge
(2.3)
(2.7)
(5.0)
–
–
–
–
(5.0)
Payment for lease liabilities
–
(4.7)
(4.7)
–
–
–
–
(4.7)
Total financing cash flows
(2.3)
(7.4)
(9.7)
2.3
(18.3)
(71.4)
(87.4)
(97.1)
Total non-cash movements
2.3
3.4
5.7
2.2
762.6
63.6
828.4
834.1
At 31 December 2023
39.9
45.7
85.6
317.7
736.9
135.3
1,189.9
1,275.5
NOTES TO THE COMPANY STATEMENTS
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
232
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
59 EVENTS AFTER THE BALANCE SHEET DATE
There have been no material events occurring between the balance sheet date and the date of
signing this report.
NOTES TO THE COMPANY STATEMENTS
FURTHER
INFORMATION
234 Five-year record
234 Corporate information
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
233
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
234
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
FIVE-YEAR RECORD
2024
2023
20222
20212
20202
£m
£m
£m
£m
£m
Operating income (and underlying operating income)¹
895.9
571.1
455.9
435.9
366.1
Underlying profit before tax¹
227.6
127.1
97.1
120.7
92.5
Profit before tax
99.6
57.6
64.1
95.0
43.8
Profit after tax
65.5
37.5
49.0
75.2
26.7
Equity dividends paid and proposed
96.9
62.9
49.3
49.5
38.7
Basic earnings per share
63.0p
52.6p
83.6p
133.5p
49.6p
Diluted earnings per share
60.4p
50.8p
81.6p
129.3p
47.6p
Underlying earnings per share¹
161.6p
135.8p
130.8p
172.2p
133.3p
Dividends per ordinary share
93.0p
87.0p
84.0p
81.0p
72.0p
Equity shareholders' funds
1,359.4
1,350.2
634.8
623.3
513.8
Total funds under management and administration
£109.2bn
£105.3bn
£60.2bn
£68.2bn
£54.7bn
1. A reconciliation between the underlying measure and its closest IFRS equivalent for the current year and the prior year is shown in table 4 on page 42
2. Data excludes IW&I
GLOSSARY
To find a glossary of terms, including our alternative performance measures (APMs) please visit our website.
CORPORATE INFORMATION
Wealth Management
Asset Management
Principal trading names
Rathbones Investment Management
Rathbones Investment Management International
Greenbank Investments
Rathbones Trust Company
Rathbones Legal Services
Vision Independent Financial Planning
Castle Investment Solutions
Saunderson House
Investec Wealth & Investment
Investec Wealth & Investment (Channel Islands)
Rathbones Asset Management
(formerly Rathbone Unit Trust Management)
Offices
23
2
Websites
rathbones.com
rathbones.com/international
greenbankinvestments.com
rathbones.com/financial-planning
rathbonesam.com
investec.com/en_gb/wealth
FURTHER INFORMATION
STRATEGIC
REPORT
FINANCIAL
STATEMENTS
GOVERNANCE
REPORT
FURTHER
INFORMATION
235
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
FURTHER INFORMATION
REGISTERED OFFICE
Rathbones Group Plc
30 Gresham Street
London
EC2V 7QN
Company No. 01000403
www.rathbones.com
GROUP COMPANY SECRETARY
A Johnson
ali.johnson@rathbones.com
REGISTRARS
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
www.equiniti.com
UK MAINLAND CORRESPONDENCE
Rathbones
PO Box 1965
Liverpool
L69 3HU
OUR OFFICES
To find your local office please visit our website.
www.rathbones.com
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236
RATHBONES GROUP PLC REPORT & ACCOUNTS 2024
Rathbones Group Plc
30 Gresham Street
London
EC2V 7QN
+44 (0)20 7399 0000
rathbones.com